Daily fantasy sports (DFS) firm Underdog and crypto exchange Crypto.com has announced it has teamed up to launch prediction markets in the US.

Per the agreement, the contracts will be accessible on Underdog’s app and powered by the New York-based firm’s technology, while Derivatives North America (CDNA), a Commodity Futures Trading Commission (CFTC)-licensed exchange and clearinghouse and affiliate of Crypto.com, will process the trades.

The deal will see Underdog become the first DFS platform or US gaming company to enter the prediction markets space, with NFL, college football, NBA, MLB and more available to trade.

As reported by CNBC, the rollout will cover 16 states and focus on those jurisdictions that don’t currently have legal sports betting.

The largest states by population that could fall into that category are Texas and California, while Florida’s Seminole Tribe has a monopoly on the legal sports betting market through its Hard Rock Bet app. 

Last month, Crypto.com appointed former Fanatics senior director of trading Chris Fargis as its new managing director of sports and prediction markets. 

On the Underdog announcement, Travis McGhee, managing director and global head of capital markets at Crypto.com, said: “We are thrilled to partner with Underdog to enhance the sports experience for customers nationwide with the ability to now trade using Underdog’s technology – all in one app.

“We were the first to offer sports events contracts, and our technology partnership with Underdog will provide more access to CDNA’s innovative offerings.” 

Underdog joins the likes of prediction markets Kalshi, Polymarket and retail financial trading app Robinbood in offering event contracts in the US.  

Crypto exchange Coinbase announced last month that it would also enter the space, while FanDuel has signed a joint venture with CME Group, although this only involves the Flutter-owned brand launching financial contracts rather than sports.

Reports from Front Office Sports in July also suggested that DraftKings is eyeing up a potential acquisition of CFTC-registered of Railbird Exchange. 

Underdog founder and CEO Jeremy Levine said: “Prediction markets are one of the most exciting developments we’ve seen in a long time. 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.” 

Underdog’s fantasy sports offering is available in 40 states, while the company also offers legal sports betting in North Carolina.

Meanwhile, prediction markets been met with opposition by gaming regulators across the country, who argue that it overlaps too closely with sports betting. 

In August, Robinhood filed a lawsuit against regulators in Nevada and New Jersey following attempts by both to block the rollout of the firm’s sports event contract offering.  

In the suit, Robinhood referenced Kalshi’s victories against the same regulators during its own legal disputes. 

However, Kalshi was unsuccessful in Maryland, where the state’s District Court rejected its request for a temporary injunction.  

Kalshi was also hit with a cease-and-desist order in Maryland in May.  

Last month, senior executives from the NFL advised players and staff against using platforms such as Kalshi and Robinhood as they deem them to be akin to sports betting.

Elsewhere, the CFTC and Department of Justice officially ended their investigation into Polymarket in July.

The post Underdog to roll out prediction markets in collaboration with Crypto.com first appeared on EGR Intel.