Legal sports betting is still not offered in California or Texas, the country’s two most populous states—and in Florida, the third most-populous, it’s largely controlled by the Seminole Tribe. But a new venture from Crypto.com and fantasy-sports provider Underdog could open new doors for fans.
The companies announced Tuesday they are teaming up to launch a sports prediction market in 16 states. Fans will be able to buy and sell outcomes of sporting events, similar to how prediction markets are used to “bet” on elections, Bitcoin prices, or pop culture events. Odds shift with market movements rather than a bookmaker’s call.
“Prediction markets are one of the most exciting developments we’ve seen in a long time,” said Jeremy Levine, Underdog’s founder and CEO, in a statement. “While still new and evolving, one thing is clear—the future of prediction markets is going to be about sports.”
The field is already getting crowded. Robinhood, Polymarket, and Kalshi currently offer prediction markets, and FanDuel announced this month it would partner with CME Group to create sports event contracts.
Sports betting itself is a massive business. Last year, Americans wagered $150 billion in legal sportsbooks, a 22.2% jump from 2023, according to the American Gaming Association. The growth of online gambling has also brought more casual players into the fold.
Prediction markets, however, exist in a legal grey zone, with courts and the Commodity Futures Trading Commission (CFTC) still determining their status. Even so, sites continue to expand and develop loyal users.
Polymarket, one of the largest players, shut down its U.S. operations in 2022 over licensing issues and concerns about manipulation. It relaunched in July of this year after acquiring QCX, a CFTC-licensed derivatives exchange, and QC Clearing, a $112 million clearinghouse. Earlier this summer, the Justice Department and CFTC closed their investigations into the platform.
“Demand is greater than ever—not just in user growth and trading volume, but in how mainstream audiences are turning to Polymarket,” said founder and CEO Shayne Coplan at the time.
The Crypto.com–Underdog market will try to sidestep those problems by offering contracts through Crypto.com’s Derivatives North America, a CFTC-registered exchange. Underdog will host the platform and continue to run its fantasy sports business.
Users will be able to predict outcomes for the NFL, college football, the NBA, and Major League Baseball, with more leagues expected. The companies plan to first target states without legal sports betting, but described the platform as “federally compliant,” hinting at ambitions for nationwide expansion.
Citizens analyst Jordan Bender estimates the sports prediction market could generate $555 million in revenues for participating companies. That’s small compared to the $13.71 billion sportsbooks made last year, but still significant.
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