DraftKings Acquires Golden Nugget: What Does That Mean In Michigan?

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DraftKings made a significant move in the rapidly expanding online gambling industry with yet another acquisition. This time, the deal involves two operators currently active in Michigan’s emerging online casinos and online sports betting sectors. On Monday, DraftKings announced a substantial all-stock purchasing agreement worth $1.56 billion to acquire Golden Nugget Online Gaming.

DraftKings, a prominent national sports betting company, is making a strategic move to enhance its online casino reputation by partnering with a well-established brand.

DraftKings and Golden Nugget are among the 14 active online gambling operators in Michigan, recognized and familiar to residents across the state. Golden Nugget Casino, positioned in the middle of this group, has recently launched a marketing campaign featuring CEO Tilman Fertitta, aiming to capture more attention in the local market.

Michigan players can anticipate no alterations at DraftKings or Golden Nugget until the sale is finalized, projected to be in the first quarter of 2022.

Golden Nugget purchase boosts DraftKings casino position

The purchase will enhance DraftKings’ presence in the nationwide online casino industry, where the Boston-based company is already strong.

Every month in Michigan, DraftKings Casino and FanDuel Casino compete fiercely for the second spot in internet gaming revenue, trailing behind BetMGM Casino.

In less than six months, DraftKings generated $84.6 million in online casino revenue by June, ranking third among BetMGM ($175.4 million) and FanDuel ($89.0 million). Together, these three operators accounted for 77.2% of the market share through June.

Golden Nugget ranks eighth out of 14 operators on the MI online casino revenue list, earning $18.2 million in revenue.

According to the announcement, the company clearly holds significant value, evident from its expansive customer base of over 5 million nationwide.

Golden Nugget is a highly influential brand in the online casino industry in the state of New Jersey, being the first operator to introduce live dealer online casino games in the United States. Following its successful launch last month through Evolution, Golden Nugget is now among the ten operators providing live dealer casino games in Michigan.

Golden Nugget’s sports betting activity has been relatively sluggish compared to other brands in Michigan. Despite being in 11th place, the brand has managed to accumulate $4.1 million in lifetime wagers as of June. However, this figure only surpasses the handle of Four Winds Sportsbook ($1.9 million) and FireKeepers Sportsbook, which had a wider launch in July, but launched a few weeks after Golden Nugget.

GNOG spun out, now spun off to DraftKings

Last year, Golden Nugget separated its online gaming division and made it available for public trading on the Nasdaq stock exchange. The division, known as GNOG, is the unit that DraftKings is acquiring.

In addition to gaining access to Nevada, DraftKings can leverage its association with Golden Nugget to expand its presence in several other states.

DraftKings announced their purchase and also mentioned a separate agreement with Fertitta’s Houston Rockets, revealing their plan to establish a sportsbook at Houston’s Toyota Center once Texas sports betting becomes available.

The ownership of the iconic Golden Nugget Las Vegas Hotel & Casino will remain unchanged, as it is still owned by Fertitta’s Landry’s, Inc., a renowned national restaurant and hotel conglomerate. However, an addition to the property will be the inclusion of a DraftKings retail sportsbook in downtown Las Vegas.

DraftKings’ physical property plans still murky in MI

Playinmichigan has learned that the anticipated DraftKings retail sportsbook at Bay Mills Casino in Brimley is currently on hold.

Recently, DraftKings made the exciting announcement of its entry into the Detroit sports bar industry.

An agreement with Sports & Social is set to introduce a sports bar in Detroit, featuring the DraftKings brand. The exact location, most likely within or close to the downtown stadium district, has not been disclosed. However, the announcement saw Sports & Social being replaced by PointsBet Sports Bar at Little Caesars Arena.

Barstool, BetMGM, and FanDuel, the primary online rivals of DraftKings, have established brick-and-mortar sportsbooks in the three casinos located in downtown Detroit.

Penn National Gaming purchased theScore last week

The acquisition of DraftKings takes place just two business days following Penn National Gaming’s announcement of a $2 billion acquisition of theScore on Thursday.

In Detroit, Penn is the proud owner of Greektown Casino and holds a partial ownership stake in Barstool Sportsbook, along with its parent company, Barstool Sports.

theScore, a well-known Canadian media brand, has partnered with Barstool Sportsbook to integrate its technology directly into their operations.

Could MI online casino, sports betting licenses open up later?

DraftKings becomes the second company to secure two out of the 15 entries in the Michigan online gambling marketplace following the acquisition of GNOG.

DraftKings and Golden Nugget have both collaborated with Native American tribes from the Upper Peninsula to gain access in Michigan. DraftKings has established a partnership with the Bay Mills Indian Community, whereas Golden Nugget has secured access through the Keweenaw Bay Indian Community.

In the same way, Flutter brands also require two operator licenses. FanDuel has formed a partnership with MotorCity Casino based in Detroit, while Fox Bet Sportsbook, Stars Casino, and PokerStars Michigan have joined forces with the Little Traverse Bay Band of Odawa Indians for access.

After a span of five years, when it comes to renewing those licenses, the possibility of consolidation might arise, paving the way for additional brands to enter the market, like Bally’s or Circa. Moreover, casino operators have the flexibility to seek a new license with a different partner whenever necessary, based on their contractual agreements with the initial partners.

Currently, Michigan’s online gambling market is predominantly dominated by a few key players who continue to strengthen their positions.

This statement is already clear and concise.