The online gaming arm of Golden Nugget received a boost from the New Jersey Casino Control Commission (CCC), as the regulator approved the combination between Golden Nugget Online Gaming (GNOG) and the special purpose acquisition company (SPAC) Landcadia Holdings II.
Path to Merger Completion Cleared
During its special meeting on Wednesday, the CCC signaled the go-ahead for the pending merger deal with the blank-check company Landcadia Holdings II and opened the path to GNOG being listed on the NASDAQ. GNOG was also granted an online gaming license, allowing it to finally spin off from the parent company into a separate entity.
“We are appreciative of the efforts of both the New Jersey Division of Gaming Enforcement and the Casino Control Commission in approving our transaction.”
Tilman J Fertitta, Co-Chairman and CEO, Landcadia II, Owner, GNOG
Back in June, there was an announcement that a SPAC company, Landcadia Holdings II, owned by Tillman J. Fertitta and investment bank Jefferies LLC entered into an agreement for the purchase of Golden Nugget Online Gaming, in a transaction valued around $745 million, with the payment being made in a combination of cash and rollover equity in the SPAC. Upon completion of the merger, Landcadia which is already trading on the NASDAQ will change its name to GNOG.
“With this regulatory approval, we are one step closer to completing our acquisition of GNOG. We are now waiting on the Securities and Exchange Commission to approve our definitive proxy statement for mailing to our stockholders and approval from our stockholders of the transaction, which we hope will happen in the near future.”
Steven L Scheinthal, General Counsel, Landcadia Holdings II
GNOG Support Vital for the Atlantic City Casino
The approval was not as straightforward as expected as commissioners and a representative from the Division of Gaming Enforcement (DGE) expressed real concerns regarding how the spun off of GNOG from its parent company would affect the Golden Nugget casino in Atlantic City. During the period of casino closures, online gambling was still booming and GNOG was greatly helping its land-based counterpart.
GNOG representatives told the commissioners that the merger is needed to raise capital for the upcoming launches into Pennsylvania and Michigan, raising fears for the CCC that the online gaming operator would not be able to plough money back into its Atlantic City establishment, and it may not be obliged to, either.
Commissioners’ concerns were alleviated by GNOG executives, who noted that both the spun off online operator and the parent company have the same owner, hence the same stimulus for success, implying that some of GNOG’s net gaming revenues would continue to support the casino.
Golden Nugget Atlantic City vice president and treasurer Richard Liem told the commissioners that due to the “single enterprise approach” adopted by Golden Nugget, the Atlantic City casino would only go down when the company as a whole does.
Upon completion of the merger, Tilman J. Fertitta will remain as GNOG Chairman and CEO, while the man who has helped oversee the development of Golden Nugget’s online business, Thomas Winter, will continue to serve as GNOG President.