Landcadia Holdings II – Golden Nugget SPECIAL SITUATIONS REPORT Report date July 19, 2020 CMP $14.08 Executive Summary: Ticker LCA, LCAHW, LCAHU On June 29, 2020, Landcadia Holdings II, Inc. (“Landcadia”) and Tilman J. Fertitta announced Market cap $556M that Landcadia entered into a definitive purchase agreement with LHGN HoldCo, LLC, a 52W Hi/Lo $17.0-$8.8 Delaware limited liability company (“Landcadia HoldCo”), Gaming, Inc. 3M ADTV 1.4M (f/k/a Landry’s Finance Acquisition Co.), a corporation, GNOG Holdings, LLC, a Delaware limited liability company, and Landry’s Fertitta, LLC, a limited liability company. IPO date May 7, 2019 Deadline May 9, 2021 The transaction is expected to close in Q3 2020. Upon closing, Landcadia II will change its name IPO proceeds $316M to Golden Nugget Online Gaming and will trade on the NASDAQ under the ticker symbol IPO unit structure Common + 1/3 “GNOG”. The transaction will be structured as an umbrella partnership C corporation (Up-C) Warrant where an entity indirectly owned by will retain common units of a partnership Shares issued 39.5M managed by the combined company and an equal number of non-economic voting shares in Warrants issued 16.4M the combined company. ● $11.50 strike, ● Call at $18.00, SPAC Background: ● 5-year term Landcadia Holdings, founded in 2019 and headquartered in , Texas, is a special IPO Bankers Jefferies, Ladenburg purpose acquisition company (“SPAC”). It is co-sponsored by and Thalmann Jefferies Financial Group. Landcadia raised $316M in an IPO and started trading on the Target Golden Nugget NASDAQ under the ticker symbol "LCA" beginning on May 7, 2019. Online Gaming Target sector Online gaming The Target Company: IBC announced June 29, 2020 Golden Nugget (GNOG or “Company”) is an online casino gaming company affiliated with the Proxy filed TBD Golden Nugget / Landry’s hospitality, restaurant, entertainment and gaming company owned Closing vote Q3 2020 by Tilman J. Fertitta. Golden Nugget’s iGaming business is well-established in New Jersey, the Combined EV $745M oldest and largest iGaming jurisdiction in North America. Cash out $30M Key closing Total cash ≥$314M The Company has 600 outlets, 3 hotels, 4 aquariums, 2 amusement parks and 5 casinos in conditions Atlantic City, Las Vegas, Laughlin, Lake Charles and Biloxi. Post the transaction the Company Committed will become the second online casino operator (after DraftKings, Inc.; NASDAQ: DKNG) to be financing publicly traded on a US exchange. Transaction SPAC: Jefferies Bankers The Transaction: Legal Counsel SPAC: White & Case The transaction values the combined Company at a pro forma enterprise value of Golden Nugget: approximately $745M, or 6.1x GNOG's estimated 2021 revenue of $122M. Landcadia will will Haynes and Boone pay down an additional $150M of its debt plus pay prepayment fees, transaction fees and expenses and will assume $150M of GNOG debt. If there are no redemptions, the level of net debt after factoring in balance sheet cash will be approximately $62M. $17 $16 Not factoring in redemptions, approx. $321M is currently held in Landcadia's trust account. $15 LCA After payment of the purchase price, debt repayment and transaction fees and expenses, the $14 combined company is expected to have $88M on its consolidated balance sheet at closing and $13 a pro forma equity market capitalization of nearly $700M. Per the Merger Filings, the $12 $11 transaction can be terminated if the cash balance following the Closing is less than $80M after $10 repayment of $150M in debt, $54M in fees and $30M in cash to the Sellers i.e. the minimum $9 cash condition to Closing is $314M. $8

Proceeds will be used to fund expansion of the business beyond the current base in New Jersey,

6-Jul

1-Jun 8-Jun

15-Jun 22-Jun 29-Jun

18-May 25-May 11-May with an emphasis on web-based casino-type betting and sports wagering. Tilman Fertitta will

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remain GNOG's Chairman and CEO, and Thomas Winter, who was brought in to develop Golden Nugget's online gaming business, will continue to serve as GNOG's President.

