The Arizona Department of Gaming (ADG) has confirmed that it issued a stern statement to gambling firm Underdog about the future of the company’s operating license.
The watchdog has scrutinized Underdog’s links to prediction markets, following a host of other regulators in states nationwide that are clamping down on this form of wagering.
In a statement to ReadWrite, an ADG spokesperson said: “The Department has issued a Notice of Violation and Intent to Revoke to Fantasy Sports Licensee, Underdog, on December 5th, 2025. The Department issued a notice of intent based on the licensee’s continued partnership with an operator that the Department had previously ordered to cease certain activities in Arizona for conduct alleged to be unlawful, despite prior notice and warnings.
“The notice of intent is subject to the administrative appeal process, no final determination has been made, and the licensee remains authorized to operate pending the outcome of that process.”
Underdog license under serious scrutiny in Arizona
Sport Radar’s Robert Linnehan commented on the developments via X, saying, “The Arizona Department of Gaming notified @Underdog it intends to revoke its fantasy sports contest license in the state due to the company’s prediction market and sports event contract offerings.”
The Arizona Department of Gaming notified @Underdog it intends to revoke its fantasy sports contest license in the state due to the company's prediction market and sports event contract offerings.
Underdog can appeal the department's decision.
https://t.co/YRCy1yeJt5— RLinnehanSR (@RLinnehanSR) December 13, 2025
In a direct correspondence obtained by Sports Betting Dime, said Linnehan, the “ADG has determined that Underdog, by contracting with Crypto, benefitting from Crypto’s services, supporting Crypto’s interests, and providing financial support to Crypto, is aiding and abetting Crypto’s illegal conduct in Arizona and providing it with a façade of legitimacy.”
As we reported, prediction markets have dominated the betting headlines in 2025, with particular focus on battles between federal and state jurisdictions.
The Commodities Futures Trading Commission (CFTC), the federal regulator, and state gambling authorities have been at odds with one another on what red tape takes precedent.
Underdog announced a partnership with Crypto.com in September 2025, stating it would aggressively expand into states that do not currently offer sports wagering, and the betting brand brought 16 established Underdog licenses to the deal, including Arizona.
The statement from the ADG concluded, “Underdog’s relationship with Crypto is an association that poses a threat to the public interest of this State. As a result, the Department hereby provides Underdog notice of its intent to revoke fantasy sports contest operator license FS200008.”
Prediction markets join forces
In response to growing grumblings and penalties, such as the Arizona gambling regulator’s action against Underdog, a number of companies have teamed up.
The newly formed group of prediction market providers, named the Coalition for Prediction Markets and one executive board member of the coalition and president of North America and chief corporate affairs officer at Crypto.com, Matt David, said, “The U.S. is the biggest frontier for prediction markets, and the momentum we are seeing makes a unified industry voice not just important, but necessary.”
This coalition marks the first unified industry effort to protect access, strengthen integrity, and ensure prediction markets continue to serve the public good.
Today is just the beginning. A clearer, more trusted prediction market ecosystem benefits everyone.Learn more:…
— Coalition for Prediction Markets (@PredictAction) December 11, 2025
This is a crucial time for the prediction market, as the gold rush in territory yet to be claimed by CFTC-backed parties is either becoming limited or encountering stern resistance from traditional gambling licensing authorities.
This attempt by providers to unite through an established group could be seen as a defensive move amid rising scrutiny and legal battles across the country.
UPDATE: A statement from the Arizona Department of Gaming was included on December 17, 2025.
Featured image: Underdog
