IG Group to acquire Underdog in $1.3 billion deal

IG Group has agreed to acquire Underdog in a deal worth up to $1.3 billion, marking one of the largest acquisitions yet in the rapidly growing prediction markets industry.

The IG Group Underdog transaction values parent company Underdog Sports at approximately $1.1 billion upfront, with an additional earnout of up to $200 million tied to financial performance. IG said the acquisition would establish it as a leader in US prediction markets while more than doubling its US revenue.

Underdog will continue operating as a standalone business following the acquisition, retaining its existing brand, management team and technology platform.

Why IG Group is acquiring Underdog

IG Group described the acquisition as a defining step in its long-term strategy to build a consumer platform spanning trading, investing and entertainment.

"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," IG Group CEO Breon Corcoran said.

The company expects the deal to more than double its US revenue, increase its US monthly active customers more than tenfold and create new opportunities to cross-sell customers between sports prediction markets, investing and financial trading products.

How Underdog became a prediction market leader

Founded in 2020, Underdog Sports built Underdog Fantasy into one of the largest daily fantasy sports sites in the United States before expanding into federally regulated prediction markets in September 2025.

IG Group estimates that Underdog Fantasy is now the third-largest prediction market in the US by regulated notional volume across prediction markets and daily fantasy sports combination trades, behind only Kalshi and Robinhood.

The company generated approximately $466 million in net revenue during the 12 months ended June 30, 2026, including approximately $122 million in revenue and $46 million in EBITDA for the second quarter of 2026.

IG said Underdog Fantasy has more than 11 million registered accounts, over five million depositing customers and approximately one million monthly active users, providing a significant customer base for future growth.

Prediction markets central to the strategy

While Underdog Fantasy built its reputation through daily fantasy sports, IG Group believes prediction markets represent the company's biggest long-term opportunity.

The acquisition gives IG ownership of a vertically integrated regulatory structure that includes a futures commission merchant, designated contract market and derivatives clearing organization, allowing Underdog Sports to operate federally regulated prediction markets across the full trade lifecycle.

IG believes the same infrastructure can eventually support contracts covering cryptocurrencies, financial markets, macroeconomic events, politics and culture, substantially expanding the addressable market beyond sports.

"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," Underdog co-founder and CEO Jeremy Levine said.

"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 the IG Group Underdog deal includes

The acquisition includes approximately $1.1 billion in upfront consideration, comprising a mix of cash and newly issued IG Group shares, plus an earnout of up to $200 million if Underdog meets agreed financial targets.

Separately, eligible Underdog employees could receive up to $850 million through a performance-based management incentive plan tied to future EBITDA targets.

IG expects the acquisition to be broadly neutral to adjusted earnings in its first year before becoming double-digit accretive by year three.

When will the acquisition close?

The IG Group Underdog transaction remains subject to US regulatory approvals and antitrust clearance, with completion expected in late 2026 or early 2027.

If approved, the acquisition would represent one of the largest investments made in a prediction markets company and further demonstrates the growing confidence major financial firms have in the industry's long-term potential.