Illustration: Rebecca Zisser/Axios
DraftKings is one step closer to going public, after the SEC approved its reverse merger with blank-check acquisition company Diamond Eagle and sports betting enterprise solution SBTech.
What's next: Diamond Eagle's shareholders will vote April 23 on the merger, which is expected to go through.
- Why it matters: With this deal, DraftKings will become "the only vertically integrated U.S. sports betting and online gaming company," per Variety's Dave McNary.
Background: DraftKings was founded in 2012 as a platform for daily fantasy sports (DFS) — a market already dominated by FanDuel, which launched three years earlier.
- In 2017, the FTC blocked a merger between FanDuel and DraftKings, citing fears of a monopoly.
- In 2018, after PASPA was overturned and gaming legislation could be made at the state level, DraftKings Sportsbook — the first legal, online sports betting venue — was born.
The bottom line: Despite the global economy grinding to a halt, the environment surrounding this deal should allow the business to flourish in the long run.
- DraftKings is a marketing behemoth, SBTech offers best-in-class infrastructure, and whenever we emerge from this crisis, more states will have regulated sports betting markets than ever before.