Sports betting giant DraftKings has completed its acquisition of Golden Nugget Online Gaming (GNOG), the company announced on Thursday. The deal was first unveiled in August last year, an all-stock deal worth roughly $450 million that involves Golden Nugget’s iGaming product and existing combined database of more than 5 million customers.
The GNOG acquisition is expected to, among other things, allow DraftKings to leverage Golden Nugget’s established brand to broaden its reach into new customer segments. It will also enhance the combined company’s iGaming product offerings through DraftKings’ vertically-integrated tech stack and GNOG’s unique capabilities, including Live Dealer.
The transaction does not include brick-and-mortar Golden Nugget casinos, which will continue to be owned by mogul Tilman Fertitta and his Fertitta Entertainment business. The deal is set to deliver “significant benefits” to DraftKings, which expects synergies of $300 million at maturity.
“Acquiring Golden Nugget Online Gaming gives us synergies across our business,” said Jason Robins, Chairman and CEO of DraftKings. “We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual-brand iGaming strategy.”
Additionally, DraftKings’ CEO said the deal will unlock gross margin improvement opportunities, and cost savings across external marketing and SG&A (Selling, General and Administrative Expenses). “I am proud to welcome the Golden Nugget Online Gaming team to the DraftKings family,” he further commented.
DraftKings is set to integrate Golden Nugget Online Gaming employees across its business, including Thomas Winter, who will transition to General Manager of North America iGaming, from his previous role as President of Golden Nugget Online Gaming.
“This will be an alliance unlike any other in the digital sports, entertainment and online gaming industry,” said Tilman Fertitta, Chairman and CEO of Golden Nugget Online Gaming. “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.”
Houston mogul Tilman Fertitta
In terms of strategies going forward, DraftKings announced it will deploy a “multi-brand approach” that will enhance cross-selling opportunities and drive increased revenue growth for the combined entity. Additionally, it expects multiple channels for cost savings.
These include recognizing enhanced returns on advertising spending through marketing efficiencies, eliminating platform costs from migrating Golden Nugget Online Gaming’s current technology to DraftKings’ in-house proprietary platform, and reducing G&A (General and Administrative) costs, such as vendor services and duplicative overhead.
Moreover, DraftKings is set to rebrand “certain current and future” retail sportsbook locations at Fertitta Entertainment-owned Golden Nugget properties into DraftKings sportsbooks. Previous reports also indicated the deal will turn DraftKings into the exclusive DFS, sports betting and iGaming partner of Fertitta Entertainment-owned NBA’s Houston Rockets.
The sports betting giant expects revenue to increase from additional cross-promotion opportunities arising from the deal, which could complementarily grow DraftKings’ customer base by engaging existing GNOG iGaming-first customers. Additionally, anticipated revenue synergies include potential tech and game expansion, such as Live Dealer offerings.
The transaction was initially expected to close in the first quarter, but the businesses were ultimately unable to gain all necessary approvals by that date. An investigation launched to determine whether GNOG’s board breached their fiduciary duties in connection with the deal is credited with having delayed the closure of the transaction.
On the land-based side of business, Golden Nugget Casino Danville broke ground last month in Illinois, which would mark the sixth Golden Nugget casino in the United States. The plan is for the casino to open in March 2023, with other businesses to follow. Earlier in April, it was announced that Tilman Fertitta is purchasing the Wildwood Casino and Hotel in Cripple Creek, Colorado, for $43 million. The deal, expected to finalize by summer, is being carried out through the mogul’s Fertitta Entertainment company and will see the introduction of the iconic Golden Nugget brand to the state.
Original article: https://www.yogonet.com/international/news/2022/05/06/62520-draftkings-closes–450m-acquisition-of-golden-nugget-online-gaming
