Underdog Self-Certifies First Contracts for In-House Exchange — What It Means for DFS Bettors

Underdog has self-certified the first set of contracts for its own in-house prediction market exchange, a regulatory filing that suggests the daily fantasy sports giant is close to launching real trading on its own platform. The filing, first reported by PredictionMarketPulse, is typically one of the final procedural steps before an exchange moves into live testing and then a full public launch.

At least one market maker is already lined up to trade on the newly certified contracts, though it isn’t clear yet whether that market maker is an outside firm or part of Underdog itself. Either way, the move is the clearest sign so far that Underdog intends to run its prediction markets business fully in-house rather than continuing to lean on outside exchange partners.

How Underdog Got Here

Underdog’s push into prediction markets didn’t happen overnight. The daily fantasy operator first added sports event contracts to its app last September through a partnership with Crypto.com Derivatives North America, a CFTC-registered exchange. That deal let Underdog users trade on sports outcomes across 16 states, positioning the DFS giant as the first major sports gaming operator to offer prediction markets alongside its fantasy contests.

The bigger shift came in March 2026, when Underdog acquired Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc. — giving the company its own Commodity Futures Trading Commission-registered Designated Contract Market and Derivatives Clearing Organization. That acquisition, similar to the strategy Robinhood and Polymarket used to fast-track their own prediction market ambitions, let Underdog skip the multi-year application process and build a federally compliant exchange under its own roof. Underdog has also secured Futures Commission Merchant status, giving it what the company describes as the first complete federal license stack for prediction markets held by a U.S. sports company.

What the New Contracts Cover

The self-certified filings reportedly include seven sports event-contract templates spanning baseball, basketball, and other outcome-based markets, covering game winners, winning margins, and total-score outcomes. There’s also a broader template allowing bets on individual athletes, teams, or events. The contracts trade on a $1 notional value between $0.001 and $0.999, with position limits set for both individual traders and market makers. Notably, the filings reportedly permit combining multiple event outcomes using AND/OR logic — letting Underdog offer parlay-style combinations without using the word “parlay,” a term tightly associated with regulated sportsbooks rather than CFTC-overseen exchanges.

That distinction matters. Because prediction markets fall under CFTC oversight rather than state gaming regulation, operators like Underdog have more flexibility in how they structure combination bets and where they can offer them. Underdog’s prediction markets are already live in more than 30 states, including California, Texas, and Georgia — states where traditional sports betting remains illegal. That footprint is a big part of the appeal for Underdog: rather than fighting state-by-state legislative battles to add a sportsbook, the company can offer sports-outcome trading nationally under one federal framework.

The timing lines up with Underdog’s broader business pivot over the past year. The company pulled its sports betting license application in Missouri just before that state’s sportsbook launch, shut down its lone traditional sportsbook in North Carolina, and cut more than 20% of its workforce in March as it reallocated resources toward prediction markets and AI. Underdog CEO Jeremy Levine has framed the shift as a deliberate move from a state-by-state regulatory framework to a single national platform overseen by the CFTC rather than dozens of individual state gaming commissions.

What It Means for DFS Bettors

For daily fantasy players who already use Underdog for player-prop-style contests, the self-certification signals that in-house sports contracts are coming soon directly inside the same app, rather than through the Crypto.com partnership Underdog has relied on since last fall. That could mean tighter integration between fantasy lineups and event-contract trading, and potentially better pricing or execution once Underdog controls its own exchange infrastructure end-to-end instead of routing trades through an outside clearinghouse.

It’s also part of a wider trend of DFS operators blurring the line between fantasy sports and prediction markets. Rival PrizePicks has made similar moves into the space, and both companies are betting that prediction markets — regulated federally rather than state-by-state — offer a more predictable long-term path than traditional sports betting licensing. Bettors who follow Underdog’s DFS product should expect more detail on pricing, available states, and contract types as the exchange moves from self-certification into live testing in the coming weeks.