IG Group Buys Underdog for Up to $1.3 Billion, Entering Prediction Market Space
The FTSE 100 trading platform is paying about $1.1 billion upfront for the fantasy sports operator that became the first US sports company to hold exchange, clearing and brokerage licenses.
IG Group agreed on July 30 to buy US fantasy sports and prediction markets operator Underdog for up to $1.3 billion, giving the London-listed broker its own federally licensed sports exchange.
The purchase hands IG the full set of Commodity Futures Trading Commission (CFTC) permissions needed to list, clear and broker sports event contracts in the United States. Underdog bought its exchange and clearing house from Aristotle in March 2026 and began running markets on its own venue on July 18, 12 days before agreeing to sell itself.
IG Pays $1.1 Billion Upfront for the License Stack
The upfront consideration values Underdog at an enterprise value of about $1.1 billion. Shareholders can earn roughly $200 million more if the business hits 2026 revenue targets.
IG is paying mostly in stock, issuing about 24.1 million new shares, equal to 6.8% of its enlarged capital. Underdog reported net revenue of $466 million for the 12 months to June 30, up 21%.
"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."
Jeremy Levine, Underdog's co-founder and chief executive, said that in the announcement.
A separate management incentive plan can pay Underdog's managers as much as $850 million, funded from the company's own earnings. The maximum requires $700 million of 2029 EBITDA, the measure of earnings before interest, taxes, depreciation and amortization. Underdog booked $46 million of it in the second quarter.
Closing Depends on Approvals and Unsettled State Law
IG calls Underdog the third-largest US prediction markets venue by regulated notional volume. Sportico put its share of US volume nearer 2% in July, behind Kalshi, Polymarket and Robinhood.
FairGambling covered Fanatics buying its own exchange and clearinghouse in July.
The contracts themselves still face state courts, where regulators call them unlicensed betting. A King County judge enjoined Kalshi in Washington and rejected the federal preemption defense the sector relies on. IG expects the deal to complete in late 2026 or early 2027, subject to US regulatory sign-off and Hart-Scott-Rodino antitrust clearance.
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