IG Group Acquires Underdog for $1.3B, Entering Prediction Markets

UK-listed broker IG Group has agreed to acquire U.S. prediction market and fantasy sports platform Underdog for approximately $1.3 billion. This move marks a significant expansion for one of the largest traditional retail brokers into the rapidly growing event-based trading market. For at least a year, industry observers have questioned how prediction markets might affect the CFD sector. IG's acquisition is a clear response from a major CFD broker, indicating that event trading is becoming a strategic priority.

The acquisition comes shortly after Robinhood reported $156 million in revenue from event contracts in Q2 2026, more than ten times the level from a year earlier. With 13.6 billion event contracts traded in a single quarter, Robinhood has demonstrated that retail traders increasingly view sports, macroeconomic decisions, and political outcomes as tradable assets. This growth has prompted other major players to enter the space through acquisitions rather than building from scratch.

Recent consolidation includes DraftKings' acquisition of CFTC-regulated Railbird (rebranded as DKeX) in October 2025, and Robinhood's joint venture with Susquehanna to acquire derivatives exchange MIAXdx (rebranded as Rothera) in January 2026. These moves highlight a trend toward owning regulated infrastructure for event trading.

For retail forex traders, this development signals a broadening of product offerings at major brokers. While CFDs remain core to IG's business, the company's entry into prediction markets could lead to new trading venues and instruments. However, traders should be aware that prediction markets carry unique risks, including regulatory uncertainty and potential market manipulation. As more traditional brokers enter this space, oversight and investor protection will be critical.

IG Group's acquisition is likely to prompt other brokers to reassess their strategies, potentially leading to further consolidation. The integration of prediction markets into established brokerage platforms may expand access for retail traders, but it also raises questions about the suitability of these products for less experienced investors.

This is information, not investment advice.