It was recently announced that DraftKings may become the owner of partypoker in a case if the poker site’s parent company indeed accepts the $20 billion offer. Entain is one of the largest online gaming companies in the world and along with partypoker includes such giants such as bwin, Ladbrokes, and Coral.

According to CNBC, DraftKings has offered Entain a $20 billion deal. The possibility of this deal was announced on Tuesday when Entain filed a report on this offer with the London Stock Exchange. Read on for more details and what this deal means for the future of partypoker.

The Offer Details

DraftKings is a popular US-based daily fantasy sports contest and sports betting operator. This company offers its users to participate in daily and weekly fantasy sports contests where they have an opportunity to win money based on player performances in various sports leagues such as NBA, Premier League, UEFA Champions League, and NASCAR. DraftKings went public in 2020 through a reverse merge with a special purpose acquisition company.

Entain (formerly GVC Holdings) is a very large company as well. It focuses on the international sports betting and gambling market. As mentioned previously, Entain owns brands such as bwin, partypoker, Coral, Ladbrokes, and many other gaming companies. Not to mention that partypoker is one of the most popular online poker rooms in the world, generating a lot of revenue for Entain. It regularly ranks in the top 10 poker operators in the world, according to PokerScout.

If this deal indeed goes through, it will result in massive sports betting, online gaming, online poker, and fantasy sports empire. Even though the possibilities of this move are impressive, there are some potential particularities which need to be addressed by both companies.

Since the US Supreme Court legalized sports betting in 2018, quite a few British companies have established operations in the country, but state regulations have required them to have a US partner, which, in most cases, holds sports betting licenses. Entain is no exception. This company has a partnership with the US-based MGM Resorts, which has a growing sports betting and online poker presence in several states. This partnership is required for the partypoker US Network and includes poker skins like Borgata and BetMGM. PartyCasino brand is also involved in this partnership.

Therefore, while MGM is not directly involved in the bid of DraftKings to acquire Entain, its consent is required for all deals that involve Entain’s assets in the US. CNBC reported the following comment made by Entain in its statement:

“Any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM’s consent. MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”

DraftKings has not made any comments to CNBC with regards to this statement.

What Happens Next?

This deal makes for a truly fascinating case. What’s interesting is the fact that earlier this year, MGM has decided to make its own offer of $11 billion to purchase Entain. All of this amount would be paid in MGM’s stocks. However, the UK gaming giant rejected the offer stating that this deal “significantly undervalued the company”

The deal proposed by DraftKings is a combination of cash and DraftKing’s stocks. This was confirmed in a filing with the London Stock Exchange, where Entain’s board confirmed that it has indeed received an offer from DraftKings, which consists of cash and stock. However, this report did not mention any specific prices and values. It is evident that Entain is still indecisive about this deal. As stated in the filling by the UK company:

“A further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.”

Let us not forget the fact that DraftKings and BetMGM are fierce competitors when it comes to sports betting and online gaming in the US. Therefore, MGM is unlikely to be interested in such a deal. Strictly speaking, this move would mean that MGM, a current leader in US online gaming, is going to be partially owned by DraftKings, its main rival.

However, at this point, all of this remains nothing more than speculation. The only thing that we know for sure is that DraftKings indeed made an offer to purchase Entain, but even the $20 billion may not be an exact number as some experts believe it to be an overvalue of the UK company.

How Will it Affect Partypoker?

Partypoker has been constantly growing ever since it was first launched in 2001. It is available in many countries worldwide and attracts thousands of players every day. Partypoker gained even more popularity during the COVID-19 pandemic, as online poker became the only possible alternative to live events. However, even with such success, it seems unlikely that DraftKings is targeting partypoker specifically. Given that DraftKings focuses more on sports betting, Etain’s online casino brands seem to be more appealing for the US brand.

In a case where this deal indeed takes place, DraftKings would have an opportunity to expand beyond the United States. Owning a large poker brand such as partypoker can benefit both companies. For example, partypoker is likely going to attract millions of new players and DraftKings would get extra revenue from the poker room.

Even though much remains uncertain in this story, it is clear that demand for online betting has been surging during the COVID-19 pandemic. The rapid growth in this market makes Entain a very favorable purchase for US-based companies that want to capitalize on this dynamic. We have seen a similar situation last September when the US casino operator Caesars offered $3.7 billion to buy William Hill. However, as it turned out, Caesars did not want to keep the British 87-year-old-brand as well as its non-US online operations. Therefore, William Hill was acquired by 888 Holdings. Is there a chance that the same fate awaits Entain and partypoker? Only time will tell.

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About the Author

Georgy

Hello, my name is Georgy and I like to write about all of the latest poker news and events. I have always found the game of poker fascinating due to its complexity and action. I also enjoy covering the business side of the pokerworld such as different networks, rooms, and promotions!

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The last changes of the page “DraftKings Makes $20 Billion Offer To Purchase Partypoker Parent Company Entain” was made by on September 23, 2021