IG Group to acquire Underdog for up to $1.3 billion

IG Group has agreed to acquire Underdog in a deal value up to $1.3 billion, shopping for the fantasy sports activities firm simply 12 days after it launched prediction markets by means of its personal federally regulated alternate.

The acquisition brings collectively a serious international on-line brokerage and derivatives buying and selling firm with a U.S. sports activities platform that has quickly reworked itself right into a vertically built-in prediction market operator.

IG will acquire Underdog at an enterprise worth of roughly $1.1 billion, with its shareholders eligible for a further earnout of about $200 million. The upfront fee will embody roughly $380 million in money and 24.1 million newly issued IG shares.

The London-listed firm additionally expects to repay roughly $160 million of Underdog debt at closing. The acquisition stays topic to regulatory approvals and different customary closing situations.

Underdog announced the launch of its personal alternate on July 18. IG disclosed the acquisition settlement Thursday, July 30, capping an unusually quick growth from fantasy sports activities into federally regulated event-contract buying and selling.

Underdog constructed a prediction alternate in months

Founded in 2020, Underdog initially constructed its enterprise round every day fantasy sports activities, turning into notably recognized for its choose’em contests and huge finest ball fantasy soccer tournaments. It later added conventional on-line sports activities betting in a restricted variety of states.

The firm entered prediction markets in September 2025 by means of a partnership with Crypto.com. Underdog served because the customer-facing middleman, permitting customers to commerce sports activities occasion contracts by means of its app whereas Crypto.com operated the underlying alternate.

Underdog later added entry to contracts provided by means of Kalshi, but it surely was nonetheless depending on exterior exchanges to checklist and function the markets.

That modified in March, when Underdog acquired Aristotle Exchange DCM Inc. and Aristotle Exchange DCO Inc., giving it management of a Commodity Futures Trading Commission-approved designated contract market (DCM) and registered derivatives clearing group (DCO).

Underdog can be registered as a futures fee service provider (FCM), giving it the full regulatory stack wanted to checklist contracts, clear trades and handle buyer accounts by means of its personal companies.

Exchange launched 12 days earlier than sale announcement

Underdog started providing prediction markets by means of its personal alternate on July 18, just a little greater than 4 months after asserting the Aristotle acquisition.

The firm stated the launch made it the primary sports activities firm to possess the whole prediction market licensing stack of a DCM, DCO and FCM.

Before the launch, Underdog had continued providing contracts by means of Crypto.com and Kalshi. Moving exercise onto its personal alternate allowed the corporate to management extra of the product and the income generated by buyer buying and selling.

The acquisition settlement with IG was introduced lower than two weeks later.

The timing means IG just isn’t merely buying a fantasy sports activities app or sportsbook. It is buying a longtime U.S. sports activities model that now owns a federally regulated alternate, clearinghouse and customer-facing futures middleman.

IG expands its US buying and selling enterprise

IG Group operates on-line platforms for buying and selling derivatives, shares, international alternate, futures, choices and cryptocurrency merchandise.

The firm’s core enterprise has traditionally centered on leveraged derivatives, together with contracts for distinction and monetary unfold betting exterior the United States. Those merchandise enable prospects to commerce on worth actions with out proudly owning the underlying property.

The acquisition comes simply three days after IG-owned brokerage tastytrade launched prediction markets for its U.S. prospects. The providing focuses on occasion contracts tied to financial releases and monetary markets, together with Federal Reserve selections, inflation, employment, volatility, crude oil and cryptocurrency.

Acquiring Underdog offers IG a special type of U.S. retail viewers constructed round sports activities followers somewhat than conventional monetary merchants. It additionally supplies IG with prediction market infrastructure that will in any other case require separate regulatory purposes or acquisitions to assemble.

The deal represents one other convergence between sports activities gaming and conventional monetary markets as occasion contracts change into a bigger retail buying and selling product.

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