DraftKings Secures Acquisition of Golden Nugget Online Gaming for $1.56bn in Stock

  • The all-stock transaction needs GNOG shareholder approval, but is expected to close in 2022
  • DraftKings boss Jason Robins said the company will utilize Golden Nugget’s strong brand
  • GNOG CEO Tilman Fertitta will receive shares and stay on to help the company’s growth
  • Penn National, Bally’s, and Caesars have all agreed acquisitions of their own in the past year
People holding building blocks
DraftKings is ready for an iGaming expansion after agreeing to acquire Golden Nugget Online Gaming for $1.56bn in an all-stock transaction. [Image: Shutterstock.com]

DraftKings seals the deal

The US gambling space has a history of high value mergers and acquisitions between the market’s big players. Bally’s Corporation, Penn National Gaming, and Caesars Entertainment have all secured multibillion-dollar deals over the past year, and now DraftKings has joined the party.

Investors will receive 0.365 DraftKings shares for each GNOG share

The sportsbook operator announced on Monday that it has reached an agreement to acquire Golden Nugget Online Gaming (GNOG) in an all-stock transaction. The deal includes DraftKings stock with an implied equity value of approximately $1.56bn. Investors will receive 0.365 DraftKings shares for each GNOG share.

According to a company statement, the agreement will allow DraftKings to capitalize on Golden Nugget’s “well-known brand, iGaming product experience” and existing customer database of “more than five million.”

GNOG shareholders must still approve the deal, but the DraftKings board of directors has already okayed the agreement. Subject to customary closing conditions, DraftKings expects the deal to close in the first quarter of 2022.

Robins and Fertitta team up

Following the announcement of the impending acquisition on Monday, the chief executives of both companies spoke with CNBC to explain their reasons for the move.

DraftKings CEO Jason Robins said the transaction “checks a lot of strategic boxes” in terms of iGaming expansion. While he praised his own company for its success in the sports betting industry, Robins claimed GNOG has had more success attracting new customers into the iGaming sphere.

one of the oldest gaming brands in the world”

The DraftKings CEO also noted GNOG’s success in New Jersey iGaming, where it has emerged as a market leader. He attributed this in part to the operator’s well-known brand. “They’ve really done a tremendous job building that brand,” he commented. “It’s one of the oldest gaming brands in the world and it still resonates as much today as it did back 100 years ago.”

Golden Nugget has generated the highest online gaming revenue in New Jersey to date. The operator’s lifetime iGaming revenue totals $935.5m in the state, 66% more than its closest rival Resorts Atlantic City. In New Jersey’s most recent revenue report, Golden Nugget saw the second highest iGaming revenue at $27.6m, below Borgata at $34.3m.

Meanwhile, Tilman Fertitta, CEO of GNOG and owner of around 46% of the company, said he agreed to the all-stock deal because he wants to help the combined business grow. He also noted multiple attractive attributes of DraftKings, including its balance sheet with “more than $2bn in cash,” it’s platform for growth, and brand exposure across the US.

Fertitta took GNOG public last year through a reverse merger with Landcadia Holdings II.  Through the agreed DraftKings transaction, the CEO will receive more than $700m worth of the combined company’s stock. He will join the DraftKings board upon completion of the deal.

One of many gaming acquisitions

DraftKings is not alone in its pursuit of new acquisitions. The gambling industry has seen a number of multibillion-dollar deals in recent months. Most recently, Penn National Gaming agreed to acquire Canadian sportsbook operator Score Media and Gaming for approximately $2bn in cash and stock last week. The board of directors of both companies have unanimously approved the deal, expected to close in Q1 2022.

a deal worth $2.74bn

Earlier in the year, Bally’s Corporation secured an agreement to purchase UK-based gaming operator Gamesys Group in a deal worth $2.74bn. The US-based casino operator said the deal would allow the combined group to capitalize on growth opportunities in the US sports betting and online gaming markets. 

Completing one of the most high-profile deals of the past year, Caesars Entertainment closed its acquisition of William Hill in April. Last week, the company unveiled its rebrand of William Hill’s US-facing sportsbook after the $4bn takeover. The mobile app is now live in eight states under the name Caesars Sportsbook.

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