IG Group has agreed to acquire U.S.-based daily fantasy sports and prediction markets operator Underdog in a transaction valued at up to $1.3 billion, marking one of the largest deals to date in the emerging prediction markets sector.

The agreement gives the UK-listed trading and investing company a significantly larger presence in the United States while advancing a strategy focused on expanding beyond its traditional financial trading products. The acquisition combines IG’s established brokerage and trading operations with one of the fastest-growing brands in U.S. sports-focused prediction markets.

Under the terms of the transaction, the total consideration includes an upfront enterprise value of approximately $1.1 billion and a potential earnout of around $200 million payable to Underdog shareholders. IG expects the upfront equity value at completion to be roughly $963 million, consisting of approximately 24.1 million newly issued IG shares and around $380 million in cash. The company will also assume and repay about $160 million of Underdog’s debt when the deal closes.

“The acquisition of Underdog establishes IG as a leader in U.S. prediction markets, one of the most significant opportunities across trading and entertainment, and accelerates our growth in the world’s largest and fastest-growing retail trading market,” IG CEO Breon Corcoran said, according to Reuters.

Acquisition Supports IG’s Strategic Shift

The purchase forms a central part of the strategic review IG launched in March 2026. Alongside the company’s proposed redomicile and organizational changes announced earlier this year, the transaction largely completes that review process.

IG believes the addition of Underdog will more than double its U.S. revenue and increase its monthly active customer base by more than ten times. The company also expects the deal to create new opportunities to connect sports and prediction market users with its broader trading and investing products through both the tastytrade platform in the United States and IG’s international operations.

Management expects the acquisition to have a limited impact on adjusted earnings per share during the first year following completion. By the third year, however, IG forecasts that the transaction will contribute double-digit percentage accretion to earnings and generate returns above the company’s weighted average cost of capital.

Corcoran said: “Technology is reshaping the large, high-engagement markets in which IG operates – and increasingly bringing them together. Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full license stack that together give us a differentiated position in US prediction markets. It expands both our addressable market and our growth trajectory. We are delighted to welcome Jeremy and the Underdog team to IG.”

Underdog Brings Sports Audience and Prediction Market Infrastructure

Founded in 2020, Underdog has become one of the largest operators in the U.S. daily fantasy sports market. The company offers both traditional draft contests and pick’em-style games, attracting a customer base that exceeds five million depositing users and more than 11 million registered accounts.

The company reported approximately $466 million in net revenue for the 12 months ending June 30, 2026, up from $380 million in the comparable prior-year period. During the quarter ending June 30, 2026, Underdog generated about $122 million in revenue and approximately $46 million in EBITDA.

While daily fantasy sports fueled the company’s growth, prediction markets have become an increasingly important part of the business. After launching prediction market products in September 2025, Underdog expanded across 30 states and has risen to become the third-largest U.S. prediction markets venue by regulated notional volume flow, trailing only Kalshi and Robinhood.

The company’s prediction market products accounted for 54% of handle during the first half of 2026, highlighting the growing importance of the category within its overall business.

Jeremy Levine, Underdog’s co-founder and chief executive officer, said: “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. 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. IG’s scale, expertise, resources and reach are going to unlock our potential, expand what we’ve built, and bring our products to more audiences. I couldn’t be more excited about what we’re going to do together.”

Focus Extends Beyond Sports Contracts

A major attraction for IG is Underdog’s ownership of a vertically integrated regulatory structure covering brokerage, exchange, and clearing operations. The company holds a futures commission merchant, designated contract market, and derivatives clearing organization framework that allows it to manage the full lifecycle of prediction market trades.

Industry participants increasingly view prediction markets as a fast-growing segment where users trade contracts tied to future events. Sports currently account for much of the activity, though operators continue exploring opportunities involving financial, macroeconomic, cultural, and political outcomes.

IG believes Underdog’s sports-focused audience provides a foundation for future expansion into those additional categories. The company also sees potential opportunities connected to perpetual futures markets and infrastructure sharing.

Underdog recently launched its own proprietary exchange in July 2026, a move expected to give the business greater control over product development while allowing it to retain more of the economics generated by trading activity.