Sports betting platform DraftKings has announced plans to go public in 2020. The company plans to merge with a special purpose acquisition company called Diamond Eagle Acquisition Corporation, as well as the global gaming and sports betting technology provider SBTech.
the combined company will be the only one of its kind in the United States
DraftKings has boasted that the combined company will be the only one of its kind in the United States. The merger is expected to be finalized in the first few months of 2020.
This will see Diamond Eagle change its name to DraftKings Inc. It will be reincorporated in Nevada and will stay listed on the NASDAQ, using a new ticker symbol.
Management team staying in place
Jason Robins, the CEO and co-founder of DraftKings, shared his thoughts on this new plan, stating: “The combination of DraftKings’ leading and trusted brand, deep focus on customer experience and data science expertise and SBTech’s highly innovative and proven technology platform creates a vertically-integrated powerhouse.”
He went on to discuss the continuing mission to roll out on a state-by-state level across the country to cater to fans of sports betting.
Robins will continue to lead the company when it goes public. The management team will also be staying in place. They will be joined by the management team of SBTech, who have plenty of experience operating in global markets.
$3.3 billion valuation
A number of institutional investors have already been making moves to get a piece of the DraftKings pie. A commitment has already been made by institutional investors to buy $304m in Class A common shares of the combined company.
A founding investor of Diamond Eagle, Harry Sloan, has given his thoughts on the multibillion-dollar deal. He said: “With the full integration of SBTech’s technology and innovative product expertise coupled with the right capitalization, DraftKings will be in a great position to continue its ambitious expansion plans in the United States.”
Huge success story
DraftKings has been taking the US sports betting market by storm since the federal ban was lifted in May 2018. DraftKings was the first mobile sportsbook to launch in New Jersey and it has established a consistent 30% share of the market in the state.
DraftKings was the first mobile sportsbook to launch in New Jersey
It also has online sportsbooks in West Virginia, Pennsylvania, and Indiana, and operates retail sportsbooks in New York, New Jersey, Mississippi, and Iowa.
Its daily fantasy sports offering is available in 43 different states, as well as eight global markets. DraftKings has a market share of about 60% in this sector, also having the ability to cross-sell its sports betting offerings.
SBTech is a company that has more than 50 partners across over 20 markets. It has a presence already in the US sports betting market, thanks to an exclusive license for retail and mobile sports betting in Oregon.