Landry’s CEO and billionaire Tillman Fertitta’s online gambling company Golden Nugget Online Gaming (NASDAQ:GNOG) is finally listed. GNOG stock is the result of a reverse-merger with blank-check company Landcadia Holdings II and is the second online casino company to go public after Draftkings (NASDAQ:DKNG).
GNOG stock, though, was down roughly 19% since Dec. 30 last year. However, investors shouldn’t feel hard done by its initial hiccups as it has massive long-term potential for success going forward.
Fertitta will serve as the company’s CEO and the chairman of its board of directors. The rest of the company’s team will continue to serve in their respective roles. Fertita Entertainment sponsored Lancadia and will retain roughly 52% of GNOG stock.
Landcadia was valued at $745 million back in July, based on Golden Nugget Online Gaming’s 2021 revenue estimates. The company’s market cap has now exceeded $1.41 billion Its market share should continue to rise as regulators continue to embrace online gaming.
Long-Term Growth and GNOG Stock
Golden Nugget Online Gaming has become an established player in the New Jersey market, but other markets greatly magnify its potential as an investment.
Currently, the New Jersey market is estimated to contribute up to $950 million in revenues to the iGaming market by 2025. Moreover, states such as Pennsylvania and Michigan will add to a combined market opportunity of $2.5 billion by 2025.
As we advance, Golden Nugget Online Gaming will also be looking to expand its access beyond the states mentioned above. It will be exploring market opportunities in states such as Nevada, Illinois, Mississippi, and others.
GNOG believes it can post up to $635 million in revenues by 2025. These projections factor in other states apart from its three main markets. At this point, it appears that the company should achieve its revenue goals by 2025.
Sports Gambling and the Biden Presidency
The exhausting U.S. presidential election recently wrapped up with Democratic Nominee Joe Biden emerging victorious. Industry experts have been speculating for months about his presidency would affect different industries, but few have discussed sports gambling. Former President Donald Trump was in favor of sports gambling but did little to advance any federal-level laws.
Back in 2018, The Supreme Court nullified the PAPSA law, which put restrictions on sports gambling and gave power to the states. Since then, more than 20 states have legalized some form of sports gambling.
President Biden had little to say about the industry during his campaign. Still, his officials have remarked how he “believes states and federal authorities should cooperate to ensure that gambling is safe, fair, and corruption-free.”
In covering compliance-related costs and deterring betting scandals, major sports leagues such as the MLB and NBA have proposed a 1% integrity fee from the total bet pool.
We are already seeing major sports leagues and platforms partnering with companies such as Draftkings in many of their major events. Biden is likely to remove any unnecessary restrictions on the sector. Therefore, expect greater collaboration of sports leagues with the iGaming market in the future.
The Bottom Line on GNOG Stock
GNOG is the latest player in the iGaming market to go public and is already making waves in the industry. It already has a strong position in the New Jersey market and is building its presence in Pennsylvania and Michigan.
Moreover, it plans to expand to other states to cement its positioning as a leading player in the industry. It should benefit from the tailwinds created by Joe Biden’s presidency, which may remove unnecessary sector restrictions. Hence, GNOG is a fabulous play in the growing iGaming market.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.