Underdog to Exit Fantasy Sports in Seven States to Maintain CFTC-Licensed Prediction Offerings
TL;DR — Underdog will shut its Drafts fantasy product in seven US states on 10 September after regulators deemed it incompatible with CFTC-licensed prediction markets. The move follows the $1.1bn IG Group acquisition and leaves fantasy available in 33 states. Prediction markets, launched in September 2025, are now the clear priority.
SCCG Take — State regulators are forcing product-line choices that favor pure-play prediction operators. Hybrid platforms must weigh license retention against market access in an environment where prediction volume increasingly drives value.
US-based sports firm Underdog is surrendering its fantasy sports licenses in seven states to continue operating its prediction market products without restriction. The states determined that the two offerings are incompatible, forcing the company to choose between them.
Jeremy Levine, Underdog Founder and Chief Executive Officer, announced the shutdown of the Drafts product effective 10 September in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio and Pennsylvania. As reported by SBC News, Levine disagrees with the states’ legal viewpoint that offering CFTC-licensed prediction products bars fantasy sports in those jurisdictions.
Levine posted on X: “Drafts community, I have some not fun news to share. Right after kickoff on Wednesday, we will be shutting down Drafts in seven states: MA, MD, MI, MS, NJ, PA and OH. Already entered drafts will continue as normal, but in those states you won’t be able to enter new drafts. If you’re a drafter in one of those states, I’m really sorry.”
He added: “This sucks, but I want to explain why. 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.”
Strategic Shift Toward Prediction Markets
Underdog launched its prediction markets in September 2025 through a partnership with Crypto.com. Fantasy sports contests remain available in 33 US states plus Canada outside Ontario. The seven-state exit leaves the original Drafts product as a smaller part of the portfolio, even as Levine noted it was the first game launched and helped build the company.
Regulatory and Acquisition Context
The decision arrives after Underdog’s late July agreement to be acquired by UK-based FTSE 100 fintech IG Group in a $1.1bn deal. Over 60% of Underdog’s monthly active users are under 30, against IG Group’s average customer age of 42. Breon Corcoran, IG Group CEO, said at announcement: “Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full licence stack that together give us a differentiated position in US prediction markets.”
The UK Financial Conduct Authority is reassessing access to investment products this September, which could reopen retail binary options and create a pathway for prediction markets. Operators holding hybrid offerings will watch whether that regulatory stance reduces the binary choices currently imposed in certain US states.
Reporting: SBC News
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Regulators forced the choice; Underdog chose prediction volume and the IG acquirer's future over nostalgia in seven states.
We're watching state regulators cleave product lines in real time. Underdog walked away from fantasy in seven states—including New Jersey and Pennsylvania—to keep its CFTC prediction license live. That tells you where the volume and the $1.1bn IG Group valuation really sit. Hybrid models are under pressure.
- Drafts fantasy shuts 10 Sept in MA, MD, MI, MS, NJ, OH, PA; prediction markets stay
- $1.1bn IG Group acquisition closed in July; prediction launched Sept 2025 via Crypto.com
- Regulators ruled CFTC prediction license incompatible with fantasy sports in those seven states
SCCG angle: SCCG has guided operators through multi-product licensing conflicts and M&A integration across every regulated US market. When state rules force you to pick a lane, we map the revenue trade-offs, connect you to the right regulatory counsel, and help you pivot product roadmaps without losing momentum or valuation.
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