10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 000-24993

GOLDEN ENTERTAINMENT, INC.

(Exact Name of Registrant as Specified in its Charter)

Minnesota	41-1913991
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
6595 S Jones Boulevard
Las Vegas, Nevada	89118
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (702) 893-7777

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	GDEN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of August 6, 2019, the registrant had 27,802,033 shares of common stock, $0.01 par value per share, outstanding.

GOLDEN ENTERTAINMENT, INC.

FORM 10-Q

INDEX

		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	1
	Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018	2
	Consolidated Statement of Shareholders’ Equity for the three and six months ended June 30, 2019 and 2018	3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018	5
	Condensed Notes to Consolidated Financial Statements	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4.	CONTROLS AND PROCEDURES	30
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	30
ITEM 1A.	RISK FACTORS	31
ITEM 6.	EXHIBITS	32
SIGNATURES		33

Part I. Financial Information

ITEM 1. FINANCIAL STATEMENTS 

GOLDEN ENTERTAINMENT, INC.

Consolidated Balance Sheets

(In thousands, except per share data)

	June 30, 2019			December 31, 2018
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	116,689		$	116,071
Accounts receivable, net of allowance of $670 and $503		15,348			12,779
Prepaid expenses		21,309			17,722
Inventories		8,557			6,759
Other		3,580			3,428
Total current assets		165,483			156,759
Property and equipment, net		1,030,148			894,953
Operating lease right-of-use assets, net		158,085			—
Goodwill		182,870			158,134
Intangible assets, net		146,806			141,128
Other assets		11,278			15,595
Total assets	$	1,694,670		$	1,366,569
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt and finance leases	$	1,875		$	10,480
Current portion of operating leases		29,351			—
Accounts payable		30,581			27,812
Accrued taxes, other than income taxes		8,066			6,540
Accrued payroll and related		24,545			19,780
Accrued liabilities		28,360			18,848
Total current liabilities		122,778			83,460
Long-term debt, net and finance leases		1,123,439			960,563
Non-current operating leases		143,426			—
Deferred income taxes		598			2,593
Other long-term obligations		1,340			4,801
Total liabilities		1,391,581			1,051,417
Commitments and contingencies (Note 10)
Shareholders' equity
Common stock, $.01 par value; authorized 100,000 shares; 27,800 and 26,779    common shares issued and outstanding, respectively		278			268
Additional paid-in capital		457,870			435,245
Accumulated deficit		(155,059	)		(120,361	)
Total shareholders' equity		303,089			315,152
Total liabilities and shareholders' equity	$	1,694,670		$	1,366,569

The accompanying condensed notes are an integral part of these consolidated financial statements.

1

GOLDEN ENTERTAINMENT, INC.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues
Gaming	$	146,246		$	132,546		$	290,038		$	266,409
Food and beverage		52,104			43,422			101,862			86,025
Rooms		35,514			27,660			66,801			53,787
Other		14,206			12,915			29,261			25,111
Total revenues		248,070			216,543			487,962			431,332
Expenses
Gaming		84,007			78,510			166,355			156,198
Food and beverage		40,216			35,351			78,430			68,943
Rooms		16,008			12,291			30,409			23,856
Other operating		5,160			3,655			11,594			7,651
Selling, general and administrative		56,235			43,615			113,182			87,821
Depreciation and amortization		29,976			22,854			57,241			48,091
Acquisition and severance expenses		1,123			565			2,667			1,864
Preopening expenses		738			389			1,516			837
Loss on disposal of assets		585			218			832			295
Total expenses		234,048			197,448			462,226			395,556
Operating income		14,022			19,095			25,736			35,776
Non-operating income (expense)
Interest expense, net		(19,135	)		(16,066	)		(37,270	)		(30,809	)
Loss on extinguishment and modification of debt		(9,150	)		—			(9,150	)		—
Change in fair value of derivative		(1,489	)		1,462			(3,737	)		4,673
Total non-operating expense, net		(29,774	)		(14,604	)		(50,157	)		(26,136	)
Income (loss) before income tax benefit		(15,752	)		4,491			(24,421	)		9,640
Income tax benefit (provision)		1,344			(897	)		1,995			(2,116	)
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524
Weighted-average common shares outstanding
Basic		27,762			27,406			27,667			27,278
Dilutive impact of stock options and restricted stock units		—			2,258			—			2,250
Diluted		27,762			29,664			27,667			29,528
Net income (loss) per share
Basic	$	(0.52	)	$	0.13		$	(0.81	)	$	0.28
Diluted	$	(0.52	)	$	0.12		$	(0.81	)	$	0.25

The accompanying condensed notes are an integral part of these consolidated financial statements.

2

GOLDEN ENTERTAINMENT, INC.

Consolidated Statements of Shareholders’ Equity

(In thousands)

(Unaudited)

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders'
	Shares		Amount		Capital			Deficit			Equity
Balances, March 31, 2019		27,743	$	277	$	455,696		$	(140,651	)	$	315,322
Cumulative effect, change in accounting    for leases, net of tax		—		—		—			—			—
Issuance of common stock related to business    combination		—		—		—			—			—
Proceeds from issuance of stock on    options exercised		57		1		55			—			56
Share-based compensation		—		—		2,122			—			2,122
Tax benefit from share-based    compensation		—		—		(3	)		—			(3	)
Net loss		—		—		—			(14,408	)		(14,408	)
Balances, June 30, 2019		27,800	$	278	$	457,870		$	(155,059	)	$	303,089

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders'
	Shares		Amount		Capital			Deficit			Equity
Balances, March 31, 2018		27,388	$	274	$	426,952		$	(75,931	)	$	351,295
Proceeds from issuance of stock on    options exercised		42		—		417			—			417
Share-based compensation		—		—		2,718			—			2,718
Issuance of common stock, net of    offering costs		—		—		—			—			—
Tax benefit from share-based    compensation		—		—		(1,237	)		—			(1,237	)
Net income		—		—		—			3,594			3,594
Balances, June 30, 2018		27,430	$	274	$	428,850		$	(72,337	)	$	356,787

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders'
	Shares		Amount		Capital			Deficit			Equity
Balances, December 31, 2018		26,779	$	268	$	435,245		$	(120,361	)	$	315,152
Cumulative effect, change in accounting    for leases, net of tax		—		—		—			(12,272	)		(12,272	)
Issuance of common stock related to business    combination		911		9		16,599			—			16,608
Proceeds from issuance of stock on    options exercised		110		1		55			—			56
Share-based compensation		—		—		6,262			—			6,262
Tax benefit from share-based    compensation		—		—		(291	)		—			(291	)
Net loss		—		—		—			(22,426	)		(22,426	)
Balances, June 30, 2019		27,800	$	278	$	457,870		$	(155,059	)	$	303,089

3

GOLDEN ENTERTAINMENT, INC.

Consolidated Statements of Shareholders’ Equity – (Continued)

(In thousands)

(Unaudited)

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders'
	Shares		Amount		Capital			Deficit			Equity
Balances, December 31, 2017		26,413	$	264	$	399,510		$	(79,861	)	$	319,913
Proceeds from issuance of stock on    options exercised		42		—		417			—			417
Share-based compensation		—		—		4,562			—			4,562
Issuance of common stock, net of    offering costs		975		10		25,598			—			25,608
Tax benefit from share-based    compensation		—		—		(1,237	)		—			(1,237	)
Net income		—		—		—			7,524			7,524
Balances, June 30, 2018		27,430	$	274	$	428,850		$	(72,337	)	$	356,787

The accompanying notes are an integral part of these consolidated financial statements.

4

GOLDEN ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities
Net income	$	(22,426	)	$	7,524
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		57,241			48,091
Amortization of debt issuance costs and discounts on debt		2,471			2,551
Share-based compensation		6,262			4,562
Loss on disposal of property and equipment		832			295
Loss on extinguishment of debt		9,150			—
Change in fair value of derivative		3,737			(4,673	)
Deferred income taxes		(1,995	)		107
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(953	)		1,395
Income taxes receivable		193			2,008
Prepaid expenses		(943	)		2,547
Inventories and other current assets		(1,203	)		(959	)
Accounts payable and other accrued expenses		8,715			(6,165	)
Accrued taxes, other than income taxes		755			41
Other		(467	)		(133	)
Net cash provided by operating activities		61,369			57,191
Cash flows from investing activities
Purchase of property and equipment, net of change in construction payables		(53,221	)		(27,448	)
Acquisition of business, net of cash acquired		(148,952	)		—
Proceeds from disposal of property and equipment		93			—
Other investing activities		(295	)		—
Net cash used in investing activities		(202,375	)		(27,448	)
Cash flows from financing activities
Repayments of revolving credit facility		(145,000	)		—
Borrowings under revolving credit facility		145,000			—
Repayments of term loans		(220,000	)		(4,000	)
Proceeds from issuance of senior notes		375,000			—
Repayments of notes payable		(881	)		(217	)
Principal payments under finance leases		(829	)		(468	)
Payments for debt issuance costs		(6,668	)		(95	)
Debt extinguishment and modification costs		(4,763	)		—
Proceeds from issuance of common stock, net of issuance costs		56			25,608
Tax withholding on share-based payments		(291	)		(820	)
Net cash provided by financing activities		141,624			20,008
Cash and cash equivalents
Change in cash and cash equivalents		618			49,751
Balance, beginning of period		116,071			90,579
Balance, end of period	$	116,689		$	140,330

5

Consolidated Statements of Cash Flows – (Continued)

(In thousands)

(Unaudited)

Supplemental cash flow disclosures
Cash paid for interest	$	28,752		$	29,455
Cash received for income taxes, net		(193	)		—
Non-cash investing and financing activities
Payables incurred for capital expenditures	$	9,877		$	3,636
Assets acquired under finance lease obligations		3,352			62
Loss on extinguishment of debt		4,388			—
Impairment of right-of-use asset		12,272			—
Common stock issued in connection with acquisition		16,608			—

The accompanying condensed notes are an integral part of these consolidated financial statements.

6

GOLDEN ENTERTAINMENT, INC.

Condensed Notes to Consolidated Financial Statements (Unaudited)

Note 1 – Nature of Business and Basis of Presentation

Overview

Golden Entertainment, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on resort casino operations and distributed gaming (including gaming in the Company’s branded taverns).

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the operation of ten resort casino properties in Nevada and Maryland, comprising:

The STRAT Hotel, Casino & SkyPod ("The Strat")	Las Vegas, Nevada
Arizona Charlie's Decatur	Las Vegas, Nevada
Arizona Charlie's Boulder	Las Vegas, Nevada
Aquarius Casino Resort ("Aquarius")	Laughlin, Nevada
Edgewater Hotel & Casino Resort ("Edgewater")	Laughlin, Nevada
Colorado Belle Hotel & Casino Resort ("Colorado Belle")	Laughlin, Nevada
Pahrump Nugget Hotel Casino ("Pahrump Nugget")	Pahrump, Nevada
Gold Town Casino	Pahrump, Nevada
Lakeside Casino & RV Park	Pahrump, Nevada
Rocky Gap Casino Resort ("Rocky Gap")	Flintstone, Maryland

The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC, which own the Edgewater and Colorado Belle in Laughlin, Nevada, as further described in Note 2, Acquisitions, below.

On March 12, 2019, the Company’s Board of Directors authorized the repurchase of up to $25.0 million additional shares of common stock, which replaced the prior share repurchase program authorized in November 2018. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the Company’s finance agreements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice.

On April 25, 2019, the Company issued $375 million in principal amount of 7.625% Senior Notes due 2026 in a private placement to institutional buyers, as further described in Note 5, Long-Term Debt, below.

Basis of Presentation

The unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) has been condensed and/or omitted. For further information, please refer to the audited consolidated financial statements of the Company for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K previously filed with the SEC. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s results for the periods presented. Results for interim periods should not be considered indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements for the previous year period have been reclassified to be consistent with current year presentation. These reclassifications had no effect on previously reported net income.

Lessee Arrangements

The Company is the lessee under non-cancelable real estate leases, equipment leases and space lease agreements. Beginning on January 1, 2019 (the date of the Company's adoption of Topic 842, as defined and discussed further in “Accounting Standards Issued and Adopted”, below), operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The Company’s lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of reasonably certain. For leases where the

7

Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. Additionally, for certain vehicle and equipment leases, a portfolio approach is utilized to effectively account for the operating lease ROU assets and liabilities.

