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The revolution in private markets and private lending is setting the stage for a sweeping investor shift out of publicly traded stocks and into alternatives, according to Apollo Global CEO Marc Rowan.
Apollo, Blackstone and KKR together now have more than $2.6 trillion of assets under management, more than quadruple what they held a decade ago.
“I do think [investing] is broken,” Rowan said. “We had this notion 40 years ago that private was risky and public was safe. What if that’s just fundamentally wrong?”

A version of this article appeared in CNBC’s Inside Alts newsletter, a guide to the fast-growing world of alternative investments, from private equity and private credit to hedge funds and venture capital. Sign up to receive future editions, straight to your inbox.
The revolution in private markets and private lending is setting the stage for a sweeping investor shift out of publicly traded stocks and into alternatives, according to Apollo Global CEO Marc Rowan.

With the stock market increasingly driven by passive investing and indexing, and dominated by a handful of mega-tech stocks, investors seeking diversification will need to start turning to the rapidly expanding private markets, Rowan told CNBC.
“I do think [investing] is broken,” he said. “We had this notion 40 years ago that private was risky and public was safe. What if that’s just fundamentally wrong?”
Rowan and Apollo are at the forefront of a tectonic shift in the investing landscape, with the lines between public and private markets blurring and the burgeoning business of private credit funding a growing share of corporate America’s growth.

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A handful of private equity giants are now muscling out the banks and stock markets to make trillions of dollars of loans and open up new opportunities – and risks – for investors.
Apollo, Blackstone and KKR together now have more than $2.6 trillion of assets under management, more than quadruple what they held a decade ago. Apollo alone has $840 billion in assets, up from $40 billion in 2008, Rowan said.

“I’d like to attribute that to good management, but that wouldn’t be true,” Rowan said. “The answer is, there are just fundamental factors that are reshaping and growing private markets.”
Those factors start with the post-financial crisis regulations that curbed bank lending and allowed the private credit market to step in and provide long-term (and in many cases riskier) loans to large corporate borrowers.

Marc Rowan, chief executive officer of Apollo Global Management LLC, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, U.S., on Tuesday, April 5, 2022. Jeenah Moon/Bloomberg via Getty Images
Jeenah Moon | Bloomberg | Getty Images

Private credit as an investment class expanded, first among endowments, sovereign wealth funds and pensions and later among family offices and high-net-worth investors. With returns of up to 15% or more, hundreds of billions of dollars flowed into private credit funds.
At the same time, the effectiveness of the 60-40 portfolio of stocks and bonds has become outdated, Rowan said. The rise of exchange-traded funds and indexing means most investors do little research about the individual stocks they own. Even the indexes are now driven by a handful of mega-tech stocks. And as stocks and bonds have become more correlated, diversification needs to be redefined.
Rowan said the decline in the number of publicly traded companies – from 8,000 in the 1990s to about 4,000 today – means investors aren’t actually getting the investment benefits of the American economy.
“When we own the S&P 500, do we actually own the 500?” he said. “Ten stocks are now 40% of the index. We have lost the ability to really invest in a way that reflects the strength of the U.S. market, or, quite frankly, the strength of any market.”
Instead, he said, investors will start allocating more of their fixed income and their equities portfolios in private investments.
Private credit firms have about $450 billion available to invest, according to Preqin.
And today’s private credit loans often involve big, publicly traded companies. Meta Platforms, for instance, just secured $29 billion in financing from a group led by Blue Owl Capital and Pacific Investment Management Co. for a data center in Louisiana.
Air France, AB InBev, Intel and AT&T have all turned to Apollo for loans rather than traditional banks. Investors and companies are just waking up to the potential size of the market, Rowan said.
“If private credit is direct lending, leverage lending, below investment grade, it’s roughly a $1.5 trillion market,” he said. “If private credit is investment grade and the low investment grade, it’s a $40 trillion market today. Today, the vast majority of what we do is investment grade, and that always shocks people.”

