Underdog exits North Carolina sports betting to focus on prediction markets

• Underdog ceases sports betting operations in North Carolina on 16 December, ending its only active sportsbook market.
• Operator shifts strategy towards prediction markets following Crypto.com partnership in September.
• Daily fantasy sports offerings remain available in North Carolina and 40 other US states.

Underdog has closed its sports betting operations in North Carolina, the only US state where its sportsbook was active, as the operator pivots towards prediction markets.

The company informed customers that sports wagering would cease after 16 December, with all open bets to be settled by 17 December.

North Carolina regulators confirmed during a Regulated Gaming Committee meeting that Underdog contacted them before Thanksgiving to announce it was making a “business decision to cease offering sports wagering” in the state.

Futures settled as winners

Underdog is honouring all wagers placed before 17 December. Any futures bets that remain unsettled by that date will be paid out as wins. For example, customers holding futures wagers on teams mathematically eliminated from contention will still receive payouts.

Account withdrawals remain available at any time, as the Underdog app continues to operate daily fantasy sports (DFS) in North Carolina. Active bonus funds will remain available for use on fantasy games after the sports betting closure.

“We wanted to let you know about an upcoming change in North Carolina: Starting December 17, sports betting will no longer be available via the Underdog platform,” the company’s notification to customers stated.

“Don’t worry. Underdog isn’t going anywhere. You’ll still be able to make fantasy picks, play drafts, and enjoy everything else you love about the app using the same credentials as before.”

North Carolina regulators said they would post a consumer notice at ncgaming.gov, including an FAQ to help customers with outstanding wagers and withdrawals. The state lottery commission confirmed it will continue working with Underdog on the exit plan and regulatory obligations.

Strategic shift to prediction markets

The North Carolina exit follows Underdog’s decision to withdraw from Missouri days before the Show-Me State launched sports betting on 1 December. The operator held licences in both states but chose not to activate its Missouri authorisation, opting instead to focus on prediction markets.

Underdog launched prediction market offerings in September through a partnership with Crypto.com. The collaboration with Crypto.com | Derivatives North America (CDNA), a Commodity Futures Trading Commission-registered exchange, allows customers to trade sports event contracts across major leagues including the NFL, NBA, MLB and college football.

“Prediction markets are one of the most exciting developments we’ve seen in a long time,” said Jeremy Levine, founder and CEO of Underdog.

“While still new and evolving, one thing is clear – the future of prediction markets is going to be about sports – and no one does sports better than Underdog.”

The prediction market model differs from traditional sports betting. Users buy and sell contracts based on event outcomes, with prices updating in real-time according to market movements rather than fixed bookmaker odds. This enables Underdog to offer sports-related products in states where traditional sports betting remains illegal, including California and Texas.

Market implications

Underdog’s departure leaves North Carolina with seven online sportsbooks: FanDuel, DraftKings, BetMGM, Fanatics Sportsbook, Caesars, bet365, and theScore Bet.

The state does not release individual operator revenue, making Underdog’s market share unknown since online wagering launched in March 2024.

North Carolina sports betting generated a record handle of $814 million in November 2025, producing $16.7 million in tax revenue. The competitive landscape remains dominated by DraftKings and FanDuel, which command approximately two-thirds of the US market.

Smaller operators compete for single-digit market share, facing substantial customer-acquisition costs and state tax rates of around 18%.

Prediction markets offer an alternative model without state-level taxation or revenue sharing with market access partners. The structure operates under CFTC oversight at federal level, bypassing state gaming regulations and associated tax obligations.

Industry analyst Jordan Bender estimated sports event contracts could generate $555 million in 2025, representing approximately 3.5 per cent of the traditional sports betting market’s $16 billion in 2024 revenue.

Regulatory considerations

Underdog also holds a sports betting licence in Ohio, but has never activated it. Ohio’s Casino Control Commission warned that sports betting licensees partnering with prediction market operators could face licensing issues.

The regulatory treatment of prediction markets varies by jurisdiction. Whilst CFTC oversight provides federal legitimacy, several state regulators have issued cease-and-desist orders to different prediction platforms.

Underdog confirmed it plans to launch prediction market services in North Carolina “soon.”

The company currently offers prediction markets in 25 states and DFS products in 41 states, focusing resources on these areas rather than competing directly with established sportsbook operators.