One of the most popular online casino platforms in three states is now officially under new ownership. On Thursday, the DraftKings Golden Nugget acquisition finally closed.
For players in Michigan, New Jersey, and West Virginia, there are some ramifications of the takeover to consider. Those ramifications might include Golden Nugget iGaming products coming to new markets.
DraftKings Golden Nugget deal done
The move, nearly a year in the making, is now in the past. Thursday morning’s announcement signals the closure of an all-stock transaction originally valued at over $1.5 billion. In the nine months since, however, DraftKings‘ $DKNG stock price has plummetted.
According to PlayUSA‘s own Nicholaus Garcia, Golden Nugget Online Gaming shareholders will receive 0.365 shares of DraftKings for every $GNOG share they held. That price puts the acquisition cost at around $365 million.
It’s important to note that DraftKings only owns the online gaming company that bears the Golden Nugget name. The hospitality company that operates the brick-and-mortar Golden Nugget casinos is a separate entity.
While $GNOG stockholders might be a bit disappointed with not getting a larger premium for their shares upfront, they now hold $DKNG stock at what might be a good time.
Morgan Stanley vets $DKNG stock
Earlier this week, Morgan Stanley gave a vote of confidence to $DKNG for the long-term. Garcia reports that out of the 45 companies on the broker’s high conviction list, DraftKings was the only gaming company.
The Golden Nugget acquisition is likely part of that. DraftKings now owns one of the strongest iGaming brands in the United States to complement its own DraftKings Casino product.
Earlier this year, DraftKings CFO Jason Park spoke about the importance of Golden Nugget as a way to strengthen its online casino business.
“DraftKings has done incredibly well with iGaming,” Park stated.
“The DraftKings brand just doesn’t resonate with that casino-first customer nearly as much as Golden Nugget does and we looked at multiple opportunities. We looked at building our own casino-first brand and we got very excited about the Golden Nugget brand. We will very likely maintain the Golden Nugget brand. It’s a brand that resonates with a different demographic that we don’t have today.”
With that excitement come some possibilities. That, in turn, likely leads to some questions from those who prefer to risk their money on slots online rather than the stock market.
What’s going to happen to my favorite online casinos?
At least for the foreseeable future, both DraftKings Casino and Golden Nugget Casino should continue to operate in their current jurisdictions as they are now. DraftKings has no immediate plans to alter course with either brand.
It is quite possible, however, that Golden Nugget will become the brand that DraftKings leads with when entering new markets for iGaming. That’s due to DraftKings seeing it as a better draw for iGaming enthusiasts.
At this time, to be clear, there is no official word about expansion. It isn’t a foregone conclusion that DraftKings would try to get Golden Nugget into Connecticut or Pennsylvania, for example.
If DraftKings does indeed prioritize Golden Nugget, further ramifications could involve devoting a larger share of developmental resources toward Golden Nugget as opposed to DraftKings Casino. In simpler language, DraftKings will double-down on a winner.