IG Group, the London-listed trading company best known for spread betting and contracts for difference, has agreed to acquire the US operator Underdog for up to roughly $1.3 billion. It is a landmark deal for the prediction-markets sector, and a statement of intent from a traditional finance firm about where it thinks retail trading and entertainment are heading. The figures and details here are drawn from IG Group's announcement and reporting by Reuters, Legal Sports Report, and iGaming Business.
The structure gives a sense of the conviction behind it. IG is paying an upfront enterprise value of about $1.1 billion, a mix of new IG shares and roughly $380 million in cash, with a further $200 million available as an earnout tied to Underdog's 2026 performance. The deal is expected to close in late 2026 or early 2027, subject to US regulatory approvals including antitrust clearance under the Hart-Scott-Rodino Act.
What IG is buying
Underdog started as a daily fantasy sports company and moved into prediction markets in September 2025. In less than a year it has become the third-largest US prediction-markets venue by regulated notional volume, trailing only Kalshi and Robinhood. That ranking is worth reading closely: it measures regulated US flow, which is why Robinhood, which offers event contracts through a tie-up with Kalshi's infrastructure, sits above the offshore-flavored Polymarket in this particular league table. Underdog also runs its own exchange, which is a big part of what IG is paying for.
The people involved are betting-industry heavyweights. Underdog's co-founder and CEO Jeremy Levine is a serial daily-fantasy entrepreneur who previously built DRAFT, sold to what is now Flutter, and StarStreet, sold to DraftKings. IG's CEO, Breon Corcoran, is himself a betting veteran who ran Betfair and then Paddy Power Betfair before moving into online trading, and he held a personal investment in Underdog before this deal; Levine will now report to him. We note that prior stake for transparency; it is disclosed and does not by itself imply anything improper.
Trading meets betting
Strip away the corporate language and the logic is simple. IG framed the purchase as a step toward a "global consumer engagement platform" built on the convergence of trading, investing and entertainment, which is a polished way of saying that buying a share of Tesla, betting on an NFL game, and trading a contract on an election outcome increasingly happen inside the same kind of app, for the same kind of customer. Underdog's sports brand gives IG a foothold to push prediction contracts into crypto, financial, macroeconomic, cultural and political outcomes, the whole event-contract universe, not just games.
The timing is the story
What makes this more than a routine acquisition is when it is happening. Prediction markets are in the middle of an existential legal fight in the United States over whether their sports contracts are federally regulated financial products or unlicensed sports bets. In just the past two weeks, a House subcommittee held a hearing on exactly that question, 44 state attorneys general told the CFTC it lacks the authority to regulate these products, and a South Carolina lawsuit invoked a colonial-era gambling statute to go after the sector. Committing more than a billion dollars into that uncertainty is a bet that the federal-financial-product interpretation wins. Levine leaned into exactly that, saying Underdog has proven it can build winning products "no matter how the regulatory landscape shifts."
Our take
This is the convergence thesis becoming real money. For a couple of years the idea that trading apps and sportsbooks were collapsing into one product was mostly a talking point; a $1.3 billion acquisition by a serious, regulated financial firm is that thesis with a price tag. It also validates prediction markets as a category, not a fad: you do not pay a billion-plus for a business you expect regulators to shut down.
For US bettors, the practical implications are a step removed but real. More capital and a bigger platform behind Underdog means a more polished, better-resourced competitor to Kalshi, Robinhood and Polymarket, and more marketing pressure pulling sports customers toward event contracts and away from traditional sportsbooks, which pay state taxes and carry state consumer protections that these platforms largely do not. That is the same tension running through everything we have covered in this space lately. The deal is a vote of confidence that prediction markets survive the legal fight; it does not settle that fight, and the outcome in the courts still decides how much of this actually reaches you. We will follow the deal through its regulatory review.