Could Golden Nugget Online Gaming Become the Next DraftKings?

Last month, Golden Nugget Online Gaming announced it would be coming to the public markets through a merger with special-purpose acquisition company (SPAC) Landcadia Holdings II (NASDAQ: LCA). Shares of Landcadia spiked after the announcement as investors cheered the opportunity to gain exposure to the fast-growing online gambling market.

Golden Nugget Online Gaming isn't going public through a traditional IPO process. Instead, an already-public special-purpose acquisition company (SPAC) will be bringing it public through acquisition. SPAC IPOs are not new, but they have risen in prominence in recent years as an attractive way for private companies to go public faster.

In this case, Landcadia Holdings II, a SPAC managed by billionaire businessman Tilman Fertitta, is acquiring Golden Nugget Online Casino for $745 million. The deal still needs to be approved by Landcadia's shareholders and by regulators before it can close; however, Landcadia is already a public company, which means investors can buy the stock in anticipation of the deal closing to gain exposure.

Source Fool.com