A few months after Underdog shut down its limited online sports betting operations in a pivot toward expanding in the prediction market space, it has undergone a round of layoffs that reportedly impacted over 100 employees.
Underdog, which has a workforce of just over 500 people, parted ways with up to 125 employees in recent days, according to a report from Front Office Sports (FOS). That would equate to a workforce reduction of more than 20%.
Per FOS, the New York-based company laid off employees across several segments including compliance, product development, human resources, fraud and payments and cut more than half of its fraud department.
“We transitioned our business this year. We went from a focus on a state-by-state framework to a national prediction markets platform with seamless offerings across the country,” Underdog CEO Jeremy Levine said in a statement to SBC Americas. “It’s simply a different operation, and the changes we made are a part of that transition. We take pride in hiring people who are passionate, good human beings and who really care about their work, so if you’re hiring and come across an ex-Underdog person you’d be lucky to have them and call me for a reference.”
Underdog declined to comment to SBC Americas on any specific details of the layoffs.
All-in on prediction markets
As referenced by Levine, the layoffs at Underdog come amid a shift in strategy after the company ceased online sports betting operations in December 2025. The company had secured an online sports betting license in North Carolina, providing it with access to one of America’s newest online sports betting markets, which opened in March 2024.
North Carolina was the only state where Underdog offered online sports betting after the company abandoned its plans to expand its reach to Missouri’s sports betting market before that state opened for business on Dec. 1, 2025.
Underdog closed its online sports betting business to go all in on prediction markets. It initially entered that space through a pact with Crypto.com that allowed Underdog to offer event contracts using Crypto.com’s tech stack, making Underdog the first gaming operator to offer event contracts on its own platform.
The company’s prediction market operations got a boost in January with the National Futures Association (NFA) approving an Underdog-affiliated entity to operate as a futures commission merchant (FCM) and a swap firm. Underdog’s registration as an FCM is a key step towards the company being able to launch its own prediction market platform using event contracts from numerous designed contract markets (DCMs) with backing from the Commodity Futures Trading Commission (CFTC).
Other CFTC-approved FCMs include FanDuel Predicts, PrizePicks and Robinhood. Companies that are DCMs include Crypto.com, Kalshi, Polymarket and CME Group.
Underdog’s new strategy draws Arizona’s eye
Underdog’s partnership with Crypto.com and its firm move into sports event contracts was opposed by the Arizona Department of Gaming (ADG). The state regulator issued a notice of violation to the operator in December, with an intent to revoke the company’s fantasy sports license for its partnership with Crypto.com
Underdog does not provide event contract trading to Arizona residents and visitors, but the ADG took issue with Underdog’s partnership with Crypto.com after that fintech company ignored a cease-and-desist order sent by the gaming regulator in 2025.
Underdog adds to other job cuts in gaming
Underdog is reportedly cutting a much more significant portion of its workforce than DraftKings, which announced plans to reduce its headcount as part of a reorganization.
The restructuring by DraftKings is aimed at reducing general and administrative costs and could result in the loss of approximately 5% of its global workforce of around 5,500 employees, according to Citizens Capital Markets and Advisory Managing Director of Gaming Equity Research Jordan Bender.
The job cuts are projected to result in an annual cost savings of roughly $30m.
DraftKings has yet to disclose what job positions will be impacted by the company’s recent round of layoffs. In 2023, it reduced its workforce that year by approximately 3.5% when it laid off around 140 employees. The majority of the job cuts were for positions held outside of North America in regions, including Europe.
