[toc]DraftKings will not launch a daily fantasy sports product in the United Kingdom until 2016, according to multiple media reports, a delay of months from a planned roll-out in October.
No DK in the UK this year
Bloomberg broke the news of DraftKings’ delayed launch on Wednesday. According to that report, the launch has been delayed to “early next year.”
The Boston Globe also reported on the delay, talking to an executive who said that DraftKings would enter the UK once some “minor issues are resolved.”
The biggest sport in the UK is soccer’s English Premier League; that organization’s schedule continues through the middle of May. So it appears conceivable that DraftKings could go live for the tail-end of the season.
The backstory of DraftKings and the UK
DraftKings had earlier said that its UK product would go live sometime in the fourth quarter of this year. But after pushing back a stated launch at least twice, the DFS operator apparently is willing to take its time in entering the UK market.
Here’s the timeline of how we got here:
- DraftKings applied for a UK gaming license in June for “gambling software” and “pool betting.”
- The UK license was approved in August. In a press release, DraftKings noted it expected “to be operational in the U.K. in the fourth quarter.”
- In an interview in September, DraftKings CEO Jason Robins said it would launch in October. He also noted that player pools would be shared across the U.S., Canada and the U.K.
- DraftKings signed a deal to sponsor the NFL’s International Series. Robins and some other DraftKings executives were attending a game in London as the DraftKings data leak story began making news.
- A Boston Globe story noted that Robins indicated DraftKings would go live in November.
Why the delay in the UK?
Beyond what DraftKings has said via the media, the reasons for the delay are a matter of speculation. It’s reasonable to conclude that time spent on matters in the U.S. — namely the court battle in New York and lobbying efforts in a variety of states — are likely pulling the company’s attention away from the core business and the international expansion effort.
The UK launch for DraftKings is also not a direct port of the North American product, so there are likely complications in creating the UK platform that could have been unforeseen.
In October, some politicians questioned how DraftKings received a license given the news that had broken across the Atlantic Ocean, but there has been no more chatter via UK media on that front.
DFS presence in the UK, and market possibilities
The market for DFS in the UK is still in its infancy. Soccer-only DFS site Mondogoal, leads the market and has experienced growth in 2015, but it is still a fairly niche endeavor.
FanDuel has also applied for a UK gaming license, but its application is still showing as “pending” at the UK Gambling Commission website.
Generally, DFS sites only operate in the U.S. and Canada, as a gaming license is understood to be needed to operate in most jurisdictions around the world.
While focusing efforts overseas during the current turmoil in the U.S. might seem to some to be a less-than-ideal strategy on its face, it could also make a lot of sense.
As DFS operators face the possibility of regulation in a number of states and an uncertain future in jurisdictions throughout the U.S., DFS sites — or at least DraftKings and FanDuel — can pursue licenses in jurisdictions where they can have legal clarity. DraftKings has expressed its interest the Asian and Australian markets just a few months ago, but before controversy in the industry erupted.
Of course, getting gaming licenses and developing a market for daily fantasy sports in other countries is an expensive proposition, and FanDuel and DraftKings are having to pour a lot of capital into their efforts stateside.
And the capital needed for international expansion could be impacted by short-term concerns. Sites are facing falling numbers in their NFL contests, although they have seen solid numbers for the NBA. The NFL season is also rapidly coming to a close, meaning revenue at every DFS site will take a hit once the calendar turns to 2016. And further venture capital for the DFS industry is likely difficult to come by in the current environment.
The success of international expansion is far from a given, but it also stands as a possible path forward for operators. It will be interesting to see how sites approach the possibilities of international markets given the uncertainty they face at home.