Golden Nugget Online acquired by Draft Kings
Last Updated on by James King
In what can only be described as a major statement in the industry, Fantasy Sports company, Draft Kings has completed the ambitious purchase of Golden Nugget Online Gaming; one of the most prominent gambling companies in the US.
It could even be argued that the price paid for a company that has a huge amount of potential represented a great deal for Draft Kings, despite this being a cool $1.56 billion.
DraftKings agrees to buy Golden Nugget for $1.56 billion, expanding its presence in the hot online-betting market https://t.co/aOSrGGi2Jz
— Bloomberg (@business) August 9, 2021
There has been a significant amount of activity in the online gambling industry over the last year, in regards to mergers and acquisitions, though this is being seen as somewhat of an unconventional move in the industry.
Not known as a traditional gambling organisation, Draft Kings combines the act of gambling with fantasy sport and to date has been relatively successful since inception. The COVID-19 pandemic meant that the company’s revenue was limited due to the lack of sport, so adding Golden Nugget to their repertoire is being seen as a clever move.
The US is one of the fastest growing online gambling markets in the world and has the potential to be the biggest when considering the fact that more and more states are opening up, due to them approving legislation for online gambling.
Strategic move from Draft Kings?
Following the takeover, CEO of Draft Kings, Jason Robbins told CNN Business that the acquisition “fills a meaningful hole for us”, due to the fact that it will help them to significantly add to their existing customer base.
In addition, this also presents a number of cross-marketing opportunities between the two brands and help with potential customer conversion from one to the other.
For Draft Kings, this move certainly signals the size of their ambition to compete with the biggest companies in the marketplace, such as MGM Resorts, Caesars Entertainment and Flutter Entertainment (owner of direct competitor Fan Duel), among others.
Caesars itself has been the centre of M&A (merger and acquisition) activity in the last year, when they acquired leading British bookmaker William Hill in a deal worth £2.9 billion.
This deal could just be the first in a long line for Draft Kings, who have a great opportunity to build an online gambling empire that is US focused, which could even see them emulate Caeser’s and complete their own deal to buy a British or European sportsbook in the future.