Regulatory Barriers Force Underdog to Shut Drafts Fantasy Sports in Seven States
TL;DR — Underdog is ending Drafts fantasy sports in seven states including Massachusetts, New Jersey, and Pennsylvania due to conflicts with CFTC-regulated prediction markets. Jeremy Levine cited the product’s origins and expressed regret while hinting at future ideas for a return. The shift follows the firm’s acquisition of Aristotle Exchange.
SCCG Take — This choice reveals how regulatory barriers compel operators to narrow offerings as prediction markets scale. Clarity on product boundaries would reduce such forced trade-offs across states.
Underdog is shutting down its Drafts fantasy sports product in seven states at the start of the NFL season to focus on prediction markets. The company faced a direct conflict because operators of CFTC-regulated products cannot also offer fantasy sports in these jurisdictions. Submitted drafts will be settled, but no new entries will be permitted.
Jeremy Levine, founder and chief executive officer of Underdog, described the move as “not fun news.” The affected states are Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania, and Ohio. Levine apologized to impacted players and confirmed the decision prioritized the firm’s growing prediction markets business.
Levine made clear the company did not want to choose between its offerings. It could have retained fantasy sports by exiting prediction markets but elected the opposite course. As reported by GamblingNews, prediction markets have become an increasingly important product to Underdog.
The Weight of the Decision on Core Products
Levine stated: “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.”
The shutdown follows Underdog’s acquisition earlier this year of the Aristotle Exchange DCM and Aristotle Exchange DCO. Those purchases enabled the launch of event contracts and broader expansion in prediction markets. Levine noted his team had to make the choice regardless of its preferences.
Outlook for Drafts and Regulatory Trade-offs
Levine added: “I’m optimistic, and we’re definitely going to try. But until then, I don’t think there’s really anything I can say other than I’m sorry.” He indicated the company has ideas for potentially restoring access but said it was too early to commit to specifics.
This exit underscores the concrete limitations state rules impose on multi-product operators. Where regulatory lines divide CFTC-compliant offerings from fantasy sports, firms must pick a lane or reduce their footprint.
Reporting: GamblingNews
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
When regulators force a fork in the road, choose the product with the clearer runway and federal backing.
We've counseled dozens of operators through product conflicts like this. Underdog chose prediction markets over legacy fantasy because regulatory clarity and federal oversight beat state-by-state patchwork every time. The CFTC acquisition gave them a lane; state fantasy rules closed another. That trade-off will repeat across the industry.
- Underdog exits Drafts fantasy in MA, NJ, PA, OH, MD, MI, MS due to CFTC prediction market rules
- Decision follows Aristotle Exchange acquisition enabling event contracts under federal oversight
- Levine regrets losing original product but prioritizes scalable, federally regulated prediction markets
SCCG angle: SCCG has guided operators through CFTC compliance, state-by-state licensing strategy, and product portfolio decisions when regulatory lines collide. We connect clients to the right legal, compliance, and market-entry advisors who understand where federal and state authority overlap—and where they force hard choices like this one.
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