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As consolidation continues in the sports betting and online gaming space, one rumored deal has failed to materialize.
What Happened: DraftKings Inc (NASDAQ:DKNG) announced Tuesday that it will not be holding further talks with the Entain ADR (OTC:GMVHY) board of directors or making a firm offer for the company.
“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” DraftKings CEO and co-founder Jason Robins said.
Earlier this month, DraftKings listed a deadline of Nov. 16 to make a formal offer for Entain. The company said it was doing further due diligence and analysis for a potential offer.
Entain owns brands like Eurobet, bwin, Ladbrokes, partypoker and PartyCasino and is one of the largest sports betting companies in the world. The company has licenses in 20 countries on five continents.
Entain is also a 50% owner of BetMGM, a joint venture with MGM Resorts International (NYSE:MGM), which owns the other 50%.
Related Link: Michigan September Online Sports Betting Heats Up, DraftKings Passes $100M, Do Profits Matter?
Why It’s Important: It's possible the BetMGM joint venture was a sticking point in the deal. DraftKings holds a dominant top-three market share position in the U.S.
MGM attempted to acquire Entain earlier this year with bids of $10 billion and $11 billion. DraftKings was rumored to be acquiring the company for over $20 billion.
MGM said at the time of the DraftKings rumors that it was the exclusive partner in the U.S. online sports betting and iGaming market for Entain and would have to consent to any transaction involving a competitor owning Entain and the joint venture.
DraftKings is working on closing its acquisition of Golden Nugget Online Gaming (NASDAQ:GNOG) and will look to continue growth of its own products going forward.
“Based on our vertically-integrated technology stack, best-in-class product and technology, capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market,” Robins said.
The earlier October announcement from DraftKings said it was focused on opportunities in the North American market.
DKNG Price Action: DKNG shares were trading 5.77% higher at $49.52 midday Tuesday.
