DraftKings Acquisition of Golden Nugget Gaming Is ‘Unfair’ To Investors, Says Suit

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DraftKings Golden Nugget Acquisition Lawsuit Overview: 

• Who: Peter Wong filed a lawsuit against Golden Nugget Online Gaming, Inc., its majority owner, and DraftKings Inc.
• Why: Wong claims the all-stock sale of Golden Nugget to Draft Kings is unfair to shareholders and is being hurried without proper oversight.
• Where: The lawsuit was filed in New York federal court.

A proposed $1.56 billion sale of Golden Nugget Online Gaming to Draft Kings is “unfair” to shareholders and being done without proper oversight, a new lawsuit alleges. 

Plaintiff Peter Wong claims the sale does a disservice to shareholders and is asking a New York federal court to block it. 

Wong claims the sale is “materially misleading” to investors and “omits material facts.” 

Golden Nugget and Draftkings are in the process of completing an all-stock sale which will give DraftKings access to Golden Nugget’s five million customers and allow them to decrease costs from third-party platforms.

The acquisition will also place Golden Nugget’s gaming technology on the DraftKings platform.

Wong’s argument centers around his claim that the deal should have to be approved by a majority of minority investors, otherwise known as a “majority of the minority” provision.

Wong also claims the sale was hurried without proper oversight from an independent committee, and that the sale price itself is questionable. 

“Clearly, the company is likely to have tremendous future success and should command a much higher consideration than the amount contained within the Proposed Transaction,” the lawsuit states. 

Golden Nugget and DraftKings have also failed to provide investors with clear future financial projections, making it hard for investors to know what the companies are now worth, the lawsuit alleges. 

Wong claims the company’s are violating the Securities and Exchange Act of 1934. He is requesting a jury trial. 

A class action lawsuit was filed against DraftKings executives last month over claims they misled investors by failing to disclose the questionable past of a gambling company they merged with. 

Do you believe DraftKings acquisition of Golden Nugget is unfair to investors? Let us know in the comments! 

The plaintiff is represented by Evan J. Smith of Brodsky & Smith, LLC. 

The DraftKings Golden Nugget Acquisition Lawsuit is Wong v. Golden Nugget Online Gaming, Inc., et al., Case No. 1:21-cv-09331, in the U.S. District Court for the Southern District of New York.

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