Boston-based bookmaker DraftKings announced a restructuring and the release of an unspecified number of employees. These moves could signal a leaner approach for a company whose stock has tumbled over the last year.
Necessary Cuts
DraftKings and FanDuel both got a jump on the competition when PASPA was overturned in 2018, paving the way for sports betting throughout the US. Both companies dominated the daily fantasy sports (DFS) market, effortlessly converting all the customers in their respective databases into sports bettors.
The licensed sports betting industry launched eight years ago and has been adopted by 39 states at last count, allowing DraftKings and FanDuel to enjoy a duopoly while all other competitors jockey for third place.
However, the market is maturing, and growth will be slowed now that most states have adopted sports betting as a reliable revenue source.
In an earnings call approximately two weeks ago, DraftKings reported a 43% year-over-year revenue increase in the fourth quarter of 2025, but expenses have been soaring, including:
- 6% to 13% hike in general and administrative costs
- 3% to 9% for marketing costs
- 12% to 26% increase in technology costs
DraftKings stock has cratered from a high of $48.00 in August 2025 to $22.94 at the end of February 2026.
Although DraftKings did not specify a precise number of layoffs, industry insiders believe the company laid off roughly 5% of its workforce, which would equal roughly 300 positions. It was the second time the company had conducted a mass layoff, with the first occurring in 2023 when 3.5% of its personnel were let go.
Citizens Equity Research analyst Jordan Bender stated that shedding payroll would lead to about a $30 million annual savings.
AI Replacing Humans
Much has been written about the increasing influence of artificial intelligence (AI) in today’s workforce and how its implementation could potentially replace human roles.
The most recent round of layoffs at DraftKings may be a direct manifestation of this trend.
DraftKings has been a leader in its use of AI in the gaming industry, and although these most recent layoffs cannot be directly attributed to its increasing role at the company, it is reasonable to believe its influence was part of the corporate restructuring.
Industry analyst Jordan Bender stated, “Internally, the company has adopted AI functions to help write RFPs, help engineers to write code, add in chatbots, and draft legal opinions, all which can save on outsourced labor over time.
Externally, AI is improving its ability to serve content in a personalized manner. For example, 70% of promotional spending is determined by AI, which should increase over time. Overall, we could expect more cost structure rationalization in the coming quarters to years as the business continues to benefit from AI and maturing markets.”
