DraftKings completes GNOG acquisition, expects Q2 Ontario launch

DraftKings has announced that it has completed the acquisition of Golden Nugget Online Gaming (GNOG) that it had announced in August 2021.

The all-stock transaction, which has an implied equity value of approximately US$1.56 billion, will enable the group to leverage the Golden Nugget brand to broaden its reach into new customer segments and enhance the combined company’s iGaming product offerings, said DraftKings in a news release.

The deal had initially been expected to close in the first quarter of 2022. However, that deadline passed without the businesses gaining all the approvals necessary to combine, and was pushed back to 31 May.

The acquisition does not include brick-and-mortar Golden Nugget casinos, which will continue to be owned by Fertitta Entertainment. However, Fertitta and DraftKings expect some DraftKings rebranding to occur at selected current and future retail sportsbook locations at the properties. DraftKings also intends to bring GNOG onto its in-house technology to reduce third-party platform costs, operating expenses, and vendor costs.

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As part of the acquisition, DraftKings will integrate GNOG employees across its business. Tilman Fertitta, chairman and CEO of Golden Nugget, will join the company’s board, and Thomas Winter will transition to General Manager of North America iGaming from his previous role as GNOG president. Fertitta said the alliance will be “unlike any other in the digital sports, entertainment and online gaming industry”.

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Meanwhile, DraftKings said in an earnings call on May 6 that it expects to launch in Ontario’s regulated market in the second quarter of 2022, i.e. before the end of June.

The company said it anticipates its all-stock acquisition of GNOG and the coming launch in Ontario will add another US$130 million to US$150 million in revenue and negative US$50 million to negative US$70 million in adjusted EBITDA this year.

DraftKings has thus far been a noticeable exception to the flurry of big-name operators joining Ontario’s nascent regulated online gaming and betting market.

“Due to the presence of grey-market operators, many of which have been present in Ontario for several years, we do not believe that the timing of our launch will have any impact on the share we are able to achieve in that province,” Robins said during a conference call for analysts and investors, per Covers.

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