DraftKings to Go Public in 2020, Merging With Online Gambling Platform SBTech

Draftkings - H 2015
Courtesy of Playbook.draftkings.com

The fantasy sports company is going public with a $304 million Wall Street investment.

With consumers of daily fantasy sports leagues now allowed to place legal wagers on pro athletes' performances in some U.S. states, DraftKings has unveiled a merger deal with Diamond Eagle Acquisition and online gaming platform SBTech to take the company public in 2020.

Terms of the agreement include DraftKings, a leading fantasy sports league, seeking a public listing as a sports betting and online gaming company, along with Wall Street institutional investors agreeing to making a private investment of $304 million in class A common stock. The merger follows the Supreme Court earlier this year allowing legal betting as Fox Sports, ESPN and Turner target consumers of fantasy leagues with new TV sports programming.

The industry positioning for an anticipated sports betting boom includes Rupert Murdoch's newly formed Fox Corp. launching Fox Bet, a national media and sports wagering pact; Turner Sports' Bleacher Report unveiling its own betting vertical; and Peter Chernin's betting startup The Action Network website and app also gearing up for sports betting in the U.S. market.

The legalization of sports gambling in eight U.S. states and the 2018 Supreme Court ruling is expected to allow domestic sports brands to diversify their TV revenue streams and target fantasy sports league consumers with new programming and legalized betting platforms.

DraftKings will continue to be led by co-founder and CEO Jason Robins and a management team that includes co-founders Paul Liberman and Matt Kalish.

"DraftKings is already a premier online fantasy sports and betting platform. With the full integration of SBTech’s technology and innovative product expertise coupled with the right capitalization, DraftKings will be in a great position to continue its ambitious expansion plans in the United States," Harry E. Sloan, founding investor of Diamond Eagle, said in a statement Monday about the combination of Draftkings and SB Tech.

DraftKings currently offers mobile and online sports betting in Indiana, New Jersey, Pennsylvania and West Virginia, and retail locations in Iowa, Mississippi, New Jersey and New York. The company's daily fantasy sports product is also available in 43 states and eight international markets, including Australia, Canada and the U.K., allowing additional potential growth for its vertically integrated fantasy league and legalized betting offering.