DraftKings Makes iGaming Splash, Buys Golden Nugget Online Gaming for $1.56B
DraftKings (NASDAQ:DKNG) is showing its dedication to the flourishing cyberspace cassino industry. The companionship proclaimed today that it’s getting Tilman Fertitta’s Golden Nugget Online Gaming (NASDAQ:GNOG) for $1.56 1000000000 in equity.
News of the transaction, which comes nigh VIII months after Golden Nugget Online went public followers a merger with a special intention acquisition fellowship (SPAC), has Fertitta’s online rig trading higher by more than 47 percent inward midday trading. GNOG investors will incur 0.365 shares of DraftKings for apiece share they own. Under the terms of the accord, Fertitta agrees to take hold the shares of DraftKings he’s receiving for at least a year. He owns 46 percent of the online gaming firm.
This business deal creates meaningful synergies, such as increased combined troupe revenues driven by additional cross-sell opportunities, trueness integrations, and tech-driven mathematical product expansion, as substantially as engineering optimization and greater marketing efficiencies,” said DraftKings CEO Jason Robins inward a statement.
The trade is expected to come together inwards the world-class billet of 2022 and sets the present for DraftKings to turn the scoop daily fantasy sports, sports betting, and iGaming partner of the Sam Houston Rockets — the NBA franchise Fertitta owns. The Boston-based society testament also open a sportsbook at the Toyota Center — the Rockets’ rest home court of law — when Texas approves sports wagering.
DraftKings Buy Highlights iGaming Allure
While sports betting often commands to a greater extent headlines and is sound inward more states, online casinos – Golden Nugget Online’s core group competency – are generating considerable growth bombination in their have right.
Some analysts believe the combined Frederick North American internet cassino and online sports wagering market place could be worth $42 billion past 2030. Earlier this year, Goldman Sachs said online sports betting and internet casinos could leap to $39 1000000000000 and $14 billion, respectively, past 2033. The cant forecasts a 40 percent chemical compound yearly ontogenesis charge per unit (CAGR) for iGaming, good onwards of the 27 percent CAGR it estimates for sports betting.
Analysts and operators are enthusiastic almost the outlook for net casinos because there’s a long runway for state-level legitimation (it’s currently permitted inwards just a smattering of states). It’s also a higher margin business sector than sports betting, and bettors are often stickier and expend to a greater extent money than they fare on sports wagering.
With the GNOG deal, DraftKings reduces its market place approach costs and bolsters its posture inward New Jersey, where Fertitta’s fellowship is single of the dominant iGaming operators.
DraftKings Continues Being Acquisitive
DraftKings has been a stand-alone public fellowship since Apr 2020. In that brief period, the companionship is showing a penchant for acquisitions, gobbling upward media and engineering companies patch being the nerve center of other buyout rumors prior to today’s Golden Nugget Online News.
The vendee forecasts $300 meg of nest egg past acquiring GNONG, noting, “There will follow multiple channels for cost nest egg by, among other things, eliminating weapons platform costs as a resultant of migrating Golden Nugget’s current engineering to DraftKings’ in-house proprietary platform, recognizing enhanced returns on advertising spend through marketing efficiencies and reducing G&A costs, such as duplicative collective overhead.”
The acquisition, one of the largest to engagement inwards the iGaming space, doesn’t threaten the strength of DraftKings’ equilibrize sheet, because it’s paying equity for the target, leaving it with immediate payment it could habituate for other deals downward the road.
DraftKings raised its 2021 revenue guidance when it reported second-quarter results lowest Friday. The Golden Nugget Online purchase testament add together to the operator’s 2022 sales.