Billion-Dollar Deal: IG Group Proposes $1.3bn Acquisition of Underdog Sports

A massive transaction is taking shape in the international gaming and finance landscape as IG Group, a prominent FTSE 100 fintech company, has launched a proposal to acquire Underdog Sports. The deal, valued at approximately $1.3 billion, signals IG Group’s intent to dominate the US prediction markets and daily fantasy sports (DFS) scene. This move highlights an increasing trend where professional trading technology meets digital sports entertainment, creating a specialized platform for consumer engagement on a global scale.

Underdog Sports has rapidly ascended to become the third-largest prediction market venue in the US regarding regulated notional volume flow, trailing only behind Kalshi and Robinhood. The company's financial performance has been robust, with net revenue climbing 21 percent year-on-year to approximately $466 million for the 12 months ending June 30, 2026. For IG Group, the acquisition offers a diversified revenue stream that is largely uncorrelated with its core brokerage business, providing a buffer against traditional market volatility.

Numbers and facts

The financial structure of the acquisition is multi-layered. It includes an enterprise value-based upfront consideration of $1.1 billion, consisting of $380 million in cash and the issuance of 24.1 million new IG ordinary shares. Furthermore, IG Group has committed to repaying Underdog's existing debt of approximately $160 million upon completion. Financial giants Barclays and Goldman Sachs have already provided a bridge facility of up to $950 million to support the transaction.

To ensure long-term performance, a management incentive plan has been established for Underdog employees. This plan could result in a payout of up to $850 million, but it is strictly conditional. Underdog must deliver an EBITDA of at least $400 million in 2028 and $700 million in 2029 to trigger the maximum payout, which would be self-funded from the entity's own earnings.

"Technology is reshaping the large, high-engagement markets in which IG operates – and increasingly bringing them together. Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full licence stack that together give us a differentiated position in US prediction markets." - Breon Corcoran, CEO of IG Group

Background

Underdog Sports is expected to remain a commercially standalone business, retaining its own brand name and operational leadership. The acquisition is the result of a comprehensive strategic review initiated by IG Group in March, aimed at building a global platform that merges investing and entertainment. Looking forward, the group plans to expand the prediction market offerings into diverse areas such as macroeconomics, politics, and culture, while utilizing the infrastructure of tastytrade to further long-term growth.

"IG’s scale, expertise, resources and reach are going to unlock our potential, expand what we’ve built, and bring our products to more audiences." - Jeremy Levine, Co-Founder and CEO of Underdog Sports

Why it matters for German players

For residents in Germany, this US-centric deal has no immediate impact on their gambling options. Underdog Sports does not currently hold a license from the GGL (Joint Gambling Authority of the German States). In accordance with the GlüStV 2021, only companies listed on the official white-list are permitted to offer their services to German consumers. Strict regulations such as the 1,000 Euro monthly deposit limit and the 1 Euro per spin limit for virtual slots remain the standard for player protection in Germany.

What it means for GGL-licensed casinos

The entry of a financial titan like IG Group into the broader betting sector increases global competition for innovation. GGL-licensed providers must balance these technological trends with Germany's specific regulatory environment. While prediction markets for cultural or political events are gaining ground in the US, they face significant regulatory hurdles in Germany, where the focus remains on traditional betting formats and strict addiction prevention.