DraftKings announced yesterday it has entered a definitive agreement to acquire Golden Nugget Online Gaming. The all-stock transaction has an implied equity value of approximately $1.56 billion.
The acquisition will allow DraftKings to leverage Golden Nugget’s well-known brand, iGaming product experience and existing combined database of more than 5m customers, the company said. In connection with the acquisition, DraftKings has entered into a commercial agreement with Fertitta Entertainment, Inc., the parent company of the Houston Rockets, Golden Nugget, LLC and Landry’s LLC, and a leader in the gaming, restaurant, hospitality, and sports entertainment industry.
“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with iGaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers,” said DraftKings CEO and chairman Jason Robins.
“This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations and tech-driven product expansion as well as technology optimization and greater marketing efficiencies. We look forward to Tilman being an active member of our Board and one of our largest shareholders.”
With this acquisition, New DraftKings will become the going-forward public company for both DraftKings and GNOG. New DraftKings will be renamed DraftKings Inc at closing. DraftKings will be able to market to existing Golden Nugget customers through cross-selling products, in retail sportsbooks, and across Fertitta Entertainment assets. DraftKings customers also will have access to VIP and promotional opportunities, including the ability to purchase discounted rewards and secure reservations using the DraftKings VIP rewards program, subject to a pricing agreement to be determined.
DraftKings has also reached an agreement regarding a separate commercial deal with Fertitta Entertainment, which will include marketing integrations, sponsorship assets with the Houston Rockets, an expanded retail sportsbook presence, and the optionality to obtain market access on favorable terms through certain Golden Nugget casinos.
DraftKings will also become the exclusive daily fantasy sports, sports betting, and iGaming partner of the NBA’s Houston Rockets and intends to open a sportsbook at the team’s Toyota Center stadium in Houston, pending state legalization and regulatory approvals.
The transaction is subject to approval by Golden Nugget Online Gaming stockholders, the receipt of required regulatory approvals, and other customary closing conditions, and is expected to close in the first quarter of 2022.
The approval of the transaction by Golden Nugget Online Gaming stockholders is expected to be obtained through a written consent to be provided by Tilman Fertitta. DraftKings’ board has also approved the transaction.
Under the terms of the merger agreement entered into on August 9, 2021, Golden Nugget Online Gaming stockholders would receive a fixed ratio of 0.365 shares of New DraftKings’ Class A Common Stock for each Common Share of Golden Nugget Online Gaming they hold on the record date. Tilman Fertitta, who owns beneficially approximately 46% of the equity in GNOG, has agreed to continue to hold the DraftKings shares to be issued to him in the merger for a minimum of one year from the closing of the transaction.
The approval of the transaction by Golden Nugget Online Gaming stockholders is expected to be obtained through a written consent to be provided by Tilman Fertitta.