Underdog Sports will surrender its fantasy sports licences in seven US states as it prioritises its prediction market business amid a regulatory dispute with state authorities.
The company will withdraw its ‘Drafts’ fantasy product from Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio, founder and CEO Jeremy Levine said in an X post on 5 September.
Existing customers in those states will be allowed to complete drafts they have already entered. However, the company will stop accepting new drafts, and the product will be shut down once the first game of the 2026 NFL season begins on 9 September.
Levine said the decision followed positions taken by regulators in the seven states over Underdog’s prediction market operations. He said the company disagrees with those interpretations.
Underdog has secured approval from the Commodity Futures Trading Commission (CFTC) for its prediction market offering. According to Levine, regulators in the seven states told Underdog that it could not offer prediction markets while retaining its fantasy sports licences.
“Those states have taken a legal viewpoint we disagree with, so we had to choose,” he wrote on X. “We could keep our fantasy licences in those states, or surrender the licences and offer our full experience, minus Drafts effectively.”
Drafts community, I have some not fun news to share. Right after kickoff on Wednesday, we will be shutting down Drafts in seven states: MA, MD, MI, MS, NJ, PA and OH. Already entered drafts will continue as normal, but in those states you won’t be able to enter new drafts. If…
— Jeremy Levine (@JerLevine) September 5, 2026
“It sucks,” Levine said, noting that Drafts was the first game Underdog launched and had played a “big part” in building the company. “It pains me that we can’t do right by the Drafts community and offer the best experience possible to the most customers.”
He added that Underdog was working on plans to “get Drafts back to more customers”, although he said it was too early to commit to a specific solution.
Underdog has previously adjusted its strategy in favour of its prediction market products. The company announced in December last year that it would exit North Carolina’s sportsbook market as it shifted its focus towards fantasy sports and prediction markets.