IG Group Q3 Revenue Drops 14% as Underdog Jumps 100%

Underdog is growing fast, and IG Group wants in. The US daily fantasy sports and prediction market operator booked roughly $105 million in net revenue for Q3 2026, up more than 100% year-on-year. IG, a FTSE 100 firm, disclosed the figure in its first financial update since announcing the acquisition. Context matters here: Q4, the seasonally heavy period, hasn't happened yet, and it made up more than a third of Underdog's total 2025 revenue.

Now compare that to IG's own quarter. Total Q3 2026 revenue for the London-listed company is expected to land at approximately £240 million. That's a decline of around 14% against the same quarter last year.

Investors didn't wait around. IG shares opened at £9.79 on the London Stock Exchange and slid to £9.58 within 40 minutes. They've since clawed back to £9.88. The early dip told its own story about how touchy the market is on the group's core numbers while the $1.1 billion Underdog purchase sits in the pipeline.

That deal was announced earlier this year and is expected to close late this year or in early 2027. Since it came out, Underdog has shut down its DFS operations in seven states, all places where regulators ruled that state-licensed fantasy sports can't be combined with federally regulated event contracts. A deliberate tilt toward prediction markets? Looks like it. Underdog hasn't gone quietly, either. It filed lawsuits against multiple states to block local enforcement under the Supremacy Clause, opening a legal front even as it voluntarily gave up some DFS licenses.

The tension is hard to miss. IG Group CEO Breon Corcoran pointed to Underdog's "leading daily fantasy sports franchise" as a reason to buy the company, yet that same company is retreating from DFS in several jurisdictions. Prediction markets look like the priority. Whether the pivot holds in the UK and Europe is another question. The UK, IG's home market, is still weighing its own stance. Last month, the Financial Conduct Authority confirmed it was in discussions to reassess whether consumers should get wider access to investment products, a review that could eventually let UK customers trade prediction-style contracts.

Sentiment in Europe seems to be warming. The Global Prediction Market Forum at the SBC Summit in Lisbon last week drew speakers who voiced confidence in a future for prediction platforms across the continent. Useful tailwind for Underdog, which may need to give IG Group a real boost while the parent company's revenue slides. A 14% year-on-year drop in Q3 is the kind of number that puts pressure on management to prove the acquisition adds growth rather than just cost.

More detail lands Thursday, when IG leadership hosts a virtual seminar on Underdog for institutional investors and analysts. That session should clarify how the company plans to integrate the US business, how the state-by-state legal fights factor into the timeline, and what revenue contribution IG expects once the deal closes. Until then, the market has two numbers to weigh. Underdog's $105 million quarter, growing at triple-digit rates. IG's £240 million quarter, shrinking. Analysts will be listening Thursday for any sign the first can offset the second.