Underdog Rolls Out Its Own Federally Licensed Prediction Market Exchange

Underdog has launched its own CFTC-licensed exchange for sports event contracts, moving trading directly into its app after using outside partners.

Ziv Chen

Last Updated: July 21, 2026 7:06 AM EDT • 2 minute read

Pictured: Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) as we look at Underdog getting a license for prediction markets. Photo by REUTERS/Andrew Kelly

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Daily fantasy sports operator Underdog has launched its fully owned exchange for trading sports event contracts. The New York company announced the move this month, describing it as a wholly owned operation licensed by the Commodity Futures Trading Commission (CFTC) that will now sit directly inside the existing Underdog app rather than routing through an outside partner.

The company had previously worked through other exchanges to give users access to event contracts, first partnering with Crypto.com last fall and later adding Kalshi as a channel. That arrangement changes now that Underdog controls its own infrastructure.

The shift traces back to March, when the company acquired Aristotle Exchange DCM and Aristotle Exchange DCO, giving it status as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO) under CFTC oversight.

Combined with its standing as a registered Futures Commission Merchant, Underdog says it now holds the full set of licenses needed to run every part of the trading process in-house, something no other sports gaming company has assembled. It's a major step into competition with the best prediction markets.

“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,” said Jeremy Levine, CEO and co-founder of Underdog. “Now with our own exchange, we’re going to unlock so much for more sports fans. Prediction markets are largely about sports, and Underdog is the best at sports.”

A crowded race for federal sports market licenses

Underdog's move to bring its exchange in-house lands amid a much broader scramble among sports-focused platforms to secure the same kind of federal approval.

A month earlier, New York-based operator Novig received its own DCM designation from the CFTC, a nod the company called one of the fastest such approvals in the agency's history. That clearance came just days after rival ProphetX secured comparable DCM and DCO status, making the two firms the first sports-native platforms to reach that regulatory milestone within the same week.

Novig, started by Jacob Fortinsky and Kelechi Ukah, is pitching itself as a peer-to-peer trading venue where users take positions against each other instead of against a bookmaker. Fortinsky told CNBC the goal is a national platform built specifically around sports traders rather than general prediction markets.

The company has already recorded more than $5 billion in cumulative trading volume and over $8 billion on an annualized basis, and closed a funding round earlier this year that reportedly valued it at $500 million.

Both newcomers now enter a field where Kalshi holds a commanding lead, while Polymarket, Robinhood, Crypto.com and established sportsbook operators like FanDuel, DraftKings, and Fanatics compete for the same audience of bettors turning to exchange-style contracts over traditional wagers.

Written by:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.