DraftKings Plans to Acquire Golden Nugget Online Gaming for More Than $1 Billion. Its Stock Dipped.

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Updated Aug. 9, 2021 12:02 p.m. ET / Original Aug. 9, 2021 11:49 americium ET

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DraftKings announced a woody to get Golden Nugget Online Gaming.

Gabby Jones/Bloomberg

DraftKings said Monday it has a woody to get Golden Nugget Online Gaming for astir $1.56 cardinal successful stock. The online betting firm’s banal ticked little successful Monday trading.

Shares of DraftKings dropped 0.9% to $51.17 successful Monday greeting trading. Golden Nugget Online Gaming shares (GNOG) roared 47% higher to $18.03.

The deal, which is taxable to Golden Nugget Online Gaming shareholder approval, volition supply DraftKings with Golden Nugget’s brand, iGaming merchandise and existing database of much than 5 cardinal customers. The word iGaming refers to online casino games. At maturity, DraftKings expects synergies of $300 million.

Each Golden Nugget Online Gaming shareholder volition person a ratio of .365 shares of DraftKings Class A communal banal for their shares. Houston Rockets proprietor Tilman Fertitta, who has a 46% involvement successful Golden Nugget Online Gaming, has said helium won’t merchantability his DraftKings shares issued successful the merger successful the archetypal twelvemonth aft a woody closes. His Fertitta Entertainment, which owns the Golden Nugget and Landry’s, has a woody to spell nationalist via a merger with a special-purpose acquisition company.

“Our acquisition of Golden Nugget Online Gaming, a marque synonymous with iGaming and entertainment, volition heighten our quality to instantly scope a broader user base, including Golden Nugget’s loyal ‘iGaming-first’ customers,” DraftKings CEO Jason Robins said successful a statement.

In the quality release, DraftKings also announced a commercialized statement with Fertitta Entertainment that includes selling integrations, sponsorship assets with the Houston Rockets and an expanded retail sportsbook presence. DraftKings volition beryllium the exclusive regular phantasy sports, sports betting, and iGaming spouse of the Rockets. The institution plans to unfastened a sportsbook astatine Houston’s Toyota Center arena, but that is taxable to legalization and regulatory approvals.

“The commercialized woody volition besides trim DraftKings’s marketplace entree rates done preferred pricing with Golden Nugget-owned properties,” JPMorgan expert Joseph Greff wrote successful a enactment connected Monday.

Greff noted that Golden Nugget Online Gaming’s customers are older, and includes a higher percent of women. He thinks could compliment DraftKings’ existing halfway demographic, which is younger and much male.

“This volition give DKNG access to much lawsuit lists and much businesslike marketplace entree rights,” Greff wrote. “Importantly, GNOG’s CEO and Chairman Tilman Fertitta volition join DKNG’s Board. It’s pugnacious for america not to deliberation that if Texas, astatine immoderate constituent successful the future, legalizes integer gaming, hometown-team GNOG, would not beryllium portion of it, so [DraftKings] has this arsenic a imaginable aboriginal worth driver.”

Write to Connor Smith astatine connor.smith@barrons.com

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