Underdog Launches Its Own Regulated Exchange

In July 2026, Underdog launched its own federally regulated prediction market exchange, becoming the first sports gaming company to hold a complete CFTC license stack. By shifting from external partners to an in-house platform, the company can now directly list and clear sports and cultural event contracts within its app.

How Underdog Bypasses State Rules with New Federal Exchange

Underdog CEO Jeremy Levine believes the current U.S. sports betting industry fails to serve fans adequately. To address this, the company is launching its own exchange, leveraging its expertise to offer better prediction market experiences. After acting as an intermediary last fall, Underdog acquired a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) in March 2026. As a registered Futures Commission Merchant (FCM), Underdog is now the first sports company to hold a complete and regulated prediction market license stack.

Underdog became the first sports gaming company to secure complete federal licensing under the CFTC by acquiring a Designated Contract Market and Derivatives Clearing Organization. This further enables operational independence and a strategic shift to bypass restrictive state-by-state sports betting frameworks. Operating under federal derivatives rules allows Underdog to control contract design and settlement directly, improving its ability to scale nationwide. This regulatory autonomy offers greater efficiency in launching sports gaming products.

Future growth for platforms like Underdog points to broadened asset classes and industry consolidation, expanding from sports into cultural and political derivatives while reflecting rising corporate value. However, any connection to healthcare is a false premise; the app is strictly for entertainment and retail trading, meaning it has no role in clinical workflows for doctors or patients.

Impact on the ICT Industry

This Underdog’s new launch of a federally regulated prediction market exchange positively impacts the ICT Industry by driving vertical integration, expanding the addressable market into restricted jurisdictions, and bypassing traditional third-party operational dependencies.

This provides a complete licensing stack, allowing it to retain full revenue economics, as the convergence of finance and gaming attracts major corporate acquisitions. Product innovation enables real-time, flexible custom contract design and direct settlement for sports and cultural events inside native mobile consumer apps. 

This integration sets intermediary margins by revolutionizing high-engagement consumer apps into regulated retail derivatives trading platforms. By connecting technology and finance, companies can provide fast settlements that reshape user experiences and drive high-value corporate deals across the market.

This further addresses industry limitations, including geographic fragmentation, which is bypassed using federal CFTC oversight to operate where standard sports betting is banned; clearing and infrastructure bottlenecks are reduced by eliminating third-party partner exchanges, and monetization caps are replaced with financial derivatives architecture to increase trading volume capacity.

Impact of the Fantasy Sports Industry

The global fantasy sports market size accounted for USD 38.50 billion in 2025 and is predicted to increase from USD 43.74 billion in 2026 to approximately USD 137.81 billion by 2035, expanding at a CAGR of 13.60% from 2026 to 2035.

According to Precedence Research, this launch impacts the fantasy sports industry by bypassing state-by-state gambling restrictions, internalizing revenue, and merging traditional daily fantasy sports with federally overseen derivatives.

This development impacts the fantasy sports industry by developing new revenue streams, fostering direct competition, and consolidating product convergence. It mitigates third-party middleman fees to operate in-house, forces traditional competitors to offer event contracts, and blends standard formats with financial market trading contracts. These changes further reshape how platforms build products and handle market share. Companies must adapt quickly to these hybrid trading models and risk losing users to leaner and in-house systems that bypass external fees.

Further, this offers strategic advantages where the platform leverages geographic expansion through CFTC licenses to enter states without mobile betting, ensures regulatory stability through unified federal rules instead of state commissions, and achieves control of margin by managing contract creation, pricing, and clearing infrastructure directly.

About Underdog

Underdog is an American sports gaming, daily fantasy sports, and prediction market platform founded in 2020 and headquartered in Brooklyn, New York, with the mission to make sports fun by creating simple ways for fans to compete and win rewards, while redefining fan engagement through innovative, casual, and accessible market alternatives.

The company offers Best Ball Tournaments, Pick'em Contests, Prediction Markets, and a Sports Media Network as the core offerings. These products facilitate automated season-long fantasy drafts, high-low projection predictions, real-time sports event trading through a regulated exchange, and professional athlete-led media content.