BOSTON – DraftKings had a big bounce on Wall Street Wednesday on news that basketball legend Michael Jordan is taking an ownership stake in the sports betting site.
Jordan is getting stock in DraftKings in exchange for providing “guidance and strategic advice” to the Boston-based company's board of directors, the company said. DraftKings did not release details on the size of Jordan’s stake.
Shares of DraftKings Inc., which went public in April, ended up 8% on Wednesday.
Jordan is the majority owner of the NBA’s Charlotte Hornets and the deal has the league's approval.
“NBA team investors, including governors, are permitted to have involvement with sports betting and fantasy sports businesses, subject to safeguards required under league rules to prevent actual or perceived conflicts of interest,” an NBA spokesperson said Wednesday.
Jordan’s interest in DraftKings is not expected to affect the Hornets’ presence on the site.
The NBA agreed to a multiyear deal about a year ago to make DraftKings an official sports-betting operator. The NBA has several similar arrangements, including one with DraftKings’ longtime daily fantasy sports rival FanDuel. The league also struck a first-of-its-kind deal with MGM Resorts International in 2018 to be compensated for providing official data as a way for those casinos to determine outcomes of various bets.
That differs from the way Golden Nugget casinos, owned by Houston Rockets owner Tilman Fertitta, are permitted to handle games involving his NBA club. Golden Nugget sports books in Nevada, New Jersey and Mississippi can accept NBA wagers, but cannot for games involving the Rockets.