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

IG Group chief executive Breon Corcoran told investors the legal outcome for US prediction markets could arrive “sooner than we might have anticipated” after a split-court decision accelerated the path to the US Supreme Court. The trading firm completed its July acquisition of DFS and prediction market operator Underdog in a deal worth up to $1.3bn (£960m), and Corcoran said IG will be well positioned for multiple regulatory outcomes.

What Corcoran said about prediction markets and the Supreme Court

Corcoran opened the investor update by framing the current legal backdrop. He said the split decision at appellate level — a reference to conflicting rulings from the Third Circuit Court of Appeals and the Ninth Circuit Court of Appeals — has made a Supreme Court judgement more likely and brought an industry "end state" closer.

"End state is probably coming sooner than we might have anticipated. I think that is a good thing," Corcoran said.

He emphasised that, regardless of the Supreme Court’s decision on sports prediction markets, IG will still have a significant customer base: roughly five million depositing customers predominantly male and aged 20–40 who are interested in sport and also trade other asset classes.

Deal background: Underdog, Aristotle Exchange and the $1.3bn price tag

IG announced in July it had acquired DFS and the prediction market platform Underdog in a transaction valued at up to $1.3bn (£960m). Prior to IG’s purchase, Underdog launched an in-house exchange to support its prediction market product. The platform had also earlier acquired Aristotle Exchange, a derivatives clearing organisation (DCO) and designated contract market (DCM) regulated by the US Commodity Futures Trading Commission (CFTC), for an undisclosed fee.

Underdog’s metrics were highlighted during IG’s update. For the three months to 30 September 2026, Underdog reported revenue of roughly $105m, a year-on-year increase of more than 100%. Handle per customer rose 165%, average deposits per customer increased 109% and monthly active users grew 13%. The company noted the reporting period included the World Cup, which materially boosted volumes.

The appellate split and the route to the Supreme Court

The Ninth Circuit Court of Appeals ruled in August that the federal Commodity Exchange Act does not stop states from regulating sports event contracts, siding with Nevada in its case against Kalshi. That decision conflicts with a Third Circuit ruling from April, which found the state of New Jersey lacked authority to regulate sports event contracts offered within its borders.

New Jersey Attorney General Jennifer Davenport has petitioned the US Supreme Court to resolve the contradiction between the circuits. Corcoran referenced that split-court reality as an accelerant toward Supreme Court review.

How Underdog and IG would respond to adverse rulings

Underdog co-founder Jeremy Levine explained contingency plans should the Supreme Court defer authority back to states and sports event contracts be restricted. Levine said the company would pivot most sports flow back to fantasy sports under the DFS regulatory framework and that the DFS business remains core to Underdog’s strategy. He noted Underdog recently surrendered licences in seven states after regulators signalled they were not supportive of prediction markets; in six of those states the company only offered its Drafts game, which the co-founder described as a very small portion of revenue.

Levine also confirmed that a return to regulated online sports betting (OSB) is an option IG and Underdog would evaluate if it suited the business. He said the company has the capabilities to pursue OSB where appropriate and that management feels well set up for any regulatory outcome.

Market structure and strategic rationale for IG

Corcoran compared the current exchange market to his experience at Betfair to argue that liquidity alone does not define success. He predicted multiple exchanges will coexist rather than one dominant winner and said IG can bring experience from regulated financial markets — including best execution and market structure expertise — to complement Underdog’s customer focus and product velocity.

"Liquidity is very important — liquidity does not necessarily predetermine success," Corcoran said, noting the potential for differentiated products built on top of exchange infrastructure.

He outlined a likely future where customer opinions are matched through a selection of exchanges and a mix of market makers, and where operators can layer sportsbook-style products on exchange technology to offer alternative product and promotional strategies. Corcoran described the opportunity for IG shareholders as significant if the group becomes an active, profitable participant in these markets.

Financial context for IG and Underdog

IG Group reported group revenue of £240m for the three months to 30 September 2026, down 14% year on year. By contrast, Underdog’s revenue growth over the same period exceeded 100% to approximately $105m, with sharp increases in handle per customer, deposits and monthly actives as previously noted.

What operators and regulators will watch next

Regulators and operators will monitor whether the Supreme Court accepts the circuit split and how quickly it issues a decision. The industry is also watching how state regulators respond if the Supreme Court defers authority back to states, and whether firms that have built prediction market infrastructure will shift volumes into DFS or regulated OSB. For readers following the regulatory angle, refer to our coverage of regulation for broader context on jurisdictional responses.

IG’s acquisition places it among firms investing in exchange infrastructure and DFS, alongside existing exchange operators such as Kalshi and Polymarket, and established sports-betting and DFS operators like DraftKings. The coming months of litigation and regulatory engagement will determine whether prediction markets scale inside regulated US frameworks or whether operators refocus on alternative regulated products such as DFS and OSB.