IG Group buys prediction-market operator Underdog for up to $1.3B
What's the deal? IG Group Holdings has agreed to acquire Underdog, a US daily fantasy sports and prediction markets operator, for total consideration of up to approximately $1.3 billion. The upfront consideration is based on an enterprise value of about $1.1 billion — settled partly in IG shares — plus an earnout of roughly $200 million payable to Underdog's shareholders.
Why now? The acquisition is the key outcome of a strategic review IG announced on March 19, 2026. Alongside a proposed redomicile and refreshed organisational model unveiled on July 8, 2026, it substantially concludes that review.
What's the endgame? IG wants to build what it calls a global consumer engagement platform capitalising on the convergence of trading, investing, and entertainment. Underdog reported net revenue of $466 million in the twelve months ended June 2026, and the deal is expected to more than double IG's US revenues and lift its US monthly active customers more than tenfold.
By the numbers: Since launching prediction markets in September 2025, Underdog has become the third-largest US prediction markets venue by regulated notional volume, behind Kalshi and Robinhood. Eligible Underdog employees will also share a management incentive plan worth up to $850 million, self-funded from earnings and conditional on delivering EBITDA of at least $400 million in 2028 and $700 million in 2029.
IG expects the deal to be broadly neutral to adjusted earnings per share in year one and double-digit accretive by year three. It plans to pause share buybacks.
"The acquisition of Underdog establishes IG as a leader in US prediction markets, one of the most significant opportunities across trading and entertainment," said chief executive officer Breon Corcoran.
The signal: Prediction markets are among the fastest-growing corners of trading and entertainment, with volume so far dominated by sport. IG is betting Underdog's brand can expand into crypto, financial, macroeconomic, cultural, and political outcomes — a far larger addressable market that established players like Kalshi and Robinhood are already chasing.
Read more: investegate.co.uk
