Lancadia II Gets New Jersey Approval for GNOC Acquisition

Casino Chips With a Casino Floor Themed Background

The New Jersey Casino Control Commission has given the green light for the acquisition of Golden Nugget Online Gaming by Lancadia Holding II.

With the approval, GNOG is now a separate entity from its brick-and-mortar casino business. This move allows Lancadia II and GNOG to complete the merger announced earlier this year. Once that deal is consummated, the combined entity will go public and trade in the stock exchange.

Said Lancadia II co-chairman and CEO Tillman Fertitta:

“We are appreciative of the efforts of both the New Jersey Division of Gaming Enforcement and the Casino Control Commission in approving our transaction.”

A Special Acquisition Company

Lancadia II is a special acquisition company (SPAC) or blank-check company launched by Tillman Fertitta. Fertitta is the owner of five Golden Nugget casinos-two in Nevada, one in Atlantic City, one in Biloxi, Mississippi, and one in Lake Charles, Louisiana. Lancadia II is currently traded under the symbol “LCA” but will change its name to Golden Nugget Online Gaming, Inc. with “GNOG” as its Nasdaq trading symbol.

Fertitta will remain as the chairman and CEO of GNOG. He will hold a controlling economic interest and a controlling voting interest in the merged company. Meanwhile, Thomas Winter, who was hired to develop Golden Nugget’s online gaming business, will continue to serve as the company’s president.

Second Publicly Traded Online Casino

Golden Nugget Online Gaming is affiliated with Golden Nugget/Landry’s hospitality, gaming, and restaurant business owned and operated by Fertitta. It started operations in 2013 and has seen a 50% CAGR revenue growth since 2014. GNOG will become only the second pure publicly traded online casino in the United States

GNOG’s merger with Lancadia II was first announced in June 2020. Once completed, the merged company will have an anticipated pro forma enterprise value of $645M. That amount is six times the projected $122M 2021 projected revenue of GNOG. Lancadia will assume $150M of GNOG debs while paying down at closing and additional $150M of its own debt, plus pay prepayment fees, transaction fees, and expenses.

Strong Presence in New Jersey

Golden Nugget reported an online gaming revenue of over $28M in New Jersey, easily the biggest for New Jersey online gaming operators. From January to October 2020, Golden Nugget had a total online gaming revenue of $263M according to the monthly state reports.

GNOG will enter the Pennsylvania and Michigan markets once their applications in those states are approved. It plans to enter both markets in early 2021. Last week, GNOG also entered into an agreement with the Danville Development LLC for access to the Illinois market for online gaming and sports betting once these are legalized. The Danville casino will also be branded as Golden Nugget.

Island View Casino Parent Company Sues Insurer Over COVID-19 Losses

Casino Floor In Michigan
Gulfside Casino Partnership, the owners of Island View Casino Resort in Mississippi, has filed a $10M federal lawsuit against its insurance company for COVID-19 losses. Gulfside Casino Partnership is also demanding $90M in punitive damages, attorney’s fees, and interest.

The Misissippi casino says that it has lost $46.M when it was forced to close from March 16 to May 21, 2020 per instruction of the Mississippi Gaming Commission. However, the policy only covers up to $10M.

The case alleges breach of contract and negligence against the Georgia-based Westchester Surplus Lines Insurance Co. which is affiliated with Chubbs. According to a report from the AP Westchester divided shares of the risk to nine other insurers.

Won’t Pay Unless There is Physical Damages

Gulfport lawyer Joe Sam Owen, who represents Chubbs, said that legal claims related to COVID-19 have boiled down to the definition of “physical damage”. As a general rule, insurance companies argue that properties must suffer actual physical damage to recover losses under their insurance policies.

But Gulfside Casino argues that its policy specifically covers the losses caused by its inability to accept bookings or cancelled bookings brought about by “a contagious or infectious disease at an insured location, and as determined by a public or civil authority”. Because its insurance policy had cancellation coverage, the Mississippi casino paid $408,268.00 per annum for the premium.

Not Covered

Last July, insurance consultant Crawford Global Technical Services was tasked to review the claim of the Mississippi casino. In a letter sent to Island View Casino, Crawford Global said that “As a general matter, the policies afford coverage only when there has been direct physical loss, damage or destruction. In the absence of such damage, there is not coverage.”

Crawford Global added that pollutants and contaminants such as virus are not covered. Likewise, communicable disease is not covered in other policy language. Last July, Circus Circus LV also filed a lawsuit against American International Group (AIG), joining a long list of companies in various industries pursuing litigation against its insurers.

