Golden Nugget Coming To Michigan With Focus On Online Casinos

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Brands focusing on Michigan casinos seem to be lacking in the market, despite the frequent influx of mobile sports betting options in the state.

Golden Nugget Online Gaming (GNOG) and its ambitious proprietor, Tilman Fertitta, are aiming to make it a reality.

Subject to regulatory approval, the owner of the Houston Rockets is planning to introduce his online gambling venture to Michigan in collaboration with an undisclosed tribal casino.

This week, the partnership between Golden Nugget and the Nasdaq market was mentioned in a pre-recorded audio release. During the release, Golden Nugget executives provided a comprehensive overview of their intentions to become a publicly traded company on the Nasdaq.

Fertitta expressed his confidence in becoming the leading iGaming company in America. He acknowledged the significance of sports but emphasized their focus on the iGaming business, as it holds greater financial opportunities and a higher value for customers. Fertitta believes that the future lies in iGaming and that it will be a lucrative venture.

Michigan launch among reasons for public offering

The Golden Nugget is a member of the top online casino group in New Jersey.

The online company is part of a group of four brands that collectively generated over $29 million in online gaming revenue in May, which is almost twice the amount earned by any other competing group.

Golden Nugget’s online casino is eagerly anticipating its upcoming launches in Michigan and Pennsylvania, with high expectations.

To support these launches and ambitious spending goals, there arises a necessity for a substantial infusion of funds.

According to Fertitta, Golden Nugget plans to invest $4 million to establish a presence in the Michigan market. They anticipate spending around $13 million within the initial two years, but also anticipate incurring significant financial losses.

There is an evident requirement with $8 million allocated for entering the Pennsylvania market and approximately $15 million to be spent within the first two years.

Fertitta emphasized the importance of going public or partnering with an equity firm at this stage. He highlighted the vast potential that lies ahead, citing the notable progress achieved in New Jersey. Fertitta confidently predicted that Pennsylvania and Michigan, in addition to these three states, will generate remarkable results in the coming years.

Details of Golden Nugget’s move to Nasdaq market

In an official move, Landcadia Holdings II Inc. (LCA) is announcing its acquisition of Golden Nugget Online Gaming.

However, it’s merely a rearrangement of the Fertitta companies’ deck.

Fertitta Entertainment Inc. and Jefferies Financial Group Inc. are co-sponsoring LCA, a publicly traded special purpose acquisition company, in order to spin off the Golden Nugget online division to them.

The completion of the deal is scheduled for the third quarter, after which LCA will undergo a name change to Golden Nugget Online Gaming Inc. (GNOG) for trading purposes.

The company’s market value is estimated to be around $745 million, which is more than six times its projected revenue of $122 million for 2021.

GNOG will be worth tracking on Nasdaq

The gambling industry has been closely monitoring the stock market, particularly with the impressive performance of DraftKings (DKNG) stock. GameAccount Network (GAN), a publicly traded online casino company, is also attracting attention.

As per Eilers & Krejcik Gaming’s report, GAN stock has witnessed a positive surge of 63% since the beginning of the year. Additionally, DraftKings has experienced a remarkable 91% increase in its stock value since its introduction on Nasdaq in late April.

Golden Nugget is an innovative company that holds the distinction of being the pioneer in introducing online live dealer games in the United States.

Golden Nugget Las Vegas, established in 1946, is an enduring presence on Fremont Street and widely renowned as one of the most iconic casino brands worldwide.

In 2017, Fertitta acquired the Rockets and currently holds ownership of Landry’s Inc., a renowned restaurant corporation in the country. Landry’s Inc. boasts several popular chains including Joe’s Crab Shack, Morton’s The Steakhouse, and Rainforest Cafe.

When will online casinos be live in Michigan?

According to the latest forecast, online gambling in Michigan is projected to commence by October, contrary to earlier predictions that anticipated a launch in early 2021.

Both Fertitta and GNOG President Thomas Winter mentioned that Golden Nugget will be launched in Michigan during the early months of 2021.

Fertitta predicts a surge in the online casino industry due to the COVID-19 pandemic, as it has negatively impacted public tax revenue. Currently, online casinos are only operational in three states: Delaware, New Jersey, and Pennsylvania.

Fertitta expressed, “The runway is extensive, with continuous opportunities arising every year. The greatest advantage, however, is that you can enjoy playing from the comfort of your own home. There’s no need to visit a casino, and iGaming customers hold far greater value.”

Fertitta: iGaming players 7x more valuable vs. sports

According to Fertitta, the value of online casino customers is seven times higher than that of sports betting customers.

He stated that they have longer playing sessions and generate a greater profit for the operator.

Fertitta stressed the company’s primary emphasis on online casinos and mentioned that it will also provide online sports betting.

According to Fertitta, women make up 51% of land-based casino players, while they account for 45% of online casino players.

However, Fertitta mentioned that the decline of women in sports betting is significantly smaller, accounting for only 5% of the market.

He stated that by transitioning to online sports instead of iGaming, we essentially exclude half of the population. This presents a significant opportunity for us to expand our business.

“The allocation of 5% of our casino floor to sportsbook and 95% to tables and slots is not without reason.”

Barstool, BetMGM, BetRivers, DraftKings, FanDuel Sportsbook, Fox Bet Sportsbook, Parx, PointsBet, and William Hill are among the online sports betting brands ready to make their entry into the Michigan market.

Who is Golden Nugget partnering with in Michigan?

An announcement regarding the specifics of a partnership between Golden Nugget and Michigan is still pending.

Winter mentioned during the call that the company has a tribal partnership that is awaiting regulatory approval.

On Wednesday, Kambi revealed its collaboration with Four Winds Casinos, aiming to launch online sports betting operations and offer their services at all three of Four Winds’ establishments in southwest Michigan.

Furthermore, Kewadin Casinos hinted at an untold narrative when it disclosed its collaboration with GAN for online gaming and sports betting in April.

The release mentioned that a well-established casino operator in the US, referred to as the “partner,” has requested to remain unnamed until specific regulatory approvals are obtained.

There are still a few other potential tribal partners present in Michigan.

Partnerships have not been announced by the Keweenaw Bay Indian Community and the Hannahville Indian Community in the Upper Peninsula.

On Wednesday, Winter informed Playinmichigan that he anticipates the announcement of the deal to take place in the following week.

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