DraftKings has gone through a lot of changes and made a lot of developments since they first began as a pioneer of the Daily Fantasy Sports world. When the U.S. Supreme Court in May 2018 overturned a decades-old law that banned sports betting in the United States, DraftKings was one of the companies at the forefront of opening a full-fledged sportsbook — first in New Jersey and then in Pennsylvania and other states. Now, DraftKings is taking their company one step further, merging with two other companies and planning to go public. The merger with Diamond Eagle Acquisition and SBTech will end up valuing the company at a whopping $3.3 billion when it’s all completed, making DraftKings a force in the industry.
Most people in the sports gambling world are familiar with the DraftKings name. They may not be as familiar with the other two companies involved in this mega-merger, though.
Diamond Eagle Acquisition is a special purpose acquisition company. SBTech is a technology and trading services provider that helps gaming companies. Diamond Eagle will acquire both companies in this deal, and the new name of the company will become DraftKings. It will get a new ticker on the stock exchange, and DraftKings’ co-founder, Jason Robins, will head up the new company as its CEO. The company will be incorporated in Nevada but headquartered in Boston. Sports betting is very popular around the world. See for yourself at the sportsbook below.
DraftKings has had a lot of success in the New Jersey sportsbook market since sports betting was legalized in that state. In 2019 alone, DraftKings and its land-based partner, Resorts Atlantic City, has generated more than $70 million in revenue, which ranks second in the state behind only FanDuel’s $108 million.
New Jersey has a total of 17 sportsbook apps and 10 retail sportsbooks, which have taken roughly $5.3 billion in wagers since the practice was legalized in June 2018. This number has helped the state surpass the totals of what was formerly the sports betting mecca of the United States — Nevada.
But it hasn’t been all about New Jersey for DraftKings. It has also done well in neighboring Pennsylvania, which legalized sports gambling in September 2018. Since then, the state has taken in more than $1.1 billion in sports wagers, with $74 million in revenue.
DraftKings also has sportsbook operations launched and going in Indiana and West Virginia. It was also recently selected as the sole retail and sportsbook operator in New Hampshire.
DraftKings generating investment already
The new merger with SBTech and Diamond Eagle Acquisition has already attracted a good amount of attention from the investment world. In fact, three major companies — Wellington Management, Franklin Templeton, and Capital Research and Management — have given it $304 million in investments so far.
These investment firms are betting on the same thing that DraftKings did when it entered the sportsbook market — the power and popularity of sports gambling. Some experts believe that in the U.S. alone, the sports betting industry could reach $40 billion. In addition, Canada is currently debating legalizing single-game sports gambling as well, and if they do, it’s a market that would be prime for the taking for DraftKings.
The major success of DraftKings so far and the enormous potential of the industry are just a few reasons why the newly-formed company is attracting so much attention from legitimate investment firms.
While Canadians wait to see if their country legalizes single-sports wagering like the U.S. did, they can still place bets at sportsbooks based offshore. Take a look at one of the sportsbooks below.
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