Sports betting giant DraftKings planing merger, to go public

BOSTON (AP) — Sports betting giant DraftKings plans to merge with two other firms and go public, the Boston-based company announced Monday.

DraftKings said it will complete its merger with gambling tech firm SBTech and acquisition company Diamond Eagle Acquisition sometime in the first half of 2020.

DraftKings said the combined company will be valued at $3.3 billion, and it will have $500 million on hand once the deal is complete.

The new company will retain the DraftKings moniker and company co-founder and CEO Jason Robins will continue to lead it, along with a management team that includes co-founders Paul Liberman and Matt Kalish.

DraftKings said it will also reincorporate in Nevada but remain physically headquartered in Boston, where it’s one of the city’s largest tech companies, with roughly 600 workers in its recently opened headquarters in the Back Bay neighborhood.

The three companies are merging through a special purpose acquisition, a method of taking a company public that differs from the more familiar initial public offering, or IPO, process, DraftKings said.

The new company will effectively assume Diamond Eagle’s publicly-traded status, though under a new stock ticker symbol.

It will also receive a $400 million infusion from the Los Angeles-based company, which was founded earlier this year by Jeff Sagansky, a former president of CBS Entertainment, and Harry Sloan, a former chairman and CEO of MGM, in order to invest in media and digital entertainment ventures.

SBTech’s management team, meanwhile, will be integrated into the new company, but the details of that won’t be made public until next year, according to DraftKings.

The company has offices on the Isle of Man, in London and elsewhere in Europe, and provides sports betting software and programs to gambling operations globally. It was founded in 2007.

DraftKings was founded in Boston in 2012 as a purveyor of daily fantasy sports contests, which are are online games that challenge players to build rosters of actual athletes in order to vie for cash and other prizes based on how those athletes do in games.

The company has since expanded into online and retail sports books operations in the handful of states that have legalized sports betting, including Indiana, New Jersey, Pennsylvania, West Virginia, Iowa, Mississippi, New Jersey and New York.

DraftKings had previously attempted to merge with its chief rival, FanDuel.

But the two companies scrapped the plans in 2017 after the Federal Trade Commission and the attorneys general of California and the District of Columbia sued to block it over antitrust concerns.

New York-based FanDuel completed a merger with Dublin-based gaming giant Paddy Power Betfair last year instead.

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This story has been updated to correct that the companies are planning a special purpose acquisition, not an initial public offering.