Underdog isn't the underdog anymore

Chapter 01 / 2009–2019

The fantasy seller

The protagonist of this story is Jeremy Levine, and his biography begins where a sports entrepreneur's biography ought to — in Cambridge, Massachusetts, ground zero of Boston sports fandom. An only child; his father a practicing criminal defense attorney; in a GGB Magazine profile Levine says it was his parents who showed him how passion for one's work fuses with life. His first market was sports cards: the kid deliberately bought up rookie cards of players he calculated would rise in value. The calculation, by his own admission, was shaky — he loaded up on Vince Carter instead of Kobe, and "the financial results would've been very different." Consider it the first entry in his betting record.

Next came the Beaver Country Day private school outside Boston and Syracuse University, where Levine discovered a major called entrepreneurship and, as he tells it, picked it without quite knowing what the word meant — he simply always wanted to build his own thing. Senior year culminated in a business-plan competition, and that same year he spotted a Wall Street Journal story about a company attempting to build a "sports stock market" — the very idea he had been carrying since the card-collecting days. His reaction was on-brand for this character: I'll do it better. The starting assets: no money, no connections, no ability to code, and rejections from every incubator he approached. So Levine posted a Craigslist ad looking for engineers — and found two. That is how, in 2009, in the attic of his parents' house, StarStreet was born: an exchange for "shares" of athletes he built with co-founder Nicolo Giorgi. A year later the startup went through TechStars Boston and took a check from SV Angel; the business model was a 4% cut of every trade.

The sports stock market never took off, but Levine read the wind in time: in 2011 StarStreet pivoted into the embryonic daily fantasy space, and in 2012 it launched both a salary-cap game and — mark this — the first pick'em contests in DFS history. Remember that too: the format that would become Underdog's main breadwinner a decade later was invented at Levine's very first company. For a stretch StarStreet ran neck and neck with the future giants, but capital decided the race: DraftKings raised big money, forced FanDuel to raise big money, and Levine, by his own admission, had the best product and none of the scaling or fundraising chops. In 2014, DraftKings bought StarStreet's assets. A modest exit, but an exit.

In 2015 Levine went in for round two with an app called DRAFT. While DraftKings and FanDuel slugged it out in salary-cap formats built for grinders, DRAFT bet on snake drafts and casual players — small contests, small prizes, the simplest possible mobile product. The company raised a $3.5 million Series A — and almost immediately got steamrolled: state attorneys general began declaring DFS illegal, one after another. Marketing plans went in the bin; part of the team was laid off. Levine later recalled writing candidly to investors that the odds of regulators killing real-money play were roughly 50/50. He chose not to fold.

What happened next belongs in a networking textbook. Spring 2017, an industry event. Levine meets Breon Corcoran — then the CEO of Paddy Power Betfair. From his US Bets interview:

"You guys should buy us," I said. "Yeah, we should," he said. Jeremy Levine, on meeting Breon Corcoran in 2017

Within weeks PPB closed the deal: $19 million upfront and up to $48 million all-in. The DRAFT team was promised resources and a long build together — and it was inside DRAFT, right after the acquisition, that Levine began turning into a product the format that would later become Underdog's foundation: best ball. An important caveat: the format already existed in niche season-long leagues (the best-known ancestor being MFL10s on MyFantasyLeague), but it was DRAFT, as Levine told US Bets, that first pulled it out of the niche and into a mass-market mobile product.

Then came the classic corporate whiplash. In August 2017 Corcoran left PPB. In May 2018 the US Supreme Court struck down PASPA, the federal ban on sports betting. Less than ten days later PPB bought FanDuel, and next to the new flagship little DRAFT became surplus: it was force-merged into FanDuel and shut down not long after. Levine walked away with money, the experience of two exits, and one very specific lesson: when you are a product inside somebody else's strategy, you are the first thing they switch off.