Illinois Casinos Ordered To Shut Down Again Beginning Friday

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Illinois Gov. J.B. Pritzker announced in a news conference on Tuesday the complete shutdown of Illinois casinos. The decision comes in the wake of a surge in the COVID-19 virus cases during the past week.

Said Pritzker during the briefing:

“The simple fact is that COVID-19 is spreading quickly and widely. Our hospitals are beginning to experience real strain, and at the current infection rate they will be overwhelmed.”

Pritzker added that the effort would “pause a number of indoor activities where science shows us this virus can can easily spread.” He hopes that the measures will help bend the state’s current coronavirus curve without having to enforce a stay-at-home order for its constituents.

The shutdown follows the actions of Michigan after Governor Gretchen Whitmer ordered the state’s three commercial casinos closed for three weeks beginning Tuesday to curb the spread of the pandemic. Unlike Michigan’s shutdown, Pritzker didn’t give a timetable as to when the Illinois casinos can reopen. Illinois was one of the first states to shut down its casinos at the height of the pandemic last March Illinois casinos were forced closed on March 15, 2020 and were allowed to reopen on July 1st.

Tier 3 Mitigations

Pritzker’s move puts the state into what he termed as Tier 3 mitigations beginning 12:01 am on Friday. Under the new shutdown, retail establishments are ordered to drop to 25% capacity while groceries and pharmacies are limited to 50% capacity. Gyms car stay open at 25% capacity if masks are worn at all times and locker rooms are closed.

On the other hand, museums, theaters, and Illinois casinos will be completely closed. Impacted by the order are Caesars Entertainment and Penn National Gaming who each have three casinos in the state, Rush Street Gaming and Boy Gaming who each have one Illinois casino, DraftKings which has licensed its name to Casino Queen, and Jumer’s which is in the process of beng sold to Bally’s Corp.

Rise in COVID-19 cases

State Health Officials reported 12,601 probable and new cases of COVID-19 on Tuesday. That was the 12th straight day where the state had more than 10,000 cases During the past week, Illinois has averaged 12,381 COVID-19 cases per day. Overall, the state has accumulated a total of 597,849 cases since the pandemic began.

97 deaths were also reported on Tuesday, bringing the statewide total to 10,875. Over the past week, Illinois has been averaging 84 deaths per day which is the highest weekly average since June 2nd. During the height of the pandemic, the average deaths per day in the state was 100 deaths per day.

Zouk Group Partners With Resorts World Las Vegas For $4.3B Project

Resorts World Las Vegas
The Zouk Group has forged a partnership with Resorts World Las Vegas to build an integrated resort which will bring Singapore’s homegrown brand to Sin City.

The $4.3B project is expected to open in the summer of 2021. According to the Singapore news outlet The Straits Times, the night club and entertainment space will occupy 100,000 square feet of the Resorts World Las Vegas. The venture aims to reinvent the traditional Las Vegas hospitality experience by showcasing Singapore’s famed approach to entertainment.

Said Andrew Li, Chief Executive officer of Zouk Group, in a statement:

“The partnership between Zouk Group and Resorts World Las Vegas will bring entertainment and lifestyle brands together on a property destined to breathe new life into the Las Vegas market. With over 29 years of experience in the nightlife industry, the Zouk brand is proud to make its debut at Resorts World Las Vegas, in a destination considered by many to be the entertainment capital of the world.”

Largest Development in Two Decades

The multi-concept complex will include a Zouk nightclub which is similar to the iconic one in Singapore, an AYU dayclub, an outdoor venue with a Southeast Asian tropical island theme, RedTail, FUHU Asian dining cuisine, and social gaming bars where guests can enjoy food and drinks while playing a variety of fun game like beer pong, darts, and pool.

Genting Berhad of Malaysia has been tasked to develop the project which is being labeled as the largest development in the city in almost two decades. This venture is the first such undertaking of the Zouk Group in the United States. More details about the project will be revealed in the coming months.

A Lifestyle and Entertainment Company

The Singapore based Zouk Group is a leading lifestyle and entertainment company. It owns establishments in the entertainment, food and beverage, and nightlife sectors. The business started as a single night club called the Zouk Club.The club fostered the growth of electronic dance music and influenced the music taste in the Lion City.

The Zouk Club was purchased in by the Genting Hong Kong group in 2015 a the prompting of Genting heir Lim Keong Hui. The young Lim grew the business into a diverse lifestyle group with 17 outlets that include night clubs, day lounges, restaurants, and burger bards. Last September, the son of Genting patriarch LKim Kok Thay purchased the Zouk Group for $10.1M.

