IG Group has applied for a UK gambling license to offer prediction markets on politics, entertainment and sports, the company said today (Thursday). It expects to open them in early 2027, after launching contracts on financial events for UK professional clients in the fourth quarter.
The application sits with IG View Limited, a London subsidiary listed on the Gambling Commission's public register under the trading name "ig prediction markets". The register shows one pending activity, a remote general betting license for real events. No license has been granted yet.
London's trading industry is coming home!
The two-step launch follows how British rules split the product. The Financial Conduct Authority (FCA) treats contracts on financial outcomes as binary options, which it has banned for retail investors since 2019, while bets on sports and politics fall to the Gambling Commission.
The US market IG is entering has grown quickly. Taker volume on Kalshi and Polymarket reached $172.4 billion in the third quarter, up from $98.5 billion in the second, according to FM Intelligence calculations.
IG Returns to the Gambling Register
IG agreed in July to buy Underdog, a US fantasy sports and prediction markets operator, for up to about $1.3 billion. The deal is expected to close in late 2026 or early 2027.
"Trading, investing and entertainment are converging," Chief Executive Breon Corcoran said in the statement.
Corcoran was chief executive of Betfair and led Paddy Power Betfair until January 2018. IG itself left gambling in 2011, when it sold the customer base of its Extrabet betting arm to Spreadex.
Spreadex, which offers both sports and financial spread betting, holds the same type of general betting license IG has requested, as does Sporting Index.
Betfair, Smarkets and Matchbook hold betting intermediary licenses, the category the Gambling Commission said in February would appear to cover prediction markets.
Neither Kalshi nor Polymarket appears on the register, and neither do IG's listed UK rivals CMC Markets and Plus500. Across the European Union, no prediction market holds a license, and Gibraltar granted its first one in April.
Freetrade Revenue Falls by Two-Thirds
The statement also showed lower revenue at Freetrade, the UK investing app IG agreed to buy for £160 million. Its net trading revenue fell 67% year-on-year to £2.2 million in the third quarter, from £6.7 million.
Freetrade's monthly active customers slipped 1% to 454,700 over the same period. That puts revenue at about £4.84 per active customer for the quarter, against £14.57 a year earlier, by FinanceMagnates.com's calculation.
IG linked lower stock trading revenue to softer markets, concern over technology and AI valuations, and caution ahead of possible capital gains tax changes in the coming UK Budget. Freetrade reported a £24.4 million pre-tax loss for 2025, its first year under IG.
IG's own investing customers in the UK and Ireland grew 30% year-on-year to 78,100. The company said its single app for trading, investing and crypto, which absorbed its separate trading app, is now live in the UK and will reach its other markets next.
IG Kept Less of What Clients Paid
Total revenue fell 14% year-on-year to £240.5 million in the third quarter, in line with the estimate IG published on October 2.
Income from client fees and commissions on over-the-counter derivatives, such as contracts for difference and spread bets, rose about 8% year-on-year, but net revenue from them dropped 18% to £156.1 million.
The difference lies in return to volume, the share of that income IG converts into net trading revenue. It fell to 70% from an average of about 80% since the second half of 2025, and IG said it expects the figure to be structurally higher over time.
The company kept its 2026 forecast of mid-single-digit revenue growth and said share buybacks are expected to resume in 2027. Its move of the holding company to Jersey is due to take effect in late 2026 or early 2027.
This article was written by Damian Chmiel at www.financemagnates.com.
Source: Finance Magnates
