DraftKings Announces Agreement To Acquire GNOG, Combining NJ Online Gambling Market Leaders

How powerful is a haul of DraftKings stock worth $1.56 billion? Apparently, powerful enough to take control of the lucrative New Jersey online casino market. That’s essentially what the Golden Nugget acquisition will give DraftKings.

DraftKings announced the deal Monday, which should increase the hype around its stock value. In terms of NJ, though, it’s the ultimate “if you can’t beat them, buy them out” move.

Pending regulatory and stockholder approval, the deal is expected to close during the first quarter of 2022.

Details of the Golden Nugget acquisition

About a year ago, Golden Nugget spun off its online gaming division into its own publicly traded company. Since then, Golden Nugget Online Gaming (GNOG) has continued to be among the leaders in iGaming in NJ.

For example, GNOG, led by Golden Nugget online casino, placed second in revenue with $27.6 million in win for June of this year. The state Division of Gaming Enforcement breaks the monthly figures down by license holder versus operator like in other jurisdictions. With that being said, of the five brands operating under the Golden Nugget license, it’s Play NJ’s understanding that the namesake brand accounts for the bulk of the revenue.

That’s a big part of the reason why DraftKings estimates that GNOG will contribute $300 million in new revenues to the company in the future.

For that new revenue stream, DraftKings has parted with stock that it values at $1.56 billion. Fertitta Entertainment founder Tillman Fertitta will also join DraftKings’ board of directors.

“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with iGaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers,” said Jason Robbins, DraftKings’ CEO and board chairman. “This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations, and tech-driven product expansion as well as technology optimization and greater marketing efficiencies. We look forward to Tilman being an active member of our Board and one of our largest shareholders.”

The press release makes no mention of any immediate changes to any online casino product in NJ. There are some hypothetical situations for the future that seem more likely than others, though.

What this could mean for NJ online casino players

It’s easier right now to rule out what isn’t likely to happen. Given how popular Golden Nugget online casino is in NJ, DraftKings probably isn’t going to scrap that brand altogether. Then there is DraftKings Casino, operating under the Resorts Digital license (ranked No. 3 behind Borgata and GNOG).

That doesn’t mean DraftKings won’t integrate its branding somehow, though. For example, an app re-design in the future could include a new name like “Golden Nugget Casino by DraftKings.”

Now that DraftKings will control both NJ iGaming properties, there could be a lot of integration across the brands. For example, DraftKings players might be able to use Crowns on Golden Nugget and Golden Nugget rewards might be useful on DraftKings’ platform.

Exclusive titles for either brand could be available on both platforms in the future as well. Promotions for customers on both apps could be quite similar going forward, too. New Jerseyans have already seen this kind of cross-brand integration with BetMGM Casino and Borgata Casino, which share ownership.

With GNOG now in the fold, DraftKings is ready to be the most formidable force in NJ iGaming. It’s now up to the rest of the players in the game to either up the ante or fold.