Since DraftKings entered into a Special Purpose Acquisition Company (SPAC) agreement to purchase SBTech through Diamond Eagle Acquisition Corp last December to become a public company, SPAC deals have become increasingly more popular in the US gaming market.
Rush Street Interactive became publicly listed following a definitive agreement to combine with SPAC dMY Technology Group in July.
In June, Golden Nugget Online Gaming (GNOG) announced its intentions to go public after Landcadia II entered into a purchase agreement to acquire it, with the deal being granted regulatory approval by the New Jersey Casino Control Commission earlier this week.
Ader, gaming analyst and SpringOwl Asset Management CEO, said SPAC deals have become all the rage in the US due to the speed at which they can be completed with travel restrictions in place.
Speaking to Gaming America, Ader said: “In the pandemic, nobody is travelling and people are staying at home, so there’s a bigger online economy in general, including in gaming.
“SPACs are doing well, not only in gaming but across all industries, because you can raise a SPAC on Zoom in a few days, then use the travel constraints as a way to take the company public with better information than would’ve been the case in the traditional IPO (Initial Public Offering) route.
“The pandemic has accelerated two trends; one is the SPAC industry in general as it’s a way to raise capital then allow companies to go public without having to travel, in a way that is faster and lets them get better information about the company they’re investing in.”
You can read the full interview with Jason Ader on SPAC agreements in the November/December edition of Gaming America.