Golden Nugget Online Gaming Inc
Golden Nugget Online Gaming — Landcadia Holdings II — SPAC Merger (June 2020)
52 slides from Golden Nugget Online Gaming's SPAC merger presentation, Jun 29, 2020
Slide 1: Investor Presentation June 29, 2020
INVESTOR PRESENTATION JUNE 29, 2020
Slide 2: Disclaimer
Disclaimer 2 This investor presentation (the “presentation”) is for informational purposes only and does not constitute an offer to sell, a s olicitation of an offer to buy, or a recommendation to purchase any equity, debtor other financial instruments of Landcadia H old ings II, Inc. (“Landcadia”)
Slide 3: Golden Nugget Online Gaming (GNOG)
Golden Nugget Online Gaming (“GNOG”) 3 GNOG is a leading operator in one of the fastest growing markets in the U.S. today Award - winning management team with history of successful execution Well - established leader in New Jersey, the largest online gaming market in the U.S. Golden Nugget is a hous
Slide 4: Agenda
4 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 5: Proposed Transaction Structure
52% 2% 46% Tilman Fertitta & Fertitta Entertainment Jefferies SPAC Sponsor Shares Public Shareholders Landcadia Share Price $10.00 Pro Forma Shares Outstanding (millions) 68.3 Total Equity Value $683 Plus: Debt Outstanding 150 Less: Cash (88) Pro Forma Enterprise Value $745 Enterprise Value Trading
Slide 6: Comparable Company Benchmarking
Comparable Company Benchmarking 6 Source: GNOG management, Company filings, and Wall Street research. Note: Data as of 6/26/2020. 2021E Revenue ($mm) Cash Flow 5 Stock Price Return Since Launch Total Enterprise Value ($mm) 1 TEV / 2021E Revenue $733 3 ’19 - ’24 Revenue CAGR Net Average Revenue per U
Slide 7: Comparable Company Benchmarking
0.17x 0.45x 0.75x 0.49x 0.83x 0.65x 0.40x 35.8% 33.8% 17.1% 14.9% 7.2% 8.0% 10.9% 6.1x 15.2x 12.9x 7.3x 5.9x 5.2x 4.3x Comparable Company Benchmarking 7 Source: GNOG management, Company filings, and Wall Street research. Note: Data as of 6/26/2020. 1. TEV pro forma for primary share offering (June 1
Slide 8: Agenda
8 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 9: Golden Nugget at a Glance
Golden Nugget at a Glance 9 Golden Nugget is an Internationally Recognized Brand & Company • Approximately $4 billion in 2019A revenue • Golden Nugget / Landry's is a diversified restaurant, hospitality entertainment and gaming company with: • 600 outlets • 3 hotels • 4 aquariums • 2 amusement parks
Slide 10: Golden Nugget / Landry's Has a Broad National Network of Locations
Golden Nugget / Landry’s Has a Broad National Network of Locations 10 We Are Strategically Located Where Americans Live, Play and Eat • National footprint augmented by an extensive database • Over 3 million Landry’s Select Club Members • Over 2.5 million Golden Nugget 24K Select members
Slide 11: Golden Nugget Has Become a Household Name Throughout America
Golden Nugget Has Become a Household Name Throughout America 11 Houston Rockets owner Tilman Fertitta with NBA All - Star and Most Valuable Player James Harden New York Times Best - Selling Author “Fertitta shares the commonsense principles that have rocketed his worldwide hospitality empire to the
Slide 12: Databases Provide a Built-in Base of Customers for New States
• Over 3 million Landry’s Select Club members • Historically, added ~5,500 new members per week • 18% of restaurant sales are associated with Landry’s Select Club transactions • 40% of members cross brands Golden Nugget and Landry’s Databases Provide a Built - in Base of Customers for New States 12
Slide 13: Golden Nugget Has a Strong History of Generating Returns
27% 17% 16% 15% Biloxi Las Vegas / Laughlin Lake Charles Atlantic City GNOG Source: Golden Nugget management. 1. Return on Investment defined as EBITDA divided by Total Investment. As of February 2020. Refer to slide 51 of this presentati on for reconciliation of Net Income to EBITDA. Golden Nugget
Slide 14: Seasoned Management Team of Industry Experts
