FanDuel shuts down Florida game studio and lays off 55

FanDuel, the embattled daily fantasy sports company, has shut a game development studio in Orlando and laid off 55 people.

The layoffs come at a time when FanDuel and its rival DraftKings have been under growing legal pressure from states who say that betting on daily fantasy sports tournaments constitutes illegal gambling and not a game of skill as the companies argue. And it means that kind of pressure is forcing the company to scale back their ambitions and focus on core businesses.

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Still, FanDuel and DraftKings are titans in the $1 billion daily fantasy sports market, and they’ve raised significant war chests that have allowed them to advertise heavily to get millions of customers. But that advertising ultimately got them in trouble with state regulators.

A company spokesperson told GamesBeat, “In 2015, we saw continued growth with more than six million users registering for FanDuel and our largest NFL season to date, despite regulatory pressure. As we plan for the future, we are building out our customer service operations in Florida and will continue to hire for select roles throughout the company. We did have a group of developers in the Orlando office that were focused on R&D for ancillary games and applications that we will not be investing in moving forward. We are helping the individuals in these roles find employment elsewhere and are grateful for the work they did at FanDuel. There are open positions on the Careers section of our website, which can be found here.”

The company still has an operations team of 19 people in Orlando, and it will keep that office open for its customer support agents and a “talent team.” The company is restructuring the departments, and it says it will continue to grow to support its core business.

The Orlando team included a lot of people who once worked at Zynga’s sports game division. Zynga shut that division, and it had previously hired a lot of people from the Electronic Arts’ EA Sports game development team.