Underdog Prediction Markets: Underdog Exchange, States and Fees

Underdog’s prediction markets are called Prediction Picks: event contracts on game winners, spreads, totals and player stats inside the Underdog app, alongside its Pick’em fantasy game. Since 20 July 2026 many of those contracts trade on Underdog’s own CFTC-regulated exchange, Underdog Exchange (UDX), built on the licences of Aristotle Exchange, which Underdog acquired in March 2026. As of 25 October 2026 Prediction Picks are open to adults 18+ in 46 states plus Washington, DC, but not in Arizona, Michigan, Nevada or New York.

This page explains who regulates what, where it is legal, what it costs, how the published welcome offers work and how Prediction Picks differ from Pick’em. It is information only for US readers: no rating, no recommendation and no promo code of ours. For the wider legal background, see our US sports prediction markets guide. Help is available any time on 1-800-MY-RESET.

What is Underdog Exchange, and who regulates it?

Underdog Exchange is the trading name of Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc., a designated contract market and a derivatives clearing organisation regulated by the Commodity Futures Trading Commission (CFTC). Underdog bought the two licensed companies in March 2026 and launched UDX inside its app on 20 July 2026, according to Yogonet’s report of the launch. Underdog also owns an FCM, UDM, LLC, doing business as Underdog Predict.

Holding all three licences (exchange, clearing house and broker) made Underdog the first sports company with the full stack, as the launch coverage put it. Before UDX, Underdog had offered prediction markets since September 2025 through third-party exchanges. It still does: its help centre says Prediction Picks come from UDX, Kalshi or Crypto.com | Nadex, the app shows one market per game, and each position settles under the rules of the exchange it came from.

The separation protects money differently. Underdog says balances in your Underdog Predict futures account get CFTC segregation and bankruptcy protections, while Underdog Fantasy balances are subject to state rules but not CFTC or NFA oversight. UDX says member funds are held in segregated accounts at Banc of California.

The IG Group takeover

On 30 July 2026 IG Group, the UK-listed trading company, agreed to buy Underdog Sports Holdings, Inc. for up to about $1.3 billion: an enterprise value of about $1.1 billion upfront, paid partly in IG shares, plus an earnout of about $200 million. IG said Underdog was the third-largest US prediction-market venue by regulated volume, behind Kalshi and Robinhood, with about one million monthly active users. Completion was expected in late 2026 or early 2027, subject to US regulatory and antitrust approvals, and had not been announced as of 25 October 2026. IG says Underdog will keep its own brand and run as a standalone business.

Where are Underdog Prediction Picks legal, and what is the age limit?

Underdog’s help centre (10 September 2026) lists Prediction Picks in 46 states plus DC and excludes Arizona, Michigan, Nevada and New York, plus Ontario and all US territories. You must be 18 or older and physically in an eligible state; residency does not matter. Fourteen states get Prediction Picks but not Pick’em or Drafts: Connecticut, Hawaii, Idaho, Iowa, Louisiana, Maine, Maryland, Massachusetts, Montana, Mississippi, New Jersey, Ohio, Pennsylvania and Washington.

The excluded list is wider than Novig’s (Arizona, Michigan and Nevada) because it adds New York. Ohio and Tennessee remain eligible even though the 6th Circuit ruled on 25 September 2026 that both states may apply their gambling laws to Kalshi’s sports contracts. New Jersey’s Supreme Court petition on the same question (No. 26-299) was pending in late October 2026, so the map can change. If you travel into an ineligible state, open positions still settle, but you cannot place entries or cash out until you return.

How do Prediction Picks differ from Underdog Pick’em?

Pick’em pays a fixed multiplier on a lineup of Higher or Lower player picks. Prediction Picks are contracts priced between $0 and $1 that pay $1.00 each if correct. In states with both products, Underdog decides which one your entry becomes based on the picks you make: one pick with a prediction market, or two players from the same team, becomes a Prediction entry; picks that meet fantasy rules switch to a Fantasy entry automatically.

Underdog’s own example of the player rule: buy a contract at $0.60, the player is ruled out, and the exchange settles it at $0.58, so you get $0.58 back rather than a refund. Prediction Parlays combine only Prediction Picks and have no Flex; one wrong leg loses the whole parlay. Entries that mix both products are “Combos” and each part follows its own rules.

