Shares of DraftKings rose 8% on Wednesday after the company said Michael Jordan is joining the betting company as a special advisor to the board of directors.
Jordan, a member of the National Basketball Association Hall of Fame, will have an equity interest in the company as part of the deal. He is the current chairman and owner of the Charlotte Hornets franchise.
Jordan is expected to offer DraftKings his expertise on sports company strategy, product development, diversity, equity and belonging, marketing activities and other key initiatives, according to the release.
"While the immediate financial impact is hard to measure, we see this development benefiting [DraftKings] by associating its brand with the US most revered living athlete," wrote Jed Kelly, an analyst at Oppenheimer.
The move offers "opportunities to work even closer with the NBA; and we see the Jordan legacy tying itself to [DraftKings] as validating legalized online sports betting as a mainstream industry while more states look to legalize sports wagering," Kelly added.
For the company, the counsel from the six-time NBA Finals MVP and Chicago Bulls icon will be more than welcome, according to CEO Jason Robins.
"Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur," Robins said in a press release. "The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team."
The Covid-19 pandemic continues to disrupt scores of professional and college sports leagues as efforts to contain the coronavirus force athletes and fans home.
A spokesperson from the NBA told CNBC that "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."
Despite the Covid-19 headaches, DraftKings investors remain largely positive on DraftKings's longer-term outlook and have sent its stock soaring more than 240% so far this year to $36.93 by Tuesday's close.
Its ability to broker a deal with the likes of Jordan is perhaps the most striking example yet of the excitement surrounding the sports gambling world and the wealth now tied to the nascent industry.
A recent addition to the public markets, DraftKings in April combined with Diamond Eagle Acquisition Corp., a special purpose acquisition company, and gaming technology provider SBTech. The move allowed it to circumvent the typical initial public offering process.
At the time it went public and closed its merger with Diamond Eagle on April 24, DraftKings was worth about $780 million. It's now worth north of $13 billion, according to FactSet estimates.
— CNBC's Jessica Golden contributed reporting.