FanDuel, one of the two leading companies in the daily fantasy sports industry, is reportedly scaling back with employee layoffs after expanding rapidly for most of the last 18 months.
Citing multiple sources within the company, Forbes first reported on the layoffs. FanDuel has yet to comment on the report.
…New York-based FanDuel has begun the process of laying off some of its staff. The layoffs were announced by a senior executive within the company. At the time of publication, it is unknown how deep the cuts are or across how many departments. Initially reached for comment on Tuesday, a spokesperson for FanDuel denied any layoffs were occurring. Multiple emails to FanDuel seeking comment on Wednesday after confirmation of the layoffs went unreturned.
On a company history page apparently last updated in 2014, FanDuel reported having 79 employees in three offices in the United States and Scotland. As of Wednesday, the company’s LinkedIn profile claimed over 500 employees across its US and UK offices.
Fueled by massive fundraising rounds, FanDuel poured considerable resources into development and acquisitions in 2015. The company opened an office in Orlando and staffed it with 40 former Zynga employees, then acquired a Scotish app development company and DFS analytics site numberFire within a matter of months.
The company also started generating more of its own content under the FanDuel Insider blog umbrella.
“Our ambitions have really broadened,” CEO Nigel Eccles told TechCrunch, after the numberFire acquisition. “We’ve started to think of ourselves less as a fantasy sports business — we want to make sports more exciting.”
And then there were the ads, without which no narrative featuring FanDuel or DraftKings is complete.
The companies combined to spend more than $220 million on television advertising alone in the span of three months in the latter half of 2015, garnering attention from prospective customers, opponents from the broader gaming industry and aggressive politicians while burning through significant portions of their fresh capital.
Both companies defended the ad spend in September when public backlash against the ubiquitous campaigns began to boil over into attention from major media outlets, but have since admitted (quite begrudgingly, in DraftKings’ case), that maybe they went a little overboard.
The content of those ads, and the inability to escape them, are cited in virtually every media report about the industry and every piece of harmful legislation or negative opinion from an attorney general. One politician in Washington state has even introduced a bill that would make advertising DFS a felony in the state.
In recent months, the funds that the company spent on advertising—a planned expense—have gone toward legal defenses and lobbyists, likely an unplanned expense, at least to the extent the companies now find necessary.
And while advertising and legal spending have been a drain on both of the industry’s leading companies, it has likely been especially costly to FanDuel. The company, which had a three-year head start on DraftKings and opened 2015 as the clear industry leader, saw that lead dissipate entirely by the close of the year.