FanDuel Prepares to Take Its Games to Europe
Daily fantasy sports are coming to the U.K., but not even the companies offering it quite know what that will mean. FanDuel has applied for a gambling license in the U.K, as first reported by the website LegalSportsReport. DraftKings already has a license to operate in the country, as does Mondogoal, a smaller daily fantasy sports company focused on soccer. The license would allow FanDuel to start offering fantasy games outside the U.S. for the first time.
Nigel Eccles, the chief executive officer of FanDuel, says he is aiming to launch a product in the U.K. some time in 2016. Eccles described his company’s international expansion as an experiment. “I think it’s an interesting proposition,” he said. “Candidly, we’re going to test the waters, but it’s an unknown. Everyone needs to prove that there is a market outside the U.S."
Fantasy sports have never caught on in Europe in the way they have in the U.S., in part because the most popular sport in most of the world is a game that often ends in a scoreless tie. This could mean that the products FanDuel offers in Europe would differ drastically from its U.S.-based product.
“It may not even be a daily fantasy product. I told the guys, come to me with a skill-based product in the U.K. that you think will work,” said Eccles. “We think that sports is universal, but the way people engage with sports is different, and the right game for them might be different in every country.” He said FanDuel is uninterested in offering something that would resemble traditional sports gambling, but it might develop a subscription-based service rather than a series of individual games in which people pay entry fees to win prizes.
FanDuel’s first entry into a regulated gambling market comes on the heels of Eccles’s acknowledging that the days of unregulated fantasy sports in the U.S. are almost over. There’s some question about whether the economics of fantasy sports will work once regulation cuts into the profit margins. Mondogoal says it pays 15 percent of its gross revenue in the U.K. in taxes and that about 20 percent of its costs go to regulatory expenses.
Eccles, of course, is optimistic that daily fantasy will be able to figure it out and says his company could be profitable as soon as next year. As for the company’s first experience with U.K.’s gambling regulators, he says it has been fairly painless. “It’s simple,” he said. “You fill out the form, you post it off, and you’re good.”