Online casino operator Golden Nugget Online Gaming Inc (GNOG) has published its financial results for the third quarter and first nine months of 2021, reporting a Q3 net loss despite having seen revenue increase significantly during the trading period.
GNOG’s revenue for Q3 was $35.6m, a 37.4% increase compared to $25.9m recorded during Q3 2020. Revenue for the first nine months of 2021 improved as well year-over-year by 38.2% to $94.1m (2020: $68.1m).
The casino operator’s net loss for Q3 was $31.3m (Q3 2020: net loss of $1.8m) which includes a loss on warrant derivative liabilities of $18.9m, stock-based compensation expense of $3.4m, and $2.8m of merger-related expenses whereas no such loss or expenses were recognized in the prior-year period. Net income for the first nine months of 2021 was $36.7m (2020: $2.5m).
GNOG recorded an adjusted EBITDA loss for Q3 of $2.5m (Q3 2020: adjusted EBITDA of $8.2m), and an adjusted EBITDA loss was $9.8m for the first nine months of 2021 (2020: adjusted EBITDA of $22.6m). It noted the decline in adjusted EBITDA is primarily attributable to growth investments in new markets, predominantly in Michigan.
Active First Time Depositors (AFTD) for Q3 grew 133.2% compared to Q3 2020, while 12-Month Active Depositors grew 111.9%. For the first nine months of the year, AFTD grew 188.2% compared to the first nine months of 2020.
Chairman and CEO Tilman Fertitta commented: “We are pleased to deliver another quarter of double-digit revenue growth in an increasingly competitive market. Golden Nugget Online Gaming continues to pride itself in making the right investments in product, marketing and technology without wavering from our ultimate goal of profitability – as we have achieved in New Jersey.
“With successful launches in West Virginia and Virginia now under our belt, we look forward to expanding into new jurisdictions where we can bring our players a premium player experience.”
During Q3, GNOG deployed 103 new games in Michigan and 90 new games in New Jersey on the web, iOS, and Android, and the operator expects to bring its New Jersey offering to over 1,000 games in Q4.
In New Jersey, the operator partnered with Greentube to help the firm make its US debut, launched Live Dealer Auto-Roulette in its Live Dealer studio, and continued work on a 1,800 square foot expansion of its Live Dealer Studio, increasing its table capacity from 18 to 33 tables. The studio expansion is now expected to be completed by the end of the year.
GNOG’s Live Dealer agreement with Entain in the Garden State was extended for three more years as well during Q3 and it includes a commitment to operate additional private tables once the Live Dealer Studio expansion has been completed.
In Michigan, the casino operator launched player-favorite promotion Free Spins and initiated a refresh on its Live Dealer tech stack, which will be replaced by an Amazon Web Services solution to improve resiliency.
In West Virginia, GNOG launched its online casino and sportsbook and was granted permanent igaming and sports wagering management services provider permits by the West Virginia Lottery.
In Virginia, the operator launched its online sportsbook as an untethered license holder. At launch, it made a $1m donation in support of the five historically black colleges and universities (HBCUs) in the state as part of its commitment to be a part of meaningful change. It will continue to support the HBCUs by sharing proceeds from Virginia operations on an annual basis going forward.
GNOG has temporarily withdrawn its petition with the Commonwealth of Pennsylvania for an interactive gaming certificate to facilitate the prompt consummation of its proposed merger transaction with DraftKings Inc. It expects to promptly reapply for the certificate after the merger closes.
The casino operator now expects to commence Pennsylvania operations at the end of Q1 2022, subject to regulatory approvals. As a result of its delayed launch in the Keystone state, the operator expects to come in at the low end of the range of its 2021 revenue guidance.
President Thomas Winter stated: “2021 continues to be a banner year for growth at GNOG. In Michigan, we continue to grow revenues, posting a 26.3% GGR increase over Q2 2021, while the rest of the market grew 4.7%.
“Our market-leading growth in market share in the state during the quarter is a direct reflection of our steady focus on customer acquisition and retention, while our 33.6% quarterly growth in Net Gaming Revenue, outpacing our GGR growth, illustrates our financially disciplined approach to new markets.
“In Q3, Michigan accounted for 70% of our new active depositors, Net Average Revenue Per User (ARPU) kept growing in line with our forecast and we expect this trend to continue, as the weight of returning players, especially VIPs, increases in our players mix. This customer loyalty gives us further confidence that Michigan will eventually be at par with New Jersey in our revenue mix.”
“Elsewhere, we expect to build on this growth with our recent launches in West Virginia and Virginia and look forward to continuing our expansion plans as we move closer towards bringing the premium content and innovative features, synonymous with the Golden Nugget brand, to Arizona, Ontario, and Pennsylvania, subject to licensure and regulatory approvals.”
