Chief Legal Officer @underdog | Created & launched the first-ever CFTC-regulated sports prediction market (2024)
Joined October 2016
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Thrilled to announce that I’ve been named CLO of @Underdog! I am very proud to have created the first-ever CFTC-regulated sports prediction market in 2024 and to now double down on that with @jerlevine and an exceptional sports-native team.
With our full stack of CFTC licenses and a foundation built upon numerous first-in-time products, we’re perfectly positioned to redefine the largest category in the prediction market industry - sports.
Game on.
May 6
A prediction mkt industry move: @underdog has hired Nick Lundgren, who previously led crypto.com’s OG exchange. Lundgren helped launch trading of the very first sports prediction contract in the US in 2024, sparking the crazy growth in this space since.
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Team America 🇺🇸
💰 $25,000,000 GIVEAWAY 💰
If the US Men's National Team wins it all, we're sending 25 people $1,000,000!
Just make at least one entry between now and the end of the tournament to qualify 🇺🇸
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Nick | Underdog retweeted
Underdog will be fully integrated with the prediction market exchange it bought by the start of NFL season, according to a Bank of America report, including the presence of an affiliated trading arm.
Transitioning from Crypto(.)com-owned exchange.
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Locked in for what’s next 💪
Among prediction markets with flow outside of Kalshi, Underdog is one of the biggest, according to a recent Bank of America analyst report.
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May 27
Lots of confusion on predictions “data reporting”. Lemme clarify:
Notional does not equal handle. But volume equals amount of hard cash put up at the time of speculation.
Thank you 🙏
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May 17
Prediction Volume vs SB Handle. Substantially the same to a takers/bettors in terms of payout but very different to the platform provider. Example 👇
If taker/bettor bets 2c to win $1:
-prediction platform generates a small single digit % of the 2c in revenue (guaranteed, no payout risk)
-SB generates double digit % of the 2c in rev (not guaranteed, payout risk exists hence the double digit % rev and not 98%)
It’s why similar activity on its face is regulated entirely different. The business models and related incentives are polar opposites and we didn’t even acknowledge the capital necessary to facilitate the 98c portion!
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May 16
Betting on Sports in the US can be done on a uniform 50 state basis via federally regulated prediction markets and also on state regulated sportsbooks. As a country that primarily regulates based on activity and not speech, positioning a venue as a place to Bet on Sports is totally fine so long as it is either federally regulated or state regulated. The casual description of either venue as being a place to Bet on Sports is irrelevant to how its regulated. Lemme explain 🧵
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May 16
7/ Americans Betting on Sports on a nationwide, exchange model basis provides for very high entertainment value while simultaneously allowing for speculation on a specific sporting event occurring. This mechanism also creates a market where other (primarily large) participants can hedge exposure against that price discovery and liquidity while, or alternatively, speculating that the opposite outcome will occur. All commodity derivatives function this way.
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May 16
8/I’m obviously very long prediction markets and thankful the federal government continues to regulate the activity occurring rather than the way it’s described. I understand this disrupts a lot of legacy business models. But nationwide availability of and certainty in how markets are regulated are the keys to remaining the best place in the world to build 🇺🇸
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Nick | Underdog retweeted
May 5
I applaud today’s action by Arizona’s District Judge, which reaffirms what we all know: the @CFTC has full jurisdiction over prediction markets. We’ll keep pursuing action against any state that infringes on our statutory authority.
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Nick | Underdog retweeted
May 1
The @CFTC granted the Iowa Electronic Market no-action relief to host political event contracts in 1992. In 2004, the CFTC granted the first approval permitting a DCM to list binary options to North American Derivatives Exchange, Inc. Prediction markets are nothing new to the CFTC.
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Apr 16
Rule 40.11 enumerating "gaming" (among other specific things) as a specific category of underlying events is referring to the underlying event itself. Not other activities ancillary to the underlying event. The underlying event of a sports event contract is the sporting event itself. Sports existed before gambling on sports. Elections existed before gambling on elections. Weather existed before gambling on the weather.
Calling a sport contest "gaming" and inferring that the contest itself is gambling is not supported from a common sense standpoint and certainly not supported from a legal standpoint. My kid isn't participating in gambling when playing tee-ball and Sam Darnold isn't participating in gambling when playing in the Super Bowl.
Sportsbooks hanging a line and not immediately funding their payout on a time-price priority marketplace is not a swap and thus not subject to federal regulation. That's why sportsbook licensing (in some states) exists at the state level. And why sports prediction market licensing exists at the federal level.
If 40.11 was supposed to include underlying activity involving "sports", it would have specifically and expressly listed "sports" as an enumerated category. It doesn't.
Regardless, whether 40.11 applies to a CFTC-registered institution is EXCLUSIVELY the CFTC's jurisdiction and not the patchwork of possible interpretations of each of the 50 states.
The global sports industry is in the trillions of dollars. Saying there is no economic impact to the outcome or occurrence of specific sporting events is laughable.
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Nick | Underdog retweeted
Apr 10
Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent. I welcome the Court’s order today that sends a clear message: these cases raise important issues that must be resolved before states seek to enforce state laws against @CFTC registrants.
Any state that attempts to circumvent federal law will be met in court.
Read more ⬇️
cftc.gov/PressRoom/PressRele…
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Mar 13
Appreciate the official recognition as the first-ever DCM to be designated a prediction market by the @CFTC in their most recent Proposed Rulemaking!
We were also the first regulated sports prediction market in the country too 💪
cftc.gov/PressRoom/PressRele…
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