DraftKings (NASDAQ:DKNG) has agreed to buy Golden Nugget Online Gaming in a deal valued at $1.56 billion U.S., expanding the fantasy-sports giant’s presence in online betting.
DraftKings expects to use Golden Nugget Online Gaming to boost its sales and market share, yielding $300 million U.S. in savings from overlapping costs and creating new opportunities, the companies said in a news release.
The deal, which has already been approved by both companies’ boards of directors, is expected to close in the first quarter of 2022.
The merger gives DraftKings more casino-type betting customers, in addition to expanding its market share in sports wagering, which is gaining traction in the U.S. as more states legalize the practice. Last week, DraftKings raised its revenue forecast for the year, citing strong demand.
Golden Nugget is backed by billionaire Tilman Fertitta, who took the company public last year (2020). Fertitta said he expects more consolidation in the online betting industry and that he picked DraftKings to merge with because he expects it to be a long-term winner.
DraftKings is currently the market leader in the fast-growing $5 billion U.S. North America online sports betting and online casino industry, which is projected to reach $30 billion U.S. in coming years.
Shares of Golden Nugget Online Gaming jumped as much as 52% to $18.71 U.S. and DraftKings stock rose 2% on news of the deal.
