The proposed takeover would push IG Group deeper into US sports and event contracts while leaving Underdog’s brand and app operating on their own.
Cash, Shares and a Very Large Incentive Pot
IG Group has agreed to acquire daily fantasy sports and prediction market operator Underdog in a deal worth up to roughly $1.3bn. The package includes an upfront enterprise value of about $1.1bn and a potential $200m earnout tied to Underdog’s 2026 performance.
The expected upfront equity payment is approximately $963m. IG plans to cover around $380m in cash and issue about 24.1 million new ordinary shares, equal to 6.8% of its enlarged share capital. It will also repay roughly $160m of Underdog debt and has arranged a bridge facility of up to $950m through Barclays and Goldman Sachs International.
Then there is the eye-catching employee incentive plan. Eligible Underdog staff could receive up to $850m, although that money sits outside the purchase price and would require some heroic earnings numbers. The maximum payout depends on Underdog producing at least $400m in EBITDA in 2028 and $700m in 2029.
Underdog Brings Players, Licences and Momentum
Underdog launched in 2020 and has grown into one of the largest daily fantasy sports businesses in the US. It now has more than 11 million registered accounts, over five million depositing customers and around one million average monthly active users.
Its move into prediction markets began in September 2025. IG estimates that Underdog has since become the third-largest regulated US venue by notional volume across prediction contracts and combined DFS trades, behind Kalshi and Robinhood. The company also launched its own exchange in July 2026, giving it greater control over products and the economics behind each transaction.
The financial trajectory helps explain IG’s enthusiasm. Underdog generated approximately $466m in net revenue during the 12 months to 30 June 2026, up 21% year on year. It recorded around $122m in net revenue and $46m in EBITDA during the final quarter of that period.
Sports Could Be Only the Opening Act
IG sees more than a fantasy sports operator. Underdog owns a vertically integrated US licence structure covering brokerage, exchange and clearing functions, allowing it to handle more of the prediction market process itself. That infrastructure could support contracts linked to finance, cryptocurrency, economics, culture and politics, rather than keeping the product menu centred on touchdowns and player statistics.
For everyday Underdog customers, the immediate experience may look familiar. The business is expected to retain its name, management and operating platform after completion. That means players should not wake up to a hastily repainted app, although IG’s funding and trading expertise could eventually produce a wider range of markets.
The acquisition would more than double IG’s US revenue and increase its US monthly active customer count more than tenfold, according to the company. IG also believes there is room to move customers between sports predictions, investing and active trading products. Whether users share that appetite remains to be seen, but the overlap is tempting enough for IG to place a billion-dollar wager on it.
Approval Comes Before the Celebration
The transaction remains subject to US regulatory and antitrust clearance, along with final documentation and due diligence. Completion is expected in late 2026 or early 2027.
IG expects the deal to have a broadly neutral effect on adjusted earnings per share during the first year, before becoming double-digit percentage accretive by year three. Underdog will need to keep growing quickly for the more lavish parts of the package to pay out, so this is less a quiet corporate purchase and more a bet that prediction markets are becoming a mainstream form of digital entertainment.
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