Underdog buys Aristotle exchange licenses to launch US sports prediction market

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Underdog is shifting deeper into prediction markets after shopping for two federally regulated change entities, a step that can permit the sports activities gaming firm to function its personal U.S. market for event-based contracts.

The New York-based agency said Monday (March 9) it acquired Aristotle Alternate DCM, Inc. and Aristotle Alternate DCO, Inc., each registered with the U.S. Commodity Futures Buying and selling Fee. Collectively, the licenses create the regulatory framework wanted to run a derivatives-style change.

Underdog CEO Jeremy Levine:

"The fact is, prediction markets are primarily about sports activities."

Good to have some precise fact on a Monday morning.

— Tom Nightingale (@TNightingaming) March 9, 2026

One entity holds approval as a Designated Contract Market, that means it will probably checklist and facilitate buying and selling in derivatives contracts. The opposite is registered as a Derivatives Clearing Group, which manages the clearing and settlement course of that ensures trades are finalized and obligations between events are met.

By bringing these capabilities below its personal umbrella, Underdog plans to construct a federally compliant prediction market platform the place customers can commerce contracts tied to sports activities outcomes and different real-world occasions.

Underdog expands into prediction markets through regulated Aristotle change

Underdog launched in 2020 and shortly gained traction within the U.S. sports activities gaming business by way of fantasy sports activities contests, media content material, and newer prediction-style merchandise. Final September, the corporate started providing entry to sports prediction markets inside its mobile app, however the system labored as a gateway that routed customers to outdoors exchanges relatively than operating {the marketplace} itself.

The newly acquired licenses open the door for Underdog to function its personal change infrastructure. As an alternative of counting on third events, the corporate would have the ability to checklist contracts straight and clear transactions by way of its personal regulated entities.

Jeremy Levine, CEO and co-founder of Underdog, mentioned the corporate plans to work intently with regulators because the change takes form.

“We sit up for working with the CFTC to supply an change that brings much more choices to take pleasure in sports activities to our prospects,” Levine mentioned.

He added that the agency sees prediction markets as a rising method for followers to have interaction with sports activities past conventional betting or fantasy contests.

“We’re within the early innings of what prediction markets could be, particularly for sports activities followers,” Levine mentioned. “We’ll use this chance to deliver the identical relentless concentrate on innovation and expertise that we’ve all the time dropped at our prospects. The fact is, prediction markets are primarily about sports activities and no firm is aware of how you can interact with sports activities followers and create merchandise for sports activities followers higher than Underdog.”

Prediction markets permit folks to purchase and promote contracts linked to the end result of real-world occasions. Costs transfer as merchants sign their expectations about whether or not one thing will occur. When structured as regulated derivatives contracts, the markets fall below federal commodities oversight relatively than conventional sports activities betting guidelines.

Underdog has already been increasing its presence within the area. The corporate lately partnered with Crypto.com to assist entry to sports-related prediction markets in a number of U.S. states by way of its app.

On the identical time, the corporate has been criticized for reshaping its operations because it grows. Underdog recently cut a portion of its workforce because it refocused assets on key areas together with regulated merchandise and long-term platform improvement.

Monetary phrases of the Aristotle acquisition weren’t disclosed.

Featured picture: Underdog

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