For them to put out a $1M opening night NBA game on a 3 game slate they have to know that it was going to overlay. If they were on the verge of insolvency they would not be offering contests knowing that they're likely going to overlay if you're close to insolvency.
I can confirm the layoffs at FanDuel as true, although I don't know the specific numbers. However, having worked with a few startups in my past, I will say that layoffs are inevitable when growth stops, as you don't look at your cost structure as closely as you should when everything is focused on growth. Once the growth slows down you look to increase profitability.