IG Group to acquire Underdog for up to $1.3 billion, targeting US prediction markets

IG Group will pay roughly $1.1 billion at closing, with Underdog shareholders eligible for up to $200 million more if the business hits agreed performance targets. IG Group will also retire about $160 million of Underdog’s existing debt.

The earnout structure ties a meaningful chunk of the payout — up to $200 million — to Underdog actually hitting performance targets after the deal closes, rather than paying the full amount upfront. That’s a fairly standard way for an acquirer to hedge against integration risk in a fast-growing but young market, while still giving Underdog’s existing shareholders and management a strong incentive to keep growing the business rather than coast after the sale.

Underdog will keep operating as a standalone business after the deal closes, retaining its own brand, management team, and operating platform rather than being folded into IG Group’s existing infrastructure.

IG Group’s core business is regulated trading — CFDs, spread betting, and forex — built around markets with clear rules and licensed infrastructure. Prediction markets sit adjacent to that: the same regulatory muscle memory and retail trading audience, but a newer, faster-growing US vertical that traditional trading platforms have mostly watched from the outside. Buying an established operator instead of building from scratch skips years of licensing and product work in a market where speed matters.

Underdog ranks among the largest prediction-market operators in the US. Beyond prediction markets, it runs a daily fantasy sports business and recently launched its own event-contracts exchange.

According to IG Group, Underdog’s revenue grew 21% over the past 12 months to $466 million. The platform has more than 11 million registered users, of whom roughly 5 million have made at least one deposit — a conversion rate of about 45% that will likely matter more to IG Group long-term than the headline user count, since accounts that never fund don’t generate revenue.