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DraftKings gets SEC clearance for merger

Prominent gaming company DraftKings is pressing ahead with plans for its three-way merger with gaming technology provider SBTech and special purpose acquisition company Diamond Eagle Acquisition Corp., despite there being no sports happening for betting or fantasy gaming purposes.

The deal, announced earlier this year, was set to create a new entity valued at around $3.3bn. the union has been declared “effective” by the US Securities and Exchange Commission, clearing the way for the deal to close. Shareholders for the publicly traded Diamond Eagle will now vote on the transaction on April 23. 

If shareholders approve, the heretofore privately held DraftKings will become a publicly traded company, operating under a new ticker symbol of “DKNG,” and incorporating in Nevada. The goal is to create what company officials are describing as the only vertically integrated sports betting and online gaming company in the US. 

DraftKings currently offers sports betting in some form in eight states, and has a much older daily fantasy sport business that operates in eight countries with 15 distinct sport categories. The company will continue to be run by chief executive and co-founder Jason Robins, along with co-founders Paul Liberman and Matt Kalish. 

Special purpose acquisition companies, or blank check companies as they are sometimes called, such as Diamond Eagle have grown in prominence in recent years as a tool for investors to gain access to upstart operators in emerging industries such as digital media.