The Arizona Department of Gaming (ADG) has notified fantasy sports operator Underdog that it is revoking its licence due to its partnership with Crypto.com and its prediction market offerings across 24 U.S. states.
Earlier this month the Arizona Department of Gaming notified Underdog that its fantasy sports betting permit was being revoked following the September launch of prediction markets on the Underdog app.
That notice was issued at the weekend.
One of the largest Daily Fantasy Sports (DFS) and sports betting brands in the U.S., Underdog offers fantasy sports products in 41 states and has been licensed in Arizona since August 2023.
But now the ADG has determined: “By contracting with Crypto, benefitting from Crypto’s services, supporting Crypto’s interests, and providing financial support to Crypto, Underdog is aiding and abetting Crypto’s illegal conduct in Arizona and providing it with a façade of legitimacy.
“Moreover, and in the same fashion, Underdog’s relationship with Crypto is an association that poses a threat to the public interest of this State.
“As a result, the Department hereby provides Underdog notice of its intent to revoke fantasy sports contest operator license FS200008.”
Underdog, reportedly, has already appealed the ADG decision. It has 30-days in which to do so.
Hair of The Dog
Arizona is one of seven states–including Connecticut, Illinois, Massachusetts, Michigan, Nevada and Ohio–that have warned licence holders that if they dabble in prediction markets, they’ll be out on their ears and tails and locked out of the formal licensing regime.
But the Grand Canyon State is the first jurisdiction to enforce the sanction.
FanDuel and DraftKings–which between them account for 60 percent of legal online U.S. sports betting action–have also announced the imminent launch of their respective prediction market apps.
But while they have both voluntarily withdrawn from the representative American Gaming Association and operating in Nevada neither has had a licence revoked to date.
America’s iGaming industry is now watching closely to see if other states will follow Arizona’s lead – and asking whether this new division could create an unprecedented opportunity for a market‑order shake‑up in the world’s largest gambling jurisdiction.
Underdog Bites Back
This month Underdog withdrew its temporary sports betting licence in Missouri–less than a week before the launch of legalised sports betting in the state; although, according to the Missouri Gaming Commission (MGC), the company still retains its DFS permit.
MGC Executive Director Mike Leara believes Underdog has “chosen the side of prediction markets, which are unregulated and don’t tax”.
This is up for debate, but Underdog also withdrew sports betting operations in North Carolina last week and will cease operations in the so-called Tar Heel state from tomorrow, December 16.
Watch this space!