As mostof the Company’s leases do not provide an implicit rate, the incremental borrowing rate is estimated based on the information available at the commencement date in determining the present value of lease payments. The implicit rate will be used when readily determinable. The operating lease ROU assets also includes any lease payments made and excludes lease incentives. The Company does not record an asset or liability for operating leases with a term of less than one year. Prior to the adoption of Topic 842 on January 1, 2019, the Company did not record an asset or liability for any of its operating leases.

Lessor Arrangements

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space within its resort casino properties. The lease arrangements generally include minimum base rent and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. Generally, the terms of the leases range between five and 10 years, with options to extend the leases. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and non-lease components for the purpose of measuring lease revenue. Revenue is recorded in other operating revenue on the consolidated statements of operations.

Net Income Per Share

For all periods, basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income per share in profitable periods reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding. Due to the net losses for the three and six months ended June 30, 2019, the effect of all potential common share equivalents was anti-dilutive, and therefore all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods. The amount of potential common share equivalents were 739,934 and 892,282 for three and six months ended June 30, 2019, respectively.

Accounting Standards Issued and Adopted

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), as amended, as of January 1, 2019, and elected the option to apply the transition requirements in the new standard at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to retained earnings on January 1, 2019. As a result, the balance sheet presentation is not comparable to the prior period in this first year of adoption.

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows the carry forward of the Company’s Leases – Topic 840 assessment regarding definition of a lease, lease classification, and initial direct costs. The Company also elected the short-term lease exception, which allows leases with a lease term of 12 months or less to be accounted for similar to existing operating leases. The Company elected not to separate non-lease components from lease components and, instead, to account for each separate lease component and the non-lease components associated with it as a single lease component, recognized on the balance sheet. The Company did not elect the use-of-hindsight, which requires an entity to use hindsight in determining the lease term and in assessing impairment of right-of-use assets, or the practical expedient pertaining to land easements, which is not applicable.

The standard did not materially impact the Company’s consolidated net earnings and had no impact on cash flows. The effect of adopting Topic 842 on the January 1, 2019 consolidated balance sheet is as follows:

(In thousands)	Prior to Adoption			Effect of Adoption(1)			Post Adoption
Prepaid expenses	$	17,722		$	(194	)	$	17,528
Property and equipment, net		894,953			2,503			897,456
Operating lease right-of-use assets, net		—			140,715			140,715
Intangible assets, net		141,128			(2,503	)		138,625
Operating lease liability		—			155,878			155,878
Other long-term obligations		4,801			(3,085	)		1,716
Accumulated deficit		(120,361	)		(12,272	)		(132,633	)

(1) Prepaid expenses, favorable lease intangible and deferred lease expense included in other long-term obligations were reclassed to the related right-of-use asset upon adoption of Topic 842 and represents a non-cash investing activity.

8

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Compensation – Stock Compensation, which expands previous guidance to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. The Company adopted the standard as of January 1, 2019, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

Accounting Standards Issued but Not Yet Adopted

See Note 2, Summary of Significant Accounting Policies, to the Company’s audited consolidated financial statements for the year ended December 31, 2018 for a discussion of accounting standards issued but not yet adopted. No other recently issued accounting standards that are not yet effective have been identified that management believes are likely to have a material impact on the Company’s financial statements.

Note 2 – Acquisitions

Laughlin Acquisition

Overview

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC (the “Acquired Entities”) from Marnell Gaming, LLC (“Marnell”) for $156.2 million in cash (after giving effect to the post-closing adjustment provisions in the purchase agreement) and the issuance of 911,002 shares of the Company’s common stock to certain assignees of Marnell (the “Acquisition”). The results of operations of the Acquired Entities are included in the Company’s results subsequent to the acquisition date.

In connection with the Acquisition, the Company borrowed $145.0 million under its revolving credit facility.

Purchase Price

The Acquisition has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”), which, among other things, establishes that equity issued to effect the acquisition be measured at the closing date of the transaction at the then-current market price. Accordingly, the fair value of the Company's common stock issued was based on the closing price of the Company's common stock on January 14, 2019 of $18.23.

The following is a summary of the components of the purchase price paid by the Company to Marnell in the Acquisition (after taking into account the adjustment to the cash portion of the purchase price pursuant to the post-closing adjustment provisions of the purchase agreement, as described above):

(In thousands)	Amount
Cash	$	156,152
Fair value of common stock issued (911,002 shares)		16,608
Total purchase price	$	172,760

Purchase Price Allocation

Under ASC 805, the purchase price of the acquisition is allocated to the identified tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date which are determined in accordance with the applicable accounting guidance for business combinations and with the services of third-party valuation consultants. The excess of the purchase price over the fair values is recorded as goodwill which is expected to be deductible for tax purposes.

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Balances subject to adjustment primarily include current assets, property and equipment, intangible assets, liabilities, as well as tax-related matters, including tax basis of acquired assets and liabilities.

The following table summarizes the preliminary allocation of the purchase price:

(In thousands)
Current assets	$	12,615
Property and equipment		126,198
Right-of-use assets		2,620
Intangible assets		19,234
Goodwill		24,736
Liabilities		(10,023	)
Lease liabilities		(2,620	)
Total assets acquired, net of liabilities assumed	$	172,760

9

The following table summarizes the preliminary amounts assigned to property and equipment and estimated useful life by category:

(In thousands)	UsefulLife (Years)
Land	Not applicable	$	4,160
Building and site improvements	10-30		102,450
Furniture and equipment	2-13		18,185
Construction in process	Not applicable		1,403
Total property and equipment		$	126,198

The following table summarizes the preliminary values assigned to acquired intangible assets and estimated useful lives by category:

(In thousands)	Useful Life (Years)
Non-compete agreements	5	$	3,630
Trade names	Indefinite		6,980
Player loyalty program	2		8,600
Other	4		24
Total intangible assets		$	19,234

Pro Forma Combined Financial Information

The following unaudited pro forma combined financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Acquisition had occurred on January 1, 2018, or what such results or financial condition will be for any future periods. The unaudited pro forma combined financial information is based on preliminary estimates and assumptions and on the information available at the time of the preparation thereof. These preliminary estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the Acquisition. The unaudited pro forma combined financial information does not reflect non-recurring charges that were incurred in connection with the Acquisition, nor any cost savings and synergies expected to result from the Acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the Acquisition.

The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of the Acquired Entities for the three and six months ended June 30, 2018, adjusted to give effect to the Acquisition, related transactions, and the adoption of ASC 606 for the Acquired Entities.

	Three Months Ended		Six Months Ended
(In thousands, except per share data)	June 30, 2018		June 30, 2018
Pro forma combined revenues	$	242,473	$	480,705
Pro forma combined net income		2,364		7,519
Weighted-average common shares outstanding:
Basic		28,317		28,189
Diluted		30,575		30,439
Pro forma combined net income per share:
Basic	$	0.08	$	0.27
Diluted		0.08		0.25

In connection with the Acquisition, the Company incurred approximately $0.9 million and $1.3 million of acquisition costs during the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2019, the Acquired Entities contributed revenue of approximately $25.3 million and $46.8 million, respectively. For the three and six months ended June 30, 2019, operating expenses related to the Acquired Entities were approximately $13.6 million and $25.0 million, respectively.

10

Note 3 – Property and Equipment, Net

Property and equipment, net, consisted of the following:

(In thousands)	June 30, 2019			December 31, 2018
Land	$	125,240		$	121,081
Building and site improvements		858,855			723,354
Furniture and equipment		197,067			154,663
Construction in process		33,401			35,151
Property and equipment		1,214,563			1,034,249
Less: Accumulated depreciation		(184,415	)		(139,296	)
Property and equipment, net	$	1,030,148		$	894,953

Depreciation expense for property and equipment, including finance leases, was $24.3 million and $18.5 million for the three months ended June 30, 2019 and 2018, respectively, and $45.9 million and $39.4 million for the six months ended June 30, 2019 and 2018, respectively.

Note 4 – Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	June 30, 2019		December 31, 2018
Gaming liabilities	$	13,676	$	12,473
Interest		6,306		305
Deposits		3,589		2,652
Other accrued liabilities		4,789		3,418
Total accrued and other current liabilities	$	28,360	$	18,848

Note 5 – Long-Term Debt

Long-term debt, net, consisted of the following: 

(In thousands)	June 30, 2019			December 31, 2018
Term loan	$	772,000		$	992,000
Senior notes due 2026		375,000			—
Finance lease liabilities		7,086			7,127
Notes payable		231			1,111
Total long-term debt		1,154,317			1,000,238
Less unamortized discount		(20,394	)		(25,658	)
Less unamortized debt issuance costs		(8,609	)		(3,537	)
		1,125,314			971,043
Less current maturities		(1,875	)		(10,480	)
Long-term debt, net	$	1,123,439		$	960,563

Senior Secured Credit Facility

In October 2017, the Company entered into a senior secured credit facility consisting of a $900 million senior secured first lien credit facility (consisting of an $800 million term loan and a $100 million revolving credit facility) with JPMorgan Chase Bank, N.A. (as administrative agent and collateral agent), the lenders party thereto and the other entities party thereto (the “Credit Facility”). The revolving credit facility was subsequently increased from $100 million to $200 million in 2018.

As of June 30, 2019, the Company had $772 million in principal amount of outstanding term loan borrowings under its Credit Facility, no letters of credit outstanding under the Credit Facility, and the Company’s revolving credit facility was undrawn, leaving borrowing availability under the revolving credit facility as of June 30, 2019 of $200 million.

As of June 30, 2019, the weighted-average effective interest rate on the Company’s outstanding borrowings under the Credit Facility was approximately 5.5%.

The revolving credit facility matures on October 20, 2022, and the term loan under the Credit Facility matures on October 20, 2024. The term loan under the Credit Facility is repayable in 27 quarterly installments of $2 million each, which commenced in March 2018, followed by a final installment of $746 million at maturity.

11

The Company was in compliance with its financial covenants under the Credit Facility as of June 30, 2019.

Senior Notes due 2026

On April 15, 2019, the Company issued $375 million in principal amount of 7.625% Senior Notes due 2026 (“2026 Notes”) in a private placement to institutional buyers at face value. The 2026 Notes bear interest at 7.625%, payable semi-annually on April 15^th and October 15^th of each year.

In conjunction with the issuance of the 2026 Notes, the Company incurred approximately $6.7 million in debt financing costs and fees that have been deferred and are being amortized over the term of the 2026 Notes using the effective interest method.

The net proceeds of the 2026 Notes were used to (i) repay the Company’s $200 million second lien term loan (the “Second Lien Term Loan”), (ii) repay outstanding borrowings under the revolving credit facility, (iii) repay $18 million of the outstanding term loan indebtedness under the Credit Facility, and (iv) pay accrued interest, fees and expenses related to each of the foregoing.

The 2026 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. Prior to April 15, 2022, the Company may redeem up to 40% of the 2026 Notes at a redemption price of 107.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. Prior to April 15, 2022, the Company may also redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and an Applicable Premium (as defined in the indenture governing the 2026 Notes (the “Indenture”)), if any, thereon to the redemption date.

Under the Indenture, the Company and its restricted subsidiaries are subject to certain limitations, including limitations on their respective ability to:  incur additional debt. grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments.In addition, in the event of a change of control (as defined in the Indenture), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2026 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase.

Expenses Related to Extinguishment and Modification of Debt

In April 2019, the Company recognized a $5.5 million loss on extinguishment of debt and $3.7 million of expense related to modification of debt, related to the repayment of the Company’s Second Lien Term Loan and $18 million prepayment of the term loan under its Credit Facility.

Note 6 – Stock Incentive Plans and Share-Based Compensation

As of June 30, 2019, a total of 1,359,129 shares of the Company’s common stock remained available for grants of awards under the Golden Entertainment, Inc. 2015 Incentive Award Plan (the “2015 Plan”), which includes the annual increase in the number of shares available for grant on January 1, 2019 of 1,119,924 shares.

