Underdog has forged a significant partnership with Crypto.com, enabling it to offer wagers in states where legal sports betting remains elusive, most notably in Texas and California. This collaboration was announced just ahead of the upcoming football season, signaling a strategic move to blend Daily Fantasy Sports (DFS) with prediction markets.
By harnessing this partnership, Underdog will introduce Same Game Parlays (SGP), integrating Crypto.com’s federally licensed moneyline markets with Underdog’s fantasy prop markets. A recent example highlights the potential of this offering, where users can engage in a parlay for the highly anticipated season opener between the Dallas Cowboys and Philadelphia Eagles. In this scenario, a user correctly wagered on the Eagles to win while also predicting Dak Prescott’s combined rushing and passing yards to be below 255.5. The final leg of the parlay secured a win when Saquon Barkley recorded a rushing touchdown.
Currently, these combined markets are accessible in 16 states, including Texas and California, despite ongoing legislative struggles in these heavily populated areas. A broad range of other states benefiting from the partnership includes Alabama, Alaska, Arkansas, Georgia, Minnesota, Nebraska, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Utah, and Wisconsin.
During the announcement, Travis McGhee, Managing Director and Global Head of Capital Markets at Crypto.com, expressed enthusiasm for the collaboration. He emphasized its potential to enhance the sports experience for customers across the nation by integrating Underdog’s technologies into a single application. McGhee highlighted Crypto.com’s pioneering role in offering sports event contracts, stating that this partnership would further broaden access to innovative offerings.
This partnership highlights the unique advantage that Underdog holds in leveraging its existing fantasy markets to expand available options without necessitating additional regulatory filings. In contrast, other platforms navigating the prediction market space, such as Kalshi, are also broadening their offerings by self-certifying parlays alongside traditional betting options like moneylines and point spreads.
Nevertheless, a potential downside of this collaboration could be the decreased liquidity of the markets; for instance, the maximum “entry” is limited to $50. Ideally, the Crypto.com markets should align with other users’ predictions, while Underdog’s fantasy markets face limitations in certain jurisdictions.
As the landscape evolves, questions arise regarding the legality of these prediction markets, especially as both prediction markets and DFS platforms confront allegations of operating as unlicensed sports betting entities. Crypto.com has received cease-and-desist letters in five states, though it is not launching its partnership in any of those areas. Underdog has also faced challenges, particularly in states like New York, where it incurred a hefty fine of $17.5 million.
The legality of offering fantasy markets in these parlays remains a gray area. Should Underdog assume liability for the bets, it could face challenges from state authorities. Alternatively, if the bets are arranged on a peer-to-peer basis, states may still react swiftly with protests or cease-and-desist orders, signaling ongoing scrutiny of the evolving sports betting landscape.