Brin Gibson Appointed As Nevada Gaming Control Board Chairman

Table with Poker Cards and Casino Chips, Welcome to Las Vegas Sign
Las Vegas attorney J. Brin Gibson has been named as chairman of the regulatory panel he once advised. Gibson was appointed as Chairman of the Nevada Gaming Control Board on Tuesday by Gov. Steve Sisolak.

The appointment is effective on November 18th and will run through the remaining two years of outgoing chairman Sandra Douglass Morgan’s term. Morgan resigned last week to join the board of Fidelity National Finance, Inc. She was the first African-American and second woman to chair the more than 60-year old board.

Said Gov. Sisolak of the appointment:

“I am overjoyed to make this appointment. Brin is exactly the type of committed public servant needed in this important role during this critical time. Brin’s extensive background and expertise in highly regulated industries, including his experience as Chief of the Gaming Division, makes him a perfect fit for this position, and I look forward to watching him excel in this position.”

Extensive Background and Expertise

Gibson spent four years as the Chief of the Gaming Division and First Assistant Attorney General for the Nevada’s Attorney Genera’s Office. In this role, Gibson supervised all regulatory and administrative law action for the Office of the Attorney General and oversaw a 400 strong staff of lawyers and legal associates.

Most recently, Gibson served as thee general counsel of Nevada Governor Steve Sisolak. Under that capacity, Gibson served as the Chief Legal Counsel regarding ethics, transactional, and legislative matters. He was also Chief Legal Counsel to Gov. Sisolak and all Executive Branch agency directors and cabinet members.

Top Gaming Regulator

As Chairman of the Board of the Nevada Gaming Control Board, Gibson is considered as the state’s top gaming regulator. The job has an annual salary of $158,879 and the three-man Board is responsible for making recommendations on licensing and other gaming polices to the Nevada Gaming Commission.

The Commission and Board govern the Nevada gaming industry through strict regulation and other related activity. Their mission is to protect the integrity and stability of the industry through investigative and licensing practices. They enforce laws and regulations while holding the gaming licensees to a high standard. Through these practices, both regulatory  ensure the collection of taxes and fees that are essential sources of income for the state.

JCM Global and Churchill Downs Expand Partnership at Newport Racing

Image of Horse Racers and Sportsbook Background
Churchill Downs Incorporated further strengthened its partnership with JCM Global by giving its newest parimutuel gaming entertainment venue, the Newport Racing & Gaming, the same systems that were installed by the latter at Oak Grove Racing earlier this month.

Said CDI Sr. Director Slot Strategy and Performance Duncan McConnell:

“Guests at Newport Racing & Gaming can now experience the same wagering transactions they have come to expect at Oak Grove Racing, Gaming & Hotel through this expanded partnership with JCM.”

Same As Oak Grove

Just last week, Churchill Downs Incorporated selected JCM as the exclusive gaming transactions solutions provider for its newly opened Oak Grove Racing, Gaming, & Hotel in Oak Grove, Kentucky.

Under that agreement, each of the 1,325 Historical Racing Machines at Oak Grove Racing was equipped with JCM’s award-winning iVIZION bill validator, GEN5 thermal printer, and Intelligent Cash Box (ICB) system. These systems from JCB Global have proven to save casino operators hundreds of thousands of dollars annually. Now, all these have been installed at Newport Racing as well.

Security, Accountability, & Efficiency

The iVIZION is a powerful system that reads more than 9.5 data points on each note. Its combination of optical sensors and mechanical security give gaming operators protection against cheats and counterfeiters. On the other hand, GEN5 has a very fast CPU and print speed. It also has the capability to print TITO, promotional tickets, wager tickets, and coupon promo templates.

The ICB is a management system that increases efficiency and eliminates human error on the part of the operator. For gaming customers, it gives them the ability to access important information securely, anytime and anywhere. The combination of the above mentioned solutions systems gives CDI’s gaming venues added value in security, accountability, and efficiency while also providing its customers unmatched gaming experience.

About JCM and Newport Racing

JCM Global is the leader in the creation of innovative automated transactions solutions for various industries like banking, financial, gaming, kiosk, retail, transportation, vending, other specialty industries, and other businesses that require speed, security, and accuracy in their day to day operations.

