Missouri’s entry into the legal sports betting scene will begin on December 1, but one notable sportsbook, Underdog, will not be joining the launch. The company withdrew its application for an operating license earlier this month, marking a surprise turn of events for a brand that had heavily advertised in anticipation of the state’s rollout.

Underdog’s Withdrawal and Future Focus

Underdog, a major player in the daily fantasy sports (DFS) market, had been one of the first to apply for a sports betting license when Missouri opened its application process. Despite initial enthusiasm, the company has now chosen to refocus its efforts on markets that are less regulated. The Missouri Gaming Commission (MGC) confirmed Underdog’s decision to pull out, leaving eight licensed operators to proceed with the state’s launch.

As reported by Fox 2, Mike Leara, Executive Director of the MGC, shared insights on the decision, explaining that Underdog has shifted its attention to “prediction markets”, which are “not regulated at any level compared to what traditional sports betting is regulated, and obviously, there’s no tax on it.” These prediction markets, which Underdog has been expanding into, offer a less restrictive and untaxed environment, appealing to the company’s business model.

As a result of Underdog’s exit, the Missouri sports betting landscape will now feature the following eight licensed operators: DraftKings, Circa Sports, Caesars Sportsbook, BetMGM, Bet365, theScore Bet, Fanatics, and FanDuel.

Underdog had been actively building partnerships in Missouri as part of its bid to enter the sports betting market. The company secured a deal with Major League Baseball’s Kansas City Royals, intending to use the team’s branding for marketing and promotional activities. This partnership also included philanthropic initiatives. However, with Underdog now out of the picture, the Royals’ revenue-sharing license becomes available for other operators to potentially take advantage of.

The company also formed an agreement with the NHL’s St. Louis Blues, gaining the right to utilize the team’s intellectual property and content for marketing purposes. Despite these efforts, Underdog’s decision to step back from the market means that Missouri’s betting space will now see one less participant as the launch date nears.

Shifting Focus to Prediction Markets

Underdog’s pivot towards prediction markets over traditional sports betting may come as a surprise, given its early push into Missouri. The company has maintained a strong DFS presence in 41 states, and it will continue to offer these services, along with its sports betting operations in North Carolina — currently its only state with legal sports wagering.

Prediction markets, which Underdog has been expanding through a partnership with Crypto.com, allow participants to place bets on a variety of events without being subject to state-imposed gaming taxes. This has become an increasingly attractive option for the company, especially as it navigates the complexities of state-level sports betting regulations.

The MGC’s Leara suggested that Underdog’s shift away from sports betting towards less-regulated markets indicates a broader trend in the industry. Companies are seeking out tax-advantaged markets to avoid the high costs associated with state-run sports betting frameworks.

Despite Underdog’s departure, Missouri’s sports betting market will move forward with its planned launch on December 1. The eight remaining operators are set to begin accepting bets, and players across the state will have access to a range of sportsbooks. Notable operators such as Caesars, DraftKings, and BetMGM are expected to drive considerable interest, particularly after Missouri legalized sports betting earlier this year.