IG Group Acquires US Sports and Prediction Markets Firm Underdog for $1.1 Billion
IG Group has agreed to acquire US sports and prediction markets company Underdog for $1.1 billion (£810 million), marking a major expansion for the FTSE 100-listed firm into sports gaming and event-based prediction markets. According to the announcement, the transaction is subject to regulatory and antitrust approvals and is expected to complete in late 2026 or early 2027.
Strategic Expansion and Revenue Projections
Heading into the late-2026 sports calendar, the acquisition will significantly alter IG Group’s geographic revenue distribution. Per the company disclosures, the combined business expects to generate approximately 40% of its revenue in the United States, marking a steep increase from its current 22% footprint. Underdog generated net revenue of $466 million during the 12 months leading up to June 2026. The platform currently registers more than 11 million users, which includes over five million deposited customers who primarily interact through daily fantasy sports offerings.
Beyond traditional daily fantasy rosters, Underdog recently launched its own prediction markets exchange. This platform allows users to trade contracts across sporting events, political races, financial benchmarks, cryptocurrencies, and cultural happenings.
Regulatory Licenses and Infrastructure
The acquisition grants IG Group direct access to Underdog’s vital regulatory licenses. According to corporate filings, these approvals include futures commission merchant (FCM), designated contract market (DCM), and derivatives clearing organisation (DCO) authorizations. These regulatory designations give the combined enterprise the legal framework required to list, clear, and manage its own contracts directly within the United States market.
Financial Structure and Management Incentives
According to the deal terms, the agreement features up to $200 million in earnout payments tied directly to Underdog’s financial performance through the end of 2026. Additionally, the arrangement details a management incentive plan valued at up to $850 million, which becomes payable if the business achieves specific EBITDA targets across 2028 and 2029.
IG Group Chief Executive Breon Corcoran noted that technology is rapidly reshaping high-engagement markets and bringing them together. In a statement released with the acquisition, Corcoran emphasized that Underdog provides a product-first team, a leading daily fantasy sports franchise, and a comprehensive license stack that establishes a differentiated position in US prediction markets. Underdog Co-Founder and Chief Executive Officer Jeremy Levine added that building the company relied on creating optimal user experiences despite shifting regulatory landscapes, noting that the new exchange structure and integration with IG Group will enable expanded product offerings for sports fans and forecasters alike.
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