Underdog Fantasy Acquires Aristotle Exchange to Secure CFTC-Regulated Infrastructure for National Prediction Market Pivot

Underdog acquires Aristotle Exchange's DCM and DCO licenses, accelerating its pivot toward a national, CFTC-regulated sports prediction market platform.

By: AXL Media

Published: Mar 10, 2026, 11:25 AM EDT

Source: The information in this article was sourced from Gambling Insider

Strategic Infrastructure Acquisition

Underdog’s acquisition of Aristotle Exchange represents a fundamental shift in its business architecture. By taking control of the exchange’s DCM and DCO licenses, Underdog can now list, price, and clear its own event contracts. Previously, the company relied on infrastructure provided by Crypto.com to offer its "Pick 'em" style event contracts. Owning the clearinghouse and exchange directly allows Underdog to operate more like a financial exchange—similar to Kalshi—rather than a traditional sportsbook. This vertical integration is intended to provide greater control over liquidity and product design as the company targets sports fans with "early innings" prediction market products.

The Great Pivot: From Betting to Prediction Markets

The acquisition marks the conclusion of a turbulent few months for the operator. In December 2025, Underdog shuttered its North Carolina sports betting operations and withdrew its Missouri sportsbook application, effectively abandoning the state-by-state sports betting model. This was followed by the layoff of approximately 125 employees (over 20% of its staff) in late February 2026. CEO Jeremy Levine framed these moves as a "national reorientation," moving away from the complex legal landscape of state gambling laws toward the federal regulatory framework of commodities trading.

Industry-Wide Race for Exchange Licenses

Underdog is not alone in this strategy. A wave of recent acquisitions shows a broader trend of fintech and gambling giants securing regulated exchange licenses: