Daily fantasy sports operator FanDuel is laying off staff as the legal and financial challenges facing the industry show no sign of letting up.

On Wednesday, Forbes’ Maury Brown quoted sources at FanDuel saying a senior exec had announced the layoffs to staff at the company’s New York offices. The scale of the cutbacks has not been publicly confirmed. The news follows rival DraftKings’ recent decision to look for a way out of the pricey New York office lease it signed last June.

The layoffs come just one day after Texas state Attorney General Ken Paxton became the latest to declare DFS to be illegal gambling. While DraftKings immediately stated its intention to continue serving the Texas market, FanDuel’s statement hedged on whether it planned to exit Texas, which reportedly accounts for up to 8% of all DFS entry fees.

At least one DFS operator’s concern over their increasingly insecure legal situation is borne out in federal lobbying disclosure forms. While FanDuel’s $20k federal lobbying budget was unchanged from Q3 to Q4, DraftKings’ expenditure rose from $10k in Q3 to $80k in Q4.