On Monday. DraftKings has agreed to acquire Golden Nugget Online Gaming from Fertitta Entertainment, Inc. Now, DraftKings holds 100% of GNOG after completing a $1.56 billion all-stock deal. The CEO of Golden Nugget, Tilman Fertitta who holds almost half of the GNOG’s shares will join the DraftKings board.
To finalize the deal, Golden Nugget Online Gaming’s shareholders must vote on the transaction. Good news, GNOG’s board has unanimously approved the decision. Subject to regulatory approvals, the deal is expected to close in the Q1 of 2022.
DraftKings acquires Golden Nugget Online Gaming
Thanks to this latest development, DraftKings would have access to Golden Nugget’s 5 million online customers. Certainly, these customers are regular online casino players, and DraftKings will benefit from the Golden Nugget’s online casino betting arm and would be critical to its future revenue growth. At maturity, DraftKings expects synergies of $300 million.
The CEO of Golden Nugget Online, Tilman Fertitta is also set to join the DraftKings board. Fertitta currently owns 47% of the company and intends to hold on to the new company’s stock for roughly a year after the deal has been made.
DraftKings CEO Jason Robins said, “Our acquisition of Golden Nugget Online Gaming, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers”.
In addition, DraftKings also made an commercial agreement with Fertitta Entertainment. The agreement includes marketing integrations, sponsorship assets with the Houston Rockets and expansion of retail sportsbook presence. Fertitta, and others, believe that iGaming customers are worth seven times the value of regular sports betting customers.
With this deal, DraftKings will be the exclusive iGaming, sports betting. and daily fantasy sports partner of the Rockets. Moreover, the company has plans to open a sportsbook at Houston’s Toyota Center arena, however, it is subject to legalization and regulatory approvals.
DraftKings and GNOG Rally
The shares of both giants are rallying following the news of acquisition. Golden Nugget Online Gaming is a rising bull with currently up by 52% after the news. In fact, the share value did rise from $12 to currently trade at $18 per share. This certainly is a huge relief for GNOG after starting the year 2021 at $20 per share but heavily dropped to the $11 sub-level earlier this month.
On the other hand, the shares of DraftKings are also benefiting with the acquisition. The company is up by 2.2% at the opening of US market. The current share value of DraftKings is trading at $52.73. Since the last year, the DraftKings shares are up by over 10%.
Golden Nugget Online shareholders expect to receive 0.365 shares of DraftKings stock.