DraftKings Buys Golden Nugget Online Gaming in $1.56 Billion Deal

US fantasy sports outfit DraftKings has agreed to acquire Golden Nugget Online Gaming for $1.56 Billion in an all-stock deal that gives the Boston-based DraftKings access to the company’s database of more than 5 million gamblers and is expected to yield $300m in synergies, according to the companies.
 
DraftKings will create a new holding company in which GNOG shareholders will receive 0.365 shares for each common share they own. DraftKings has also agreed a separate commercial deal with Fertitta Entertainment, the parent company of Golden Nugget and basketball team Houston Rockets owned by billionaire Tilman Fertitta.

Shares of Golden Nugget Online Gaming skyrocketed nearly 50% on the news. The company is controlled by Tilman Fertitta, the billionaire owner of the Houston Rockets NBA team.
 
The high-priced deal is the latest development in the rapid growth of the online gambling world. As more states legalize sports betting as well as online casino games such as poker and blackjack, companies like DraftKings are trying to attract gamblers of all types.
 
DraftKings, which was trading flat on Monday, is not yet profitable. But the company is growing quickly, with second-quarter revenue surging nearly 300% from a year ago.
 
Of course, the sports world was still largely in shutdown mode during the spring and early summer of 2020 due to Covid-19. But DraftKings also boosted its revenue outlook for the rest of 2021.
 
DraftKings CEO Jason Robins said in an interview with CNN Business that he thinks buying Golden Nugget Online Gaming will help increase the company’s customer base and “fills a meaningful hole for us.”