Golden Nugget Online Gaming strengthens its market position

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Golden Nugget Online Gaming (GNOG) posted stunning growth figures as the company announced its end of year results for 2020. The company is a major regional operator, winning the EGR North America Virtual Awards for four years straight from 2017 – 2020.

The company’s results, announced on March 23rd, meant that GNOG published total annual revenues for the year ending December 2020 of over $91 million. This represents an impressive increase of 64% over 2019.

The celebratory atmosphere was slightly dampened by the news that despite this excellent performance, the NASDAQ listed company also posted a net loss of over $31 million for the year. This was largely as a result of a number of one off expenses incurred. These will apply in 2020 only, and were the result of acquisitions ($4m), repayment of a long standing loan $25m) and depreciation costs in excess of $8m. These total costs of approaching $38m certainly take the gloss off the figures, but are unlikely to be repeated in 2021.

GNOG President Thomas Winter was more than happy with the company’s performance, pointing out that he was “extremely proud of everything achieved by Golden Nugget Online Gaming in what was a challenging year for everyone.”  He also remarked on the successful completion of the company’s NASDAQ Stock Market listing and the fact that the business was growing “faster than ever before”.

Indeed, recent corporate licensing agreements seem likely to accelerate the company’s growth still further, validating GNOG’s strategy of focusing on iGaming and its online offering in general. These include a potentially lucrative tie up with Las Vegas based gaming giant Scientific Games (SG). The deal enables Golden Nugget Online Gaming to offer Scientific’s renowned sports betting OpenSports service to its customers. This is in addition to the OpenGaming platform already in operation.

The agreement is an excellent deal for both companies. It expands the service GNOG can offer its customers, including the launch of a new iOS app. This will feature the full range of Golden Nuggets casino offering as well as Scientific Games’ OpenSports sports betting service. The deal also represents a good pay off for Scientific Games, enabling the massive conglomerate to expand its influence via GNOG’s interests in the Michigan and New Jersey gaming markets. This territorial expansion should reach still further later in the year, with the service expected to open in Pennsylvania too.

GNOG President Winter is certainly very upbeat about his company’s prospects, informing investors that 2020s figures and subsequent deals “validates our iGaming focused strategy and, combined with our increasing market access footprint, gives us conviction in our ability to take advantage of what we believe could ultimately be a $30bn market opportunity.” The partnership with Scientific Games will certainly help in achieving his ambitions.

The stock market sentiment was one of slight disappointment. Although 2020 growth was indeed spectacular, prospects for 2021 were underwhelming, as similarly sized rivals forecast more ambitious growth forecasts than GNOG. As a result, the company’s NASDAQ share price fell in early trading by over 10%. At the time of writing, shares were trading at around $14.

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