Chapter 02 / 2020–2022

Round two: the birth of Underdog

Underdog was founded in early 2020 — formally the worst moment in the history of the sports industry, with the world's games grinding to a halt. Levine assembled the company in Brooklyn together with co-founders Brandon Stakenborg and Trevor John, both veterans of his previous ventures, StarStreet and DRAFT (Sacra profile). The thesis was the same as DRAFT's, only more radical — not a niche app this time: the American fan is underserved, and whoever makes the games genuinely easy and fun will take the market without billion-dollar marketing budgets.

The cap table read like a marquee: Mark Cuban, Kevin Durant, Trae Young, Jared Goff, Adam Schefter and even The Chainsmokers; on the fund side, SV Angel — a believer in Levine since the StarStreet days — followed later by BlackRock and Acies. And one detail that reads like prophecy today: early private investors in Underdog reportedly included Breon Corcoran — the very man who had bought DRAFT from Levine in 2017. Hold that name; it returns in the finale.

It was no cruise: Levine himself has described the company crawling out of the "dead pool" three times — that state where the market has already mentally buried you. But the product stuck, word of mouth compounded, and in July 2022 Underdog raised a Series B: $35 million at a $485 million valuation. That same round produced the argument that explains the company's entire subsequent strategy: a typical American sportsbook was paying around $500 to acquire a single customer — Underdog was acquiring for a fraction of that.

Chapter 03 / Product

A religion called best ball

If you know Underdog only by the logo, here is the minimum viable explainer. Best ball is draft-and-forget fantasy: an 18-round snake draft, half-PPR scoring, and that is where the active management ends. No waivers, no trades, no weekly lineups — the system automatically builds the optimal lineup from your roster. All the skill is concentrated in a single event: the draft. Roster construction, stacks, correlations, planning for the playoff weeks — a pure, distilled game against the field.

The flagship tournament, Best Ball Mania, became to the format what the WSOP Main Event is to poker. The trend line speaks for itself: the champion of the first BBM, decided over the 2020 season, took home $200K; in BBM II first place was worth a million for the first time; BBM III in 2022 filled 451,200 entries against a $10 million pool; BBM IV raised the bar to a $15 million pool with $3 million up top; BBM V fit 672,672 teams.

A whole subculture grew up around the tournament: "Hot Best Ball Summer" as an official season of the year, roster screenshots instead of vacation stories, ADP simulators, analytics services, volume drafters with hundreds of teams and models of their own. The format is unapologetically skill-heavy — and it is precisely what raised the thinking, sharp audience that becomes the key to this entire story's endgame.

Now the awkward part — the economics. Grab a calculator: 672,672 entries at $25 is roughly $16.8 million in handle. The prize pool is $15 million. That leaves about $1.8 million of rake, a margin of around 11%. Analyst and Establish The Run co-founder Adam Levitan has cited exactly that figure: $1.8 million of rake is 0.15% of a $1.2 billion valuation. The conclusion is harsh but honest: best ball is not a business. Best ball is community, brand, and the cheapest loyal-customer factory in the industry. The money had to be made somewhere else.

Chapter 04 / Regulation

Pick'em: a hit on the edge of a foul

Somewhere else turned out to be pick'em — a product where the player takes higher/lower on individual athletes' stat lines and bundles the picks into parlays. Formally, fantasy. Functionally, something indistinguishable from a props parlay against the house. The irony is that Levine knew this format better than anyone on the market: the first pick'em contests in DFS history were launched by his own StarStreet back in 2012. The product became a smash at Underdog and PrizePicks — and, simultaneously, a red rag for licensed sportsbooks, which pay for licenses, taxes and compliance while somebody next door sells the same props under a DFS sign.

The crackdown began in 2023. Wyoming sent cease-and-desist letters to Underdog and PrizePicks back in July, with Maine joining in August. In September, Florida sent letters to Underdog, PrizePicks and Betr — tellingly, DraftKings and FanDuel received none. In October, New York adopted rules banning pick'em against the operator, and Michigan followed suit.

