FanDuel goes through third round of layoffs in a year

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The Backstory

Pressure builds beyond the sportsbook

FanDuel’s latest job cuts come after a year in which the company has been trying to protect its lead in U.S. online betting while adjusting to a faster-changing competitive landscape. The operator remains one of the strongest brands in regulated sports wagering and online casino, but its third round of layoffs in a year points to a business recalibrating around profitability, product focus and new threats from outside the traditional sportsbook market.

The cuts follow a series of internal shifts. FanDuel said in March it would wind down FanDuel TV, a move expected to affect more than 100 roles over time. The company also has been operating through a leadership transition after former Chief Executive Amy Howe left in May. Together, those changes suggest FanDuel is narrowing investment toward areas it sees as more scalable, particularly online casino, core sportsbook operations and technology that can deepen player engagement without adding the same level of fixed costs.

The timing is notable because FanDuel is not cutting from a position of weakness in many state markets. It continues to post strong revenue in mature sports betting states and has been expanding casino features in the largest regulated iGaming markets. But the broader economics of online gambling are shifting. Operators that spent heavily for market share in the first years after the repeal of the federal sports betting ban are now under pressure to show steadier margins, disciplined customer acquisition and faster product development.

FanDuel still converts share into revenue

State-by-state results show why FanDuel remains a central player. In Indiana, the company ranked second in online sports betting handle in February but led the market in revenue. The Indiana Gaming Commission reported that FanDuel handled US$133.4 million in online wagers that month, behind DraftKings’ US$150.4 million, while FanDuel generated US$19.1 million in gross revenue compared with DraftKings’ US$16.8 million. That marked the second consecutive year in which FanDuel produced more revenue despite a smaller handle, according to Indiana online sports betting results.

That performance matters because revenue efficiency is increasingly important in a sector where promotional spending, tax rates and product investment can erode returns. A book that can turn a smaller handle into higher revenue has more flexibility in pricing, risk management and marketing. FanDuel’s Indiana result also showed that its position is not solely dependent on being the largest by volume in every market.

Kansas offered a similar picture of scale, even where DraftKings led. The Kansas Lottery reported total sportsbook revenue of US$23.9 million in February, up from US$3 million a year earlier. FanDuel generated US$67.2 million in settled wagers and US$7.7 million in revenue, both sharply higher than the prior year. DraftKings led with US$88.8 million in settled wagers and US$9.9 million in revenue, but FanDuel’s gains showed continued momentum in a competitive six-operator market. The Kansas sportsbook revenue jump underscored how favorable hold rates can quickly lift operator results.

Casino growth becomes a larger strategic lever

FanDuel’s cost reductions also have to be viewed against its push into online casino, where revenues can be more recurring and less dependent on sports calendars. The company has been investing in features designed to increase engagement and differentiate its casino product from rivals offering similar slot and table-game libraries.

One example is the launch of Casino Jackpots in New Jersey, Michigan and Pennsylvania, the three most important U.S. iGaming states. The product connects progressive jackpots across selected slots and table games, allowing players to opt in for an additional US$0.10 per wager and compete for Mini, Minor, Major and Mega tiers. FanDuel said the feature had produced more than 50,000 winners since launching in early 2025, with about 1,500 daily jackpot wins. The rollout was tied to FanDuel’s 2024 acquisition of BeyondPlay, whose technology helped power the system. The Casino Jackpots launch across three states showed how FanDuel is using acquisitions to build in-house product advantages.

Michigan highlights why that strategy has become more important. The state’s iCasino market generated US$243.4 million in September revenue, up 33.5% from a year earlier, according to the Michigan Gaming Control Board. FanDuel led all operators with US$65.6 million, up 54.3% year-over-year, ahead of BetMGM at US$61.9 million. The Michigan iCasino revenue report showed FanDuel overtaking a market where BetMGM had long been a benchmark brand.

That casino strength helps explain why FanDuel may be reallocating resources. Online casino can support deeper player lifecycles than sportsbook alone, but it also requires ongoing technology development, compliance investment and content partnerships. Layoffs in software engineering, customer support and business development suggest the company is not abandoning growth but is choosing where it wants that growth to be staffed internally and where it can automate, consolidate or redirect resources.

Prediction markets add a new form of competition

The most disruptive pressure cited by laid-off employees is the rise of prediction markets. These platforms allow users to trade event contracts on outcomes, including some sports-related events, and they are increasingly competing for attention with traditional sportsbooks. The business model differs from sports betting, but the consumer proposition can overlap: users risk money on whether an event will happen.

Kalshi’s rapid valuation growth has made that threat harder for sportsbook operators to dismiss. The company recently raised more than US$1 billion in a funding round that doubled its valuation to US$22 billion, according to a Wall Street Journal report cited in coverage of Kalshi’s latest financing. That followed a previous US$1 billion round that valued Kalshi at US$11 billion and an October Series D that valued it at US$5 billion. Rival Polymarket also drew attention after Intercontinental Exchange, owner of the New York Stock Exchange, invested US$2 billion and lifted its valuation to US$8 billion.

Those numbers matter because capital can accelerate product development, marketing and legal fights. Prediction markets are still facing scrutiny from state regulators, particularly over sports event contracts. Arizona’s attorney general recently filed criminal charges against Kalshi for alleged illegal betting, and Kalshi founder Tarek Mansour called the action a “total overstep.” The dispute captures the regulatory uncertainty: states see sports event contracts as betting activity, while prediction-market operators argue they fall under a different federal framework.

For FanDuel and other licensed sportsbooks, the risk is twofold. If prediction markets are allowed to offer sports-adjacent products nationally, they could bypass the state-by-state licensing structure that sportsbooks have spent years and large sums navigating. If regulators clamp down, sportsbooks still face a period of market confusion in which customers, investors and partners reassess what counts as betting and who can offer it.

Efficiency replaces expansion as the operating mandate

The layoffs suggest FanDuel is preparing for a market where scale alone is not enough. Sports betting is now legal and operational in many major states, leaving fewer large new markets to open. Online casino remains restricted to a smaller group of states, making each product improvement more important in places such as Michigan, New Jersey and Pennsylvania. At the same time, artificial intelligence is changing staffing needs across customer operations, engineering and marketing.

That does not mean FanDuel is retreating. Its revenue performance in Indiana, Kansas and Michigan shows a company still capable of leading or closely challenging in key markets. Its BeyondPlay acquisition and jackpot rollout show continued investment in product. But the company appears to be moving from the land-grab phase of U.S. online gambling into a phase defined by operating leverage.

The stakes are high for employees, rivals and investors. FanDuel’s decisions often signal broader industry direction because of its market share and ownership by Flutter Entertainment. If one of the sector’s strongest operators is cutting roles while posting strong market results, competitors may face similar pressure to justify headcount, trim noncore projects and prove that technology spending can produce measurable returns. The latest reductions are therefore not just a FanDuel story. They reflect a maturing U.S. online gambling market confronting new competition, tighter economics and a more demanding investor climate.