In replicating Golden Nugget online success in other US states, the New Jersey’s market-leading online casino is being spun off from its parent company. Tilman Fertitta, Fertitta Entertainment owner, announced on Monday that he had reached a deal to spin off the Golden Nugget online gambling operations from his Landry’s land-based gaming firm into a standalone entity.
This will be done through a reverse takeover with Landcadia II Holdings, which already trades on the Nasdaq stock exchange.
After the acquisition of Golden Nugget Online Gaming (GNOG), Landcadia will rebrand itself as GNOG after regulatory approval, which is expected by Q3. The agreement values GNOG at about $745m, which includes Landcadia assuming $150m of GNOG debt. The current GNOG president Thomas Winter will remain in his current post. At the same time, Tilman Fertitta will remain GNOG’s chairman and CEO. Following the reverse takeover and listing, Tilman will be controlling economic interest and voting interest in GNOG.
The Golden Nugget, which routinely reports monthly revenue that dwarfs its closest competitors, is New Jersey’s unquestioned online market leader. In May, Rush Street Interactive’s PlaySugarHouse and Churchill Downs Inc’s BetAmerica, the Nugget’s family of sites, reported revenue of over $29m. The announcement on Monday covers off a remarkable turnaround for Tilman Fertitta, who called online gambling “a bust” in 2014 when the Golden Nugget site had only been operational for around six months and ranked dead last in New Jersey’s nascent online market.
In 2016, the Nugget’s online casino finally turned profitable and reported net income of $11m last year. By early next year, they are planning to develop into Pennsylvania and Michigan’s online markets. However, it remains to be seen whether the Nugget can replicate its New Jersey success without the assistance provided by the other sites piggybacking on its Garden State license. The reverse takeover reflects the process by which daily fantasy/sports betting operator DraftKings went public this spring.