Another day, another acquisition in the fast-growing online gambling world. This one involves two operators live in the young Michigan online casinos and online sports betting spaces, as DraftKings announced a $1.56 billion all-stock purchasing agreement of Golden Nugget Online Gaming on Monday.
It’s a move largely for DraftKings, a national sports betting leader, to boost its online casino standing with a proven brand.
DraftKings and Golden Nugget are two of the 14 live Michigan online gambling operators, both known by residents statewide. Golden Nugget Casino, with a market share in the middle of that pack, started a marketing push here the past few months that stars CEO Tilman Fertitta.
There’s not expected to be any change for Michigan players at DraftKings of Golden Nugget for the foreseeable future, especially until the sale closes. According to the announcement, that eventuality is expected in the first quarter of 2022.
Golden Nugget purchase boosts DraftKings casino position
The acquisition will boost DraftKings in the national online casino market, in which the Boston company is already formidable.
Through June, DraftKings had earned $84.6 million in online casino revenue in less than six months, third to BetMGM ($175.4 million) and FanDuel ($89.0 million). Those three operators have made up 77.2% of the market share through June.
Golden Nugget is further down the MI online casino revenue list, with its $18.2 million of revenue eighth of 14 operators.
Still, it’s a company that obviously has strong value, along with more than 5 million customers nationally, according to the announcement.
Golden Nugget is a particularly strong brand in US online casino leader New Jersey, where it was the first operator to bring live dealer online casino products to the United States. Golden Nugget is one of 10 operators to offer live dealer casino games in MI after it launched last month through Evolution.
Sports betting has been slower for Golden Nugget. The brand is 11th in Michigan online sports betting handle, taking $4.1 million in lifetime wagers through June. That total only tops Four Winds Sportsbook ($1.9 million handle), which launched a few weeks after Golden Nugget, and FireKeepers Sportsbook, which launched widely in July.
GNOG spun out, now spun off to DraftKings
Golden Nugget had spun out its online gaming division last year and made it publicly traded on the Nasdaq stock exchange. This division (GNOG) is what DraftKings is purchasing.
DraftKings could also use the Golden Nugget connection for entry into more states, such as Nevada.
Alongside the purchasing announcement, DraftKings noted a separate deal with Fertitta’s Houston Rockets, which includes the opening of a sportsbook in Houston’s Toyota Center when Texas sports betting comes on board.
Nothing will change about the naming rights of the iconic Golden Nugget Las Vegas Hotel & Casino, which is still owned by Fertitta’s Landry’s, Inc., a national restaurant and hotel conglomerate. The downtown Las Vegas property will get a DraftKings retail sportsbook.
DraftKings’ physical property plans still murky in MI
What about that DraftKings retail sportsbook expected at Bay Mills Casino in Brimley? That’s on hold, PlayMichigan has learned.
DraftKings also announced recently that it’s getting into the Detroit sports bar market.
A partnership with Sports & Social will bring a DraftKings branded sports bar to Detroit, presumably in or near the stadium district downtown. No location has been announced, and Sports & Social was replaced by PointsBet Sports Bar at Little Caesars Arena the day of the announcement.
DraftKings’ key online competitors (Barstool, BetMGM and FanDuel) all have presences in downtown Detroit’s three casinos with retail sportsbooks.
Penn National Gaming purchased theScore last week
The DraftKings purchase comes two business days after Penn National Gaming announced a $2 billion purchase of theScore this past Thursday.
Penn owns Greektown Casino in Detroit and also is a part-owner of Barstool Sportsbook and its parent company, Barstool Sports.
theScore is a popular media brand in Canada and also will allow Barstool Sportsbook to bring its technology in-house.
Could MI online casino, sports betting licenses open up later?
With the GNOG purchase, DraftKings is the second company with two of the 15 entries into the Michigan online gambling marketplace.
Both DraftKings and Golden Nugget partnered with Upper Peninsula Native American tribes for MI access. DraftKings has a deal with the Bay Mills Indian Community, while Golden Nugget has access through the Keweenaw Bay Indian Community.
Similarly, Flutter brands take up two operator licenses as well. FanDuel is partnered with MotorCity Casino in Detroit, while Fox Bet Sportsbook, Stars Casino and PokerStars Michigan teamed with the Little Traverse Bay Band of Odawa Indians for access.
When those licenses are up for renewal after five years, perhaps consolidation could open a door for more brands in the market, such as Bally’s or Circa. Casino operators also could apply for a new license with a new partner at any time, depending on the contracts with the original partners.
But for now, Michigan’s online gambling market is a top-heavy one. And the leaders are only getting stronger.