DraftKings Adds to Acquisition Run with Blue Ribbon Software Purchase
Posted on: April 5, 2021, 10:39h.
Last updated on: April 5, 2021, 11:53h.
DraftKings (NASDAQ:DKNG) is adding to its technology offerings, announcing today that it’s acquiring Blue Ribbon Software.
Tel Aviv-based Blue Ribbon is a provider of global jackpot and gamification services for use with jackpot promotions. Terms of the deal weren’t disclosed.
Founded in 2017, Blue Ribbon specializes in jackpot technology that can be used across a variety of gaming concepts, including internet casinos and sports wagering — two of DraftKings’ core competencies.
“DraftKings will now be able to enhance the customer experience by integrating BlueRibbon’s unique jackpot functionality, including personalized promotions and rewards tailored to the individual customer or jackpots that payout across DraftKings’ various product offerings,” according to a statement issued by the companies.
The Boston-based daily fantasy sports (DFS) provider didn’t mention if the Blue Ribbon purchase will be accretive to earnings.
Last month, the sportsbook operator announced the sale of $1.15 billion worth of convertible debt, saying at the time of the offering some of the proceeds could be used to fund acquisitions.
The company is living up to that pledge. Last week, DraftKings revealed the purchase of Vegas Sports Information Network (VSiN), a deal aimed at bolstering the gaming company’s content platform. That was followed by today’s news of the Blue Ribbon accord, meaning DraftKings made two acquisitions in less than a week.
The purchases underscore DraftKings’ efforts to become vertically integrated, meaning essentially all of its business needs are filled in-house and that it can limit spending on third-party suppliers and vendors.
“Vertical integration is a strategy whereby a company owns or controls its suppliers, distributors, or retail locations to control its value or supply chain,” according to Investopedia. “Vertical integration benefits companies by allowing them to control processes, reduce costs and improve efficiencies.”
Given that the US iGaming and sports wagering markets are still in their infancy, it remains to be seen if vertical integration permeates the industry. However, as DraftKings proves, acquisitions are fast avenues for accomplishing that goal.
Blue Ribbon Software isn’t the first Israeli company DraftKings has been involved in.
SBTech, the provider of sports betting data and services to lotteries and gaming providers around the world, was part of the reverse merger with a blank-check company that paved the way for DraftKings to go public. Today, SBTech is a unit of the parent company, while founder Shalom McKenzie is on the DraftKings board and one of the operator’s largest shareholders.
DraftKings intends to increase its hiring in its Tel Aviv office following the Blue Ribbon deal.
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