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DraftKings Takes Over Golden Nugget Online Gaming’s Business for $1.56 Million

One of the largest fantasy sports companies in the US – DraftKings – has agreed to take over Golden Nugget Online Gaming in an all-stock deal worth $1.56 million. Reportedly, the agreement only doubles its valuation since it was listed in 2020 after using a special purpose acquisition company.

According to the two companies, the acquisition will provide DraftKings with access to the online casino operator’s customer base of more than 5 million users and is expected to yield $300 million in synergies. For the transaction, a new holding company is set to be created by DraftKings, with the shareholders of the Golden Nugget Online Gaming set to receive 0.365 shares in return for each common share they have.

As revealed by DraftKings, it has also shaken hands with the parent company of Golden Nugget, Fertitta Entertainment, and the Houston Rockets basketball team over a separate commercial deal.

In 2020, Fertitta Entertainment decided to spin off its online casino assets through a special purpose acquisition company deal with Landcadia Holdings II. As a result of the agreement, the company was valued at $745 million. The operator still holds almost half of the equity in Golden Nugget Online Gaming (46%).

US Land-Based Sports Betting Companies Aim at Gaining Online Presence

Deals between operators targetting the quickly growing US sports betting market have risen in number as gambling companies look for ways to boost their presence while at the same time cut customer acquisition costs.

Furthermore, gambling companies that already have some experience online have also turned into attractive acquisition targets for brick-and-mortar casino companies. The most rapid growth in the sports betting sector has been coming from mobile gambling companies in states where this form of gambling is already legal. In a number of states, companies that are based only online have been required to partner with land-based companies in order to be granted operating permits.

Several gambling firms have joined forces with media start-ups, such as the partnership between DraftKings and the sports subsidiary of AT&T, Turner Sports, or Penn National’s acquisition of Score Media and Gaming that has been completed only recently.

Also, the interest of US casino and gambling companies in acquiring UK-based online betting operators has increased. Earlier this year, Bally’s revealed plans to take over the US-based online gambling company Gamesys in a $2-billion acquisition deal. Market analysts also expect the US gambling giant MGM Resorts to place another offer for the British gambling company Entain, formerly known as GVC Holdings, which has already rejected its first acquisition bid.

DraftKings, which has started operation as a daily fantasy sports company, has expanded into a sports betting operator. With the expansion of the sports betting industry in its domestic market, the operator has also been seeking ways to expand its presence and take advantage of the new form of gambling to the fullest.

 Author: Hannah Wallace

Hannah Wallace has been part of our team since the website was launched. She has a master’s degree in IT.