IG chief questions Kalshi and Polymarket volume records

IG Group CEO Breon Corcoran is challenging the usefulness of the trading-volume records highlighted by Kalshi and Polymarket, arguing that net gaming revenue offers a better measure of the sector’s economics. According to Finance Magnates, he addressed analysts on Thursday at a seminar about Underdog, the US prediction markets operator IG is acquiring for up to $1.3 billion.

Volume and revenue tell different stories

Corcoran illustrated the gap with a 100-leg parlay: a customer’s $1 stake can translate into thousands, or even tens of thousands, of dollars in notional value. He said handle—the amount customers actually stake—is closer to listed-company reporting terminology, but identified net gaming revenue as the key measure. Kalshi surpassed $100 billion in lifetime notional volume in June, supported by World Cup markets; the privately held company raised $1 billion at a $22 billion valuation in May. Polymarket is also private.

Corcoran said IG was currently the only public company discussing prediction markets revenue, while acknowledging that Robinhood had previously disclosed it. Robinhood’s second-quarter event-contract revenue reached $156 million, more than ten times its year-earlier level, according to Finance Magnates.

Underdog’s growth comes with margin questions

Underdog co-founder and Chief Executive Jeremy Levine reported third-quarter net revenue of $105 million, an increase of 118% from a year earlier, alongside a 165% rise in handle per customer. World Cup matches and an unusually weak margin comparison helped those results, he said. Underdog put its 2025 net revenue at $441 million. Responding to Deutsche Bank analyst David McCann’s question about lower margins on newer prediction products, Levine said rapid handle growth would not always coincide with improving margins; he would accept three times the handle at half the margin.

The acquisition agreement reached in July provides for $1.1 billion upfront and an earn-out of up to $200 million linked to 2026 revenue. IG Chief Financial Officer Clifford Abrahams said the initial payment represented 2.4 times Underdog’s net revenue for the 12 months to June. He said prediction markets and daily fantasy sports would account for 27% of combined group revenue, while the US share would increase to 41% from 19%. Corcoran described Underdog’s typical customers as men aged 20 to 40 who also trade other asset classes.

Exchange ownership and IG’s next steps

Underdog opened its own exchange in July and holds all three federal registrations required to broker, list and clear contracts. Other operators have also taken steps toward exchange infrastructure: DraftKings submitted its first event-contract templates for DKeX in May, while Robinhood and Susquehanna acquired MIAXdx in January and renamed it Rothera, giving Robinhood its own licensed exchange and clearinghouse, Finance Magnates reported.

The seminar followed IG’s disclosure a week earlier that third-quarter revenue declined about 14% year over year. Retention in its over-the-counter business fell to around 70%, against an average of about 80% since mid-2025. IG is scheduled to outline its strategy for the existing business in London on October 22.

What it means for prediction markets

• Notional records are not revenue records. Corcoran’s parlay example highlights why headline activity figures alone cannot establish an operator’s economic value.
• Growth comparisons need context. Underdog’s reported expansion benefited from World Cup activity and a weak prior-year margin period; rising handle does not necessarily imply rising margins.
• Revenue mix matters for IG. The proposed acquisition would give prediction markets and daily fantasy sports a 27% share of combined revenue, making their performance material to the group.
• Infrastructure is another measure of expansion. Underdog’s registrations, DraftKings’ filings and Robinhood’s exchange acquisition provide milestones distinct from notional trading totals.