Cracking DraftKings

DraftKings' Receives A U.K. Gaming License

News came out recently that DraftKings has applied for and received a license to operate in the U.K.  According to the press release from DraftKings:

DraftKings, Inc., a leading skill-based daily fantasy sports destination, today announced the company has been granted a license to operate in the United Kingdom and will open its third office, in London, by the end of 2015.  DraftKings expects to be operational in the UK in the fourth quarter, with launches in additional markets, including Europe, Asia Pacific and Latin America, planned for 2016.  

"Our expansion into the United Kingdom marks a milestone moment in the growth of DraftKings as we introduce our world-class product to new audiences," said DraftKings Chief Executive Officer Jason Robins. "We will add new sports and games to our burgeoning roster of offerings and further connect fans to their favorite teams and players. We also welcome the opportunity to forge new partnerships with leagues, teams and media outlets internationally as we have done with exceptional success in the United States." 

DraftKings' worldwide expansion will be led by newly appointed Chief International Officer Jeffrey Haas, a business development veteran with experience in opening markets for new gaming products across the globe. Haas will manage the London office, including the hiring of more than 20 new positions in customer acquisition and retention marketing, communications, analytics, compliance, business development, and corporate partnership roles... 

"DraftKings is well-poised for explosive growth internationally, and I am excited to lead their expansion efforts," said Haas. "Daily Fantasy Sports is a growing category outside North America, and we have a tremendous opportunity to engage sports fans around the world. We will look to maintain our leadership position in the Daily Fantasy Sports industry – creating innovative games across the most sports, providing our players with elite customer service and fostering mutually-beneficial relationships with our partners."

So what does all of this mean, especially for DFS players?  Well, at first, not much.  DraftKings already offered daily fantasy soccer from the English Premier League (EPL), but this step appears to be a move in the direction towards offering more games that appeal to the U.K. audience.  The press relase did note that DraftKings is planning "launches in additional markets, including Europe, Asia Pacific and Latin America" in 2016.

The bigger question here is how this will impact the outlook on DFS sites in general in the United States.  Only a handful of other companies that offer DFS contests have U.K. gaming licenses.  The association of a major DFS company such as DraftKings with a gaming license may add fuel to the fire that some believe that DFS contests are more towards gambling and gaming than the game of skill protected by the Unlawful Internet Gambling Enforcement Act, or UIGEA, which decreed DFS contests as games of skill under the law of most U.S. states.  This move, along with possible subsequent licenses in other countries, may tarnish that view in the U.S. and lead towards regulation of DFS sites.

The DFS landscape continues to evolve and change almost as fast as new contests appear.  Worldwide acceptance of DFS as gambling, should it come to that, will add weight to supporters who already view DFS as a type of gambling activity on sports contests.  With new sites entering into the DFS community right now, any negative light that may shine on the UIGEA will hurt existing sites, new players and the entire DFS community as a whole.

All of DFS now has yet another reason to stay tuned and nervously rest on the edge of their collective seats.