While the risks of investing in private credit are well known, Rowan said they’re often misunderstood. Investing in a loan to Meta, for instance, shouldn’t be considered more risky than buying its stock through an index.
“What if private is both safe and risky, and public is both safe and risky, and they are just differing degrees of liquidity?” he said. “That’s the world I think we’re in.”
As alternatives start to move down the investing ladder, from institutions to family offices and eventually to retail investors, concerns are growing that retail investors would be putting a portion of their retirement savings into less liquid assets. After all, Harvard, Yale and other endowments are now struggling to sell a portion of their private equity and alternatives investments at discounts to raise needed cash.
Rowan said the rise of new funds, market makers and ETF products will provide increasing levels of liquidity as the private credit world matures. Yet, he said some level of illiquidity is important for higher returns.
“If you work with Apollo today and you want to be 100% private investment grade, every 30 days, you can take 100% of your money out,” he said. “As an investor, if you don’t have the capacity to bear 30 days of illiquidity, you should not be in private markets.”
Last month, the Trump administration issued an executive order that will start opening the door for more alternative investments and crypto in 401(k) plans. Rowan said the process will take time but that the experience of countries that allow more alternatives in national retirement plans – including Australia, Israel and Mexico – bodes well for U.S. investors.
Expanding access will also eventually lead to lower fees, stronger performance and more transparency in an investment segment that’s still widely seen as opaque.
“There’s no market in the world where transparency and opening up the market has not brought better access, lower prices and a weeding out of the poor managers,” he said. More

Constellation Brands cut its fiscal year guidance on Tuesday, citing a “challenging macroeconomic environment.”
The company also reported a decline in sales among Hispanic consumers, who it has said make up about half of its beer sales.
Constellation said it expects beer sales to fall by 2% to 4% during the fiscal year.

Cases of Mexican beer are seen at a supermarket in Houston, Texas, on July 15, 2025.
Ronaldo Schemidt | AFP | Getty Images

Constellation Brands on Tuesday slashed its full fiscal year outlook, saying a “challenging” economy is hitting its alcohol sales.
The company, home to popular brands like Modelo and Corona, had previously said in April that higher U.S. tariffs on beer would affect its sales and overall consumer demand. Constellation on Tuesday cut its comparable earnings per share outlook for its fiscal 2026 to a range of $11.30 to $11.60, down from $12.60 to $12.90.

The stock fell about 8% before the bell. Constellation is set to participate in the 2025 Barclays Global Consumer Staples Conference later on Tuesday.
“We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026,” CEO Bill Newlands said in a statement. “Over the last several months, high-end beer buy rates decelerated sequentially, as both trip frequency and spend per trip declined.”
Constellation anticipates organic net sales will fall 4% to 6%, down from a previous expectation of 1% growth to a 2% decline. That metric excludes the Svedka vodka brand and wine brands the company sold.
The company expects net beer sales will fall 2% to 4% due to lower volumes and additional tariff impacts. It previously anticipated sales would range from flat to up 3%. Constellation is also lowering its free cash flow estimate from $1.5 to $1.6 billion to $1.3 to $1.4 billion.
“We remain resolutely focused on continuing to execute against our strategic objectives, including driving distribution gains, disciplined innovation, and investing behind our brands,” Newlands said.

He also pointed to lower demand from Hispanic consumers, a trend the company has seen for several months. Newlands added that high-end beer sales for the population were “more pronounced than general market declines.”
The brewer previously said the pullback was caused by Hispanic consumers’ concerns about President Donald Trump’s immigration policies and potential job losses. Constellation has said Hispanic consumers in the U.S. account for about half of its beer sales.
The company has made strides to make up for its losses. In April, it announced it was repositioning its portfolio by divesting “mainstream” wines. Constellation also authorized a share repurchase program, which it said on Tuesday has led to $604 million in buybacks in the first half of the fiscal year under its three-year $4 billion share repurchase authorization. More

Amgen said it will spend more than $600 million to build a new research and development facility at its headquarters in Thousand Oaks, California.
It is the latest in a string of new U.S. investments by the pharmaceutical industry as President Donald Trump threatens to clamp down on the industry with tariffs on pharmaceuticals imported into the country.
Amgen said construction of the facility will begin in the third quarter of this year and will create hundreds of U.S. jobs. 

