DraftKings Reportedly in Talks of Buying SBTech

Multiple sources report that the sports betting and daily fantasy sports operator, DraftKings, is reportedly in the final stages of buying the betting technology company SBTech. However, details and the timing of the deal are unknown.

What does this mean for the operator? This kind of a deal, if struck, would give DraftKings its own platform for sports betting and casino games. At the moment, it works with Kambi, a European company, providing it with a sportsbook and online casino in New Jersey. Right now, its online casino offering exists as a functionality within its sportsbook. Acquiring SBTech would open more immediate possibilities for the operator to open an active sportsbook in Pennsylvania, in case the company finds a land-based casino partner in the state.

According to a statement from the operator: “DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to discuss the specifics of any of those discussions.”

Expanding Sports Betting in the US

The number of states that will be able to offer online sports betting in the United States is bound to rise in the coming year. The operator is possibly considering Iowa, Tennessee, Indiana and Illinois for potential launches in 2020…

…the company already has plans to launch an app for sports betting in West Virginia and is actively looking for a partner for sports betting in PA.

On the other hand, we have SBTech providing the platform for Oregon Lottery, which is releasing sports betting this summer.

This is not the first time we see the sports betting firm and SBTech in the same news. DraftKings, together with Kambi, replaced SBTech in providing retail sportsbook at Resorts Casino in Atlantic city earlier this year.

Changes in Both Companies

Both have made some changes in upper management recently. DraftKings hired a new chief financial officer, Jason Park who previously worked as an operating partner for Bain Capital Private Equity.

SBTech has just hired a new president of its US-based business. Melissa Riahei. Ms. Riahei previously held a position in the Illinois Lottery as its General Counsel.

There are a lot of moving parts regarding this deal. There is the question of what will happen with the partnership between DraftKings and Kambi.

Due to the lack of information about the potential acquisition in the first place, nothing is clear at all. All we know is that Kambi had a multi-year deal in place, providing services such as the launch and trading of the operator’s Sportsbook in New Jersey.

More about SBTech

The company provides award-winning sports betting solutions and a full range of management services to over 50 partners worldwide. It offers full platform solutions for managing and monitoring businesses. Among other solutions, it delivers managed services with a complete managed marketing package and omni-channel solution, enabling seamless, single-wallet betting on all channels, devices and land-based touchpoints. Additionally, it has a vast amount of experience in regulated markets, ensuring their clients get the best solution possible and at the same time meet regulatory requirements of the markets.

Source:

“Gamechanger? DraftKings Appears Close To Buying Online Gambling Company SBTech”, Dustin Gouker, legalsportsreport.com, June 28, 2019.