DraftKings will acquire Golden Nugget Online Gaming (GNOG) for $1.56 billion, according to both companies. It’s a move that signals DraftKings’ desire to ramp up its online casino presence.
GNOG is an online casino market leader in New Jersey. With more state legislatures starting to consider passing online casino gaming, including Illinois, DraftKings wants to increase its iGaming market share.
DraftKings CEO Jason Robins said of the acquisition:
“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with iGaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers. This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations and tech-driven product expansion as well as technology optimization and greater marketing efficiencies.
DraftKings will keep the Golden Nugget online casino branding.
Tilman Fertitta, chairman and CEO of GNOG, will join the DraftKings board. Fertitta said of the deal:
“This transaction will add great value to the shareholders as two market leaders merge into a leading global player in digital sports, entertainment and online gaming.”
Fertitta also owns the Houston Rockets. With the move, Golden Nugget online sportsbook can accept NBA bets once again in states where it’s live.
This will be an all-stock transaction. Fertitta also said:
“DraftKings is the Coca-Cola of the space. I wanted only stock. I wanted to ride this thing all the way up with these guys. This is the best management team in the space.”
By handle, DraftKings is the leader of the sports betting market in Illinois. It notched $160.2 million in June handle.
And with online casino potentially on the way in the Land of Lincoln, DraftKings is now set up to dominate that space, too.
Latest with Illinois online casino in legislation
The Illinois House and Senate introduced online casino bills in 2021. However, neither passed during the most recent legislative session.
With that said, there is momentum for online casino in Illinois in the future.
The state Senate recently released a report detailing how much money online casino could have generated for the state had it been legal prior to the COVID-19 pandemic.
The authors concluded that iGaming could have generated anywhere between $75 million and $230 million in state taxes during a 16-month span, depending on tax rates. Operators, meanwhile, could have raked in between $622.4 million and $1.249 billion.
Sen. Cristina Castro, who sponsored the study, told PlayIllinois regarding online casino’s legalization prospects:
“I don’t know if it can be done in a year. It’s going to take time to educate my colleagues on what iGaming is and what it isn’t. There are people with concerns, and we need to address VGTs. Maybe we set up the ground work over 2022 and look at 2023 to pass it.”
DraftKings is set up for success in sports betting and iGaming in the event that online casino passes in the next few years.
Golden Nugget plans to develop Danville casino
Golden Nugget has a market access deal with Danville Development to spearhead the Danville casino project. If approved, the gaming facility will have Golden Nugget branding.
Golden Nugget has also said it wants to get into the Illinois online sports betting market. It will be interesting to see how the DraftKings acquisition affects that.
This deal only applies to Golden Nugget’s online gambling assets, so DraftKings would not also own the Danville casino.
As for the Danville casino timeline, it’s a long way off. Golden Nugget submitted its materials to the Illinois Gaming Board (IGB) in late 2020, and the agency has yet to make a ruling one way or another.
The IGB also has several other casino license applications to evaluate before Danville, so it could be a while.
Golden Nugget is not going to become an immediate online or retail gambling player in Illinois. But fast-forward five years, and it could have a significant footprint in the Prairie State.