Please ensure Javascript is enabled for purposes of website accessibility

Why Golden Nugget Online Gaming Stock Soared Today

By Joe Tenebruso – Aug 9, 2021 at 4:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The casino operator struck a deal with an industry titan.

What happened 

Shares of Golden Nugget Online Gaming (GNOG) surged more than 50% on Monday after the company said it agreed to be acquired by digital sports entertainment giant DraftKings (DKNG 4.64%)

So what

The all-stock deal values Golden Nugget at about $1.56 billion. Investors would receive 0.365 shares of DraftKings stock for each share of Golden Nugget they own. The transaction is expected to close in the first quarter of 2022, subject to regulatory and shareholder approval.

An online casino game is displayed on a mobile phone.

Draftkings wants to bolster its betting operations by purchasing Golden Nugget Online Gaming. Image source: Getty Images.

The merger would allow DraftKings to benefit from Golden Nugget's popular brand and 5-million-strong customer database, thereby boosting its market share and gaming revenue. Management also projects up to $300 million in annual synergies, driven by reduced technology and marketing costs.

As part of the deal, DraftKings reached an agreement with Fertitta Entertainment -- the parent company of Golden Nugget Hotel & Casinos and the NBA's Houston Rockets -- to become the exclusive daily fantasy sports and sports betting partner of the Rockets.

Now what 

Notably, Tilman Fertitta, who owns roughly 46% of Golden Nugget's stock, agreed to hold the DraftKings shares he obtains from the merger for at least one year after the closing.

"There's a reason I wanted it to be an all-stock deal," Fertitta said during an interview with Bloomberg TV. "This is going to be a huge part of the American economy, online sports betting and gaming, in the years to come."

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DraftKings Inc. Stock Quote
DraftKings Inc.
DKNG
$15.11 (4.64%) $0.67
Golden Nugget Online Gaming Stock Quote
Golden Nugget Online Gaming
GNOG

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.