DraftKings has reached an agreement to buy the Golden Nugget’s Online Gaming business, in an all-stock deal valued at $1.56 billion.
Golden Nugget is a subsidiary of Fertitta Entertainment, a conglomerate owned by billionaire restaurateur Tilman Fertitta, who also owns the NBA side Houston Rockets.
Online casino games are becoming increasingly important for platforms like DraftKings, which sees opportunity beyond just fantasy sports and sports betting. This acquisition will help DraftKings to expand its global reach because it will get full access to Golden Nugget Online’s five million customers.
DraftKings CEO and chairman Jason Robins said: “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.”
He further added, “This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations, and tech-driven product expansion as well as technology optimization and greater marketing efficiencies.”
As part of the deal, DraftKings will form a new holding company called New DraftKings, which will become the new combined public company for both properties. When the deal closes, that company will be renamed DraftKings. The acquisition is yet to get the approval of Golden Nugget Online Gaming shareholders.
Houston Rockets owner Tilman Fertitta, who owns about 46% of the Golden Nugget Online business, will join the DraftKings board and become one of the company’s largest shareholders. He has agreed to a one-year lock-up on his new shares.
DraftKings had also recently announced their Q2 earnings wherein they generated US$298 million in revenue, a leap of 297 per cent year-on-year (YoY) pro forma. They continue to diversify their business into new avenues.