Underdog co-founder and CEO Jeremy Levine took the stage at a virtual IG Group shareholder seminar Thursday to explain what the London-listed trading company is actually buying for $1.3bn.
Levine said it is a sports company that rebuilt itself as a vertically integrated, federally regulated prediction markets operator ready to evolve with an ever-changing U.S. market. IG announced the acquisition in July to help bolster its American business.
The company will host a strategy update on Oct. 22, where it plans to lay out its refreshed strategy, capital allocation framework and guidance. IG held Thursday’s seminar as a deep dive on the Underdog business ahead of the deal closing, which is expected in late 2026 or early 2027, pending U.S. regulatory approvals.
Thursday’s presentation framed Underdog as one of the fastest-growing sports companies ever and as a business whose pivot into prediction markets is already showing up in its numbers.
“Underdog gets us into a high-growth adjacent category spanning daily fantasy sports, prediction markets and more,” IG CEO and Executive Director Breon Corcoran said. “Prediction markets are growing quickly, led by sport, and Underdog is built and designed for sport. Underdog performed well in Q3, heading into its busiest quarter of the year, which includes more of the NFL season and the start of the NBA season.
“The business has strong momentum, and I remain convinced that Underdog will accelerate IG’s scale and growth profile.”
Underdog deal behind the seminar
IG announced the acquisition in July, agreeing to an upfront value of about $1.1bn, plus an earnout of up to $200m tied to Underdog’s 2026 net revenue and positive 2026 EBITDA.
IG is settling approximately 60% of the upfront payment through about 24.1m new IG shares, with the rest in cash. A separate management incentive plan worth up to $850m would only pay out in full if Underdog delivers at least $400m in EBITDA in 2028 and $700m in 2029, according to IG’s deal announcement.
Corcoran said at the time that the deal “establishes IG as a leader in US prediction markets.”
The transaction was the main outcome of a strategic review IG launched in March, and it more than doubles IG’s US revenue while adding about 1 million average monthly active users. IG already owns U.S. brokerage tastytrade, and it plans to use that platform to move Underdog customers from sports contracts into financial trading.
Underdog goes from daily fantasy to a prediction markets
The seminar laid out why Underdog moved away from the daily fantasy model that built it. From its founding in 2020, the company grew net revenue from $9m in 2021 to $441m in 2025, according to Levine.
Levine said daily fantasy rules meant Underdog offered about a third of the product customers wanted compared with full sportsbooks, and only in about 36 states. Underdog offered stat-related player picks but did not have team-based picks, spreads, moneylines and totals.
The emergence of prediction markets removed the regulatory limits, he said.
Underdog launched predictions in September 2025 as a front end for Crypto.com‘s exchange, expanded to 30 states, and later integrated Kalshi markets through its own futures commission merchant. By March, predictions made up half of Underdog’s handle, according to Levine. The company acquired designated contract market and clearinghouse licenses, then launched its own exchange, Underdog Exchange, in July.
Levine said Underdog offers its core sports experience in 46 states under a single federal regulator, the Commodity Futures Trading Commission. Its player-only picks daily fantasy product operates in 36 states under individual state regulations.
Levine described the app as a “super app” which routes customers to fantasy, Underdog Exchange or other exchanges through a “proprietary orchestration layer.”
The strategy has come at a cost. In September, Underdog surrendered its fantasy licenses in seven states:
- Massachusetts
- Maryland
- Michigan
- Mississippi
- New Jersey
- Ohio
- Pennsylvania
Q3 numbers show Underdog prediction markets shift
The seminar gave investors the first look at Underdog’s third-quarter performance.
Its preliminary Q3 2026 handle reached about $1.08bn, up 199% year-over-year, while net revenue of about $105m rose 118%, according to Levine. Levine attributed the revenue jump to strong World Cup results and a soft Q3 2025 by comparison.
Levine said users did not grow at the same pace. Average monthly active users were an estimated 705,000 in the third quarter, up 13%, but down from 1.07 million in the first quarter and 836,000 in the second quarter. Year-to-date net revenue sits at about $355m, up 30%.
Levine noted that the fourth quarter accounted for more than a third of 2025 revenue, about $147m or more, and positioned the NFL and NBA seasons as the drivers of a stronger finish.
Underdog Exchange traded $972m in contracts from Sept. 8 to Oct. 7, up 137% from the prior 30 days but still about 1% of total prediction market volume, an industry that Kalshi dominates with a 78% share.
Underdog built for two regulatory outcomes
Levine addressed the question of what happens if states win in the regulatory oversight battle that appears destined for the U.S. Supreme Court.
He laid out two scenarios:
- Under a federal-led framework, the company would offer its full sports markets nationwide.
- Under a state-led framework, it would fall back to player-only fantasy markets in about two-thirds of states, including in large non-betting states such as California and Texas.
“We feel really well set up for any outcome,” Levine said. “And we’d certainly kind of like the uncertainty or the limbo to get answered sooner rather than later because we feel really good about either path for ourselves.”
Underdog itself is a litigant in multiple states. But in both cases, Levine argued it keeps financial markets, games and a single app with a large base of depositing customers.
Levine also said innovation will remain important and highlighted new products, including Streaks, Ladders, Crash and Rips. He said those launches are slated for this month.
“Our revenue is well diversified, and we’re well set up to succeed under any likely regulatory outcome,” he said. “And we now head into our biggest quarter of the year with the best product we’ve ever had.”
