Divestitures and Assets Held for Sale

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

The Company classifies assets as held for sale when a sale is probable, is expected to be completed within one year, and the asset group meets all of the accounting criteria to be classified as held for sale. Gains or losses associated with the disposal of assets held for sale are recorded within operating expenses.

As discussed in “Note 1 — Nature of Business and Basis of Presentation,” on July 25, 2023, the Company completed the sale of Rocky Gap. Operations of Rocky Gap had historically been presented in the Company’s Maryland Casino Resort reportable segment. The Company incurred $8.1 million in transactions costs since the announcement of the sale on August 25, 2022, $0.2 million of which was incurred in 2022 and $7.9 million of which was incurred during the nine months ended September 30, 2023. The Company recorded transaction costs in selling, general and administrative expenses as incurred.

As discussed in “Note 1 — Nature of Business and Basis of Presentation,” on March 3, 2023, the Company entered into definitive agreements to sell its distributed gaming operations in Nevada and Montana and continued to classify the assets related to the distributed gaming operations as held for sale as of September 30, 2023. The Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreements on March 3, 2023. On September 13, 2023, the Company completed the sale of the distributed gaming operations in Montana. The Company has incurred $0.9 million in transactions costs for both transactions since the announcement of the sale, which were recorded in selling, general and administrative expenses. The Company’s proposed sale of its distributed gaming operations in Nevada remains pending and is expected to close during the fourth quarter of 2023, subject to satisfaction or waiver of customary closing conditions, including receipt of gaming regulatory approvals. Prior to the sale, the results of the distributed gaming operations in Montana were combined with the results of the distributed gaming operations in Nevada and presented in the Company’s Distributed Gaming reportable segment.

The assets and liabilities of the Rocky Gap and Montana distributed gaming businesses previously held for sale were as follows as of the most recent balance sheet date preceding the sale:


	June 30, 2023
(In thousands)	Maryland Casino Resort		Distributed Gaming – Montana
ASSETS
Current assets
Cash and cash equivalents	$	6,297	$	4,402
Accounts receivables, net	2,027		1,196
Prepaid expenses	605		139
Inventories	760		—
Other	60		346
Total current assets held for sale	9,749		6,083
Property and equipment, net	24,441		16,373
Operating lease right-of-use assets, net	5,980		904
Goodwill	—		8,193
Intangible assets, net	1,064		10,127
Other assets	2		1,078
Total assets held for sale	$	41,236	$	42,758
LIABILITIES
Current liabilities
Current portion of long-term debt and finance leases	$	105	$	—
Current portion of operating leases	436		603
Accounts payable	1,585		851
Accrued payroll and related	923		353
Other accrued liabilities	2,631		4,090
Total current liabilities related to assets held for sale	5,680		5,897
Non-current finance leases	153		—
Non-current operating leases	5,206		347
Total liabilities related to assets held for sale	$	11,039	$	6,244

The following information presents the revenues and pretax income generated by the Rocky Gap and Montana distributed gaming businesses previously held for sale and divested on July 25, 2023 and September 13, 2023, respectively:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Maryland Casino Resort
Revenues	$	5,723	$	21,624	$	43,456	$	60,062
Pretax income	1,625		7,310		12,435		17,847
Distributed Gaming – Montana
Revenues	$	24,205	$	28,168	$	80,878	$	82,095
Pretax income	2,925		1,965		8,883		5,849

As discussed above, the Company’s proposed sale of its distributed gaming operations in Nevada remains pending and the carrying amounts of the assets and liabilities held for sale consisted of the following:


	September 30, 2023
(In thousands)	Distributed Gaming – Nevada
ASSETS
Current assets
Cash and cash equivalents	$	34,694
Accounts receivables, net	1,816
Prepaid expenses	1,503
Other	2,395
Total current assets held for sale	40,408
Property and equipment, net	20,318
Operating lease right-of-use assets, net	39,547
Goodwill	69,452
Intangible assets, net	28,379
Other assets	6,105
Total assets held for sale	$	204,209
LIABILITIES
Current liabilities
Current portion of long-term debt and finance leases	$	1,789
Current portion of operating leases	23,462
Accounts payable	2,427
Accrued payroll and related	1,448
Other accrued liabilities	662
Total current liabilities related to assets held for sale	29,788
Non-current operating leases	16,385
Other long-term obligations	66
Total liabilities related to assets held for sale	$	46,239

Revenues and pretax income generated by the Nevada distributed gaming assets held for sale as of September 30, 2023 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Distributed Gaming - Nevada
Revenues	$	57,667	$	62,995	$	180,479	$	193,061
Pretax income	5,137		4,949		16,122		17,618