DraftKings Set to Buy Golden Nugget Online Gaming

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The US sports betting giant DraftKings is ready to finalize the purchase of Golden Nugget Online Gaming (GNOG).

According to available information, the all-stock acquisition will be worth $1.56 billion.

This is an essential move for DraftKings, as the operator is looking to significantly increase its presence in the online gambling market.

DraftKings Increasing Its Online Gaming Footprint

GNOG was established last year as the online gambling and sports betting division of the Golden Nugget land-based casino. The business venture was founded in a SPAC deal with Landcadia Holdings II, a company established by Golden Nugget’s owner Tilman Fertitta and a New York-headquartered financial group.

Under the provisions of the acquisition deal, GNOG’s shareholders will get 0.3564 shares of DraftKings stock. Its value should be at a 53% premium to the iGaming giant’s shares’ closing price on Friday, August 13, 2021.

Fertitta, who currently owns 46% of GNOG, and serves as the company’s Chief Executive officer, is contractually obliged to hold on to the DraftKings stock for a minimum of one year following the closure of the transaction. The Texan businessman will get a place at the DraftKings Board of Directors.

The transaction should be completed in the first quarter of 2020.

DraftKings expects to save $300 million through the GNOG acquisition, as the latter has an in-house developed platform and technology. By using them, DraftKings will be able to reduce fees paid to third-party providers.

In addition to the technology, DraftKings will take over GNOG’s five million online casino customers. Fertitta pointed out the importance of having a massive base of online casino players on several occasions. With more and more states making online gambling legal, online gambling should become the leading driver of revenue increase.

Making the Most out of the Partnership

DraftKings has been focusing its attention on online gaming. The activity will enable the company to diversify its offering further, making it appealing even after sports seasons end. And while DraftKings is one of the leading names in the US sports betting space, its online gambling platform has struggled to deliver an equally successful performance.

Jason Robins, Chief Executive Officer at DraftKings, said the operator had been working hard to increase this market footprint into the online gambling audience.

DraftKings’ acquisition of GNOG will allow the sports betting and daily fantasy sports operator to expand its current lineup of products and make the most out of Fertitta Entertainment’s other offerings. DraftKings will also be able to use the Houston Rockets, Landry’s restaurant chain, and Golden Nugget brick-and-mortar casinos for promotional and marketing purposes.

Fertitta pointed out that DraftKings would create an unbeatable partnership by joining forces with his companies’ extensive offering and broad customer base.

This is yet another merger and acquisition deal completed in the gambling industry over the last couple of months. Caesars Entertainment purchased William Hill earlier this year, while only a week ago, Penn National Gaming announced it would be taking over theScore in a deal worth $2 billion.

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