Sports betting company DraftKings (DKNG) has agreed to acquire Golden Nugget Online Gaming in an all-stock transaction worth an estimated $1.56 billion.

The new deal will create cross-selling opportunities and allow the fantasy sports operation to further expand DraftKings' presence in the online gambling market.

The acquisition is expected to result in the formation of a new holding company with both DraftKings and Golden Nugget, which also owns Landry’s LLC portfolio.

There will also be plenty of cost savings by moving Golden Nugget onto DraftKings’ modernized system. The Golden Nugget is owned by Tilman Fertitta, CEO of Landry’s LLC.

“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with iGaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘iGaming-first’ customers,” Jason Robins, CEO of DraftKings, said in a statement.

“This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations, and tech-driven product expansion as well as technology optimization and greater marketing efficiencies. We look forward to Tilman being an active member of our Board and one of our largest shareholders.”

As part of the agreement, Golden Nugget Online Gaming shareholders will receive 0.365 shares of DraftKings stock for each share they hold.

“This transaction will add great value to the shareholders as two market leaders merge into a leading global player in digital sports, entertainment, and online gaming,” said Fertitta.

The deal is expected to be finalized in the first quarter of 2022.

As of Monday at 1:32 p.m. ET, shares of DraftKings were trading at $51.67, up $0.08, or 0.16%.

Top daily fantasy sports companies FanDuel and DraftKings agreed to stop taking money in New York on Monday. Here, the companies’ logos are displayed on a board at a DFS players conference in New York City, Nov. 13, 2015. Lucas Jackson/Reuters