Crypto.com Teams Up with Underdog for Sports Prediction Markets

In a groundbreaking collaboration, the fantasy sports operator Underdog has joined forces with Crypto.com to roll out sports prediction markets across 16 U.S. states. This partnership specifically targets regions where sports betting hasn't been legalized, according to statements made to CNBC.

This marks Underdog's bold entry into a burgeoning sector that uniquely blends elements of financial trading and sports wagering. Unlike traditional markets, these prediction venues allow participants to trade on sports outcomes, with no bookmaker involved and odds influenced by market fluctuations.

Existing ventures like Kalshi and Polymarket are already capitalizing on the concept of trading sports events contracts.

Meanwhile, other major players in the betting industry are expressing interest. Entities such as FanDuel have intentions to explore financial contracts, with CEO Jason Robins expressing similar ambitions.

These types of contracts pose significant potential gains, particularly for businesses that maneuver around state gaming laws and bypass opposition from tribal authorities.

Challenges in Major States

In populous states like California and Texas, legal sports betting is not an option. Florida is an exception, where the Seminole Tribe holds substantial gambling rights through its Hard Rock establishments.

Despite resistance from tribal authorities who see these markets as jeopardizing their sovereign enterprises, sportsbooks are effectively barred from entering these lucrative areas.

Regulatory Considerations

Ongoing debates continue at the federal level, involving the Commodities and Futures Trading Commission, regarding the classification of sports prediction markets as potential forms of gambling. This also touches on whether they infringe upon state's rulers over gambling or the Indian Gaming Regulatory Act.

However, the momentum within prediction markets is undeniable, as highlighted by Jordan Bender, a gaming analyst with Citizens, who noted their noisy presence in the industry.

Bender projected a revenue generation of $555 million from these markets for the year. To contextualize, the legal online sports betting industry raked in roughly $16 billion in 2024.

Innovative Offerings by Crypto.com

The new sports events contracts will be delivered by Crypto.com Derivatives North America, an exchange compliant with the CFTC regulations. These will be integrated into Underdog's platform, utilizing its technological framework.

As Travis McGhee, the managing director at Crypto.com, elaborated, the collaboration with Underdog aims to extend their reach by leveraging CDNA's pioneering solutions.