Fantasy and sports activities gaming operator Underdog is partnering with Crypto.com to supply sports activities prediction markets in 16 states, principally centered on the place authorized sports activities betting has not been adopted, the businesses instructed CNBC on Tuesday.
“Prediction markets are some of the thrilling developments we have seen in a very long time, ” Underdog founder and CEO Jeremy Levine stated on CNBC’s “Worldwide Alternate” Tuesday. “Whereas nonetheless new and evolving, one factor is obvious — the way forward for prediction markets goes to be about sports activities — and nobody does sports activities higher than Underdog.”
Underdog is the primary sports activities gaming platform to enter the brand new and quickly increasing prediction market business, which is a contemporary chimera of economic buying and selling and sports activities betting: Merchants purchase and promote the end result of sporting occasions, however the odds change in response to market actions, and there isn’t any bookmaker.
Robinhood, Kalshi and Polymarket already provide sports activities occasions contracts.
FanDuel, owned by Flutter, introduced earlier this month that it might associate with the CME Group to supply monetary occasions contracts. DraftKings CEO Jason Robins has additionally instructed CNBC he is all in favour of getting into the fray.
Sports activities occasions contracts may very well be particularly profitable for platforms that bypass state gaming regulators and tribal pushback.
The nation’s most populous states, California and Texas, don’t provide authorized sports activities betting. In Florida, the third most populous state, the Seminole Tribe has a close to monopoly on authorized playing via its Exhausting Rock casinos and sportsbooks.
These markets stay inaccessible to authorized sportsbooks, and the tribes have demonstrated a dedication to heading off what they think about to be a aggressive risk to their sovereign rights.
The Commodities and Futures Buying and selling Fee and federal courts are nonetheless grappling with the query of whether or not sports activities predictions markets are sports activities playing, in addition to whether or not they encroach on states’ proper to control sports activities playing or in the event that they violate the Indian Gaming Regulatory Act.
Nonetheless, as Residents gaming analyst Jordan Bender wrote in April, “prediction markets are too loud to disregard.”
He estimated that the sports activities prediction market might generate $555 million this 12 months. The authorized on-line sports activities betting market generated about $16 billion in 2024, in response to Bender.
The game occasions contracts can be offered by Crypto.com Derivatives North America (CDNA) — an change that is already registered with the CFTC — however hosted on Underdog’s platform and fueled by its know-how, the businesses stated.
“We had been the primary to supply sports activities occasions contracts, and our know-how partnership with Underdog will present extra entry to CDNA’s progressive choices,” stated Travis McGhee, managing director and world head of capital markets at Crypto.com.
