DraftKings push through with its Australian launch despite the roll-out of higher POC gambling tax laws in a number of territories. The Boston-based fantasy sports operator has now opened its daily fantasy sports (DFS) product to Aussie punters via au.DraftKings.com, where Australians can take part in real money competitions against players from several parts of the US and Europe. Australia becomes the eight country in DraftKings’ growing portfolio of international markets, which includes Germany, Malta, Austria, Canada, UK, and Ireland.
Aussies Can Now Play At DraftKings
Operating with a government license awarded by the Northern Territory Racing Commission, DraftKings will be able to offer their DFS product to more than 20 million Australians in all the territories of the country—except for those who live in South Australia, which has a separate gaming regime.
Aussie punters will be able to join beginner-only contests, which are open to starting players; casual contests, which are open to players who have played less than 500 contests; and the bigger leagues, where customized games could be created to enable customers to play with their friends and family. Currently, DraftKings offer contests in 11 different sports including the NBA, NHL, UFC, MLB, Soccer, eSports, and Nascar racing. In the next year, DraftKings revealed that they are planning to expand to other sports such as NRL and AFL.
DraftKings Bets On Australian market
It will be challenging for DraftKings to fight for a share of the current Australian DFS market. While there are approximately 1.65 million fantasy sports punters in Australia, a huge chunk of this market has already been captured by existing DFS operators such as Moneyball, Draftstars, and TopBetta.
DraftKings is taking up the challenge of battling for market share and as they take a huge step to set up shop in a continent far from their headquarters. According to DraftKings Chief International Officer Jeffrey Haas, they believe that the strong sports market in Australia will attract punters to their site. The launch comes just in time before the FIFA World Cup 2018 commences and since Australia is playing at the World Cup, DraftKings is confident that it will see an influx of sports fans during the World Cup.
In a statement, Haas said, “Australia is home to some of the most passionate sports fans in the world and that’s a key reason why DraftKings decided to open there. We’re confident Australians will enjoy the exciting and innovative competition formats we have available across 10 international sports, and their ability to compete against other people, both local and international.”
DraftKings Live Events
Haas also says that they are gearing to introduce DraftKings Live Events to the Australian market in the next few months, where Australians can come together in one venue to play competitive DFS in a tournament format. They have yet to decide when and what kind of live events to offer in the country, but they are looking to host their first live event at Darwin to attract non-Australians to join in the fanfare.
Despite their optimism over the Australian sporting culture, DraftKings said that they are not planning to expand their offering to include sports betting.
Stricter Gambling Taxation
DraftKings has launched operations in Australia right when Australian territories are introducing new gambling tax schemes which could significantly eat into DraftKings’ potential profit. Even though operators consider DFS as a skill-based game, DFS still constitutes gambling and is therefore under online gambling regulations in Australia.
Australian territories including Western Australia, South Australia, Victoria, Queensland, and New South Wales introduced new points of consumption (POC) taxes for gross gambling yield recently.
Along with the launch of DraftKings this week, the Australian Capital Territory (ACT) became the latest to roll out a 15 percent POC tax rate for online betting, which is set to take effect by January 1, 2019. The Australian government expects that the new tax will generate at least $2 million in additional revenue each year.
A Challenge For DFS Operators
Despite DraftKings’ positive attitude towards its Australian expansion, many believe that DFS operators are not making as much money as they expect they could. Last month, when DraftKings’ archrival FanDuel merged with the US franchise of Paddy Power Betfair, they revealed that they were only operating at “broadly EBITDA breakeven” even though they technically competed with just DraftKings for the US market.
With higher gambling taxes and the declining profitability of DFS, will DraftKings be able to the test down under?