Going into 2017, there was a lot of uncertainty surrounding the daily fantasy sports (DFS) industry. Would DraftKings' proposed merger with FanDuel be approved? No. Would any daily fantasy company steal considerable market share from the top two companies? Also no.

In 2018, the climate has not become much better for the top DFS companies or the industry as a whole. While everyone waits to see how the U.S. Supreme Court rules on a pending case concerning the constitutionality of a federal sports betting ban, DraftKings and FanDuel are struggling to grow, with industry research company Eilers & Krejcik Gaming reporting that it does not believe DraftKings was operationally profitable in 2017 or that it will be in 2018, and that FanDuel is in or near a cash crunch.

But the research company did note that "international expansion may provide room for minor incremental growth." For a somewhat stagnant industry, even small wins need be sought and celebrated.

And as such, DraftKings may have cause for celebration, as it just recently announced its expansion into Australia planned for as soon as Q2 2018.

"Within the last few years, Australia's burgeoning fantasy sports market has dramatically evolved, adding a variety of daily fantasy sports platforms, feeding the appetite of the many passionate sports fans who love getting closer to the teams, athletes and sports they love," said DraftKings Chief Executive Officer, Jason Robins. "Australia is an important market for DraftKings, as it combines devoted sports fans with sophisticated, tech-savvy consumers - exactly the kind of people who love competing on DraftKings."

While DraftKings will not be able to reach the entirety of the continent, as South Australia will not permit the operation at the time being, it should still have access to over 20 million potential new customers. Based on the company's own research, Australia is already home to more than 1.6 million fantasy sports players.

What is becoming clear is that while DraftKings absolutely wants to become a competitor should the sports betting landscape open up in the U.S., it is not holding its breath as it waits for a U.S. Supreme Court decision. It is doing what it believes it must to grow, which is largely through international expansion, and it will soon be set up to operate in not only Australia, but also the United Kingdom, Ireland, Germany, Austria and Malta. Further, even if the U.S. sports betting laws change, DraftKings is cognizant that it may need to broker relationships with land-based live casino operators, which is a separate challenge that it faces as it continues to strive for growth.

Published on: Apr 20, 2018
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