Underdog Sports has confirmed it will surrender its fantasy sports licences in seven US states, choosing to protect its growing prediction market business instead.
Founder and CEO Jeremy Levine announced the decision in a post on X on 5 September, outlining the scale of the withdrawal.
The company will pull its ‘Drafts’ product from Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio with immediate effect.
Players who have already entered drafts in the affected states will be permitted to continue as normal without disruption to their existing contests.
However, Underdog will no longer accept new draft entries, with the service set to close immediately after the first game of the 2026 NFL season kicks off on 9 September.
Underdog has secured approval from the Commodity Futures Trading Commission (CFTC) for its prediction market product, making the licence a significant asset worth protecting.
Authorities in all seven states had informed Underdog that offering prediction market products would disqualify it from also operating fantasy sports in those markets simultaneously.
“Those states have taken a legal viewpoint we disagree with, so we had to choose,” Levine said on X. “We could keep our fantasy licences in those states, or surrender the licenses and offer effectively our full experience, minus Drafts.”
Levine acknowledged the decision was not taken lightly, given that fantasy sports has been central to Underdog’s identity since the company was founded in 2020.
The CEO added that Underdog was working on plans to “get Drafts back to more customers,” though cautioned it was “too early to commit to anything” on that front.
Levine struck a notably personal tone in his post, saying “I don’t think there’s really anything I can say other than I’m sorry” to affected users in the seven states.
Reaction in the comments beneath Levine’s post was mixed, with at least one user suggesting the company should be “dropping the stupid prediction markets shit” rather than abandoning fantasy sports.
The backlash reflects how deeply embedded fantasy sports remains in Underdog’s user base, particularly among players in states with established and competitive fantasy markets.
This is not the first instance of Underdog choosing to favour its newer prediction markets product over its more established fantasy sports offering, indicating a clear strategic direction for the company.
The prediction markets sector has attracted growing regulatory and commercial attention across the US, with operators increasingly viewing it as a high-value, high-growth segment worth defending aggressively.
