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GNOG Q1 revenue rises while SPAC warrants help profit skyrocket 1,000%


Golden Nugget Online Gaming (GNOG) reported a revenue increase of 54.2% in the first quarter of 2021, and while operating losses rose by almost $12m as costs grew rapidly, non-operating income meant final profit grew more than tenfold.

Revenue came to $26.7m, a rise of $9.4m from $17.3m in the previous first quarter. Gaming made up $23.0m of the revenue, an increase of 54.7% year on year, while other revenue rose by 51% to $3.6m.

However, costs and expenses exceeded revenue, resulting in an overall loss.

Costs of revenue came to $12.1m, a rise of 79.6% compared to the first quarter of 2020. Advertising and promotional costs also rocketed to $14.3m, a sharp increase of 382.7% year on year. General and administrative costs, at $6.0m, and depreciation and amortization expenses, at $4,400, rose 208.6% and 29.4% respectively.

Total costs and expenses came to $32.6m, a sharp rise of 185.3% year on year. Therefore, the overall operating loss for GNOG in the first quarter of 2021 amounted to $5.8m, compared to a $5.8m profit in the previous year’s first quarter.

However, non-operating income brought GNOG back into profit. Expenses on interest generated a cost of $5.7m, bringing GNOG’s loss to $11.5m, but a gain on warrant derivatives, at $81.0m, then meant the operator made a profit of $69.5m.

GNOG announced a merger with special purpose acquisition company (SPAC)  Landcadia Holdings II at the end of 2020. This merger led to the triggering of Landcadia warrants, where individuals could buy shares for a set price on the NASDAQ exchange, where the operator now trades. The $81.0m gain was due to the exercise of all 10.5 million of the SPAC’s warrants.

Other expenses, at $366,000, brought the final income before taxes to $69.1m, a huge rise of 1074.1% year on year.

Adjusted EBITDA for the quarter resulted in a loss of $3.5m, a decrease of $9.4m compared to the first quarter of 2020.

“We are very pleased to start 2021 with such strong results across both our established and new expansion markets.” said Thomas Winter, president of GNOG.

“We believe we are well positioned to capitalize on the significant and fast growing market for iGaming across North America. We expect that 2021 will be a milestone year for the Company as we are on target to be live in 6 states by the end of the year, including all 4 key iGaming states.”

In March GNOG partnered with Scientific Games to migrate and relaunch its mobile sportsbook in New Jersey.

Last year GNOG reported a 65.8% rise in gross gaming revenue across its services, while the company experienced an overall loss of $14.4m.