IG Group's $1.3B Bet on US Prediction Markets

IG Group Holdings has agreed to acquire US prediction markets operator Underdog Sports Holdings for up to approximately $1.3 billion, the London-listed company announced on 30 July 2026. The upfront enterprise value is $1.1 billion, with an earnout of up to roughly $200 million contingent on Underdog's 2026 net gaming revenue and positive EBITDA. IG Group will also repay Underdog's existing debt of approximately $160 million.

CEO Breon Corcoran said the acquisition establishes IG as a leader in US prediction markets, calling it one of the most significant opportunities across trading and entertainment.

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01

How the Deal Is Funded

02

Why Underdog

03

Impact on IG Shareholders

04

What Comes Next

How the Deal Is Funded

The consideration will be funded through new IG ordinary shares and debt, including a $450 million short-term leveraged loan from Barclays Bank PLC and Goldman Sachs. IG Group paused its £125 million share buyback programme, with approximately £33 million completed.

Pro forma gross leverage is expected to stay under 2.0 times at end-2026, and IG remains committed to an investment grade credit rating. The solvency ratio was 237 percent at 30 June 2026, with the pro forma ratio expected within the 160 to 200 percent target range.

A separate management incentive plan, not part of seller consideration, could give eligible Underdog employees up to $850 million from future earnings conditional on strong outperformance. IG Group said the plan is expected to be self-funding from Underdog's cash flows.

Why Underdog

Underdog, founded in 2020, cut staff earlier in 2026 to redirect resources toward prediction markets. It is migrating from a broker-centric model to a proprietary exchange strategy, having acquired Aristotle Exchange earlier this year.

Underdog averaged 952,500 monthly active users in H1 2026, up from 835,700 in 2025. It swung to positive EBITDA of $59.6 million from negative $52.8 million in the prior-year period. As of mid-July 2026, it ranked fourth among CFTC-regulated prediction market destinations in the US. IG Group said Underdog could eventually expand beyond sports into election betting and cryptocurrency price movements.

Impact on IG Shareholders

The acquisition is expected to be broadly neutral to adjusted EPS in year one and double-digit percentage accretive by year three, with return on invested capital exceeding IG's weighted average cost of capital by year three.

IG Group's H1 2026 results showed total revenue up 18 percent to £642.8 million and net trading revenue up 21 percent to £588.8 million.

Corcoran held a small equity stake in Underdog of less than 0.5 percent, acquired in 2021 and 2023 before he became CEO in 2024. The IG board was aware of the investments.

What Comes Next

Completion is expected in late 2026 or early 2027, subject to regulatory approvals. Underdog will operate as a standalone business with its own brand and management team under IG Group. Federal regulation of exchange-based betting lets firms facilitate wagers across all 50 US states.