IG Group has agreed to acquire US prediction markets and daily fantasy sports operator Underdog for up to approximately $1.3 billion, making the sector a central element of the broker’s next phase of expansion.
The acquisition is a key outcome of the strategic review IG launched in March. Together with its proposed redomicile and refreshed organisational model, the transaction substantially concludes that process. Completion is expected in late 2026 or early 2027, subject to regulatory approvals.
Underdog Adds Exchange and Clearing Infrastructure
The deal comprises upfront consideration based on an enterprise value of approximately $1.1 billion and an earnout of up to approximately $200 million.
IG expects an upfront equity value of about $963 million, settled with approximately 24.1 million new shares and a cash payment of about $380 million.
A bridge facility of up to $950 million will fund the cash payment, earnout and refinancing of approximately $160 million of Underdog debt.
Separately, eligible Underdog employees could receive up to $850 million under a management incentive plan. IG said it falls outside the consideration payable to selling shareholders and is expected to be funded from Underdog’s earnings. The maximum payout requires EBITDA of at least $400 million in 2028 and $700 million in 2029.
The acquisition would give IG a vertically integrated US licence stack comprising a futures commission merchant, designated contract market and derivatives clearing organisation, spanning brokerage, exchange and clearing.
Underdog launched prediction markets in September 2025 and its proprietary exchange in July 2026. IG said the infrastructure could also support contracts referencing crypto, financial and macroeconomic events, as well as cultural and political outcomes.
- IG Group’s New Data Model Wins Google Backing as Firms Race for AI Readiness
- Tesla Options Go Daily in Market First from IG Amid Campaign to Raise UK Retail Investment
- With Pat Cash Onboard, IG Addresses Falling UK IPOs and Retail Engagement
H1 Shows Faster Product Rollout
IG had already accelerated product expansion before announcing the deal. It launched almost as many products and features during the six months to June as during the whole of 2025. Tastytrade added prediction markets covering commodities, crypto, and economic and financial events.
Total revenue increased 18% to £642.8 million. Active customers rose 66% to 843,600 and first trades increased 107% to 121,400, including acquisition effects. On an organic continuing-operations basis, active customers increased 13% and first trades rose 74%.
IG said the acquisition would more than double its US revenue and increase US monthly active customers more than tenfold. Based on the companies’ 2025 results, the US would have represented approximately 40% of pro forma group revenue, compared with 22% for IG alone.
The company expects the transaction to be broadly neutral to adjusted earnings per share in the first year and double-digit percentage accretive by year three.
Underdog would remain commercially standalone under its existing brand, management and platform. IG’s London listing would remain unchanged under the proposed Jersey parent.