2024 finished the job: after Florida's second wave of orders, the operators left the state by March 1 — and then returned with a peer-to-peer version of the game, played against other players rather than the company. Underdog ran the same maneuver in Massachusetts and a string of other states. The bill for the most painful market came due in March 2025: a $17.5 million settlement with New York's gaming commission and the withdrawal of the draft and pick'em products from the state — with the regulator noting the company had operated in good faith.

What is telling is how all this ended for the business: while the lobby squeezed "DFS 2.0," Underdog launched in three new states through the turmoil and kept breaking download records — through the NFL season it and PrizePicks out-downloaded every betting app except FanDuel and DraftKings. And days after the New York settlement came the Series C: a $70 million first close led by Spark Capital at a $1.225 billion pre-money valuation — Spark, early money in Twitter, Slack and Discord, called it the largest investment by a top-tier Silicon Valley venture firm in sports gaming.

Chapter 05 / Media

The media machine: content instead of marketing

While competitors bought ads, Underdog built a TV network. The logic was direct: if a sportsbook pays hundreds of dollars per customer and your podcast delivers the same people for pennies, then content is your performance marketing. At its peak, Underdog's content network looked like a standalone media company: Gil's Arena with Gilbert Arenas, Cut To It with Steve Smith Sr., Rasheed Wallace's show, Jared Carrabis's baseball vertical, in-house NFL insider James Palmer, a partnership with Snapback, the licensed viral hit It Is What It Is from Cam'ron and Mase — even Bill Belichick made it into frame. After his exit from FOX, Skip Bayless landed here too, fronting the studio show The Arena: Gridiron.

But the heart of the machine wasn't the stars — it was the fantasy desk: the Josh Norris and Hayden Winks podcast, grown from zero to 170,000+ YouTube subscribers — the flagship product for that same sharp best-ball audience.

On July 6, 2026, the machine was switched off in a single day. Underdog shut down all of its original production — The Arena, The Arena: Gridiron, and the Norris & Winks show — citing a focus on the core business: prediction markets, pick'em and fantasy. Within a week, Norris and Winks were signed by Yahoo Sports — with Underdog itself helping the show relocate. Important context: this was no single company's whim but a trend — DraftKings and FanDuel had already wound down their own in-house networks.

The best explanation of why came from Adam Levitan in a July 7 thread, and his logic deserves the retelling. Good fantasy content raises a thinking audience capable of winning — and sportsbooks don't want that audience: it gets limited. The formula that actually works in sportsbook marketing is more cynical: the simplest possible content for the most casual possible player. For prediction markets, however, a sharp audience is the ideal customer: price-sensitive, willing to post liquidity, and sophisticated enough to grasp exchange mechanics. Accept that frame, and the content shutdown stops being a mystery — and becomes a symptom of a business model changing underneath it.

Chapter 06 / The pivot

From bookmaking to the exchange

Underdog did have a classical bookmaking track, for the record — and it ended tellingly fast. The company won a license in Ohio and never launched. Its only live sportsbook opened in North Carolina in March 2024. Then the late-2025 calendar reads like divorce papers served on an entire industry: in late November Underdog declined to launch its Missouri sportsbook days before the market opened, choosing predictions instead; on December 16 it stopped taking bets in North Carolina, and settled its unsettled futures as wins at the maximum payout — a classy parting gesture. Since December 17, 2025, Underdog has not run a sportsbook anywhere.

Because the real bet had already been placed. In September 2025 Underdog became the first gaming operator to put prediction markets inside its app — through a partnership with Crypto.com's exchange, live in 16 states at launch. A doubly audacious move: event contracts are regulated federally, through the CFTC, over the top of the states' patchwork — and the states hate it. In December 2025, Arizona declared Crypto.com's contracts illegal gambling and threatened to revoke Underdog's fantasy license, held since 2021.