Pro forma estimates, USD Mn Sources Uses Trust cash $322 Cashout to Sellers $30 Equity consideration Equity consideration to $314 $314 to Sellers Sellers SPAC Equity $54 SPAC Sponsor Equity $54 Balance sheet cash at $88 closing Debt paydown $150 Debt paydown fees $24 Transaction Fees $30 Total sources $690 Total uses $690

Balance Sheet Composition Shareholding Composition Shares Shares, Mn 68.3 Shareholders % (M) Tilman Fertitta & Fertitta Share price $10.00 35.5 52.0 Entertainment

Total equity value $683 Jefferies SPAC Sponsor 1.4 2.0 Plus: Debt $150 Public shareholders 31.4 46.0 Outstanding Less: Cash (88) Enterprise Value $745 Total 68.3 100.0

Sponsor Economics: Pursuant to a Sponsor Forfeiture and Call Option Agreement, Jefferies will forfeit 67% of their Founder Shares at Closing and will grant the Company an option to repurchase any of Jefferies’ private placement warrants whenever Jefferies wishes to sell such warrants:

Entity Shares % Stake Shares % Stake Fertitta 4,090,625 51.70% 4,090,625 76.30% Entertainment. Jefferies Financial 3,815,625 48.30% 1,271,875 23.70% Group Total 7,906,250 100.00% 5,362,500 100.00%

Business Overview: 1. Company History & Management: ● Tilman Fertitta has been the sole shareholder, Chairman and CEO of Fertitta Entertainment, Inc., which owns the NBA , the restaurant conglomerate Landry's and the Golden Nugget Casinos. ● Fertitta’s $1.4B buyout of Landry’s in 2010, in which he took private the public company he founded in 1986, paved the way for building his casino business. ● Fertitta acquired his first casinos in 2005 when Landry’s bought the and for $325M; he is today recognized as a global leader in the dining, hospitality, entertainment and gaming industries. ● Thomas Winter, President and with the Company since inception is a seasoned online gaming executive; previously CEO of Betclic, a European online and gaming operator, which he grew organically 10x to $200M in revenue over 3 years. www.spacalpha.com Page 2 of 8

● Warren Steven, VP, Product & Operations, a 15-year veteran of online gaming, was previously with Betclic Everest Group, overseeing P&L of Casino, Games, Poker and Bingo products for the Betclic, Expekt and Everest brands, including developing and operating the online version of Casino de Monte - Carlo brand for Société des Bains de Mer. ● Golden Nugget started operations in New Jersey in Q4 2013 and has been profitable since 2016, with 48% revenue CAGR over FY2016 – 19 and rapid forecasted growth during the COVID-19 pandemic. ● First online gaming company to launch Live Dealer in the US in 2016 and first to launch Live Casino Floor gambling in US and a number of exclusive slot machine games to mobile devices, tablets and computers throughout New Jersey.

● Won the EGR North America Top Operator Award for three consecutive years (2017- 2019).

2. Commercial Analysis:

● Business Model: GNOG makes money on each bet – this is measured by a metric called gross gaming revenue (GGR) that represents the difference between the amount of money players bet minus the amount they win. ● The Company estimates that the total size of the US iGaming market will be $22B once all US States permit iGaming across the country. Of this: ● Pure casino revenue is expected to account for $12B (55% share), and ● Sports-led betting revenue is expected to account for $10B (45% share). ● Currently, iGaming is permitted in only 3 US states with expected 2020 GGR of $1.2B: New Jersey, Pennsylvania and Michigan whereas Online Sportsbetting is permitted in 10 US States. ● New Jersey: sole area of iGaming and Online Sports operations for GNOG ● Pennsylvania: expected to open iGaming operations by Jan 2021 ● Michigan: expected to open iGaming and Online Sports operations by Jan 2021 ● GNOG has delivered 50% revenue CAGR since 2014 with significant growth in EBITDA margins by improving player retention and Average Revenue per User (ARPU) over time.

