Underdog has officially introduced its own prediction market exchange, which is federally licensed and allows for trading in various contracts related to sports, culture, and other events. This new platform is built on infrastructure that the company owns and operates.
Licensed by the U.S. Commodity Futures Trading Commission (CFTC), the exchange is seamlessly integrated into the existing Underdog app, enabling users to engage in prediction market trading directly through the platform.
This development signifies a notable transition for Underdog, which had previously relied on third-party exchanges, including Crypto.com and Kalshi, for its prediction markets.
The launch follows the company's acquisition of a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO) in March, allowing it to manage its own federally regulated exchange.
Furthermore, Underdog is recognized as a registered Futures Commission Merchant (FCM), making it the first sports-focused company to possess the complete licensing framework for prediction markets, which includes DCM, DCO, and FCM registrations.
Jeremy Levine, the Chief Executive Officer and Co-Founder of Underdog, expressed, “We initiated this company with a strong conviction that there is much more to create for sports enthusiasts in America. Despite significant transformations in the U.S. market over recent years, we still perceive an industry that often overlooks the needs of sports fans.”
The company emphasized that the new exchange will provide customers with enhanced opportunities to voice their opinions on sports, culture, and other events within the Underdog app.
Underdog positions itself as the pioneering sports gaming operator to grant access to sports prediction markets, having launched an in-app feature last fall that initially served as a facilitator for third-party exchanges.
This launch aligns with a growing trend among prediction market operators who are increasingly establishing their own trading infrastructures to enhance control over their platforms.
Since last September, Underdog's prediction market has achieved nearly $6.5 billion in notional trading volume, placing it ahead of several prominent competitors in the U.S. market.
However, it is important to note that the company’s prediction market is not available in 13 U.S. jurisdictions, including Nevada and Washington, D.C.