Betting company Underdog has agreed to sell to IG Group Holdings, a publicly traded company from London, for as much as $1.3 billion in stock and cash based on performance incentives. IG Group will pay at least $1.1 billion.
There’s also a management incentive plan that could give “eligible Underdog employees” up to $850 million from the company’s future earnings, “conditional on strong outperformance,” per terms of the deal disclosed Thursday.
As part of the agreement, IG Group will repay Underdog’s existing debt, expected to be approximately $160 million.
IG Group said Underdog’s recent prediction market push, which includes launching its own exchange, is a key appeal. Federal regulation of exchange betting has opened the door for companies to facilitate bets in all 50 states rather than being limited by the laws of individual states—a lucrative opportunity that has seen Kalshi and Polymarket rise to valuations above $10 billion. In addition to prediction markets, Underdog also still runs daily fantasy sports contests.
Underdog will operate as a standalone business with its own brand and management team under IG Group’s umbrella, according to the announcement. IG Group CEO Breon Corcoran had a small equity stake in Underdog, acquired before he was named chief executive in 2024, according to the announcement. The IG board was aware of the investments, made in 2021 and 2023 and totaling less than 0.5% of Underdog, and approved his participation in the negotiations (though he recused himself from the board’s ultimate vote). He will be treated like all the other Underdogs shareholders in his class, the company said.
