Underdog buys Aristotle exchange licenses to launch US sports prediction market

Underdog Makes a Bold Play: Acquires Regulated Exchange Licenses to Launch U.S. Sports Prediction Markets

In a major strategic move that could reshape the landscape of sports gaming, Underdog—the rapidly growing New York-based sports gaming company—has acquired two federally regulated exchange entities, paving the way for its own U.S. prediction market platform. This bold acquisition signals a significant expansion into the world of event-based trading and derivatives-style markets, marking a new chapter for the company as it aims to deepen fan engagement through innovative, regulated financial products tied to real-world sports outcomes.

The acquisition, announced on March 9, 2026, involves Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc., both registered with the U.S. Commodity Futures Trading Commission (CFTC). These licenses are crucial because they provide the regulatory framework necessary to operate a fully compliant derivatives-style exchange. One entity holds the designation as a Designated Contract Market (DCM), which allows it to list and facilitate trading in derivatives contracts. The other is registered as a Derivatives Clearing Organization (DCO), responsible for managing the clearing and settlement process—ensuring trades are finalized and obligations between parties are met.

By bringing these capabilities under its own umbrella, Underdog is poised to build a federally compliant prediction market platform. This move represents a significant step beyond its previous model, which routed users to external exchanges through its mobile app. Now, Underdog can list contracts directly and clear transactions through its own regulated entities, offering users a seamless, integrated experience.

Jeremy Levine, CEO and co-founder of Underdog, emphasized the company’s commitment to working closely with regulators as the exchange develops. “We look forward to working with the CFTC to offer an exchange that brings even more options to enjoy sports to our customers,” Levine said. He added that the company sees prediction markets as a growing way for fans to engage with sports beyond traditional betting or fantasy contests. “We’re in the early innings of what prediction markets can be, especially for sports fans,” Levine noted. “We’ll use this opportunity to bring the same relentless focus on innovation and experience that we’ve always brought to our customers. 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.”

Prediction markets allow people to buy and sell contracts linked to the outcome of real-world events. Prices move as traders signal their expectations about whether something will happen. When structured as regulated derivatives contracts, these markets fall under federal commodities oversight rather than traditional sports betting rules, providing a layer of consumer protection and regulatory clarity.

Underdog’s expansion into prediction markets comes at a time when the company is already making waves in the sports gaming industry. Launched in 2020, Underdog quickly gained traction through fantasy sports contests, media content, and newer prediction-style products. Last September, the company began offering access to sports prediction markets inside its mobile app, but this system worked as a gateway that routed users to outside exchanges rather than running the marketplace itself.

The company has also partnered with Crypto.com to support access to sports-related prediction markets in multiple U.S. states through its app, further expanding its reach. However, Underdog’s growth has not been without challenges. The company recently cut a portion of its workforce as it refocused resources on key areas including regulated products and long-term platform development. Financial terms of the Aristotle acquisition were not disclosed, but the strategic importance of the move is clear.

As Underdog prepares to launch its own prediction market platform, the company is positioning itself at the forefront of a new era in sports engagement. By combining its deep understanding of sports fans with the regulatory infrastructure needed to operate a compliant exchange, Underdog is betting that prediction markets will become a mainstream way for fans to interact with the games they love.

Tags: Underdog, prediction markets, sports betting, CFTC, Aristotle Exchange, derivatives, Designated Contract Market, Derivatives Clearing Organization, sports gaming, fantasy sports, Jeremy Levine, Crypto.com, regulated exchange, event-based contracts, sports outcomes, commodities oversight, U.S. prediction market, sports engagement, financial products, mobile app, workforce cuts, innovation, sports fans, trading contracts, federal compliance, clearing and settlement, market platform.

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