IG Group Underdog Acquisition Leads Industry Shake-Up

IG Group's $1.3B Bid for Underdog Shakes Prediction Markets

In a significant strategic move, trading platform IG Group has made a bid to acquire daily fantasy sports (DFS) operator Underdog. The deal, valued at up to $1.3 billion, underscores a major push into the burgeoning US prediction markets. This landmark IG Group Underdog acquisition signals the company's ambition to diversify and expand its footprint in the world's largest retail trading market.

Led by former Paddy Power/Flutter CEO Breon Corcoran, IG Group valued Underdog at $1.1 billion, with an additional earnout of up to $200 million tied to 2026 revenue targets. The acquisition is expected to more than double IG Group's US revenues and increase its active US customer base tenfold. Funding for the deal is supported by a bridge facility of up to $950 million from Barclays Bank PLC and Goldman Sachs, with completion anticipated in late 2026 or early 2027.

Underdog, described as the second-largest DFS operator by revenue, has a strong customer base with over five million depositing customers and 11 million registered accounts. The company has already expanded its prediction markets across 30 states and plans to leverage its proprietary exchange to grow further. Post-acquisition, Underdog will operate as a standalone brand, with its CEO Jeremy Levine reporting directly to Corcoran.

UKGC Flags Money Laundering Risks in New Report

The UK Gambling Commission (GC) has published its 2026 risk assessment report, identifying significant vulnerabilities to money laundering (ML) and terrorist financing (TF). The report maintains that remote and non-remote casinos, alongside betting activities, remain the highest-risk subsectors. Notably, the report calls out insufficient scrutiny of white-label partnerships as a key risk contributor.

The GC also upgraded the gambling software sector from a low to medium ML risk, citing the cross-border nature of software supply. The increasing use of e-wallets, pre-paid cards, and cryptoasset-linked funds is highlighted as a growing concern. Criminals are also employing more sophisticated techniques, including deepfakes and AI-generated fraudulent identities, to bypass due diligence.

"The escalating sophistication of criminal techniques aimed at undermining customer due diligence, including the use of deepfakes and face-swap videos, presents a significant challenge for operators. It requires a new level of vigilance and technological investment to mitigate these advanced threats."

To combat the rising threat from illegal gambling, the UK government has allocated £26 million over three years to the Gambling Commission. This funding will help intensify actions against illegal markets and their associated payment chains.

Global Market Updates: Records and Regulatory Actions

Around the world, markets are experiencing both record growth and decisive regulatory action, painting a picture of a dynamic and evolving industry.

Codere Online Smashes Records with World Cup Boost

Codere Online reported an exceptional second quarter, with record net gaming revenue (NGR) of €69.4 million, a 27% year-on-year increase. This performance led the company to raise its full-year 2026 guidance to an expected NGR of between €255 million and €265 million. The success was largely attributed to an “outstanding” World Cup, which doubled the NGR from the 2022 tournament and acquired nearly 40,000 new customers. The operator's core markets of Spain and Mexico saw NGR increase by 25% and 24%, respectively.

Ontario's iGaming Market Continues to Soar

The regulated market in Ontario continues to show impressive strength. In June, total wagers reached CA$9.46 billion, a 30.3% rise year-on-year. Non-adjusted gross gaming revenue hit CA$400.6 million, with online casinos accounting for CA$8.30 billion of the handle. The market now serves 1.32 million active player accounts, demonstrating sustained consumer engagement.

Rwanda Suspends Operator Amid Market Opening

In Africa, the Rwanda Development Board (RDB) suspended Baron Sports Gaming Ltd, trading as Forzza, for offering casino-style games outside the scope of its sports betting licence. This enforcement action occurs as Rwanda actively works to professionalize its gambling sector by welcoming established international operators. Recently, brands like ForteBet, Betway, and ElephantBet received licenses, a move the RDB believes will help develop a robust regulatory framework.

Industry Integrity and Consolidation Trends

Two key trends are shaping the industry's future: the fight against fraudulent activities and the consolidation driven by increasing compliance demands.

The Growing Threat of Fake Casino Games

A recent podcast with Jack Crabtree, head of sales at GameCheck, revealed the scale of fake casino games operating in grey markets. The firm has detected over 8,500 fake games globally, with Brazil emerging as a major hotspot with over 6,800 instances alone. This activity causes significant revenue leakage for legitimate suppliers, as cloned games effectively reduce a studio's RTP to zero on every spin.

Compliance Drives M&A in UK Prize Draw Sector

The UK's prize draws and competitions (PDC) sector is undergoing rapid maturation, driven by a new Voluntary Code of Good Practice and the formation of the Prize Competition Council. This shift has placed compliance at the forefront of M&A activity, with acquirers applying rigorous scrutiny.

This new environment favors larger, well-capitalized operators who can absorb compliance costs, leading to increased consolidation. Recent deals, such as ZEAL Network SE’s acquisition of SevenCanyon, illustrate how regulatory experience is now seen as a key competitive advantage.