Underdog is teaming with Crypto.com to provide prediction markets in its app, the first gaming company—but certainly not the last—to launch a futures product as the definition of legal sports betting continues to blur.
The company, which mostly offers fantasy-style games, announced a new relationship Tuesday with Crypto.com | Derivatives North America (CDNA), an affiliate of Crypto.com that is a registered exchange with the Commodity Futures Trading Commission (CFTC), the government agency that oversees prediction markets. Starting immediately, sports markets on that exchange will be available to Underdog customers in U.S. dollars on the company’s app alongside its fantasy and gambling products.
It’s a notable move as well for Crypto.com, which was the first company to offer this type of sports prediction market contracts in the U.S., beating Kalshi late last year. Those efforts have been much quieter in recent months as Kalshi, and soon Polymarket, have been aggressive in growing their product, their social presence and their U.S. market share. The industry’s emergence has been the biggest story in gambling this year; advocates claim the prediction contracts are identical to other financial assets, while others believe the exchanges have found a way to bypass existence sports betting laws, regulations and tax structures, despite having a virtually identical product.
The relationship between Crypto.com and Underdog is not exclusive, a representative for Underdog told Sportico, meaning Crypto.com is free to partner with other groups to reach a wider audience for its markets. He declined to comment on how the two companies will share in the economics of the partnership—whether through revenue sharing, a cash component, etc.
While Underdog is the first major licensed U.S. gaming company to directly layer on prediction markets, others are looking intently at their options. Last month FanDuel announced a partnership with CME Group, which owns four CFTC-regulated exchanges, a move that could pave the way for its participation. DraftKings CEO Jason Robins has also made it clear that his company is also considering something similar. What remains to be seen, however, is how sports betting regulators across the U.S. react to companies that suddenly begin offering both products. In that sense, Underdog’s move will likely be closely watched by the entire gaming industry.
Crypto.com launched its sports prediction market in December 2024. The company then ignored an order from CFTC regulators in the final month of Joe Biden’s presidency to take the contracts down.
After setting up a series of media interviews to promote its contracts on the outcome of the Super Bowl, Crypto.com has been mostly silent about its prediction markets over the past seven months. It has been far slower to add new market types than competitor Kalshi, while devoting little resources to advertising even as Kalshi has flooded the zone with marketing materials. The organization has repeatedly declined requests for comment and interviews on industry developments.
Founded in 2020 as a fantasy product, Underdog has begun testing the waters of more traditional sports betting, and the regulation that comes with it. The company has had a lot of success with both social and digital media—Bill Belichick had a podcast on its platform for a while—and earlier this year said a $70+ million funding round had valued the company at $1.23 billion. That made it one of a handful of global sports gaming unicorns, Sportico reported at the time.
That round was led by Spark Capital, which was an early backer of Twitter, Overtime, Slack and Discord. Prior Underdog investors include Mark Cuban, Kevin Durant, Odell Beckham Jr., Trae Young, Nas, Kygo, Future and a number of other sports and entertainment celebrities.
As the sports futures markets have exploded in popularity, the CFTC has undergone dramatic change as well. The formal nomination of Brian Quintenz, a Kalshi board member who is President Donald Trump’s choice to run the commission, has been paused for more than a month. Under the interim leadership of Caroline Pham, the new-look commission has been permissive toward sports prediction markets, an expected outcome given that Donald Trump Jr. is an advisor and investor in both Kalshi and Polymarket. Crypto.com also recently partnered with Trump Media & Technology Group to launched a new cryptocurrency treasury firm.
The CFTC has not made any public remarks about Crypto.com ignoring the agency’s prior takedown order under former chairman Rostin Behnam. The organization has also hinted that its depleted staff and funding challenges could soon limit some of its enforcement actions.
Crypto.com’s low-key approach of late has perhaps been best captured by New Jersey seemingly overlooking its existence when sending a cease-and-desist letter to Kalshi. “[New Jersey’s] demands do not currently apply to any other [company], including a Kalshi competitor that likewise offers sports-event contracts,” Kalshi’s legal representation wrote in a court filing, referencing how Crypto.com escaped the Garden State’s notice.
A CFTC official told Sportico last month they weren’t aware of Crypto.com’s standing and would need to look into it—but still haven’t provided insight.
Ahead of the Underdog announcement, there were signs Crypto.com was ready to ramp up its prediction markets. Three weeks ago, Crypto.com announced the hire of Chris Fargis as director of sports and prediction markets. Fargis previously worked at DraftKings, Fanatics and Hard Rock in betting related role.
“This category is red-hot, and there are very exciting things happening at the company,” Fargis wrote on LinkedIn.
