DraftKings Set To Acquire Golden Nugget Online Gaming For $1.56 Billion
Gambling giant DraftKings has agreed to acquire Golden Nugget Online Gaming for $1.56 billion, with the mergers and acquisitions in the sector rising.
DraftKings Will Buy Golden Nugget Online Gaming
DraftKings has announced earlier today that it would acquire Golden Nugget Online Gaming. The deal is expected to continue a recent tradition of mergers and acquisitions in the gambling sector. According to the reports, DraftKings would acquire Golden Nuggets for $1.56 billion.
Golden Nugget Online shareholders are expected to receive 0.365 shares of DraftKings stock, 53% higher than Golden Nugget Online shares’ closing price on Friday. The CEO of Golden Nugget Online, Tilman Fertitta, currently owns 47% of the company. He stated that he intends to hold on to the new company’s stock for roughly a year after the deal has been finalized. Fertitta is also set to join the DraftKings board.
Thanks to this latest development, DraftKings would have access to Golden Nugget Online’s 5 million customers. These customers are regular online casino players, and DraftKings said the online casino betting arm would be critical to its future revenue growth. Fertitta, and others, believe that iGaming customers are worth seven times the value of regular sports betting customers.
GNOG And DKNG Rally Following Acquisition News
The shares of Golden Nugget Online Gaming are rallying following the news of the acquisition. GNOG is currently up by 52% after the news, rising from $12 to currently trade at $18 per share. The surge in share price is a recovery for GNOG, after starting the year at $20 per share but dropping to the $11 sub-level earlier this month.
Furthermore, the shares of DraftKings are also performing well today. DKNG is up by 2.2% since the US market opened a few hours ago. At the time of this writing, DKNG is trading at $52.73 per share. Year-to-date, DKNG is up by over 10%.
DraftKings CEO Jason Robins recently stated that iGaming provides an opportunity for the company to diversify its offering beyond sports seasons. Despite that, it has struggled to win customers to its casino play platform over the past few years.