Player economics: iGaming vs. Sportsbetting

● Supported by favorable customer demographics and differences in playing behavior, iGaming players deliver ~7x more revenue per month than sports bettors: • mature (40-45 years old for iGaming) vs younger (30-35 years old for sportsbetting)

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• balanced gender distribution: 45% females and 55% males (iGaming) vs 5% females and 95% males (sportsbetting)

iGaming Online Sports Slots Tables Bets Avg. Bet (per player) $2.7 $45 $45 Daily Handle $1.9k $1.75k $240 Hold % 4.3% 1.9% 6.0% Daily Hold ($) $83 $33 $14 Visits/month 6x 6x 7x Monthly Bets 4,300 230 35 Monthly Hold $500 $200 $100 Total Hold / Active Month $700 $100

Consequently, GNOG has a higher 5-year lifetime value per customer (LTV) of ~$7.7k vs ~$2.4k of DraftKings in the New Jersey market.

NJ iGaming Competitor Matrix

GNOG DraftKings FanDuel Caesars MGM

Brand Heritage DFS brand DFS brand with Well- High brand brand; in with a focus a focus on both recognized recognition online market on sports sports and with a focus with a focus almost since casino on casino on both sports inception and casino

2019 iGaming 13% 11% 17% 9% (incl. 2% 13% (incl. 9% Market Share from from Borgata) (1) Harrah's)

Demographics High value Strong focus Strong focus on Mix of high Mix of high players on young young male value and value and looking for a male sports sports fans and casual casino casual casino modern and fans pure casino players players authentic players casino experience

Reliance on Low reliance- High-reliance High-reliance of High reliance- Medium cross - selling Player base of of DFS and DFS and notable uplift reliance- loyal sportsbetting sportsbetting from Total notable uplift customers database database Rewards from M-Life built over 7+ database database years

Focus iGaming Mostly Sports and iGaming Sports and Sports, but iGaming iGaming also iGaming

Content >870 titles 210 titles 550 titles 740 titles 478 titles Strategy

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3. Product Portfolio: Golden Nugget has partnered with technology companies since its inception - a partnership with Scientific Games Corporation (NASDAQ: SGMS) in a new multi-state, multi-product, multi- channel agreement will provide access to strong iGaming content, ~870 games as well as solutions across multiple states through 2024 and potentially beyond. Licensing Scientific Games' technology allows the Company to focus on product innovation, player acquisition and retention leveraging Landry's assets data analytics and VIP management.

Slot players have a range of games to choose from the simple machines to high-tech video slots with state-of-the-art graphics and animations, multiple paylines and bonus rounds. In addition to slots, Golden Nugget Online Casino offers a large variety of video poker, 15 types of blackjack, and 6 varieties of roulette. Other table games include No Commission Baccarat, 3 Card Poker, and Let it Ride.

4. Key Financials:

$M 2017 2018 2019 Jan - Apr Jan - Apr 2019 2020 GGR Sport 0.3 0.1 0.2 GGR Casino 32.2 48.9 60.6 18.7 27.6 Gross Gaming $32.2 $48.9 $60.9 $18.8 $27.8 Revenue Y-o-Y Growth NM 52% 25% NM 48% Bonuses & Jackpot (7.0) (10.0) (13.1) (4.2) (5.7) accruals Net Gaming Revenue $25.2 $38.9 $47.8 $14.6 $22.1 Other Income (1) 2.7 4.1 7.6 2.3 3.4 Net Revenue $27.9 $42.9 $55.4 $16.9 $25.5 Y-o-Y Growth NM 54% 29% NM 50% Royalties (3.2) (5.3) (6.8) (1.9) (3.1) Payment processing (2.0) (3.0) (3.8) (1.1) (1.5) Gaming tax (5.6) (8.4) (10.0) (3.0) (4.7) Gross Profit $17.1 $26.2 $34.8 $10.9 $16.2 Advertising (7.0) (8.2) (9.3) (3.1) (4.4) Total G&A (5.5) (6.9) (8.8) (2.8) (3.2) Adj. EBITDA $4.6 $11.1 $16.7 $5.0 $8.5 % of Net Revenue 16% 26% 30% 30% 33% Y-o-Y Growth NM 141% 50% NM 70%

Note: (1) Includes market access royalties from skins, and B2B revenues from GNOG's Live Dealer studio. Adjusted EBITDA is net of brand royalties.

