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GNOG sees Q3 net loss widen despite revenue growth


Golden Nugget Online Gaming (GNOG) posted a net loss of $25.8m for the third quarter of its 2021 financial year, more than it lost in the same period of 2020, despite also reporting a 37.4% year-on-year rise in revenue.

Total revenue for the three months through to the end of September amounted to $35.6m, up from $25.9m in the corresponding period last year.

GNOG drew most of its revenue from gaming, with revenue in this segment of the business rising 38.9% year-on-year to $31.8m, while other revenue also increased 26.7% to $3.8m.

The quarter also saw a number of major highlights, not least an agreement for DraftKings to acquire 100% of the GNOG business in an all-stock deal with $1.56bn. Brokered in August, the deal will mean GNOG’s chairman, chief executive and largest shareholder, Tilman Fertitta, will join the DraftKings board.

Subject to regulatory approvals, the deal is expected to close in the first quarter of 2022.

Also during the quarter, GNOG partnered with Scientific Games to launch a new online sportsbook in Virginia, as well as internet sports betting and igaming in West Virginia.

GNOG also partnered with Genius Sports to gain access to its suite of data services, while the operator agreed a partnership with Boom Entertainment that will see it gain access to the developer’s online gaming content and become a minority investor in the business.

“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,” Fertitta said.

“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.”

In terms of costs for the quarter, operating expenses amounted to $44.3m, up 148.9% on last year as GNOG spent more across all areas, while the operator also reported $24.0m worth of financial costs, including an $18.9m loss on warrant derivatives that was not present in the 2020 Q3 results.

This higher spending meant an increased pre-tax loss of $32.7m, compared to $3.2m last year, while adjusted earnings before interest, tax, depreciation and amortization (EBTIDA) also fell 69.5% to $2.5m due to growth investments in new markets.

GNOG did receive $1.4m in tax benefits, resulting in a net loss of $31.4m, much wider than the $1.8m loss posted in 2020. After also including $5.6m in income from non-controlling interests, net loss attributable to GNOG was $25.8m, compared to $1.8m last year.

Looking at year-to-date performance, revenue in the nine months to September 30 stood at $94.1m, up 38.2% year-on-year.

Operating costs increased 153.3% to $115.5m and finance expenses reached $54.7m, which left a pre-tax profit of $33.2m, up 876.5% from $3.4m last year. However, adjusted EBTIDA loss amounted to $9.8m, down from a positive of $22.6m in 2020.

GNOG received $3.5m in tax benefits during the nine-month period, meaning it recorded a net profit of $36.7m, up 1,356.0% on last year. When also including $16.1m worth of income from non-controlling interests, net profit attributable to GNOG was $52.9, up 2,136.0% year-on-year.