DraftKings Acquires Golden Nugget Online Gaming For $1.56B

DraftKings announced this morning that it has entered into an agreement to acquire Golden Nugget Online Gaming. The equity value of the all-stock transaction is estimated to be around $1.56 billion.

This agreement involves Golden Nugget Online Gaming, but it will significantly affect the physical casino sportsbooks. All sportsbooks in Golden Nugget casinos will undergo a rebranding process to become DraftKings Sportsbooks. This change will apply to all existing and upcoming sportsbooks within Golden Nugget casinos.

DraftKings sportsbooks will replace the Golden Nugget casinos in Las Vegas and Laughlin. However, the timeline for this transition is yet to be determined.

Deal includes casino, sportsbook, and steak

The agreement between DraftKings and Golden Nugget goes beyond the simple purchase of an online casino. It enables DraftKings to utilize the Golden Nugget and various Landry’s restaurant brand names. Furthermore, DraftKings has also established a deal with Fertitta Entertainment, Inc., the parent company of the Houston Rockets, Golden Nugget, LLC, and Landry’s LLC.

DraftKings’ CEO and Chairman of the Board, Jason Robins, said:

This agreement leads to significant synergies like enhanced revenue for the merged company, made possible by increased cross-selling opportunities, loyalty program integrations, and tech-based product growth. It also facilitates technology optimization and improved marketing efficiencies.

Tilman Fertitta’s company will grant DraftKings access to all Landry’s restaurants, Golden Nugget casinos, and the NBA team it owns.

This deal, particularly the Las Vegas portion, is significant for those who wish to bet using DraftKings’ app. However, the deal holds more benefits for DraftKings beyond this.

DK gets access to Golden Nugget email database

This deal will not only provide DraftKings with entry to new online and retail sportsbook markets, but also offer other benefits. Both companies will gain access to each other’s marketing databases and rewards programs.

DraftKings will gain access to the rewards programs at both Golden Nugget casinos and Landry’s properties, along with the ability to utilize the databases of Golden Nugget 24K Club and Landry’s Select Club.

The two rewards programs collectively have over 5.5 million members, which is significant for DraftKings’ expansion. However, these programs are considerably smaller compared to traditional casino rewards clubs.

To draw a comparison, MGM Resorts boasts over 55 million M Life Rewards members, while Caesars Rewards has an even larger membership. By consolidating all of its rewards programs, DraftKings can edge closer to the conventional casino-sportsbook model offered by Caesars and MGM Resorts.

Members enrolled in the DraftKings VIP rewards program will be entitled to hotel room discounts at Golden Nugget casinos nationwide. This arrangement allows DraftKings to provide a comprehensive gaming experience, incorporating access to eateries and casinos across the nation.

Members of Golden Nugget rewards should anticipate receiving marketing offers from DraftKings too.

DraftKings In Las Vegas was only a matter of time

For years, DraftKings has been preparing to penetrate the Las Vegas market. The company hired Johnny Avello from Wynn Las Vegas in 2018 and subsequently expanded its workforce in the city. Currently, DraftKings operates a 300-person office in Las Vegas.

In 2020, DraftKings made significant headway in Nevada by securing a deal to be the main sponsor of the Center for Gaming Innovation at UNLV. This deal holds considerable weight as it places the DraftKings brand alongside some of the world’s largest gaming companies.

Earlier this year, the Vegas Sports and Information Network (VSiN) was acquired by DraftKings. Broadcasting live daily from the Circa and South Point casinos in Las Vegas, the company continues its operations.

There’s a significant amount of investment in Las Vegas, even without having a retail or online presence within Nevada.

The Nevada DraftKings experience

DraftKings, an online sportsbook operator, has struck a deal with Golden Nugget that will allow it access to retail sportsbooks in Las Vegas and Laughlin. However, the DraftKings experience for Nevada residents will differ somewhat from other markets.

If the Nevada Gaming Control Board doesn’t amend the regulations for in-person signup on mobile sportsbook, customers will continue to need to go to a Golden Nugget casino to open an account. Furthermore, it’s probable that customers in Las Vegas will need to utilize a different sportsbook app compared to the rest of the nation.

Companies such as Caesars, MGM Resorts (BetMGM), and Wynn (WynnBet) offer different national apps compared to what they provide in Nevada. The apps used in Nevada do not offer as many promotions, have varied features, do not share a wallet, and provide different odds compared to their counterparts outside of the state.

A change is taking place that will enable DraftKings sportsbooks to accept bets on the Houston Rockets. Due to existing ownership connections, the Golden Nugget’s sportsbook is currently unable to provide odds on any games, players, or futures of the Houston Rockets.