DraftKings (NASDAQ: DKNG) has finally announced the acquisition of online casino operator Golden Nugget Online Gaming (NASDAQ: GNOG) at a 41.56 billion in equity.
DraftKing made this revelation on Monday, becoming its largest purchase since becoming a free-standing company in April 2020. This acquisition also signals the opportunity that the internet casino industry is presenting.
DraftKing seems to be bullish about Golden Nugget Online casino. B. Riley analyst David Bain believes the acquisition of GNOG is a cheaper way for DraftKings to access iGaming, which is profitable than online sports wagering.
“The transaction should fast forward a needed iGaming player base for DKNG where GNOG is live-DKNG’s current player base of younger males differs materially from iGaming’s more similar older/female offline slot demographic.”
DraftKings stock this week has steadily been rising, mostly after the acquisition announcement. GNOG shares also soared on Monday, reflecting the upcoming sale of iGaming Company.
DraftKings CEO Jason Robins told shareholders on Monday that GNOG’s purchase is a steal for the company. Additionally, Robin noted that that the acquisition might be an overstatement.
DraftKings is paying less equity for GNOG than in any of its recent deals. Analyst Bain believes that GNOG could finally control 10 percent of the internet casino market and its shares could be worth $27. Meanwhile, DraftKings is only paying about $18 per share.