DraftKings Acquires Golden Nugget: What Does That Mean In Michigan?

DraftKings made headlines in the rapidly expanding online gambling industry with yet another acquisition. In this instance, they have set their sights on the flourishing Michigan online casinos and online sports betting sectors. On Monday, DraftKings revealed their all-stock purchasing agreement of Golden Nugget Online Gaming, valued at an impressive $1.56 billion.

DraftKings, a prominent national sports betting leader, is making a strategic move to enhance its online casino reputation by partnering with a well-established brand.

Both DraftKings and Golden Nugget are among the 14 online gambling operators in Michigan that are well-recognized by residents across the state. Golden Nugget Casino, positioned in the middle of the pack in terms of market share, has recently launched a marketing campaign featuring CEO Tilman Fertitta, which has been gaining momentum over the past few months.

Michigan players at DraftKings or Golden Nugget can expect no alterations in the near future, particularly until the completion of the sale. The anticipated timeline for this occurrence is the first quarter of 2024, as stated in the announcement.

Golden Nugget purchase boosts DraftKings casino position

The purchase will greatly strengthen DraftKings’ position in the nationwide online casino industry, where the Boston-based company is already a dominant force.

Every month, DraftKings Casino and FanDuel Casino in Michigan compete fiercely for the second spot in internet gaming revenue, with BetMGM Casino consistently leading the pack.

By June, DraftKings had generated $84.6 million in online casino revenue within a span of under six months, ranking third behind BetMGM ($175.4 million) and FanDuel ($89.0 million). Together, these three operators accounted for 77.2% of the market share through June.

Golden Nugget ranks eighth out of 14 operators on the MI online casino revenue list, generating $18.2 million in revenue.

According to the announcement, the company evidently holds significant value and boasts a customer base of over 5 million nationwide.

Golden Nugget holds a prominent position as a leading brand in the US online casino industry, especially in New Jersey. It was the pioneer in introducing live dealer online casino products in the country. Following its successful launch last month through Evolution, Golden Nugget has become one of the ten operators to provide live dealer casino games in MI.

Golden Nugget’s performance in sports betting has been lackluster as it currently ranks 11th in Michigan’s online sports betting handle. With only $4.1 million in lifetime wagers through June, Golden Nugget’s total surpasses only Four Winds Sportsbook ($1.9 million handle), which was introduced a few weeks later, and FireKeepers Sportsbook, which had a more widespread launch in July.

GNOG spun out, now spun off to DraftKings

Last year, Golden Nugget separated its online gaming division and listed it on the Nasdaq stock exchange. The division, known as GNOG, is the division that DraftKings is acquiring.

DraftKings has the potential to leverage its Golden Nugget connection to expand its presence in additional states, including Nevada.

DraftKings also mentioned a distinct agreement with the Houston Rockets, owned by Fertitta, wherein they plan to launch a sportsbook within Houston’s Toyota Center once Texas legalizes sports betting.

The ownership of the iconic Golden Nugget Las Vegas Hotel & Casino, which is currently owned by Fertitta’s Landry’s, Inc., a national restaurant and hotel conglomerate, will remain unchanged with regards to its naming rights. However, the downtown Las Vegas property will be receiving a DraftKings retail sportsbook.

DraftKings’ physical property plans still murky in MI

Playinmichigan has learned that the expected DraftKings retail sportsbook at Bay Mills Casino in Brimley has been put on hold.

Recently, DraftKings unveiled its plans to enter the Detroit sports bar industry.

Detroit will soon welcome a DraftKings branded sports bar through a partnership with Sports & Social. The exact location within or close to the downtown stadium district has not yet been disclosed. However, it is worth noting that PointsBet Sports Bar replaced Sports & Social at Little Caesars Arena on the same day the announcement was made.

Barstool, BetMGM, and FanDuel, which are major online rivals of DraftKings, have established retail sportsbooks in the three downtown casinos of Detroit.

Penn National Gaming purchased theScore last week

The acquisition of DraftKings takes place just two business days following Penn National Gaming’s announcement of a $2 billion acquisition of theScore on Thursday.

Penn is the owner of Greektown Casino in Detroit and holds a partial ownership of both Barstool Sportsbook and its parent company, Barstool Sports.

theScore, a renowned media brand in Canada, has partnered with Barstool Sportsbook to incorporate its cutting-edge technology internally.

Could MI online casino, sports betting licenses open up later?

DraftKings now holds two of the fifteen entries in the Michigan online gambling marketplace, following its acquisition of GNOG.

DraftKings and Golden Nugget have both formed partnerships with Native American tribes in the Upper Peninsula to gain access to Michigan. DraftKings has established a collaboration with the Bay Mills Indian Community, whereas Golden Nugget has secured access through the Keweenaw Bay Indian Community.

In the same way, Flutter brands also acquire two operator licenses. FanDuel has formed a partnership with MotorCity Casino located in Detroit, while Fox Bet Sportsbook, Stars Casino, and PokerStars Michigan have teamed up with the Little Traverse Bay Band of Odawa Indians to gain access.

After five years, when it’s time for the renewal of these licenses, the possibility of consolidation may arise, leading to the introduction of additional brands in the market like Bally’s or Circa. Moreover, casino operators have the option to seek a new license with a different partner at any given moment, depending on the agreements with their initial partners.

Currently, Michigan’s online gambling market is primarily dominated by a few key players who continue to consolidate their position and grow stronger.