DraftKings, a prominent New York-listed sports betting and iGaming provider, has announced it won’t be making an offer to acquire Entain. The two companies have been in extensive talks since September 2021, when DraftKings has proposed to purchase Entain. However, after a new series of discussions, the previously interested company has revealed it won’t follow up on its interest. Even though the deadline was extended until November 16, 2021, DraftKings has already decided against making an official bid.
The suggested purchase has caused some stir among the MGM Resorts International executives. The company runs its business in the US via a joint venture with Entain. The collaborating operations have been too profitable to endanger, so Entain has asked DraftKings to clarify the terms of the technology provision deal. Consequently, the proposed buyer has declined to make a firm offer to acquire Entain.
DraftKings to Maintain Leadership Position
DraftKings made two offers to acquire Entain in September 2021, and the first one was turned down quickly. The prospective buyer then proposed an amount of $22.40bn. However, Entain has considered neither of them a firm bid, and the new deadline was issued. Alongside the technology supply issue, the questions of the management structure and regulatory hurdles have been raised. They have represented insurmountable obstacles regarding the deal. DraftKings says it might make a new bid under new conditions, including a significant change of circumstances.
Jason Robins, DraftKings CEO and Co-Founder, has announced the decision to decline to make an official offer. He said his company was confident it would maintain the front-running status in the North American jurisdiction. It already offers the best solutions regarding technology and product capabilities and sports an industry-leading brand. He expressed certainty it would be able to realize its long-term expansion strategy and cement its leading position in the industry. He remains confident DraftKings will remain a driving force in the North American market.
Entain to Strengthen US Presence
In the meantime, Entain will try its luck running independent operations. Its impressive track record, including 23 consecutive quarters of double-digit online NGR profit, gives it confidence. It will concentrate on cementing its market position and experiencing stable growth in the US regulated markets. Expanding the US footprint is a part of the global growth strategy the enterprise plans to realize. Broadening its activities by entering new entertainment sectors, such as esports, is also a part of the strategy. The company offers a diverse product range that will enhance customer loyalty and boost player retention and acquisition.
The board of executives is certain Entain will continue to deliver on its own in the future. The bid from DraftKings is not the only one the company has received in 2021, as its partner MGM Resorts International made an $11 bn offer. The offer has included the US-facing BetMGM gaming and betting operations. However, Entain has declared the bid undervalued its operations, and MGM has decided not to make a more lucrative proposition.