A historic deal between DraftKings and Entain was just revealed to have fallen through. The agreement fell through after many weeks of discussions, which resulted with DraftKings paying a princely price of $22.4 billion for UK-based betting business Entain. At the last minute, DraftKings backed out of the deal, claiming a reluctance to accept Entain’s conditions.
Entain, on the other hand, indicated his dissatisfaction with DraftKings’ offer. DraftKings submitted a cash and stock offer as part of the grand buyout, with the latter accounting for the bulk. This component is said to have generated concern among Entain’s board of directors, causing the idea to falter. Following the announcement of the bankruptcy, DraftKings saw an immediate increase in stock value, while Entain saw a minor decrease.
When the news of DraftKings’ offer to buy Entain for $22.4 billion surfaced, there was a lot of excitement. It would have been a marriage of business titans, with unprecedented globalisation of betting. Entain has developed quickly in recent years, and at the start of 2021, the company turned down a big $11 billion bid from MGM.
Entain acquired Unikrn, a speciality esports betting platform that has seen a rapid growth in popularity in a very short period of time, in August of 2021. Unikrn was taken offline after the transaction, with the promise that it will resurface in earnest in 2022.
Previously, esports betting was not particularly valuable; now, these platforms are valued in the millions, if not billions, of dollars. DraftKings recognises the industry’s future potential and pledges more expansion, implying that this isn’t the company’s final bid for Entain. Jason Robins, the CEO of DraftKings, said in a statement:
We are confident in our ability to retain a leadership position and fulfil our long-term growth ambitions in the fast increasing North American market thanks to our vertically integrated technological stack, best-in-class product and technology capabilities, and leading brand.
This organisation should be familiarised by everyone interested in betting on the North American market. To find out, we’ve put together a detailed DraftKings review.
Following the failure of this proposition, Entain is still in a strong position. The UK-based betting firm has a sizable portfolio, and the betting and esports betting industry as a whole are only becoming bigger. The Entain Group stated in a press release that there were great expectations for Entain’s future:
Entain’s management is continuing to focus on executing its growth and sustainability plan, as well as delivering the potential outlined in Entain’s capital markets event on August 12th to triple its total addressable market to c.$160 billion.
One of the significant prospects noted was the possibility of ‘expanding into new interactive entertainment experiences, such as the growing esports wagering sector.’ Esports betting is becoming a hugely popular and valuable sector as time goes on, and businesses like Entain and DraftKings are at the forefront of that growth.