Underdog exits fantasy in 7 states as predictions take priority
Underdog is pulling its fantasy sports contests out of seven states, handing back licences in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio and Pennsylvania as the company goes all-in on prediction markets. Founder and CEO Jeremy Levine confirmed the move on X. It takes effect right after kickoff on Wednesday, 10 September, and follows the firm's late-July agreement to be bought by UK-based FTSE 100 fintech IG Group for $1.1bn.
Levine apologised to users, calling the shutdown "not fun news" and explaining that state regulators have taken a legal position he disagrees with: if Underdog offers its CFTC-licensed products, it can't also run fantasy sports in those states. "So we had to choose," he wrote. "We could keep our fantasy licenses in those states, or surrender the licenses and offer effectively our full experience, minus Drafts." Already-entered drafts will run as normal, though players in those seven states won't be able to join new ones.
The decision marks a quiet but real shift in Underdog's priorities. Prediction markets launched in September 2025 through a Crypto.com partnership, a space Levine called "one of the most exciting developments we've seen in a long time." Drafts, by contrast, was Underdog's first game and still operates in 33 US states plus Canada outside Ontario. Levine admitted it "doesn't get anywhere near the usage of our other offerings." He added the team has ideas for bringing Drafts back to more customers, but it's "too early to commit to anything yet."
Some customers pushed back, arguing the fantasy element is what sets Underdog apart from prediction-only rivals. Levine acknowledged the frustration, saying "it pains me that we can't do right by the Drafts community." But he gave no signal of retreat from the predictions path. The boom in that space, still running strong, appears to have outweighed the fantasy product's pull.
The IG Group deal raised eyebrows of its own, partly because no prediction market has secured a licence from the UK Gambling Commission. The regulator, like many across Europe, insists prediction platforms hold the same licences as traditional gambling operators. Many prediction firms resist that. Notably, Smarkets CEO Jason Trost sees exchanges and prediction platforms as the same thing, a view that may foreshadow how the UK treats the sector.
IG Group's interest in Underdog goes beyond the licence stack. Over 60% of Underdog's monthly active users are under 30; IG Group's average customer is 42. The acquisition offers a direct route to a younger demographic. IG Group CEO Breon Corcoran said at the announcement: "Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full licence stack that together give us a differentiated position in US prediction markets."
The UK is currently weighing its stance on prediction markets. The Financial Conduct Authority is expected to reassess consumer access to investment products in September, potentially revisiting the retail binary options ban and opening a door for prediction platforms. If that happens, Underdog's pendulum may swing further toward predictions. Drafts would become an increasingly secondary offering.