DraftKings delays launch in UK

Fantasy site says improvements needed; Had initially hoped to launch in October

DraftKings will not be introduced in the UK this month as planned.Scott Olson/Getty Images/Getty

DraftKings Inc. has again delayed the launch of its daily fantasy sports contests in the United Kingdom, the company acknowledged Wednesday, a setback to its overseas expansion efforts.

The company had previously said its games would be available in the UK by the end of 2015 but has now pushed back the debut until early next year.

"We have been testing our product with focus groups, and the response has been positive," Jeffrey Haas, the veteran Internet gambling executive hired by the company in September to lead its overseas push, wrote in an e-mail. "But we think we can do better and need to make some improvements before we go to a full launch. Once these minor issues are resolved, we will be ready to launch. There is nothing else standing in our way."

Unlike in the United States, where a debate is raging about whether daily fantasy contests for cash are a form of illegal gambling, the UK permits many forms of gambling, including online betting on sports matches.

Earlier this year, DraftKings applied for and received a license from the UK's Gambling Commission, an onerous process that saw regulators carefully examine the company's financial records and interview top executives and investors.

The delayed launch, first reported by Bloomberg News, means DraftKings will miss out on a busy period in British soccer, when the top-level Premier League, for example, hosts additional games during the holidays.

That still leaves time for the company to launch before the popular UEFA Champions League tournament resumes in February. The company expects soccer matches will be its most popular offering in the UK and has said it may add other sports that are popular there, such as cricket and rugby.

Boston-based DraftKings has previously acknowledged the international expansion took on greater importance as the company faced more scrutiny at home. It is currently fighting a shutdown order in New York from that state's attorney general, and regulators and legislators in other states — as well as federal investigators — are examining whether its contests are legal under gambling laws.

"It's an opportunity to effectively mitigate any risks that may come into play in the US as some states take different view on our products," Haas told the Globe in November.

In New York, one of the country's largest markets for daily fantasy sports, Attorney General Eric Schneiderman has sued to ban DraftKings and its rival FanDuel Inc., saying their contests are forbidden by state gambling laws. Last week, a New York judge granted Schneiderman's request to shut the companies down there while they battle in court, but the order was temporarily put on hold by a higher court.

DraftKings had originally hoped to get underway in the UK in October, but Haas acknowledged in November the launch suffered from "executive inattention" as company officials were consumed with the New York court battle and other controversies.

Industry observers cautioned against reading too much into the delay, saying that launching in the crowded UK market was always a difficult prospect.

"The general consensus in industry circles was that a 2015 UK launch was ambitious and somewhat unlikely to start with — let alone post-controversy, when so many resources and so much attention was required to stem the tide in the US," saidChris Grove, who runs the Legal Sports Report news website.

He added that the first daily fantasy sports company to operate in the UK will probably have to spend heavily to educate bettors while also competiting against established gambling venues.

Haas told the Globe in November that he expects a daily fantasy customer base of roughly 1.1 million people in the UK, a market he estimated could be worth $60 million to $100 million.

DraftKings won't be the only daily fantasy company to enter the UK market. FanDuel said Wednesday it was in the process of obtaining a UK license. Yahoo! Inc., the third-largest daily fantasy sports operation in the United States, has partnered with firm Mondogoal, which already holds a UK license.