IG Group announced its acquisition of Underdog for up to $1.3 billion. The deal includes an upfront payment of $1.1 billion, partially in IG Group shares, with an additional $200 million earnout. This acquisition is a result of IG’s strategic review initiated in March to expand its reach in trading, investing, and entertainment platforms. IG aims to enhance its U.S. revenues by increasing active users, positioning Underdog as a key player in transforming sports customers into financial market traders.
In This News
Strategic Goals and Incentives
IG Group has laid out plans for Underdog to serve as a bridge between sports markets and active trading. Part of the deal incentivizes Underdog’s management, with an $850 million potential payout tied to achieving specified EBITDA targets—$400 million in 2028 and $700 million by 2029. Still, this ambitious incentive scheme underscores IG’s commitment to driving large growth through this acquisition. And jeremy Levine, Underdog’s CEO, expressed enthusiasm over the merger: “We’ve created a leading experience for fans, and now, with IG, we’re set to transform offering predictions on sports and more.” Levine highlighted the synergy expected from IG’s extensive resources and global reach.
Market Position and Industry Context
Underdog ranks as the third-largest U.S. Still, prediction market operator by notional volume, trailing behind Kalshi and Robinhood. The acquisition propels IG into a dominant position in the prediction markets—a sector increasingly blending with traditional financial trading. Breon Corcoran, IG’s CEO and former head of Paddy Power Betfair, emphasized the transformative potential of this deal: “Technology is blurring lines between highly engaging markets, and Underdog places us at a convergence point.” It’s a strategic expansion that Corcoran believes will redefine IG’s market penetration. For industry observers, this acquisition is notable, especially given the recent regulatory adjustments that may impact prediction markets. While Underdog has thrived, capturing a major share of the market, the wider regulatory climate remains an uncertain variable.
Financial Performance and User Metrics
IG’s presentation revealed Underdog’s impressive financial metrics: $250.1 million in revenue and $59.6 million in EBITDA for the first half of 2026. This follows a fiscal year 2025 with $441.2 million in revenue but a $52.8 million EBITDA loss. Nonetheless, revenue for the past 12 months hit $466 million, marking a 21% increase from the previous period. The user base is robust—over 950,000 monthly actives, a 39% rise year-over-year, with more than 11 million registered users and 5 million depositing funds. Looking ahead, IG Group plans to use Underdog’s established user engagement to strengthen its foothold in the U.S. market. Underdog’s customer acquisition strategy—paying off costs typically within 12 months—adds a compelling dimension to IG’s growth outlook. Underdog’s next chapter under IG’s umbrella will be closely watched. The company must navigate shifting regulations and market dynamics to meet its ambitious growth targets. As the integration unfolds, the industry will eagerly anticipate the board’s decisions and any regulatory feedback, with specifics expected in the coming quarters.
Marcus Chen brings a quantitative approach to poker strategy and sports betting analysis. With a background in data analytics and over eight years covering professional poker circuits, his articles combine statistical insights with practical advice for serious players looking to sharpen their edge at the table.
