When DraftKings and Golden Nugget Online Gaming announced that the sportsbook would acquire the iGaming site, the all-stock transaction carried a value of $1.5 billion based on the share price. The deal closed last week.
GNOG Chairman Tilman Fertitta said it’s a game-changer.
“This will be an alliance unlike any other in the digital sports, entertainment and online gaming industry,” said Fertitta. “Now that the acquisition is completed, I look forward to what the future will bring for our combined company and am confident this relationship will be a huge success.”
DraftKings CEO Jason Robbins feels the same way.
Acquiring Golden Nugget Online Gaming gives us synergies across our business,” he said. “We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual brand iGaming strategy, gross margin improvement opportunities, and cost savings across external marketing and SG&A. I am proud to welcome the Golden Nugget Online Gaming team to the DraftKings family.”
The agreement gave GNOG shareholders 0.365 shares of DraftKings stock for each share of GNOG. At the current rate—25 percent of the original price—the deal is worth $365 million. Of course, GNOG tumbled as well.
Regardless, Fertitta said the deal was still going ahead because GNOG’s value dropped commensurately.
“It’s not just DraftKings,” Fertitta said. “Look at every other online gaming company, it’s universal. GNOG would likely be trading like that also.”
Fertitta remains bullish on the long-term prospects of the DKNG stock. He’ll be one of the largest shareholders of DraftKings and in a few years it could be in Amazon and Tesla territory. The guy really believes it.
“When they turn the corner like all tech companies and become profitable, they become really profitable. I saw that for myself running GNOG.”
“I wanted only stock,” Fertitta said who owns 46 percent of GNOG stock.
Going along with the deal is former GNOC President Thomas Winter and his staff, which engineered the remarkable success of the company. Winter becomes general manager of North America iGaming for DraftKings. That alone gives Fertitta confidence.
“I wanted to ride this thing all the way up with these guys,” he says. “This is the best management team in the space.”