Sports betting and daily fantasy sports operator DraftKings is in advanced talks to buy betting technology company SBTech, Legal Sports Report reported citing multiple sources familiar with the ongoing talks.
News about a potential tie-up arrive as the US sports betting space is expanding, with more and more states legalizing the practice after the US Supreme Court lifted a federal ban on wagering last May.
Details about a potential deal between DraftKings and SBTech, including the purchase price and its timing, are still unknown.
The sports betting operator potentially buying the tech firm would give it its own in-house sports betting and casino gaming platform as DraftKings is looking to expand into states where its products are legal. At present, the company works with sports betting platform provider Kambi for its betting and gaming operation in New Jersey.
DraftKings entered the state’s gambling market last year through a partnership with Atlantic City’s Resorts Casino Hotel. The betting and DFS operator operates a physical and digital sportsbook in New Jersey and also provides casino gaming.
DraftKings’s betting operation quickly gained momentum in the state’s market, making the company the second best performing wagering operator in New Jersey, behind its DFS archrival FanDuel. Their combined betting revenue accounts for more than a third of the state’s sports gambling market.
What a Deal Between DraftKings and SBTech Would Mean for the Operator?
If DraftKings buys SBTech, it would secure itself with its own in-house platform provider that would significantly facilitate and speed up its planned expansion in the US betting space. In addition, the company will be able to further enhance its online casino product.
At present, DraftKings’ online casino offering exists as a functionality within its sportsbook. According to Legal Sports Report, the acquisition of SBTech “would seemingly make it more immediately possible for DraftKings to provide a full online casino and sportsbook in Pennsylvania,” in case the company finds a land-based casino partner in the state.
Pennsylvania went live with brick-and-mortar sports betting last fall. And the much-anticipated start of online sports betting finally occurred late last month when SugarHouse Casino in Philadelphia launched its product. Earlier this week, Parx Casino launched its mobile app with GAN to expand the state’s digital betting space. Pennsylvania also gears up preparations for the expected July 15 start of online casino gambling.
DraftKings is eyeing the Pennsylvania gambling space and would certainly roll out its product, if it finds a suitable partner. A deal with SBTech could likely boost its expansion plans, not just there but also in other states.
SBTech itself is pushing hard to cement itself in the US gambling field. The company has secured several major partners, including Churchill Downs, Golden Nugget, and most recently the Oregon Lottery to grow its US business.
Earlier this week, SBTech appointed Melissa Riahei as President of its US division. Ms. Riahei brings in a wealth of experience in the US gaming and lottery experience to steer the company in its bid to solidify its footprint in the emerging US betting market.
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories.
