GNOG close to moving out of its parents’ house
The New Jersey Casino Control Commission gave Golden Nugget Online Gaming (GNOG) a double-win on Wednesday, granting it an internet gaming license and approving its merger with Landcadia Holdings II, paving most of its way to becoming a publicly traded company.
Though Golden Nugget has an online gaming license in New Jersey, it wants to spin off GNOG into its own company to expand across the United States and therefore GNOG needs its own license.
Wednesday’s hearing lasted well over two hours, even accounting for a 20-minute break. This writer assumed the two thumbs-up would be academic, as Golden Nugget has been in good standing in the Garden State and has long been the market leader in the online gaming space. But Commissioners and a representative from the Division of Gaming Enforcement had real concerns about how GNOG striking out on its own would potentially affect the Golden Nugget casino in Atlantic City.
Will still be part of the family
Online gambling has been a massive boon to Atlantic City, propping up casinos during down times. With the COVID-19 pandemic, this year has most certainly been a down time. Casinos were closed for a while in the spring, and even now, strict capacity restrictions are in place and people are reluctant to travel to gamble. Golden Nugget Online Gaming has greatly helped its land-based counterpart.
But the question those in the meeting had was what will happen when GNOG is doing its own thing? The company’s representatives said that the main reason for going public was to raise capital for its expensive launches in other states, Pennsylvania and Michigan, specifically, as those are coming soon. Commissioners were worried that while GNOG is losing money at first outside of New Jersey, it won’t be plowing any money back into Atlantic City. Nor might it be obligated to.
GNOG’s executives assured them that this would not be the case. Though GNOG will be its own company, it will still be controlled by Tillman Fertitta, the owner of the Golden Nugget. He has every reason to want the casino to continue to succeed, and GNOG will continue to use some of its net gaming revenues to support the casino.
Richard Liem, vice president and treasurer of Golden Nugget Atlantic City (GNAC), said that the company takes a “single enterprise approach,” adding that it is only when the company as a whole goes down that the Golden Nugget casino in Atlantic City will go down.
Federal regulators still need to approve the merger. Landcadia Holdings II is a “special purpose acquisition company” SPAC, created by Jefferies Financial Group Inc. and Fertitta Entertainment, Inc. It is already publicly traded on Nasdaq. Landcadia will buy GNOG and then change its name to Golden Nugget Online Gaming, making GNOG a publicly traded company.
