IG Group Confirms $1.3 Billion Acquisition of Prediction Markets Operator Underdog

IG Group has confirmed a deal to acquire Underdog, the US daily fantasy sports and prediction markets operator, in a transaction valued at up to $1.3 billion. The agreement marks one of the largest deals yet in the fast-growing prediction markets space and gives the UK-based financial technology company a significant new foothold in the American retail trading market.

The acquisition comes less than two weeks after Underdog launched its own in-house sports event contract exchange, and it positions IG as a major player in a category that has exploded in popularity over the past year as bettors increasingly weigh prediction markets against traditional sportsbooks and prediction market promo codes from platforms like Kalshi and Polymarket.

Breaking Down the $1.3 Billion Price Tag

The total consideration comprises upfront consideration based on an enterprise value of approximately $1.1 billion, plus an earnout of roughly $200 million payable to Underdog’s shareholders. The upfront equity value, expected to be about $963 million, will be settled through a mix of stock and cash: IG plans to issue around 24.1 million new ordinary shares — about 6.8% of its enlarged share capital — alongside a cash payment of approximately $380 million. IG will also repay roughly $160 million of Underdog’s existing debt at completion.

Separately, eligible Underdog employees will participate in a management incentive plan with a maximum potential payout of $850 million, though that figure is self-funded from Underdog’s own earnings and contingent on the company hitting steep performance targets, including at least $400 million in EBITDA by 2028 and $700 million by 2029.

IG’s upfront consideration works out to roughly 2.4 times Underdog’s trailing twelve-month net revenue through June 2026, a period in which the company reported net revenue of approximately $466 million, up 21% year-over-year. The deal is expected to more than double IG’s US revenue and increase its US monthly active customer base more than tenfold, pushing the American market to roughly 40% of IG’s group revenue on a pro forma basis, up from 22% today.

Underdog’s Rapid Rise in Prediction Markets

Since adding prediction markets to its platform in September 2025, Underdog has climbed to become the third-largest US prediction markets venue by regulated notional volume flow, trailing only Kalshi and Robinhood. That growth trajectory is a big part of what made the company an attractive target for IG, which has watched prediction markets emerge as one of the fastest-growing corners of the broader trading and entertainment landscape.

“The acquisition of Underdog establishes IG as a leader in US prediction markets, one of the most significant opportunities across trading and entertainment, and accelerates our growth in the world’s largest and fastest-growing retail trading market,” said Breon Corcoran, IG Group CEO.

Jeremy Levine, co-founder and CEO of Underdog, framed the deal as validation of the company’s approach to building consumer-facing products under regulatory uncertainty. “We built Underdog by creating the best experience for fans, and we’ve proven we can build the best products no matter how the regulatory landscape shifts,” Levine said. “It’s why we’ve taken off in prediction markets since we launched last year. Now, with our own exchange and by joining IG, we’re going to take an incredible leap in what we can offer customers and make Underdog the place to make predictions on sports and beyond.”

What Happens Next

IG has said it does not plan to change the Underdog brand, and the company will continue operating as a standalone business with its own management team and platform. IG intends to use Underdog as an entry point into its broader trading ecosystem, eventually steering customers toward financial trading through its tastytrade platform, and is already evaluating expansion of Underdog’s prediction markets into crypto, financial, macroeconomic, and political outcomes.

To help fund the acquisition, IG has secured a committed $450 million bridge facility with Barclays Bank and Goldman Sachs International, and the company has paused share buybacks effective immediately, with plans to resume them in 2027. Pro forma gross leverage is expected to stay under 2.0x by the end of 2026. IG projects the deal will be broadly neutral to adjusted earnings per share in its first year, before becoming double-digit percent accretive by year three.

Completion of the acquisition is expected in late 2026 or early 2027, pending regulatory approvals. As one of the largest M&A moves yet in the prediction markets sector, the deal underscores how quickly the space has evolved from a regulatory afterthought into a battleground drawing serious capital from established financial and betting industry players alike, alongside firms like Polymarket that continue to compete for market share.