Draftkings, the popular Daily Fantasy Sports and bookmaker, is going public. Draftkings is merging with Diamond Eagle Acquisition Corp., a SPAC (Special Purpose Acquistion Company), that will allow Draftkings to become a public company, without having to go down the normal IPO road.
Along with combining with Diamond Eagle Acquisition Corp., with a market cap of about $500 million, they will also combine with SBTech, a company specializing in betting and gaming tech.
Diamond Eagle, who is already a publicly traded company, will change its name to Draftkings Inc. under the merger, and change it’s ticker symbol and remain Nasdaq listed. The combined company will mean that Draftkings will become the only pure-play sports betting and online gaming company that is based in the United States.
The merger is expected to close around the first half of 2020.
Jason Robins who is the Draftkings CEO & founder, will remain at the helm and hold onto the very experienced management team, that include the other co-founders, Paul Liberman and Matt Kalish. Also being integrated into the organization will be the SBTech management who will bring a tremendous amount of experience from within the trading, risk management and international markets.
Draftkings and close rival Fanduel, have gained a lot of popularity in the last 10 years for their respective daily fantasy sport platforms, constantly fighting with state regulators that incessantly argued that they were gambling sites. The Fanduel Draftkings merger was big talk back in 2017, and came close to actually happening, before the FTC stepped in to nix the idea.
In 2018, the supreme court struck down a federal ban on sports gambling, which paved the way for Draftkings to also become a sport bookmaker, currently operating in Pennsylvania, New Jersey, Indiana and West Virginia. More states are likely to follow suit as sports betting becomes more accepted across the US.
The sports gambling industry as a whole is growing at such a rate that it is expected to generate as much as $13+ billion by the end of 2023.