DraftKings Working On an “International Road Map” For Expansion

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Global expansion

The daily fantasy sports industry has enjoyed lightning growth amidst considerable attention from the U.S. media in the last year.

And now one of the two major players is hoping to export that formula to foreign shores.

That’s per comments DraftKings CEO Jason Robins made to TheStreet.com.

“We have an international road map we’re working on,” Robbins said, asserting that overseas expansion “is one of the most compelling long-term opportunities for us.”

User growth at lower cost?

One reason why Robbins and other DFS sites might look to markets beyond North America: escalating user acquisition costs.

Current conditions in the U.S. market combine to create a perfect recipe for continued upward pressure on the price of bringing in new users to a DFS site. Consider:

Of course, one could easily argue that many of those conditions are not unique to the North American market and are likely to manifest in some similar form in almost any locale.

That conclusion makes it tough to argue for expansion as a cure for the ills of rising acquisition cost.

At that point, the justifications for international expansion start to look more like:

Low-friction, low-overhead markets likely targets

Robbins didn’t explicitly outline a list of target markets for DraftKings’ international expansion, but did suggest that the company would focus on what would appear to be the lowest-hanging fruit.

“[G]oing into the UK is going to be a lot simpler than going into India,” Robbins noted.

DraftKings (and other DFS operators) are likely looking to check a number of boxes before designating a market as a reasonable opportunity, including:

Will the product thrive alongside legal sports betting?

Another concern for DFS sites eyeing international markets is that many of the most obvious options – such as the UK – do not share America’s lack of legal ways to mix money and the outcomes of sporting events.

Some argue that DFS is not a replacement for traditional sports betting, but a new product altogether.

Others counter that DFS is only likely to thrive under the specific set of circumstances present in the U.S.. where sports betting is widely illegal (as are most forms of online gambling), while DFS enjoys a legal carve out on the federal level, is permitted in the vast majority of states, and is afforded a sort of protection thanks to the broader popularity of season-long fantasy sports.