Stock Options

The following table summarizes the Company’s stock option activity: 

	Stock Options
				Weighted-
				Average
	Shares			Exercise Price
Outstanding at January 1, 2019		3,424,755		$	11.49
Granted		—		$	—
Exercised		(52,390	)	$	9.06
Cancelled		(21,875	)	$	11.41
Outstanding at June 30, 2019		3,350,490		$	11.53
Exercisable at June 30, 2019		2,668,865		$	11.31

Share-based compensation expense related to stock options was $0.9 million and $1.4 million for the three months ended June 30, 2019 and 2018, respectively, and $3.4 million and $2.9 million for the six months ended June 30, 2019 and 2018, respectively. The Company’s unrecognized share-based compensation expense related to stock options was approximately $3.6 million as of June 30, 2019, which is expected to be recognized over a weighted-average period of 1.4 years.

12

Restricted Stock Units

The following table summarizes the Company’s activity related to time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”):

	RSUs					PSUs
				Weighted-				Weighted-
				Average Grant				Average Grant
	Shares			Date Fair Value		Shares(1)		Date Fair Value
Outstanding at January 1, 2019		232,299		$	29.10		171,748	$	28.41
Granted		461,606		$	14.06		204,580	$	14.13
Vested		(102,218	)	$	29.59		—	$	—
Cancelled		(12,827	)	$	26.80		—	$	—
Outstanding at June 30, 2019		578,860		$	17.07		376,328	$	20.65

__________________

(1) The number of shares for 62,791 of the PSUs listed as outstanding at January 1, 2019 represents the actual number of PSUs granted to each recipient eligible to vest if the Company meets its performance goals for the applicable period. The number of shares for the remainder of the PSUs listed as outstanding at January 1, 2019 and for all of the PSUs granted in 2019 represents the “target” number of PSUs granted to each recipient eligible to vest if the Company meets its “target” performance goals for the applicable period. The actual number of PSUs eligible to vest for those PSUs will vary depending on whether or not the Company meets or exceeds the applicable threshold, target or maximum performance goals for the PSUs, with 200% of the “target” number of PSUs will be eligible to vest at “maximum” performance levels.

Share-based compensation expense related to RSUs was $1.0 million and $1.0 million for the three months ended June 30, 2019 and 2018, respectively, and $2.1 million and $1.1 million for the six months ended June 30, 2019 and 2018, respectively. Share-based compensation expense related to PSUs was $0.2 million and $0.4 million for the three months ended June 30, 2019 and 2018, respectively, and $0.6 million and $0.5 million for the six months ended June 30, 2019 and 2018, respectively.

As of June 30, 2019, there was $7.4 million and $4.0 million of unamortized share-based compensation expense related to RSUs and PSUs, respectively, which is expected to be recognized over a weighted-average period of 2.3 years and 2.4 years for RSUs and PSUs, respectively.

Note 7 – Income Taxes

The Company’s effective tax rate was 8.2% and 22.0% for the six months ended June 30, 2019 and 2018, respectively.

Income tax benefit of $2.0 million for the six months ended June 30, 2019 was primarily due to the change in valuation allowance against the Company’s deferred tax assets during the first six months of 2019. Income tax expense of $2.1 million for the six months ended June 30, 2018 was primarily due to expenses that are not deductible for tax purposes.

Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. The Company continues to evaluate its deferred tax asset valuation allowance on a quarterly basis.

Note 8 – Financial Instruments and Fair Value Measurements

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

13

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short duration of these financial instruments.

The following table summarizes the fair value measurement information about the Company’s long-term debt:

	June 30, 2019
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	772,000	$	770,070	Level 2
Senior notes due 2026		375,000		383,438	Level 2
Finance lease liabilities		7,086		7,086	Level 3
Notes payable		231		231	Level 3
Total debt	$	1,154,317	$	1,160,825

	December 31, 2018
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	992,000	$	952,300	Level 2
Finance lease liabilities		7,127		7,127	Level 3
Notes payable		1,111		1,111	Level 3
Total debt	$	1,000,238	$	960,538

The estimated fair value of the Company’s term loan debt is based on a relative value analysis performed as of June 30, 2019 and December 31, 2018. The finance lease liabilities and note payable debt are fixed-rate debt, are not traded and do not have observable market inputs, therefore, the fair value is estimated to be equal to the carrying value.

As of June 30, 2019, the Company had an interest rate cap agreement that was outstanding with a notional amount of $650 million, which expires on December 31, 2020. Using Level 2 inputs, the Company adjusts the carrying value of the interest rate cap agreement to estimated fair value quarterly based upon observable market-based inputs that reflect the present values of the difference between estimated future fixed rate payments and future variable receipts. The fair value of the Company’s interest rate cap agreement was $0.5 million and $5.0 million as of June 30, 2019 and December 31, 2018, respectively. As the Company elected to not apply hedge accounting, the change in fair value of its interest rate cap agreement was recorded in the consolidated statement of operations.

Note 9 – Leases

Company as Lessee

The Company has operating and finance leases for offices, taverns, land, vehicles, slot machines, and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slots at business locations, which are recorded in gaming expenses. The leases, excluding land, have remaining lease terms of1 year to 28 years, some of which include options to extend the leases for an additional 5 to 15 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days’ to 1 year’s notice. The Company leases slot machines from gaming equipment manufacturers under short-term agreements. Most of the slot machine leases have variable rent structures, with amounts determined based on the performance of those machines. Certain others are short-term in nature, with fixed payment amounts. The Company has an operating ground lease with the Maryland Department of Natural Resources for approximately 270 acres in the Rocky Gap State Park on which Rocky Gap is situated. The Company leases approximately 20 acres of land in Laughlin, Nevada for the Laughlin Event Center and four parcels of land in Pahrump, Nevada on which the Gold Town Casino is located.

The Company leases approximately 4.5 acres of undeveloped land in Carson City. Upon the adoption of Topic 842, the Company wrote off the associated ROU asset for this land lease of $9 million to its beginning balance of retained earnings as of January 1, 2019. The Company is also lessee for nine taverns and locations subject to space lease agreements that it does not plan to develop, operate, or sub-lease. The Company wrote off the associated ROU asset for these eleven leases of $3 million to its beginning balance of retained earnings as of January 1, 2019.

The Company leases one of its tavern locations and its office headquarters building from a related party. See Note 12, Related Party Transactions, for more detail.

The current and long-term obligations under finance leases are included in “current portion of long-term debt, net and finance leases” and “long-term debt, net and finance leases”, respectively. The majority of the finance leases relate to vehicles used within the Company’s Distributed Gaming business and equipment for the Company’s casinos.

The components of lease expense are follows:

Three Months Ended Six Months Ended

14

(In thousands)	Classification	June 30, 2019		June 30, 2019
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	11,416	$	23,056
Variable lease cost	Operating and SG&A expenses		4,468		8,654
Short-term lease cost	Operating and SG&A expenses		1,112		2,161
Total operating lease cost		$	16,996	$	33,871
Finance lease cost
Amortization of lease assets	Depreciation and amortization	$	505	$	999
Interest on lease liabilities	Interest expense, net		100		198
Total finance lease cost		$	605	$	1,197

Supplemental cash flow information related to leases is as follows:

	Six Months Ended
(In thousands)	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,255
Operating cash flows from finance leases		198
Financing cash flows from finance leases		829
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	36,117
Finance leases		849

Supplemental balance sheet information related to leases is as follows:

(In thousands, except lease term and discount rate)	June 30, 2019
Operating leases
Operating lease right-of-use assets, gross	$	175,898
Accumulated amortization		17,813
Operating lease right-of-use assets, net	$	158,085
Current portion of operating leases	$	29,351
Noncurrent operating leases		143,426
Total operating lease liabilities	$	172,777
Finance leases
Property and equipment, gross	$	13,290
Accumulated depreciation		(2,785	)
Property and equipment, net	$	10,505
Current portion of finance leases, net	$	1,763
Noncurrent finance leases, net		5,323
Total finance lease liabilities	$	7,086

Weighted Average Remaining Lease Term
Operating leases	11.2 years
Finance leases	22.4 years
Weighted Average Discount Rate
Operating leases		6.3	%
Finance leases		5.8	%

Maturity of Lease Liabilities

15

	Operating			Finance
(In thousands)	Leases			Leases			Total
Remaining 2019	$	23,164		$	1,146		$	24,310
2020		30,778			1,954			32,732
2021		29,443			1,460			30,903
2022		22,906			589			23,495
2023		17,469			553			18,022
Thereafter		117,243			7,339			124,582
Total lease payments		241,003			13,041			254,044
Less: interest		(68,226	)		(5,955	)		(74,181	)
Present value of lease liabilities	$	172,777		$	7,086		$	179,863

As of June 30, 2019, the Company does not have any leases that have not yet commenced but that create significant rights and obligations.

Company as Lessor

Minimum and contingent operating lease income is as follows:

	Three Months Ended		Six Months Ended
(In thousands)	June 30, 2019		June 30, 2019
Minimum rental income	$	1,973	$	3,798
Contingent rental income		384		585
Total rental income	$	2,357	$	4,383

Future minimum rental payments to be received under operating leases:

(In thousands)	Operating Leases
Remaining 2019	$	2,635
2020		4,211
2021		3,272
2022		2,433
2023		1,763
Thereafter		2,546
Total future minimum rentals	$	16,860

Disclosures related to periods prior to adoption of Topic 842

For the three months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $10.0 million, $0.4 million and $3.8 million for space lease agreements, related party leases and other operating leases, respectively. For the six months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $19.4 million, $0.8 million, and $7.4 million for space lease agreements, related party leases and other operating leases, respectively. The Company recorded rental revenue of $1.9 million and $3.6 million for the three and six months ended June 30, 2018, respectively.

Note 10 – Commitments and Contingencies

Participation and Revenue Share Agreements

In addition to the space lease agreements described above in Note 9, Leases, the Company also enters into slot placement contracts in the form of participation and revenue share agreements. Under participation agreements, the business location holds the applicable gaming license and retains a percentage of the gaming revenue that it generates from the Company’s slots. Under revenue share agreements, the Company pays the business location a percentage of the gaming revenue generated from the Company’s slots placed at the location, rather than a fixed monthly rental fee. During the three and six months ended June 30, 2019, the aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $39.4 million and $77.9 million, respectively, including $0.3 million and $0.5 million, respectively, under revenue share and participation agreements with related parties, as described in Note 12, Related Party Transactions. During the three and six months ended June 30, 2018, the aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $37.5 million and $74.6 million, respectively, including $0.2 million and $0.5 million, respectively, under revenue share and participation agreements with related parties.

The Company also enters into amusement device and ATM placement contracts in the form of participation agreements. Under these agreements, the Company pays the business location a percentage of the non-gaming revenue generated from the Company’s amusement devices and ATMs placed at the location. During the three months ended June 30, 2019 and 2018, the total contingent

16

payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.4 million and $0.3 million, respectively. During the six months ended June 30, 2019 and 2018, the total contingent payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.8 million and $0.7 million, respectively.

Legal Matters

From time to time, the Company is involved in a variety of lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of business, including proceedings concerning labor and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which the Company recorded reserves of $1.0 million for claims as of June 30, 2019. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of its currently pending matters should not have a material adverse effect on its business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect the Company’s business, financial condition, results of operations or liquidity in a particular period.

In February and April 2017, several former employees filed two separate purported class action lawsuits against the Company in the District Court of Clark County, Nevada, on behalf of similarly situated individuals employed by the Company in the State of Nevada. The lawsuits allege that the Company violated certain Nevada labor laws including payment of an hourly wage below the statutory minimum wage without providing a qualified health insurance plan and an associated failure to pay proper overtime compensation. The complaints seek, on behalf of the plaintiffs and members of the putative class, an unspecified amount of damages (including punitive damages), injunctive and equitable relief, and an award of attorneys’ fees, interest and costs. The Company agreed to settle the first of these cases in the fourth quarter of 2017 and the second of these cases in the third quarter of 2018. In February 2019, the court approved the settlement for the first case for $0.5 million. In July 2019, the court approved the settlement for the second case for $1.1 million, which is included in the Company’s recorded reserves at June 30, 2019.

On August 31, 2018, prior guests of The Strat filed a purported class action complaint against the Company in the District Court, Clark County, Nevada, on behalf of similarly situated individuals and entities that paid the Clark County Combined Transient Lodging Tax (“Tax”) on the portion of a resort fee that constitutes charges for Internet access, during the period of February 6, 2014 through the date the alleged conduct ceases. The lawsuit alleged that the Tax was charged in violation of the federal Internet Tax Freedom Act, which imposed a national moratorium on the taxation of Internet access by states and their political subdivisions, and sought, on behalf of the plaintiff and the putative class, damages equal to the amount of the Tax collected on the Internet access component of the resort fee, injunctive relief, disgorgement, interest, fees and costs. All defendants to this matter, including Golden Entertainment, Inc., filed a joint motion to dismiss this matter for lack of merit. The District Court granted this joint motion to dismiss on February 21, 2019. The plaintiffs appealed the District Court decision on April 10, 2019 to the Supreme Court of Nevada.