Then the tempo rises. In February 2026 the company went through a painful cut — at least 125 people, over 20% of staff. Ten days later it announced the purchase of Aristotle Exchange DCM and DCO — a CFTC-registered designated contract market and clearing organization (the same rails that power PredictIt). On July 18, 2026, Underdog launched its own federally licensed prediction-market exchange — and, adding FCM status, became the first sports company with the complete license stack: exchange, clearing, broker.

The numbers at launch: roughly $6.5 billion of notional volume since September 2025 and third place in the US by regulated volume — behind Kalshi and Robinhood, ahead of Polymarket, DraftKings and FanDuel. The 2026 World Cup arrived as a gift: by H2 Gambling Capital's estimate, prediction markets took roughly 27% of the entire sports betting market during the tournament.

Chapter 07 / The deal

The circle closes

The IG deal opened Underdog's books to the public for the first time — and they explain the timing better than any insider whisper. Per IG's presentation: 2025 — $441.2 million of revenue with an EBITDA loss of $52.8 million; the first half of 2026 — already $250.1 million of revenue and a positive $59.6 million of EBITDA. Over the trailing twelve months: $466 million of revenue (+21%), more than 950,000 monthly active users (+39%), 11 million registered users, about 5 million depositors, and a 12-month payback on customer acquisition. The company sold not at peak hype, but at the first moment of proven unit economics. Beautiful.

Now the buyer. IG Group is a veteran of London retail trading: CFDs, derivatives, the US broker tastytrade, and a recent shopping list that includes Freetrade (£160 million, January 2025) and crypto platform Independent Reserve. The strategy IG spells out plainly in its release: the convergence of trading, investing and entertainment, with Underdog as the top of the funnel. A sports fan comes in for a call on the game, stays for the markets — and gradually graduates to derivatives on tastytrade. By IG's math, the acquisition more than doubles the group's US revenue and grows its active customer base by an order of magnitude.

And the cherry that justifies reading this far. The CEO of IG Group is Breon Corcoran. The same man who, as the head of Paddy Power Betfair in 2017, bought DRAFT from Jeremy Levine for $48 million — and then, per iGaming Business, personally invested in Underdog. Nine years later he is buying Levine's company a second time — now at twenty-seven times the price. In the deal statement Corcoran calls Underdog a "product-first team" that puts IG at the front of the markets' convergence; Levine answers in kind, promising an incredible leap in what the company can offer. The first tweet that ripped through the industry after the announcement pointed at exactly this thread: the man who bought Draft in 2017 now decides best ball's fate — and for the community, that reads as good news.

Chapter 08 / Outlook

What happens to best ball — and what it all means

The community's main question after the announcement was, predictably, not about multiples but about the games: does best ball survive inside a London financial group? There is no official answer. But there are three reasons not to panic. The first has been mentioned: the product's fate now rests with a man who once bought a company precisely for this format. The second is funnel arithmetic: BBM with its pocket-change rake was never a business, but it was the industry's best machine for producing loyal, solvent, mathematically literate customers — exactly the people a prediction exchange needs. Cutting that funnel to save costs is a decision that is hard to defend to your own CFO. The third came from Levitan on deal day: the overlap between fantasy sickos and prediction-market grinders is more than decent — keep the games.

The risks haven't gone anywhere. The regulatory status of sports event contracts is an open front: states keep fighting the federal CFTC framework, and the Arizona precedent shows that even adjacent licenses can get caught in the blast. The MIP targets — $400 million of EBITDA in 2028 against $59.6 million in the last half-year — assume growth you have to believe in very sincerely. And Underdog is, for the first time in its life, becoming part of a public company with quarters, guidance and shareholders — while Levitan noted in that same July thread: once professional investment money enters a company, making decisions simply because they're the right thing gets noticeably harder.

Step back, though, and the picture is still extraordinary. A man the market buried twice built a company from zero to $1.3 billion in six years — not by dumping bonuses or buying traffic, but through product, community, and the willingness to reinvent the business model three times over: fantasy → pick'em → exchange. The company was called Underdog because that is what it was. As of July 30, 2026, the word in the name is just a fine piece of irony.

Timeline: 17 years of one idea