IG Group Secures Underdog in $1.3 Billion Deal to Bolster U.S. Operations
Olivia Perry · Jul 31, 2026
IG Group Secures Underdog in $1.3 Billion Deal to Bolster U.S. Operations
IG Group, the London-listed trading platform provider, announced the purchase of Underdog, a company focused on prediction markets and daily fantasy sports, for up to $1.3 billion in a transaction that combines $1.1 billion paid upfront with an additional $200 million tied to earnout targets. The agreement, disclosed in July 2026, positions the UK firm to double its U.S. revenue base while adding scale in active users and opening pathways into non-sports prediction markets.
Breakdown of the Transaction Terms
The structure splits payment across an immediate cash outlay and performance-linked incentives, a format that aligns seller and buyer interests over the integration period. Underdog reported $46 million in EBITDA for the second quarter alone, alongside $466 million in revenue for the twelve months that ended June 30. These figures supplied the financial foundation for the valuation and gave IG Group concrete benchmarks against which future earnouts will be measured.
Revenue and User Growth Projections
Company filings indicate the acquisition will immediately double IG Group’s existing U.S. revenue contribution. The combined user pool expands materially because Underdog already operates a large base of active participants in daily fantasy and prediction products. Integration plans call for cross-promotion of IG’s broader trading tools into Underdog’s audience, a move expected to increase overall engagement metrics without requiring separate customer acquisition campaigns.
Market Expansion Beyond Sports
Underdog’s platform currently centers on sports-related events, yet its technology stack supports prediction markets in other verticals such as entertainment, politics, and economic indicators. IG Group executives outlined plans to leverage that infrastructure to introduce non-sports offerings across U.S. states where regulatory frameworks permit. The expansion aligns with observed growth in event-based trading volumes reported by multiple North American exchanges during the first half of 2026.
Regulatory Context Across Jurisdictions
IG Group already holds licenses in several U.S. states through prior acquisitions and organic growth. The addition of Underdog brings established compliance relationships in markets where daily fantasy operations have operated for years. State gaming control boards in New Jersey, Pennsylvania, and Michigan maintain public records showing steady increases in licensed operator counts, providing a stable backdrop for the combined entity’s expansion timeline. Observers note that similar cross-border transactions have required coordinated filings with both the Securities and Exchange Commission and individual state regulators, a process IG Group has navigated successfully in earlier deals.
Financial Performance Context
Underdog’s trailing twelve-month revenue of $466 million and second-quarter EBITDA of $46 million reflect strong unit economics in a competitive daily fantasy segment. Those results compare favorably with industry benchmarks published by the American Gaming Association, which tracks aggregate handle and operator margins across sports wagering and fantasy platforms. The acquisition multiple implied by the headline price sits within ranges seen in other recent gaming and trading platform combinations completed in 2025 and early 2026.
Integration and Operational Outlook
Post-closing work will focus on technology platform alignment and brand migration. IG Group intends to retain Underdog’s product teams in their current locations while centralizing certain corporate functions. The earnout structure incentivizes continued revenue growth and margin improvement over the next two fiscal years, metrics that will be reported in IG Group’s quarterly updates beginning in the fourth quarter of 2026.
Looking Ahead
The completed transaction adds both immediate scale and longer-term optionality for IG Group in the U.S. market. Regulatory approvals remain the final gating items, with filings already submitted to the relevant state authorities. Once cleared, the combined platform will operate across an expanded set of products and geographies, supported by the financial performance Underdog demonstrated through June 2026.