- UK’s IG Group acquired Underdog for $1.3 billion on Thursday.
- The daily fantasy sports operator’s position as a prediction market was the key appeal for the deal.
- Underdog’s lucrative position of offering sports event contracts to their current list of 38 states as a federally registered Futures Commission Merchant changes the game.
BROOKLYN, N.Y. – IG Group acquired daily fantasy sports and prediction market operator Underdog for up to $1.3 billion on Thursday. The move marks a big push for the UK-listed IG Group to join the American trading market currently under fire in state courts.
Underdog got their start as a daily fantasy sports operator and even tried operating a sportsbook, but Underdog’s entrance into prediction markets has changed everything. Less than a year since becoming the first gaming operator to integrate prediction markets alongside their fantasy products, Underdog is valued at ~$1.1 billion.
Underdog’s Prediction Gamble Produces Incredible Financial Return
The deal includes an upfront payout based on Underdog’s $1.1 billion evaluation and roughly $200 million for Underdog shareholders on earnout. According to Reuters, the upfront equity value expects to be roughly $963 million between cash and new IG shares, plus the company will pay off Underdog’s $160 million debt.
“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.
Underdog is the fourth-most popular prediction market operator in the U.S. as of late July. They posted close to a billion monthly users in the first half of 2026, up more than 100,000 from last year’s numbers.
Underdog’s push as a prediction market operator was the driving force of the deal, but the foundation of that success continues to be pushed in state and federal court.
Risky Business?
The plan for a UK-listed company to redomicile in New Jersey with their new ownership of a CFTC-registered exchange to offer sports event contracts for Americans across all 50 states (including the ones trying to ban them) is a mess. Tribal groups and states are actively challenging federal regulation of these apps, which will eventually be settled in the U.S. Supreme Court.
Underdog’s prediction market allows users to trade sports event contracts across 38 states, but federal regulation of predictions is an active legal battle. Many states are passing laws to ban prediction markets from offering “sports event contracts” that too closely resemble legal sports betting.
Aside from that debate, IG Group’s position as a British company raises question about foreign-parented ownership in American trading. However, this is quite normal considering FanDuel’s Flutter, bet365 and BetMGM involve foreign operators.
The Underdog sale sets the groundwork for everyone else through owning distribution and exchange infrastructure. Even before the sale, Fanatics bought a CFTC-registered exchange for their sports prediction contracts to trade on. Expect PrizePicks, Sleeper, Betr, and more companies to try to follow suit.
