Sports betting site DraftKings is only issuing credits while events are canceled during the pandemic, but that hasn’t stopped it from plans to go public this month.
The Boston-based company will go public through a reverse merger, under terms of a deal made last December with gaming technology provider SBTech and sports acquisition company Diamond Eagle Acquisition Corp., which is publicly traded. Diamond Eagle will change its name to DraftKings Inc. as part of the deal, as well.
The deal values DraftKings at $3.3 billion. Shareholders for Diamond Eagle will vote on April 23, which will be a continued meeting from an earlier one postponed due to the pandemic.
Diamond Eagle is what’s called a “blank check company” that raised $400 million for DraftKings in an initial public offering last May. As part of this deal, shares will be issued in the company’s DEAC Nevada unit as well.
Diamond Eagle is a special purpose acquisition company that was already publicly traded. That means DraftKings, by merging with it, can go public without going through a traditional initial public offering process.
The new, merged company will still be helmed by DraftKings CEO and co-founder Jason Robins, and the company will be based in Nevada alongside its initial base in Boston. The company also has offices in New York, New Jersey, San Francisco and Las Vegas.
Robins said he looks forward to opening even more offices and continuing to create an engaging experience for sports fans.
SBTech said it would continue its current focuses and looked forward to conjoining its workings with DraftKings. As both are “tech native” companies, SBTech felt the merger would allow for expansion in the field.
As the coronavirus mandates a ban on large gatherings to contain the virus, gamblers have been starved for options to indulge in the practice. In lieu of the usual array of games, they’ve been betting on Eastern European table tennis.
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