DraftKings Nevada Entry Possible Following Golden Nugget Online Acquisition

Posted on: August 12, 2021, 09:56h. 

Last updated on: August 12, 2021, 02:09h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

DraftKings (NASDAQ:DKNG) could eventually make its long-awaited move into Nevada sports wagering following the purchase of Golden Nugget Online Gaming (NASDAQ:GNOG) announced earlier this week.

DraftKings Golden Nugget
The entrance of Golden Nugget Las Vegas, pictured above. A DraftKings sportsbook could open there following that company’s purchase of Golden Nugget Online. (Image: FOX5 Vegas)

On Monday, the sportsbook operator said it’s acquiring Tilman Fertitta’s online casino firm for $1.56 billion in equity. That could pave the way for DraftKings to gain access to the second-largest sports wagering market in the US. It’s one where the Boston-based company and rival FanDuel are surprisingly absent.

In a presentation to investors on the buyout, DraftKings discusses market access, though stops short of specifically mentioning Nevada.

Preferred market access rates through existing Golden Nugget casinos. Retail sportsbooks at current and future Golden Nugget casinos to be rebranded as DraftKings,” according to the presentation.

Fertitta’s Fertitta Entertainment is the owner of the land-based Golden Nugget Casinos and the Landry’s restaurants empire. That company controls five Golden Nugget gaming venues, including one in downtown Las Vegas and another in Laughlin, Nevada.

DraftKings’ Nevada History

In 2016, prior to the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA), DraftKings and FanDuel lobbied Nevada regulators to consider developing a fantasy sports license.

That didn’t happen, and then-Attorney General Adam Laxalt ruled daily fantasy sports (DFS), then the primary business for DraftKings and FanDuel, “constitute sports pools and gambling games.” That meant the operators needed to obtain a sports betting permit to continue operating in Nevada, which they did not do.

Since then, DraftKings’ Nevada footprint consists of a Las Vegas office that opened in January 2020. It became the primary sponsor for the Center for Gaming Innovation at the University of Nevada, Las Vegas last November, and the acquirer of the Vegas Sports Information Network (VSiN), announced in March. However, the operator hasn’t booked a single bet in the state that’s the mecca of domestic gambling.

Should DraftKings ultimately gain access to online sports betting in Nevada, it’d go head-to-head with entrenched rivals such as BetMGM, Caesars, and Circa, among others, testing the operator’s vaunted brand recognition.

More Market Access Details

DraftKings’ purchase of GNOG, which is scheduled to be completed in the first quarter of 2022, is being praised by Wall Street and includes other potentially compelling market access tidbits.

Notably, the acquirer becomes the exclusive daily fantasy sports, sports betting, and iGaming partner of the Houston Rockets, and will open a retail sportsbook at Toyota Center, meaning it’s positioning for Texas to eventually approve sports wagering.

When the acquisition closes, DraftKings will continue accepting wagers on the Houston Rockets. That’s something Golden Nugget online and retail sportsbooks are forbidden from doing because Fertitta owns the team.

Golden Nugget’s other land-based casinos are in Louisiana, Mississippi, and New Jersey, with another planned for Illinois. DraftKings is already operational in Illinois, Mississippi, and New Jersey, and soon will be in Louisiana.