Underdog will surrender its daily fantasy sports license in Michigan and six other states after Wednesday’s NFL kickoff, shutting down its Drafts contests there while allowing existing entries to run to completion. The company said it is choosing to keep its federally regulated prediction-market business rather than maintain state fantasy permissions.
The seven states are Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio. Customers who have already entered Drafts contests in those states will keep playing, but no new drafts will be offered after the cutoff.
Jeremy Levine, Underdog’s chief executive and founder, said the states had taken the view that if the company offers CFTC-licensed products, it cannot also offer fantasy sports there. He framed the choice as keeping the fantasy licenses or surrendering them and offering the rest of the platform, minus Drafts.
Drafts matters to the company because it was the first game Underdog ever launched and, Levine said, a big part of what built the business. He also said it was too early to give details on how the product might return to more customers.
The cutback comes after a fast build-out of prediction markets. Underdog acquired Aristotle Exchange DCM and Aristotle Exchange DCO in March, then launched its own federally regulated prediction exchange in July after earlier partnerships with Crypto.com and Kalshi.
In investor materials tied to IG Group’s acquisition of Underdog, prediction markets were shown rising from 14% of handle in 2025 to 54% by the first half of 2026, with a longer-term model putting them at about 99%.
The move lands in a wider fight over whether sports event contracts belong under federal commodities law or state gambling rules. Michigan’s gaming board said in 2023 that fantasy-contest operators may offer only athletic-event contests and may not mimic sports betting or prop bets, under the Fantasy Contests Consumer Protection Act.
