Gambling Firms Cut Staff as AI and Prediction Markets Pressure Sportsbooks
Penn Entertainment and Gambling.com Group announced new layoffs this week, underscoring a shakeout in sports betting as operators automate more work and prediction markets attract wagering activity.
Gambling.com said it is cutting about 25% of its workforce, roughly 150 employees. Penn will eliminate more than 75 positions from its Interactive division, including teams tied to theScore Bet, online casino and social gaming.
Gambling.com paired the reductions with its first-quarter results, reporting a $1.2 million loss on flat revenue of $40.4 million. Incoming CEO Kevin McCrystle told analysts AI is already producing about 80% of new engineering code, a shift the company expects will support $13 million in annualized savings. It also lowered full-year 2026 revenue guidance to $165 million-$170 million. The stock fell more than 45% following the update.
Penn's moves extend a restructuring announced in January that centralized technology under Aaron LaBerge and removed two senior executive roles. The company reported first-quarter revenue of about $1.4 billion.
The latest cuts come as regulated prediction-market venues, overseen by the Commodity Futures Trading Commission (CFTC), gain traction. Platforms including Polymarket and Kalshi have processed an estimated $150 billion in combined lifetime volume, with sports-related contracts driving much of the recent activity. DraftKings has acquired a CFTC-licensed exchange and partnered with Polymarket on clearing, while Penn has avoided event contracts, citing regulatory uncertainty.
Industry lobbying has intensified. The American Gaming Association is pushing regulators to classify event contracts as gambling and, as Congress weighs the Clarity Act, is urging lawmakers along with the Indian Gaming Association to add language stating prediction platforms cannot offer nationwide sports betting and casino-style gambling.
Kalshi reported $14.8 billion in monthly trading volume in April, overtaking Polymarket for the first time in eight months. Event-contract venues are increasingly competing with sportsbooks across player props, spreads and live markets, prompting operators to reduce headcount and lean further into automation. The next regulatory fault lines around event contracts are expected to emerge at both the state and federal level.
