- New Drafts entries stop in Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio once Wednesday’s NFL opener begins.
- The seven states told Underdog it could not run prediction markets and hold fantasy licenses at the same time.
- Drafts already entered in those states will continue and pay out normally, but no new entries will be accepted.
- Underdog kept the prediction-market business IG Group agreed in July to buy for up to $1.3 billion.
NEW YORK – Underdog will end Drafts, its original fantasy game, in Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio the moment Wednesday’s NFL opener kicks off, co-founder and CEO Jeremy Levine said. The states told the company it could not offer prediction markets and keep running fantasy sports, and Underdog chose the prediction side.
The States Forced A Choice, And Fantasy Lost
Levine announced the shutdown in a post on X on Sept. 5. “Right after kickoff on Wednesday, we will be shutting down Drafts in seven states,” he wrote, ticking the seven off by postal abbreviation. Entries already live in those states will run to completion and pay out normally; new entries stop once the season’s first game begins.
The shutdown was not a product decision. Each of the seven states told Underdog that a company offering prediction-market contracts would not be permitted to also operate fantasy sports there, Levine said. The states “have taken a legal viewpoint we disagree with,” he wrote.
Drafts, a peer-to-peer best ball and snake-draft game, was the product Underdog Fantasy launched on at its 2020 founding. “It sucks. I love Drafts. It was the first game we ever launched,” Levine wrote, adding the company has “some ideas about how to get Drafts back to more customers.”
Why One Federal License Outweighed Seven State Ones
Underdog runs its own prediction-market exchange, licensed by the Commodity Futures Trading Commission, inside the same app that hosts its fantasy games. A fantasy license covers one state at a time; the federal registrations behind an event-contract exchange are not issued by any state, and that arrangement is what the seven regulators objected to.
The ultimatum produced the opposite of a retreat into state-licensed lanes. Underdog took the reverse of the path Kalshi has followed through the courts, where that exchange has sued state regulators to keep operating. Rather than litigate, Underdog handed back the fantasy side and left the seven states with no license over either product.
The company made that call while the CFTC weighs a proposed gaming rule that would set state bans aside for sports contracts, a change that would harden the federal ground Underdog just chose.
Event contracts trade under federal derivatives oversight, a category apart from the state-licensed gambling sites for USA players, and that split in oversight is what let one company be told yes by Washington and no by seven state capitals at once.
A $1.3 Billion Buyer Waits On The Other Side
The business Underdog protected is the one it has agreed to sell. IG Group, the London-listed trading firm, agreed on July 30 to acquire Underdog for total consideration of up to approximately $1.3 billion, a deal built around the prediction-market operation rather than the fantasy games the company started with.
The acquisition is expected to close in late 2026 or early 2027. The Drafts shutdown takes effect Wednesday night, when the NFL season’s first game kicks off.