Recently, there have been some major mergers and acquisitions in the gambling industry in the US that you should know about if you are interested in this fascinating market. Let’s talk about the three most important ones, starting with DraftKings and GoldenNugget.
Golden Nugget Online Gaming’s Purchase is Completed by DraftKings
A $1.56 billion all-stock offer for GNOG was made public by DraftKings in August when the target was trading at about $12. Over the ensuing weeks, the share price of the target virtually doubled. But shortly after, the wind changed with the sales of online casinos and sports betting stocks, raising doubts about the deal’s future. The stock’s final trading day, May 4, saw GNOG shares settle at $5.78, underscoring the sector’s ongoing deterioration.
Several ways to cut costs are expected, including increasing the returns on advertising investments through marketing efficiencies, removing platform costs from moving Golden Nugget Online Gaming’s current technology to DraftKings’ proprietary platform, and lowering G&A costs like vendor services.
At a time when analysts and investors are screaming for the gaming business to slash costs and whip out profitability initiatives, DraftKings is projecting $300 million in cost reductions as the agreement develops.
Caesars Completes the sale of William Hill’s Assets to 888 and Will Use the Proceeds to Reduce Debt
The US casino juggernaut would receive $730 million in net revenues after deducting fees and taxes, indicating that the gross transaction price was about $765 million rather than the $1.09 billion the parties agreed upon when the deal was first announced last year.
Last year, William Hill’s assets were going to be sold to British-based 888, and now this acquisition has been finally completed. To obtain money, Caesars management quickly declared it will sell the non-US assets of the UK-based sportsbook operator after that deal was disclosed in late 2020. One of the oldest sports betting companies in Europe has no shortage of reputed suitors.
Caesars may significantly reduce its debt load with the anticipated sale of one of its Las Vegas Strip properties. In the first part of this year, an announcement to that effect was anticipated. Although it hasn’t happened yet, there is a rumor that Caesars is in negotiations with potential buyers for the Flamingo.
Greektown Casino Gets a New Name as Penn National Expands in Hollywood
The downtown casino was acquired for $1 billion by Penn National Gaming (PNG) and Caesars Entertainment’s real estate investment company VICI Properties in May 2019. The remaining $300 million was paid by PNG for the operational rights, while VICI paid $700 million for the real estate assets. PNG pays VICI a yearly rent of around $56 million.
This weekend, Greektown will become the Hollywood Casino at Greektown, giving PNG a total of 18 Hollywood-branded gambling establishments in the US.
Following the acquisition of Greektown by VICI and Penn National, the businesses promised a $30 million refurbishment. The investment entailed completely renovating the resort’s lobby as well as all 400 hotel guest rooms. Since then, the lobby has been finished, but the guest rooms are still under construction.
The $30 million budget also covers new technology on the casino floor and upgrades to the property’s 700-space parking garage. Penn National will introduce its “mywallet” software to the venue, enabling consumers to place bets without using cash or credit cards.