Freetrade's revenue fell 67% as IG bets on prediction markets

Breon Corcoran made two acquisitions and filed a gambling licence application in the same quarter that Freetrade, the UK investing app IG bought for £160 million, reported net trading revenue of £2.2 million — down from £6.7 million a year earlier.

That number deserves a moment. IG's own investing customers in the UK and Ireland grew 30% over the same period. The problem is not the customer count. The problem is what each customer is worth: roughly £4.84 in quarterly trading revenue, against £14.57 twelve months ago. Freetrade posted a £24.4 million pre-tax loss for 2025, its first full year under IG ownership.

Corcoran attributed the shortfall to softer equity markets, anxiety around technology valuations, and caution ahead of possible capital gains tax changes in the UK Budget. All three are real. None of them fully explains a 67% revenue drop. When a newly acquired asset misses this badly this fast, the explanation that management reaches for first is rarely the complete one.

The prediction market pivot, then, carries more weight than IG's framing suggests. The company filed for a remote general betting licence through IG View Limited, a London subsidiary now listed on the Gambling Commission's register under the trading name "ig prediction markets." No licence has been granted. The plan is a two-step launch: financial event contracts for UK professional clients first, under FCA jurisdiction, then sports, politics and entertainment once the Gambling Commission acts, with an opening target of early 2027.

The regulatory split is not a technicality. The FCA banned binary options for retail investors in 2019. Contracts on financial outcomes fall under that ban. Contracts on elections and football matches do not — those belong to the Gambling Commission, which said in February that a betting intermediary licence would appear to cover prediction markets. IG has applied for a general betting licence instead, the same category Spreadex and Sporting Index hold. Whether that is the right vehicle for what IG actually wants to offer is a question the Commission has not yet answered.

Corcoran knows this regulatory terrain. He ran Betfair and then Paddy Power Betfair. IG itself exited gambling in 2011, selling Extrabet's customer base to Spreadex. The institutional memory of why that exit happened is presumably still somewhere in the building.

The US acquisition adds another variable. IG agreed in July to buy Underdog, a fantasy sports and prediction markets operator, for up to approximately $1.3 billion, with closing expected in late 2026 or early 2027. Taker volume on Kalshi and Polymarket reached $172.4 billion in the third quarter, up from $98.5 billion in the second. That growth rate is the thesis. But Kalshi is fighting enforcement actions in Utah and Ohio simultaneously, Polymarket filed suit against Ohio regulators in federal court on October 16, and neither platform holds a UK licence or an EU licence of any kind.

The consensus reading of IG's moves is straightforward: a legacy financial broker diversifying into a faster-growing adjacent market while one of its recent acquisitions underperforms. I think that framing understates the execution risk on both ends. Freetrade's revenue problem is structural until proven otherwise, and the prediction market licences IG needs — in the UK and through Underdog in the US — are arriving into a regulatory environment that is actively hostile to the products IG is building toward.