Yahoo became the latest daily fantasy sports site to enter the United Kingdom, joining DraftKings and FanDuel.
The news comes as daily fantasy soccer site Mondogoal shut down its consumer-facing product. Mondogoal once was a partner with Yahoo.
Yahoo, now in the UK
The company received a gambling license in the UK and launched to DFS players there with little fanfare.
The news of the UK launch initially came via Twitter. Yahoo confirmed the launch to Legal Sports Report but offered no further comment.
Previously, Yahoo DFS was available to players in much of the US and Canada.
Yahoo offers soccer contests, and also localizes currency with British pounds. All contests available to Americans and Canadians are open to players in the UK, with liquidity shared universally.
The license can be seen on the UK Gambling Commission’s website:
Yahoo and a gambling license?
It is an interesting development that a major publicly held company in the US — that is not a part of the casino industry — now holds a gambling license in any jurisdiction. (The license is actually held by a Yahoo subsidiary based in Dublin. However, the license is being deployed to share liquidity with Yahoo’s US-facing product.)
This appears to be more of a practical matter related to DFS than indicative of plans to offer widespread sports betting.
DraftKings and FanDuel also hold UK gambling licenses — both launched there earlier this year. That’s despite the fact that they attempt to distance themselves from being a gambling product at every turn.
Whether DFS runs afoul of state gambling laws in the US is still in question in some jurisdictions, as is its status under some federal laws. But it’s clear that a DFS business in the UK requires a “pool betting” license. Offering DFS contests for real money in a variety of US states appears to be legal as a game of skill, despite no laws specifically dealing with DFS in a vast majority of jurisdictions.
The rationale for all three companies is that a gaming license is what it takes to operate in the UK, so they procured one. None of them view it as a tacit admission that any of them are offering a gambling product stateside.
Now if Yahoo were to start offering sports betting outside of DFS in the UK, that would be a major development. But there are no indications that Yahoo has plans to deploy the license in any way other than for DFS.
Yahoo DFS and Europe
The future of DFS in UK and the rest of Europe is still somewhat murky. The rollout of consumer-facing DFS products in the UK has been somewhat underwhelming. The launches of DraftKings and FanDuel in the UK market were not accompanied by massive customer acquisition efforts.
Mondogoal, Global Daily Fantasy Sports, and some other providers view the future of DFS in the UK and beyond as a business-to-business proposition. They envision their DFS platforms being deployed via already established online sportsbooks. Mondogoal is already doing just that with providers in Italy.
Yahoo has shown little desire to spend in a meaningful way on marketing and customer acquisition in the US. Expect that trend to continue in the UK.
Yahoo DFS, still a distant No. 3
Yahoo is a clear No. 3 in the DFS market. But it’s nowhere close to Nos. 1 and 2.
DraftKings and FanDuel depend on net revenue from entry fees. Yahoo, of course, benefits from DFS in ways other than the bottom line of its DFS contests, such as more engagement with its sports content.
The “big two” in DFS are on the path to become one, with a planned merger announced last month. Once the merger goes through, it would appear to leave an opportunity for another DFS company to gain marketshare.
Could that company be Yahoo? So far, it hasn’t shown that kind of ambition for the DFS market. But a change in the dynamic could bring about a change for Yahoo.