Newport Racing & Gaming is a $34.8M facility at the Newport Shopping Center in Northern Kentucky. It was developed by Churchill Downs Inc to create a Las Vegas-like atmosphere in the area. The 17,000 foot gaming area used to be a Chinese restaurant which CDI renovated last May.

MGM Resorts Considering Mid-Week Closure of Strip Properties

Outside of MGM in Las Vegas
MGM Resorts International is considering closing some of its Las Vegas Strip properties during the middle of the week. It is also keeping an eye on the possibility of operating on limited hours like other Strip casino operators like Wynn Resorts. The moves come as the demand in Las Vegas casinos continues to be low amid the COVID-19 pandemic.

During a quarterly earnings call, MGM CEO Bill Hornbuckle said:

“There are certain amenities, certain towers, certain brands potentially that could face closure from mid-November — give or take — through the holiday season.”

An MGM spokesman later clarified that the closures are not full property closures but only limited to midweek operations.

Slow Tourism

Las Vegas casinos have felt the effect of the slow tourism since the outbreak of the COVID-19 pandemic last March. With a steep decline in airline travel, visitors have been few and rare in Sin City. According to a report, the arrivals at McCarran international airport declined by more than 60 percent in September 2020 as compared to the numbers of the same month last year.

Likewise, the falloff in group conventions has also taken its toll on the economy. Prior to the pandemic, Las Vegas was the convention capital of the world with over 22,000 conventions, exhibitions, and events per year The sharp drop in these events have heavily impacted midweek reservations.

Following The Lead

With scarce business, some LasVegas casino resort operators have decided to close during the midweek. For instance, starting October 19, Wynn Las Vegas and Encore are closed on Tuesdays and Wednesdays due to low consumer demand. The resorts are open from 2pm of Thursday until noon time of Monday. It’s possible that MGM could follow their lead.

MGM reported a net revenue of $1B for the quarter ending September 30, 2020 which is down 66% from the revenues posted during the same period last year. The net loss attributed to the company was $535M or $1.08 per diluted share. During the third quarter of 2019, the company reported a net loss of only $37M. MGM’s Strip properties posted net revenues of $481M for the quarter which is a huge drop of 68% from the third quarter of 2019.

Boyd Gaming and Aristocrat Launch Cashless Wagering Digital Wallet

Row of Slot Machines in Casino

As one of its responses to the COVID-19 pandemic, Boyd Gaming Corporation has partnered with Aristocrat Technologies for the introduction of a cashless wagering digital wallet at Boyd’s Blue Chip Casino Resort Spa in Michigan City, Indiana.

With regulators asking gambling operators to come up with cashless strategies to combat the spread of the COVID-19 virus and customers looking to a convenient way to place bets, Boyd and Aristocrat have heeded the call. During an announcement last Monday, Boyd Gaming Senior Vice President and Chief Information Officer Blake Rampmaier said this innovation will enhance client experience at Boyd properties.

Added Rampmaier:

“Building on our strategic partnership with Aristocrat, Boyd Gaming continues to add best-in-class mobile cashless wagering and contactless solutions that will greatly enhance the patron experience at our properties. As previously announced, we will continue to leverage our partnership with Aristocrat to drive mobile innovation in a secure and exciting environment for our patrons.”Resort Wallet Feature

The digital wallet is part of Boyd’s “Resort Wallet” scheme. Under this feature, Boyd patrons can can place an amount on the account at the cashier’s cage. Then they can use their casino Loyalty Cards to access the casino floor and play games.This digital wallet eliminates the need to use cash when playing slot machines.

As of the moment, this cashless wallet feature can only be experienced by slot machine players, allowing them to use their B Connected loyalty cards to place wagers and cash out credits.However, Boyd plans to expand its use to table games, restaurants, and other casino amenities.

Expanding To Other Properties

The new product is currently limited to Blue Chip Casino but Boyd plans to expand its use to its other properties across the country, pending regulatory approvals and depending on the success of its maiden launch.Boyd Gaming also intends to integrate this cashless wallet to its B Connected Mobile App so that their patrons will fully experience touchless gaming.

With many regulators calling for the development of a cashless payment system, Boyd and Aristocrat believe that this pandemic-hit period is the best opportunity to offer cashless gaming solutions.

Live Entertainment To Return At MGM’s Las Vegas Properties Next Month

Outside of MGM in Las Vegas

MGM is bringing back live entertainment back to Las Vegas. In a statement released on Tuesday, MGM Resorts announced the return of various live shows to some of its Las Vegas casinos.

