FanDuel closes its UK Shop for the 2017/2018 season. The leading daily fantasy sports company will put the majority of its eggs in its US market basket instead.
In its first year, the daily fantasy sports took almost £1 million. Nevertheless, FanDuel’s decision to close may be still be due to the small return it received from the UK market.
FanDuel sent out an email to its players on Friday last week regarding its decision to pull out of the UK market. The email said FanDuel would no longer provide any contest this season. Some analysts, however, frowned at this news since the email was sent just two weeks before the English Premier League which is UK’s most popular sporting event.
It is important to note that FanDuel faces some financial trouble. The company reported operational losses of about $59 million in most parts of 2016. FanDuel was looking to merge with its rivals, DraftKing, to alleviate its finance problems. However, the FTC in America blocked the deal because of the potential problems of illegal monopoly that could occur should the merger go through.
As a result, FanDuel has decided to officially end its merger with DraftKings. Nigel Eccles, CEO of FanDuel, commented on the cancellation of the merger deal:
“We have determined that it is in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company. There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry.”
What’s left of FanDuel?
With the merger blocked, FanDuel opted to begin a funding round. Its exit from the UK market could be an indication of the company’s uncertainty in making a profit in the region. Last year, FanDuel players only won around £1 million. This is incredibly small compared to the numbers in the US market.
Moreover, some question the daily fantasy sports’ appeal to the players in the UK. UK bettors can easily go to a Bitcoin sportsbook site and put real money down on the Premier League or other major UK sports. This type of freedom is not enjoyed by US players, which are the largest market for FanDuel.
With FanDuel leaving the UK, the daily fantasy sports site is looking to redouble its effort in the US market. This is due to the upcoming NFL season. FanDuel has a strong hold on the daily fantasy sports market in the US and the NFL is a lucrative season for the company.
FanDuel stated in its email that it hopes to be back in the future to bring more games that the UK players will love. For the future, this could be after 2018, which Nigel Eccles stated as the company’s ‘break-even year’.
FanDuel had only started its daily fantasy sports offering in the UK for one year. DraftKings and Yahoo also came in last year to test the daily fantasy sports water in the region where the Bitcoin casino market enjoys a warmer reception.