Underdog Withdraws Sports Betting License in Missouri

Less than a week before the Show Me State’s December 1, 2025, launch of its long-awaited sports betting industry, one of the largest DFS companies in the nation has drastically pivoted from entering the state’s mobile sports betting market and has voluntarily withdrawn its license.

Prediction Decision

After approximately 13 months of waiting, the launch of sports betting in Missouri is finally upon us. The industry had planned to go live in June 2025, utilizing emergency powers, but the recently installed Secretary of State, Denny Hoskins, rejected the request, citing that it did not fall under what Missouri law construed as an emergency.

Of course, Hoskins was the industry’s chief opponent, insisting that it be tied to the legalization of video lottery terminals (VLTs) that dot the state’s landscape of convenience stores, truck stops, and barrooms. When that did not happen, sports betting legislation became gridlocked in the legislature, forcing stakeholders, like the state’s professional sports teams, to get the question on the ballot in November 2024, where it was passed by a razor-thin margin.

But after all that time, Underdog has announced it is withdrawing its license before ever accepting a bet in Missouri. The surprising decision is tied to the company’s desire to pursue its path in the prediction market, where selling sports betting contracts, and not taking bets, has gained momentum.

Prediction Markets vs. State Regulators

The prediction market platforms have been decried by state gaming regulators across the nation, as they are governed by the Commodity Futures Trading Commission (CFTC) and do not have to abide by state laws, nor do they need to obtain a license from those gaming regulators, as they have argued that their governance comes from a federal authority, the CFTC, and that supersedes all state agencies’ rules and regulations.

Mike Leara, executive director of the Missouri Gaming Commission, stated, “They have decided to go to that market. It’s not regulated at any level compared to what traditional sports betting is regulated, and obviously, there’s no tax on it.”

The Legal Outlook

The most popular prediction market platform, Kalshi, has battled the state gaming authorities in federal court and has been allowed to operate in all 50 states under the umbrella of the CFTC. However, several other legal challenges have emerged, and this court battle is far from finished, with many industry insiders believing it will eventually reach the Supreme Court within two years for a declarative judgment.

What’s Next?

The CFTC has not gotten involved in the sports betting legal battle, and its nominee for chairperson, Michael Selig, has stated that the courts, and not the CFTC, will ultimately decide the legality of the prediction markets.

Underdog recently partnered with Crypto.com to launch its prediction market platform in September and currently operates in Missouri. This would likely become an acrimonious situation should Underdog have launched its sports betting arm in the Show Me State.

“Underdog withdrew their application for a sports wagering license, but they maintain their fantasy sports contest operator license in good standing,” explained another member of the Missouri Gaming Commission.

Nevada’s Warning and Industry Response

Sports betting industry powerhouses DraftKings and FanDuel withdrew their inactive licenses in Nevada after the Nevada Gaming Control Board (NGCB) issued a letter to its licensees stating the following:

“Engaging in unlawful sports wagering in another state or entering into a business relationship with another entity offering unlawful sports wagering in another state may call into question the good character and integrity of the licensee,” the letter states.

Both DraftKings and FanDuel have stated they will not launch their prediction platforms, DraftKings Predictions and FanDuel Predicts, in markets where online sports betting is legal.

Nevertheless, the specter of more sports betting platforms launching their own prediction market brands is very real, as it allows them to operate in all 50 states, including California and Texas, the two biggest markets in the nation, both of which have yet to legalize mobile sports betting.