IG Group Buys Underdog for $1.3 Billion — The First Major Foreign Acquisition of a US Prediction Market Exchange
IG Group, the UK-listed financial trading platform, has agreed to acquire Underdog for approximately $1.3 billion — 13 days after Underdog launched its own CFTC-licensed exchange. The deal gives IG Group a US designated contract market and clearing organisation, making it the first international financial firm to acquire a licensed US prediction market venue. Underdog is currently the third-largest US prediction market by regulated notional volume.
IG Group, the UK-listed financial technology company operating spread-betting and CFD platforms across 17 countries, has agreed to acquire US prediction market and daily fantasy sports operator Underdog for approximately $1.3 billion. The announcement on 31 July comes just 13 days after Underdog launched its own CFTC-licensed exchange — the Aristotle Exchange DCM and DCO it acquired in March — making it the fifth licensed US prediction market venue. IG Group CEO Breon Corcoran described the deal as 'a decisive step in IG's long-term strategy to build a global consumer engagement platform that capitalises on the rapid convergence of trading, investing and entertainment.' It is the first time an international financial firm has purchased a licensed US prediction market exchange.
For UK readers, the significance is direct. IG Group is one of the UK's best-known retail trading platforms, LSE-listed, regulated by the FCA and familiar to hundreds of thousands of UK spread-betters and CFD traders. The Underdog acquisition gives IG a CFTC-registered US exchange — a regulatory credential it does not currently hold — and a sports-focused US user base. IG has regulatory relationships in the UK, EU, Australia, Singapore, and South Africa; Underdog brings the US CFTC licence. The combined entity is the first prediction market operator with simultaneous FCA and CFTC regulatory presence, which is the structural prerequisite for a product that could eventually bridge UK and US markets.
The $1.3 billion valuation is significantly below Kalshi's $40 billion target and Polymarket's $15 billion, reflecting Underdog's earlier-stage position — $6.49 billion in cumulative notional volume since September 2025, versus Kalshi's $86.5 billion. But the Aristotle Exchange licences that come with Underdog are what IG is buying as much as the volume: a CFTC-registered DCM and DCO is a regulatory asset that cannot be replicated quickly, regardless of capital. Underdog CEO Jeremy Levine noted that the company had 'proven we can build the best products no matter how the regulatory landscape shifts' — a reference to the ongoing state-level enforcement actions and federal preemption litigation that has tested every US prediction market operator in 2026.
The deal follows the pattern predicted by a Bernstein report in late June, which named Kalshi and Polymarket as likely M&A targets for established financial platforms. IG Group's move confirms the logic from a different angle: rather than a US platform buying prediction market capacity, a global financial firm is buying a US licence. If other international trading platforms — European banks, Asian brokers, UK spread-betting firms — follow the same strategy, the consolidation of US prediction markets will increasingly be driven by inbound foreign acquisition rather than domestic merger.
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Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanour, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.