Investors Can Do A Twofer with Golden Nugget

The Golden Nugget brand could offer two opportunities for investors. The first involves going public with the successful Golden Nugget Online Gaming. The second is a possible IPO for the less successful Golden Nugget’s Atlantic City casino (l.). Both moves will help reduce debt.

The Golden Nugget brand is offering investors two chances for a payoff.

The first chance expects to happen by year’s end when shareholders of acquisition company, Landcadia Holdings II, cast their vote on a proposal to merge with online casino operator Golden Nugget Online Gaming. The second opportunity involves the possible IPO for Golden Nugget casino itself.

The initial investment was set to take place December 18, but not enough shareholders voted. Still, 99 percent of those that did said yes to the merger.

Should the acquisition be approved, it will mark only the second involving a publicly traded online casino enterprise. DraftKings went public in April following a merger with SBTech and Diamond Eagle Acquisition Corp.

As the acquisition looms, Golden Nugget supporters can point to the success as the largest online casino in New Jersey, producing $289.4 million in revenue to date in 2020. The figure is 80 percent more than the same period last year

But the revenue comes from four brands within the casino’s license, not all from GNOG. The other three include BetFair, SugarHouse, and Bet America, and are not broken out when the Division of Gaming Enforcement releases monthly figures. GNOG reported third-quarter gross gaming revenue of $28.9 million, a 93 percent improvement from last year, and net revenue of $25.9 million, good enough for a 92 percent year-over-year increase.

Prior to going public, billionaire entrepreneur Tilman Fertitta controls all that is Golden Nugget. He runs Landcadia, serves as CEO of GNOG, and owns the Golden Nugget casino, along with several restaurant chains and the Houston Rockets.

Bloomberg reported Fertitta’s interest in taking the casino and restaurants through an IPO to pay down accumulated debt. But for all its success in the iGaming field, Golden Nugget ran eighth in casino winnings in New Jersey and lags behind its rivals when it comes to sports betting.

So far this year, Golden Nugget has produced $1.1 million in revenue from sports betting, while the Meadowlands, powered by FanDuel, generated $173.3 million.

For an investor, should Golden Nugget Online Gambling go public, which almost seems a formality at this point assuming it can get enough shareholders to vote, it looks like it would be a good bet.

So where does that leave potential investors?

New Jersey excels in online gambling, including sports wagers. GNOG has its eyes set on Michigan and Pennsylvania as well. That makes it a good bet for shares, according to the Motley Fool.

The Golden Nugget casino is another story, especially since the pandemic has not been conquered enough to bring casinos back to normalcy.