Underdog Launch Prediction Markets with Crypto[dot]Com

Join 4500+ Leaders in Web3 & Sports from brands like FIFA, NBA, Premier League, NHL, reading Sporting Crypto every week 👇️ 

Get your tickets to Sports Blockchain Summit London → 5th November 2025!

Underdog's Market Entry 🎯

Underdog have partnered with Crypto[dot]com Derivatives North America (CDNA) to launch sports prediction markets across 16 states. The company are focusing on states where sports betting remains illegal, including California and Texas.

Unlike traditional sports betting, which requires state-by-state licensing, CDNA's CFTC regulation allows nationwide operation under federal oversight. This gives Underdog access to millions of potential customers who currently cannot access legal sports wagering in their home states.

The partnership makes Underdog the first operator to offer fantasy sports, sports betting, and prediction markets within a single application. Users can trade contracts on NFL, college football, NBA, MLB, and other major sports leagues through Underdog's platform, whilst CDNA provides the underlying contract infrastructure.

Underdog has now created a comprehensive sports gaming and wagering ecosystem compliant with each state's regulatory environment.

Market Dynamics & Competition 📊

Underdog's announcement comes amid increasing activity from traditional gambling operators entering the prediction markets space. FanDuel have announced a joint venture with CME Group, whilst DraftKings CEO Jason Robins has indicated the company are "looking into prediction markets" during recent earnings calls.

This interest reflects the explosive growth of prediction markets from crypto-native businesses like Polymarket, and existing operators like Kalshi. As discussed in our State of Prediction Markets 2025, Polymarket has processed over $15 billion in cumulative volume over the past 12 months, with Kalshi on track for over $6 billion. The entry of established operators like Underdog, who already have sophisticated user acquisition and retention capabilities, is only a sign of things to come.

The market opportunity has become substantial, and existing gambling operators have been given the choice to wait for regulations to become clearer or move quickly to engage in event contracts, which give them nationwide access to customers.

Analysis 🧠

The regulatory arbitrage we’re seeing is happening at the speed of light.

Indeed, the outgoing CFTC commissioner Kristin N. Johnson said that there are ‘too few guardrails’ on prediction markets. And it’s hard to disagree. In my opinion, these are the three reasons why:

1) Gambling regulation being state-by-state and fairly immature in the United States
2) Their rapid ascension into sports
3) The variety of companies launching these products (Sportsbooks, finance and crypto businesses)

This makes it much more difficult to moderate, and the question has to be asked:

Has the horse already bolted from the stable?

It’s a difficult position for a regulator.

By the time the CFTC decides to change anything (which I doubt they will), have these businesses and the volumes within them become too big?

The convergence of the ‘types’ of companies looking at this space is hard to manage as well.

What is clear, however, is that gambling operators are now seeing this as a way to hedge bets against these two things:

1) State-by-state gambling regulation being slow
2) Kalshi, Crypto[dot]com, Polymarket and others eating market share

All the while, their gambling licenses mean they also have a hedge on the CFTC switching gears and making things much more difficult for operators with no gambling license, or creating a new regulatory category altogether (both of which seem unlikely).

For the right operator, this feels like a no-lose situation and is a hedge against regulatory slowness and change simultaneously.

Concluding Thoughts 💭

(1) Convergence

The convergence of traditional gambling, cryptocurrency, and financial markets is accelerating. Underdog's partnership with Crypto[dot]com reflects access to blockchain-native infrastructure that enables more sophisticated products than traditional gambling technology supports. We’ve also seen the likes of Kalshi go 24/7 to compete with Polymarket’s ability to be ‘always on’, which is inherent to the blockchain itself.

A year ago — the idea of Robinhood, Crypto[dot]com, Polymarket, FanDuel + CME Group and Underdog all offering or announcing prediction market products would have been ludicrous.

(2) Sports is the Captain Now

Underdog founder and CEO, Jeremy Levine said:

“Prediction markets are one of the most exciting developments we’ve seen in a long time. While still new and evolving, one thing is clear – the future of prediction markets is going to be about sports – and no one does sports better than Underdog.” 

