IG Makes Prediction Markets a Growth Priority With $1.3 Billion Underdog Deal

IG Group has agreed to acquire Underdog, a US prediction markets and daily fantasy sports operator, for up to approximately $1.3 billion, positioning the sector as a central element of its next growth phase.

The deal follows a strategic review launched in March and would largely complete that process alongside the company's proposed redomicile and refreshed organisational model. Completion is expected in late 2026 or early 2027, subject to regulatory approvals.

The consideration includes upfront payment based on an enterprise value of roughly $1.1 billion and an earnout of up to $200 million. IG expects an upfront equity value of about $963 million, funded through approximately 24.1 million new shares and around $380 million in cash. A bridge facility of up to $950 million will cover the cash payment, earnout and refinancing of about $160 million of Underdog debt.

Eligible Underdog employees may receive up to $850 million under a separate management incentive plan, which IG said would be funded from Underdog's earnings. The maximum payout requires Underdog to reach EBITDA of at least $400 million in 2028 and $700 million in 2029.

The acquisition would give IG a vertically integrated US licence stack containing a futures commission merchant, designated contract market and derivatives clearing organisation. Underdog launched prediction markets in September 2025 and its proprietary exchange in July 2026. IG said the infrastructure could also support contracts tied to crypto, financial and macroeconomic events, and cultural and political outcomes.

IG reported faster product rollout ahead of the deal, launching nearly as many products and features in the six months to June as in all of 2025. Tastytrade added prediction markets covering commodities, crypto and economic and financial events. Total revenue rose 18% to £642.8 million. Active customers climbed 66% to 843,600, and first trades increased 107% to 121,400, including acquisition effects. On an organic continuing-operations basis, active customers rose 13% and first trades increased 74%.

IG said the acquisition would more than double its US revenue and increase US monthly active customers more than tenfold. Based on 2025 results, the US would have accounted for about 40% of pro forma group revenue, versus 22% for IG alone. The company expects the deal to be broadly neutral to adjusted earnings per share in the first year and double-digit percentage accretive by year three.

Underdog will remain commercially standalone under its existing brand, management and platform. IG's London listing would be unchanged under the proposed Jersey parent company.