- Arizona is the first state to announce intentions to revoke the license of a sports betting operator, as Underdog has come under fire for their partnership with Crypto.com.
- Underdog never officially launched sports prediction markets in Arizona.
PHOENIX – Arizona is set to revoke the fantasy sports operator license of Underdog due to their partnership with Crypto.com, allowing Underdog to offer prediction markets on sporting events which bypass state laws.
The Arizona Department of Gaming initially informed Underdog of their decision on December 5th and Underdog has 30 days to request a notice of appeal or formal hearing.
Unprecedented Territory
Arizona is the first state to officially make a motion towards revoking a sports betting or fantasy sports license due to a company’s partnership with a prediction market, though many have taken legal action.
Prediction market sites such as Kalshi, Crypto.com, and Robinhood have all received cease-and-desist notices from multiple states, including Arizona, and have caused a major uproar amongst states due to the differences in legislation between traditional sports betting and prediction markets for sporting events.
Underdog began offering prediction markets in September of 2025 with Crypto.com, allowing users to trade and purchase “contracts” for sporting events with different age and tax laws than traditional sports betting.
Underdog Isn’t Backing Down
“Arizona regulators are trying to supersede federal law, which they cannot do. We will vigorously defend against this illegal action,” said general counsel for Underdog, Nicholas Green.
Underdog never officially offered its sports prediction markets in Arizona prior to the ADG’s decision, the board argued that “Underdog makes the sale of event contracts with Crypto plain on the same site on which it advertises other products to Arizona residents.”
Crypto.com took down their sports prediction markets in Arizona on December 2nd and subsequently took down their full prediction market offerings this past Friday, December 12th.
Underdog has announced their intentions to oppose the decision and file for an appeal. The license will be inactive during the appeal process unless granted a stay by the court.
What Does This Mean For Other States and Betting Sites?
If the state’s decision is upheld and Underdog’s license is officially revoked, legal sports betting sites in other states could be subject to similar circumstances, as it would set a precedent for disallowing prediction markets on traditional sports betting sites.
Additionally, it would continue to mount pressure on prediction markets offering sporting contracts, as the legality of such markets is actively being weighed and redefined.
In all likelihood, a ruling against Underdog would force legal betting sites in Arizona to discontinue their partnerships with prediction markets or run the risk of having their license revoked.
