In an important development, Golden Nugget Online Gaming Inc. has requested the New Jersey state to approve the special merger that the company has agreed with Landcadia Holdings II Inc. Once approved, Golden Nugget Online Gaming Inc. will bifurcate its casino operations into online and physical platforms. The trend is aligned with the rising popularity of Crypto Casinos as more players now prefer online mediums of gaming rather than physical format.
According to the plan, Golden Nugget’s online gaming business will be completely separated from the physical casino business. The company also plans to go public with the online gaming business, with its shares expected to feature on the NASDAQ stock exchange. According to the recent reports, the court hearing on this matter is scheduled for the next Wednesday, when the case will be presented before the Casino Control Commission.
It is important to note that Landcadia Holdings II Inc. had already announced its business merger on June 29th earlier this year. The company also stated that this would be its second entity to be traded on the US Stock Market, and through this process of merger, the name of the company will be changed to Golden Nugget Online Gaming Inc. Additionally, the trading simple will also be transformed into GNOG from LCA. The transformation will finally be approved by the New Jersey Gaming Regulators.
Future Scenario
Post the merger, the Chief Executive Officer of Landcadia Holdings II Inc., Tilman Fertitta, will be elevated to the position of Chairman and Chief Executive Officer of the new entity. Fertitta is currently holding the five different gaming facilities of Golden Nugget. Another significant change will manifest in the form of Thomas Winter taking the position of the President of the Golden Nugget’s online gaming arm. Winter has performed a key role in enhancing the digital operations of the company since 2013.
Once this merger is complete, Golden Nugget is expected to get $321 million from Landcadia as a part of the deal. This money will be utilized to pay off the debt and make the business stand on its feet again. On the revenue front, Golden Nugget seems to be on a solid wicket as the company has reported a healthy 92% increase in its revenue from online operations on a Year-on-Year basis. Even a comparison on a quarterly basis, the company has been able to increase its revenue by around 2%, with the total figure standing at $25.9 million.
On the other hand, the operating revenue registered a decline by around $300,000 in the third quarter compared to the second one. From January to October 2020, Golden Nugget has generated a healthy $263 million of revenue from its digital and online operations. This translates into a 72% increase in the gross revenues for the first nine months of operations. The company also said that it has registered bets worth over $2 billion on its platform.
Association with Greenbrier Hotel Corporation
Just a couple of days back, Golden Nugget has also entered into a partnership with the Greenbrier Hotel Corporation, which has provided it access to the market of West Virginia. Under the license of Greenbrier, Golden Nugget will be able to offer online wagering services in West Virginia, provided this agreement gets all regulatory approvals while meeting the necessary compliances of various statutory bodies.
The positive financial performance of the Golden Nugget is sure to rub off on the stock price of Landcadia, especially at a time when the merger gets approval, and the deal consummates. We expect a similar positive impact on the Golden Nugget stock prices, a positive signal for its business sustainability in the future. Golden Nugget has big plans in the domain of online gaming as it aims to roll out services in the state of Illinois and Michigan in the future.