Don’t Bet On DraftKings Buying Circa, Says Stevens

Posted on: October 15, 2021, 12:34h. 

Last updated on: October 15, 2021, 01:32h.

Circa Sports founder and CEO Derek Stevens took to Twitter earlier today to refute speculation his company is for sale, calling the rumor “pure BS.”

DraftKings Circa
Circa Casino owner Derek Stevens probably isn’t looking to sell. He called rumors about DraftKings buying Circa “BS.” (Image: Las Vegas Review-Journal)

In highlighting tidbits from the firm’s most recent sports betting monitor report, Eilers & Krejcik analyst Chris Krafcik pondered the possibility of DraftKings (NASDAQ:DKNG) potentially purchasing a Nevada casino, noting that Circa Las Vegas is rumored to be a target.

Stevens quickly refuted the rumor.

The 777-room Circa, the first new from-the-ground-up integrated resort to be constructed in downtown Las Vegas in four decades, opened its doors in October 2020. It has since become the only venue in that part of Sin City to receive the prestigious AAA Four Diamond.

Stevens is widely viewed as the godfather of downtown Las Vegas, and in addition to Circa, which some industry insiders say is his “baby,” his company’s portfolio includes D Las Vegas, Golden Gate Hotel & Casino, and Downtown Las Vegas Events Center.

A request for comment from Circa wasn’t replied to prior to publication of this article. Krafcik said in a subsequent tweet that the rumor comes from a source considered “reliable,” and he acknowledges that he didn’t check in with Stevens prior to sending the initial tweet.

DraftKings Wants Nevada Access

While it appears unlikely DraftKings will acquire Circa, it’s not up for debate that the online sportsbook operator is expanding in Nevada.

Earlier this month, the company announced it’s moving to a new 90,000-square-foot space in the southwest area of Las Vegas and that it will employ more than 1,000 people in the region. That makes the Sin City office its second-largest after its Boston headquarters. In March, the company announced the acquisition of Vegas Sports Information Network (VSiN).

Interestingly, VSiN’s broadcast studio is located inside Circa Las Vegas. But that appears to be the only tie between DraftKings and the casino operator.

Other points indicate long odds of DraftKings moving on Circa. First, the company is an asset-light online enterprise with no holdings in brick-and-mortar casinos. Second, if it’s Nevada access the company is after, a pending acquisition may deliver that. DraftKings purchase of Golden Nugget Online Gaming (NASDAQ:GNOG), announced in August, could help the operator get into the US gaming mecca.

In a presentation to investors on the buyout, DraftKings discusses market access, though stops short of specifically mentioning Nevada.

“Preferred market access rates through existing Golden Nugget casinos. Retail sportsbooks at current and future Golden Nugget casinos to be rebranded as DraftKings,” according to the presentation.

DraftKings Has Other Fish to Fry

In addition to the remote likelihood that Stevens is a seller — he’s not — there’s another reason DraftKings may not be imminently pursuing Circa or any other Nevada operator.

The company is attempting to acquire Entain Plc (OTC:GMVHY) in what would be the largest sports wagering takeover on record. DraftKings reportedly floated a $22.4 billion cash and equity bid after a prior offer was rejected, and the suitor has until Oct. 19 to formalize a proposal.

That transaction has a slew of moving parts, not the least of which is Entain’s 50 percent stake in BetMGM. MGM Resorts International (NYSE:MGM) controls the other half, and that company must approve any deal that involves Entain being acquired and folded into what could become a competing business. DraftKings hasn’t publicly said if it’s courting Entain for technology and access to foreign markets, or if it’s angling to control BetMGM as well.

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