While legal proceedings are inherently unpredictable and no assurance can be given as to the ultimate outcome of any of the above matters, based on management’s current understanding of the relevant facts and circumstances, the Company believes that these proceedings should not have a material adverse effect on its financial position, results of operations or cash flows.

Note 11 – Segment Information

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the ownership and operation of resort casino properties in Nevada and Maryland. The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Corporate and Other segment includes the Company’s cash and cash equivalents, miscellaneous receivables and corporate overhead. Costs recorded in the Corporate and Other segment have not been allocated to the Company’s reportable operating segments because these costs are not easily allocable and to do so would not be practical.

The Company evaluates each segment’s profitability based upon such segment’s Adjusted EBITDA, which represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, preopening expense, acquisition expenses, share-based compensation expenses, executive severance, rebranding, class action litigation expenses, gain/loss on disposal of property and equipment, gain on change in fair value of derivative and other losses, calculated before corporate overhead (which is not allocated to each segment).

17

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles net income (loss) to Adjusted EBITDA:

	Three Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	72,237	$	74,009	$	—		$	146,246
Food and beverage		39,049		13,055		—			52,104
Rooms		35,514		—		—			35,514
Other		11,916		2,089		201			14,206
Total revenues	$	158,716	$	89,153	$	201		$	248,070
Net income (loss)	$	22,471	$	7,347	$	(44,226	)	$	(14,408	)
Depreciation and amortization		24,052		5,569		355			29,976
Preopening and related expenses(1)		700		660		137			1,497
Acquisition and severance expenses		101		9		1,013			1,123
Asset disposal and other writedowns		511		74		—			585
Share-based compensation		—		—		2,134			2,134
Other, net		81		—		406			487
Interest expense, net		64		23		19,048			19,135
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		1,489			1,489
Income tax benefit		—		—		(1,344	)		(1,344	)
Adjusted EBITDA	$	47,980	$	13,682	$	(11,838	)	$	49,824

	Three Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	61,929	$	70,617	$	—		$	132,546
Food and beverage		30,743		12,679		—			43,422
Rooms		27,660		—		—			27,660
Other		10,594		2,101		220			12,915
Total revenues	$	130,926	$	85,397	$	220		$	216,543
Net income (loss)	$	24,236	$	7,552	$	(28,194	)	$	3,594
Depreciation and amortization		17,412		4,979		463			22,854
Preopening expenses(1)		—		88		301			389
Acquisition and severance expenses		168		2		395			565
Asset disposal and other writedowns		218		—		—			218
Share-based compensation		—		—		2,758			2,758
Other, net		123		195		99			417
Interest expense, net		25		26		16,015			16,066
Change in fair value of derivative		—		—		(1,462	)		(1,462	)
Income tax provision		—		—		897			897
Adjusted EBITDA	$	42,182	$	12,842	$	(8,728	)	$	46,296

18

	Six Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	143,122	$	146,916	$	—		$	290,038
Food and beverage		75,491		26,371		—			101,862
Rooms		66,801		—		—			66,801
Other		24,676		4,223		362			29,261
Total revenues	$	310,090	$	177,510	$	362		$	487,962
Net income (loss)	$	45,160	$	14,953	$	(82,539	)	$	(22,426	)
Depreciation and amortization		45,695		10,898		648			57,241
Preopening and related expenses(1)		2,354		1,226		149			3,729
Acquisition and severance expenses		387		35		2,245			2,667
Asset disposal and other writedowns		767		65		390			1,222
Share-based compensation		11		5		6,302			6,318
Other, net		92		—		1,259			1,351
Interest expense, net		116		39		37,115			37,270
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		3,737			3,737
Income tax benefit		—		—		(1,995	)		(1,995	)
Adjusted EBITDA	$	94,582	$	27,221	$	(23,539	)	$	98,264

	Six Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	126,388	$	140,021	$	—		$	266,409
Food and beverage		60,739		25,286		—			86,025
Rooms		53,787		—		—			53,787
Other		20,499		4,251		361			25,111
Total revenues	$	261,413	$	169,558	$	361		$	431,332
Net income (loss)	$	48,077	$	15,000	$	(55,553	)	$	7,524
Depreciation and amortization		37,047		10,127		917			48,091
Preopening expenses(1)		—		236		601			837
Acquisition and severance expenses		219		37		1,608			1,864
Asset disposal and other writedowns		280		15		—			295
Share-based compensation		—		—		4,602			4,602
Other, net		160		362		203			725
Interest expense, net		49		72		30,688			30,809
Change in fair value of derivative		—		—		(4,673	)		(4,673	)
Income tax provision		—		—		2,116			2,116
Adjusted EBITDA	$	85,832	$	25,849	$	(19,491	)	$	92,190

(1) Preopening expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

Total Segment Assets

The Company’s assets by segment consisted of the following amounts:

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at June 30, 2019	$	1,213,701	$	431,956	$	49,013	$	1,694,670
Balance at December 31, 2018	$	1,006,292	$	299,697	$	60,580	$	1,366,569

19

Note 12 – Related Party Transactions

As of June 30, 2019, the Company leased its office headquarters building from a company 33% beneficially owned by Blake L. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Stephen A. Arcana. The rent expense for the office headquarters building was $0.3 million for each of the three months ended June 30, 2019 and 2018, and $0.6 million and $0.8 million during the six months ended June 30, 2019 and 2018, respectively. There were no amounts owed by the Company, and no amount was due and payable by the Company, under this lease as of June 30, 2019 and December 31, 2018. Additionally, a portion of the office headquarters building was sublet to a company owned or controlled by Mr. Sartini. There was less than $0.1 million of rental income under such sublease for each of the three and six months ended June 30, 2019 and 2018. No amount was owed to the Company under such sublease as of June 30, 2019 and December 31, 2018. Mr. Sartini serves as the Chairman of the Board, President and Chief Executive Officer of the Company and is co-trustee of The Blake L. Sartini and Delise F. Sartini Family Trust, which is a significant shareholder of the Company. Mr. Arcana serves as the Executive Vice President and Chief Operating Officer of the Company.

In November 2018, the Company entered into a lease agreement for office space in a building to be constructed and owned by a company 33% beneficially owned by Mr. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Mr. Arcana. The lease is intended to commence in 2019 and expires on December 31, 2030. The rent expense for the space is expected to be approximately $0.3 million per year. Additionally, the lease agreement includes a right of first refusal for additional space on the second floor of the building.

One tavern location that the Company had previously leased from a related party was sold in the second quarter of 2019 to an unrelated third party. A second tavern location that the Company had previously leased from a related party was sold in 2018 to an unrelated third party. The rent expense for tavern locations leased from related parties (for the periods in which the leases were with related parties) was less than $0.1 million and $0.2 million for the three months ended June 30, 2019 and 2018, respectively, and $0.2 million and $0.3 million during the six months ended June 30, 2019 and 2018, respectively. There were no amounts owed by the Company, and no amount was due and payable by the Company, under such leases as of December 31, 2018. No tavern locations were leased from related parties as of June 30, 2019.

During the three months ended June 30, 2019 and 2018, the Company paid $0.2 million and less than $0.1 million, respectively, under aircraft time-sharing, co-user and cost-sharing agreements between the Company and Sartini Enterprises, Inc. a company controlled by Mr. Sartini. During the six months ended June 30, 2019 and 2018, the Company paid $0.4 million and less than $0.1 million, respectively, under the aircraft time-sharing, co-user and cost-sharing agreements. The Company owed less than $0.1 million under the aircraft time-sharing, co-user and cost-sharing agreements as of June 30, 2019 and December 31, 2018.

During the three months ended June 30, 2019 and 2018, the Company recorded revenues of $0.3 million in each period, and the Company recorded gaming expenses of $0.3 million and $0.2 million, respectively, related to the use of the Company’s slots at a distributed gaming location owned in part by Sean T. Higgins, who serves as the Company’s Executive Vice President of Compliance and Governmental Affairs and Chief Legal Officer. During each of the six months ended June 30, 2019 and 2018, the Company recorded revenues of $0.6 million and $0.5 million, respectively, and the Company recorded gaming expenses of $0.5 million in each period, related to the use of the Company’s slots at this distributed gaming location.De minimis amounts were owed to the Company and were due and payable by the Company related to this arrangement as of June 30, 2019 and December 31, 2018.

During the three months ended June 30, 2018, the Company recorded expenses of less than $0.1 million related to a three-year consulting agreement between the Company and Lyle A. Berman, who serves on the Board of Directors of the Company. During the six months ended June 30, 2018, the Company recorded $0.1 million of SG&A expenses related to Mr. Berman’s consulting agreement. No amount was due and payable by the Company as of December 31, 2018 related to this agreement. The consulting agreement expired on July 31, 2018.

Note 13 – Subsequent Events

The Company’s management evaluates subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the consolidated financial statements as of and for the six months ended June 30, 2019.

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report on Form 10-Q, unless the context suggests otherwise, the terms “Golden,” “we,” “our” and “us” refer to Golden Entertainment, Inc. and its subsidiaries.

The following information should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”).

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “project,” “seek,” “should,” “think,” “will,” “would” and similar expressions. In addition, forward-looking statements include statements regarding cost savings, synergies, growth opportunities and other financial and operating benefits of our casino and other acquisitions; our strategies, objectives, business opportunities and plans for future expansion, developments or acquisitions; anticipated future growth and trends in our business or key markets; projections of future financial condition, operating results, income, capital expenditures, costs or other financial items; anticipated regulatory and legislative changes; and other characterizations of future events or circumstances as well as other statements that are not statements of historical fact. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause our actual results to differ materially include: our ability to realize the anticipated cost savings, synergies and other benefits of our casino and other acquisitions, including the casinos we recently acquired in Las Vegas and Laughlin, Nevada, and integration risks relating to such transactions; changes in national, regional and local economic and market conditions; legislative and regulatory matters (including the cost of compliance or failure to comply with applicable laws and regulations); increases in gaming taxes and fees in the jurisdictions in which we operate; litigation; increased competition; our ability to renew our distributed gaming contracts; reliance on key personnel (including our Chief Executive Officer, Chief Operating Officer, and Chief Strategy and Financial Officer); the level of our indebtedness and our ability to comply with covenants in our debt instruments; terrorist incidents; natural disasters; severe weather conditions (including weather or road conditions that limit access to our properties); the effects of environmental and structural building conditions; the effects of disruptions to our information technology and other systems and infrastructure; factors affecting the gaming, entertainment and hospitality industries generally, and other factors identified under the heading “Risk Factors” in our Annual Report on Form 10-K and in Part II, Item 1A of this report, or appearing elsewhere in this report and in our other filings with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the filing date of this report. We undertake no obligation to revise or update any forward-looking statements for any reason.

Overview

We own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on resort casino operations and distributed gaming (including gaming in our branded taverns).

We conduct our business through two reportable operating segments: Casinos and Distributed Gaming. In our Casinos segment, we own and operate ten resort casino properties in Nevada and Maryland. Our Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.

Casinos

On January 14, 2019, we completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC (the “Acquired Entities”) from Marnell Gaming, LLC (“Marnell”) for $156.2 million in cash (after giving effect to the post-closing adjustment provisions in the purchase agreement) and the issuance by us of 911,002 shares of our common stock to certain assignees of Marnell (the “Laughlin Acquisition”). The Laughlin Acquisition added two resort casino properties in Laughlin, Nevada to our casino portfolio: the Edgewater Hotel & Casino Resort (the “Edgewater”) and the Colorado Belle Hotel & Casino Resort (the “Colorado Belle”), which increase our scale and presence in the Southern Nevada market. The results of operations of the Acquired Entities are included in our results subsequent to the acquisition date. See Note 2, Acquisitions, in the accompanying unaudited consolidated financial statements for additional information.

