FanDuel is withdrawing from the United Kingdom. FanDuel sent out an e-mail to all UK-based players informing them that the daily fantasy site will not be hosting contests for UK players this season and that full refunds will be issued to all customers.
A statement published on the FanDuel.co.uk domain states the following:
“Unfortunately, we will not be offering contests in the UK this season. We hope to be back in the future, bringing you more of the games you love.”
The front page of FanDuel.co.uk also offers assurances for customers who still have funded accounts:
“If you had funds in your FanDuel account, your balance has been credited to the most recent bank card we have on record for you. You should also have received an email with more details.”
And just like that, FanDuel has left the UK market just one year after its much-publicized expansion across the ocean. FanDuel acquired its UK license last July and then launched its first real money fantasy contests for UK customers in August. The statement does leave some hope that FanDuel will return one day, but there is no word yet as to when that might be.
The announcement comes just two weeks after FanDuel and DraftKings publically called off their own merger here in the United States. With FanDuel and DraftKings being the two largest fantasy sites and controlling 90% of the US daily fantasy market, the FTC began sniffing around and eventually sued to stop the merger. Rather than fight the FTC in an expensive, uphill court battle, both sites called off the merger.
FanDuel has yet to explain its rationale for suspending operations in the United Kingdom, but the timing is probably not coincidental. With the UK market still very underdeveloped and FanDuel now on its own, FanDuel execs probably figured it would be best to avoid a two-front war and focus their efforts on the established market back home.
Update: FanDuel offered a bit of an explanation in a quote provided to Gambling Insider:
“We will not be operating our UK product this upcoming EPL season to focus on our product in the US. As we approach the NFL season, we are allocating all of our resources towards ramping up a US product that consumers love and building out complementary fantasy sports products. There are over 53 million people playing fantasy sports in the United States and we are investing all of our resources on that market.”
Now that the merger with DraftKings has fallen through, FanDuel will have to turn back to full-on competition mode with its biggest rival in the United States. There’s only so much money to go around and it seems likely that the small UK market is just too expensive to maintain at the same time.
As always, Legal Sports Report has an excellent breakdown with its own similar hypothesis. Legal Sports Report makes special note of FanDuel’s claim that the company paid out nearly £1 million in daily fantasy prize money last year in the UK market. While that’s not a bad number for a single company operating in an undeveloped market, it pales in comparison to the estimated $1.5 billion in entry fees FanDuel handles in the US.
Opportunity for DraftKings
DraftKings Chief International Officer Jeffrey Haas told Legal Sports Report that the company has no plans to follow FanDuel’s lead in leaving the UK. According to Haas, DraftKings will be starting up the next season of fantasy soccer contests shortly.
With FanDuel out of the picture in the UK, that leaves DraftKings as the only other major player in the UK market. Other sites such as Mondogoal and PlayON still operate in the UK, but DraftKings is by far the biggest company still active across the pond.
This presents DraftKings with a wide-open opportunity to attack the UK market now that its biggest competitor is withdrawing. DraftKings has a reputation for sparing no expense when it comes to marketing, so it will be interesting to see if they push give their UK market an extra push or focus their efforts on protecting their US market from FanDuel.
The UK does have a market for daily fantasy sports, but it’s also a different market with unknown potential. For one, the UK does not have a fantasy sports tradition like the United States. Marketing daily fantasy to the US was fairly straightforward given the United States’ existing familiarity with daily fantasy sports.
Furthermore, operators such as FanDuel and DraftKings compete with a very entrenched sports betting industry. Not only do they need to explain the fantasy concept to players, but they also need to convince sports fans to switch from what they know (sports betting) to daily fantasy sports. However, we know the UK has a ravenous sports appetite and daily fantasy does tap into that love of the game.
The question is if how much time and resources DraftKings will be willing to dedicate to marketing its wares in the UK while its biggest rival back home focuses exclusively on the US market, which is the bread and butter for both sites.