Underdog said it is surrendering its daily fantasy sports licences in Pennsylvania and six other states after regulators concluded that its federally regulated prediction business could not coexist with its state-licensed fantasy offering. In Pennsylvania, fantasy contests including Best Ball Drafts will end on Sept. 10, but Prediction Picks will remain available and existing entries will settle normally.
The company is also pulling fantasy contests from Maryland, Massachusetts, Michigan, Mississippi, New Jersey and Ohio. Underdog said Mississippi will lose access a day earlier, on Sept. 9, while the other six states, including Pennsylvania, will see the change on Sept. 10.
Jeremy Levine, the founder and chief executive, said on X that the states had taken a legal view he disagreed with: if Underdog offers its CFTC-licensed products, it cannot offer fantasy sports in those states. He said the company had to choose between keeping the fantasy licences or surrendering them and offering its “full experience, minus Drafts.”
The move sits inside a wider fight over sports event contracts and who regulates them. Prediction-market operators argue those contracts fall under the Commodity Futures Trading Commission and federal commodities law, while state gaming regulators and attorneys general say they amount to wagering and cannot sidestep state gambling rules.
In a press release, the Pennsylvania Gaming Control Board said executive director Kevin F. O’Toole had warned Congress that sports prediction markets threaten the state’s carefully crafted sports wagering market and create a backdoor to legalized sports betting outside the state system. The board said it had already submitted written testimony to the CFTC in April 2025 on the problem of commingling futures markets and sports wagering.
Underdog began as a fantasy sports operator in 2020, acquired a CFTC-designated contract market and derivatives clearing organization in March, and launched its own federally licensed prediction exchange on July 18 after previously offering access through third-party exchanges. Levine said the company “hate[s] doing this” and would seek to restore Drafts if the regulatory environment changes.
