IG Group has applied for a UK gambling licence as it prepares to introduce prediction markets covering sports, politics and entertainment in early 2027. The financial trading company also plans to launch contracts linked to financial events for professional clients during the final quarter of 2026.

The application was submitted through IG View Limited, a London subsidiary registered under the trading name “ig prediction markets”. The UK Gambling Commission’s public register lists its application for a remote general betting licence covering real events as pending.

IG outlined the plans during its October 22 Capital Markets Event, where executives presented a strategy to combine prediction markets with its existing investment services.

According to Finance Magnets, Chief Executive Breon Corcoran commented:

“Trading, investing and entertainment are converging, and IG is well placed to capitalise on the opportunity.”

The announcement follows IG’s agreement to acquire US fantasy sports and prediction market operator Underdog, supporting its expansion into event-based trading.

UK Licensing Requirements Shape Launch Plans

IG intends to introduce its prediction products in stages because financial and non-financial contracts fall under different British regulatory frameworks.

The Financial Conduct Authority (FCA) regulates financial derivatives, including binary options, which have been prohibited for UK retail customers since 2019.

Consequently, IG’s initial financial prediction markets will target professional clients.

Its planned sports and political contracts require authorisation from the Gambling Commission, with approval still pending.

IG Consumer CEO Michael Healy outlined plans to incorporate these products into the company’s unified trading platform.

The application already combines traditional investing with cryptocurrency services in the UK, with expansion to other markets planned.

IG is also preparing an advertising campaign promoting its trading services, with commercials expected to appear on Sky Sports and other television channels in November.

The move represents a return toward gambling-related products for IG, which sold its Extrabet customer base to Spreadex in 2011.

Spreadex and Sporting Index currently hold UK general betting licences, while betting exchanges such as Matchbook operate under a different licensing category.

The regulatory treatment of prediction markets remains under discussion, with the FCA examining their future classification in Britain.

Underdog Deal Expands IG’s US Exposure

IG’s planned acquisition of Underdog represents a significant part of its international development strategy.

The company agreed to purchase the US fantasy sports and prediction market operator in July 2026, in a transaction valued at up to approximately $1.3 billion.

Completion is expected in late 2026 or early 2027, subject to regulatory approval.

Underdog already offers prediction products across much of the United States, where interest in event contracts has increased considerably.

According to industry estimates, combined taker trading volume on Kalshi and Polymarket reached $172.4 billion during the third quarter of 2026, compared with $98.5 billion in Q2.

These US platforms operate under Commodity Futures Trading Commission oversight, although their sports-related contracts continue to face legal scrutiny.

IG plans to use Underdog’s experience alongside its existing financial trading technology as it develops additional products.

The company also announced a revised organisational structure consisting of three divisions: IG Consumer, IG Securities and tastytrade.

Management expects the acquisition to increase the combined group’s medium-term revenue growth above its standalone target.

Third-Quarter Revenue Falls Ahead of Expansion

IG’s prediction market announcement accompanied weaker financial results for the three months ending September 30.

Group revenue declined 14% year-on-year to £240.5 million, consistent with guidance issued earlier in October.

Net trading revenue from over-the-counter derivatives fell 18% to £156.1 million, despite an approximately 8% increase in customer fees and commissions.

The company’s return-to-volume ratio, which measures how much gross trading income becomes net revenue, decreased to 70% from an average of approximately 80% since the second half of 2025.

Freetrade, IG’s UK investing subsidiary, also recorded lower revenue.

Its net trading revenue declined 67% to £2.2 million, while monthly active customers decreased 1% to 454,700.

IG attributed weaker investment activity partly to subdued stock trading and concerns about technology valuations. Uncertainty surrounding potential capital gains tax changes in the UK Budget also affected customer behaviour.

However, IG’s own UK and Ireland investing customer base grew 30% to 78,100.

The company maintained its 2026 forecast for mid-single-digit revenue growth and an EBITDA margin in the low-40% range, excluding specified non-recurring costs.

Management also expects share buybacks to resume in 2027, subject to financial conditions.

Separately, IG continues preparing to relocate its holding company to Jersey, with completion expected in late 2026 or early 2027, pending the necessary approvals.