In an impactful move for online sports betting and online casinos across the country, DraftKings Inc. announced the completion of the acquisition of Golden Nugget Online Gaming, Inc. on Thursday morning.
The move will just pertain to Golden Nugget’s online properties, but allow DraftKings to broaden its reach.
Here’s a look at the details behind Thursday’s acquisition.
DraftKings acquires Golden Nugget Online Gaming
It also will enhance the combined company’s iGaming product offerings through DraftKings’ vertically-integrated tech stack and Golden Nugget Online Gaming’s unique capabilities – including Live Dealer.
“Acquiring Golden Nugget Online Gaming gives us synergies across our business,” said Jason Robins, Chairman and CEO of DraftKings. “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 acquisition does not include brick and mortar Golden Nugget casinos, which will continue to be owned by Fertitta Entertainment.
DraftKings’ plans for GNOG
The GNOG acquisition will deliver significant benefits to DraftKings as well as expected synergies of $300 million at maturity.
DraftKings will deploy a multi-brand approach that will enhance cross-selling opportunities and drive increased revenue growth. In addition, there will be multiple channels for cost savings. Included in the cost savings will be:
- Recognizing enhanced returns on advertising spending through marketing efficiencies.
- Eliminating platform costs from migrating Golden Nugget Online Gaming’s current technology to DraftKings’ in-house proprietary platform.
- Reducing G&A costs, such as vendor services and duplicative overhead.
Additionally, DraftKings and Fertitta Entertainment expect to rebrand certain current and future retail sportsbook locations at Fertitta Entertainment-owned Golden Nugget properties into DraftKings sportsbooks.
“This will be an alliance unlike any other in the digital sports, entertainment and online gaming industry,” said Tilman Fertitta, Chairman and CEO of Golden Nugget Online Gaming. “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 will integrate Golden Nugget Online Gaming employees across its business. Included in that is Thomas Winter. He will transition to General Manager of North America iGaming. Winter’s previous role was as President of Golden Nugget Online Gaming.
How it will impact both platforms
DraftKings plans to bring Golden Nugget Online Gaming onto its in-house technology. That is expected to deliver cost savings by reducing Golden Nugget Online Gaming’s third-party platform costs, operating expenses, and vendor costs.
Additionally, once integrated, customers of both brands will utilize DraftKings’ technology and have access to expanded product offerings and features.
Included in those expanded features will be in-house live dealer and proprietary games.
Where DraftKings, GNOG stand in Michigan
In Michigan, DraftKings is the online operator for Bay Mills Resort & Casino in Brimley. Golden Nugget is the operator for Ojibwa Casinos in Baraga and Marquette.
DraftKings has been Michigan’s second-leading online casino in terms of revenue. It has generated $245.5 million all-time since online casinos were legalized in the state. Golden Nugget has produced $68.3 million all-time in the state.
When it comes to online sports betting, DraftKings is third in Michigan for all-time online handle ($1.28 billion) and third in sports betting revenue ($66.6 million). Golden Nugget has amassed $13.5 million in online handle and just $1.1 million in sports betting revenue.