Daily fantasy sports company DraftKings is launching in Germany on Thursday, Yahoo Finance has learned. The company is opening up a beta version of its platform, complete with all of the sports the app currently offers in the US, including soccer, NFL, MLB, NBA, NHL, and golf.
At the end of January, DraftKings announced it had obtained a gaming license from the Malta Gaming Authority. This month, another daily fantasy sports company, Oulala, announced the same.
Why do fantasy sports companies suddenly care about Malta, a Mediterranean island with a population of 400,000?
The license, called a “controlled skill games license,” labels DraftKings contests as games of skill (as opposed to chance), a designation that was hotly debated in the company’s legal battle with the New York State attorney general last year. More importantly, the Malta license allows a company to operate in many nations across Europe, with the exceptions of a few countries that have stricter rules for daily fantasy sports, like England, France, Belgium and Spain.
It is the Malta license that paved the way for DraftKings to launch in Germany.
While Malta is small, it looms large in the online gaming world; its Malta Gaming Authority (MGA) wields real influence. The MGA only just established its skill games license for daily fantasy sports companies in January.
DraftKings was the first fantasy operator to get one, and Oulala is the first B2B fantasy operator to get one. (Oulala creates white-label daily fantasy games for other companies to offer on their own platform.) Two other fantasy sports operators have obtained them as well, but have not launched, so the MGA cannot release their names.
Sources say that as many as 20 different fantasy sports companies, large and small, daily and “season-long,” have applied for the Malta license in a frenzy. The MGA would not confirm the figure.
FanDuel doesn’t have the Malta license, and sources say it isn’t actively seeking one. That’s likely because DraftKings and FanDuel have announced their intention to merge, so they will eventually be one company—if regulators approve the merger, which is not guaranteed.
The rise of the Malta license
Applying for the Malta license carries an application fee of 2,300 euros, plus an annual licensing fee of 8,500 euros—it all amounts to less than $12,000. That may sound nominal, but it’s enough to weed out some of the very small new operators that are eager to enter the market and think Malta might be the place to start.
“I would say the cost is good, it is high enough that people who don’t have enough money to launch a business will say that it’s too high,” says Valery Bollier, CEO of Oulala. “And one thing in this industry is you see a lot of young guys arriving with 150,000 euro and thinking they can launch a new DFS game in Europe. And it’s not enough. The money is going to disappear very quickly, and then after the company goes down, people will think that DFS is not working. That’s not the case. We need serious competitors to come, because it will help all of us.”