Building rendering of a new, state-of-the-art science and innovation center at Amgen’s global headquarters in Thousand Oaks, California.
Courtesy: Amgen

Amgen on Tuesday said it will spend more than $600 million to build a new research and development facility at its headquarters in Thousand Oaks, California, the latest in a string of new U.S. investments by the pharmaceutical industry. 
Drugmakers have been scrambling to boost their presence in the U.S. as President Donald Trump threatens to clamp down on the industry with tariffs on pharmaceuticals imported into the country. Trump has said those levies will incentivize companies to re-shore production at a time when domestic drug manufacturing has shrunk dramatically over the past decade. 

In a release, Amgen said construction of the facility will begin in the third quarter of this year and will create hundreds of U.S. jobs. 
Notably, the facility is not a manufacturing plant, but it will allow researchers, engineers and scientists to collaborate on finding next-generation drugs for patients with “the most serious diseases,” according to the company. Amgen said the building features “advanced automation and digital capabilities,” which will give scientists the necessary tools for that research and development. 
“At Amgen, we’re continuing to invest in the future of American science and innovation,” CEO Bob Bradway said in the release. “The center will empower our scientists with the tools and collaborative environment they need to shape the next era of scientific discovery and advance medicines that improve human health.”
Amgen said that since the passage of the Tax Cuts and Jobs Act of 2017, it has invested almost $5 billion in direct U.S. capital expenditures. In April, the company announced a $900 million expansion of its Ohio biotech manufacturing facility. In December, the drugmaker announced it would spend $1 billion to build a second drug substance plant in Holly Springs, North Carolina.
Those investments come after the U.S. Food and Drug Administration in August launched a program that aims to make it easier for companies to set up new drug manufacturing plants in the U.S. The White House estimates it can currently take five to 10 years to build new manufacturing capacity for pharmaceuticals, which it previously called “unacceptable from a national-security standpoint.”

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Blue Owl is backing about 100 athletes competing in professional tennis tournaments around the world this year.
It’s part of the firm’s strategy to raise brand awareness primarily among high-net-worth individuals, and part of a broader effort to bring alternative asset managers out of obscurity. 
Over the last decade or so, alternative asset managers have been delving into more retail-oriented investor channels — particularly through semi-liquid vehicles at lower price points and with less complexity.

Jelena Ostapenko of Latvia (R) argues with Taylor Townsend of the United States (L) following their Women’s Singles Second Round match on Day Four of the 2025 US Open at USTA Billie Jean King National Tennis Center on August 27, 2025 in the Flushing neighborhood of the Queens borough of New York City.
Clive Brunskill | Getty Images

At the U.S. Open last week, a terse exchange between players Taylor Townsend and Jelena Ostapenko went viral — and brought alternatives manager Blue Owl Capital further into the limelight.
Videos and photos of the exchange flooded social media. Ostapenko, the women’s world No. 26 from Latvia, pointed a finger and shouted insults at Townsend, who had won the second-round match but was later defeated in a competitive match against Barbora Krejčíková. As the camera panned in for viewers to get a closer look at the confrontation, careful observers could see a Blue Owl patch emblazoned on Townsend’s tennis dress.

The $284 billion asset management firm, which focuses largely on private credit and real estate, is not exactly the type of household name you might expect to see sponsoring a tennis player. 
Townsend is one of about 100 athletes competing in professional tennis tournaments around the world this year who are backed by Blue Owl. It’s part of the firm’s strategy to raise brand awareness primarily among high-net-worth individuals, and part of a broader effort to bring alternative asset managers out of obscurity. 

