Landcadia Holdings II to Buy Golden Nugget Online Business By End of Year

Landcadia Holdings II, called a special shareholders meeting last week to approve its acquisition of Golden Nugget Online Gaming. Landcadia scheduled the special meeting, in place of its 2020 annual meeting of stockholders, specifically to approve the proposed business merger.

While the Golden Nugget Online merger is subject to usual closing conditions, the deal is expected to be finalized as soon as possible, as long as shareholders approve of the deal.

However, not enough shareholder votes were cast to approve the merger at the recent meeting, and another meeting has been scheduled for December 29. Only a little more than 40% of all shares were voted, and 99.8% of those were in favor of the merger; but new merger rules will allow the deal to be approved with a majority of the votes cast at the meeting, rather than 50% of all outstanding shares.

The deal was first announced earlier this last summer, and values the online business at $745 million.

Tilman Fertitta, the owner, and CEO of Landry’s, established Landcadia II with Jeffries investment bank, and will serve as the co-chair and chief executive of the new special-purpose acquisitions company. 

Golden Nugget Online Gaming as a Separate Entity

The Landcadia acquisition will see Golden Nugget Online Gaming spinning off from the Landry’s hospitality and casino business, and the newly created company will trade on the Nasdaq as a separately listed entity.

The acquisition took a positive step last week, when Golden Nugget Online was granted an internet casino license by the New Jersey Casino Control Commission. That established Golden Nugget Online as a separately licensed entity to the brick-and-mortar Golden Nugget casinos.

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Revenue Booming at Golden Nugget Online Gaming

October results showed that Golden Nugget Online recorded nearly a 92% jump in net revenue for the third quarter of 2020. Overall, gross gaming revenue for that quarter came to nearly $29 million, almost double the nearly $15 million generated during the third quarter of 2019.

After gaming taxes, Golden Nugget’s net revenue came to nearly $26 million, up from $13.5 million during the prior year.

Golden Nugget Online’s president, Thomas Winter, indicated that based on October’s performance, he believes the online casino could generate gross gaming revenue over $100 million in New Jersey alone for 2020.

If Golden Nugget Online continues to post kind of revenue, Landcadia II stock will be a big success once the merger closes. At that point, Golden Nugget Online will be only the second, purely online, publicly traded casino company in the US, following DraftKings. 

The Venerable Golden Nugget Casino 

The original Golden Nugget casino in downtown Las Vegas is one of Sin City’s oldest casinos, opening in 1946. At one point, Vegas legend Jackie Gaughan had a stake in the Nugget. Steve Wynn bought a stake in the Nugget back in 1973, becoming one of the youngest casino owners in Vegas.

The Nugget went through a few more hands before Tilman Fertitta purchased the property in 2005, including the casino in his Landry’s hospitality and restaurant company. After the purchase, Fertitta launched a 14-month, $100 million renovations of the landmark casino, completed in November 2006. 

The Golden Nugget Atlantic City occupies the old Trump Castle building, built in 1985 by Hilton Hotels. That property also changed ownership a few times, before Fertitta bought the property in 2011. He launched a year-long $150 million renovation project, featuring new restaurants, clubs, a new outdoor swimming pool, and a renovated marina.

 It wasn’t until late in 2013, that the Golden Nugget launched its real-money online casino. Despite a late entry into the online market, within four years, the online casino had grown exponentially. In fact, not only did the Golden Nugget became the first online casino in New Jersey to offer 400 games, it earned more than any other online casino in the state. 

 The Golden Nugget’s online casino consistently leads the New Jersey market in revenues, and in 2018, became the first online casino in the country to offer 500 unique games. 

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