Dear IG Group,
You just agreed to spend up to $1.3 billion to acquire a company that I have used, abused, cursed and celebrated almost every day for the past four years. And I get it. You didn’t spend a billion dollars on Underdog because you love drafting the Puppy. You did so because, well, it’s a good investment. Prediction markets are no longer a fun side to the gambling industry; they are becoming the industry itself.
Underdog's past 10 months have been a rocket ship. It’s now the third-largest US prediction markets venue by regulated notional volume- trailing only Kalshi and Robinhood. Oh, and as of July 18th, it now has its own federally licensed prediction market exchange. So yeah, it seems like you picked the right horse (dog) to bet on.
My fear, which I know from talking to other badge-wearers is widely shared:: What happens to the app I love?
Your own announcement called the deal a “rapid convergence of trading, investing, and entertainment”. Fantastic. I love that framing. There’s no purer form of convergence than Fantasy Football-native markets built directly off Underdog’s own Best Ball scoring and contests. These markets shouldn’t be considered an afterthought next to crypto, politics or pop culture. It’s the one category where this acquisition’s entire thesis writes itself.
Kalshi and Polymarket are already feasting on the big three non-sports markets. For them, sports function as an acquisition channel; the other categories keep users trading. Per Steve Flanders (@SteveFlanders22 on X), of nearly one million Polymarket users whose first trade was sports-related, over half (55.2%) later traded a non-sports category. And yes, that’s the goal. Underdog should expect, and will probably celebrate, the same. That doesn’t mean sports should get ignored, though. If anything, it signals that Underdog should be sharpening the sports product specifically, to separate itself from the other two industry giants.
As it currently stands, the Fantasy Football prediction market landscape is thin. Polymarket offers a few basic markets, but liquidity is poor. At the time of writing, “Fantasy Football: Top WR” is only trading with an abysmal volume of $226.1K. LeBron alone pulled $245M+ between Kalshi and Polymarket after the Miami Heat press conference link fiasco. The low volume is not for lack of interest (Polymarket actually had a “top flex” market in 2024 that closed with over $24M in volume); it’s a packaging and distribution problem. Traders aren’t flocking to Kalshi and Polymarket for fantasy football: that game lives at Underdog. Fill the missing gap in the industry, and give us Fantasy-derived markets specific to Underdog contests and scoring.
In my humble opinion this is truly a perfect use case for prediction markets. Many of your users have thousands if not tens of thousands of exposure to fantasy football, and prediction markets can allow everyone to hedge their positions or double down with further conviction. Say someone ended up with an outsized number of drafts from the 1 slot and now sits with thousands of dollars on Jahmyr Gibbs. They can take the NO Gibbs markets to hedge that exposure. Or show further confidence in the pick and double-down.
The following is a wishlist of the markets I, and many others, would love to see and be able to trade. On behalf of all the drafters, ahem, traders on Underdog, build these markets. Build them for the community and for the business. Keep the culture happy. After all, culture is one of the main reasons Underdog became a billion-dollar company.
Wishlist Market #1 – Advance Rates
One of the most beloved data points Best Ball drafters argue about all offseason: Advance Rates. Simply put, it’s the percentage of total teams that rostered Player X and advanced to the second round of Best Ball Tournaments. It’s a simple, widely understood litmus test for whether a player was a good draft pick at cost. Since Best Ball Mania advances 2/12 in every league, our expected advance rate is just that: 2/12, or 16.67%.
The Market – Will Player X exceed the average advance rate in Best Ball Mania?
Wishlist Market #2 – Fantasy Finish Markets
The undisputed flagship market every site should have readily tradable the second the NFL draft ends. As referenced above, Polymarket has already taken a position here with their… nominally tradable markets on Fantasy Finishes but it’s just not finding any real liquidity. Underdog can own this category. Offer markets for every fantasy-relevant position (QB through TE) using Underdog scoring, with clear brackets (Top 5, Top 12, Top 24) in addition to the outright “Top Fantasy XX” markets. Volume drafters and casual players alike will show up in droves to take positions on their favorite players and biggest stands (not to mention a good hedging opportunity for those with big fades).
The Market – Will Player X finish inside or outside the Top 5, 12 & 24 at their respective positions?
Wishlist Market #3 – Boom Rates
The game theory behind every draft pick made in a BBM style tournament centers around the player’s weekly ceiling. The more usable boom weeks a player delivers, the more valuable he is.
Define “boom week” cleanly (maybe 20+ fantasy points for RB/WR/TE) and let the market price how often a player hits it.
The Market – Will Player X have 3+ boom weeks (20+ fantasy points)?
Wishlist Market #4 – Closing Line Value (CLV) Market
The ADP landscape on Underdog moves quickly. A 12th-round pick can climb multiple rounds off a single, strong camp report. Sharp drafters shrewdly draft early in the summer to identify those risers and pocket some positive CLV.[1]
Other sites already sell tools that track a drafter's CLV. Underdog should sell the market itself.
[1] They also draft early due to a pure, childlike excitement that cannot be contained for another two months
The Market – Live Underdog ADP: Will Player X finish higher or lower than his starting ADP?
Wishlist Market #5 – Drafter-Specific Finishes
I will be the first to admit, there is certainly more ambiguity and nuance regarding this market, but I think it has some legs. Every postseason, popular creators and high-volume drafters regularly flaunt their advance rates and big hits. Or, in the case of Davis Mattek, a popular Best Ball streamer, get roasted for the lack thereof. As annoying as that must be for Davis, it does prove people care about drafter performance, not just player performance. PredictQ’s own co-founder and BBM winner, Justin Herzig, already tested a version of this concept last year with a contest letting users draft from a pool of max-entry drafters. Underdog currently has creator-specific contests in the “Badge Bros Brawl” and “Flock Community”. Turning that interest into permanent markets is a natural extension.
There are a few clear ways to spin this, too. Markets could consist of: beating out the average advance rate, getting a team through to the finals, and X amount of teams finishing in the top 10,000 in regular season points. Even having a finals-specific market that allows traders who didn’t get a team through to still have some action in Week 17 seems plausible.
The Market – Week 17 one-week market: Who will win Best Ball Mania?
Wishlist Market #6 – Highest-Scoring Stack (weekly + yearly)
Stacking has become so engrained in the brains of drafters it’s no longer even considered a strategy – it’s practically a rule at this point. It’s been that way for years now. In fact, Mike Leone confirmed that over 87% of all drafters in BBMIII stacked to some degree, and that was three years ago. Markets on the highest-scoring stack (both weekly and full-season) would convert an activity the community already loves into a clean, high-engagement trading product. It’s an easy way to turn the daily contests that the culture enjoys on Underdog into a tradable market.
The Market – Will Stack X finish with the highest combined points this week?
I think you get the idea. These markets would be wildly successful and a great way to introduce prediction markets to your existing diehard customers. There are many ways to keep the spirit of Underdog alive, the loyal consumers satisfied and engaged, while still capitalizing on the Prediction Market paradigm shift. We look forward to watching what you build.