21

We own and operate ten resort casino properties in Nevada and Maryland, comprising:

• The STRAT Hotel, Casino & SkyPod (“The Strat”): The Strat is our premier casino property, located on Las Vegas Blvd on the north end of the Las Vegas Strip. The Strat comprises the iconic SkyPod, a casino, a hotel and a retail center. As of June 30, 2019, The Strat featured an 80,000 sq. ft. casino, 2,429 hotel rooms, 644 slots, 44 table games, a race and sports book, 12 restaurants, two rooftop pools, a fitness center, retail shops and entertainment facilities.

• Arizona Charlie’s casinos: Our Arizona Charlie’s Decatur and Arizona Charlie’s Boulder casino properties primarily serve local Las Vegas patrons, and provide an alternative experience to the Las Vegas Strip. As of June 30, 2019, our Arizona Charlie’s Decatur casino offered 259 hotel rooms, 1,040 slots, ten table games, race and sports books, five restaurants and an approximately 400-seat bingo parlor, and our Arizona Charlie’s Boulder casino offered 303 hotel rooms, 835 slots, eight table games, race and sports books, four restaurants, and an approximately 450-seat bingo parlor, as well as an RV park with approximately 220 RV hook-up sites.

• Laughlin casinos: We own and operate three casinos in Laughlin, Nevada, which is located approximately 90 miles from Las Vegas on the western riverbank of the Colorado River: the Aquarius Casino Resort (the “Aquarius”), the Edgewater and the Colorado Belle. Our Laughlin casinos are situated along the heart of the Laughlin Riverwalk and cater primarily to patrons traveling from Arizona and Southern California, as well as customers from Nevada seeking an alternative to the Las Vegas experience. As of June 30, 2019, the Aquarius had 1,906 hotel rooms, 1,200 slots, 33 table games and eight restaurants. As of June 30, 2019 the Colorado Belle had 1,102 hotel rooms, 698 slots, 16 table games and three restaurants. As of June 30, 2019 the Edgewater had 1,052 hotel rooms, 714 slots, 20 table games and six restaurants and dedicated entertainment venues, including the Laughlin Event Center.

• Pahrump casinos: We own and operate three casinos in Pahrump, Nevada, which is located approximately 60 miles from Las Vegas and is a gateway to Death Valley National Park: the Pahrump Nugget Hotel Casino (“Pahrump Nugget”), Gold Town Casino and Lakeside Casino & RV Park. As of June 30, 2019, Pahrump Nugget offered 69 hotel rooms, 406 slots, 10 table games, a race and sports book, an approximately 200-seat bingo facility and a bowling center. As of June 30, 2019, our Gold Town Casino offered 229 slots, and our Lakeside Casino & RV Park offered 171 slots, an approximately 100-seat bingo facility, and approximately 160 RV hook-up sites.

• Rocky Gap Casino Resort (“Rocky Gap”): Rocky Gap is situated on approximately 270 acres in the Rocky Gap State Park in Maryland, which we lease from the Maryland Department of Natural Resources under a 40-year ground lease expiring in 2052 (plus a 20-year option renewal). As of June 30, 2019, Rocky Gap offered 665 slots, 19 table games, two casino bars, three restaurants, a spa and the only Jack Nicklaus signature golf course in Maryland. Rocky Gap is a AAA Four Diamond Award® winning resort with 198 hotel rooms, as well as an event and conference center.

Distributed Gaming

Our Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana. We place our slots and amusement devices in locations where we believe they will receive maximum customer traffic, generally near a store’s entrance. In addition, we own and operate branded taverns with slots, which target local patrons, primarily in the greater Las Vegas, Nevada metropolitan area. As of June 30, 2019, our distributed gaming operations comprised approximately 10,700 slots in over 1,000 locations.

Our branded taverns offer a casual, upscale environment catering to local patrons offering superior food, craft beer and other alcoholic beverages, and typically include 15 onsite slots. As of June 30, 2019, we owned and operated 65 branded taverns, which offered a total of over 1,000 onsite slots. Most of our taverns are located in the greater Las Vegas, Nevada metropolitan area and cater to local patrons seeking more convenient entertainment establishments than traditional casino properties. Our tavern brands include PT’s Gold, PT’s Pub, Sierra Gold, Sean Patrick’s, PT’s Place, PT’s Ranch, PT’s Brewing Company, Sierra Junction and SG Bar. We also own a brewery in Las Vegas, PT’s Brewing Company, which produces craft beer for our taverns and casinos.

22

Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2019 and 2018.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2019			2018			2019			2018
Revenues by segment
Casinos	$	158,716		$	130,926		$	310,090		$	261,413
Distributed Gaming		89,153			85,397			177,510			169,558
Corporate and other		201			220			362			361
Total revenues		248,070			216,543			487,962			431,332
Operating expenses by segment
Casinos		77,236			62,402			150,779			123,121
Distributed Gaming		67,936			66,612			135,593			131,962
Corporate and other		219			793			416			1,565
Total operating expenses		145,391			129,807			286,788			256,648
Selling, general and administrative		56,235			43,615			113,182			87,821
Depreciation and amortization		29,976			22,854			57,241			48,091
Acquisition and severance expenses		1,123			565			2,667			1,864
Preopening expenses		738			389			1,516			837
Loss on disposal of assets		585			218			832			295
Total expenses		234,048			197,448			462,226			395,556
Operating income		14,022			19,095			25,736			35,776
Non-operating expense, net		(29,774	)		(14,604	)		(50,157	)		(26,136	)
Income tax benefit (provision)		1,344			(897	)		1,995			(2,116	)
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524

Three and Six Months Ended June 30, 2019 Compared to Three and Six Months Ended June 30, 2018 

Revenues

The $31.5 million, or 15%, increase in revenues for the three months ended June 30, 2019 compared to the prior year period resulted from increases of $13.7 million, $8.7 million, $7.9 million and $1.2 million in gaming, food and beverage, room and other revenues, respectively, due primarily to the impact of the Acquired Entities.

Casinos segment revenue increased $27.8 million, or 21%, for the three months ended June 30, 2019 compared to the prior year period. Gaming revenues in the Casinos segment increased $10.3 million, which reflected the inclusion in the current year period of $9.1 million of gaming revenue from the Acquired Entities and a combined increase in slot revenue of $1.6 million at The Strat and Aquarius. The increase was offset by a decrease in the Nevada casinos’ race and sports book revenue of $0.4 million resulting from the outsourcing of our race and sports book management in the first quarter of 2019, the income from which is classified as other operating revenue. Casinos segment food and beverage revenue increased by $8.3 million due primarily to The Strat and the inclusion in the current year period of food and beverage revenues from the Acquired Entities, partially offset by decreases in food and beverage revenues at our other casino properties. Casinos segment room revenues increased by $7.9 million primarily due to The Strat and the inclusion in the current year period of room revenues from the Acquired Entities. Casinos segment other revenues increased by $1.2 million primarily due to the contribution of $1.5 million of other revenues from the Acquired Entities, and was partially offset by a decrease in other revenues at The Strat of $0.4 million.

Distributed Gaming segment revenue increased $3.8 million or 4% for the three months ended June 30, 2019 compared to the prior year period due to an increase of $3.4 million in gaming revenues (reflecting a $1.8 million increase from new sales at our additional locations and machines in Montana and a $1.6 million increase in Nevada from our six new taverns that opened since the prior year period and improved performance of our slot devices at non-casino locations) and of $0.4 million in branded tavern food and beverage revenues.

The $56.6 million, or 13%, increase in revenues for the six months ended June 30, 2019 compared to the prior year period resulted from increases of $23.6 million, $15.8 million, $13.2 million and $4.0 million in gaming, food and beverage, room and other revenues, respectively, due primarily to the impact of the Acquired Entities.

Casinos segment revenue increased $48.7 million, or 19%, for the six months ended June 30, 2019 compared to the prior year period. Gaming revenues in the Casinos segment increased $16.7 million, which reflected the inclusion in the current year period of $16.8 million of gaming revenue from the Acquired Entities and an increase in slot revenue of $1.5 million at some of our Nevada casinos. The increase was offset by a decrease in the Nevada casinos’ race and sports book revenue of $0.9 million resulting from the outsourcing of our race and sports book management in the first quarter of 2019, the income from which is classified as other operating revenue, and a decrease in table game revenue of $0.7 million at The Strat. Casinos segment food and beverage revenue

23

increased by $14.7 million due primarily to the inclusion in the current year period of $14.5 million in food and beverage revenues from the Acquired Entities and an increase of $1.1 million in food and beverage revenue at The Strat, partially offset by decreases in food and beverage revenues at our other casino properties. Casinos segment room revenues increased by $13.2 million primarily due to increased room revenues from the Aquarius as well as the inclusion in the current year period of $10.7 million in room revenues from the Acquired Entities. Casinos segment other revenues increased by $4.0 million primarily due to the contribution of $4.8 million of other revenues from the Acquired Entities, and was partially offset by a decrease in other revenues at The Strat of $1.0 million.

Distributed Gaming segment revenue increased $8.0 million or 5% for the six months ended June 30, 2019 compared to the prior year period due to an increase of $6.9 million in gaming revenues (reflecting a $3.3 million increase from new sales at our additional locations and machines in Montana and a $3.6 million increase in Nevada from our six new taverns that opened since the prior year period and improved performance of our slot devices at non-casino locations) and of $1.1 million in branded tavern food and beverage revenues (primarily due to the inclusion in the current year period of a full period of revenues from the three taverns opened in 2018).

During the three and six months ended June 30, 2019, Adjusted EBITDA in our Casinos segment as a percentage of segment revenues (or Adjusted EBITDA margin) was 30% and 31%, respectively, compared to Adjusted EBITDA margin in our Distributed Gaming segment of 15% in each period. During the three and six months ended June 30, 2018, Adjusted EBITDA margin in our Casinos segment was 32% and 33%, respectively, compared to Adjusted EBITDA margin in our Distributed Gaming segment of 15%  in each period. The lower Adjusted EBITDA margin in our Distributed Gaming segment relative to our Casinos segment reflects the fixed and variable amounts paid to third parties under our space and revenue share agreements as expenses in the Distributed Gaming segment (which includes the percentage of gaming revenues paid to third parties under revenue share agreements). See Note 11, Segment Information, in the accompanying unaudited consolidated financial statements for additional information regarding segment Adjusted EBITDA and a reconciliation of segment Adjusted EBITDA to segment net income (loss).

Operating Expenses

The $15.6 million, or 12%, increase in operating expenses for the three months ended June 30, 2019 compared to the prior year period resulted primarily from the inclusion of operating expenses of the Acquired Entities. Gaming expenses increased $5.5 million for the three months ended June 30, 2019 compared to the prior year period. Of this increase, $4.0 million related to the inclusion of gaming expenses relating to the Acquired Entities in the current year period, and $1.1 million related to gaming expenses in our Distributed Gaming segment, which included an increase of $1.6 million relating to our Montana distributed gaming operations, offset by $0.5 million decrease from our Nevada distributed gaming operations. The increase of $4.9 million of food and beverage expense compared to the prior year period was due primarily to the inclusion in the current year period of $4.7 million relating to the Acquired Entities, combined with increases of $0.7 million relating to The Strat (reflecting increased and improved offerings at The Strat), offset by a decrease in food and beverage revenues at our other casino properties. The $3.7 million year-over-year increase in room expense was due primarily to the inclusion in the current year period of $3.3 million relating to the Acquired Entities, combined with an increase of $0.8 million related to The Strat. The $1.5 million year-over-year increase in other operating expenses was almost entirely due to the inclusion in the current year period of other operating expenses relating to the Acquired Entities.

The $30.1 million, or 12%, increase in operating expenses for the six months ended June 30, 2019 compared to the prior year period resulted primarily from the inclusion of operating expenses of the Acquired Entities. Gaming expenses increased $10.2 million for the six months ended June 30, 2019 compared to the prior year period. Of this increase, $7.1 million related to the inclusion of gaming expenses relating to the Acquired Entities in the current year period, and $2.7 million related to gaming expenses in our Distributed Gaming segment, which included an increase of $2.9 million relating to our Montana distributed gaming operations, offset by a slight decrease from our Nevada distributed gaming operations. The increase of $9.5 million of food and beverage expense compared to the prior year period was due primarily to the inclusion in the current year period of $8.5 million relating to the Acquired Entities, combined with increases of $0.6 million relating to our Nevada distributed gaming operations and $1.2 million relating to The Strat (reflecting increased and improved offerings at The Strat), offset by a decrease in food and beverage revenues at our other casino properties. The $6.6 million year-over-year increase in room expense was due primarily to the inclusion in the current year period of $5.7 million relating to the Acquired Entities, combined with an increase of $1.2 million related to The Strat. The $3.9 million year-over-year increase in other operating expenses was almost entirely due to the inclusion in the current year period of other operating expenses relating to the Acquired Entities.

