Crypto.com and Underdog are launching sports prediction markets in 16 U.S. states

Crypto.com and Underdog are launching sports prediction markets across 16 U.S. states where gambling on sports is still banned.

They’re building a new system that dodges gaming regulators by not calling it betting. Instead, it’s a tradeable contract based on game outcomes, and yes, it’s real money.

The structure is simple. Crypto.com’s U.S.-registered derivatives arm, CDNA, will provide the infrastructure. Underdog will run the front-end, where users actually place the trades, using its existing app.

There will be no sportsbooks, no odds from a bookmaker, and no need for state betting licenses. Everything runs on pricing from market activity alone.

The more people buy into an outcome, the more expensive it gets. If you sell at the right time, you profit. If your outcome wins and the market agrees, you profit. No one takes your bet, because it’s not a bet, it’s a contract.

Underdog moves first while others circle the space

Underdog is the first sports gaming platform to fully step into this kind of setup. It’s a market space that blends the mechanics of crypto, finance, and sports into a single tradeable product.

CEO Jeremy Levine said on CNBC’s Worldwide Exchange that “prediction markets are one of the most exciting developments we’ve seen in a long time,” and added, “While still new and evolving, one thing is clear; the future of prediction markets is going to be about sports, and no one does sports better than Underdog.”

Others are watching closely. Platforms like Robinhood, Kalshi, and Polymarket already offer event-based contracts tied to sports, but none have the kind of reach or existing user base that Underdog has in fantasy gaming.

On top of that, FanDuel, which is owned by Flutter, recently announced a partnership with CME Group to offer similar financial products. DraftKings boss Jason Robins has also expressed interest on CNBC.

What makes Underdog’s deal different is the combination of timing, size, and legal positioning. By using CDNA, Crypto.com’s North American derivatives platform, they’re tapping into a regulatory structure that already exists under the CFTC. That gives them a legal pathway that most traditional sportsbooks don’t have, especially in restricted states.

The map of the U.S. tells the story. California and Texas, the two most populous states, still don’t allow legal sports betting. Florida, which ranks third in population, has its gambling system locked up by the Seminole Tribe.

The tribe has exclusive rights to run casinos and sportsbooks through its Hard Rock brand. That leaves millions of potential users out of the betting market, and Underdog wants to give them something else to use.

Regulators, tribes, and lawsuits can’t stop the contracts… yet

This approach is likely to raise eyebrows at both the state and federal levels. The Commodities and Futures Trading Commission hasn’t decided how to classify these contracts yet. Courts are still wrestling with whether prediction markets count as gambling.

And questions are being raised about whether they violate state control over gaming laws or infringe on tribal rights under the Indian Gaming Regulatory Act.

But as of now, none of that is stopping the rollout. Citizens gaming analyst Jordan Bender, writing in April, said, “prediction markets are too loud to ignore.” Bender estimated the market could hit $555 million in 2025. For comparison, legal online sports betting raked in roughly $16 billion in 2024.

Crypto.com’s CDNA, being already registered with the CFTC, is at the center of the launch. Travis McGhee, managing director and global head of capital markets at Crypto.com, said: “We were the first to offer sports events contracts, and our technology partnership with Underdog will provide more access to CDNA’s innovative offerings.”

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