Underdog launched its own prediction markets exchange Saturday, ending its reliance on third-party exchanges.
The launch comes four months after buying Aristotle Exchange DCM and Aristotle Exchange DCO, giving Underdog the designated contract market and derivatives clearing organization needed to launch its own exchange.
Underdog is also a registered futures commission merchant, which makes it the “first sports company with the complete prediction market license stack,” according to the release.
Underdog has offered sports prediction markets since last September through other exchanges, including Kalshi and Crypto.com.
Levine: ‘so much more’ coming
Operating its own exchange means Underdog can offer more markets than before.
“We started this company with a clear belief – there is so much more to be built for sports fans in America,” CEO Jeremy Levine said in the release. “Despite incredible changes in the U.S. market in recent years, through the twisting journey from fantasy sports to regulated sports betting to prediction markets, we still see an industry that far too often simply misses in serving sports fans.
“Now with our own exchange, we’re going to unlock so much for more sports fans. Prediction markets are largely about sports, and Underdog is the best at sports.”
Underdog ditched betting for predictions
The story of Underdog’s shift from licensed sportsbook operator to prediction markets should be a cautionary tale for any state considering higher taxes on sports betting operators.
Underdog began as a fantasy operator and offered popular DFS contests that closely resembled a parlay bet on multiple player props. The company shifted to sports betting eventually, going live with its first sportsbook when North Carolina launched its regulated market in March 2024.
Underdog was one of the first to apply for Missouri sports betting and announced at the end of September that it had market access through a partnership with the Kansas City Royals.
But the writing was on the wall that a Missouri launch may never come even before securing said access. Underdog announced just a few weeks after its predictions launch that it was building out its predictions leadership team.
About two months later, Underdog announced it would not offer sports betting in Missouri, deciding to launch its predictions product in the state instead. It then shut down its North Carolina sportsbook in December, ending its journey as a sports betting operator.