Seasoned Management Team of Industry Experts 14 Warren Steven VP, Product & Operations Thomas Winter President Tilman Fertitta Chairman & Chief Executive Officer • Mr. Fertitta has been the sole shareholder, chairman and Chief Executive Officer of Fertitta Entertainment, Inc., which owns the NBA Hou
Slide 15: Overview of Golden Nugget Online Gaming
Source: GNOG management. Note: Refer to slide 51 of this presentation for reconciliation of Net Income to EBITDA and Adj. EBITDA. Overview of Golden Nugget Online Gaming 15 Leading U.S. Online Casino Operator • Launched iGaming operation in New Jersey in 2013, built leadership position through first
Slide 16: Awards in the Last Years
Over 15 Awards in the Last 5 Years 16
Slide 17: iGaming Player and Spend Habits
Source: Land - Based Casino Player metrics as per Golden Nugget Atlantic City management. iGaming Player metrics as per GoldenNugg etCasino.com. Online Sports Player metrics per GNOG Management estimates. Note: Demographics for land - based, iGaming and online sports players are directional and per
Slide 18: iGaming vs. Sportsbetting: Player Economics
iGaming vs. Sportsbetting: Player Economics 18 iGaming Players Place More Bets and Are ~7x More Valuable Than Sports Bettors iGaming Land - based Casino Online Sports Slots Tables Slots Tables Bets Avg. Bet $2.7 $45 $1.8 $50 $45 Daily Handle $1.9k $1.75k $1.5k $2.4k $240 Hold % 4.3% 1.9% 8% 1.9% 1 6
Slide 19: Pandemic-Proof Business Model
Source: GNOG management and New Jersey Gaming Commission. Note: Refer to slide 51 of this presentation for reconciliation of Net Income to EBITDA. Pandemic - Proof Business Model 19 Golden Nugget Online Gaming Outperformed the NJ Market During the COVID - 19 Crisis Golden Nugget Online Gaming New Je
Slide 20: Agenda
20 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 21: Investment Highlights
1. Business model focused on online casino. 2. At maturity (2030 - 2040 depending on when states legalize online casino games). Investment Highlights 21 • Cutting - edge innovator: • First in the U.S. to launch in - house Live Dealer studio • First to launch branded slot (Golden Nugget ™ Video Slot)
Slide 22: Well Positioned to Become the Leading U.S. iGaming Operator
Source: Eilers and Krejcik and GNOG management. Note: Refer to slide 51 of this presentation for reconciliation of Net Income to Adj. EBITDA. Well Positioned to Become the Leading U.S. iGaming Operator 22 GNOG has the Expertise, Infrastructure and Brand to Capture Outsized Share in Key U.S. iGaming
Slide 23: Milestones of Golden Nugget Online Gaming
Source: GNOG management. 1. Post - COVID landing, people back to work. Milestones of Golden Nugget Online Gaming 23 ~50% Revenue CAGR Since 2014 Q4 $11 $8 Q1 Q2 Q4 $9 Q3 Q3 Q1 $15 $5 Q2 Q2 $6 Q3 Q4 Q1 $6 Q1 Q2 Q4 Q3 Q4 $15 Q1 $8 Q2 $8 Q4 F Q3 Q4 Q4 Q2 Q3 Q1 $2 Q2 F Q3 F $1 $3 $27 Q1 $4 $4 $4 $4 $5 $
Slide 24: Huge U.S. iGaming Opportunity for Golden Nugget Online Gaming
Huge U.S. iGaming Opportunity for Golden Nugget Online Gaming 24 NJ, PA and MI Only the Start of U.S. iGaming Roll - Out NJ Today Immediate Opportunities Future Opportunities ~13% of a ~$800 million iGaming market ~10% of a ~$22 billion iGaming market at maturity W A O R M T I D U T W Y C O O K K S
Slide 25: U.S. iGaming: a ~$22 billion+ Opportunity
NJ 2020F iGaming GGR Implied U.S. iGaming GGR U.S. Commercial & Tribal Land- Based GGR Implied U.S. iGaming GGR iGaming Market Size 25 U.S. iGaming: a ~$22 billion+ Opportunity Source: Gaming Commissions, Census, and Wall Street research. Note: Charts in Red are not to scale. NJ 3.4% of U.S. Househo
Slide 26: The 'Pure Casino' Market Could be Worth ~$12 billion
The ‘Pure Casino’ Market Could be Worth ~$12 billion 26 Pure Casino: Players Acquired Directly Into (and Spend Most of Their Time On) iGaming U.K. iGaming GGR by Type of Company, 2019A Source: Oakvale Capital, Company reports, and GNOG management estimates. Pure Casino Companies $2.2 billion (55%) S
Slide 27: GNOG is New Jersey's Leading Online Operator
