Underdog acquired a federally regulated derivatives exchange and clearinghouse, positioning the fantasy-sports firm to list and clear sports event contracts directly under the Commodity Futures Trading Commission (CFTC). The deal gives Underdog access to one of the limited exchange-and-clearing stacks that can run these contracts end to end.
The Brooklyn-based company bought the exchange units from Aristotle Inc., which operates the PredictIt political predictions market, and Aristotle will keep control of PredictIt. Underdog said it also plans to list contracts tied to cultural events, and it did not disclose terms.
“This is @Underdog’s day and it’s a great day for traders out there, and, a great day for the trajectory of the prediction and sports industries.”
— Harry Raymond (@harryraymond) March 10, 2026
Cool to see PredictIt co-founder John Phillips & @DustinGouker at @nextdotio on the day we acquired their DCM/DCO licenses. pic.twitter.com/d60BX179zi
Underdog acquired CFTC-registered DCM and DCO licenses from Aristotle Exchange, clearing a path to launch its own regulated prediction market platform.
Prediction markets use event contracts that settle to a yes-or-no outcome. Their ability to list nationally has drawn pushback from state regulators, casinos, and tribal groups that argue the products function like sports betting without state safeguards.
Underdog entered the CFTC-regulated market in September through a partnership with Crypto.com, which let it list contracts without owning an exchange. The Aristotle purchase lets Underdog operate nationwide, ahead of DraftKings, FanDuel, and Fanatics, which still depend on state licensing for most products.
The national angle is now being tested in court. Kalshi and Crypto.com are fighting claims that their offerings should be subject to state rules and potential enforcement, and Bloomberg Intelligence analyst Elliott Stein said March 6 that the disputes are likely headed to the US Supreme Court.
Chief Executive Officer Jeremy Levine said prediction markets will let Underdog offer “even more” as it shifts “to an entirely new federally regulated framework.” He described a model where “news becomes tradeable” and helps inform what happens “both on and off-field,” tying market activity to the information cycle.
The pivot has come with cost pressure. Front Office Sports reported Underdog cut more than 20% of staff, about 125 people, partly tied to artificial intelligence adoption and the prediction-markets push. Next catalyst is the first listed sports and culture contracts under the new license, alongside any court decision that clarifies how far federal oversight can go.
