DraftKings to acquire Golden Nugget Online Gaming
CNBC’s Contessa Brewer reports on DraftKings’ acquisition of Golden Nugget Online Gaming and what it means for both businesses. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
The wild spate of mergers and acquistions inward the gambling manufacture continued Monday as DraftKings agreed to acquire Golden Nugget Online Gaming for $1.56 billion inward stock.
Golden Nugget Online shareholders will receive 0.365 shares of DraftKings stock, which puts the offer at a 53% premium to Golden Nugget Online shares’ closing price on Friday.
Golden Nugget Online shares surged nearly 48% on the news, while DraftKings stock remained relatively level after the deal’s announcement. DraftKings has a market cap of $20.68 billion.
Golden Nugget Online CEO Tilman Fertitta owns 47% of the business, which was formed by spinning off the sports gaming and iGaming operations of the Golden Nugget. The billionaire said he will continue to take hold on to the stock of the new company for at to the lowest degree a year after the deal closes. Fertitta will also bring together the DraftKings board.
The deal gives DraftKings access to Golden Nugget Online’s 5 million customers, who are dependable online casino players. The gaming manufacture anticipates customers who bet inward online casino games will be critical to its hereafter revenue growth. Fertitta, and others, have got said iGaming customers are worth seven times the value of a sports betting customer.
On DraftKings second-quarter earnings conference call, CEO Jason Robins said iGaming provides an opportunity to diversify the company’s offering beyond sports seasons. even so, it has struggled to win customers to its casino play platform.
“We definitely experience inward the iGaming segment that we do better with people who are sports fans, that we can cross-sell, and we’ve been working hard to try to extend our brand and extend our reach into the non-sports fan iGaming audience,” Robins said.
DraftKings anticipates $300 million inward cost savings from the deal, as it brings platform and technology inward house, cuts fees to third-party providers and lowers marketing costs. The company will be able to acquire promotional and marketing consideration with Fertitta’s Houston Rockets, Landry’s restaurants and Golden Nugget brick-and-mortar casinos.
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