IG wants to be your broker and your bookie: the UK gambling licence application and what it means for Asian traders

Is IG becoming a betting company? Partly, and on purpose. IG Group, one of the world's biggest CFD and spread betting brokers, has applied for a UK gambling licence to offer prediction markets on politics, entertainment and sports, and expects to open them in early 2027, as reported by Finance Magnates. Before that, it plans to launch contracts on financial events for UK professional clients in the fourth quarter.

The move comes as IG's traditional business slows. Third quarter revenue fell 14 percent to 240.5 million pounds, and its new investing app Freetrade saw revenue collapse. For traders in Singapore, Australia and across Asia who use IG and its rivals, the strategy shows where brokers think the next wave of retail activity lies, and why regulators everywhere are paying attention.

What IG has applied for

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 licence for real events. No licence has been granted yet.

The two step launch reflects how British rules split the product. The Financial Conduct Authority treats contracts on financial outcomes as binary options, which it has banned for retail investors since 2019, so IG's financial event contracts will be for professional clients only. Bets on sports and politics fall under the Gambling Commission, which is why IG needs a betting licence for those markets.

IG is not new to gambling. Chief executive Breon Corcoran previously ran Betfair and led Paddy Power Betfair until January 2018, and IG itself left gambling in 2011, when it sold the customer base of its Extrabet betting arm to Spreadex. "Trading, investing and entertainment are converging," Corcoran said.

Why prediction markets now

The growth numbers explain the rush. Taker volume on Kalshi and Polymarket reached 172.4 billion dollars in the third quarter, up from 98.5 billion dollars in the second, according to Finance Magnates' calculations. US midterm elections in November have driven a surge in political contracts, and crypto exchanges including Coinbase have launched their own prediction products, as we covered in our report on Coinbase's 15 minute prediction markets ahead of its earnings.

IG has already bet big on the US market. In July, it agreed to buy Underdog, a US fantasy sports and prediction markets operator, for up to about 1.3 billion dollars, a deal expected to close in late 2026 or early 2027.

When a CFD broker applies for a betting licence, it is admitting that the line between trading and wagering has become a marketing choice.

Competitors are watching. Neither Kalshi nor Polymarket appears on the UK register, and neither do IG's listed rivals CMC Markets and Plus500. Across the European Union, no prediction market holds a licence, and Gibraltar granted its first one in April.

The business pressure behind the move

IG's core business is under strain. Total revenue fell 14 percent year on year to 240.5 million pounds in the third quarter, in line with the estimate it published on 2 October. Income from client fees and commissions on over the counter derivatives such as CFDs and spread bets rose about 8 percent, but net revenue from those products dropped 18 percent to 156.1 million pounds, reflecting tougher trading conditions.

Freetrade, the UK investing app IG agreed to buy for 160 million pounds, has been weak. Its net trading revenue fell 67 percent year on year to 2.2 million pounds, and monthly active customers slipped 1 percent to 454,700. IG linked lower stock trading revenue to softer markets, worries about technology and AI valuations and caution ahead of possible capital gains tax changes in the UK budget. We covered the market's reaction to IG's revenue outlook in our report on IG's 22 percent share plunge.

There were bright spots. IG's own investing customers in the UK and Ireland grew 30 percent to 78,100, and its single app for trading, investing and crypto is now live in the UK, with other markets to follow.

What it means for traders in Asia

IG operates in several Asian markets, including Singapore, Japan and Australia, where retail derivatives are tightly regulated. Prediction markets face an uncertain reception in the region. Taiwan has blocked election betting platforms, as we reported in our analysis of Taiwan's move against Coinbase and Kalshi, and many Asian regulators view binary style contracts as gambling or high risk derivatives.

That means Asian clients are unlikely to see IG's prediction markets soon. But the strategy will influence product design across the industry, as brokers look for ways to keep clients engaged when traditional trading slows. The key points for Asian traders include:

• Prediction markets are regulated as gambling in some countries and as derivatives in others
• Short term binary style contracts are restricted for retail investors in many Asian markets
• Brokers may introduce event linked products where local rules allow
• Offshore platforms offering prediction markets may operate without local licences
• Licensed brokers remain the safer choice for derivatives trading

What comes next

The Gambling Commission's decision on IG's licence will set an important precedent for how British regulators treat broker run prediction markets. IG's fourth quarter launch of financial event contracts for professional clients will offer an early test of demand.

For the broker industry, IG's move signals a shift from pure trading platforms to multi product entertainment and investment apps. Whether regulators in Asia allow similar products will determine how far that convergence spreads to the region.

IG's application for a gambling licence shows how far the broker industry is willing to go to find growth as traditional trading slows. Prediction markets offer a fast growing, highly engaging product, but they sit uneasily between finance and gambling, and regulators across Asia remain wary. Whether IG's bet pays off will depend as much on licensing decisions as on customer demand.