Crypto.com to Empower Underdog’s Entry into Prediction Markets
Underdog Expands into Prediction Markets with Crypto.com Partnership
Underdog, a well-known fantasy sports and sports betting operator, has announced a strategic collaboration with Crypto.com, a prominent cryptocurrency exchange based in Singapore. This alliance will enable Underdog to step into the rapidly expanding arena of prediction markets.
Understanding Prediction Markets and Underdog’s Ambitions
Prediction markets offer a unique blend of stock trading mechanics and sports betting, allowing participants to buy and sell shares based on the anticipated outcomes of various events. These markets cover a wide range of topics including sports events, political outcomes, legal rulings, and even more unusual occurrences like papal elections.
Although the sector has faced some regulatory and industry resistance, prediction markets have seen swift growth. Recognizing this opportunity, Underdog aims to capitalize on this momentum and compete with established players such as Kalshi and Robinhood. Crypto.com, recognized for its leadership in sports event contracts, will provide vital support to help Underdog quickly establish itself in this field.
Through this partnership, Underdog plans to launch prediction markets in 16 U.S. states, focusing mainly on areas where sports betting laws are not yet fully developed. Unlike traditional sports betting, prediction markets fall under the regulatory domain of the Commodity Futures Trading Commission (CFTC), a distinction that has stirred debate within the betting community.
Specifically, Underdog’s new prediction markets will operate on the Crypto.com Derivatives North America (CDNA) platform, which holds registration with the CFTC.
Optimism from Underdog’s Leadership
In a recent interview on CNBC’s Worldwide Exchange, Jeremy Levine, founder and CEO of Underdog, expressed strong enthusiasm about prediction markets, describing them as one of the most exciting advancements in gaming history. He emphasized that this innovation demonstrates the gaming industry’s ongoing evolution.
While political prediction markets have gained notable interest, Levine anticipates that sports will be the core driver of future growth. Confident in Underdog’s expertise in sports-related gaming, he conveyed his excitement about entering this promising market segment.
Challenges and Regulatory Concerns Around Prediction Markets
Industry analysts predict that revenues from prediction markets could reach $555 million by 2025. Although this figure is modest compared to traditional betting market revenues, it has already garnered attention and concern from some commercial and tribal sportsbooks.
State regulators have been cautious regarding prediction markets, mirroring their scrutiny of other alternative gaming formats such as sweepstakes. Several states have issued cease-and-desist orders to prediction market operators, while others have appealed to the CFTC to prevent what they view as a problematic regulatory precedent.
A key criticism centers on the notion that prediction markets do not face the same stringent regulatory hurdles as their commercial and tribal sportsbook counterparts, which some argue leads to an uneven competitive environment.
