DraftKings to buy Golden Nugget online casino for $1.56bn
DraftKings to buy Golden Nug...
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DraftKings to buy Golden Nugget online casino for $1.56bn

10 August 2021
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2 min.
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DraftKings to buy Golden Nugget online casino for $1.56bn

DraftKings & Golden Nugget

DraftKings (NASDAQ:DKNG) has decided to acquire Golden Nugget Online Gaming (NASDAQ:GNOG) for $1.56 billion, CNBC reports.

Through this acquisition, DraftKings will be able to attract more than 5 million Golden Nugget online casino players. Also, through this deal, the shareholders will have 0.356 shares in DraftKing.

Because of this news, Golden Nugget's stock rose nearly 48%, while DraftKings shares barely changed in value. DraftKings has a market capitalisation of $20.68 billion.

Crucial to the entire gaming industry are online casino customers. For example, the revenue generated by online casino customers is 7 times higher than that generated by sports betting customers.

Moreover, Tilman Fertitta, the CEO of GNO, owns 47 per cent of Golden Nugget Online (GNO).

During DraftKings' quarterly earnings report, DraftKings CEO Jason Robins said online gaming gives the company an opportunity to diversify its offerings to customers without being tied to sports seasons.

The benefits of the M&A deal for DraftKings will be $300 million in savings as the deal extends to the online platform and related technology, it will also reduce commission payments to third-party vendors and marketing costs. DraftKings is looking to diversify its revenues beyond fantasy sports and sports betting. To that end, it is making deals with sports bars, has launched an NFT trading platform and has partnered with data provider Genius Sports, which provides it with official data on NFL games and other sports.

And for Golden Nugget Online, the important point is that "Fertitta Entertainment's large selection of entertainment and large player database along with DraftKings makes this partnership mighty," Fertitta said. Also significant is the fact that, according to gambling analysts, the sale was the only option for Golden Nugget Online, as it has a large market share only in New Jersey and does not have the resources to compete sufficiently.

Persons2 and Companies5 in the news

Co-founder of DraftKings
1 place
General director of Fertitta Entertainment
2 place
DraftKings
2 place
CNBC
4 place
Nasdaq
5 place
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