Golden Nugget Online Gaming
The top line
Revenue was up 54.2% to $26.7m while the company fell to an adjusted EBITDA loss of $3.5m from a profit of $2.9m in Q120. Net income hit $69.6m reflecting non-cash gains on warrant derivative liabilities of $81.1m.
The company maintained its full-year outlook of revenue in the range of $130-$145m.
Lights out for the territory: GNOG completed its first quarter of operation in Michigan, its first state outside of New Jersey. It also has market access arranged for sports and online casino in Colorado (via Maverick’s Z Casino) and Iowa (via the Wild Rose Casino) and is preparing the ground in West Virginia, Virginia, Pennsylvania and Illinois for market entry in H2. The expansion is being funded by circa 30% EBITDA margin performance in New Jersey but such is the progress in Michigan, chairman Tilman Fertitta said the state was on course to turn profitable in 2022, way ahead of expectations. CEO Thomas Winter said GNOG was one of only two operators to increase GGR in Michigan between March and April, gaining market share against ”high-spending” competitors. According to state data, Golden Nugget achieved 4.1% market share in April in the iCasino market. (See Michigan data below).
“When you offer only sports it is extremely difficult to get to profitability. The real profitability comes from iGaming, and this is where we want to focus our marketing expenses. In states that are offering only sports at least at the start, it is more a way for us to get set up and increase brand awareness and a player database, ahead of any expected iGaming launch.”
Get active: The average active depositor numbers were undoubtedly impressive. Active FTDs rose 386% (driven by the Michigan launch) and returning active depositors rose 49%. Total active depositors rose from 30k in Q420 to 45k in Q1. Thomas Winter said that increased spending from loyal customers was one of its growth pillars.
Going live: There were some interesting comments from Winter about live-dealer suppliers turning their collective noses up at the New Jersey opportunity back in 2015, a rejection that persuaded GNOG to build its own studio in partnership with supplier Ezugi. That facility is now being expanded by 1,800 sq ft and has six other B2B clients on board. As Winter noted drily, “the situation is different now” and with both Evolution and Playtech building studios in other iGaming states, he said there was no need for GNOG to build further studios. But the potential is there to use the new Jersey facility for other states should that be allowed by the regulators.
“Right now all these states have asked that live dealer studios be located in the state but that might change,” he said. “So if at any point we are authorised to use our own studio in other states, we will do that.”
