IG Group Bets on Underdog and the Future of Prediction Markets
United States.- 14 August 2026 | www.zonadeazar.com IG Group has agreed to acquire Underdog Sports Holdings in a transaction designed to position the company within the rapidly expanding US prediction markets and event contracts sector.
The deal carries an initial enterprise value of approximately US$1.1 billion, with a further US$200 million earn-out potentially payable to Underdog shareholders depending on future performance.
Deal Structure
The agreement was announced on 30 July and is expected to complete in late 2026 or early 2027.
Separate from the purchase consideration, Underdog management and employees could receive up to US$850 million under an incentive plan if the business reaches exceptional EBITDA targets in the coming years.
The first tranche becomes payable if Underdog reaches US$140 million in EBITDA in 2028.
The maximum 2028 award requires US$400 million in EBITDA, while the 2029 component reaches its maximum if EBITDA rises to US$700 million.
Underdog Growth
Underdog generated US$466 million in net revenue during the 12 months to June 2026, representing 21% year-on-year growth.
Prediction markets accounted for 54% of handle during the first half of the year.
The business has approximately five million depositing customers and more than 11 million registered accounts.
That growth has made event contracts a central part of its future strategy.
Prediction Markets as a Strategic Driver
IG Group believes its financial-trading expertise and risk-management capabilities can complement Underdog’s customer base and sports-focused brand.
The company expects its balance sheet and market experience to help Underdog retain more of the economic value created by prediction markets.
Underdog launched its own exchange in July, although much of its early growth in prediction markets was generated using third-party infrastructure.
Liquidity and Competition
Liquidity is expected to be one of the key challenges.
Underdog currently trails platforms including Kalshi and Robinhood in regulated US event-contract volume.
IG hopes its financial-market expertise can help Underdog internalise more liquidity provision and reduce reliance on external infrastructure.
However, industry analysts warn that building sufficient liquidity may prove more difficult than obtaining technology or regulatory access.
Regulatory Risk
The transaction also carries meaningful exposure to regulatory uncertainty surrounding US prediction markets.
State regulators, tribal interests, consumer groups and established gambling companies have challenged whether federally regulated sports event contracts should be treated as financial products rather than gambling.
Several legal and regulatory cases remain ongoing.
By linking a significant proportion of potential consideration to future performance, IG has structured the transaction in a way that provides some protection if regulation limits the sector’s expansion.
Expansion Beyond Sport
IG Group does not see Underdog’s potential as limited to sport.
The company has suggested the platform could eventually offer contracts linked to cryptocurrency, financial and macroeconomic events, culture and politics.
Exchange and clearing infrastructure could also potentially be shared across IG’s existing businesses.
The longer-term ambition would be to evolve Underdog from a sports-focused product into a broader event-trading platform.
Next Steps or Impact
The acquisition gives IG Group direct exposure to one of the fastest-growing and most contested areas of the US market.
The company is effectively betting that prediction markets will survive the current regulatory debate, expand beyond sport and become a lasting part of the retail trading landscape.
The transaction also increases competitive pressure on traditional sportsbooks, many of which are already building, acquiring or partnering with prediction-market platforms.
Editó: @fonta
