DraftKings and Golden Nugget Imminent Merger, Online Casino Plans
During Bank of America’s online sports betting and gaming virtual event on March 11, Jason Park, CFO of DraftKings says merge with gold nugget game is “imminent”.
Park provided insight into DraftKings’ customer acquisition plans and the path to profitability. He also gave some clues as to what’s to come for DraftKings’ four main verticals:
DraftKings stock is down more than 35% so far in 2022 and 72.1% over the past 12 months. DraftKings has a current market capitalization of $8 billion. They reported $1.3 billion in revenue in 2021, with revenue expected to reach $1.9 billion in 2022.
“I’ve said many times that our fixed costs will slow down significantly from 2023,” Park said.
In response to DraftKings stock issues, CEO Jason Robins tweeted:
If you sold #DKNG today just know that my team and i are on a mission to make you regret this decision more than any other decision you have ever made in your life
— Jason Robins (@JasonDRobins) March 9, 2022
DraftKings and Golden Nuggets
DraftKings has reached an agreement to acquire Golden Nugget Gaming ($GNOG) in August 2021 for $1.56 billion in an all-stock transaction. The deal was announced in early August 2021 and is expected to close in early 2022.
Bank of America Analyst Shaun Kelley asked Park about the Golden Nugget deal and what it will bring to DraftKings capabilities.
Park pointed out that DraftKings players are trending towards online sports betting, or moving from sports betting to online casino. They are young men who prefer table games.
“I’m super excited and closing is imminent. DraftKings has done incredibly well with iGaming. The DraftKings brand just doesn’t resonate with this first casino customer as much as Golden Nugget and we looked at several opportunities. We considered creating our own casino brand and were very excited about the Golden Nugget brand. We will most likely maintain the Golden Nugget brand. It’s a brand that resonates with a different demographic that we don’t have today. »
Market share and end of the New Jersey prototype
DraftKings Sportsbook was the launch of the first online bookmaker in New Jersey when it was uploaded in August 2018. Park spoke in depth about the “New Jersey prototype.”
DraftKings is now acquiring more customers at a faster pace when a state launches only a few years ago. During the first six months of commissioning in ArizonaDraftKings acquired 6.5% Population. When they arrived in New Jersey, they 1.3% Population.
“The The New Jersey prototype no longer applied. SIf a lot more people aspire to join that product category, you are actually buying more efficiently. It’s just that you acquire a lot more people in those early months or quarters of a state.
DraftKings Social Media Network
DraftKings has a social media network integrated into its sports betting application. If you log in and click on the “social” tab, users can share bet slips and picks for games and can also comment. Park said they expect to make “big improvements” to the DraftKings social network in 2022.
What’s next for DraftKings Sportsbook and casino in 2022
DraftKings has changed its betting engine from Kambi at SBTech. The migration was completed from a rented betting engine to an in-house betting engine before the start of the football season. DraftKings users have probably noticed the main benefits in the form of same-game parlays, faster live betting, and more prop markets for players.
“Now that we’re vertically integrated, we’re really set up to listen to the customer and bring them what they want and bring them what they don’t yet know they want,” Park said.
iGaming at DraftKings has been done entirely in-house and this has given them time to build their product portfolio of DraftKings versions of standard casino games like DraftKings Blackjack.
DraftKings Rocket was built in-house and is currently available in New Jersey, Michigan West Virginia. However, currently you cannot play DraftKings Rocket in Pennsylvania.
The game is played with a rising rocket and players must cash in exiting the rocket before it stops rising. The higher the rocket, the higher the multiplier will be applied to your bet.
“Rocket is pretty fun and very innovative,” Park said. “It works extremely well. In the future, you will see us releasing more innovative and unique in-house games to DraftKings.
“We have a DraftKings games studio, which would be part of our product and technology organization and that’s part of the fixed cost growth that we’ve seen and will continue to see through 2022. I think in Coming out of 2022, they’ll be in a great place just to produce new titles forever.
DraftKings and NFT Marketplace
Launch of DraftKings Market in July 2021 to buy, sell and trade digital collectibles. It was launched in partnership with Autograph, an NFT platform co-founded by Tom Brady.
Park said NFTs are the number one product category on the market. In the short term, DraftKings expects $70 million of Marketplace revenue in 2022.
“Crypto and NFT was something our players were already engaging with. We see great cross-selling once we get them to market. The market is something that we expect to be profitable or profitable from the start. »
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