Underdog Relinquishes Fantasy Sports Licenses in Seven States to Maintain Prediction Market Operations
TL;DR — Underdog is surrendering fantasy sports licenses in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio, and Pennsylvania to continue CFTC-licensed prediction markets. The Drafts shutdown begins after NFL kickoff on September 5, 2026, with existing entries unaffected. The $1.3 billion IG Group acquisition supports deeper prediction market focus.
SCCG Take — The binary license choice reveals regulatory segmentation that forces product prioritization. Operators face concrete decisions on which lines to retain in restrictive states.
Underdog is voluntarily surrendering its fantasy sports licenses in seven states after regulators determined that offering prediction markets is incompatible with fantasy sports. The states are Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio, and Pennsylvania. The move covers all draft products, including best ball.
Jeremy Levine, Underdog founder, outlined the choice on X. “Those states have taken a legal viewpoint we disagree with. If we offer our CFTC-licensed products we cannot offer fantasy sports in those states. So we had to choose. We could keep our fantasy licenses in those states, or surrender the licenses and offer effectively our full experience, minus Drafts.” The shutdown takes effect Wednesday evening after NFL season kickoff. Existing entries continue as normal.
Levine addressed the impact directly. “It sucks. I love Drafts. It was the first game we ever launched and a big part of what built Underdog. Even though they don’t get anywhere near the usage of our other offerings, we still care deeply about them. And it pains me that we can’t do right by the Drafts community and offer the best experience possible to the most customers.” He noted ideas exist to restore access but said it remains too early to commit, adding he is optimistic about trying.
Regulatory Conflict Between Product Categories
The states’ legal view forces operators into an either-or decision on licenses. Underdog selected its CFTC-licensed prediction markets, launched in September 2025, over the fantasy format that built its initial business. This exposes a clear jurisdictional split on how regulators classify and permit the two offerings. The source material does not detail enforcement mechanisms or parallel actions in other states.
Resources and Direction After the IG Group Deal
Underdog agreed in July to be acquired by IG Group Holdings for $1.3 billion. The London-based firm supplies a larger financial and technology platform as Underdog expands in prediction markets. The acquisition, as reported by InGame, equips the operator with added capacity to absorb license losses in these seven jurisdictions while preserving core product lines. Levine’s statements leave open the possibility of future fantasy reinstatement but provide no timeline or method. The gap in usage between Drafts and newer offerings limits immediate revenue risk yet carries clear costs for the affected user base.
Reporting: InGame
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Regulators forced a binary choice; Underdog chose federally-licensed prediction markets over legacy fantasy sports in seven states.
This is the first major product bifurcation driven by state-federal regulatory clash. We're watching operators navigate incompatible licensing regimes—fantasy versus CFTC markets—that force real business choices. The IG Group $1.3 billion backing lets Underdog absorb the hit, but smaller players won't have that cushion when states draw similar lines.
- Seven states ruled fantasy sports and CFTC prediction markets incompatible under one license
- Underdog surrendered fantasy licenses in MD, MA, MI, MS, NJ, OH, PA to preserve prediction market operations
- $1.3 billion IG Group acquisition provides capital cushion for product prioritization and license exits
SCCG angle: SCCG helps clients navigate this exact regulatory segmentation: we connect operators to compliance counsel, state lobbying teams, and alternative market-entry structures when product lines collide across jurisdictions. We've placed regulatory advisors in 30+ markets—this is where our network turns conflict into strategy.
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