Underdog Self-Certifies First Contracts for In-House Prediction Market Exchange

Underdog has taken another concrete step toward operating its own fully independent prediction market, self-certifying the first slate of contracts for its in-house exchange with the Commodity Futures Trading Commission. The filing, submitted July 15, covers seven sports event-contract templates and signals that public trading on Underdog’s proprietary platform could begin imminently.

The move continues a rapid buildout that began in March, when Underdog acquired Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc. — a CFTC-registered Designated Contract Market and Derivatives Clearing Organization, respectively. Combined with its status as a registered Futures Commission Merchant, the acquisitions gave Underdog the complete federal license stack needed to run its own regulated exchange rather than routing trades through outside partners.

What the Self-Certified Contracts Cover

The seven newly certified templates, filed under the exchange’s operating name UDX, break down into three baseball templates, three basketball templates, and one broader template covering individual athletes, teams, or entities achieving a specified outcome. The sports-specific contracts track familiar structures — game winner, winning margin, and total score — while carrying a $1 notional value and trading in a range between $0.001 and $0.999. Position limits apply to both individual participants and market makers, with at least one liquidity provider already lined up to support trading once contracts go live.

Self-certification is a standard CFTC pathway that lets a Designated Contract Market list new products by attesting the contracts comply with the Commodity Exchange Act and CFTC regulations, without waiting on a formal Commission approval process. It places responsibility on the exchange itself to ensure ongoing compliance, with the CFTC retaining oversight through surveillance and rule-enforcement reviews. For Underdog, clearing that step is typically the last procedural hurdle before live testing and a full public launch.

From Intermediary to Full Operator

Underdog first entered the prediction market space last September, becoming the first major sports gaming operator to offer event contracts inside its app — initially as an intermediary working through outside exchanges, including Crypto.com and Kalshi. Since then, the company’s notional trading volume has climbed to roughly $6.5 billion, putting it third among U.S. operators behind only Kalshi and Robinhood.

Owning the exchange itself changes that relationship. Rather than relying on external platforms to originate, match, and settle contracts, Underdog will control the venue where at least a portion of its prediction-market business is built end to end. CEO Jeremy Levine confirmed the broader launch of the company’s proprietary exchange in a recent CNBC interview, calling it a major step in what Underdog can offer customers going forward. Underdog’s prediction market currently reaches roughly two-thirds of the country, while the company’s separate pick ’em daily fantasy contests remain geoblocked in more than a dozen jurisdictions.

What Comes Next

A separate rule amendment tied to a request-for-quote function on the exchange is still working through the CFTC’s standard 10-day review window, suggesting some planned features may roll out after the initial contract templates go live. But with the core sports contracts now certified and a market maker in place, Underdog appears positioned to move from filings to real trading in the near term — completing its transition from prediction-market participant to full-fledged operator of a federally regulated exchange.

The expansion arrives as competition in the prediction market space continues to intensify, with operators racing to lock down regulatory infrastructure and liquidity ahead of what many expect to be a defining stretch for the sector. Bettors weighing where to place event-contract action can compare current terms across platforms in prediction market promotions, and those tracking the space more broadly can find further explainers in the site’s how prediction markets work guide.