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Landcadia Holdings II to Acquire Golden Nugget Online Gaming
by Eric Weidemann on 2020-06-29 at 9:54am

This morning, Landcadia Holdings II, Inc. (LCA) announced the signing of a Purchase Agreement with Golden Nugget Online Gaming, a deal combining two Tilman Fertitta companies into a publicly traded entity. The company is known for initiating Live Dealer, Live Casino Floor gambling and a number of exclusive slot machine games to mobile devices, tablets and computers throughout New Jersey, as well as its top-notch 24/7 customer support.bringing online Live Dealer to the marketplace.

Golden Nugget Online Gaming, “GNOG” is affiliated with the Golden Nugget / Landry’s hospitality, gaming and restaurant business, owned and operated by the billionaire Tilman Fertitta, who also owns the Houston Rockets. The online gaming business began operations in 2013 and has seen 50% CAGR revenue growth since 2014. GNOG will become only the second pure publicly traded online casino company in the US.

Internet gambling is just getting started in the United States. While online gambling has been prevalent in other countries for many years, the genesis of US gaming growth is the 2018 Supreme Court decision – Murphy v. National Collegiate Athletic Association.  Four states offer online poker; three allow online casino gambling (slots and house-banked table games), and 11 more states permit online sports gambling. Illinois, North Carolina, Tennessee, and Virginia have potential to be added to the list of available online gaming states by the end of this year, and COVID-19 has supercharged growth prospects for this entire industry. GNOG has seen an additional ~50% increase in revenue from Q1 of 2020 to Q2 2020. Quarantine and stay-at-home orders no doubt have played a role, but it is likely that many of these incremental COVID-19 users will stick around once the virus is behind us. As more states come online, the market for online gambling is wide open, and GNOG already has expansion plans for Pennsylvania and Michigan in 2021, subject to regulatory approval.

The management team, led by Tilman Fertitta as CEO and Thomas Winter as President, combine deep entrepreneurial and subject matter expertise. While Mr. Fertitta brings the deal making and general hospitality / gaming expertise you would expect from a famous billionaire, Mr Winter provides the digital business acumen through his experience as CEO of Betclic a major European online sports betting brand. According to Mr. Fertitta, “Golden Nugget is one of the most time-honored brands in the gaming business today. When customers hear the name Golden Nugget, they know they are dealing with a trusted online gaming business. Thomas and his team have done a remarkable job, are the best in the industry, and with this transaction, will have access to growth capital to allow for the rapid expansion of the business.

The transaction values the combined company at an anticipated pro forma enterprise value of approximately $745 million, or 6.1x GNOG’s estimated 2021 revenue of $122 million. Landcadia II will be assuming $150 million of GNOG debt and will pay down at closing an additional $150 million of its debt, plus pay prepayment fees, transaction fees and expenses. The combined company will have a dual-class share structure with super voting rights for Mr. Fertitta. The transaction is expected to close in the third quarter of this year. The Investor Presentation can be found here.

Quick Take: The internet gambling space is taking off in the United States and is still in very early innings. Investors are buying the growth stories for dominant brands like Draftkings but not as much for lesser known names like Esports Entertainment Group (GMBL). Plus, if we look at the comps benchmarking, provided in the presentation, Golden Nugget stacks up quite nicely with a healthy discount to it’s closest comparables.

Landcadia benchmarking


But more importantly, particularly right now with a potential second-wave of Covid-19, gaming is pandemic proof as evidenced by the following slide, also included in today’s presentation.

landcadia pandemic proof

And while it’s a little odd when the Chairman and CEO of a SPAC buys his own company, investors won’t make much of an issue about it if the share price performs.  And since this transaction will most likely be well received, Tillman Fertita will certainly get some dispensation.  This one looks another winner in a string of winners lately.


  • Jefferies LLC is acting as exclusive financial and capital markets advisor to Landcadia II.
  • Haynes and Boone LLP is acting as legal advisor to GNOG.
  • White & Case LLP is acting as legal advisor to Landcadia II.
  • Houlihan Lokey, Inc. is serving as financial advisor to the Committee of Landcadia II.
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