Sports betting giant DraftKings has become a public company following approval of a merger with SBTech and Diamond Eagle Acquisition, the public acquisition vehicle headed by entertainment industry veterans Harry Sloan and Jeff Sagansky.
The stock opened Friday at $17.53 on the Nasdaq under the ticker symbol DKNG and rose nearly 11% to close at $19.45 a share.
Shareholders of Diamond Eagle Acquisition Corp. approved the merger Thursday with DraftKings, which describes itself as the only vertically integrated pure-play sports betting and online gaming company based in the United States.
“Today marks another milestone for DraftKings and the future of digital sports entertainment and gaming in America,” said Jason Robins, co-founder and CEO of DraftKings. “By bringing together our leading consumer brand, data science expertise and industry-leading products with SBTech’s proven technology platform, we will accelerate our innovation, growth and scale. I am confident that the new DraftKings will progress our goal of offering the best, most innovative sports and gaming products to our customers.”
Robins said Friday that the company’s near-term outlook is uncertain given the wide range of outcomes for sports during the coronavirus pandemic, but noted that DrafKings has access to $500 million in unrestricted cash to fund its operations.
“We recognize these are extraordinary times and we understand that state governments in the U.S. are prioritizing the response to COVID-19, as they absolutely should be,” Robins said. “Eventually we do expect to start and to return to a new normal. At that time, we expect that the demand in states for legal sports betting will resume.”
DraftKings has approximately 2,300 worldwide employees and will maintain its global headquarters in Boston, as well as additional U.S.-based offices in Hoboken, Las Vegas, New York and San Francisco. The company will also have international offices in Dublin, Kyiv, Plovdiv, Sofia and Tel Aviv.
The DraftKings deal was orchestrated by Sloan, who has launched six public acquisition vehicles with Sagansky since 2011. Diamond Eagle bowed in May with a $400 million public offering. Robins will also serve as chairman with Sloan as vice chair.
Sloan served as chairman and CEO of MGM between 2005 and 2009 prior to the completion of its restructuring via a pre-packaged bankruptcy. He was also the founder, chairman and CEO of SBS Broadcasting, Europe’s second-largest broadcaster. Sagansky worked for three decades in show business, including serving as president of CBS Entertainment between 1990 and 1994, and as CEO of Paxson Communications from 1998 to 2003.