DFS Operators Reposition as PrizePicks Will Exit Canada and Underdog Lays Off Staff
PrizePicks will exit Canada, while Underdog cuts staff as it pivots toward prediction markets, highlighting how DFS operators are adjusting their expansion strategies amid a shifting U.S. gambling landscape.
Two of the largest daily fantasy sports (DFS) operators are reshaping their growth strategies amid regulatory pressure and new opportunities in prediction markets. PrizePicks has announced it will exit Canada in early April, while rival Underdog has laid off more than 100 employees, saying it is part of a shift towards prediction markets.
The two moves highlight how DFS companies are responding to the changing landscape of their core products and new wagering formats across North America.
PrizePicks to Exit Canada
PrizePicks confirmed it will “pause” operations in Canada on April 3, as the company focuses on expanding its U.S. footprint. The company also said that it will stop accepting deposits after March 9. The last day to withdraw funds is April 2.
The operator told Sports Betting Dime that the decision comes as it is “hyper-focused” on expanding its presence across the U.S.
PrizePicks offers DFS in all Canadian provinces except Ontario.
Recent Re-Entry into New York
The Canada exit announcement comes a month after PrizePicks relaunched in New York after exiting the state in 2024 amid compliance concerns.
In 2024, PrizePicks reached a $15 million settlement with the New York State Gaming Commission for operating without a wagering license. At the center of the dispute were the company’s against-the-house Pick ‘Em contests, which the regulator deemed illegal.
Now, PrizePicks has relaunched in the Empire State with its peer-to-peer Real Money Game (previously Arena).
In August 2025, the company announced it was ending its against-the-house Pick’Em contests nationwide. Instead, it replaced them with the peer-to-peer product and introduced a free-to-play streak builder.
Underdog Cuts Staff Amid Strategic Pivot
At the same time, competitor Underdog is restructuring internally as it pivots toward prediction markets.
According to reporting from Front Office Sports, the company laid off at least 125 employees. That represents more than 20% of its workforce. Two-thirds of the company’s fraud and customer operations teams were reportedly affected by the cuts.
Underdog founder and CEO Jeremy Levine said the layoffs were part of a broader effort to realign the company’s strategy.
“We made the difficult decision to reduce our workforce as we focus resources on the areas of the business with the greatest long-term opportunity,” Levine told Front Office Sports.
Prediction Markets Emerging as Strategic Focus
The twin developments come as DFS and sports betting operators increasingly explore federally regulated prediction markets as a potential avenue for expansion.
Underdog entered the sector in September 2025 through a partnership with Crypto.com. The collaboration allows Underdog users in over 30 states, including non-betting states like Texas and California, to place event-based wagers.
The company’s entry into prediction markets led to Underdog shuttering its North Carolina sports betting platform. It also withdrew its application for a sports betting license in Missouri.
PrizePicks has also entered the prediction market space via a partnership with Kalshi in November 2025. In January, it expanded its prediction market product to 48 states, offering sports event contracts in 35 states, plus Washington, D.C.
Prediction Markets Allow Access to Non-Betting States
Unlike traditional sports betting, prediction markets are regulated by the Commodity Futures Trading Commission (CFTC). That allows licensed platforms to reach users in states where sports wagering remains illegal.
In addition, prediction market platforms do not pay state taxes on revenue.
Industry analysts note that prediction markets could give DFS operators access to large, untapped states, including California and Texas, where sports betting legislation has repeatedly stalled.
DFS Faces Regulatory Headwinds
The pivot towards prediction markets comes as the DFS industry faces growing regulatory scrutiny.
PrizePicks’ decision to end Pick ’em contests came as multiple states have targeted against-the-house pick ’em contests, arguing they function as unlicensed sports betting.
In July 2025, California Attorney General Rob Bonta issued a legal opinion concluding that all DFS contests violate state gambling statutes. While his opinion does not change the law, multiple class-action lawsuits were filed against operators such as PrizePicks and Underdog.
Meanwhile, the Arizona Department of Gaming issued a notice in December 2025 seeking to revoke Underdog’s DFS license for its involvement in prediction markets.
Additionally, several states, including Virginia, have introduced legislation this year to tighten DFS regulation.
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