Underdog has shut down its daily fantasy contests in seven states, choosing to protect its prediction-market business over its original product. On September 9 in Mississippi and September 10 in Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania, the company stopped offering fantasy contests, including its signature Best Ball drafts. Already-entered drafts will run to completion and pay out normally. The details here come from Underdog and reporting by RotoWire and Casino.org.
The trigger is a regulatory either-or. Those seven states have taken the position that a company cannot both hold a state daily-fantasy license and offer CFTC-regulated sports event contracts, the prediction-market product. Faced with the choice, Underdog kept the federal product and surrendered the fantasy licenses in those states. CEO Jeremy Levine put the bind plainly: "if we offer our CFTC-licensed products we cannot offer fantasy sports in those states." He has made clear he disagrees with the framing, but for now the company is complying rather than fighting it in these markets.
A pivot years in the making
This is the clearest sign yet of where Underdog is heading. The company built its name on Best Ball, arguably the best season-long draft product in daily fantasy, but over the past year it has moved aggressively into prediction markets, obtaining its own CFTC pathway and pushing event contracts into a national audience. In July, UK-listed IG Group agreed to acquire Underdog in a deal worth up to about $1.3 billion, a bet by a regulated financial firm on exactly this convergence of fantasy, trading, and betting. When the regulated financial product and the state-licensed game collided, the company sided with the former.
A note on our relationship with Underdog
We should be upfront: Underdog is a partner we work with on the daily fantasy side, and we cover it in our DFS section. We are reporting this the same way we would for any operator, because our readers in these states are directly affected. If you played Underdog fantasy in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio, or Pennsylvania, those contests are gone for now, and the practical alternatives are other daily-fantasy operators that have kept their state licenses. We have updated our Underdog review and DFS guide to reflect the smaller footprint.
Our take
This is the prediction-market boom biting the hand it grew from. For two years the story was that event contracts were a way to reach bettors where sportsbooks could not go; now the same product is forcing a company to abandon the state-licensed game that built it. The seven states drawing this line are not banning Underdog, they are refusing to let one company wear both hats, and Underdog has told them which hat it values more. For daily-fantasy players in those states the loss is real, especially for Best Ball regulars mid-season. For everyone else it is a signal: as prediction markets scale, expect more of these forced choices, and expect the companies making them to keep choosing the federal product. We will keep our DFS pages current as the map shifts, and we cover prediction markets themselves as what they are, a fast-growing product on unsettled legal ground.