Underdog Launches In-House Prediction Market Following Aristotle Exchange Acquisition

Underdog, an established provider in the daily fantasy sports sector, has taken a significant step in its corporate strategy. The company has integrated its own platform for prediction markets. This development is a direct result of the acquisition of Aristotle Exchange, an exchange already regulated by the CFTC, in early 2026. The new platform is wholly owned and operated by Underdog and is available directly within its existing application. This allows users to trade contracts on sports, culture, and other events.

Numbers and facts

Underdog was already the first operator to offer sports prediction markets in the fall of 2025, but it did so by utilizing third-party platforms such as Kalshi and Crypto.com. With the acquisition of Aristotle Exchange, Underdog now holds all necessary licenses to operate its own prediction markets. These include a CFTC-registered Designated Contract Market (DCM), a Derivatives Clearing Organization (DCO), and a Futures Commission Merchant (FCM). Based on data from July 16, 2026, Underdog has self-certified three baseball contracts, three basketball contracts, and one contract covering multiple sports. Jeremy Levine, CEO and co-founder of Underdog, emphasized the focus on sports fans.

"We're in the early innings of what prediction markets can be, especially for sports fans." - Jeremy Levine, CEO and co-founder of Underdog

The acquisition of Aristotle Exchange, according to Gambling Insider, occurred on March 10, 2026. Underdog thereby gained control of an exchange and clearinghouse regulated by the Commodity Futures Trading Commission (CFTC). The purchase enables Underdog to offer event contracts directly, rather than relying on third-party infrastructure. In December 2025, Underdog shut down its sports betting platform in North Carolina and withdrew its application for a sports betting license in Missouri, signaling a clear exit from the sports betting sector. The core daily fantasy sports (DFS) business was also restructured, with Pick ’em contests being pulled from several states and now offered in 15 markets, mostly without sports betting.

Background

The expansion into prediction markets is a strategic move for Underdog, as evidenced by comments from Jeremy Levine. He sees great potential in better serving sports fans in America. The company aims to go beyond traditional fantasy sports and offer innovative products to users.

"We started this company with a clear belief: there is so much more to be built for sports fans in America. Despite incredible changes in the U.S. market in recent years, through the twisting journey from fantasy sports to regulated sports betting to prediction markets, we still see an industry that far too often simply misses in serving sports fans. Now with our own exchange, we're going to unlock so much for more sports fans. Prediction markets are largely about sports, and Underdog is the best at sports." - Jeremy Levine, CEO and co-founder of Underdog

Interest in prediction markets is growing, and Underdog is not the only company pursuing this path. FanDuel also announced the launch of a sports prediction market platform in a joint venture with CME Group. DraftKings is also exploring such opportunities. However, this development raises regulatory questions, as some state regulators classify prediction markets as sports betting.

Why it matters for German players

For players in Germany, the developments at Underdog and the US prediction markets have no direct impact. The German State Treaty on Gambling 2021 (GlüStV 2021) sets the framework for online gambling in Germany. Prediction markets, such as those offered by Underdog, are currently not part of the regulated offerings in Germany. The GlüStV 2021 focuses on sports betting, online casino games, and online poker. Providers must meet strict German requirements and be listed on the whitelist of the Joint Gambling Authority of the Federal States (GGL). Germany has introduced very specific player protection measures. These include a stake limit of 1 Euro per spin for online slots and a monthly deposit limit of 1,000 Euros, which is monitored by the central LUGAS system. Such protection measures, as they apply to derivatives in the US via the CFTC, are firmly anchored in the German online gambling market, but for different product categories.

What it means for GGL-licensed casinos

For online casinos holding a GGL license, nothing changes due to Underdog's activities. These casinos must continue to adhere to applicable German laws. Their offerings are limited to the types of games permitted by the GlüStV 2021. Innovations in prediction markets, as Underdog is pursuing in the USA, are not relevant for GGL-licensed providers due to the current legal situation in Germany. The focus here is on compliance with player protection and the prevention of gambling addiction. The GGL strictly monitors compliance with the rules to ensure a safe and responsible gambling environment.