Editor
Online gambling giant DraftKings is allegedly in the midst of a significant series of layoffs despite robust revenue in its most recent quarter.
According to Jordan Bender, an analyst with Citizens Capital Markets and Advisory, a workforce reduction of approximately 5% is anticipated, with the expectation that AI will pick up the slack.
DraftKings posted record revenue of $1.9 billion during its last earnings report in December. That represents a massive 43% year-over-year increase.
Despite the impressive revenue figures, investor sentiment in DraftKings has been relatively low over the last year as the company tries to stave off competition from prediction markets like Kalshi and Polymarket.
The company is in transition, experimenting with its own prediction markets through partnerships with CME and Crypto.com.
Did AI Play a Role in DraftKings Layoffs?
The Citizen’s Bank report noted that DraftKings’ increased use of AI may have led to some layoffs.
DraftKings has allegedly been experimenting with AI for writing code, chatbot support, drafting legal documents, and even creating personal promotions for customers. The report claimed 70% of promotional spending is determined by AI, and that number will increase over time.
If DraftKings did indeed lay off 5% of its workforce, that would represent tens of millions of dollars in savings.
Interestingly, the layoffs may have been more severe if not for the company’s recent foray into prediction markets.
14 Years Later: DraftKings at a Crossroads
The current market conditions seem to be an inflection point for DraftKings.
The Boston-based gambling company debuted exclusively as a Daily Fantasy Sports (DFS) operator in 2012 and quickly built a massive user base among sports fans.
DraftKings’ growth accelerated exponentially in 2018, when the long-standing Professional and Amateur Sports Protection Act was struck down, paving the way for widespread legalization of sports betting.
The fast-moving company went public in 2020 and went on a tear during the pandemic, as plenty of cooped-up sports bettors looked for entertainment. DraftKings’ stock peaked at roughly $72 in 2021 before a sharp correction the following year, during which the company lost 80% of its value.
The next few years saw DraftKings steadily rebuild value, but it hit another major obstacle in 2025 with the rise of prediction markets like Kalshi and Polymarket. DraftKings, which disrupted traditional gambling markets in 2012, was suddenly being disrupted by the newer, faster, less-regulated rivals.
DraftKings has attempted to keep up by launching its own prediction markets. Still, it’s in a challenging spot as a licensed sports betting operator in many US states while also offering prediction markets where it’s not licensed for sports betting. To that end, DraftKings (and rival FanDuel) left the American Gaming Association last year to pursue the development of prediction markets.
Investors seem worried that DraftKings might drift into irrelevance as it attempts to thread the needle between a state-regulated entity and a federally operated prediction market.
The most significant factor working against DraftKings is Kalshi’s outright dominance (which has received support from the Trump administration).
In the short term, it’s unlikely that DraftKings will sway investors until Kalshi is banned in multiple states. That might happen, as Massachusetts and Nevada have started winning significant cases against Kalshi.
