DraftKings buys Golden Nugget Online Gaming for nearly $ 1.6 billion

Golden Nugget Online Gaming shares have climbed nearly 50% on the news. The company is controlled by Tilman Fertitta, the billionaire owner of the Houston Rockets NBA team.

The high-priced offering is the latest development in the rapidly growing online gaming world. As more states legalize sports betting as well as online casino games such as poker and blackjack, companies like DraftKings are trying to attract players of all types.

DraftKings CEO Jason Robins said in an interview with CNN Business that he believes purchasing Golden Nugget Online Gaming will help increase the company’s customer base and “fill a big gap for us.”

The online gaming brand means more to older customers who visit casinos more frequently and is also more popular with women, Robins said, while the average DraftKings bettor tends to be a younger man.

“The Golden Nugget brand resonates more than DraftKings with the casino audience,” said Robins, adding that DraftKings hopes to encourage Golden Nugget Online Gaming customers to try out the company’s main sports betting products.

A “golden” age of gambling

As part of the Golden Nugget deal, DraftKings will also work more closely with other parts of Fertitta’s business empire, which includes the Landry’s restaurant chain and the brick-and-mortar Golden Nugget casinos in Las Vegas and Atlantic. City.

DraftKings will now benefit from preferential pricing offers in sports betting at Golden Nugget casinos, which will reduce the operating costs of sports betting operations there. The company also plans to open a new sports betting site at Toyota Center, home of the Houston Rockets in Fertitta, if Texas legalizes sports betting and allows teams to operate casinos.

Fertitta, who owns around 46% of the shares of Golden Nugget Online Gaming, has agreed to hold the new DraftKings shares that will be issued under the deal for at least a year after the merger closes, which could take place in over the next four to six months.

But Robins said Fertitta told him he planned to be a long-term investor in DraftKings. To this end, Fertitta agreed to an all-equity transaction rather than including cash in the transaction.

Fertitta’s validation is clearly positive for DraftKings, which is looking to differentiate itself in an increasingly competitive gaming market.

Penn National Gaming reported strong earnings and sales last week and also announced plans to buy Score Media & Gaming, a Canada-based sports app, for around $ 1.74 billion. Flutter will release its latest results on Tuesday.