Selling, General and Administrative Expenses

The $12.2 million, or 28%, increase in selling, general and administrative (“SG&A”) expenses for the three months ended June 30, 2019 compared to the prior year period resulted primarily from the inclusion in the current year period of $6.3 million in SG&A expenses relating to the Acquired Entities, an increase in corporate SG&A of $4.5 million and an increase in Distributed Gaming segment SG&A of $1.4 million.

Within our Casinos segment, the majority of the SG&A expenses are comprised of marketing and advertising, utilities, maintenance contracts, payroll expenses and payroll taxes. Casino segment SG&A expenses increased $7.6 million, or 29%, for the three months ended June 30, 2019, compared to the prior year period, resulting primarily from the inclusion $6.3 million in the current year period of SG&A related to the Acquired Entities. The remaining increase was primarily due to increases in expenses for labor and advertising at The Strat.

24

Within our Distributed Gaming segment, the majority of the SG&A expenses are comprised of marketing and advertising, utilities, building rent, payroll expenses and payroll taxes. Distributed gaming segment SG&A expenses increased $1.4 million, or 24%, for the three months ended June 30, 2019 compared to the prior year period, primarily due to an increase in salaries and bonuses.

Corporate SG&A expenses represent corporate office overhead, information technology, legal, accounting, third party service providers, executive compensation, share based compensation, payroll expenses and payroll taxes. The $4.5 million, or 46%, increase in corporate SG&A for the three months ended June 30, 2019 compared to the prior year period resulted primarily from increases in outside service expenses in finance, marketing and human resources as well as in salaries and wages.

The $24.8 million, or 28%, increase in SG&A expenses for the six months ended June 30, 2019 compared to the prior year period resulted primarily from the inclusion in the current year period of $11.2 million in SG&A expenses relating to the Acquired Entities, an increase in corporate SG&A of $9.4 million and an increase in Distributed Gaming segment SG&A of $2.6 million.

Casino segment SG&A expenses increased $14.1 million, or 27%, for the six months ended June 30, 2019, compared to the prior year period, resulting primarily from the inclusion $11.2 million in the current year period of SG&A related to the Acquired Entities. The remaining increase was primarily due to increases in expenses for labor and advertising at The Strat and labor, advertising and printing at the Aquarius.

Distributed Gaming segment SG&A expenses increased $2.6 million, or 22%, for the six months ended June 30, 2019 compared to the prior year period, primarily due to an increase in salaries, bonuses, building rent, and expenses for marketing and cleaning supplies.

Corporate SG&A expenses increases $9.4 million, or 43%, increase in corporate SG&A for the six months ended June 30, 2019 compared to the prior year period resulted primarily from increases in outside service expenses in finance, marketing and human resources as well as in salaries and wages.

Acquisition Expenses

Acquisition expenses during the three and six months ended June 30, 2019 related primarily to the Laughlin Acquisition, which closed on January 14, 2019, and expenses during the three and six months ended June 30, 2018 related to the American Acquisition.

Preopening Expenses

Preopening expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred. Non-capital costs associated with the opening of tavern and casino locations are also expensed as preopening expenses as incurred.

During the three and six months ended June 30, 2019 and 2018, preopening expenses related primarily to costs incurred in the opening of new taverns in the Las Vegas Valley.

Depreciation and Amortization

The increase in depreciation and amortization expenses for each of the three months ended June 30, 2019 compared to the prior year period, was primarily due to the depreciation of the assets and the amortization of the intangibles acquired in the Laughlin Acquisition.

The increase in depreciation and amortization expenses for each of the six months ended June 30, 2019 compared to the prior year period, was primarily due to the depreciation of the assets and the amortization of the intangibles acquired in the Laughlin Acquisition, the opening of new taverns in the first half of 2019, and the installation of new gaming systems at some of our Nevada casinos. The increase was offset by the decrease in depreciation and amortization expense at The Strat related to the disposal of several assets and the change in useful life of depreciation.

Non-Operating Expense, Net

Non-operating expense, net increased $15.2 million for the three months ended June 30, 2019 compared to the prior year period, primarily due to a $3.1 million increase in interest expense from the substantially higher level of indebtedness following the Laughlin Acquisition, a loss on extinguishment and modification of debt of $9.2 million and a loss on change in fair value of derivative of $1.5 million versus a gain on change in fair value of derivative of $1.5 million in the prior year period.

Non-operating expense, net increased $24.0 million for the six months ended June 30, 2019 compared to the prior year period, primarily due to a $6.5 million increase in interest expense from the substantially higher level of indebtedness following the Laughlin Acquisition, a loss on extinguishment and modification of debt of $9.2 million and a loss on change in fair value of derivative of $3.7 million versus a gain on change in fair value of derivative of $4.7 million in the prior year period.

Income Taxes

Our effective tax rate was 8.2% and 22.0% for the six months ended June 30, 2019 and 2018, respectively. For the six months ended June 30, 2019, the effective tax rate differed from the federal tax rate of 21% due primarily to the change in valuation allowance against our deferred tax assets during the first six months of 2019. For the six months ended June 30, 2018, the effective tax rate differed from the federal tax rate of 21% due primarily to expenditures that are not deductible for tax purposes.

25

Non-GAAP Measures

To supplement our consolidated financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), we use Adjusted EBITDA, a measure we believe is appropriate to provide meaningful comparison with, and to enhance an overall understanding of, our past financial performance and prospects for the future. We believe Adjusted EBITDA provides useful information to both management and investors by excluding specific expenses and gains that we believe are not indicative of our core operating results. Further, Adjusted EBITDA is a measure of operating performance used by management, as well as industry analysts, to evaluate operations and operating performance and is widely used in the gaming industry. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do. A reconciliation of net income (loss) to Adjusted EBITDA is provided in the table below.

We define “Adjusted EBITDA” as earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, acquisition expenses, preopening expenses, gain/loss on disposal of property and equipment, share-based compensation expenses, executive severance, rebranding, class action litigation expenses, other gains and losses, and change in fair value of derivative.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss):

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2019			2018			2019			2018
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524
Depreciation and amortization		29,976			22,854			57,241			48,091
Preopening and related expenses(1)		2,134			389			3,729			837
Acquisition and severance expenses		1,497			565			2,667			1,864
Asset disposal and other writedowns		1,123			218			1,222			295
Share-based compensation		585			2,758			6,318			4,602
Other, net		487			417			1,351			725
Interest expense, net		19,135			16,066			37,270			30,809
Loss on extinguishment and modification of debt		9,150			—			9,150			—
Change in fair value of derivative		1,489			(1,462	)		3,737			(4,673	)
Income tax (benefit) provision		(1,344	)		897			(1,995	)		2,116
Adjusted EBITDA	$	49,824		$	46,296		$	98,264		$	92,190

(1) Preopening and related expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

Liquidity and Capital Resources

As of June 30, 2019, we had $116.7 million in cash and cash equivalents. We currently believe that our cash and cash equivalents, cash flows from operations and borrowing availability under our revolving credit facility will be sufficient to meet our capital requirements during the next 12 months.

Our operating results and performance depend significantly on national, regional and local economic conditions and their effect on consumer spending. Declines in consumer spending would cause revenues generated in both our Casinos and Distributed Gaming segments to be adversely affected.

To further enhance our liquidity position or to finance any future acquisition or other business investment initiatives, we may obtain additional financing, which could consist of debt, convertible debt or equity financing from public and/or private credit and capital markets.

In January 2018, we completed an underwritten public offering pursuant to our universal shelf registration statement, in which certain of our shareholders resold an aggregate of 6.5 million shares of our common stock, and we sold 975,000 newly issued shares of our common stock. Our net proceeds from the offering were approximately $25.6 million after deducting underwriting discounts and offering expenses.

Cash Flows

Net cash provided by operating activities for the six months ended June 30, 2019 remained overall consistent when compared to the prior year period and the timing of operating assets and liabilities.

Net cash used in investing activities was $202.4 million for the six months ended June 30, 2019, compared to $27.4 million for the prior year period. The increase in net cash used in investing activities as compared to the prior year period was primarily due to the closing of the Laughlin Acquisition in January 2019 and the additional capital expenditures in the current year period.

Net cash provided by financing activities was $141.6 million for the six months ended June 30, 2019, due primarily to our issuance of the 7.625% Senior Notes due 2026 (“2026 Notes”) in April 2019, partially offset by the repayment in full of our $200 million senior secured second lien term loan facility (“Second Lien Term Loan”).

26

Net cash provided by financing activities was $20.0 million for the six months ended June 30, 2018, and primarily related to net proceeds to us in the underwritten public offering completed in January 2018, partially offset by repayments under our Credit Facility.

Senior Secured Credit Facility

In October 2017, we entered into a senior secured credit facility consisting of a $900 million senior secured first lien credit facility (consisting of a $800 million term loan and a $100 million revolving credit facility) with JPMorgan Chase Bank, N.A. (as administrative agent and collateral agent), the lenders party thereto and the other entities party thereto (the “Credit Facility”). The revolving credit facility was subsequently increased from $100 million to $200 million in 2018.

As of June 30, 2019, we had $772 million in principal amount of outstanding term loan borrowings under our Credit Facility, no letters of credit outstanding under the Credit Facility, and our revolving credit facility was undrawn, leaving borrowing availability under the revolving credit facility as of June 30, 2019 of $200 million.

Borrowings under the Credit Facility bear interest, at our option, at either (1) a base rate equal to the greatest of the federal funds rate plus 0.50%, the applicable administrative agent’s prime rate as announced from time to time, or the LIBOR rate for a one-month interest period plus 1.00%, subject to a floor of 1.75% (with respect to the term loan) or 1.00% (with respect to borrowings under the revolving credit facility) or (2) the LIBOR rate for the applicable interest period, subject to a floor of 0.75% (with respect to the term loan only), plus in each case, an applicable margin. The applicable margin for the term loan under the Credit Facility is 2.00% for base rate loans and 3.00% for LIBOR rate loans. The applicable margin for borrowings under the revolving credit facility ranges from 1.50% to 2.00% for base rate loans and 2.50% to 3.00% for LIBOR rate loans, based on our net leverage ratio. The commitment fee for the revolving credit facility is payable quarterly at a rate of 0.375% or 0.50%, depending on our net leverage ratio, and is accrued based on the average daily unused amount of the available revolving commitment. As of June 30, 2019, the weighted-average effective interest rate on our outstanding borrowings under the Credit Facility was approximately 5.5%.

The revolving credit facility matures on October 20, 2022, and the term loan under the Credit Facility matures on October 20, 2024. The term loan under the Credit Facility is repayable in 27 quarterly installments of $2 million each, which commenced in March 2018, followed by a final installment of $746 million at maturity.

Borrowings under the Credit Facility are guaranteed by each of our existing and future wholly-owned domestic subsidiaries (other than certain insignificant or unrestricted subsidiaries), and are secured by substantially all of the present and future assets of Golden and our subsidiary guarantors (subject to certain exceptions).

Under the Credit Facility, we and our restricted subsidiaries are subject to certain limitations, including limitations on our respective ability to: incur additional debt, grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments. In addition, we will be required to pay down the term loan under the Credit Facility under certain circumstances if we or our restricted subsidiaries issue debt, sell assets, receive certain extraordinary receipts or generate excess cash flow (subject to exceptions). The revolving credit facility contains a financial covenant regarding a maximum net leverage ratio that applies when borrowings under the revolving credit facility exceed 30% of the total revolving commitment. The Credit Facility also prohibits the occurrence of a change of control, which includes the acquisition of beneficial ownership of 50% or more of our capital stock (other than by certain permitted holders, which include, among others, Blake L. Sartini, Lyle A. Berman and certain affiliated entities). If we default under the Credit Facility due to a covenant breach or otherwise, the lenders may be entitled to, among other things, require the immediate repayment of all outstanding amounts and sell our assets to satisfy the obligations thereunder. We were in compliance with our financial covenants under the Credit Facility as of June 30, 2019.

