Bally’s has bought Monkey Knife Fight gaming platform and third-largest daily fantasy sports operator in North America.

The all-stock transaction makes Bally’s just the third sports betting company in the U.S. to have a fantasy sports segment. In 2020, MKF, which offers its loyal users a dynamic and creative slate of daily sports and e-sports contests, was ranked by SponsorUnited as the sixth most-searched and tenth fastest-growing brand in sports and entertainment.

Bally’s acquisition of MKF is the latest step in the Company’s long-term growth and diversification strategy to become the first truly vertically integrated sports betting and iGaming company in the U.S. with a B2B2C business model. Importantly, it complements Bally’s recent media partnership with Sinclair Broadcast Group and its pending acquisition of Bet.Works, including its proprietary technology stack.

“With this acquisition, we are pleased to enter into the high-growth DFS market. Monkey Knife Fight is a unique asset that we look forward to incorporating into Bally’s constantly growing omnichannel portfolio of land-based casinos and iGaming platforms,” said George Papanier, President and Chief Executive Officer of Bally’s Corporation. “As with all of the properties and services that fall under the iconic Bally’s brand, we are committed to providing a best-in-class DFS platform to sports fans around the country.”

As part of the acquisition, MKF is set to receive immediately exercisable penny warrants to purchase up to approximately $50 million in Bally’s common shares (subject to adjustment) at closing, and (2) contingent penny warrants to purchase up to approximately $20 million in additional Bally’s common shares on each of the first and second anniversaries of closing, for a possible total of up to approximately $40 million.

The contingency relates to MKF’s continued operations in jurisdictions in which it operates at closing. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions.