Tag: SBTech

DraftKings Acquires SBTech And Finally Goes Public


Another week of social distancing and quarantining is in the books. Another week closer, hopefully, to the light at the end of the tunnel.

We hope everyone is staying safe, smart and sane in these trying times.

It used to be that sports provide an outlet from reality. Alas, they remain sidelined. Even casinos could offer an escape. Similarly, they are still shuttered. But US gambling news persists. So at least there’s something.

On to the Rewind:

DraftKings acquires SBTech, goes public

Following years of building up its daily fantasy sports pedigree and rising as a legal sports betting powerhouse, DraftKings has now become a publicly traded company.

Shareholders last week approved the company’s acquisition of SBTech, setting up DraftKings’ announcement a day later that it completed various transactions to complete the reverse merger.

Then, under the DKNG ticker symbol, DraftKings made its Nasdaq debut.

The details of the deal feature Diamond Eagle Acquisition Corp. paying $2.7 billion in cash and stock for both DraftKings and SBTech, a sports betting tech supplier. DraftKings is expected to receive $2.055 billion in the transaction.

For clarity, this does not mean a change of ownership for DraftKings. Rather, the deal was merely a method for the company to go public.

Diamond Eagle projects DraftKings revenue would increase by $460 million by 2021. This is partly due to the combination of DraftKings Sportsbook and SBTech, which will become one of the largest online sports betting, iGaming and DFS platforms.

A path for online sports betting in New York?

One of the biggest advocates for expanding legalized sports betting in New York showed a bit of his hand to finally bringing online wagering to the Empire State.

Assemblyman Gary Pretlow told Legal Sports Report that he would push for a constitutional amendment bill to do just that.

This decision comes during a time featuring uncertainty surrounding lawmaking sessions because of COVID-19 and on the heels of another failed effort to convince Gov. Andrew Cuomo to include mobile betting in the state budget.

Additionally, Pretlow said the amendment would allow legal wagering at off-track betting parlors and sports facilities.

With an obstacle-free path, such a proposal would require legislative passage in each of the next two years before hitting the public ballot in November 2021.

The state has obviously shut down due to the coronavirus, which will certainly affect overall revenue. It is believed that when lawmakers reconvene, they could piece together a supplementary revenue bill. And as Legal Sports Report detailed, that bill could create an opening for online sports betting in New York.

While Sen. Joseph Addabbo Jr. stands against an amendment, he conceded that he would get behind one “as a last resort. If the revenue package doesn’t materialize, I’ll do the amendment.”

Twin River acquires three Caesars, Eldorado casinos

Casinos may remain closed due to the coronavirus pandemic, but that has not stopped Twin River Worldwide Holdings, Inc. from padding its portfolio.

The group announced two agreements last week, one to acquire a pair of casinos owned by Eldorado Resorts as well as one with Caesars Entertainment to take on Bally’s Atlantic City in New Jersey.

The two Eldorado properties include Eldorado Shreveport Resort and Casino in Louisiana and Mont Bleu Resort Casino & Spa in Nevada.

According to the release, Twin River acquires both Eldorado casinos for $155 million, while the Bally’s deal will cost the group $25 million in cash.

As a result, Twin River adds three more states to its reach.  It already owned and managed properties in Rhode Island, Mississipi, Delaware and Colorado.

Recall that Caesars and Eldorado have a merger pending, which will obviously include three fewer properties.


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DraftKings Will Become Publicly Traded Company After SBTech Merger


After months of conjecture and speculation, the mammoth merger between DraftKings and sports betting technology provider SBTech has become official.

DraftKings, a daily fantasy sports giant and legal sports betting power, has “entered into a definitive business combination agreement,” according to a release, with Diamond Eagle Acquisition Corp. and SBTech. As a result, among other byproducts, DraftKings will become a publicly-traded company.

Details of the DraftKings deal

Without getting too far into the weeds, institutional investors will funnel some $304 million toward the newly combined DraftKings, which itself will feature a market cap of $3.3 billion and over $500 million in unrestricted cash.

The newly formed company becomes the only US-based vertically integrated sports betting and online gaming company. The deal is expected to close within the first half of 2020.

Diamond Eagle, a publicly traded “special purpose acquisition company,” will change its name to DraftKings once the merger finalizes. As such, DraftKings will become a public company.

“I look forward to building significantly upon our goals of continuing our state-by-state rollout,” said DraftKings CEO Jason Robins, “and creating the most entertaining and engaging customer experiences for sports fans globally.”

Two major sports betting players unite

As it has been well-publicized, DraftKings has grown into a prominent operator in the legal sports betting world. Its DraftKings Sportsbook has evolved into a market-dominant product in New Jersey as well as West VirginiaIndiana and Pennsylvania.

While DraftKings has leveraged its partnership with Kambi Group to develop online and retail sportsbooks, SBTech provides a turnkey solution, as it did for the only mobile sportsbook in Oregon earlier this year.

In an investor presentation, DraftKings noted that it will have a greater ability to release more innovative and unique betting products. With SBTech’s risk management, DraftKings will obtain better odds and more revenue.

In addition, with SBTech in its corner, SBTech will not have to rely on third-party help, aka Kambi. With in-house tech, DraftKings will be able to reduce costs.

DraftKings expanding outlook on gaming

While sports betting has quickly become a significant revenue-driver for DraftKings, the company is keeping its eyes on other verticals, as well.

When considering ways in which to boost betting business, cross-selling via an online casino is a pretty good solution.

In its investor presentation, DraftKings estimated that iGaming and sports betting could generate between $2.9 billion and $4.7 billion in annual revenue. Up to $1.2 billion could stem from iGaming such as online casinos. In New Jersey, 98% of DraftKings’ iGaming customers have been “cross-sold” from other DraftKings products.

How expansive could this merger become?

As noted, DraftKings is already a major DFS and sports betting player and still finding states in which to expand.

SBTech itself is no slouch with partnerships in New Jersey, Pennsylvania, Oregon, Arkansas and Mississippi. Internationally, SBTech operates in Mexico as well as in 15 European countries.

Now, courtesy of this merger, SBTech gains a stronger foothold on American soil. Now, DraftKings has its own tech. Now, if desired, it has an avenue overseas.

Now, DraftKings has more power.


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