DraftKings Buys Golden Nugget Online Gaming for $1.56 Billion
DraftKings, the largest online sports betting company, has agreed to buy Golden Nugget’s online gaming arm for $1.56 billion, the two companies said on Aug. 9.
DraftKings will buy Golden Nugget Online Gaming for $1.56 billion in an all-stock deal, and both companies will be overseen by New DraftKings, a newly formed holding company.
Fertitta Entertainment, which also owns the Houston Rockets basketball team, and Laundry LLC presently control Golden Nugget.
Combining Fertitta Entertainment’s huge entertainment offerings and extensive customer database with DraftKings’ mammoth network makes this an unparalleled combination, according to Tilman Fertitta, chair and chief executive officer of GNOG.
As the transaction is implemented, both parties expect to save $300 million in costs and other savings, with DraftKings hoping to eliminate GNOG’s “third-party platform costs,” lowering vendor costs.
Under the terms of the arrangement, DraftKings will have a considerably greater presence in those regions, including an exclusive marketing deal with the Houston Rockets across daily fantasy sports, sports betting, and iGaming, according to the joint release.
According to the most recent numbers from the New Jersey Division of Gaming Enforcement, GNOG was initially introduced in New Jersey in January of this year, and by June, had brought in approximately $182 million. The NJDGE will announce its July statistics later this month.
Golden Nugget in Atlantic City made roughly $319 million in online gambling last year, at a time when casinos were forced to close their physical locations for months due to the COVID-19 outbreak.
From March to July, New Jersey’s nine casinos, all in Atlantic City, were closed, then reopened in May with limited capacity for the remainder of the year.
Even before the outbreak, the majority of sports bets were placed online or through mobile apps rather than gambling at the state’s physical casinos.
During the COVID-19 closures and restrictions, internet and mobile products provided a lifeline for the state’s casino industry, which was reeling from the pandemic’s financial troubles.
Internet gambling wins nearly halved from $2.6 billion in 2019 to $1.5 billion in 2020, while casino floor winnings nearly doubled from $483 million in 2019 to $970 million in 2020. There is presently only one brick-and-mortar DraftKings sportsbook in the state, which is located at Resorts Casino Hotel.