IG Chief Questions What Kalshi and Polymarket Volume Records Are Worth

IG Group chief executive Breon Corcoran has pushed back on the volume figures promoted by prediction market operators Kalshi and Polymarket, arguing that headline notional totals are difficult to connect to real economic value. Speaking on Thursday at a seminar focused on Underdog, the US prediction markets business IG is acquiring for up to $1.3 billion, Corcoran told analysts that investors should judge the sector on net gaming revenue instead.

Corcoran said Kalshi and Polymarket were "talking up their notional traded volume with great gusto." Kalshi, which is privately held, crossed $100 billion in lifetime notional volume in June, helped by World Cup markets, and raised $1 billion at a $22 billion valuation in May. Corcoran illustrated the gap with a 100-leg parlay, where a $1 stake can carry a notional value in the thousands or even tens of thousands of dollars. He said handle — the money customers actually stake — is closer to the terminology listed companies use, and that net gaming revenue is the metric that matters.

Underdog's $105 Million Quarter

Underdog co-founder and CEO Jeremy Levine told the seminar that the company booked $105 million of net revenue in the third quarter, up 118% from a year earlier, while handle per customer rose 165% over the same period. He noted the comparison was flattered by World Cup matches during the quarter and by an unusually weak margin period a year earlier. By Underdog's own count, its net revenue reached $441 million in 2025.

IG agreed in July to pay $1.1 billion upfront for Underdog, plus an earn-out of up to $200 million tied to 2026 revenue. Chief financial officer Clifford Abrahams said the upfront price equalled 2.4 times Underdog's net revenue for the 12 months to June. Deutsche Bank analyst David McCann asked whether lower margins on newer prediction products could weigh on quarterly revenue as the mix shifts; Levine said margins will not always rise while handle grows quickly, adding: "3X the handle at half the margin? Of course we do."

Corcoran also said IG is currently the only public company talking about prediction markets revenue, though he noted Robinhood has done so previously. Robinhood earned $156 million from event contracts in the second quarter, more than ten times the year-earlier figure. Underdog launched its own exchange in July and holds the three federal registrations required to broker, list and clear contracts. DraftKings filed its first event contract templates for its DKeX exchange in May, while Robinhood and trading firm Susquehanna bought derivatives exchange MIAXdx in January and renamed it Rothera, giving Robinhood a licensed exchange and clearinghouse.

For IG, the deal reshapes the revenue base. Abrahams said prediction markets and daily fantasy sports would make up 27% of combined group revenue, with the US at 41%, up from 19% now. Corcoran described Underdog's customers as typically men aged 20 to 40 who, IG believes, also trade other asset classes. His comments came a week after IG reported third-quarter revenue fell about 14% year on year, as retention in its over-the-counter business slipped to roughly 70% from an average of about 80% since mid-2025. IG will present a strategy update for its existing business in London on October 22.