DraftKings, the US online and mobile sports betting platform provider, is planning for the initial public offering (IPO) in 2020. The company has announced a merger between two companies, SBTech and Diamond Eagle Acquisition Corp. (NASDAQ: DEACU).
The deal is expected to be finalized in mid-2020 and will allow the Los Angeles based Diamond Eagle to retake DraftKings’ name and merge in Nevada. The merger will be in a class of special purpose acquisition, and their shares will be listed at NASDAQ after the closure of the deal.
According to a statement issued by the merging companies, the three will have a total capital of $3.3 billion and over $500 million of unrestricted cash on the balance sheet. According to Casino.org, DraftKings started considering taking over the Isle of Man-based SBTech earlier in 2019.
When the deal is finalized, it will see DraftKings become the first vertically integrated sports betting firm in the US. By vertically integrated, it implies that the company will control its suppliers, distributors, and enable the firm to lower its operating cost.
Two months have passed since DraftKings, and Diamond Eagle ties were made. Initially, DraftKings wanted to merge with its major rival, FanDuel, although regulators maimed the ties over competition concerns.
Dominant Market Share
DraftKings and FanDuel still dominate the fantasy sports contest, but at the moment, the two are taking advantage of the fast-growing sports betting industry. DraftKing, in particular, has proven to be a fast-growing mobile and online betting option. DraftKings launched its first mobile sportsbook in August 2018 in New Jersey, since then, the company has maintained a 30 percent online market share.
Apart from California, DraftKings provides online betting services in Indiana, Pennsylvania, and West Virginia. The company has also been recently selected to operate online and retail sportsbooks in New Hampshire.