IG has agreed to acquire US daily fantasy sports and prediction markets operator Underdog in a deal worth up to $1.3 billion, marking the biggest strategic move under CEO Breon Corcoran and significantly expanding the broker’s presence in the fast-growing US prediction markets sector.
The acquisition comprises an upfront enterprise value of approximately $1.1 billion, with a further earnout of up to $200 million linked to Underdog’s 2026 performance. In addition, eligible Underdog employees could receive up to $850 million through a performance-based management incentive plan, funded from future earnings if ambitious EBITDA targets are achieved.
IG said the acquisition would establish the company as a leader in US prediction markets, a rapidly expanding category regulated by the Commodity Futures Trading Commission (CFTC). The deal is expected to more than double IG’s US revenues while increasing its monthly active US customers more than tenfold through Underdog’s base of around one million monthly active users and over five million depositing customers.
Underdog, founded in 2020, has quickly become one of the largest daily fantasy sports operators in the US and, since launching prediction markets in September 2025, has become the third-largest US prediction markets venue by regulated notional volume, behind Kalshi and Robinhood.
IG believes the transaction creates a powerful customer funnel, allowing users to move from sports prediction markets into active investing and derivatives trading through its existing tastytrade and IG platforms. The company also sees opportunities to expand beyond sports into contracts linked to financial markets, cryptocurrencies, macroeconomic events and politics using Underdog’s regulated infrastructure.
“The acquisition of Underdog establishes IG as a leader in US prediction markets, one of the most significant opportunities across trading and entertainment,” said IG Group CEO Breon Corcoran. “It accelerates our growth in the world’s largest and fastest-growing retail trading market.”
It’s hardley a surprise that IG has moved into sports betting, as the new CEO Breon Corcoran has previously been CEO of Betfair, the largest betting exchange in the UK, as well as COO of Paddy Power, the largest fixed odds bookmaker in the UK.
Plus, Stewart Wheeler, the founder of IG, loved to gamble, especially at the poker tables.
Why prediction markets matter
Financially, the acquisition is expected to be broadly neutral to adjusted earnings per share in its first year before becoming double-digit accretive by year three, while delivering returns above IG’s weighted average cost of capital. The company said its medium-term revenue growth outlook remains unchanged, although the addition of Underdog is expected to accelerate overall group growth. Share buybacks have been paused until at least 2027 to preserve capital while the transaction is integrated.
The scale of Underdog’s growth helps explain why IG is making such a sizeable bet on the business. Over the last 12 months, Underdog generated $466 million in net revenue, up 21% year-on-year, while becoming the third-largest US prediction markets platform by volume. Underdog has more than 11 million registered users, over 5 million depositing customers and around 950,000 monthly active users, with more than 60% of those users aged under 30 and 80% under 40, giving IG access to a significantly younger customer base than its traditional trading business.
Our View
Personally, I’m delighted to see IG return to sports betting. Over 25 years ago, when I first started trading with IG I’d bet on the FTSE during the week and the Footie on the weekends with sports spread betting. Sports spread betting in the UK is different to spread betting in the US, as instead of having to win by a certain margin, sports spread betting in the UK is like trading stocks. You buy or sell the performance of your team and the more right you are the more you win.
Obviously, the more wrong you are, the more you can lose.
Sports spread betting has similarities to prediction markets in that you can trade in and out of your bet before it settles, but unlike prediction markets, where the outcome is binary (either 0 or 100), with sports spread betting your profit or loss is unlimited.
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