Prediction Market for Sports Takes Off: Crypto.com and Underdog Launch Partnership

Crypto.com and Underdog have partnered to launch a sports prediction market in 16 states, allowing fans to buy and sell outcomes of sporting events. The market will be hosted by Underdog and run through Crypto.com's Derivatives North America, a CFTC-registered exchange. This move comes as the field of prediction markets grows, with companies like Robinhood, Polymarket, and Kalshi already offering similar services.

Crypto.com and Underdog have announced a partnership to launch a sports prediction market in 16 U.S. states, marking a significant expansion in the prediction market space. The new platform, accessible through the Underdog app, will allow fans to buy and sell outcomes of sporting events, leveraging Crypto.com's Derivatives North America (CDNA), a CFTC-registered exchange, to ensure regulatory compliance [1].

The partnership comes as prediction markets gain traction, with companies like Robinhood, Polymarket, and Kalshi already offering similar services. Underdog, a rising star in the sports gaming industry, has been at the forefront of this trend, emphasizing the potential of prediction markets. "Prediction markets are one of the most exciting developments we’ve seen in a long time," said Underdog founder and CEO Jeremy Levine [2].

The new offering includes betting on outcomes in major sports leagues, such as the NFL, NBA, and college football. Travis McGhee, Managing Director, Global Head of Capital Markets at Crypto.com, noted that the partnership will provide more access to CDNA’s innovative offerings, enhancing the customer experience by integrating trading capabilities directly into Underdog’s app [2].

The launch is particularly notable for its regional focus, targeting states where traditional sports betting is not yet legal. This approach differentiates the product from existing prediction markets, which are typically available nationwide. By restricting the availability of sports event contracts to specific states, the companies aim to navigate the complex regulatory environment while catering to markets underserved by traditional sportsbooks [1].

Despite ongoing legal debates about the jurisdiction of sports prediction markets, the market is projected to grow significantly. Analysts estimate that the sports prediction market could generate $555 million in 2025, a modest figure compared to the projected $16 billion legal online sports betting market in 2024 [1].

The partnership between Underdog and Crypto.com is part of a broader trend of expansion in the prediction market space. Other platforms, including Kalshi, Robinhood, and Polymarket, are also vying for market share. Established sports betting operators like FanDuel and DraftKings are exploring similar opportunities, with FanDuel recently partnering with CME Group to develop new event-based contracts [1].

As the industry evolves, regulatory clarity will play a critical role in determining the long-term viability of these products. In the meantime, companies like Underdog and Crypto.com are betting on a future where prediction markets become a standard offering for sports fans across the country [1].

References:
[1] https://www.ainvest.com/news/underdog-crypto-bet-big-legal-gray-area-sports-prediction-markets-2509/
[2] https://crypto.news/crypto-com-and-underdog-launch-first-regulated-sports-prediction-market/