Taylor Townsend of the United States celebrates winning match point against Jelena Ostapenko of Latvia during their Women’s Singles Second Round match on Day Four of the 2025 US Open at USTA Billie Jean King National Tennis Center on August 27, 2025 in the Flushing neighborhood of the Queens borough of New York City.
Clive Brunskill | Getty Images

“This is a premier way to gain visibility with our stakeholders and drive curiosity to help them want to learn more about us,” said Suzanne Escousse, chief marketing officer at Blue Owl. “At the end of the day, they need to know who you are to call you when it counts.” 
Brand awareness is a relatively new concept for the 50-year-old world of alternative assets. Historically, the industry has opted for a much lower profile, shrouded in secrecy. Private equity and credit firms were originally funded by a small group of sophisticated investors. Operating behind closed doors gave them a mystique of exclusivity, reinforcing their scarcity value and prestige.
Before the Jumpstart Our Business Startups, or JOBS, Act in 2012, these firms couldn’t solicit outsiders, much less advertise. But the reticence evolved after that rule change and as the industry broadened its shareholder base.

There was an onslaught of initial public offerings from many of the big managers before and shortly after the financial crisis, which came with increased disclosure requirements and public market communication necessities. Recall, Blackstone in 2007, KKR in 2010, Apollo Global Management in 2011 and Carlyle in 2012. Blue Owl didn’t list until 2021 – formed through a SPAC merger.
Over the last decade or so, alternative asset managers have been delving into more retail-oriented investor channels — particularly through semi-liquid vehicles at lower price points and with less complexity. Through this year’s first quarter, assets in perpetual strategies from the top seven publicly traded managers totaled $1.7 trillion, up 21% year over year and representing 41% of this cohort’s total assets under management, according to PitchBook. 
Of course, alternatives firms have to walk a fine line to get their names out there without commoditizing the product. There’s a fundamental rub that’s talked about in every boardroom, according to a person with knowledge of these conversations, who asked to remain unnamed to speak about private discussions. The firms want to keep their institutional investors happy, while also capturing the growing share of retail investors, the person said, noting the phrase “velvet rope” is used constantly.
But the broadening of their investor base – from institutional investors to high-net-worth individuals to, eventually, 401(k)s – has ushered alternative asset managers out of the shadows. 
“The high-net-worth wealth community represents the biggest future opportunity for the private markets firms – that’s the ‘it girl,'” said Jennifer Prosek, founder of Prosek Partners, a marketing and communications firm that represents many alternative asset managers. “Every private markets firm has woken up to the fact that brand differentiation can move the needle.” 
Escousse joined Blue Owl in 2023 as the firm’s first chief marketing officer. Six months into her tenure, she completed a brand pulse survey and found that awareness was low even when compared with competitors, she said. 

Blue Owl Capital at the New York Stock Exchange, May 20, 2021.
Source: NYSE

“We started to look for unconventional sponsorship,” Escousse said. “We know that if you can align your firm with your stakeholders’ passion points, it’s more authentic. They’re more likely to do business with you.” 
She said the financial services industry had been “over-indexed” to two sports — tennis and golf. Blue Owl opted to go all in on tennis, beginning with last year’s U.S. Open. The strategy involved putting Blue Owl’s patch on the opponents of top-seeded players, who are likely to get the most viewership – at a lower price point than a traditional TV ad. 
The firm’s logo was displayed in prime time on Australian world No. 36 Alexei Popyrin, who beat Serbian great Novak Djokovic, currently seventh in the world, at the 2024 U.S. Open. In January, Blue Owl expanded its presence at all Grand Slam tournaments to be the exclusive financial services partner for professional tennis’ player patch program. At roughly $20,000 per patch, the program will cost Blue Owl about $2 million this year, in addition to the related marketing the firm does around professional tennis. 
And Blue Owl isn’t the only alternatives firm diving into consumer marketing.
Last year, Apollo Global and its retirement services affiliate, Athene, partnered with PGA Tour golfer Patrick Cantlay – the first brand partner for the firms. Blackstone, the world’s largest alternative asset manager with more than $1 trillion in AUM, has opted for traditional brand outreach through social media, video, email, events and advertising. 
“I think there’s been a shock by institutions that want to go to retail because the price of admission is high,” said Prosek. “It’s the emerging market of marketing.” More

