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DraftKings Inc. made a significant move in the realm of online sports betting and online casinos nationwide by officially acquiring Golden Nugget Online Gaming, Inc. on Thursday morning.
DraftKings will be able to expand its reach through the move, which will solely apply to Golden Nugget’s online properties.
Let’s dive into the specifics of Thursday’s acquisition.
DraftKings acquires Golden Nugget Online Gaming
One of the benefits of the GNOG acquisition for DraftKings is the opportunity to utilize Golden Nugget’s well-known brand to expand its customer base into new segments.
Furthermore, the integration of DraftKings’ comprehensive technological infrastructure and Golden Nugget Online Gaming’s distinct strengths, such as Live Dealer, will greatly enrich the iGaming product lineup of the merged company.
Jason Robins, Chairman and CEO of DraftKings, expressed his excitement about acquiring Golden Nugget Online Gaming. He highlighted the potential synergies it brings to their business, including the opportunity to increase revenue through their data-driven marketing capabilities and a dual brand iGaming strategy. Additionally, Robins mentioned the potential for gross margin improvement and cost savings in external marketing and SG&A. He concluded by extending a warm welcome to the Golden Nugget Online Gaming team, emphasizing their integration into the DraftKings family.
Fertitta Entertainment will retain ownership of the brick and mortar Golden Nugget casinos, as they are not part of the acquisition.
DraftKings’ plans for GNOG
DraftKings can anticipate substantial advantages and projected synergies worth $300 million upon the completion of the GNOG acquisition.
DraftKings is planning to implement a multi-brand strategy to improve cross-selling potential and boost revenue growth. Furthermore, various avenues for cost reduction will be explored, resulting in significant savings. These cost savings will include:
- Identifying improved profits from investing in advertising by optimizing marketing strategies.
- The aim is to remove platform expenses associated with transferring Golden Nugget Online Gaming’s existing technology to DraftKings’ internally developed platform.
- Cutting down on general and administrative expenses, including expenses related to vendor services and redundant overhead.
Furthermore, DraftKings and Fertitta Entertainment have plans to rename specific existing and upcoming retail sportsbook venues at Golden Nugget properties, which are owned by Fertitta Entertainment, as DraftKings sportsbooks.
Tilman Fertitta, Chairman and CEO of Golden Nugget Online Gaming, expressed his excitement about the unique alliance formed in the digital sports, entertainment, and online gaming industry. With the completion of the acquisition, he eagerly anticipates the promising future of our merged company and firmly believes that this partnership will achieve remarkable success.
Thomas Winter, previously the President of Golden Nugget Online Gaming, will assume the role of General Manager of North America iGaming as part of DraftKings’ integration of Golden Nugget Online Gaming employees into its business.
How it will impact both platforms
DraftKings intends to integrate Golden Nugget Online Gaming onto its proprietary technology, which is anticipated to yield cost savings through the reduction of third-party platform expenses, operating costs, and vendor expenditures for Golden Nugget Online Gaming.
Furthermore, upon integration, customers from both brands will be able to make use of DraftKings’ advanced technology and enjoy a wider range of product offerings and enhanced features.
In addition to that, the expanded features will include live dealer and proprietary games developed in-house.
Where DraftKings, GNOG stand in Michigan
Bay Mills Resort & Casino in Brimley entrusts DraftKings as its online operator in Michigan. Similarly, Ojibwa Casinos in Baraga and Marquette have appointed Golden Nugget as their operator.
Since the legalization of online casinos in Michigan, DraftKings has emerged as the state’s second-highest revenue-generating platform, accumulating an impressive $245.5 million. In comparison, Golden Nugget has generated $68.3 million in total revenue within the state.
In terms of online sports betting, DraftKings ranks third in Michigan for total online handle ($1.28 billion) and third in sports betting revenue ($66.6 million). On the other hand, Golden Nugget has accumulated $13.5 million in online handle and only $1.1 million in sports betting revenue.
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