DraftKings Gets Extension on Entain Offer

DraftKings is getting an extra month to iron out the details of its proposed $22.5 billion takeover of Entain. Regulators in the UK, where Entain is based, approved an extension of negotiations between the two gaming industry giants while negotiators figure out the nuances of executive pay, and the more thorny issue of the company’s relationship with MGM Entertainment and BetMGM.

Acquiring Entain, its UK assets and BetMGM in the States, would be a major step forward for DraftKings; allowing it to greatly expand its US footprint. Negotiators at Entain clearly understand the stakes and, by all accounts, is taking a very hard line in the negotiations.

In a statement to the press, reported on LegalSportsReport, an Entain spokesperson voiced that sentiment saying, “The Board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology. Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, and a 3 year CAGR of 19% across 2021.”

One of the reasons Entain is feeling so confident in these negotiations is that MGM made a purchase offer earlier this year that was about half of what DraftKings is offering. Why MGM made such a low-ball offer in the first place is a bit of mystery.

Though they’ve always had an outside operator running their sports betting division, BetMGM, that outsider has always been an international operator. DraftKings is, in many ways, MGM’s direct competitor in the US market.

UK regulators have extended the deal’s deadline to November 19, and could extend it again if necessary.