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DraftKings launches in UK after delays

DraftKings CEO & founder Jason Robins.
DraftKings CEO & founder Jason Robins.Barry Chin/Globe Staff

DraftKings Inc. is now accepting fantasy sports wagers from players in the United Kingdom, completing a long-delayed international expansion that could help the embattled company add a critical chunk of new customers.

Players in the UK will be able to compete against DraftKings’ existing customers in North America. Soccer is expected to be the most popular sport, although UK players also can play fantasy basketball, football, baseball, and all other sports available on the DraftKings website and apps.

The move, planned for nearly a year, comes as DraftKings faces increasing scrutiny from state regulators who question whether the company’s cash-prize contests violate gambling laws. DraftKings executives have said that a UK expansion is the first step in what they hope will be a broader expansion into multiple countries.

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That mirrors the ambitions of US professional sports leagues — the NBA and NFL have played regular-season games in London for several years, and DraftKings investor Major League Baseball is considering a similar move.

“A lot of the American sports franchises are looking to expand their presence and their brand here in the UK and across Europe,” DraftKings international chief Jeffrey Haas said in an interview. “Our intention is to expand our product alongside that.”

DraftKings estimates there are about 8.5 million people in the country who play traditional forms of fantasy sports, which last several months and span an entire sports season. The company thinks that could translate into an audience of about 1 million for its variety of fantasy sports, known as daily fantasy.

Those contests can span just one day or one week’s worth of real-life games. Contestants pay entry fees to compile mythical rosters of actual athletes, amassing points based on those players’ actual statistics. Cash prizes in the largest games can top $1 million. DraftKings said Friday it has paid out more than $1 billion in cash and prizes since its launch in 2012.

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The UK permits many forms of gambling, including online betting on sports contests. Boston-based DraftKings secured a license from the UK Gambling Commission last year allowing it to operate “gambling software” and “pool betting.”

That’s a strong contrast with the US, which restricts most gambling businesses with a series of overlapping state and federal laws.

State regulators have increasingly questioned whether daily fantasy sports are legal in their jurisdictions, forcing DraftKings and its top competitor, New York’s FanDuel Inc., to defend their operations in lengthy court battles.

Last week, payment processor Vantiv Inc. warned that it would drop daily fantasy sports clients because of the increasing regulatory scrutiny from state attorneys general. The decision didn’t immediately affect DraftKings, which won a restraining order in Suffolk County court binding Vantiv to its existing contract.

DraftKings began publicly discussing its international expansion plans in July, when the company raised a $300 million investment round.

Those plans were repeatedly delayed, however, after regulators began probing the industry’s legality. The most serious challenge is in New York, where state Attorney General Eric Schneiderman has sued to ban DraftKings and FanDuel from operating. The companies are fighting that suit.

Massachusetts officials have said that state law does not clearly prohibit daily fantasy sports played for cash prizes. Attorney General Maura Healey is formulating a broad set of consumer protection regulations for the sector, including a ban on players under 21 and restrictions on how the companies can advertise.

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The UK debut was originally planned for October. Haas has acknowledged that the launch, which could bring needed revenue and a new base of players amid the regulatory entanglements at home, had suffered from “executive inattention” amid the US regulatory headaches.

DraftKings has said it eventually plans to use the UK as a base to launch its contests in other regions around the globe, with soccer — the world’s most popular sport — as a keystone offering.

Earlier this week, DraftKings announced marketing partnerships with Liverpool and Arsenal, two of the leading teams in the top-tier English Premier League. Liverpool is owned by Boston-based Fenway Sports Group, whose principal owner, John W. Henry, also owns The Boston Globe.

FanDuel has also applied for a UK gambling license. Yahoo Inc., the third-largest US daily fantasy sports provider, has partnered with a daily fantasy soccer company that already holds a UK license.


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