DraftKings $1.5bn Golden Nugget Online Gaming deal gets over the line
CEO Jason Robins notes potential to drive “meaningful revenue uplift” with deal for igaming operator
DraftKings has confirmed the completion of its $1.56bn acquisition of Golden Nugget Online Gaming (GNOG).
Under the terms of the deal, DraftKings will integrate all GNOG employees across its business.
Former GNOG president Thomas Winter will transition to becoming general manager of North America igaming for DraftKings. DraftKings have claimed the deal will deliver expected synergies of $300m.
The deal, which was first announced in August 2021 is expected to see DraftKings utilize the GNOG brand to augment its own igaming offering through DraftKings platform.
The operator will gain access to GNOG’s existing databases across New Jersey and Michigan, as well as GNOG’s existing live dealer product, which first launched in New Jersey in 2016.
DraftKings CEO Jason Robins welcomed the completion of the deal, suggesting it would create synergies across the operator’s entire business.
“We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual brand igaming strategy, gross margin improvement opportunities, and cost savings across external marketing and SG&A,” Robins said.
“I am proud to welcome the Golden Nugget Online Gaming team to the DraftKings family,” he added.
The Boston-headquartered operator has confirmed it will employ a multi-brand approach aimed at enhancing cross-selling opportunities between the two brands.
DraftKings has also noted potential cost savings through advertizing and marking efficiencies from operating the multi-brand approach.
These savings, the firm said, will eliminate platform costs derived from migrating GNOG’s current technology to the DraftKings/SBTech in-house proprietary technology platform, as well as reducing administrative costs.
The GNOG Acquisition does not include brick-and-mortar Golden Nugget casinos, which will continue to be owned by Fertitta Entertainment, owned by Tilman Fertitta, who becomes one of DraftKings’ largest shareholders following completion of the deal.
In a separate statement, Fertitta waxed lyrical about his new business partners.
“This will be an alliance unlike any other in the digital sports, entertainment and online gaming industry,” Fertitta said.
“Now that the acquisition is completed, I look forward to what the future will bring for our combined company and am confident this relationship will be a huge success,” he added.
Under the terms of the deal, DraftKings has entered into an exclusive commercial agreement with Fertitta Entertainment Inc.
The agreement will see DraftKings benefit from reduced market-access rates through preferred pricing at Golden Nugget-owned properties and an exclusive commercial deal across DFS, sportsbook and igaming with the Rockets.
DraftKings will also become the exclusive DFS, sports betting, and igaming partner of the team and intends to open a sportsbook at the Toyota Center, pending state legalization and regulatory approvals.
The completion of the $1.56bn deal pours cold water on several class action lawsuits launched against DraftKings and Fertitta over alleged impropriety relating to the acquisition.
The ongoing status of these lawsuits has yet to be confirmed.