DraftKings Inc. (Nasdaq: DKNG) announced today the completion of its purchase of Golden Nugget Online Gaming, Inc. A combination of DraftKings’ vertically-integrated tech stack and Golden Nugget Online Gaming’s unique capabilities – including Live Dealer – will allow the merged firm to strengthen its iGaming product offerings. 

The GNOG acquisition excludes Golden Nugget casinos, which will remain under Fertitta Entertainment’s ownership. Thomas Winter, former President of Golden Nugget Online Gaming, will become General Manager of North America iGaming at DraftKings.

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Golden Nugget Online – Draftkings Deal

The GNOG acquisition will provide enormous benefits to DraftKings, including $300 million in synergies. On the other hand, the buying company will use a multi-brand strategy to improve cross-selling and revenue growth. Other cost benefits include:

• Increased advertising returns through marketing efficiency.
• Elimination of platform costs by moving Golden Nugget Online Gaming’s current technology to DraftKings’ proprietary platform.
• Reduction of G&A expenditures such as vendor services and duplicative overhead.

As part of the agreement, DraftKings will rename existing and future retail sportsbooks at Fertitta Entertainment-owned Golden Nugget sites as DraftKings sportsbooks. The daily fantasy and sports betting operator expect revenue growth from increased cross-promotion options, which should engage existing Golden Nugget Online Gaming iGaming-first clients. The possibility for technology and game extension, including as Live Dealer options, is also predicted.

Market efficiency

DraftKings will benefit from the GNOG acquisition by simplifying marketing and increasing cross-promotional opportunities. DraftKings hopes to see higher advertising returns and LTV to CAC ratios by using Golden Nugget Online Gaming’s built-in iGaming-first consumer. DraftKings intends to move Golden Nugget Online Gaming onto its own technology, decreasing third-party platform, operating, and vendor costs. After the merger, both businesses’ users will have access to DraftKings’ technology, which includes in-house live dealer and proprietary games, as well as an improved customer experience.

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