Underdog has terminated at least 125 staff members, including a significant portion of its fraud operations team, as it pivots from conventional sports wagering and fantasy games to national prediction markets.

The layoffs appear to be more substantial than previously indicated. Earlier on Monday, Front Office Sports reported that only 15 individuals had been released based on public social media disclosures. However, further information suggests that the actual number surpasses 125 employees, accounting for over 20% of Underdog’s total workforce. According to LinkedIn, the company has a workforce exceeding 600.

In an announcement to FOS, Underdog CEO and founder Jeremy Levine highlighted the company’s strategic realignment as the main rationale behind the layoffs. He mentioned that this year marked the business’s transition from a localized approach to a comprehensive national prediction market platform with cohesive offerings nationwide.

“This is simply a different operation, and the adjustments we have implemented are part of that transition,” Levine stated. “We take pride in recruiting individuals who are enthusiastic, compassionate, and genuinely care about their responsibilities, so if you’re hiring and come across someone from Underdog, you’d be fortunate to have them and feel free to reach out to me for a reference.”

Notifications regarding the layoffs were disseminated to employees on Friday, February 27. In addition to fraud operations, positions in customer support, graphics, marketing, and Underdog’s “drafts” division, which provides daily and season-long draft games, were also eliminated. Several employees remarked that the notification process felt abrupt.

Underdog’s layoffs are indicative of its shift towards prediction markets, which follows a partnership with Crypto.com established in September. This alliance permits users in 16 states to engage in trading event contracts pertaining to the NFL, NBA, MLB, college football, and more.

Previously, Underdog seemed ready to expand its traditional sports betting operations but recently closed its North Carolina sports betting division and scrapped plans for a license in Missouri.

The prediction market sector is increasingly capturing the attention of investors and notable figures, including Donald Trump Jr., who is associated with Polymarket and Kalshi. Trump’s platform, Truth Social, is also set to introduce a prediction-market feature in collaboration with Crypto.com.

Regulatory scrutiny appears less stringent than for state-specific sports betting, with Commodity Futures Trading Commission chairman Mike Selig vowing robust support for the sector. “To anyone aiming to contest our authority in this realm, let me assure you: we will see you in court,” he stated.