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IG Group CEO Questions Kalshi and Polymarket Volume Metrics Ahead of $1.3B Underdog Acquisition

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IGGGBX 990.00 −0.50%

IG Group Holdings plc (LSE:IGG) Chief Executive Breon Corcoran challenged the headline trading volume figures highlighted by private prediction market platforms Kalshi and Polymarket. Speaking at a seminar for Underdog, a U.S. prediction markets and daily fantasy sports business IG is acquiring for up to $1.3 billion, Corcoran stated that notional volume does not accurately reflect economic value. He urged investors to focus instead on net gaming revenue, pointing out that complex multi-leg wagers can artificially inflate headline volume compared to actual customer stakes.

The acquisition marks a major strategic shift for IG Group Holdings plc, expanding its presence in the growing U.S. market. Underdog reported third-quarter net revenue of $105 million, a 118% increase from a year earlier, driven by rising handle per customer and major sporting events. Upon closing the deal, which includes $1.1 billion upfront and up to $200 million in potential earn-outs based on 2026 performance, prediction markets and daily fantasy sports will represent 27% of combined group revenue, with U.S. operations accounting for 41%.

Investors will monitor how IG Group Holdings plc integrates Underdog's licensed exchange capabilities amid intensifying competition from rival platforms launching their own event contract venues. Attention also turns to IG's existing business performance following a 14% drop in third-quarter revenue caused by slipping client retention in its over-the-counter segment. IG Group Holdings plc is scheduled to present a comprehensive strategy update for its core business in London on October 22.

Key points

  • IG Group Holdings plc CEO Breon Corcoran stated that rival prediction platforms inflate volume metrics and urged investors to focus on net gaming revenue.
  • IG is acquiring U.S. prediction and fantasy sports operator Underdog for up to $1.3 billion, including $1.1 billion upfront.
  • Underdog generated $105 million in net revenue during the third quarter, representing a 118% increase year-over-year.
  • The deal will increase U.S. operations to 41% of combined group revenue for IG Group Holdings plc.
  • IG reported a 14% drop in third-quarter revenue for its existing core business due to lower client retention.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why is IG Group buying Underdog?

IG Group Holdings plc is acquiring Underdog for up to $1.3 billion to expand into U.S. prediction markets and daily fantasy sports, which will account for 27% of combined group revenue.

What is the difference between notional volume and handle in prediction markets?

Notional volume measures total face value of contracts, which can be inflated by complex wagers, while handle represents actual money staked by customers.

How did Underdog perform in the third quarter?

Underdog generated $105 million in net revenue in the third quarter, a 118% increase compared to the same period a year earlier.