- Asset supervisor says a stake within the sports activities wagering firm detracted from a closed-end fund’s 2025 efficiency
- Staffers just lately reported vital layoffs on the gaming firm
- The operator is shifting its emphasis to prediction markets
BlackRock (NYSE: BLK), the world’s largest asset supervisor, mentioned a place in Underdog was a detractor to the 2025 efficiency of one in every of its closed-end funds.
The Underdog brand. Shares of the privately held firm harm a BlackRock closed-end fund final 12 months. (Picture: Underdog Sports activities)
Within the just lately issued annual report for a slew of closed-end funds, BlackRock famous Underdog dinged the 2025 displaying of the BlackRock Know-how and Non-public Fairness Time period Belief (BTX). That fund has $895.5 million in belongings below administration, in keeping with issuer knowledge.
Lastly, an chubby place in personal firm Underdog Sports activities Inc. detracted from relative efficiency. The inventory dipped as regulatory challenges and elevated scrutiny round Underdog’s shift into prediction market merchandise pressured its valuation,” in keeping with a BlackRock submitting with the Securities and Alternate Fee (SEC).
The gaming firm doesn’t rank amongst BTX’s high 10 holdings.
Contained in the Underdog Scrutiny BlackRock References
Although it’s possible of little solace to BTX traders, BlackRock’s commentary round Underdog has advantage.
In partnership with Crypto.com, Underdog launched its prediction market providing final September, turning into the primary licensed every day fantasy sports activities (DFS) or sportsbook operator to make such a transfer. Underdog’s prediction market push resulted within the firm abandoning plans to function a web-based sportsbook in Missouri and the lack of its DFS license in Arizona.
That call by Arizona regulators stoked hypothesis the state will pull licenses of different DFS and sportsbook operators that additionally enterprise into prediction markets.
As BlackRock notes, Underdog is a privately held firm, however shares of bigger carefully held corporations do commerce on secondary markets, giving shareholders and institutional traders avenues for valuing their stakes. Following a $70 million funding spherical in March 2025, the gaming firm was valued at $1.23 billion, placing it in “unicorn” territory.
Extra Underdog Controversy
Although not talked about within the BlackRock SEC submitting, there are different sources of controversy at Underdog. Stories surfaced final week that terminated greater than 20% of its employees throughout a number of departments, together with some DFS video games, fraud detection, and advertising and marketing, citing synthetic intelligence (AI) and the prediction markets push as the explanations.
A minimum of 125 now former staffers have been let go by Underdog, together with some that have been among the many firm’s first workers. These are unhealthy optic contemplating the corporate isn’t a 12 months faraway from being valued at $1.23 billion.
Some ex-Underdog employees mentioned media retailers they consider the headcount discount is extra attributable to the operator’s growing embrace of AI than it’s the results of its give attention to prediction markets.
The information emerged simply days after DraftKings (NASDAQ: DKNG) mentioned it’s decreasing its employees by 5% in a bid to save lots of $30 million yearly. That announcement additionally stoked loads of AI-related chatter.
