DraftKings Announces New Jersey Layoffs Amidst Problem Gambling Concerns

DraftKings announced plans to lay off 101 employees in New Jersey, attributed to the company’s decision to shut down its live dealer studio in Atlantic City. It is yet unknown whether this downsizing will affect the company’s gambling harm prevention team, as New Jersey officials recently raised significant concerns regarding rising addiction rates in the state.

Live Dealer Operations Could Take a Significant Hit

DraftKings announced the strategic decision in a New Jersey WARN Act notice, mandating a 60-day advance notice for employees affected by mass layoffs. This downsizing appears connected to DraftKings’ shutdown of its Atlantic City live dealer studio, as reported by Next.io, who received the information from inside sources familiar with the matter. 

The studio opened in 2019 at the Hard Rock Casino in partnership with Evolution and has been a key part of DraftKings’ iGaming services, operating 24/7 with exclusive branded tables for online players. Despite the live casino sector’s substantial success, the operator is reportedly scaling back its live dealer team amid operational shifts and growing concerns about the effects of online betting.

The Atlantic City live dealer studio originally featured six tables, primarily focusing on blackjack. Notably, the tables were exclusive to DraftKings players, a stark difference from other online casinos that share the tables operated by third-party providers. It is unclear whether the DraftKings live dealer operations will remain in New Jersey or be moved elsewhere.

New Jersey Remains a Challenging Jurisdiction

While the primary cause for these layoffs appears to be the studio closure, it is unclear how they will affect DraftKings’ responsible gaming efforts in New Jersey, which encompass a 60-person team tasked with monitoring customers for signs of problem gambling. In a recent interview, Lori Kalani, DraftKings’ chief responsible gaming officer, pointed out that the company remains committed to player safety.

Online gaming is for fun and entertainment. We are committed at DraftKings to making sure players play responsibly.

Lori Kalani, DraftKings chief responsible gaming officer

DraftKings’ decision comes amid heightened scrutiny regarding the online gambling sector. Lawmakers in New Jersey recently held a hearing to review the social and economic impacts of online sports betting amid growing gambling addiction rates. Those concerns have only intensified the continued calls for better responsible gaming measures in the state, where more than 90% of sports bets happen online.

DraftKings’ downsizing reflects shifting priorities in the highly competitive online gaming market as it adapts to operational changes and regulatory pressures. Even so, New Jersey’s gambling sector remains robust. The state has brought in more than $105 million through September in online sports betting taxes, plus another $2.2 million through retail bets. 

UPDATE: DraftKings clarified that the layoffs were necessary because of the company’s strategic decision to outsource its Live Dealer offerings. DraftKings noted that affected employees would receive adequate protections and transition opportunities. You can find the company’s official statement below:

As we finalize our GNOG integration, effective January 31, 2025, DraftKings will transition its in-house Live Dealer operations to third-party studios in Atlantic City. We are supporting impacted employees to offer a smooth transition for as many as possible. Our Live Dealer offerings will remain uninterrupted.

DraftKings Spokesperson