Online gambling company DraftKings announced on Monday that it would be listed on NASDAQ soon. The operator has been acquired by Diamond Eagle Acquisition Corp., a blank-check company and gaming technology provider SBTech.
DraftKings to write history
With its public listing, DraftKings will become the only publicly traded pure-play sports betting and internet gaming company in the country. The acquisition deal will be completed in the first half of 2020, which means that the listing would follow in the months to come.
Diamond Eagle is an acquisition company that will change its name to DraftKings Inc. as soon as the deal closes. The new company will be reincorporated in the state of Nevada. The company disclosed that it would trade on NASDAQ but didn’t tell which ticker it would use. The new DraftKings Inc. will be valued close to $3.3 billion and have over $500 million in cash. Several institutional investors have pledged $304 million in funding to the new company. This includes Franklin Templeton, Wellington Management Co., and Capital Research and Management Co.
The business will continue to be led by co-founder and CEO Jason Robins. Matt Kalish and Paul Liberman, co-founders, will also remain with the new company.
What is DraftKings planning?
Robins said that DraftKings was originally planning to acquire SBTech before going public. It also explored the possibility of going public before the acquisition. By going with Diamond Eagle, they will achieve both their goals in a single sweep.
The company has been one of the biggest beneficiaries of the growing sports betting market in the US. It, and rival company FanDuel, have started setting up their operations in 20 US states that allow sports betting. 13 of them have already started their markets, which gives both FanDuel and DraftKings an opportunity to register exponential growth. Note that about a third of Americans live in states where sports betting is legal.
DraftKings has retail outlets in the states of New York, New Jersey, Mississippi, and Iowa. It runs online and mobile betting services in West Virginia, Pennsylvania, New Jersey, and Indiana. A strong presence in these states has helped the company rake up a 30% share in the online gambling market. With sports betting growing in the US by the day, the company is expected to become the de facto market leader. Note that its daily fantasy sports offering is already available in 43 states.