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Underdog exits fantasy sports licenses in seven US states after regulator ruling
The company says it can either keep fantasy licenses or run its CFTC-regulated prediction products, not both, and affected states will stop taking new fantasy entries while existing contests continue.
Underdog Axes Fantasy, the fantasy sports and prediction market business, is surrendering its fantasy sports licenses in seven US states after regulators ruled its CFTC-regulated prediction products cannot operate alongside fantasy sports, according to Yahoo Finance.
In an investor-facing explanation cited by Yahoo Finance, Underdog founder and CEO Jeremy Levine said the company faced a binary legal choice in those states: retain fantasy licenses or continue offering its CFTC-licensed prediction products, but not both. As a result, new fantasy draft entries will disappear in the affected states, while contests customers have already entered will continue.
The article also frames the move as part of a broader shift ahead of Underdog's prospective $1.3 billion acquisition by IG Group. IG's acquisition presentation, as described by Yahoo Finance, shows prediction markets rising quickly as a share of Underdog handle, from 14% in 2025 to 54% by the first half of 2026, before reaching around 99% in IG's longer-term model.
Yahoo Finance further reports that IG sees Underdog's customer base as a bridge beyond sports, pointing to the fact that 46% of Underdog customers have previously traded crypto and 58% have traded individual stocks. Fantasy is not disappearing entirely, with the company continuing draft-style contests outside the states affected by the license surrender.