Senior Notes due 2026

On April 15, 2019, we issued $375 million in principal amount of 2026 Notes in a private placement to institutional buyers face value. The 2026 Notes bear interest at 7.625%, payable semi-annually on April 15^th and October 15^th of each year.

In conjunction with the issuance of the 2026 Notes, we incurred approximately $6.7 million in debt financing costs and fees that have been deferred and are being amortized over the term of the 2026 Notes using the effective interest method.

The net proceeds of the 2026 Notes were used to (i) repay our $200 million Second Lien Term Loan, (ii) repay outstanding borrowings under the revolving credit facility, (iii) repay $18 million of the outstanding term loan indebtedness under the Credit Facility, and (iv) pay accrued interest, fees and expenses related to each of the foregoing.

The 2026 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. Prior to April 15, 2022, we may redeem up to 40% of the 2026 Notes at a redemption price of 107.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. Prior to April 15, 2022, we may also redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and an Applicable Premium (as defined in the indenture governing the 2026 Notes (the “Indenture”)), if any, thereon to the redemption date.

27

The 2026 Notes are guaranteed on a senior unsecured basis by each of our existing and future wholly-owned domestic subsidiaries that guarantees the Credit Facility. The 2026 Notes are our and the subsidiary guarantors’ general senior unsecured obligations and rank equally in right of payment with all of our respective existing and future unsecured unsubordinated debt. The 2026 Notes are effectively junior in right of payment to our and the subsidiary guarantors’ existing and future secured debt, including under the Credit Facility (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of any of our subsidiaries that do not guarantee the 2026 Notes, and are senior in right of payment to all of our and the subsidiary guarantors’ existing and future subordinated indebtedness.

Under the Indenture, we and our restricted subsidiaries are subject to certain limitations, including limitations on our respective ability to: incur additional debt, grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments. In the event a change of control (which includes the acquisition of more than 50% of our capital stock, other than by certain permitted holders, which include, among others, Blake L. Sartini, Lyle A. Berman, Neil I. Sell and certain affiliated entities), each holder will have the right to require us to repurchase all or any part of such holder’s 2026 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase.

Expenses Related to Extinguishment and Modification of Debt

In April 2019, we recognized a $5.5 million loss on extinguishment of debt and $3.7 million of expense related to modification of debt, related to the repayment of our Second Lien Term Loan and an $18 million prepayment of the term loan under our Credit Facility.

Share Repurchase Program

On March 12, 2019, our Board of Directors authorized the repurchase of up to $25.0 million additional shares of common stock, subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors, which replaced the prior share repurchase program authorized in November 2018. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with our finance agreements. There is no minimum number of shares that we are required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice. During the three and six months ended June 30, 2019, no shares of our common stock were repurchased under our share repurchase programs.

Other Items Affecting Liquidity

The outcome of the following matters may also affect our liquidity.

Commitments, Capital Spending and Development

We perform on-going refurbishment and maintenance at our facilities, of which certain maintenance costs are capitalized if such improvement or refurbishment extends the life of the related asset, while other maintenance costs that do not so qualify are expensed as incurred. The commitment of capital and the related timing thereof are contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate regulatory bodies. We intend to fund such capital expenditures through our revolving credit facility and operating cash flows.

See Note 10, Commitments and Contingencies, in the accompanying unaudited consolidated financial statements for additional information regarding commitments and contingencies that may also affect our liquidity.

Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2019:

	Remaining 2019		2020		2021		2022		2023		Thereafter		Total
(In thousands)
Term loan	$	—	$	—	$	4,000	$	8,000	$	8,000	$	752,000	$	772,000
Senior notes due 2026		—		—		—		—		—		375,000		375,000
Interest on long-term debt (1)		35,187		70,365		70,332		69,980		69,547		97,150		412,561
Operating leases		23,164		30,778		29,443		22,906		17,469		117,243		241,003
Notes payable and finance    lease obligations(2)		1,200		2,074		1,481		612		565		7,339		13,271
	$	59,551	$	103,217	$	105,256	$	101,498	$	95,581	$	1,348,732	$	1,813,835

(1) Represents estimated interest payments on our outstanding balances based on interest rates as of June 30, 2019 until maturity. Includes interest on notes payable.

(2) Relates to notes payable on equipment purchases and previous tavern acquisitions and our finance lease obligations, including total finance lease interest obligations of $6.0 million.

28

Other Opportunities

We may investigate and pursue expansion opportunities in our existing or new markets from time to time. Such expansions will be influenced and determined by a number of factors, which may include licensing availability and approval, suitable investment opportunities and availability of acceptable financing. Investigation and pursuit of such opportunities may require us to make substantial investments or incur substantial costs, which we may fund through cash flows from operations or borrowing availability under our revolving credit facility. To the extent such sources of funds are not sufficient, we may also seek to raise such additional funds through public or private equity or debt financings or from other sources. No assurance can be given that additional financing will be available or that, if available, such financing will be obtainable on terms favorable to us. Moreover, we can provide no assurances that the investigation or pursuit of an opportunity will result in a completed transaction.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to the application of the acquisition method of accounting, long-lived assets, goodwill and indefinite-lived intangible assets, revenue recognition, income taxes and share-based compensation expenses. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.

A description of our critical accounting estimates can be found under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2018, previously filed with the SEC. For a more extensive discussion of our accounting policies, see Note 2, Summary of Significant Accounting Policies, in the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018. As of January 1, 2019, we updated our lease accounting policies in conjunction with our adoption of the new lease accounting standard. A description of this change is included in Note 2 to the unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q. There were no other material changes to our critical accounting policies and estimates during the six months ended June 30, 2019.

Commitments and Contractual Obligations

On April 15, 2019, we issued the 2026 Notes in a private placement to institutional buyers, and in connection therewith we repaid and discharged the Second Lien Term Loan in full, repaid $18 million in principal amount of term loan borrowings under the Credit Facility, and repaid all of the outstanding indebtedness under the revolving credit facility under the Credit Facility. Otherwise, no significant changes occurred in the second quarter of 2019 to the contractual commitments discussed under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Commitments and Contractual Obligations, in our Annual Report on Form 10-K for the year ended December 31, 2018.

Seasonality

We believe that our Casinos and Distributed Gaming segments are affected by seasonal factors, including holidays, weather and travel conditions. Our Las Vegas and Pahrump casinos as well as our Nevada distributed gaming businesses have historically experienced lower revenues during the summer as a result of fewer tourists due to higher temperatures in addition to increased vacation activity by local residents. Our casinos in Laughlin and Rocky Gap typically experience higher revenues during summer months with increased visitation and may be adversely impacted by inclement weather during winter months. Our Montana distributed gaming operations also typically experience higher revenues during the summer due to the inclement weather in other seasons. While other factors like unemployment levels, market competition and the diversification of our business may either offset or magnify seasonal effects, some seasonality is likely to continue, which could result in significant fluctuation in our quarterly operating results.

Recently Issued Accounting Pronouncements

See Note 1, Nature of Business and Basis of Presentation, in the accompanying unaudited consolidated financial statements for information regarding recently issued accounting pronouncements.

Regulation and Taxes

The casino and distributed gaming industries are subject to extensive regulation by state gaming authorities. Changes in applicable laws or regulations could have a material adverse effect on us.

The gaming industry represents a significant source of tax revenues to regulators. From time to time, various federal and state legislators and officials have proposed changes in tax law, or in the administration of such law, affecting the gaming industry. It is not

29

possible to determine the likelihood of possible changes in tax law or in the administration of such law. Such changes, if adopted, could have a material adverse effect on our future financial position, results of operations, cash flows and prospects.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt. As of June 30, 2019, our variable rate long-term debt primarily comprised our indebtedness under the Credit Facility.

As of June 30, 2019, we had $772 million in principal amount of outstanding borrowings under the Credit Facility. Our primary interest rate under the Credit Facility is the Eurodollar rate plus an applicable margin. As of June 30, 2019, the weighted-average effective interest rate on our outstanding borrowings under the Credit Facility was approximately 5.5%. Assuming the outstanding balance under our Credit Facility remained constant over a year, a 50 basis point increase in the applicable interest rate would increase interest incurred, prior to effects of capitalized interest, by $3.9 million over a twelve-month period.

As of June 30, 2019, our investment portfolio included $116.7 million in cash and cash equivalents. As of June 30, 2019, we did not hold any short-term investments.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of June 30, 2019, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2019.

On January 14, 2019, the LaughlinAcquisition was completed. Management has begun the evaluation of the internal control structures of the Acquired Entities. However, SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessments of internal control over financial reporting and disclosure controls and procedures for a period not to exceed one year from the date of the acquisition. Accordingly, we excluded the Acquired Entities from our evaluation of our disclosure controls and procedures as of June 30, 2019. We have reported the operating results of the Acquired Entities in our consolidated statements of operations and cash flows from the acquisition date through June 30, 2019. As of June 30, 2019, total assets related to the Acquired Entities represented approximately 11% of our total assets, recorded on a preliminary basis as the measurement period for the business combination remained open as of June 30, 2019. Revenues from the Acquired Entities comprised approximately 10% of our consolidated revenues for both the three and six months ended June 30, 2019.

During the quarter ended June 30, 2019, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As described above, on January 14, 2019, the Laughlin Acquisition was completed. Our integration of the Acquired Entities may lead us to modify certain internal controls in future periods.

Part II. Other Information

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in a variety of lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of business, including proceedings concerning labor and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which we recorded reserves of $1.0 million for claims as of June 30, 2019. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, we believe that the resolution of our currently pending matters should not have a material adverse effect on our business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect our business, financial condition, results of operations or liquidity in a particular period.

30

In February and April 2017, several former employees filed two separate purported class action lawsuits against us in the District Court of Clark County, Nevada, on behalf of similarly situated individuals employed by us in the State of Nevada. The lawsuits allege that we violated certain Nevada labor laws including payment of an hourly wage below the statutory minimum wage without providing a qualified health insurance plan and an associated failure to pay proper overtime compensation. The complaints seek, on behalf of the plaintiffs and members of the putative class, an unspecified amount of damages (including punitive damages), injunctive and equitable relief, and an award of attorneys’ fees, interest and costs. We agreed to settle the first of these cases in the fourth quarter of 2017 and the second of these cases in the third quarter of 2018. In February 2019, the court approved the settlement for the first case for $0.5 million. In July 2019, the court approved the settlement for the second case for $1.1 million, which is included in our recorded reserves at June 30, 2019.

On August 31, 2018, prior guests of The Strat filed a purported class action complaint against us in the District Court, Clark County, Nevada, on behalf of similarly situated individuals and entities that paid the Clark County Combined Transient Lodging Tax (“Tax”) on the portion of a resort fee that constitutes charges for Internet access, during the period of February 6, 2014 through the date the alleged conduct ceases. The lawsuit alleged that the Tax was charged in violation of the federal Internet Tax Freedom Act, which imposed a national moratorium on the taxation of Internet access by states and their political subdivisions, and sought, on behalf of the plaintiff and the putative class, damages equal to the amount of the Tax collected on the Internet access component of the resort fee, injunctive relief, disgorgement, interest, fees and costs. All defendants to this matter, including Golden Entertainment, Inc., filed a joint motion to dismiss this matter for lack of merit. The District Court granted this joint motion to dismiss on February 21, 2019. The plaintiffs appealed the District Court decision on April 10, 2019 to the Supreme Court of Nevada.

While legal proceedings are inherently unpredictable and no assurance can be given as to the ultimate outcome of any of the above matters, based on management’s current understanding of the relevant facts and circumstances, we believe that these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, which factors could materially affect our business, financial condition, liquidity or future results. There have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2018. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity, results of operations, prospects or stock price.

