IG Group has agreed to acquire US sports and prediction markets operator Underdog for $1.1 billion (£810 million).
Fantasy & Market Impact
- US Market Footprint: The acquisition accelerates IG Group’s US expansion, with the combined business projected to generate roughly 40% of its revenue stateside, up from 22%.
- Product Convergence: By integrating Underdog’s daily fantasy sports (DFS) user base of over 11 million registered accounts, IG Group gains direct exposure to high-engagement sports gaming demographics.
- Regulatory Licensing: Underdog’s futures commission merchant (FCM), designated contract market (DCM), and derivatives clearing organisation (DCO) approvals provide a complete license stack to list and manage proprietary contracts.
Structuring the $1.1 Billion Valuation and Earnouts
The agreement features up to $200 million in earnout payments tied directly to Underdog’s 2026 financial performance. Furthermore, a separate management incentive plan is worth up to $850 million, conditional on the business hitting EBITDA targets across the 2028 and 2029 fiscal cycles.
Underdog enters this agreement following a massive fiscal year. The daily fantasy sports and prediction markets operator generated net revenue of $466 million during the 12 months leading up to June 2026. Out of its 11 million registered users, more than five million represent active, deposited customers, providing IG Group with a ready-made transactional cohort.
The Rise of Prediction Markets and Exchange Infrastructure
While daily fantasy sports built Underdog’s brand equity, the platform’s recent pivot into prediction markets captured institutional attention. Underdog launched its proprietary prediction market exchange, allowing users to trade contracts on athletic fixtures alongside non-sporting verticals like politics, finance, cryptocurrencies, and broader cultural events.
Jeremy Levine, Co-Founder and Chief Executive Officer of Underdog, pointed to this product evolution in a statement regarding the acquisition. “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,” Levine stated. He added, “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.”
Corporate Strategy and the Convergence of Tech and Gaming
For IG Group, the deal represents a calculated strike into high-engagement consumer sectors. Breon Corcoran, Chief Executive of IG Group, emphasized the technological alignment driving the purchase. “Technology is reshaping the large, high-engagement markets in which IG operates – and increasingly bringing them together,” Corcoran noted.
Corcoran further underscored the structural advantage of acquiring Underdog’s proprietary infrastructure, stating, “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.”
| Metric / Indicator | Pre-Acquisition Baseline | Post-Acquisition Projection / Target |
|---|---|---|
| Transaction Value | N/A | $1.1 Billion (£810 Million) |
| US Revenue Contribution | 22% | Approx. 40% |
| Underdog Net Revenue (12m to June 2026) | $466 Million | N/A |
| Registered Users / Deposited Customers | 11 Million+ / 5 Million+ | Integrated into IG Group ecosystem |
| Contingent Earnouts & Incentives | N/A | Up to $200m (2026) / Up to $850m (2028-2029) |
Antitrust Oversight and Completion Timeline
The transaction is not yet finalized. Because the deal involves critical financial derivatives and futures licensing through Underdog’s FCM, DCM, and DCO approvals, it remains subject to mandatory regulatory scrutiny and antitrust clearances. Closing is anticipated to occur in late 2026 or early 2027, provided no major regulatory hurdles stall the integration of the exchange infrastructure.
Disclaimer: The fantasy and market insights provided are for informational and entertainment purposes only and do not constitute financial or betting advice.
