IG Group has agreed to acquire Underdog in a deal worth up to $1.3 billion, buying the fantasy sports company just 12 days after it launched prediction markets through its own federally regulated exchange.
The acquisition brings together a major global online brokerage and derivatives trading company with a U.S. sports platform that has rapidly transformed itself into a vertically integrated prediction market operator.
IG will acquire Underdog at an enterprise value of approximately $1.1 billion, with its shareholders eligible for an additional earnout of about $200 million. The upfront payment will include approximately $380 million in cash and 24.1 million newly issued IG shares.
The London-listed company also expects to repay approximately $160 million of Underdog debt at closing. The acquisition remains subject to regulatory approvals and other customary closing conditions.
Underdog announced the launch of its own exchange on July 18. IG disclosed the acquisition agreement Thursday, July 30, capping an unusually fast progression from fantasy sports company to vertically integrated prediction market operator and acquisition target for a global trading firm.
Underdog built a prediction exchange in months
Founded in 2020, Underdog initially built its business around daily fantasy sports, becoming particularly known for its pick’em contests and large best ball fantasy football tournaments. It later added traditional online sports betting in a limited number of states.
The company entered prediction markets in September 2025 through a partnership with Crypto.com. Underdog served as the customer-facing intermediary, allowing users to trade sports event contracts through its app while Crypto.com operated the underlying exchange.
Underdog later added access to contracts offered through Kalshi, but it was still dependent on outside exchanges to list and operate the markets.
That changed in March, when Underdog acquired Aristotle Exchange DCM Inc. and Aristotle Exchange DCO Inc., giving it control of a Commodity Futures Trading Commission-approved designated contract market (DCM) and registered derivatives clearing organization (DCO).
Underdog is also registered as a futures commission merchant (FCM), giving it the full regulatory stack needed to list contracts, clear trades and manage customer accounts through its own businesses.
Exchange launched 12 days before sale announcement
Underdog began offering prediction markets through its own exchange on July 18, a little more than four months after announcing the Aristotle acquisition.
The company said the launch made it the first sports company to possess the complete prediction market licensing stack of a DCM, DCO and FCM.
Before the launch, Underdog had continued offering contracts through Crypto.com and Kalshi. Moving activity onto its own exchange allowed the company to control more of the product and the revenue generated by customer trading.
The acquisition agreement with IG was announced less than two weeks later.
The timing means IG is not merely purchasing a fantasy sports app or sportsbook. It is acquiring an established U.S. sports brand that now owns a federally regulated exchange, clearinghouse and customer-facing futures intermediary.
IG expands its US trading business
IG Group operates online platforms for trading derivatives, stocks, foreign exchange, futures, options and cryptocurrency products.
The company’s core business has historically centered on leveraged derivatives, including contracts for difference and financial spread betting outside the United States. Those products allow customers to trade on price movements without owning the underlying assets.
The acquisition comes just three days after IG-owned brokerage tastytrade launched prediction markets for its U.S. customers. The offering focuses on event contracts tied to economic releases and financial markets, including Federal Reserve decisions, inflation, employment, crude oil and cryptocurrency.
Acquiring Underdog gives IG a different kind of U.S. retail audience built around sports fans rather than traditional financial traders. It also provides IG with prediction market infrastructure that would otherwise require separate regulatory applications or acquisitions to assemble.
The deal represents another convergence between sports gaming and traditional financial markets as event contracts become a larger retail trading product.
Sports and finance companies converge
Underdog’s path into prediction markets differs from those taken by several larger sports gaming operators.
FanDuel entered through a partnership with CME Group, while DraftKings and Fanatics acquired regulated exchange infrastructure. Rush Street Interactive has applied for exchange and clearinghouse approvals while saying it has not yet decided whether to launch a consumer prediction-market product.
Traditional financial companies have also moved deeper into the sector. Robinhood has made prediction markets a growing part of its retail brokerage platform, while firms including CME, Susquehanna International Group and BGC Group have formed partnerships or acquired infrastructure connected to event contracts.
The Underdog transaction reverses the direction seen in several of those deals. Rather than a sportsbook buying financial-market infrastructure, a global trading company is acquiring a sports operator that already assembled the full prediction market stack.
The acquisition could give IG a ready-made consumer platform for expanding U.S. event-contract trading well beyond Underdog’s original fantasy sports audience.