1. Estimate. Pure casino is defined as casino revenues from online casino player acquisition. 2. Estimate. Sports - led casino = casino revenues from online sports betting player acquisition. GNOG is New Jersey's Leading Online Operator 27 Golden Nugget Online Gaming Owns ~18% of the NJ Pure Casino
Slide 28: NJ iGaming Competitor Matrix
NJ iGaming Competitor Matrix 28 Using NJ as a Template for Success, GNOG Expected to Be a Strong Competitor in New States DraftKings FanDuel Caesars MGM 2 Brand Heritage brand; has been in the online market almost since inception DFS brand with a focus on sports DFS brand with a focus on both sports
Slide 29: Agenda
29 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 30: iGaming is Expected to be a Larger Vertical Than Online Sportsbetting in NJ
iGaming is Expected to be a Larger Vertical Than Online Sportsbetting in NJ 30 2021F $460 $860 $820 2018 2019 2020F 2022F 2023F $54 $277 $375 $244 $462 $230 $780 $575 $900 Online Sports GGR iGaming GGR NJ GGR by Online Sportsbetting vs. iGaming, 2018 to 2023F Source: New Jersey Gaming Commission for
Slide 31: Pandemic Has Accelerated Online Gaming Growth
Source: New Jersey Gaming Commission for 2014 - 2019 actuals and GNOG management estimates for 2021 - 2023. Pandemic Has Accelerated Online Gaming Growth 31 4% 5% 6% 9% 11% 17% 34% 32% 32% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2020F 2016 2022F 2014 2018 2015 2017 2019 2021F 2023F 44% (COVID) NJ
Slide 32: U.S. Online Gaming Positioned for Accelerated Growth
Source: GNOG management estimates. 1. As of May 2020. iGaming states are NJ, PA, DE. Online Sportsbetting states are CO, IA, IN, NH, NJ, NV, OR, PA, RI, and WV. U.S. Online Gaming Positioned for Accelerated Growth 32 Live States 3 2020E GGR $1.2 Billion iGaming Regulation 1 Online Sportsbetting Regu
Slide 33: Agenda
33 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 34: Growing and Efficient iGaming-Focused Operation
Growing and Efficient iGaming - Focused Operation 34 A Proven Operator - GNOG has Delivered 45% CAGR in GGR Over the Last 7 Years Advertising Spend/EBITDA as % of GGR, Q4 2013 to Q1 2020 • GNOG specializes in iGaming – the most valuable vertical in terms of Player Lifetime Value • Proven ability to
Slide 35: Improving Player Economics
Improving Player Economics… 35 GNOG iGaming Players Are 34% More Valuable On a Monthly Basis Since Inception $566 $624 1 $552 $493 $480 $518 2018 $467 2016 2019 2015 2020 2014 2017 +34% Casino ARPU Avg. Monthly Casino ARPU (NGR) by Year, 2014 to 2020 Source: GNOG management. 1. Forecast.
Slide 36: Above-Market Lifetime Value
Source: GNOG management and Company filings. 1. DraftKings Investor Presentation (Dec - 19). …And Above - Market Lifetime Value 36 Average Y1 LTVs at ~$2.1k; Y5 at ~$7.7k Avg. Cohort LTV (GGR), Over Six Years (Monthly) $2k $8k $6k $12k $0k $4k $10k M68 M8 M24 M2 M52 M70 M32 LTV M4 M10 M12 M14 M16 $7
Slide 37: Product and Innovation
Product and Innovation 37 The GNOG Live Dealer Studio has Benefited From Consistency in Innovation Live Dealer Studio Opens 4 tables open AUG 2016 SEP 2017 STUDIO EXPANDED Added extra 1300 sq ft Total 2200 sq ft DEC 2017 NEW GAME Casino Hold’em MAR 2018 NEW GAME Casino Floor Roulette JUN 2018 NEW GA
Slide 38: Exclusive Games Driving Player Acquisition, Retention, and Brand Equity
Exclusive Games 38 Driving Player Acquisition, Retention, and Brand Equity • 20 exclusive 1 games already launched in 2020 • 80 more lined up for 2020 - 2021 Notable Exclusive Content Partners and Games – Land Based Proven Content 2020 YTD 2016 2018 2017 2019 No. of Exclusive Games by Year 8 7 15 11
Slide 39: Best-in-Class Customer Service
Customer Service representatives average 3 years’ experience in the online gaming industry Phone, live chat, email, and help center 24/7 customer support for all methods 96% customer satisfaction rating CS and CRM teams hold regular meetings to ensure awareness of latest offers Experience Source: GN
Slide 40: Agenda
