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DraftKings inks English soccer deals ahead of UK expansion

Boston-based DraftKings Inc. said it is inching closer to a long-anticipated international expansion of its daily fantasy sports contests.
Boston-based DraftKings Inc. said it is inching closer to a long-anticipated international expansion of its daily fantasy sports contests. Scott Olson/Getty Images

With regulatory pressures growing at home, Boston-based DraftKings Inc. said it is inching closer to a long-anticipated international expansion of its daily fantasy sports contests.

On Wednesday, DraftKings announced long-term marketing agreements with two of the top teams in the English Premier League, the United Kingdom’s top soccer league.

The teams, Liverpool and Arsenal, will advertise DraftKings in stadiums and through digital marketing channels. DraftKings customers also will be eligible for special prizes, including match tickets. Terms of the deals were not disclosed.

“Our intent is not only to go to the UK, but also across the world,” said Jeffrey Haas, DraftKings’ chief international officer. “And the most popular sport in the world is what the British call ‘proper football.’ ”

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Liverpool is owned by Boston-based Fenway Sports Group. The principal owner of FSG is John W. Henry, who also owns The Boston Globe. DraftKings has a similar marketing relationship with the Red Sox, which also are owned by Fenway Sports Group.

Haas did not offer a specific date for DraftKings to launch its fantasy sports contests in the United Kingdom. Last month, the company said it would probably begin offering contests in the UK by mid-February

“We’ll launch soon, but I don’t want to be tossing around this date or that date,” Haas said. “We’re at the final stages of preparation and software development. We need to make sure we get the product right.”

Expanding to the UK gives DraftKings access to a large new pool of potential customers with fewer legal headaches than the company has faced back at home. In the United States, overlapping state and federal laws restrict gambling in various ways. But the UK permits many forms of gambling, including online betting on sports matches.

DraftKings received a license last year from the UK’s Gambling Commission allowing it to operate “gambling software” and “pool betting” in the country. Securing that license can be an onerous process, with regulators examining the company’s finances and interviewing its executives and investors.

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Haas said there are likely 850,000 to 1 million potential daily fantasy sports players in the UK, based on an estimate of about 8.5 million people playing traditional season-long fantasy games. That could project to a market worth $60 million to $100 million in entry fees a year after the games are launched, depending on how frequently British users play and how much they wager, he said.

DraftKings said it has amassed 6 million registered players since launching in 2012. Some 1 million new players signed up in September 2015 alone, coinciding with a huge marketing blitz tied to the start of the NFL season, DraftKings said.

About 200,000 players in North America have already tried DraftKings games involving professional soccer leagues, the company said. When it launches in the UK, customers will be able to play the company’s existing sports — including the NBA, NFL, and Major League Baseball — as well as soccer, against players in other countries.

DraftKings’ top competitor, FanDuel Inc., also has applied for a UK gambling license. Yahoo Inc., the third-largest daily fantasy sports operation in the United States, previously said it has partnered with Mondogoal, a daily fantasy soccer company that already holds a UK license.

DraftKings has been publicly discussing its international expansion since last summer, but those plans have been repeatedly delayed amid a surge of regulatory scrutiny in the United States.

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In July, when DraftKings raised a $300 million investment round, the company said one of its primary expenses would be an international expansion. At the time, chief executive Jason Robins said DraftKings hoped that the UK would be “a springboard for rapid international expansion in 2016.”

A month later, DraftKings announced that it had secured a gambling license from UK regulators and hired Haas, a veteran of the gambling sector with experience in online poker, as chief international officer.

DraftKings initially hoped to start its UK-based games in October, but the debut was delayed when New York Attorney General Eric Schneiderman sought to shut down fantasy sports in that state.

Haas acknowledged in November that the UK launch had suffered from “executive inattention” during that period. DraftKings then planned to open its UK office by the end of 2015, but announced in December that it would again delay the launch until early this year.

On Wednesday, Haas said DraftKings’ international ambitions were not directly tied to legal problems it has faced in the United States. But he acknowledged the importance of growing the company’s international user base when domestic regulators are threatening to cut off access to large markets such as New York.

“It’s a vital part of our strategy. I don’t think it’s necessarily related to anything that’s occurring in the US,” he said. “It just becomes more important for us, because it’s a tremendous opportunity and there aren’t any major competitors in this market — which means it’s effectively a green-field opportunity for us to establish ourselves and grow.”

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Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.