DraftKings (DKNG) – Report from DraftKings Inc. (DKNG) received shares fell lower on Tuesday after a report that the US-based online gaming group is planning a $20 billion takeover bid for UK-based Entain Plc.
CNBC’s David Faber said DraftKings wants to make its game for Entain primarily in stocks, leveraging its year-to-gain of about 28% and its market cap of about $23 billion. Faber said an informal offer of 2,500 pence per share for the UK-based bookmaker was made earlier this week.
The move could pose a challenge to UK bet 888, which agreed to buy the non-US assets of bookmaker William Hill from Caesars Entertainment (CZR) – Get Caesars Entertainment Corporation Report for about $3 billion.
A well-known figure in British culture for his sports betting dominance in that market, William Hill has been curating American sportsbooks since 2012 and operating in 13 states. It also has an existing 20% partnership with Caesars.
Entain’s London-listed shares were up 10.8% at 2122 pence each in UK late afternoon trading, while DraftKings was down 4.4% in active early trading at $54.50 each.
Last month, DraftKings reported a smaller-than-expected second-quarter loss and raised its full-year profit forecast amid a resurgence in online sports betting and interest in NFTs and other media that continue to draw users to the online platform.
DraftKings quarterly revenue in July was up 320% from last year to $298 million, well above Street’s forecasts as monthly unique payers (MUPs) on the platform rose 281% to 1.1 million.
Shares in sports betting, and the industry in general, have risen steadily since the U.S. Supreme Court overturned a decades-old law banning New Jersey from allowing sports betting in state casinos.
The ruling allowed other states to challenge the Federal Professional and Amateur Sports Protection Act of 1992, which effectively allowed only Nevada, Oregon, Delaware and Montana to offer full or limited facilities in the $150 billion sports betting market.