IG chief says Kalshi/Polymarket volume records are notional theater

Revenue versus headline volume

IG Group Chief Executive Breon Corcoran is challenging the usefulness of Kalshi and Polymarket’s headline trading figures as measures of their businesses. According to Finance Magnates, he told analysts at Thursday’s seminar on Underdog—the US prediction markets operator IG is buying for up to $1.3 billion—that net gaming revenue offers a better basis for assessing the sector.

His example was a 100-leg parlay: a customer’s $1 stake can translate into thousands, or even tens of thousands, of dollars in notional volume. Corcoran said handle, which measures money actually staked, is closer to the language used by listed companies, but put net gaming revenue first. Kalshi exceeded $100 billion in lifetime notional volume in June, with World Cup markets contributing. Both Kalshi and Polymarket are privately held; Kalshi raised $1 billion in May at a $22 billion valuation.

Corcoran described IG as currently the only public company discussing prediction markets revenue, while acknowledging previous disclosures by Robinhood. Finance Magnates reported that Robinhood’s second-quarter event-contract revenue reached $156 million, more than ten times the year-earlier amount.

Underdog’s growth and margin trade-off

Underdog co-founder and Chief Executive Jeremy Levine told the seminar that third-quarter net revenue reached $105 million, a 118% year-over-year increase, while handle per customer climbed 165%. World Cup matches and an unusually weak margin comparison a year earlier helped those results, he said. Underdog reported $441 million in net revenue for 2025. 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 would not always coincide with rising margins. He indicated that tripling handle while halving the margin would be an acceptable trade-off.

IG agreed in July to an upfront payment of $1.1 billion, with as much as $200 million more dependent on 2026 revenue. Chief Financial Officer Clifford Abrahams said the initial payment represented 2.4 times Underdog’s net revenue over the 12 months through June. Underdog also introduced its own exchange in July and holds all three federal registrations required to broker, list and clear contracts.

A changing business mix

Other operators have been building exchange infrastructure. DraftKings submitted the first event-contract templates for its DKeX exchange in May. In January, Robinhood and trading firm Susquehanna acquired derivatives exchange MIAXdx 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 following the Underdog deal. The US share would rise to 41%, compared with 19% now. Corcoran said Underdog’s typical customers are men aged 20 to 40, whom IG knows also trade other asset classes.

The seminar came a week after IG reported an approximately 14% year-over-year decline in third-quarter revenue. Retention in its over-the-counter business had dropped to around 70%, against an average of about 80% since mid-2025. IG is scheduled to deliver a strategy update on its existing business in London on October 22.

What it means for prediction markets

• The metric matters: Corcoran’s parlay example illustrates why notional volume, customer stakes and operator revenue should not be treated as interchangeable measures of growth.
• Growth needs context: Underdog’s third-quarter gains benefited from World Cup activity and a weak prior-year margin comparison. Levine’s comments also underscore that rising handle need not produce higher margins.
• Infrastructure is part of the competitive picture: Underdog, DraftKings and Robinhood have each taken steps toward operating their own exchanges, alongside the attention paid to Kalshi and Polymarket’s volume records.
• IG offers a public-company perspective: The proposed revenue mix makes prediction markets and daily fantasy sports a substantial component of the combined business, while its existing operations face weaker revenue and retention.