Daily fantasy sports and sportsbook operator DraftKings and SBTech have completed a deal that will see the two powerhouses merged into one publicly traded entity on the Nasdaq stock exchange.
Shareholders of Diamond Eagle Acquisition Corp., a special purpose acquisition company, voted to approve the first step in the process on April 23, effectively authorizing a merger between Diamond Eagle, DraftKings and SBTech.
Technology provider SBTech is contracted with Oregon Lottery to provide the online platform for Scoreboard, the state’s sports betting app.
The deal is a “reverse merger” IPO, in which Diamond Eagle, already publicly traded on Nasdaq as DEAC, combines with DraftKings and SBTech to form a new public business entity.
The new business will keep the name DraftKings, and a new stock market ticker symbol will be assigned.
DraftKings co-founder and CEO Jason Robins will also remain at the helm, along with the current leadership team.
The next step in the process is to finalize the details of the new business entity, which was originally projected for completion by the first half of this year.
The deal means that DraftKings will not only benefit from stock market investor dollars, it will also see savings from bringing SBTech’s platform technology in house.
The Boston-based company currently partners with a third-party platform provider, Kambi, for its sportsbook technology.
Founded in 2011, DraftKings quickly became a major player in the daily fantasy sports market.
Today, DraftKings’ DFS product has four million paid users in 43 states and eight international markets, including Canada, Australia and the UK.
Since DraftKings launched New Jersey’s first online sportsbook in August 2018, the company has consistently maintained a 30% share of the online sports betting market in the Garden State.
Scoreboard back on line after SBTech cyberattack
SBTech is a powerhouse in its own right, with more than 50 partners in the US and international iGaming markets.
However, the Malta-based company has had a lot of problems in recent months.
A sophisticated cyberattack on March 27 shut down SBTech’s 50-plus gaming sites around the globe.
Although Oregon Lottery’s Scoreboard app and SBTech’s international partners were able to resume operations just a few days later, a number of the company’s US partners, including BetAmerica, were down for three weeks.
SBTech has not disclosed the exact nature of the assault but claims that no user data was compromised as a result.
The computer breach delayed the DraftKings merger and caused Diamond Eagle to change the terms of the deal, which now requires SBTech to put $30 million in escrow to cover any claims that might result from the cyberattack.
In addition, SBTech has been soundly criticized for its questionable contract with Oregon Lottery, the details of which were only revealed after a lengthy court battle.
Oregon’s sports betting product has seen mounting losses since its launch in October of last year.
DraftKings partners with virtual sports software developer
With sporting events practically a distant memory due to the COVID-19 pandemic, DraftKings put a little ingenuity into finding an alternative outlet for sidelined sports bettors.
To that end, DraftKings recently entered into a partnership with virtual sports provider Inspired Entertainment.
Inspired Entertainment is a software and technology provider that offers 14 types of simulated sporting events, including football, basketball, soccer, auto racing, horse racing, and more, all for the express purpose of sports wagering.
Inspired holds an official license from NFL Alumni, which means it can use the names and likenesses of former NFL legends, so DraftKings may soon offer simulated football games featuring some familiar names in its sportsbooks.
It’s too soon to say whether Oregon bettors will be able to wager on virtual sports from the Oregon Lottery Scoreboard.