American-based Fantasy Sports and gambling site DraftKings has reportedly offered to buy out the London-based Entain for around $22 billion, it has been confirmed today.
Entain confirmed that it had received an initial offer from DraftKings for around $34.10 US Dollars per share (£25.00) which it had rejected.
DraftKings then submitted a second offer of around $38.19 dollars per share (£28.00), which the company is said to be mulling over.
The new deal would value Entain at around $22.40bn and the news has seen share prices in Entain rocket by 20% since the news broke.
It also vindicates a decision by the Entain board earlier in the year to reject an $8.1bn approach from MGM resorts earlier in 2021, an offer which Entain said drastically undervalued the company.
Buy In Experience
As the United States starts to see more states open up to sports and esports betting as well as casino gaming, there has been a concerted effort from a number of key players in the United States market to buy into experience within the industry.
A year ago, Caesars, the famous US Casino operator, completed a $3.7 billion deal to purchase the William Hill brand, with the key focus being using William Hill’s expertise to rapidly build Caesar’s US online betting offerings.
However, with little interest in William Hill’s holdings in the UK, Caesar’s have announced the sale of the William Hill International part of the business for $2.2 billion to British-based casino company 888 Holdings.
Broken Up And Sold Off?
A similar situation could arise if DraftKings bid for Entain proves successful.
Although DraftKings does maintain a presence outside the United States, its move to take over Entain is viewed as being motivated by similar reasons as Caesars take-over of William Hill.
Entain own one of William Hill’s most famous rivals, Ladbrokes, as well as other betting giant Coral. The company also recently bought out Unikrn Esports Betting site, after which the Unikrn site has seemingly been shut down and terminated all its activities while the transition is ongoing.
Unikrn is said to be scheduled to return at some point in 2022 with a new and improved site, but esports betting enthusiasts will be wondering what the future for Unikrn holds if Entain do accept the DraftKings offer.
Is it possible we could see DraftKings cherry-pick the aspects of the Entain business it needs for US-based customers and then break up and sell off the other parts of the business?
It is possible of course, but whether DraftKings would do that remains to be seen.
Good News For US-Punters, Not So Much For UK-Gamblers?
With large US-based companies seemingly keen to buy up UK-listed companies to help expand their business in the growing United States market (which has recently seen Wyoming added to the growing list of states that now permit some form of gambling). It does appear as if their expertise will benefit DraftKings expansion across the United States.
However, the questions are whether this will impact the betting options available for customers in countries, such as the UK, where companies like Ladbrokes, and Coral have a large user base.
Certainly, the loss of Unikrn, even for a short time, has been keenly felt by those with an interest in specialist esports betting. If Coral and Ladbrokes also disappear, then there could well be many more bettors inconvenienced.
The question is whether Entain’s board decide to recommend the sale. Entain has had its own eye on expansion into the US market for some time and that may well be a consideration that the board need to take into account if they wish to remain the majority shareholders in the company.
It is certainly going to be an interesting few months ahead in the esports betting, sports betting, online casino and gaming industry with the potential for more big US-based takeovers of long-established UK businesses.