Sports gaming operator Underdog has entered the US sport prediction market in a collaboration with Crypto.com.
The deal has been struck with Crypto.com Derivatives North America (CDNA), an affiliate of the cryptocurrency company that is a registered exchange with the Commodity Futures Trading Commission (CFTC).
The partnership will mean US users will have access to CDNA’s full range of sports events contracts across all major leagues, including the NFL, NBA and MLB, through Underdog’s sports betting site.
A First In The US Market
Underdog founder and CEO, Jeremy Levine, hailed what will be the first prediction market exchange offered on a major sports gaming operator app.
“Prediction markets are one of the most exciting developments we’ve seen in a long time,” he said.
“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, Global Head of Capital Markets at Crypto.com added: “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.”
The Federal Versus State Debate
The collaboration means that Underdog has become the first fantasy sports operator to enter a rapidly growing marketplace that is federally compliant but causing concern among some state legislators.
Prediction markets give users the chance to buy and sell contracts based around the outcome of sporting events.
It is federally compliant across all 50 states whereas sports betting is only legal in 39, under individual state legislation.
It is that fine line between sports events contracts and sports betting that has seen some states turn to the courts.
Nevada regulators are presently embroiled in legal proceedings with Kalshi and Robinhood, where they are challenging the two financial exchanges rights to offer sports events contracts.
It is the result of an ongoing dispute around what defines a sports bet and whether platforms such as Kalshi should be answerable to state or federal government legislation.
Just last week, FanDuel announced it was entering the world of prediction markets in partnership with the CME group, though under questioning from the Nevada Gaming Commission, executives for the popular sports betting site said it had no immediate plans to offer sport event contracts.
FanDuel will surely keep an eye on how this big market move from Underdog develops.