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Peer Valuation Comparables: TEV / 2021E Growth Adj. 2021E '19 - '24 Revenue Revenue (1) Revenue Multiple (2) CAGR (3) Golden Nugget 6.1x 0.17x 35.8% DraftKings 15.2x 0.45x 33.8% GAN Limited 12.9x 0.75x 17.1% Activision Blizzard 7.3x 0.49x 14.9% Electronic Arts (EA) 5.9x 0.83x 7.2% Take-Two Interactive (T2) 5.2x 0.65x 8.0% Zynga 4.3x 0.40x 10.9% Avg: 8.5x Avg: 0.59x Avg: 15.3% Notes: 1. TEV pro forma for primary share offering (June 18, 2020). 2. Reflects common shares outstanding. Does not take into account dilutive effect of warrants, options or other securities. Revenue estimates per Consensus Wall Street research. 3. GNOG revenue CAGR based on net revenue.

FY2021E TEV/ Revenue Cash Flow TEV ($M) FY19-FY24 ARPU* Revenue ($M) Revenue CAGR GNOG 6.1x $122 Positive $745 36% $566 DraftKings 15.2x $733 Negative $11,157 34% $39 GAN 12.9x $49 Positive $629 17% NM *Net Average Revenue Per User

Value Creation Drivers & Timeline:

All data below was sourced from the Company’s SEC filings.

● New Jersey revenue growth:

Metric 2020E 2025E iGaming market share 18.1% 15.0% iGaming market size, $M $525 $950 iGaming revenue, $M $95 $143 Online sports market share NM 3.8% Online sports market size, $M $255 $600 Online sports, $M 0 $23 Total revenue, $M $95 $166

● Pennsylvania revenue growth:

Metric 2020E 2025E iGaming market share 10.5% iGaming market size, $M $900 iGaming revenue, $M $95 Online sports market share Online sports market size, $M Online sports, $M Total revenue, $M $95

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● Michigan revenue growth:

Metric 2020E 2025E iGaming market share 10.5% iGaming market size, $M $600 iGaming revenue, $M $63 Online sports market share 3.2% Online sports market size, $M $400 Online sports, $M $13 Total revenue, $M $76

● Total growth

States 2020E 2025E New Jersey $95 $166 Pennsylvania $95 Michigan $76 Total revenue, $M $95 $337

Plus, entry into other geographies as per evolving regulatory framework.

Our view: ● The Company is targeting a large growing market driven by shift in consumer behavior to online betting, ongoing legalization of betting in US as well as cash-strapped States looking at legalizing online gambling as an avenue for revenues. ● Digital gaming is a pandemic-proof business model as players can engage in a wide assortment of gaming option from home. ● iGaming regulation is in effect across 3 States (2020E GGR of $1.2B) and online sports betting regulation in 10 States (202E GGR of $600M). ● More U.S. states have signaled their intention to allow iGaming as a logical next step after sports betting legalization and as new revenue opportunities. ● The online gambling sector could exceed $90B by 2025 and is projected to be more profitable and bigger than the sports gaming market. ● The 'Pure Casino' Market could be worth ~$12B. ● LCA stock was up 41% as of close of last trading therefore risk of redemptions is low. ● The debt level of GNOG pre-Closing is approximately $300M which translates to nearly 18x debt/EBITDA. However, the contemplated transaction envisions a reduction in debt by $150M plus $88M in cash on the balance sheet for a net debt of $62M (assuming no redemptions) i.e. under 4x net debt/FY20E EBITDA. ● On a relative valuation benchmarking basis, GNOG is well positioned relative to comparable companies such as DraftKings. On a 2021E EV/Revenue multiple, DraftKings is valued 2.5x higher than GNOG. ● Revenue is expected to grow ~3x in 5 years i.e. at better than 25% CAGR. Given operating leverage, EBITDA should grow faster than revenue. Thereby, positioning GNOG for strong performance into the future.

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