Underdog Gains CFTC Exchange License Through Aristotle Acquisition

Good to Know

• Underdog acquired Aristotle Exchange to operate a CFTC regulated event contract exchange.
• Ownership gives Underdog both a Designated Contract Market and a Derivatives Clearing Organization.
• Prediction markets tied to sports can operate across many states where traditional sportsbooks cannot.

Underdog has acquired Aristotle Exchange Inc., a platform approved by the Commodity Futures Trading Commission. Ownership of the exchange gives the company control of a federally regulated Designated Contract Market and a Derivatives Clearing Organization. Both approvals allow trading of event based contracts tied to real world outcomes such as sports results.

Jeremy Levine, chief executive officer and cofounder of Underdog, said the company intends to work with federal regulators as the platform grows.

“We look forward to working with the CFTC to offer an exchange that brings even more options to enjoy sports to our customers,” Jeremy Levine said in a statement. “We’re in the early innings of what prediction markets can be, especially for sports fans. We’ll use this opportunity to bring the same relentless focus on innovation and experience that we’ve always brought to our customers.”

Prediction markets allow users to trade contracts tied to future outcomes. In sports markets, traders can buy positions related to results similar to common sportsbook wagers such as point spreads or totals.

Underdog Focus Turns Toward Prediction Market Products

Underdog already entered the event contract space through a partnership with Crypto.com. That agreement introduced sports prediction markets to the company platform during September 2025.

Crypto.com supplied the contracts while Underdog delivered the consumer platform and audience of sports fans.

Ownership of Aristotle Exchange now gives Underdog the ability to list and manage its own event contracts rather than relying on a partner. Contracts traded on the exchange fall under oversight from the Commodity Futures Trading Commission.

Leadership views prediction markets as a natural fit for the company sports focused audience.

“The reality is, prediction markets are primarily about sports, and no company knows how to engage with sports fans and create products for sports fans better than Underdog,” Levine said.

Strategy Shift After Exit From Traditional Sports Betting

The purchase arrived after several major internal changes.

Underdog recently reduced its workforce by 125 employees, including about two thirds of staff in the fraud department. Leadership described the change as part of a transition toward prediction market products.

Levine said prediction market operations differ from standard sportsbook management.

Underdog also stepped away from the regulated sportsbook business during late 2025. The company declined to launch sports betting in Missouri when the market opened on December 1. Operations at the only sportsbook run by the company in North Carolina also shut down later that month.

Prediction markets operate under federal oversight rather than state gaming regulation. That structure allows event contract trading across a larger number of states.

Underdog began daily fantasy sports operations during 2022. Contests now run in more than 40 states in the United States along with Canada.

Integration of Crypto.com event contracts during 2025 gave Underdog access to prediction market users across 30 states. Markets included major jurisdictions such as California, Texas, and Georgia where regulated sports betting has not received approval.

Ownership of Aristotle Exchange now places Underdog directly inside the growing prediction market sector that blends financial trading and sports wagering.