DraftKings to acquire Golden Nugget Online Gaming in $1.56bn deal

The US sports betting giant DraftKings has announced plans to acquire Golden Nugget Online Gaming (GNOG) in a $1.56bn all-stock deal.

This comes after it was revealed that DraftKings had received a subpoena from the Securities and Exchange Commission (SEC).

DraftKings to acquire GNOG

Yesterday, the US betting giant DraftKings announced plans to acquire GNOG from Fertitta Entertainment, Inc in a $1.56bn all-stock deal.

The deal covers all of GNOG’s online assets, as well as its database of 5.5 million Golden Nugget customers across online and land-based.

According to the announcement, DraftKings will pay 0.365 newly issued shares for each common share of GNOG.

Tilman Fertitta, GNOG’s chairman, chief executive, and largest shareholder, who owns roughly 46% of the operation, has agreed to hold the DraftKings shares he will receive for at least a year. These shares will be worth more than $700m.

Fertitta will continue to own the land-based Golden Nugget business and join the DraftKings board.

GNOG was spun from the land-based operation through a special purpose acquisition company (SPAC) merger last year. At the time GNOG was spun off, the deal valued GNOG at $745m.

Although the board has already approved the acquisition, GNOG’s shareholders will be required to vote on the transaction.

The deal is expected to close in the first quarter of 2022 pending regulatory approvals.

According to the announcement, the two companies expect $300m in synergies at maturity.

This will include platform savings, marketing efficiencies, cross-selling opportunities between brands, loyalty scheme integrations, and savings on live-dealer studios.

Jason Robins, DraftKings’ CEO and Chairman of the Board 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, including Golden Nugget’s loyal ‘iGaming-first’ customers. 

“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. We look forward to Tilman being an active member of our Board and one of our largest shareholders.”

Tilman Fertitta, Chairman, and CEO of GNOG said: “This transaction will add great value to the shareholders as two market leaders merge into a leading global player in digital sports, entertainment, and online gaming.

“Leveraging Fertitta Entertainment’s broad entertainment offerings and extensive customer database, coupled with DraftKings’ mammoth network makes this an unbeatable partnership. Together, we can offer value to our combined customer base that is unparalleled.”

DraftKings teams up with wider Golden Nugget business

As part of the transaction, DraftKings signed a separate commercial deal with Fertitta Entertainment which covers the Houston Rockets, Golden Nugget’s casino portfolio, and Landry’s.

Under this deal, DraftKings will become an exclusive daily fantasy sport, sports betting, and online gambling partner for the Rockets.

Should Texas legalise sports betting, and award licenses to teams, DraftKings would also be able to open a sportsbook at the Toyota Center.

DraftKings will also see its presence expanded at land-based sportsbooks across Golden Nugget’s casinos.

Fertitta added: “We believe that DraftKings is one of the leading players in this burgeoning space and couldn’t be more excited to lock arms with Jason and the DraftKings family across our entire portfolio of assets, including the Houston Rockets, the Golden Nugget casinos, and Landry’s vast portfolio of restaurants. This is a strong commercial agreement for both companies.”