After migrating from Bally Tech, Golden Nugget has been operating on the NYX/Scientific Games platform since 2015, but the deal will almost certainly result in the Golden Nugget online casino migrating to DraftKings’ in-house tech stack. As Robins said during last week’s earnings call, “we’ve been working hard to try to extend our brand and extend our reach into the non-sports fan iGaming audience… I think that’s probably the biggest opportunity for us now in terms of consumer segments that we’re just not penetrating at the moment.” DraftKings is adding a casino-first company to its growing list of assets and can now leverage Golden Nugget’s five-million-strong database of high-value online casino players (that is 50% female according to Earnings+More) along with the company’s online casino know-how. Despite lacking a competitive sportsbook, GNOG’s online casino is still punching well above its weight, and we’ll soon see just how strong it can be when it can cross-sell with the DraftKings sportsbook. GNOG has been severely disadvantaged in a post-PASPA world where sports betting is driving everything. The little engine that could (see the following header) will finally have the assets to put together a championship team. We want to be a part of it and see what DraftKings does for years to come.” Winners and Losers As GNOG’s Tillman Fertitta put it, “I wanted only stock… We will be one of largest shareholders of DraftKings. The principals are also entirely on board, considering the price tag of $1.56 billion will be paid in shares (GNOG will own 6.6% of DraftKings).
Combining the Golden Nugget Online Casino business with DraftKings sports betting enterprise is the best of both worlds, as the main strength of each company is the others’ main weakness. Even the usually cynical analysts are struggling to find something to critique. The acquisition, expected to close in Q1 2022, feels like a perfect fit. The move also puts the rest of the industry on watch, as one of the preeminent US sports betting operators just added one of the preeminent US online casino operators. With the news it’s purchasing online-casino-centric Golden Nugget Online Gaming (GNOG), DraftKings just plugged a glaring hole in its suite of online gambling offerings.
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