IG Group says ‘end state’ for prediction markets may arrive sooner than expected

IG Group said in its investor update that it expects a US Supreme Court decision on the legality of prediction markets “sooner than anticipated,” and reminded investors it bought DFS and the prediction-market platform Underdog in July in a deal worth up to $1.3bn (£960m). Breon Corcoran said the company will be well positioned even if the Supreme Court bans contracts on sporting events.

Context of the deal and Underdog’s strategic move

IG Group completed the acquisition of Underdog in July as part of a strategy to enter prediction markets in the United States. Prior to the announcement, Underdog launched its own internal exchange to feed its prediction-market product after acquiring the CFTC-regulated DCM and DCO Aristotle Exchange for an undisclosed sum.

Corcoran framed the purchase within a shifting regulatory backdrop and noted that Underdog’s customer base — roughly five million depositing customers, mostly men aged 20–40 — overlaps with traders in other asset classes.

Why the Supreme Court could decide sooner and what Corcoran said about prediction markets

Corcoran said the split decision in a lower court has accelerated the move toward a Supreme Court ruling. He said:

“End state is probably coming sooner than we might have anticipated. I think that is a good thing.” — Breon Corcoran

He added that since the deal was announced there has been “a lot of legal and political news,” and he expected informational volatility around the case.

Circuit split and the political response

In August, the Ninth Circuit Court of Appeals ruled for Nevada against Kalshi, finding that the federal Commodity Exchange Act does not bar states from regulating contracts on sporting events, a decision that contradicted an April ruling from the Third Circuit Court of Appeals that held New Jersey did not have authority to intervene in contracts on events offered in that state. This circuit split has prompted regulatory debate and will likely be resolved in the courts; see more on [/regulation](/regulation).

New Jersey Attorney General Jennifer Davenport subsequently asked the Supreme Court to take the case to resolve the circuit split.

Recent financial results for IG Group and Underdog

In its latest trading update, IG Group reported revenues fell 14% to £240m in the three months ended 30 September 2026. In the same period Underdog reported revenue growth of more than 100% year-on-year, to approximately $105m.

Underdog also disclosed unit metrics: handle per customer rose 165%, average deposits per customer increased 109%, and monthly active users grew 13%. The company acknowledged the World Cup during the reporting period was a meaningful tailwind for those figures.

Underdog’s contingency plans and comments from its co-founder

Jeremy Levine, Underdog’s co-founder, explained operational alternatives if contracts on sporting events were federally prohibited. He said:

“If the Supreme Court does defer authority back to the states, we’ll shift predominantly all of our sports flow back to fantasy sports and the DFS regulatory framework.” — Jeremy Levine. The company said it would consider regulated online sports betting if that proved advantageous to the business; any shift would redirect product flow toward fantasy and DFS rules and toward regulated sports verticals like [/sports](/sports).

Levine noted Underdog recently surrendered licences in seven states after talks with regulators unsupportive of prediction markets; in six of those seven states the company only offered its Drafts product. He said Drafts is an immaterial proportion of the revenue mix and that the firm is open to returning to regulated online sports betting (OSB) where it makes commercial sense.

How IG sees the competitive landscape and sector profitability

Corcoran named Kalshi and Polymarket among competitors in the prediction-exchange space and drew on his Betfair experience to explain that liquidity matters but is not the sole determinant of success. He outlined a likely end state in which customers express views that are filled across a selection of exchanges with different market makers.

He said there is room for multiple successful operators and that IG can reshape prospects for its shareholders by being “an active, growing and profitable” part of the market. Corcoran added that IG’s experience in regulated financial markets gives it execution and compliance capabilities that can complement the product velocity and customer focus Underdog brings.

Implications for operators, regulators and investors

A Supreme Court decision resolving the tension between the Third and Ninth circuits should clarify whether states retain authority to regulate contracts on sporting events. A ruling that returns jurisdiction to the states would force platforms like Underdog to prioritise the DFS framework and consider entering or re-entering regulated OSB.

For investors the case presents two lines of focus: capital allocation to exchange infrastructure and market making, and assessing how much of Underdog’s growth is cyclical due to global events such as the World Cup. For operators and tech providers, regulatory fragmentation and the likely existence of multiple exchanges imply sustained demand for connectivity, compliance and liquidity management solutions; providers should consider opportunities in [/b2b](/b2b).

What remains to be seen

The exact timing and content of any Supreme Court decision have not been set publicly, but the split in the lower courts has increased the likelihood of federal review. Corcoran and Levine say they are preparing for several scenarios: redirecting flow to DFS, evaluating regulated OSB, and exploiting a combined exchange-and-product offering on a unified technology stack.