UK-based retail broker IG Group has agreed to acquire US prediction market platform Underdog for approximately $1.3 billion, representing a major strategic shift by a traditional CFD broker into event-based trading. The deal follows similar moves by DraftKings and Robinhood, signaling that prediction markets are rapidly becoming a mainstream retail trading product category rather than a fringe offering.
Robinhood’s second quarter 2026 results demonstrated the commercial case for this expansion, with event contract revenue hitting $156 million—more than ten times the previous year’s figure. The platform traded 13.6 billion event contracts in a single quarter, with growth outpacing even its crypto business. This performance has validated retail appetite for trading political outcomes, sports results, and macroeconomic events as distinct asset classes.
Rather than building infrastructure internally, established firms are acquiring existing CFTC-regulated platforms to accelerate market entry. DraftKings purchased Railbird Technologies in October 2025, while Robinhood and Susquehanna jointly acquired derivatives exchange MIAXdx in January 2026, gaining direct control of regulatory licenses and clearing infrastructure.
For CFD brokers operating in jurisdictions where leveraged products face increasing restrictions, prediction markets may offer an alternative revenue stream that appeals to the same client base. The regulatory environment differs significantly—US prediction markets operate under CFTC oversight while CFDs remain largely prohibited for retail clients in that jurisdiction. Brokers will need to evaluate whether their existing licenses support event trading or if acquisition represents the faster route to market.
FXnCO Insight
Traditional brokers facing margin compression and regulatory headwinds in core CFD markets should assess whether prediction market acquisitions offer strategic diversification or risk distracting from fundamental business strengths.
Source: Finance Magnates