McDonald’s is bringing back its Extra Value Meals as it tries to appeal to price-sensitive customers.
Customers will save 15% on the combo meals compared to buying the entree, fries and a drink separately.
CEO Chris Kempczinski told CNBC the company is seeing a “two-tiered economy” right now.

McDonald’s Meal Deal photographed in Washington, D.C., on Aug. 26, 2024.
Scott Suchman | The Washington Post | Getty Images

McDonald’s on Tuesday announced that it is expanding its value offerings in a bid to reach price-conscious diners.
Starting Monday, the fast-food giant is bringing back its Extra Value Meals, which were last promoted before the Covid-19 pandemic. Customers will save 15% on the combo meals compared with buying the entree, fries and a drink separately, the company said.

For more than a year, McDonald’s and its rivals have been relying on discounts and deals to lure customers back to their restaurants. Traffic to fast-food chains has been shrinking, fueled by a pullback in spending by low-income consumers. Last summer, McDonald’s rolled out its $5 value meal and extended the promotion past its initial run. It later added a buy one, get one for $1 deal to its menu as well.
The eight combo meals stretch across the McDonald’s menu and include a Sausage McMuffin with Egg; Sausage Egg and Cheese McGriddle; Egg McMuffin; Bacon, Egg and Cheese Biscuit; Big Mac; 10-piece Chicken McNuggets; any Quarter Pounder burger; and any McCrispy Sandwich.

To promote the expansion of its value menu, McDonald’s will sell a Sausage McMuffin with Egg with a hash brown and a small coffee for $5, and a Big Mac with medium fries and a medium soft drink for $8 for a limited time.
The new meals are meant to reach the customers who are not already using McDonald’s mobile app for deals or buying the chain’s existing value menu items, CEO Chris Kempczinski said on CNBC’s “Squawk Box” on Tuesday morning. That’s roughly half of the chain’s customer base.
“Particularly with lower and middle-income consumers, they’re feeling under a lot of pressure right now,” Kempczinski said. “What we see is it’s really a two-tier economy right now.”

On McDonald’s latest earnings conference call in early August, he again underlined the fast-food sector’s reliance on visits from low-income consumers.
“Reengaging the low-income consumer is critical, as they typically visit our restaurants more frequently than middle- and high-income consumers,” Kempczinski said.
McDonald’s has more deals planned for later this year, too. Starting in November, the chain will offer its Sausage, Egg and Cheese McGriddles for $5 and 10-piece Chicken McNuggets meals for $8.
“McDonald’s USA is laser-focused on delivering value and affordability for our customers, and I’m incredibly proud of how our franchisees and teams continue to step up to make it a reality,” McDonald’s U.S. President Joe Erlinger said in a statement Tuesday. More

Manhattan office leasing increased more than 20% in August compared with July to 3.7 million square feet, according to a new report from Colliers.
If demand continues at the same pace for the remainder of 2025, Manhattan’s yearly volume would exceed 40 million square feet for the first time since 2019.
At the end of August the average asking rent for Manhattan offices was $74.73 per square foot, an increase of 1% from July.

Alexander Spatari | Moment | Getty Images

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
Manhattan office leasing increased more than 20% in August compared with July to 3.7 million square feet and was well above the 10-year monthly average of 2.72 million square feet, according to a new report from Colliers. If demand continues at the same pace for the remainder of 2025, Manhattan’s yearly volume would exceed 40 million square feet for the first time since 2019.

