Global financial markets generally seem to be returning to an upward trend after the events of the last few years. For example, GIS Market revenue is forecasted to increase by 11.6% between now and 2030. As such, it’s not a bad time for companies to consider acquiring new businesses. One such transaction has turned heads in the online gambling world. DraftKings recently completed its acquisition of Golden Nugget, continuing its determined push to become the world’s leading sports betting and online casino platform.
Starting life as a Draft Fantasy League enterprise, DraftKings successfully entered the legal sports betting scene after the legalization of sports betting in some US states. After solidifying itself as one of the leading sportsbooks, attention has turned to bolstering its online casino options. The purchase of Golden Nugget should have some considerable benefits in this regard. Keep reading for an exploration into the deal and what happens next.
DraftKings purchase Golden Nugget: An overview
As the most used sports betting company in the US, DraftKings has a lot of financial might. On May 5th, 2022, it announced its successful acquisition of Golden Nugget, a deal that was more than a year in the making. Worth roughly $1.56bn, it’s one of the priciest online gambling purchases in recent memory.
Jason Robins, the DraftKings CEO, claims “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”. Clearly, DraftKings is looking to repeat its sportsbook success in the online casino sphere. Acquiring Golden Nugget casino will dramatically improve the company’s iGaming arm, which has historically lagged behind the sportsbook section of the platform.
Some market statistics
One of the main reasons why DraftKings has had so much success over the last few years is the popularity of sports betting in the US. It has been legal for several years now, with more and more states following the example set by early frontrunners such as New Jersey and Pennsylvania. Although sports betting is the most popular type of online gambling in America, online casinos are becoming increasingly legitimate after federal laws gave states the power to legalize online gambling.
With the acquisition of Golden Nugget casino, DraftKings is looking firmly toward the future. The company has already increased its 2022 revenue prediction to $2.025bn as a result. One slight worry for DraftKings is the 10.82% drop in shares so far this year, but this looks all set to change after its successful acquisition.
Why Golden Nugget?
The Golden Nugget casino brand is a historically famous household name in the gambling world. Founded by Steven Wynn, the first casino opened in Las Vegas in 1946. Nowadays, there are five casino resorts in Nevada, New Jersey, Louisiana and Mississippi. The Golden Nugget name is therefore steeped in history, with many avid gamblers swearing by the brand.
More recently, Golden Nugget began operating in the online casino world. It focuses on offering a top-tier selection of online slots alongside other table games and live casino options. Arguably the most prestigious, long running, and secure online casino platform in states such as New Jersey, it’s no wonder DraftKings decided to pull out the cheque book. Reading through any Golden Nugget casino review will confirm this sentiment.
How DraftKings will continue to perform
What does the acquisition of Golden Nugget really mean for DraftKings? Analysts expect the online gambling behemoth to continue to perform well and consolidate its position as the leading sports betting platform in America. Alongside this, there will be a renewed focus on online casino and iGaming, especially in states imminently set to legalize online gambling. DraftKings will be buoyed by the iconic Golden Nugget casino brand. Moreover, the existing framework and plethora of brand partnerships will result in an online casino platform that rivals any of its competitors.
Another significant benefit from the deal is DraftKings’ ability to leverage Golden Nugget’s five million customers, instantly boosting their customer base by a considerable amount. It has also entered a commercial agreement with Golden Nugget’s parent company Fertitta Entertainment. This will provide countless gaming, hospitality and sports entertainment opportunities. Make no mistake about it; the future looks bright for DraftKings after its purchase of Golden Nugget.