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.