DraftKings agreed to a $1.56 billion deal to acquire Golden Nugget Online Gaming, a move that will further expand the fantasy sports giant’s footprint into the burgeoning market of online casinos.
The all-stock deal is expected to close in the first quarter of 2022, according to a press release. Golden Nugget Online Gaming stock, traded under the ticker symbol GNOG, jumped up more than 50 percent Monday after the announcement.
Jason Robins, chairman and CEO of Boston-based DraftKings, said the deal will give the company a foothold in the online casino sector, also called igaming, that it hasn’t been able to carve out on its own.
“We’ve made some progress but have not yet deeply penetrated the very large audience that non-sports fan igamers,” Robins said in a conference call Monday morning. “We believe this will help us to attain much greater igaming market share in the long term.”
Golden Nugget retail sportsbooks also will be rebranded as DraftKings sportsbooks as part of the deal.
Golden Nugget Online Gaming started operations in New Jersey in late 2013 and became profitable in 2016. It went public in June 2020, valued then at $745 million. Tilman Fertitta stayed on as the company’s chairman and CEO.
Golden Nugget was the first online gaming company to launch Live Dealer — which allows gamblers to play with real dealers through their computer or smartphone — in the U.S, and Robins said the live dealer feature factors heavily into DraftKings future.
“This has become increasingly important to DraftKings and are very difficult for a company like ours that does not have a brick and mortar presence to develop solely on our own. So we’re looking forward to leveraging those as well and helping enhance our igaming portfolio by bringing some of those things in-house,” Robins said.
As part of the merger, Fertitta will take a board seat and will be “playing a very active role in helping me shape the company strategy and drive us forward as a combined company,” Robins said.
Fertitta said on Monday’s call that he was excited about joining with “the Coca-Cola of this industry.”
“There’s going to be a lot of consolidation in this space in the next few years, and we want to be part of the winner,” Fertitta said.