Underdog Surrenders Fantasy Sports Licences To Focus on Prediction Markets
Mike Goodpaster Published 15/09/2026
Underdog has surrendered its fantasy sports licenses to offer its Drafts product in seven states. The company will instead focus its energies on its prediction market sites in those seven states. It's the latest indication that a company can't operate a state-regulated gaming format in the same state as its federally regulated prediction market site.
At the same time, Underdog has filed suit in five states to protect its prediction market sites in those states. The lawsuits are seeking permanent injunctions that will block state gambling enforcement against its sports event contracts. Earlier this year, Underdog acquired the Aristotle Exchange DCM. The company began offering prediction markets in September 2025 through a partnership with Crypto.com.
Underdog CEO claims state-regulated and federally regulated gaming operations can't coexist
Underdog CEO Jeremy Levine took to social media to announce the company's plans to shutter its daily fantasy sports Drafts product in the seven chosen states. All of Underdog's Drafts operations were halted in Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania, and Ohio.
"Drafts community, I have some not fun news to share," Levine posted on X. "Right after [NFL] kickoff on Wednesday, we will be shutting down Drafts in seven states: MA, MD, MI, MS, NJ, PA and OH. Already entered drafts will continue as normal, but in those states you won’t be able to enter new drafts. If you’re a drafter in one of those states, I’m really sorry."
Levine blames state gambling regulators for his decision
Levine went on to assign blame for what he termed a difficult decision at the feet of gambling regulators in each of those seven states.
"This sucks, but I want to explain why," Levine wrote. "Those states have taken a legal viewpoint we disagree with: if we offer our CFTC-licensed products, we cannot offer fantasy sports in those states. So we had to choose. We could keep our fantasy licenses in those states, or surrender the licenses and offer effectively our full experience, minus Drafts.
"It sucks. I love Drafts. It was the first game we ever launched and a big part of what built Underdog. Even though they don’t get anywhere near the usage of our other offerings, we still care deeply about them. And it pains me that we can’t do right by the Drafts community and offer the best experience possible to the most customers."
Levine added that this decision might only be a temporary measure.
"We have some ideas about how to get Drafts back to more customers, but it’s too early to commit to anything yet," he wrote. "I’m optimistic, and we’re definitely going to try. But until then, I don’t think there’s really anything I can say other than I’m sorry."
Here's why Underdog is filing lawsuits
Underdog immediately followed its stepping back from the DFS business by aggressively moving to protect its sports-event contract prediction market interests. The company filed suit in federal court in Ohio, Washington, Wisconsin, Massachusetts and New Mexico. Underdog is seeking injunctions that would preemptively block each of those states from moving to shut down its sports-event contracts.
Previously, Underdog shut down its sportsbook in North Carolina to avoid similar complications with its prediction-market operation there. Each move adds more evidence that the dual-state-federal licensing model is no longer sustainable for prediction-market platforms. Every one of the states in which Underdog filed suit has informed the company that it cannot operate a state-regulated DFS site alongside a prediction market regulated federally by the Commodity Futures Trading Commission (CFTC) in the same state.