The deals keep coming in the online gaming industry, as DraftKings has announced their intention to purchase Golden Nugget Online Gaming Co. for $1.56 billion in an all-stock acquisition. The deal is expected to be completed in the first quarter of 2022.
The transaction gives DraftKings a significant boost in the online casino market, complementing their already strong presence in daily fantasy sports and the sportsbook space.
“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with iGaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers,” said Jason Robins, DraftKings CEO and Chairman of the Board.
Both the Board of Directors for DraftKings and Golden Nugget have approved this transaction, which continues the succession of big deals the industry has seen this year. Earlier this month, Penn National Gaming bought theScore, in a move designed to bolster the Barstool brand and extend Penn’s market share in Canada and the U.S. In April of 2021, Caesars Entertainment Inc. announced a $4 billion acquisition of William Hill, the third-largest sportsbook operator in the U.S.
DraftKings is one of the leading daily fantasy and sports betting companies in the United States, and as legalized sports betting continues to spread in the country, their reach has extended into new markets and ventures. This deal is expected to “enable DraftKings to leverage Golden Nugget’s well-known brand, iGaming product experience and existing combined database of more than 5 million customers,” according to a statement from DraftKings.
Golden Nugget shareholders will receive 0.365 DraftKings share per each share owned under terms of the deal with DraftKings, according to a joint statement released today. As a result of this transaction, DraftKings will form a new holding company, called New DraftKings, according to Forbes.
This major acquisition is expected to boost the performance of Golden Nugget’s online customer experience as it switches to the technology platform that fuels the popular DraftKings online apps and websites. With Golden Nugget as part of their portfolio, DraftKings will have more casino-style games in its lineup to offer customers.
About Golden Nugget Online
Golden Nugget Online is based in Houston and was founded in 2015. CEO Tilman Fertitta will remain on hand after the deal with DraftKings, which has led to a spike in the value of the publicly-traded company. Fertitta, who is one of the richest people in the U.S., valued at close to $5 billion, will join the DraftKings’ Board of Directors. Shares of Golden Nugget Online (GNOC on the New York Stock Exchange) were trading at more than $18 this morning, an increase of close to 50 percent in value.
As part of the deal, DraftKings also entered into a commercial agreement with Fertitta Entertainment, a holding company operated by Fertitta, that owns the Houston Rockets of the NBA, Landry’s LLC, and the Golden Nugget casinos, which are located in Louisiana, Mississippi, Nevada, and New Jersey.