A once-soaring fantasy sports betting company, previously valued over a billion dollars, is now navigating a period of intense upheaval. Underdog, fueled by substantial venture capital, is undergoing significant restructuring, marked by substantial workforce reductions and increased regulatory scrutiny.
The impact of these changes is visible on professional networking platforms, where former employees are publicly sharing news of their layoffs. Individuals who dedicated years to building the company’s systems and leading teams are now seeking new opportunities, reflecting on their time at Underdog with a mix of emotion and resilience.
The scale of the cuts appears far greater than initial reports suggest. More than 20% of the company’s workforce – at least 125 employees – have been let go as Underdog pivots away from established products and focuses more intently on prediction markets. Affected teams span critical areas like fraud prevention, marketing, customer support, and product development.
This internal shift is directly linked to mounting legal and regulatory challenges across multiple states. The company is facing intense pressure as authorities re-evaluate the legality of certain fantasy sports formats, particularly “pick ’em” and draft-style games, classifying them as illegal gambling in some jurisdictions.
In California, the Attorney General’s opinion has forced Underdog to modify its offerings. The company already exited the regulated sports betting market in North Carolina, settling outstanding wagers while maintaining customer account access. Arizona regulators are even attempting to revoke Underdog’s license, citing concerns over prediction markets and partnerships.
New York presented another hurdle, resulting in a $17.5 million settlement and the removal of specific contest types following a dispute with the state’s gaming commission. These legal battles are reshaping Underdog’s strategic direction and forcing difficult decisions.
This turbulence is a stark contrast to the company’s recent success. Just last year, Underdog secured a $70 million investment, propelling its valuation past $1.2 billion and fueling expansion. The rapid ascent now appears to be facing significant headwinds.
Despite the layoffs, Underdog continues to advertise open positions in areas like product design, analytics, and operations. This suggests a strategic recalibration, with the company aiming to consolidate resources while continuing to invest in key areas for future growth.
