Net gaming revenue and the footnotes in Underdog's growth story

Three numbers from the 8 October seminar#

The fox reads the wind before it commits a paw to the trail. On 8 October 2026 the US daily fantasy sports and prediction markets business that IG Group agreed to buy on 30 July, for up to about $1.3bn and subject to regulatory approvals, took to a virtual seminar for analysts and investors, as the RNS notice records and the issuer's acquisition release sets out. Underdog co-founder and chief executive Jeremy Levine set out the preliminary third-quarter figures, joined by IG chief executive Breon Corcoran and chief financial officer Clifford Abrahams, per the issuer's seminar notice and a third-party seminar transcript. The July agreement is context; the deal is not done.

• $1,075m

  preliminary Q3 handle, up 199 per cent year on year

• $105m

  preliminary Q3 net revenue, up 118 per cent

• ~705,000

  average monthly actives, up 13 per cent

• $355m

  2026 net revenue to date, up 30 per cent

Read the four together and a business compounding hard on every line it shows emerges. The handle is total customer entries as the deck defines that inflow, not money kept. The net revenue is a company-defined figure broader than a uniform industry net gaming revenue measure. The actives count is an average, not a retained cohort. Each number is true, and none is interchangeable with another.

That makes this a commercial story rather than a compliance footnote. For the operators, affiliates and suppliers who buy growth work, the interesting part of 8 October is not that Underdog grew, it is how carefully a growth team must define its terms before an investor believes the growth of its net gaming revenue.

What net gaming revenue measures here, and what it hides#

net gaming revenue sounds like one clean idea: the money an operator keeps once winning customers are paid and bonus costs absorbed. Underdog's own deck refuses the tidy version. It defines net revenue as what the company keeps from fantasy, gaming and trading activity net of customer payouts and promotional costs, plus other non-gaming and trading revenue off-exchange, set out in the issuer's seminar deck. A company-defined net gaming revenue that folds in off-exchange income is not the same object as a uniform industry net gaming revenue figure.

So when a headline says net gaming revenue rose 118 per cent, ask which definition sits underneath. Here it is the broader one. The discipline is not to distrust it but to label it: company-defined, and including other non-gaming and trading revenue.

Hold those five facts and the rest behaves. The definition is broader than the label, the audit line stops at 2023, and the comparator moved between the two quarters. None of that is a scandal. It is the ordinary scent on an otherwise clean net gaming revenue trail, and the point is to stop a footnote detaching from its number.

Availability is the other place a clean figure frays. Underdog's own site states that its products are available across 40 states and Washington DC, with rules varying by state and region, as its states page sets out.

The seminar set out separate product footprints, placing a core sports experience in 46 states under the Commodity Futures Trading Commission and player-only daily fantasy in 36 states under state regulators. Underdog prediction markets are no tidier: the operator's help centre lists Prediction Picks as unavailable in Arizona, Michigan, Nevada and New York.

The five-year climb, footnotes attached#

Zoom out and the trajectory is the part that made IG's strategic review interesting. Underdog's company-defined net gaming revenue ran from $9m in 2021 to $58m in 2022, then $151m in 2023, $271m in 2024 and $441m in 2025, a shape drawn from the issuer's own deck. A fox does not measure the whole thicket from one branch; it counts the runs it can use.

Every point on that line carries a label, and the labels are where the honesty sits. Fiscal 2023 to 2025 are audited under US GAAP; 2021 and 2022 are unaudited and reclassified for comparability. The 2025 total of $441m is historical, not a projection, even where a trade report slips the word projected beside it, as iGamingWorld does.

There is a wider catch against a listed operator. The $441m of 2025 sits beside year to date as given in the deck (including the preliminary Q3 figure), company-defined net revenue of about $355m, up 30 per cent year on year. A single quarter against a low base year may look explosive; a nine-month run looks merely strong, and the difference is the base.

Why the 199 per cent handle is not like for like#

Here is the number a headline wants and a growth team should fence. Underdog's preliminary Q3 2026 handle reached $1,075m, up 199 per cent year on year, per Global Gaming Insider and the issuer's deck. Handle, as the deck defines it, reflects total customer entries. It is turnover, not income. The betting handle is what customers stake; it is not revenue, and the gap between the two is the whole economy of the sport.

The 199 per cent is real, and not like for like, and the issuer says both in one breath. The deck notes that its handle includes sports betting activity in 2025 and, in 2026, a product line that did not exist in the base year, underdog rips, so base and current period measure a business that changed shape. iGaming Express and next.io add context: IG's own third quarter is softer, its third-quarter total revenue down about 14 per cent year on year per its Q3 trading update, and Underdog is the bright line inside a declining group.

The same caution runs down the ladder. The 118 per cent is no pure wagering margin, because Underdog's company-defined net revenue includes other non-gaming and trading revenue. Actives grew 13 per cent, but an average monthly active count is not a cohort retention number, and it moves with the football calendar.

Then comes the arithmetic a reader is tempted to invent. Handle divided by net revenue is not a uniform take rate, because the two are defined differently and cover a different product mix. Any margin computed from them is an artefact of the definition, not a fact, and the fox that mistakes a scent for the quarry runs the wrong way all night.

How do sports betting companies make money, and why the handle cannot answer it#

Strip the jargon and the question buyers keep asking is plain: how do sports betting companies make money, and what does the headline figure represent? Sportsbooks and prediction markets earn the gap between what customers stake and what is paid back, less promotions and operating cost. The handle is the inflow; net gaming revenue is what survives it. Underdog's definition adds a second stream, other non-gaming and trading revenue off-exchange, which is why its net gaming revenue is broader than a wagering-only picture.

The commercial lesson has little to do with Underdog's arithmetic and everything to do with the discipline that makes a net gaming revenue story believable to the people who fund it. A brand or operator pitching an acquisition, a launch or a raise is stronger when it shows its definitions, its comparators and its base periods on the same page as its wins. Sloppy comparators are the fastest way to lose a serious reader.

That is the discipline behind folkfox's iGaming marketing work and the content marketing services that keep a definition attached to its number, and the rigour we bring to brand strategy when a growth narrative has to survive a board. Related reading includes Denmark's gambling advertising ban, Malta's changing gaming licence tax and VAT, and GiG's 80 per cent buyout of 888AFRICA.

Keep the fox's patience for the next disclosure, because the brush is not yet empty. IG says fuller third-quarter detail is due on 22 October 2026, and the acquisition still needs regulatory approval before it closes, so nothing here is a recommendation about anyone's shares. What is already clear is the shape to copy: show the handle, the retained revenue and the actives, and keep the footnotes findable. The number that travels furthest is the one you can defend, and the conversation starts here if you want that discipline built into your growth story.

Frequently asked questions#