A major development in the US betting and gaming industry this week was the acquisition of the Golden Nugget casino brand by DraftKings.
The transaction will see the creation of a new holding company, named New DraftKings, which will function as the public company for both DraftKings and Golden Nugget Online Gaming Inc.
An additional caveat of the agreement will see a collaboration with the parent company of Golden Nugget, Fertitta Entertainment Inc. The company, owned by Tillman Feritta, is also the firm behind the Houston Rockets of the National Basketball Association (NBA) and restaurant chain Landry’s.
“We really have built a brand that resonates with sports fans, and we’ve done a good job of cross-selling that sports player onto igaming,” explained Jason Robins, CEO of DraftKings, speaking to CNBC’s Power Lunch. “We haven’t done as well with the igaming first customer, which Golden Nuggets brand really resonates with.
“They were an early market leader in New Jersey, and have really done a tremendous job of building that brand – its one of the oldest gaming brands in the world and it still resonates as much today as it did a hundred years ago.”
When quizzed on what makes igaming consumers so valuable and worth the premium price paid by DraftKings in its latest acquisition, Robins outlined a lack of seasonality impacts – unlike sports betting – as a key factor.
He added: “The igaming consumer plays a lot, and unlike sports there isn’t seasonality to it – they play year round. And it’s a customer that has a high degree of discretionary entertainment spend on gaming – they love gaming.
“They tend to stick around for life and be customers for life, especially when you do a great job with CRM and have a great brand like Golden Nugget or DraftKings. They’re really valuable customers and we’re very excited to expand into new audiences with this deal.”
Meanwhile, Fertitta was equally as enthusiastic about the takeover, agreeing with CNBC host Tyler Chris Mathisen that the two brands are ‘stronger together than they ever could be separately’.
“I know this is going to be great for us and it’s going to be great for the Draftkings shareholders,” he explained.
“What you’re getting here – it’s really simple – I have the best management team in this space. These are the guys that understand this space, they are a tech company, this is a tech business – this is unlike our business whatsoever in bricks and sticks.
“They (DraftKings) are by far the market leader, everybody knows the brand DraftKings. They are the Coca-Cola, the Starbucks of this industry. They’re going to be the one with all the people coming from all over the world to attack sports betting and igaming in America. They’re always going to be one of the top players, most likely the top player.”
Source – CNBC Television YouTube Channel