IG Group Holdings has agreed to acquire Underdog, a leading US daily fantasy sports and prediction markets operator, for total consideration of up to approximately $1.3 billion. Upfront consideration is based on an enterprise value of approximately $1.1 billion, partly settled through the issuance of IG ordinary shares. An earnout of approximately $200 million is payable to Underdog’s shareholders. Eligible Underdog employees will separately participate in a management incentive plan capped at $850 million, self-funded from Underdog’s earnings. The maximum MIP payout requires Underdog to deliver EBITDA of at least $400 million in 2028 and $700 million in 2029.
Since launching prediction markets in September 2025, Underdog has become the third-largest US prediction markets venue by regulated notional volume flow, behind Kalshi and Robinhood. The deal is a key outcome of IG’s strategic review announced March 19, 2026. It marks a step in IG’s plan to build a global consumer engagement platform spanning trading, investing, and entertainment. The acquisition is expected to be broadly neutral to adjusted earnings per share in year one. It is expected to be double-digit % accretive by year three.
The Board believes the deal will more than double IG’s US revenues. US monthly active customers are expected to increase more than tenfold. The acquisition adds a licence stack spanning a futures commission merchant, designated contract market, and derivatives clearing organization. This allows IG to internalize economics across the full trade lifecycle. Underdog will operate as a commercially standalone business with its own brand and management team.
Underdog generated net revenue of approximately $466 million in the 12 months ended June 30, 2026, up 21% year over year. The company posted EBITDA of approximately $46 million in the three months to June 30, 2026. Pro forma gross leverage is expected to be under 2.0x at end-2026. IG has paused share buybacks effective with today’s half-year results and expects to resume them in 2027. Completion is expected in late 2026 or early 2027, subject to US regulatory approvals.
KEY QUOTES:
“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.”
“Technology is reshaping the large, high-engagement markets in which IG operates, and increasingly bringing them together. Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full licence stack that together give us a differentiated position in US prediction markets. It expands both our addressable market and our growth trajectory. We are delighted to welcome Jeremy and the Underdog team to IG.”
Breon Corcoran, Chief Executive Officer, IG Group
“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. 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. IG’s scale, expertise, resources and reach are going to unlock our potential, expand what we’ve built, and bring our products to more audiences. I couldn’t be more excited about what we’re going to do together.”
Jeremy Levine, Co-Founder and Chief Executive Officer, Underdog
