Posted on: December 4, 2023, 08:17h.
Last updated on: December 4, 2023, 08:18h.
Mojo, a sportsbook exchange financially backed by Alex Rodriguez, laid off 20% of its workforce last week.
Financial and business news media outlet Business Insider reports that the A-Rod-supported sports betting industry startup is reworking its business model away from its initial focus.
Mojo debuted in September 2022 as a wagering exchange that allows players to buy and sell shares of NFL players. “Bet on sports like stocks” is the platform’s tagline.
Mojo’s exchange values each player’s share based on their past performance, with their future price dependent on subsequent play. A 10-yard gain for a running back increases the player’s stock value by a penny while a turnover by the same player results in a four-cent loss.
Mojo raised over $100 million in funding from A-Rod and billionaire Marc Lore, who also jointly own the NBA Minnesota Timberwolves. Lore made his fortune by selling Diapers.com to Amazon in 2011 for over $500 million.
Mojo also received funding from the NFL Players Association and New York private equity firm Thrive Capital. Before the layoffs, Mojo’s workforce numbered about 100 employees.
Business Overhaul
Mojo’s player wagering exchange never caught on. Casino.org has been following the company since its launch and has observed the platform’s X account regularly receiving less than a handful of likes and/or retweets.
Speaking with Business Insider, a Mojo spokesperson said the layoffs are primarily due to the exchange’s inability to generate meaningful, sustained user growth.
Regretfully, we let go of about 20% of the company. It’s certainly a sad day for our company and we thank those talented employees for their many contributions,” the spokesperson said of the layoffs.
The Mojo NFL player exchange was limited to New Jersey where it gained authorization through its partnership with Caesars Entertainment’s Tropicana Atlantic City. To reach a broader demographic, Mojo in September 2023 ventured into daily fantasy sports with an innovative product built on the sportsbook’s live-trading principles.
Mojo Fantasy is live in 19 states and DC. The fantasy sports game utilizes “dynamic probability-based pricing” in the format of a fantasy sports contest.
Mojo is reportedly focusing its efforts on its DFS operations. While the sports betting exchange remains operational in New Jersey, the firm appears ready to wind down its sportsbook unit in the coming months.
Sports Betting Consolidation
The Mojo Sportsbook downfall is the latest in the sports betting industry, which expanded rapidly in the US following the May 2018 Supreme Court decision that found a federal law that had limited single-game wagering to Nevada unconstitutional.
Numerous startups and sportsbooks from legacy casino operators raised significant capital after the landmark SCOTUS decision. But costly licensing fees and high tax rates imposed in many of the states that opted in rendered the industry a low-margin business that created a pathway to profitability unattainable for many of the companies.
DraftKings and FanDuel today control the legal sports betting market in the US. Those companies benefited from being the DFS leaders when the SCOTUS ruling was handed down. Their large databases of consumers who enjoyed wagering on sports allowed them to pivot to sports betting and attain considerable market share.