The DraftKings-Golden Nugget merger should be taking place soon. DraftKings CFO Jason Park confirmed that the merger, which was confirmed last August, was forthcoming. DraftKings settled to acquire Golden Nugget Online Gaming last year in an all-stock deal worth an estimated 1.56 billion.
DraftKings has made quite a name for itself in the online gaming market. However, its business model does not resonate with the casino-first customer, which is where Golden Nugget will lend its experience and expertise. According to the CFO, DraftKings had considered building its own personal casino first model but opted to collaborate instead.
As such, it is very likely that once the acquisition is finalized, DraftKings will still maintain the Golden Nugget business model that has made the brand such as success over the past few years. DraftKings was the first online sportsbook to debut its mobile sports betting services to punters in New Jersey when the Supreme Court repealed PASPA in 2018.
However, in the last year or so, DraftKings noticed that the business model it launched in New Jersey, now nicknamed the ‘New Jersey prototype’ is no longer as effective as it used to be. Case in point, when the brand first entered the New Jersey sports betting market, it had to spend heavily on customer acquisition.
In Arizona where the brand recently debuted, on the other hand, DraftKings was able to acquire customers more organically. As such, the operator believes that the New Jersey prototype is no longer viable, especially in its newer markets. In addition to improving its business model, the CFO also confirmed that the brand would be making some changes to its community platform.
DraftKings social media community is built within the app itself. When users log into the app, they can easily select the social tab button where they can perform a series of tasks. Some of the activities that can be performed in the social tab include sharing bet slips, picking video games, as well as commenting and interacting with other community members. DraftKings CFO confirmed that they would be making improvements on this section to enhance the experience for their community members.
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How will the Golden Nugget Merger benefit DraftKings?
As mentioned earlier, the Draftking prototype could use some shaking up and this merger with GNOG will allow the brand to do just that. This acquisition will also allow DraftKings to leverage GNOG’s already established and respected brand, its iGaming experience, as well as its existing customer base. At present, it is estimated that Draftkings has an extensive database that’s made up of more than 5 million customers.
As part of the acquisition, DraftKings will now be in a commercial agreement with Fertitta Entertainment. Fertitta Entertainment also owns several other well-established brands and businesses including the Houston Rockets, Golden Nugget, LLC, and Landry’s. Landry’s is one of the most recognized businesses in the gaming, hospitality, and sports industry.
This acquisition of GNOG will allow DraftKings to enhance its capacity to instantly attract a wider base of customers. Since GNOG is synonymous with iGaming, DraftKings will soon be able to leverage GNOG’s loyal iGaming first consumers for further growth. This partnership will also be beneficial to GNOG, which stands to benefit from boosted combined revenues.
Additionally, both GNOG and DraftKings will enjoy cross-selling opportunities which are hard to come by in the gaming industry. Customers will benefit from loyalty integrations, as well as a more enhanced product. For shareholders, this acquisition will add great value as the 2 powerful sports betting brands will now become a global player in sports betting and iGaming.
Once merged, GNOG will then be brought onto DraftKings’ in-house technology, which is among the best in the market. DraftKings will also get rid of GNOG’s current 3rd party platform costs, which will help the online casino greatly limit its operating expenses, as well as its vendor costs. DraftKing’s technology will also expand GNOG’s offerings to include in-house live dealer games, as well as an improved customer-centric experience.
DraftKings Has Plans to Continue Its Market Share Growth
DraftKings has no plans of slowing down anytime soon. In February, DraftKings shared its performance during Q4 2022 and it is clear that the brand is optimistic about its growth this year. During the recording of Q4 performance, the CEO and co-founder of DraftKings, Jason Robins confirmed that DraftKings had massive plans for growth as well as reaching new markets this year.
According to the CEO, customer acquisition in the new markets has become a lot easier, which has allowed the brand to grow and expand fast. This year, DraftKings is expected to continue creating promotions and incentives designed to keep its customers entertained and fully occupied. The company also plans to optimize its customer experiences by investing in even more products.
The CEO expects that the marketplace and brand’s media will also keep generating promising results in the coming months. Draftkings launched its products in the New York mobile sports betting market at the beginning of the year on January 8th. Its debut in New York was such a great success that the brand managed to register 100,000 first-time customers from the Empire State in under 24 hours. In Arizona, it took DraftKings 17 days before it acquired 100,000 new users while in Indiana, it took much longer at 344 days.
The company also has plans to debut its product and offerings in Ontario, where the market has been getting ready to welcome iGaming. Last year, Ontario and several other provinces legalized single sports betting for the first time and DraftKings has been thriving in the Canadian market as well. At present, DraftKings offers live iGaming in 5 states but has plans to debut this vertical in even more new markets.
Final Thoughts
In addition to all its plans for expansion, DraftKings has also made it very clear that it is fully committed to enhancing and supporting responsible gaming in the country. DraftKings has already promised to fund state-based problem gambling organisations and councils, which will further help to support problem gamblers and their education.
