Underdog announced on Monday the purchase of the Aristotle Exchange’s designated contract market (DCM) and derivatives clearing organization (DCO) wings, allowing the legacy fantasy sports platform to expand with its own Commodity Futures Trading Commission (CFTC)-sanctioned prediction market.
Terms were not disclosed. Aristotle will retain control of PredictIt.
Underdog partnered with Crypto.com last September, when it became the first sports gaming operator to launch a prediction market in the United States. Possessing its own DCM and DCO allows the company to take its markets to bettors without partners.
“We look forward to working with the CFTC to offer an exchange that brings even more options to enjoy sports to our customers,” Jeremy Levine, Underdog’s CEO and co-founder, said in a release. “We’re in the early innings of what prediction markets can be, especially for sports fans. We’ll use this opportunity to bring the same relentless focus on innovation and experience that we’ve always brought to our customers. The reality is, prediction markets are primarily about sports and no company knows how to engage with sports fans and create products for sports fans better than Underdog.”
Underdog morphs after layoffs
The purchase and planned expansion comes less than a week after Underdog laid off more than 20% of its workforce as part of what employees were told was a corporate restructuring.
Underdog announced a $1.2 billion valuation in March as it pivoted away from fantasy sports and sports betting and toward prediction markets. It renounced its sports betting operator licenses in Missouri and North Carolina. In December, Arizona regulators announced they would revoke Underdog’s daily fantasy sports license, because it was offering what they deemed illegal sports betting via sports event contracts on its prediction market.