What fees does Underdog charge on prediction markets?

On UDX, the fee schedule effective 9 October 2026 charges takers Round(0.07 x C x P x (1 – P)), where C is the number of contracts and P the price, and charges makers Round(0.0175 x C x P x (1 – P)) when a resting order fills. Cancelling a resting order is free. Contracts routed to Kalshi or Nadex follow those exchanges’ fees, and Underdog’s help centre uses an illustrative fee of $0.02 per contract. The exact fee appears on your entry slip.

A worked example with our own numbers: you take 150 contracts at $0.45 on UDX. The fee is 0.07 x 150 x 0.45 x 0.55 = $2.60 (rounded to the cent). Total cost $67.50 plus $2.60, so $70.10. If you are right you receive $150.00, a profit of $79.90; your break-even probability moves from 45.0% to about 46.7%. Had you posted a resting order at $0.45 and been filled, the maker fee would be about $0.65.

What welcome offers does Underdog publish?

Underdog’s help article “Choose your welcome offer”, updated the week of 25 October 2026, lists three options. Play $10, get $50 back in bonus entries. Play $5, get five free Rips packs. Or take a Deposit Match: 25% up to $250 in states with prediction markets only, or 50% up to $1,000 in states with both prediction markets and fantasy. The homepage banner on the same date read “play $5, get $50 instantly” and showed Underdog’s own code, UDPROMO; the app shows the version that applies to you.

Deposit Matches carry a playthrough: you must play the deposit plus the bonus within 14 days or the bonus is forfeited. On a $400 deposit in a prediction-only state, the 25% match adds $100, so you would need $500 of qualifying play inside two weeks. In a state with both products, a $400 deposit earns a $200 match and $600 of required play. We hold no Underdog code and earn nothing from any offer.

Deposits, withdrawals and sign-up

For Prediction Picks Underdog accepts debit and credit cards (including Apple Pay) and Trustly; PayPal, Cash App and Venmo are not accepted for predictions. The minimum deposit is $10. Standard withdrawal processing takes 48 to 72 hours, after which PayPal typically arrives within about 48 hours and Trustly can take up to three business days.

1. Download the Underdog app (iOS or Android) or open the website and register.
2. Verify your identity and allow location access.
3. Open Prediction Picks and complete the regulatory questionnaire about your job, income and trading experience; it is one-time and cannot be skipped.
4. Accept the Underdog Predict terms, risk disclosure, futures account agreement and fee schedule.
5. Choose a welcome offer, deposit at least $10 with a card or Trustly, and make your first pick.

Underdog prediction markets: pros and cons

Underdog vs PrizePicks and Novig

Our PrizePicks guide covers the closest fantasy-plus-contracts rival, and our Novig guide covers the sports-only exchange with fee-free pre-game trades. Sportsbook brands now offer similar products too, including FanDuel Predicts. If you prefer state-licensed sportsbooks, see our US sports betting guide, and for limit-setting habits read our safer betting guide. None of these US products is open to readers outside the US; the operator’s site is underdogfantasy.com.

Frequently asked questions

Does Underdog have its own prediction market exchange?

Yes. Underdog Exchange (UDX) is Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc., which Underdog acquired in March 2026 and launched in its app on 20 July 2026. Some Prediction Picks still route to Kalshi or Crypto.com | Nadex.

In which states can you use Underdog Prediction Picks?

Underdog lists 46 states plus Washington, DC as of September 2026. Prediction Picks are not available in Arizona, Michigan, Nevada or New York, in Ontario, or in US territories.

How old do you need to be for Underdog prediction markets?

You must be 18 or older for Prediction Picks. Underdog’s fantasy games require 18+, or 19+ in Alabama and Nebraska and 21+ in Arizona and Virginia.

Is IG Group buying Underdog?

IG Group agreed on 30 July 2026 to acquire Underdog for up to about $1.3 billion. It expected completion in late 2026 or early 2027 subject to US regulatory approvals, and no completion had been announced by 25 October 2026.

What fees does Underdog Exchange charge?

Under the UDX fee schedule effective 9 October 2026, takers pay 0.07 x contracts x price x (1 – price) and makers pay 0.0175 x contracts x price x (1 – price), rounded to the cent. On 100 contracts at $0.50 that is $1.75 for a taker.