Golden Nugget Online Gaming 2021 revenue rises 41% ahead of acquisition by DraftKings
Mobile casino operator reports $128.2m revenue as expenses climb 138%
Golden Nugget Online Gaming (GNOG) has reported a 41% year-on-year (YOY) rise in its revenue for 2021 to $128.2m.
Delivering its annual report, GNOG confirmed a gaming revenue increase of 41% to $113.3m, while revenue from the firm’s other operations rose by 31% YOY to $14.8m.
GNOG attributed the rise to its launch in Michigan in January 2021, as well as successive launches in West Virginia and Virginia in Q3.
GNOG’s total costs, inclusive of advertising, promotion, general, and merger-related expenditure, rose 138% YOY to $158.2m.
The firm attributed this cost increase to the impact of its Michigan launch, as well as an increase in gaming taxes, market-access fees, and increased affiliate expenditure.
As a result, GNOG’s operating income slumped from a 2020 positive figure of $24.4m to a negative figure of -$30m in 2021.
GNOG chairman and CEO, Tilman Fertitta, received a basic salary of just $75,000 in 2021, but netted stock awards valued at more than $5.9m over the same period.
Thomas Winter, GNOG president, received a $400,000 basic salary as well as bonus, stock awards, and other related compensation, bringing his total 2021 remuneration up to $4.5m. In contrast GNOG CFO Michael J Harwell received a total 2021 remuneration package of just $252,000.
The financial results are likely to be GNOG’s last as an independent company, with the business set to become a DraftKings subsidiary later this year following its $1.56bn all-stock deal to acquire the mobile casino operator.
However, the takeover of the business has been questioned by several US law firms acting on behalf of GNOG shareholders via class-action lawsuits.
GNOG’s board of directors is currently under investigation for “possible breaches of fiduciary duty and other violations of federal and state law” in connection with the acquisition.
Under the terms of the deal, shareholders of GNOG, which was spun off from Landry’s-owned Golden Nugget and listed on the Nasdaq via a SPAC, will receive 0.365 shares of New DraftKings’ Class A Common Stock for each share of GNOG they own.
Billionaire Fertitta, who owns a 79.9% stake in GNOG, has agreed to hold onto all DraftKings shares issued to him as part of the deal for a minimum of one year. He has been also targeted in a separate class-action suit alleging wrongdoing in relation to the acquisition.
The suits allege Fertitta agreed to financial and commercial terms which unfairly benefitted him and his holdings, as well as several GNOG board members who held influence over the acquisition proceedings.