Golden Nugget Online Gaming (GNOG) has earned a crucial approval for its merger with special purpose acquisition company Landcadia Holdings II Inc. from New Jersey gambling regulators.
GNOG is the iGaming and sports betting division of Tilman Fertitta-owned casino empire Golden Nugget. The operator announced this past summer plans to merge with blank check company Landcadia and to be listed on Wall Street.
When the combination becomes final, GNOG will join DraftKings as the only other publicly traded purely online gambling company in the US. DraftKings completed a similar tie-up with a SPAC in April.
Approval and Licensure from New Jersey Regulators
The New Jersey Casino Control Commission on Wednesday issued a casino license to GNOG as an online gaming affiliate of Golden Nugget Atlantic City. The agency also approved conditionally the company’s tie-up with Landcadia.
Once the merger closes, Landcadia, which was formed by Golden Nugget’s owner, Mr. Fertitta, will change its name to Golden Nugget Online Gaming Inc. and its NASDAQ ticker symbol will change from LCA to GNOG.
The transaction was originally expected to close in the third quarter of the year. However, pending regulatory approvals have delayed its finalization. GNOG and Landcadia still await federal green light to combine.
New Jersey Regulators Express Concerns with Deal
Dylan Thompson, who represented the New Jersey Division of Gaming Enforcement during a Wednesday hearing on the merger, expressed concerns that the transaction could potentially have negative effects on Golden Nugget’s land-based casino in Atlantic City, if online gambling becomes a focal point in the company’s operations in the state.
Mr. Thomspon said that the tie-up could deprive the casino “of the much-needed cash flow from Internet gaming on a permanent base.”
The chairman of the Casino Control Commission, James Plousis, said he understood those concerns and that he supported several proposed conditions aiming to ensure that the physical casino would not suffer losses or become victim of negligence after GNOG’s combination with Landcadia and due to Golden Nugget’s continued focus on online gambling.
Still, Mr. Plousis said he was satisfied with Golden Nugget’s assurances that it is committed to its Atlantic City casino and that Mr. Fertitta will “protect Golden Nugget’s brand of excellence and elegance and will do so by supporting, maintaining and ultimately growing the Atlantic City casino hotel facility.”
Richard Liem, Vice President and Treasurer of Golden Nugget Atlantic City, told regulators that the merger will secure them with access to much-needed capital and that they “need to have adequate access to capital to be able to grow and compete effectively” in the young but fast-growing online gambling industry.
Golden Nugget’s online operation has long been a market leader in New Jersey, but it has also secured access to Pennsylvania, Michigan, and most recently to Illinois and West Virginia through strategic partnerships.
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