IG Group to buy Underdog for up to $1.3 billion, says deal will boost US position

BLUF: IG Group Holdings PLC has agreed to acquire US daily fantasy and prediction markets operator Underdog Sports Holdings Inc for total consideration of about USD 1.3 billion, comprising an enterprise-value-based upfront of roughly USD 1.1 billion and an earnout of approximately USD 200 million, the company announced on 30 July 2026. The board expects the acquisition to more than double IG’s US revenue and to increase US monthly active customers by over ten times.

IG Group to buy Underdog: the deal and immediate strategic rationale

IG Group announced the proposed acquisition on 30 July 2026 as part of its half-year results statement. The target, Underdog Sports Holdings Inc, is a US-based daily fantasy sports and prediction markets operator that IG describes as "the third-largest US prediction markets venue by US regulated notional volume flow." Consideration is structured as an upfront payment reflecting an enterprise value of approximately USD 1.1 billion plus an earnout of about USD 200 million payable to Underdog shareholders, taking total potential consideration to around USD 1.3 billion.

IG said the transaction "marks a decisive step in our strategy, establishing IG as a leader in the fast-growing US prediction markets," and expects the asset to materially scale its US business by more than doubling US revenue and increasing monthly active customers in the US by more than tenfold.

Financial results that accompany the Underdog announcement

IG Group reported increased revenue and earnings for the first half of its new financial year to 30 June 2026. The company changed its financial year-end in November, moving the year-end date to 31 December from 31 May.

• Total revenue for the six months to 30 June 2026 rose 18% to £642.8 million from £545.2 million for the six months ended 30 June 2025. On an organic continuing basis, revenue increased 17% to £623.7 million from £534.8 million.

• Earlier in July IG had forecast an 18% revenue increase to £643 million with 16% organic growth to £624 million.

• Net trading revenue increased 21% to £588.8 million from £485.4 million, while organic continuing net trading revenue rose 20% to £574.2 million.

• Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4% to £282.0 million from £270.4 million.

IG attributed the more modest EBITDA uplift to "lower interest income — as rates declined and more was passed through to customers — increased investment in our propositions and marketing, and costs associated with the strategic review."

Guidance, dividend and medium-term targets unchanged excluding Underdog

The group proposed an interim dividend of 14.46 pence for the first half. IG said it expects full-year results to be "in line with market expectations" and left its medium guidance unchanged on an excluding-Underdog basis.

That guidance includes a medium-term organic total revenue compound annual growth rate of at least 10%. IG previously forecast organic total revenue growth of 10% to 15% from the 2025 base of £1.10 billion, excluding Freetrade and Independent Reserve. The company also reiterated expected net interest income of between £110 million and £120 million, and EBITDA margins in the mid-40s percentage range.

Management commentary and completion context

Chief Executive Officer Breon Corcoran framed the half as strong:

"Faster product velocity, increased marketing at attractive returns and a rapidly growing customer base drove double-digit revenue and adjusted EPS growth," Corcoran said. "Our proposed acquisition of Underdog announced on 30 July 2026 marks a decisive step in our strategy, establishing IG as a leader in the fast-growing US prediction markets."

The company also said the strategic review it announced in March "is now substantially complete." The announcement offers minimal detail on timing for deal completion or regulatory approvals; IG has not published a closing timetable in the half-year release.

What the acquisition means for IG’s US strategy and the market

IG projects that adding Underdog will materially accelerate its US footprint. The firm expects a greater than twofold increase in US revenue and a more than tenfold rise in US monthly active customers after integration. IG positions the acquisition as establishing leadership in US prediction markets, an area it characterises as fast-growing.

Operators, platform vendors and payments providers should note the focus on customer scale in the US. Integrating a US consumer-facing prediction markets business will require local regulatory compliance, platform consolidation and commercial cross-selling to convert existing IG customers to the new product set. Some readers may find the explanatory detail on how IG will deliver the tenfold monthly active customer increase light on operational specifics.

Market reaction and next steps for stakeholders

IG said it expects the Underdog acquisition to be transformational for its US business but left medium-term group guidance unchanged when the effect of Underdog is excluded. The company did not disclose additional financing details in the half-year statement; the consideration split between upfront EV-based consideration and earnout suggests a mix of immediate payment and performance-related deferred consideration.

Shareholders will see the proposed 14.46p interim dividend and await further transaction documents and regulatory filings that typically follow a deal announcement. Suppliers and rivals in the US prediction market and daily fantasy sports sectors will be watching for integration plans and any signals on product road maps and cross-border distribution.

Where to follow further coverage

This note covers the financials and the announced purchase terms; future statements from IG Group and regulatory filings will provide the timetable, conditionality and any antitrust or gambling-regulatory approvals required in the US. For related commercial implications see our coverage of betting and US market product trends in the sports and regulation sections.