By Frank Scandale @FScandale @TheDailyPayoff

Daily Fantasy player Draft Kings’ plan to obtain a gambling license in the UK is seen as a shrewd move to gain a foothold in the international market.
It is also viewed as a risky move to catch its larger rival that could tarnish its image as a fantasy player by plunging into the gambling sector, and upset its NFL and network backers.
Either way, the move is fueling speculation of what this means for daily fantasy sports, who some see will be played by 100 million people within three years.

Adam Krejcik, a partner in Eilers Research that studies the digital and interactive gaming industry, suggests why neither daily fantasy sports player has targeted the UK at this point.
“They are focusing their money and resources on the US,” he says, adding, “Once you enter into the international market, you have to file for a gambling license, which might seem hypocritical since you have maintained DFS is not gambling.”

He said FanDuel probably saw that issue, but DraftKings “feels the time is right to enter this market and doesn’t feel like this should be an issue.”
Eisler also noted the risks involved go beyond its image as a non-gambling site.
“The market itself has not been proven yet either. You have to build a team and an office, get a license and then market and acquire customers over there,” Eisler said.

Yet, Draft Kings did not make this move without consulting with its strategic US investors, including networks and pro teams.
“I would not have expected them to make this move without having discussion with shareholders who are strategically aligned,” he said. “And then at the end of the day they must have felt comfortable.”

DraftKings did not respond to requests for comment for this story.

As for the NFL, which has approved one-year partnerships with league approval, the league remains on the sidelines, he says, but are not letting its teams invest directly into DFS companies. For New England Patriots owner Robert Kraft, for instance, has an investment into DK through Kraft Sports Group and not subject to the same rules as teams.
“For other investors, generally speaking, there is a shift. The sports leagues themselves are becoming more open-minded when it comes to sports and gambling.”

Rick Wolf, president of Fantasy Alarm and co-founder of Fantasy Sports Trade Association (FSTA), sees the move as a smart diversification of Draft Kings core business.
“One of the key misnomers is that fantasy sports players are gamblers,” he said. “In research from the FSTA that has 56.8M people in North America playing, the number who wager regularly on sports is very small. It is not a cross over play, but a new business and really, why not?”
Wolf also sees the NFL and MLB, for instance, supporting fantasy sports in general, and will react to DK’s move depending on their own respective agreements and their own views, not to mention the views of the public.

“The public is smart and knows that fantasy sports is not gambling so I don’t think this is an issue for them,” Wolf said. “…and the cross over is small. To me it is just a diversification into a completely different business vertical with similar software needs.”

Another supporter of the diversification move is Darren Heitner, a sports and entertainment attorney based in Miami, who said the move makes perfect sense as it positions the company well should the United States eventually relax its overall stance on gambling on the federal level.
“It (makes sense) for multiple reasons,” Heitner said. “The chief justification being that Draft Kings can test out a proprietary gambling platform that is ready to be implemented in the United States should the federal law preventing widespread gambling (PASPA) be amended or revoked. Furthermore, it will allow for an extension of the brand on a worldwide scale, which could open doors for the proliferation of its fantasy-related offerings. Additionally, it may believe that there is market share to grab — making sense from the most basic premise that it has a platform that could generate additional revenue at a reasonable cost.”

Regardless of all the factors surrounding DFS, Heitner thinks most decisions will be based on business bottom line outcomes. While the NFL has its concerns about gambling and pro sports, he thinks the league would be taking a contradictory position if it were to chastise Draft Kings for implementing a gambling operation overseas, as it seeks to expand its product into the UK.
He said the NFL continues to expand the number of games played in the UK and “would love to have a team based there.”

“It is well aware of the amount of gambling that occurs within the UK orders,” Heitner said. “The leagues may claim that gambling runs contrary to maintaining the integrity of the game, but the bottom line is the bottom line.”

Same for investors. They will look at the strengths and weaknesses of entering such an industry in a particular market and then decide what opportunities and threats exist, Heitner said.

As for television partners , Heitner doesn’t see a problem.
“ESPN has to be quite thankful that the World Series of Poker became such a hot commodity,” he said. “Again, it should be about what this expansion does for the bottom line.
“If the operation is legal where the platform is offered, then the conversation over perception should be a nonstarter. I go back to the NFL harping on the fact that the potential of gamblijng threatens the integrity of the game. Yet, the NFL expands the number of games played in London year-over-year and would love to have a team based in the UK.”

ESPN and DraftKings recently inked a partnership deal worth a reported $250 million, according to The Boston Globe and other media sources. ( http://www.betaboston.com/news/2015/06/24/draftkings-wins-big-espn-ad-deal-but-no-word-on-investment-rumors/)

For a unique perspective on fantasy sports and the UK, Mondogoal’s founder and CEO talked about his early success there.

Shegul Arshad said his operation, which focuses on online fantasy soccer, entered the UK last summer for the World Cup with a soft launch. He has a unique perspective as the DFS landscape continues to evolve.
Incorporated in the Isle of Man with a US headquarters in Boston, Mondogoal offers cash and non-cash games for players, depending on where the individual is located and what the regional gambling rules are.

“It’s certainly a strange move, if you ask me,” he says of the Draft Kings move. “For a US-based company to go over there, it’s a strange move given the fact so many states and jurisdictions are being looked at.”

However, Arshad is optimistic because if Draft Kings is successful overseas, it will help the industry grow overall.
“If the pie grows, we are all taking slices of the pie,” he said.
He wishes them well because now if someone searches the report they heard that Draft Kings is coming to the UK, it will help drive traffic to all fantasy sports sites.
“Any new entrant and credible dollars that go into the market place, will help educate about daily fantasy, and at the end of the day, if awareness ratchets up, there will be multiple winners across the board.”