Underdog has taken a significant step forward by launching its own in-house prediction market exchange, known as Underdog Exchange (UDX), nearly a year after it first introduced prediction markets trading on its platform. This announcement was made by the company on Saturday, marking its transition from a daily fantasy sports operator to a fully-fledged exchange operator.
The UDX is registered with the Commodity Futures Trading Commission (CFTC) and enables Underdog to handle its event contract trading independently, eliminating the need for partnerships with other prediction market platforms such as Crypto.com and Kalshi.
In a press release, the company claimed it is the first sports organization to possess a complete prediction market license stack, owning both a designated contract market (DCM) and derivatives clearing organization (DCO), and functioning as an approved futures commission merchant (FCM).
CEO Jeremy Levine has consistently expressed his vision of prediction markets primarily focusing on sports. He reiterated this perspective in the recent announcement, stating, "We started this company with a clear belief – there is so much more to be built for sports fans in America. 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."
Levine emphasized that the launch of the exchange will significantly enhance offerings for sports fans, asserting, "Now, with our own exchange, we’re going to unlock so much more for sports fans. Prediction markets are largely about sports, and Underdog is the best at sports."
While FanDuel's collaboration with CME Group was announced earlier, Underdog became the first gaming operator to provide access to sports prediction markets through its app back in September 2025, thanks to a partnership with Crypto.com. The journey of diversification from a DFS-focused operator to a prediction markets platform has seen several milestones:
– **December 2025**: Underdog ceased its sports betting operations in North Carolina shortly after relinquishing its Missouri sports betting license.
– **January 2026**: The company received National Futures Association (NFA) approval to operate as both an FCM and a swap firm, facilitating partnerships with other DCMs, including Crypto.com.
– **March 2026**: Underdog acquired Aristotle Exchange, a CFTC-registered DCM and DCO managing the PredictIt exchange, a development that paved the way for the July launch of UDX.
– **April 2026**: The platform expanded its offerings by incorporating Kalshi’s sports and other contracts into its prediction markets.
Currently, Underdog provides prediction markets in 39 states, showing promise in a competitive landscape. A recent report by Bank of America indicated that Underdog ranks among the largest prediction markets in terms of notional volume, although it is still behind the industry leader, Kalshi. In an interview with CNBC's Contessa Brewer, Levine mentioned that since launching its prediction markets in September, Underdog has achieved the third-highest notional trading volume in the regulated U.S. market, trailing only Kalshi and Robinhood.
Levine announced that Underdog plans to significantly broaden its predictions product as the NFL season approaches, aiming to capitalize on its growing presence in this space.