40 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 41: Historical Year-over-Year Financial Performance
Source: GNOG management estimates. Note: Refer to slide 51 of this presentation for reconciliation of Net Income to Adj. EBITDA. 1. Includes market access royalties from skins, and B2B revenues from GNOG’s Live Dealer studio. Adjusted EBITDA is net of brand ro yalties. Historical Year - over - Year
Slide 42: Short-Term Growth Plan and Opportunity – NJ, PA, MI
State Regulation GNOG Entry 2025F Market Size ($ in millions) GNOG 2025 Expected MS 1 iGaming Online Sports Feb - 13 Nov - 18 iGaming Online Sports Q4 2013 Feb - 19 iGaming Online Sports $950 $600 iGaming Online Sports 15.0% 3.8% iGaming Online Sports Jul - 19 Nov - 18 iGaming Online Sports Exp. Jan
Slide 43: Projected Revenue
Projected Revenue 1 43 GNOG Expects to Enter New Markets, Starting with PA and MI in 2021 Net Revenue (2019 to 2025) ($ in millions) NJ MI PA New States Source: GNOG Management. 1. Assumes operations in MI and PA launch on 1/1/2021. New state market size estimates derived from research. GNOG assumes
Slide 44: Projected Contribution Profit
$27 $36 $13 $30 $49 2019A 2020F 2021F 2022F 2023F Projected Contribution Profit 44 New Jersey, Pennsylvania and Michigan (Excludes New States) Contribution Profit (2019 to 2025) 1 Source: GNOG management. Note: Drop in contribution due to marketing investment required to successfully enter Michigan
Slide 45: Org Chart
Source: GNOG management. Org. Chart 45 ~150 Staff Based in Atlantic City, New Jersey, and Houston, Texas Internet Gaming Manager & Compliance Director Compliance Analyst President VP, Product & Operations 2x Graphic Designers 2x Product Manager 1x Content Manager 1x Project Manager 100x Live Dealer
Slide 46: Agenda
46 AGENDA GNOG Company Summary How We Differentiate Ourselves Proposed Transaction Financial Overview and Growth Plan Introduction Market Overview Appendix
Slide 47: Summary of Continued Support from Golden Nugget / Landry's
Summary of Continued Support from Golden Nugget / Landry’s 47 • Upon closing of a transaction, GNOG will have approximately 120 FTEs • 80 individuals will be full - time, direct employees of GNOG, with another approximately 70 individuals being part - time Employees at GNOG License and Support Servi
Slide 48: Highly Loyal and Valuable Player Base
Highly Loyal and Valuable Player Base 48 ~50% of GGR in 2019 Generated by Cohorts Acquired Before 2018 $0m $5m $10m $30m $20m $15m $35m $65m $25m $40m $45m $50m $55m $60m 2018 Cohort 2013 2014 2015 2016 2017 2018 2019 2017 Cohort 2019 Cohort 2016 Cohort 2015 Cohort 2014 Cohort 2013 Cohort GNOG GGR b
Slide 49: Customer-Focused Strategy and Differentiation
Customer - Focused Strategy and Differentiation 49 Licensing Scientific Games’ Technology Allows GNOG to Focus on What it Does Best Player Retention Product Innovation Game Exclusives Customer Support Quality Marketing Team Player Acquisition Platform Sportsbook Content Aggregation • Golden Nugget O
Slide 50: Focus On Profitable Player Acquisition
Source: GNOG management. 1. Cumulative GGR divided by Advertising Spend. Focus On Profitable Player Acquisition 50 New Players Typically Break Even by Month 5; ~2.2x ROI by Year 1; ~8.0x ROI by Year 5 • Effective and profitable player acquisition accelerates ROI • GNOG invests in high - quality traf
Slide 51: Reconciliation of Non-GAAP Measures
Reconciliation of Non - GAAP Measures 51 Source: GNOG management. ($ in millions) 2016 2017 2018 2019 Net Income $1.6 $4.5 $7.2 $11.7 Plus: Tax Expense - 0.5 4.7 6.0 Plus: Interest Expense 0.1 0.1 - - Plus: Depreciation & Amortization 0.0 0.0 0.1 0.1 EBITDA $1.7 $5.1 $12.0 $17.8 Less: Brand Royaltie
Slide 52: Preamble Deal Roadshow
Preamble Deal Roadshow Welcome to the Landcadia II Golden Nugget Online Gaming presentation. The information discussed today is qualified in its entirety by the Form 8-K that has been filed today by Landcadia II and may be accessed on the SEC’s website, including the exhibits thereto. Statements we