Last month, seven sportsbook operators submitted applications for sports betting licenses, but one stood out: Underdog Sports.
Known primarily as a daily fantasy sports (DFS) platform, Underdog’s name appeared with the likes of FanDuel, DraftKings, and BetMGM when the applicants’ names were released.
Traditional sports betting is a new world for this DFS powerhouse, but this action in North Carolina could signal big things for the company.
Underdog co-founder Jeremy Levine has boldly claimed in the past that he’d never remain stagnant, and this foray into North Carolina online sports betting represents the brand’s most recent attempt to change the game.
Underdog is well-known in the DFS market
Underdog isn’t known for traditional sports betting; rather, it’s a DFS operator that is legal in many states across the country.
The difference between DFS games and traditional sports betting is often a little gray. DFS looks pretty similar to sports betting, specifically when a bettor would form a parlay. DFS brands such as Underdog allow users to pick fantasy winners based on proposition-style categories.
There’s no wagering on the outcome of a specific event. But users, for example, could place a stake on whether Carolina Panthers quarterback Bryce Young would throw for more than 1.5 touchdowns in a given game. Underdog offers a number of different categories, such as fantasy drafts, fantasy pick’em, and fantasy college pick’em events.
Its popularity has skyrocketed over the last few years. For example, in 2021, it hosted a fantasy tournament with $3.5 million in prizes for users. Fast forward to 2023, and the tournament reached its highest mark: $15 million in prizes.
Underdog vs. traditional sports betting
Traditional sportsbook operators aren’t fans of DFS sites like UnderDog because they feel as though it’s encroaching on their territory. In the world of DFS 2.0, fantasy players are often playing against the house instead of other players, and the fantasy games look nearly identical to prop bets.
Levine and others in this space have regularly argued that fantasy and sports betting have mutual exclusivity.
“The simple biggest misconception is the one FanDuel and DraftKings always try to spread that this is betting…The way almost every single sports betting law works is that it explicitly states if something is fantasy sports, if a contest is fantasy sports, it is therefore not betting…It can’t be both by letter of the law,” Levine told SBC Americas.
For some, including Dustin Gouker, a consultant for NCSharp’s parent company, Catena Media, the mutual exclusivity argument doesn’t hold water.
North Carolina’s stance on DFS games
In November, the North Carolina Lottery Commission opted to exclude previously outlined definitions of fantasy sports from its sports betting rules.
Original rules would have prohibited DFS operators like Underdog from offering products such as those “based on proposition wagering or contests that involve, result in, or have the effect of mimicking proposition wagering or other forms of sports wagering.”
DFS officials weren’t exactly thrilled with that language.
Tom Lee, an attorney representing PrizePicks (a similar DFS product to Underdog), called the proposed change flat-out “wrong.”
“PrizePicks is operated lawfully in North Carolina since 2020. We have hundreds of thousands of customers in this state. This proposed law says (t0) these North Carolinians ‘You’re doing something wrong. You’re doing something that you should not be allowed to do. This commission intends to stop it.’ And that respectfully is wrong.”
Right now, though, DFS 2.0 games are legal within North Carolina borders. It’s because there is no law that explicitly authorizes or rules that DFS is illegal. It’s a gray area.
Where else does Underdog have a sports betting license?
North Carolina isn’t the only state in which Underdog boasts a sports betting license. The operator owns sportsbook licenses in both Ohio and Colorado.
Levine doesn’t expect this growth to slow down at any point, and he’s primed to innovate when online sports betting launches in North Carolina. After news broke of Underdog’s sports betting application submission in North Carolina, Levine tweeted:
“Very excited about what we have coming in North Carolina. We’ve spent the last few years building our own technology so we can offer a new sports betting experience. Can’t wait to share it with the people of NC.”