Underdog Pulls Out of Missouri Market One Week before Launch

Underdog just made a significant statement on the future of their company. 

The operator has withdrawn its application to join the Missouri sports betting market, which is set to launch on December 1. Details were slim, but the operator’s decision stemmed from its new focus on sports prediction markets. Underdog, who only operate an online sportsbook in North Carolina, decided that the latest industry offered a better opportunity.

The Missouri Gaming Commission confirmed Underdog’s decision and delivered a mild rebuke of the controversial sports prediction industry.

“They have decided to go to that market,” MGC Executive Director Mike Leara told KTVI-YV in St. Louis. “It’s not regulated at any level compared to what traditional sports betting is regulated, and obviously, there’s no tax on it.”

Leara’s comments reflect growing frustration among sports betting regulators across the US. The lack of federal intervention over sports prediction markets has allowed the industry to operate in all 50 states, with almost no regulations or tax requirements. While there is strong bipartisan opposition to these controversial markets, no changes have been made.

While frustrated, the MGC confirmed they had not pressed the operator to choose between the two industries.

Underdog is the second sportsbook to pull out of the market ahead of its launch, joining the soon-to-be defunct ESPN Bet platform.

Prediction Markets Far From a Safe Bet

Underdog, DraftKings, and FanDuel have all entered the sports prediction space, and Fanatics appears eager to join them. Sportsbooks are attracted by the lack of regulations and lower operating costs, but there is growing concern that the industry's promised profits will not materialize.

One reason for that is unfolding in Nevada. Last month, the state won a case against Crypto.com, forcing the operator to shutter its platform within its borders. It was the first time an operator had been forced out, but it wouldn’t prove to be the last.

This week, a court rejected an injunction request from Kalshi against the Nevada Gaming Commission and Gaming Control Board. The decision means the operator must comply with the regulator’s request to exit the market. Kalshi has already appealed the decision, but may still be forced out as the case is reviewed.

The ruling could test a central Kalshi talking point, which insists that the CFTC requires Kalshi to operate in all 50 states, and that leaving even one state could have a devastating effect on the world’s economy. Unless an appeals court quickly comes to the operator’s aid, it appears both of those arguments will now be publicly tested.