IG chief questions what Kalshi and Polymarket volume records are worth

Revenue versus trading records

IG Group CEO Breon Corcoran is challenging the usefulness of the volume records publicized by Kalshi and Polymarket as IG prepares to buy US prediction markets operator Underdog for up to $1.3 billion. Speaking to analysts at a seminar on Thursday, he argued that net gaming revenue provides a better basis for assessing the sector than notional trading totals, according to Finance Magnates.

Kalshi surpassed $100 billion in lifetime notional volume in June, with World Cup markets contributing to activity. Both Kalshi and Polymarket are privately held; Kalshi raised $1 billion in May at a $22 billion valuation. Corcoran illustrated his concern with a 100-leg parlay: a customer’s $1 stake could represent thousands, or even tens of thousands, of dollars in notional value. He distinguished that measure from handle—the amount customers stake—and put net gaming revenue ahead of both.

Corcoran said IG was currently the only publicly traded company discussing prediction markets revenue, while acknowledging earlier disclosures from Robinhood. Robinhood’s event-contract revenue reached $156 million in the second quarter, more than ten times its level a year earlier.

Underdog’s growth and the acquisition price

Underdog co-founder and CEO Jeremy Levine told the seminar that third-quarter net revenue rose 118% year over year to $105 million, while handle per customer increased 165%. World Cup matches and an unusually weak margin comparison a year earlier supported that growth, he said. Underdog reported $441 million in net revenue for 2025. Under the agreement reached in July, IG will pay $1.1 billion upfront, with up to $200 million more dependent on 2026 revenue. IG CFO Clifford Abrahams put the initial payment at 2.4 times Underdog’s net revenue for the 12 months to June.

Asked by Deutsche Bank analyst David McCann whether newer, lower-margin prediction products could pressure quarterly revenue as the product mix changes, Levine said rapid handle growth need not coincide with improving margins. He indicated that tripling handle would be attractive even if the margin were halved.

Exchange ownership and IG’s changing business

Underdog opened its exchange in July and holds the three federal registrations required to broker, list and clear contracts. Other operators are also building exchange capabilities: 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, according to Finance Magnates.

Abrahams said prediction markets and daily fantasy sports would account for 27% of the combined group’s revenue. The US share would reach 41%, compared with 19% currently. Corcoran described Underdog’s typical customers as men aged 20 to 40 who also trade other asset classes.

The seminar followed by a week IG’s disclosure that third-quarter revenue had 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

• Volume and revenue answer different questions. Corcoran’s parlay example highlights why a notional-volume milestone does not, by itself, establish customer spending or an operator’s economic performance.
• Growth comparisons need context. Underdog’s 118% revenue increase benefited partly from World Cup activity and the prior year’s weak margins; its 165% rise in handle per customer is a separate measure.
• Product mix matters. Levine’s comments underscore that rising handle can accompany lower margins, complicating comparisons based solely on trading activity.
• IG’s acquisition creates a public-company reporting benchmark. With prediction markets and daily fantasy sports expected to contribute 27% of combined revenue, disclosures on revenue, handle and margins will be important for evaluating the business.