Underdog and Crypto.com are teaming up to offer sports prediction markets in 16 U.S. states, mostly where legal sports betting is not available, the companies said on Tuesday.
The deal puts Crypto.com Derivatives North America at the centre of the contracts while Underdog hosts the markets on its platform.
The partners say the move aims to let traders buy and sell event outcomes without a bookmaker, and it uses market pricing rather than fixed odds.
The product will reach states that lack regulated sportsbooks and could give fans a new way to wager on games.
How will the product work?
CNBC reported that Underdog will put the markets on its site and app. Crypto.com Derivatives North America, a CFTC-registered exchange, will supply the contracts. Users will be able to trade contracts that pay out based on the result of a game or a player’s performance.
Prices will shift as people buy and sell, and there is no single house setting odds. Instead, the market sets the price.
Why does the move matter?
Jeremy Levine, Underdog’s founder and CEO, called prediction markets one of the most exciting recent developments. He said sports will be a big focus and that Underdog does sports well.
The partnership could open new options in states where sportsbooks are blocked by law or by tribal agreements. If people take to the product, it could draw players who now have no legal onshore options.
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Who else is in the space?
Several firms already run sports event contracts, and Robinhood, Kalshi and Polymarket offer such products now. FanDuel this month said it would work with CME Group to list financial events contracts.
DraftKings has also expressed interest in entering prediction markets. The growing field shows many firms see room for new offerings beyond traditional sports betting.
Legal and regulatory questions
Regulators and courts are still sorting out where these markets fit. The Commodity Futures Trading Commission and federal courts must decide if sports prediction contracts count as sports gambling.
Citizens’ gaming analyst Jordan Bender estimated the sports prediction market could make $555 million this year. By contrast, legal online sports betting brought in about $16 billion in 2024.
The prediction market will likely be a smaller slice at first, but could grow as adoption rises and firms add features.
Concerns and controversies
Prediction markets have faced criticism and incidents, and Ethereum co-founder Vitalik Buterin publicly condemned Polymarket for a controversial speculative bet about a private individual.
Online reports from a blogger named Marmot say Polymarket also suffered a governance attack where powerful users skewed outcomes.
Thai police suggested blocking the Polymarket site on January 14. These examples show how fragile trust can be in decentralised platforms and how regulators may respond.
For platforms, prediction markets can avoid some state-level sportsbook rules. That may widen reach, but it also raises friction with regulators and tribes that defend betting monopolies.
Underdog and Crypto.com will need clear compliance and strong tech controls. The CFTC registration of the contract provider may ease some legal risks. Still, courts and regulators will likely keep asking tough questions.