FanDuel is eyeing up its prediction markets business with a large-scale staff layoff.
Internal emails, widely reported online, show that hundreds of FanDuel employees are now looking for new jobs. Customer service staff and software engineers are among those impacted by the downsizing.
At a Glance:
- Hundreds of FanDuel staff let go in major restructure
- Focus on prediction markets leading the charge
- Parent company Flutter sees shares leap on layoff news
- CEO Amy Howe left the company last month
- FanDuel had closed FanDuel TV in March, with the loss of 100+ staff
Staff follow CEO Amy Howe out the door
The staff cuts come just a month after FanDuel CEO Amy Howe left the company amid a general downturn. Flutter, FanDuel’s parent company, had reported a 60% stock value drop over the previous 12 months.
However, on news of the newest layoffs, Flutter’s stock price jumped by 6%.
In a statement, FanDuel said, “FanDuel implemented organizational changes to ensure the company remains agile, focused, and well-positioned to capitalize on what lies ahead, and these changes affect a number of roles across the business.
“We are deeply grateful to the talented colleagues whose contributions have helped drive FanDuel’s success and are committed to supporting those impacted through this transition.”
DraftKings results show future is in event contracts
The focus on prediction markets is driving FanDuel’s current restructure. It’s also not the only brand cutting staff across its sports betting platforms. Similar cuts have been made at DraftKings and Underdog this year.
In April, the company applied to take sole ownership of its prediction market platform, FanDuel Predicts. Like rival DraftKings Predictions, it allows traders to purchase event contracts on sports or world events.
Prediction markets differ from sports betting, in which a central odds compiler sets the price. Instead, customers set the price, which can rise or fall based on public sentiment.
DraftKings Predictions this week recorded $3.1 billion in trading volume, marking a massive 34% month-over-month increase. Those are the sorts of numbers that will be eyed keenly by FanDuel bosses.
World of sportsbooks and prediction markets merging
FanDuel is one of the leading betting operators in the U.S. right now. FanDuel Sportsbook is available in multiple states, where the company has worked hard to obtain state-specific licenses.
However, the federal Commodity Futures Trading Commission (CFTC) regulates prediction markets, a fact that has angered states over the past 12 months.
Interestingly, federally regulated prediction market sites are now moving into sportsbook-style features. Last month, Polymarket applied to add multi-leg contracts to its range of services.
Similar to sportsbook parlays, the Combinatorial Athletic Outcome Contracts (CAOCs) will allow traders to combine multiple event contracts on a single ticket. The world of online sportsbooks and prediction markets is becoming increasingly connected.
