The deal with the UK's online trading firm IG Group will pay out $200 million to investors and possibly up to $850 million towards eligible Underdog employees.
According to the initial report by Front Office Sports, Schefter, who will see his "small investment" tripled as part of the big sale, was part of the original group that invested $10 million into Underdog.
ESPN refused to comment on the matter.
Other big names who invested in the company include NBA superstar Kevin Durant and Detroit Lions quarterback Jared Goff.
This wouldn't be the first time Schefter invested in a betting business.
In 2021, he invested in Boom Entertainment (a digital casino firm), the same company that acquired the NBC Sports Predictor free-to-play app back in 2023.
Schefter has been under a lot of fire in recent years for his reporting, whether it's promoting his own side projects or the way he handles breaking news about players and coaches.
His investment in Underdog becomes a major conflict of interest as Schefter, who is the biggest name in NFL inside reporting alongside Ian Rapoport, could have potentially fixed certain news breaks for the betting market.