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Even with the uncertainty surrounding sports prediction markets, the competition is intensifying. Underdog announced yesterday that it is partnering with Crypto.com to become the first sportsbook operator to officially engage in sports event contracts.
It confirmed that it will offer these sports event contracts within its app, expanding its services to include this innovative feature. While the partnership is not yet available nationwide, it will launch in 16 states.
While the operator has yet to specify which states will participate, reports from CNBC suggest that the offering will primarily target areas where traditional sports betting remains illegal, including states such as California and Texas.
‘The future of prediction markets is going to be about sports’
The integration within the app takes a new approach compared to Underdog’s traditional picks-style offerings, yet it still presents itself like a conventional sportsbook with an odds format.
Speaking on the partnership, Underdog’s founder and CEO, Jeremy Levine, emphasized that he sees great potential in prediction markets, stating, “Prediction markets are one of the most exciting developments we’ve seen in a long time. While still new and evolving, one thing is clear – the future of prediction markets is going to be about sports – and no one does sports better than Underdog.”
Travis McGhee, Managing Director and Global Head of Capital Markets at Crypto.com, also expressed enthusiasm about the partnership, saying, “We are thrilled to partner with Underdog to enhance the sports experience for customers nationwide with the ability to now trade using Underdog’s technology – all in one app. We were the first to offer sports events contracts, and our technology partnership with Underdog will provide more access to CDNA’s innovative offerings.”
Busy Year for Sports Prediction Platforms
2025 has seen the sports prediction sector expand rapidly. The Underdog deals marks the first time that sports event contracts will be restricted to specific states intentionally. Until now, these contracts and all prediction markets have been available nationwide.
Although Robinhood briefly exited some states due to legal issues, it has since reintroduced sports event contracts across all 50 states.
As we move into the final quarter of the year, the race for CFTC-regulated sports event contracts is heating up. Polymarket is planning to return to the US with its own sports prediction market soon.
Meanwhile, FanDuel has announced a partnership with CME Group to enter the prediction markets arena. While their initial launch won’t include sports, it seems likely that this will be part of their long-term strategy.
DraftKings is also exploring its options and is expected to make a move into the prediction markets space soon after purchasing Railbird Exchange earlier in the year. Other sportsbooks and even fantasy apps may follow Underdog’s lead, alongside the potential for additional crypto platforms to join in on the action.
Regulatory Concerns Remain
While sports betting through prediction markets is currently legal across the country, its legality is facing scrutiny in the courts. Seven states have issued cease-and-desist letters to some companies, including Kalshi, Robinhood, and Crypto.com, for allegedly engaging in illegal sports betting practices.
In response, Kalshi has filed a lawsuit to challenge three of those states, and Crypto.com has taken similar legal action.
The Ohio Casino Control Commission (OCCC) has also come out to warn licensees about partnering or engaging with sports prediction markets, which it explicitly calls illegal online betting.
In a letter released last week, the regulator cautioned that partnering with these companies, even if they are based outside Ohio, could lead to issues with the operator’s license. However, it only explicitly mentioned sports betting operators, and Underdog, being a fantasy operator, could be taking advantage of this exception.
Source: SBCNews/Closing Line
