A $3.3-billion merger between DraftKings and SBTech has been signed. This outcome is not a surprise as different sources claimed earlier this year that DraftKings was very close to acquiring SBTech.
Diamond Eagle Acquisition Corp Acquires DraftKings and SBTech
The digital sports gaming company DraftKings Inc., popular for its fantasy sports and mobile sports betting, has signed a final business agreement with Diamond Eagle Acquisition Corp – a publicly traded special purpose acquisition company – and sports betting technology SBTech.
According to the agreement Diamond Eagle Acquisition will become the owner of DraftKings and SBTech.
“We are pleased to bring DraftKings and SBTech together as one public company,” Harry E. Sloan, Founding Investor of Diamond Eagle commented on the merger.
Jason Robins co-founder and CEO of DraftKings also shared his opinion on the deal saying that he was looking forward to developing the company’s state-by-state rollout and creating the most engaging experiences for sports fans and customers worldwide.
Gavin Isaacs SBTech’s Chairman, on the other hand, stressed that both companies are going to keep implementing the customer-oriented policy after the merger takes place. He underlined that SBTech will stick to its prior business and continue its B2B focus.
He also added that SB Tech’s technologies are excited about the chance to become part of a company with a similar innovation DNA and become a recognized player in worldwide sports betting and internet gaming.
Newly Established Vertically-Integrated DraftKings Inc. the First of its Kind in the USA
The new combined company will be the only vertically-integrated online gaming and sports betting operator in the USA. The deal is to be finalized by June 2020. with Diamond Eagle changing its name to DraftKings Inc., and remaining Nasdaq-listed but using a new ticker symbol.
“The combination of DraftKings’ leading and trusted brand, deep focus on customer experience and data science expertise and SBTech’s highly innovative and proven technology platform creates a vertically-integrated powerhouse,” said Robins.
Yet, DraftKings has gone a long way before getting where it is now. The company was founded back in 2011 with the aim to compete with daily fantasy sports provider FanDuel. However eventually, along with its competitor that was later acquired by Paddy Power Betfair, now called Flutter, it has become a digital fantasy sports and betting leader in the country .
It is expected that the move to fully integrate SBTech’s technology will be the most successful one for DraftKings as it will push even more its sports betting expansion in the USA.
But DraftKings is aiming much bigger with this deal , considering the opportunity to open an online casino along with expanding sports betting influence.
The casino seems a great opportunity for generating high profits through sportsbook cross-selling.
According to the investor’s forecasts, if the casino becomes reality DraftKings could reach yearly revenue from $2.9 billion to $4.7 billion from both sports betting and iGaming profits.