Over the last 25 years, on average roughly 32 million to 33 million square feet were leased in a given year. In 2024, Manhattan returned to that average for the first time since the pandemic began in 2020.
“That is a very strong market in terms of demand,” said Franklin Wallach, executive managing director for research and business development at Colliers.
“Certainly a return to office is a part of that — and low unemployment. You also have a reemergence of some key industries that were a little quieter during the pandemic years, not that they ever went away, but tech in particular comes to mind,” Wallach said. 
He pointed to over a million square feet of Manhattan office leasing by Amazon alone just since November 2024. That came in the form of leases, subleases and enterprise agreements with coworking spaces like WeWork, in addition to building purchases.

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The legal sector is another prime example. In 2023 Manhattan saw a record year of law firm leasing activity – more than 4 million square feet. Last year was slightly lower, but still above 2019 levels. 

“You also very much had flight to quality. New construction such as One Vanderbilt, Hudson Yards, Manhattan West, where availability has become very tight in that new product,” said Wallach.
As a result, the supply, known as the “availability rate,” of newer office space, has dropped to 6.7% compared with the rate for older, prewar buildings, at 17%. Manhattan’s overall availability rate fell to 15%, the lowest since January 2021 and the 18th consecutive month that its availability rate remained stable or tightened.
Of Manhattan’s three office subsectors, the availability rate tightened in Midtown, Midtown South and Manhattan overall during August while remaining stable downtown.
At the end of August the average asking rent for Manhattan offices was $74.73 per square foot, an increase of 1% from July. Compared with March 2020, however, rents are still 6% lower. 
“If you have a 1% increase during the month, that is a significant movement. Some of that is above-average-priced space coming onto the market, but we’ve also begun to see more landlords reprice their existing space higher,” said Wallach. 
Office conversions are also having a major impact on both supply and pricing. Colliers tracked nearly 9 million square feet of office space removed from the Manhattan market over the last four years. That hits not just supply, but also demand and prices. 
“We’ve seen, on average, that for every million square feet of office building slated for conversion, on average 270,000 square feet of leasing activity occurs because of the tenants coming out of that building and relocating to another building,” said Wallach. 
In addition, the buildings being converted likely had below-average-priced space, including sublet space which is also lower priced. Their removal, therefore, increases the average price of the overall Manhattan market.  More

Kraft Heinz will split into two companies.
The deal will reverse much of the $46 billion merger envisioned by Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital.
Shares of Kraft Heinz have slid roughly 60% since the merger closed in 2015.

In this photo illustration, Kraft and Heinz products are shown on March 25, 2015 in Chicago, Illinois.
Getty Images

Kraft Heinz will split into two companies, reversing much of the blockbuster $46 billion merger from a decade ago that created one of the biggest food companies in the world.
The first of the two new companies, which are not yet named, will primarily include shelf-stable meals and will be home to brands such as Heinz, Philadelphia and Kraft mac and cheese. Kraft Heinz said that company on its own would have $15.4 billion in 2024 net sales, and approximately 75% of those sales would come from sauces, spreads and seasonings.

Kraft Heinz said the second new company would be a “scaled portfolio of North America staples” and would include items such as Oscar Mayer, Kraft singles and Lunchables. That company will have approximately $10.4 billion in 2024 net sales.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” said Miguel Patricio, executive chair of the board for Kraft Heinz. “By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value.”
The transaction is expected to close in the second half of 2026.
The deal that created Kraft Heinz in 2015 was the brainchild of Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital. While investors originally cheered the merger, the luster began to fade as the combined company’s U.S. sales faltered.
Then came a disclosure in February 2019 that Kraft Heinz had received a subpoena from the Securities and Exchange Commission related to its accounting policies and internal controls. The company also slashed its dividend by 36% and took a $15.4 billion write-down on Kraft and Oscar Mayer, two of its biggest brands. Days later, Buffett told CNBC that Berkshire Hathaway had overpaid for Kraft.

