DraftKings has gained a new credit facility of up to $500m in order to gain access to greater liquidity and flexibility in its operations.
The credit line replaces a former facility that DraftKings took out with Banc of California and Citizens Bank in 2022 for $125m. That credit line has now been closed and fully replaced with the new one, which is provided by a syndicate fronted by Morgan Stanley.
The former credit line available to DraftKings made money available to borrow at the Prime Rate plus 1%. However, the new credit facility will grant a cheaper way for the company to borrow, with DraftKings allowed to choose the cheaper of two rates. At current interest rates, the difference is likely to be over a percentage point, from 8.75% down to around 7.07%.
The operator has been making considerable moves to diversify its offerings in recent months
DraftKings has not announced any specific intentions on how the money is likely to be used, or even if it is earmarked for any specific investment or expansion plans at all. However, the operator has been making considerable moves to diversify its offerings in recent months.
DraftKings has launched its player vs player poker games in a second state this year, while on an investor call last week, CEO Jason Robins confirmed the company would explore opening a prediction market before the next US presidential election.