Alex Rodriguez-backed sports trading startup Mojo announces layoffs
Alex Rodriguez-backed sports betting exchange Mojo laid off 20% of its staff last week.
Financial and business news outlet Business Insider reports that the A-Rod-backed sports betting startup is changing its business model and straying away from its original focus.
Mojo launched in September 2022 as a betting exchange that allows players to buy and sell shares of NFL players. “Bet on sports like stocks” is the platform’s slogan.
Mojo Exchange values each player's share based on their past performance, with future prices determined by subsequent matches. For every 10 yards a running back gains, the player's stock value increases by 1 cent, while a turnover by the same player results in a 4-cent loss in the player's stock value.
Mojo has raised more than $100 million in funding from A-Rod and billionaire Marc Lore, who also co-owns the NBA's Minnesota Timberwolves. Lore made his fortune by selling Diapers.com to Amazon in 2011 for more than $500 million.
Mojo also received funding from the NFL Players Association and New York-based private equity firm Thrive Capital. Before the layoffs, Mojo had about 100 employees.
Business Reform
The betting deals Mojo offered players never caught on. Have been following the company since its inception and have observed that account X on the platform regularly receives a low number of likes and/or retweets.
A Mojo spokesperson told Business Insider that the layoffs were primarily due to the exchange's inability to achieve meaningful, sustainable user growth.
Unfortunately, we sold approximately 20% of the company. "This is undoubtedly a sad day for our company, and we are grateful for the many contributions of these talented employees," a spokesperson said of the layoffs.
The Mojo NFL Player Exchange is exclusive to New Jersey and is approved through Caesars Entertainment's partnership with Tropicana Atlantic City. In an effort to reach a wider audience, Mojo ventured into daily fantasy sports in September 2023, launching an innovative product based on the live trading principles of sports betting.
Mojo Fantasy is available in 19 states and Washington, DC. live. The fantasy sports game uses "dynamic, probability-based pricing" in a fantasy sports competition format.
Mojo is reportedly focusing on its DFS business. While the New Jersey Sports Betting Exchange continues to operate, the company appears poised to shut down its sports betting division in the coming months.
Sports Betting Integration
Mojo Sportsbook's collapse is the latest incident in the sports betting industry, which has expanded rapidly in the United States since the Supreme Court's May 2018 ruling declaring a federal law limiting Nevada to a single game unconstitutional.
Following SCOTUS’s landmark decision, numerous startups and sportsbooks owned by traditional casino operators raised significant funding. Many states that have chosen the industry impose expensive royalties and high tax rates, making it a razor-thin business, creating an elusive path to profitability for many companies.
DraftKings and FanDuel now control the legal sports betting market in the United States. These companies benefited from DFS's leadership position when the SCOTUS ruling was announced. They have a large database of consumers who enjoy sports betting, which allows them to enter the sports betting space and gain significant market share.
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Source: www.casino.org
