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Fantasy sports betting firm Underdog, which once boasted hundreds of millions in venture backing and a unicorn valuation, appears to be going through a rocky patch. Last week, the business cut a significant portion of its workforce, reworking parts of its product strategy, as it deals with increased scrutiny from regulators in several states.
Former Underdog employees speak out after massive job cuts
Current and former employees took to LinkedIn to share that they were swept up in the layoffs. A member of the creative team said that Underdog “made the decision to eliminate my role in a new round of layoffs” after four years spent building systems and leading teams – “(a) lot to think about.”
Others described themselves as “a casualty of recent underdog layoffs,” said they planned to “maintain contacts,” or noted that they were “affected by Underdog layoffs.”
Many added the hashtag #OpenToWork, thanked colleagues, and expressed confidence in what was next. One former employee wrote about waking up “feeling free and ready for my next chapter,” while urging recruiters to get in touch.
An industry report suggests that the cuts will extend to some public posts. At least 125 employees, more than 20% of the company’s workforce, have been let go as Underdog moves away from some of its traditional offerings and leans more toward prediction markets. Fraud, marketing, customer support, and product operations teams are among those affected.
Regulatory pressure changed the company’s direction
Internal changes continue as Underdog battles legal and regulatory challenges across the country.
on CaliforniaUncertainty hangs over daily fantasy sports operators after the state The Attorney General issued an opinion which states that many forms of fantasy, including picks and drafts, amount to illegal gambling under state law. The company has already started changing what it offers there.
on North CarolinaUnderdog exited the regulated sports betting market late last year, halting operations while settling outstanding wagers and maintaining account access for customers.
Arizona regulators issued a notice to revoke the company’s fantasy sports operator license, due to its involvement in prediction markets and certain partnerships. Underdog said it plans to fight the move. on New Yorkthe company agreed to a $17.5 million settlement and withdrew some form of contest after a dispute with the state gaming commission.
Chaos comes shortly after the high point. Just last year, Underdog has raised a $70 million Series C round led by Spark Capitalwhich drove its valuation in the past $1.2 billion as it expands its customer base and product line.
However, the company continues to announce new openings in product design, analytics, and operations, signaling that while some areas are shrinking, others remain part of its long-term plans.
ReadWrite has reached out to Underdog for comment.
Featured image: Underdog / Canva
The post The underdog faces regulatory pressures and strategic business pivots first appeared in ReadWrite.
