When it comes to the NJ online casino industry, Golden Nugget is the gold standard. It’s a name that is almost synonymous with online gambling.
Well, that name is about to get much, much bigger.
Golden Nugget Online Gaming (GNOG) is in the process of becoming a publicly-traded company.
Details of the deal were made public Monday morning via a press release.
Landcadia Holdings II, Inc. (LCA) entered into a purchase agreement to acquire GNOG from owner Tilman Fertitta.
He owns Golden Nugget Atlantic City, too.
The transaction, or spin-off of Golden Nugget’s online division, is expected to be completed in the third quarter of 2020. LCA is the publicly traded special purpose acquisition co-sponsored by Fertitta Entertainment Inc. and Jefferies Financial Group Inc.
When the deal closes, the company intends to change its name to Golden Nugget Online Gaming Inc.
The company will have an approximate market value of $745 million, or what amounts to six times the company’s estimated 2021 revenue ($122 million).
Golden Nugget is a big NJ online casino winner
New Jersey customers are extremely familiar with the Golden Nugget online casino name.
Since its 2013 launch, the brand regularly sets industry trends, which includes being the first American operator to debut a live dealer casino.
And in terms of internet gaming revenue, Golden Nugget AC is the market leader. In May alone, the license holder reported a record high of $29 million. The previous high of $27.1 million was set in April.
Keep in mind, Golden Nugget online casino is one of four brands operating under the license. The New Jersey Division of Gaming Enforcement does not provide a breakdown by operator.
More importantly, the other brands are completely separate from the stock deal.
With Golden Nugget AC temporarily closed since March 16, it’s highly likely the bulk of the recent earnings is tied to the self-branded app.
But the success dates back long before the global pandemic crushed the Atlantic City casino business.
Just look at some highlights of GN’s online success:
- Started operation during Q4 2013
- Became profitable in 2016
- Won industry award as top operator three years in a row
- The first company to launch live casino floor games in the US
- Had net income of over $11 million in 2019
A closer look at the online gambling deal
Clearly, Golden Nugget’s track record is hard to ignore.
Rich Handler, co-chairman of Landcadia II and CEO of Jefferies, sees the value in Golden Nugget Online Gaming.
“GNOG is one of the best-positioned companies to capitalize on this massive online gaming opportunity in the US,” said Handler.
“We at Jefferies couldn’t be more thrilled to partner with Tilman and bring this great opportunity to the public markets.”
GNOG is planning to expand beyond the Garden State, which is currently North America’s largest online gaming market. The company has obtained market access, subject to regulatory approval, in Pennsylvania and Michigan.
Golden Nugget online casino launch in both states could take place in early 2021, according to the press release.
More importantly, once the transaction closes, the GNOG executive team will include some familiar names.
Fertitta will remain the chairman and CEO. Thomas Winter, who was instrumental in building Golden Nugget’s online gaming business, will serve as president.
During his seven years with the company, revenues and profitability have grown each year despite facing competition with greater financial resources.
“Golden Nugget is one of the most time-honored brands in the gaming business today. When customers hear the name Golden Nugget, they know they are dealing with a trusted online gaming business,” said Fertitta.
“Thomas and his team have done a remarkable job, are the best in the industry, and with this transaction, will have access to growth capital to allow for the rapid expansion of the business.”
So here’s the bottom line: Golden Nugget Online Gaming’s future is looking, well shall we say, golden.
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