A leadership shakeup and more write-downs of iconic brands, like Maxwell House and Velveeta, followed. Kraft Heinz also began divesting some of its businesses, selling off most of its cheese unit to French dairy giant Lactalis and its nuts division, including the Planters brand, to Hormel.
In recent quarters, the company has invested in boosting some of its brands, like Lunchables and Capri Sun. Despite turnaround efforts, shares of Kraft Heinz have slid roughly 60% since the merger closed in 2015.
Current Kraft Heinz CEO Carlos Abrams-Rivera will serve as chief executive of the new grocery staples-focused company after the separation. Kraft Heinz’s board has hired an executive search firm to find a CEO for the other company.
The split comes as more big food companies pursue breakups to divest from slower-growth categories and impress investors again.
In August, Keurig Dr Pepper announced that it will undo the 2018 deal that merged a coffee company with the 7 Up owner. Keurig Dr Pepper plans to separate after it closes its $18 billion acquisition of Dutch coffee company JDE Peet’s. And two years ago, Kellogg spun off its snacks business into Kellanova and renamed itself as WK Kellogg.
— CNBC’s Michele Luhn contributed to this report. More

Cryptocurrency trading platform Crypto.com and Underdog Sports, a fantasy sports and gaming company, are partnering to offer sports prediction markets in 16 states.
Underdog is the first sports gaming operator to offer sports prediction trades.

Crypto.com logo displayed on a phone screen with representation of cryptocurrencies.
Nurphoto | Nurphoto | Getty Images

Fantasy and sports gaming operator Underdog is partnering with Crypto.com to offer sports prediction markets in 16 states, mostly focused on where legal sports betting has not been adopted, the companies told CNBC on Tuesday.
“Prediction markets are one of the most exciting developments we’ve seen in a long time, ” Underdog founder and CEO Jeremy Levine said on CNBC’s “Worldwide Exchange” Tuesday. “While still new and evolving, one thing is clear — the future of prediction markets is going to be about sports — and no one does sports better than Underdog.”

Underdog is the first sports gaming platform to enter the new and rapidly expanding prediction market industry, which is a modern chimera of financial trading and sports betting: Traders buy and sell the outcome of sporting events, but the odds change according to market movements, and there’s no bookmaker.
Robinhood, Kalshi and Polymarket already offer sports events contracts.
FanDuel, owned by Flutter, announced earlier this month that it would partner with the CME Group to offer financial events contracts. DraftKings CEO Jason Robins has also told CNBC he’s interested in entering the fray.
Sports events contracts could be especially lucrative for platforms that bypass state gaming regulators and tribal pushback.
The nation’s most populous states, California and Texas, do not offer legal sports betting. In Florida, the third most populous state, the Seminole Tribe has a near monopoly on legal gambling through its Hard Rock casinos and sportsbooks.

These markets remain inaccessible to legal sportsbooks, and the tribes have demonstrated a commitment to fending off what they consider to be a competitive threat to their sovereign rights.
The Commodities and Futures Trading Commission and federal courts are still grappling with the question of whether sports predictions markets are sports gambling, as well as whether they encroach on states’ right to regulate sports gambling or if they violate the Indian Gaming Regulatory Act.
Still, as Citizens gaming analyst Jordan Bender wrote in April, “prediction markets are too loud to ignore.”
He estimated that the sports prediction market could generate $555 million this year. The legal online sports betting market generated about $16 billion in 2024, according to Bender.
The sport events contracts will be provided by Crypto.com Derivatives North America (CDNA) — an exchange that’s already registered with the CFTC — but hosted on Underdog’s platform and fueled by its technology, the companies said.
“We were the first to offer sports events contracts, and our technology partnership with Underdog will provide more access to CDNA’s innovative offerings,” said Travis McGhee, managing director and global head of capital markets at Crypto.com. More