There were so many who claimed Polymarket would lose traction post-elections. But that conclusion, whilst accurate, was very short-lived. Polymarket are now approaching $10bn in sports trading volume and have just been granted the ability to trade in the United States. This is only going to get bigger, unless a regulator steps in.

(3) The disruption to betting is real

Globally, this is a massive disruption to the gambling sector.

Betfair exchange hit $200 billion in global volume in 2024 on all markets. Polymarket is at a ~$15 billion annualised volume, without the U.S market. Kalshi is approaching $6 billion in annualised volume.

We’re comparing apples and oranges here… or maybe green apples and red apples, but I think this market share continues going in one direction unless we see the likes of FanDuel and DraftKings get real volume within these markets. And even then, perhaps they are eating their own lunch by cannibalising their existing offerings.

(4) This is happening extremely fast

I’ve read analysis from people who do not think this is a true disruptor to traditional gambling.

I think it is, and it will be apparent much faster than people realise.

(5) There is an edge for prediction markets in products

The US lacks sophisticated gambling products in comparison to the rest of the world. Live betting for example, is much less sophisticated. This is where prediction markets can have an edge. Additionally, they can create markets in things they do not have an edge on. Player transfers, draft picks and more. Traditional gambling models mean you need an edge as the house to drive large revenues. The proliferation of markets, within niches and those that are not possible to have an edge in, create new products.

More Sports & Web3 Stories

• RTB Digital Secures $30 Million to Expand Web3 Media Platform and Launch New Global Sports Network, ‘RoundtableSports’ (Read more here)

• Polymarket Gets US Green Light (Read more here)

• Billy Bets Raises Financing from Coinbase Ventures to Disrupt $250 Billion Market with AI for Sports Prediction Markets (Read more here)

• NFL All Day Launches Autographed Collectibles, In-Stadium Giveaways (Read more here)

• Newcastle United welcome BYDFi as crypto sponsor (Read more here)

• Polymarket are looking for a head of sports (Read more here)

• Sorare announce multi year deal with LFP (Read more here)

General ‘Stuff’ that Could Impact You

• Stripe enlists a who’s who, including Anthropic, OpenAI, and Paradigm, to build a new blockchain (Read more here)

• Kraken Acquires Breakout to Enable Leveraged Bitcoin Trading With Funded Accounts (Read more here)

• Tokenised Pokémon Cards Are Exploding Right Now (Read more here)

Thanks for reading the latest edition of the Sporting Crypto newsletter!

If you enjoyed this, please tell your friends who might be interested, and share it on socials.

Disclaimers

This newsletter is for informational purposes only and is not financial, business or legal advice. These are the author’s thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies or projects mentioned are for illustrative purposes unless specified.

The contents of this newsletter should not be used in any public or private domain without the express permission of the author.

The contents of this newsletter should not be used for any commercial activity, for example - research report, consultancy activity, or paywalled article without the express permission of the author.

Please note, the services and products advertised by our sponsors (by use of terminology such as but not limited to; supported by, sponsored by or brought to you by) in this newsletter carry inherent risks and should not be regarded as completely safe or risk-free. Third-party entities provide these services and products, and we do not control, endorse, or guarantee the accuracy, efficacy, or safety of their offerings.

It's crucial to provide our readers with clear information regarding the inherent nature of services and products that might be covered in this newsletter, including those advertised by our sponsors from time to time. When you buy cryptoassets (including NFTs) your capital is at risk. Risks associated with cryptoassets include price volatility, loss of capital (the value of your cryptoassets could drop to zero), complexity, lack of regulation and lack of protection. Most service providers operating in the cryptoasset industry do not currently operate in a regulated industry. Therefore, please be aware that when you buy cryptoassets, you are not protected under financial compensation schemes and protections typically afforded to investors when dealing with regulated and authorised entities to operate as financial services firm.