Said George Kliavkoff, MGM Resorts President of Entertainment and Sports:

“After eight months, it’s time to bring entertainment back to the Entertainment Capital of the World. While there is still a long road in our city’s recovery, the reintroduction of these shows is an important first step. November 6 is going to feel very special as we welcome back team members and guests and bring the curtains up for that first time.”

Seven Shows To Return on November 6th

According to its website, MGM will return seven shows beginning November 6th. These shows are David Copperfield, Carrot Top, Brad Garrett’s Comedy Club, Fantasy, Jabbawockeez, The Australian Bee Gees, and Thunder From Down Under. These shows will go live at MGM Grand, Luxor, and Excalibur.

Some shows will be transferred to bigger Las Vegas casinos in order to satisfy the state’s health and safety protocols. Currently, Nevada allows a maximum audience of 250 guests, separated six feet apart from one another, and a 25 feet distance between the stage and the closest audience. As a result, the following venue changes were announced:

  • David Copperfield will return to the David Copperfield Theater at MGM Grand
  • Jabbawockeez will bring its signature moves and “Timeless” show to the MGM Grand Garden Arena
  • Brad Garrett’s Comedy Club will take to the stage in the resort’s Studio A & B Ballrooms
  • Carrot Top will perform in the Luxor Theater
  • Fantasy will perform in the Luxor Theater
  • The Australian Bee Gees will perform in the resort’s Thunderland Showroom at the Excalibur
  • Thunder From Down Under will perform in the resort’s Thunderland Showroom at the Excalibur
  • MGM’s move comes after Caesars Entertainment also announced that it will be returning three of its shows on the Strip. “X Country” is slated to return on
  • October 22nd while “Absinthe” and “Piff The Magic Dragon” will go live again at the end of this month.

Convene With Confidence Plan

MGM Resorts has formulated its own Seven Point Safety Plan and the “Convene With Confidence” Program for meetings and conventions which outline the health and safety measures that the company has put in place to protect its guests and employees. A specific “Convene With Confidence” program for entertainment and sporting events has also been developed and it will be implemented when the shows open on November 6th.

The comprehensive plan includes the health screening questionnaires, mandatory wearing of masks, social distancing, sanitation stations, regular cleaning of venues in between shows, and the encouraging of digital ticket sales and their contactless scanning to minimize touch points.

Playtika Confidentially Files for IPO in The U.S.

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Mobile gaming company Playtika Holding Corp. announced last Friday that it has confidentially submitted documents with the U.S. Securities and Exchange Commission for an initial public offering. According to the company, the size and and price range of the offering has not yet been determined.

To underwrite the IPO, Playtika has hired Morgan Stanley and other banks. Sources say that they are planning to go public at the end of the year or in early 2021. If things go according to plans, the company will be valued at an estimated $10B as a result of the IPO.

Interesting Time

The move comes at an interesting time for a Chinese-owned company like Playtika. Tension between the White House and Beijing are once again running after the Luckin Coffee Fiasco. The Chinese-owned Luckin coffeehouse chain was recently delisted in the Nasdaq after it was found to have falsified its revenue declaration.

In the aftermath of the Luckin farce, Chinese firms trading in the US markets are facing more scrutiny. There are rumors that some large companies are thinking about pulling their New York listings. Last week, the US Senate passed a legislation that would require listed Chinese companies to be held to the same accounting and regulatory standard as US companies.

Sold in 2016

Playtika is the mobile gaming supplier behind the WSOP’s social platform. It is also the game developer of popular slot titles such as Bingo Blitz, Poker Heat, and Caesars Slots. It was founded in Israel in 2010 and was owned by Caesars Interactive Entertainment from 2011-2016.

When Caesars field for bankruptcy protection and tried to sell its assets in 2015, Playtika ended up being sold for $4.4B to Chinese investors in August 2016 as part of its cash raising efforts. Among the investors were Alibaba founder Jack Ma who joined the group via the Yunfeng private equity group.

Looking To Cash In

Last June, Playtika announced that it was considering an IPO in the United States, as part of its efforts to mitigate the impact of the COVID-19 pandemic on its business. At that time, the Giant Network Group Co Ltd. and Yunfeng Capital group owned mobile gaming company was anticipating a $1B offering.

Playtika is the latest mobile gaming company looking to cash in on the increasing demand for mobile gaming as more customers are preferring to play at home due to pandemic-related restrictions. Previously, DraftKings and Gan Ltd., which are also direct players in the iGaming and online gambing market, completed their IPOs and their stocks are doing very well right now.