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Fantasy sports firm DraftKings to go public through 'reverse merger'
23rd December, 15:45Dec. 23 (UPI) -- Fantasy sports provider and bookmaker DraftKings announced Monday it will become a publicly traded company and create the United States' only vertically-integrated sports betting and online gaming company.
DraftKings co-founder and CEO Jason Robins announced a deal in which the bookmaker will be bought by Diamond Eagle Acquisition Corp., a public company created for the acquisition, and SBTech, a provider of sports betting and gaming platforms.
The combined companies are expected to have an equity market capitalization of around $3.3 billion, DraftKings said. The transaction is expected to close in the first half of next year.
"Reverse mergers" with public shell companies are often viewed a simpler and less expensive alternative to a conventional initial public offering.
"DraftKings is already a premier online fantasy sports and betting platform," said Harry Sloan, founding investor of Diamond Eagle. "DraftKings will be in a great position to continue its ambitious expansion plans in the United States."
Robbins will lead the combined company.
Following a landmark ruling by the U.S. Supreme Court last year, sports betting is now legal in 13 states and eight more will follow suit in 2020. DraftKings attempted to merge with its main competitor, FanDuel, two years ago but the deal was blocked by U.S. antitrust regulators.
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