31

ITEM 6. EXHIBITS

Exhibits	Description
4.1	Indenture, dated as of April 15, 2019, between Golden Entertainment, Inc., the Guarantors party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Golden Entertainment, Inc.’s Quarterly Report on Form 10-Q dated and filed on May 10, 2019)
4.2	Form of 7.625% Senior Note due 2026 of Golden Entertainment, Inc. (incorporated by reference to Exhibit 4.2 to Golden Entertainment, Inc.’s Quarterly Report on Form 10-Q dated and filed on May 10, 2019)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Calculation Definition Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

32

SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	GOLDEN ENTERTAINMENT, INC.
	(Registrant)
Dated: August 8, 2019	/s/  BLAKE L. SARTINI
	Blake L. Sartini
	Chairman of the Board, President and Chief Executive Officer
	(Principal Executive Officer)
	/s/  CHARLES H. PROTELL
	Charles H. Protell
	Executive Vice President, Chief Strategy Officer and Chief Financial Officer
	(Principal Financial Officer)
	/s/  THOMAS E. HAAS
	Thomas E. Haas
	Senior Vice President of Accounting
	(Principal Accounting Officer)

33

EX-31.1

Exhibit 31.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OFTHE

SARBANES-OXLEY ACT OF

2002

I, Blake L. Sartini, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Golden Entertainment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2019	/s/ BLAKE L. SARTINI
	Blake L. Sartini
	Chairman of the Board, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF

2002

I, Charles H. Protell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Golden Entertainment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2019	/s/ CHARLES H. PROTELL
	Charles H. Protell
	Executive Vice President, Chief Strategy Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF

CHIEF EXECUTIVE OFFICER AND

CHIEFFINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Golden Entertainment, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2019	/s/ BLAKE L. SARTINI
	Blake L. Sartini
	Chairman of the Board, President and Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Golden Entertainment, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2019	/s/ CHARLES H. PROTELL
	Charles H. Protell
	Executive Vice President, Chief Strategy Officer and
	Chief Financial Officer

The foregoing certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. The foregoing certifications are not to be incorporated by reference into any filing of Golden Entertainment, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 06, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	gden
Entity Registrant Name	GOLDEN ENTERTAINMENT, INC.
Entity Central Index Key	0001071255
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		27,802,033
Entity File Number	000-24993
Entity Current Reporting Status	Yes
Entity Tax Identification Number	411913991
Entity Address, Address Line One	6595 S Jones Boulevard
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	Nevada
Entity Address, Postal Zip Code	89118
City Area Code	702
Local Phone Number	893-7777

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 116,689	$ 116,071
Accounts receivable, net of allowance of $670 and $503	15,348	12,779
Prepaid expenses	21,309	17,722
Inventories	8,557	6,759
Other	3,580	3,428
Total current assets	165,483	156,759
Property and equipment, net	1,030,148	894,953
Operating lease right-of-use assets, net	158,085
Goodwill	182,870	158,134
Intangible assets, net	146,806	141,128
Other assets	11,278	15,595
Total assets	1,694,670	1,366,569
Current liabilities
Current portion of long-term debt and finance leases	1,875	10,480
Current portion of operating leases	29,351
Accounts payable	30,581	27,812
Accrued taxes, other than income taxes	8,066	6,540
Accrued payroll and related	24,545	19,780
Accrued liabilities	28,360	18,848
Total current liabilities	122,778	83,460
Long-term debt, net and finance leases	1,123,439	960,563
Non-current operating leases	143,426
Deferred income taxes	598	2,593
Other long-term obligations	1,340	4,801
Total liabilities	1,391,581	1,051,417
Commitments and contingencies (Note 10)
Shareholders' equity
Common stock, $.01 par value; authorized 100,000 shares; 27,800 and 26,779 common shares issued and outstanding, respectively	278	268
Additional paid-in capital	457,870	435,245
Accumulated deficit	(155,059)	(120,361)
Total shareholders' equity	303,089	315,152
Total liabilities and shareholders' equity	$ 1,694,670	$ 1,366,569

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Accounts receivable, net of allowance	$ 670	$ 503
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	27,800,000	26,779,000
Common stock, shares outstanding (in shares)	27,800,000	26,779,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018		Jun. 30, 2019	Jun. 30, 2018
Revenues
Total revenues	$ 248,070	$ 216,543		$ 487,962	$ 431,332
Expenses
Other operating	5,160	3,655		11,594	7,651
Selling, general and administrative	56,235	43,615		113,182	87,821
Depreciation and amortization	29,976	22,854		57,241	48,091
Acquisition and severance expenses	1,123	565		2,667	1,864
Preopening expenses	738	389	[1]	1,516	837	[1]
Loss on disposal of assets	585	218		832	295
Total expenses	234,048	197,448		462,226	395,556
Operating income	14,022	19,095		25,736	35,776
Non-operating income (expense)
Interest expense, net	(19,135)	(16,066)		(37,270)	(30,809)
Loss on extinguishment and modification of debt	(9,150)			(9,150)
Change in fair value of derivative	(1,489)	1,462		(3,737)	4,673
Total non-operating expense, net	(29,774)	(14,604)		(50,157)	(26,136)
Income (loss) before income tax benefit	(15,752)	4,491		(24,421)	9,640
Income tax benefit (provision)	1,344	(897)		1,995	(2,116)
Net income (loss)	$ (14,408)	$ 3,594		$ (22,426)	$ 7,524
Weighted-average common shares outstanding
Basic	27,762	27,406		27,667	27,278
Dilutive impact of stock options and restricted stock units		2,258			2,250
Diluted	27,762	29,664		27,667	29,528
Net income (loss) per share
Basic	$ (0.52)	$ 0.13		$ (0.81)	$ 0.28
Diluted	$ (0.52)	$ 0.12		$ (0.81)	$ 0.25
Gaming [Member]
Revenues
Total revenues	$ 146,246	$ 132,546		$ 290,038	$ 266,409
Expenses
Cost of goods and services sold	84,007	78,510		166,355	156,198
Food and beverage [Member]
Revenues
Total revenues	52,104	43,422		101,862	86,025
Expenses
Cost of goods and services sold	40,216	35,351		78,430	68,943
Rooms [Member]
Revenues
Total revenues	35,514	27,660		66,801	53,787
Expenses
Cost of goods and services sold	16,008	12,291		30,409	23,856
Other [Member]
Revenues
Total revenues	$ 14,206	$ 12,915		$ 29,261	$ 25,111

[1] Preopening expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

XML

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balances at Dec. 31, 2017	$ 319,913	$ 264	$ 399,510	$ (79,861)
Balances (in shares) at Dec. 31, 2017		26,413,000
Proceeds from issuance of stock on options exercised	417		417
Proceeds from issuance of stock on options exercised (in shares)		42,000
Share-based compensation	4,562		4,562
Issuance of common stock, net of offering costs	25,608	$ 10	25,598
Issuance of common stock, net of offering costs (in shares)		975,000
Tax benefit from share-based compensation	(1,237)		(1,237)
Net income (loss)	7,524			7,524
Balances at Jun. 30, 2018	356,787	$ 274	428,850	(72,337)
Balances (in shares) at Jun. 30, 2018		27,430,000
Balances at Mar. 31, 2018	351,295	$ 274	426,952	(75,931)
Balances (in shares) at Mar. 31, 2018		27,388,000
Proceeds from issuance of stock on options exercised	417		417
Proceeds from issuance of stock on options exercised (in shares)		42,000
Share-based compensation	2,718		2,718
Tax benefit from share-based compensation	(1,237)		(1,237)
Net income (loss)	3,594			3,594
Balances at Jun. 30, 2018	356,787	$ 274	428,850	(72,337)
Balances (in shares) at Jun. 30, 2018		27,430,000
Balances at Dec. 31, 2018	315,152	$ 268	435,245	(120,361)
Balances (in shares) at Dec. 31, 2018		26,779,000
Cumulative effect, change in accounting for leases, net of tax (ASU 842 [Member]) at Dec. 31, 2018	(12,272)			(12,272)
Issuance of common stock related to business combination	16,608	$ 9	16,599
Issuance of common stock related to business combination (In Shares)		911,000
Proceeds from issuance of stock on options exercised	$ 56	$ 1	55
Proceeds from issuance of stock on options exercised (in shares)	52,390	110,000
Share-based compensation	$ 6,262		6,262
Tax benefit from share-based compensation	(291)		(291)
Net income (loss)	(22,426)			(22,426)
Balances at Jun. 30, 2019	303,089	$ 278	457,870	(155,059)
Balances (in shares) at Jun. 30, 2019		27,800,000
Balances at Mar. 31, 2019	315,322	$ 277	455,696	(140,651)
Balances (in shares) at Mar. 31, 2019		27,743,000
Proceeds from issuance of stock on options exercised	56	$ 1	55
Proceeds from issuance of stock on options exercised (in shares)		57,000
Share-based compensation	2,122		2,122
Tax benefit from share-based compensation	(3)		(3)
Net income (loss)	(14,408)			(14,408)
Balances at Jun. 30, 2019	$ 303,089	$ 278	$ 457,870	$ (155,059)
Balances (in shares) at Jun. 30, 2019		27,800,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net income	$ (22,426)	$ 7,524
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57,241	48,091
Amortization of debt issuance costs and discounts on debt	2,471	2,551
Share-based compensation	6,262	4,562
Loss on disposal of property and equipment	832	295
Loss on extinguishment of debt	9,150
Change in fair value of derivative	3,737	(4,673)
Deferred income taxes	(1,995)	107
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(953)	1,395
Income taxes receivable	193	2,008
Prepaid expenses	(943)	2,547
Inventories and other current assets	(1,203)	(959)
Accounts payable and other accrued expenses	8,715	(6,165)
Accrued taxes, other than income taxes	755	41
Other	(467)	(133)
Net cash provided by operating activities	61,369	57,191
Cash flows from investing activities
Purchase of property and equipment, net of change in construction payables	(53,221)	(27,448)
Acquisition of business, net of cash acquired	(148,952)
Proceeds from disposal of property and equipment	93
Other investing activities	(295)
Net cash used in investing activities	(202,375)	(27,448)
Cash flows from financing activities
Repayments of revolving credit facility	(145,000)
Borrowings under revolving credit facility	145,000
Repayments of term loans	(220,000)	(4,000)
Proceeds from issuance of senior notes	375,000
Repayments of notes payable	(881)	(217)
Principal payments under finance leases	(829)	(468)
Payments for debt issuance costs	(6,668)	(95)
Debt extinguishment and modification costs	(4,763)
Proceeds from issuance of common stock, net of issuance costs	56	25,608
Tax withholding on share-based payments	(291)	(820)
Net cash provided by financing activities	141,624	20,008
Cash and cash equivalents
Change in cash and cash equivalents	618	49,751
Balance, beginning of period	116,071	90,579
Balance, end of period	116,689	140,330
Supplemental cash flow disclosures
Cash paid for interest	28,752	29,455
Cash received for income taxes, net	(193)
Non-cash investing and financing activities
Payables incurred for capital expenditures	9,877	3,636
Assets acquired under finance lease obligations	3,352	$ 62
Loss on extinguishment of debt	4,388
Impairment of right-of-use asset	12,272
Common stock issued in connection with acquisition	$ 16,608

XML

Nature of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Nature of Business and Basis of Presentation

Note 1 – Nature of Business and Basis of Presentation

Overview

Golden Entertainment, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on resort casino operations and distributed gaming (including gaming in the Company’s branded taverns).

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the operation of ten resort casino properties in Nevada and Maryland, comprising:

The STRAT Hotel, Casino & SkyPod ("The Strat")	Las Vegas, Nevada
Arizona Charlie's Decatur	Las Vegas, Nevada
Arizona Charlie's Boulder	Las Vegas, Nevada
Aquarius Casino Resort ("Aquarius")	Laughlin, Nevada
Edgewater Hotel & Casino Resort ("Edgewater")	Laughlin, Nevada
Colorado Belle Hotel & Casino Resort ("Colorado Belle")	Laughlin, Nevada
Pahrump Nugget Hotel Casino ("Pahrump Nugget")	Pahrump, Nevada
Gold Town Casino	Pahrump, Nevada
Lakeside Casino & RV Park	Pahrump, Nevada
Rocky Gap Casino Resort ("Rocky Gap")	Flintstone, Maryland

The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC, which own the Edgewater and Colorado Belle in Laughlin, Nevada, as further described in Note 2, Acquisitions, below.

On March 12, 2019, the Company’s Board of Directors authorized the repurchase of up to $25.0 million additional shares of common stock, which replaced the prior share repurchase program authorized in November 2018. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the Company’s finance agreements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice.

On April 25, 2019, the Company issued $375 million in principal amount of 7.625% Senior Notes due 2026 in a private placement to institutional buyers, as further described in Note 5, Long-Term Debt, below.

Basis of Presentation

The unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) has been condensed and/or omitted. For further information, please refer to the audited consolidated financial statements of the Company for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K previously filed with the SEC. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s results for the periods presented. Results for interim periods should not be considered indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements for the previous year period have been reclassified to be consistent with current year presentation. These reclassifications had no effect on previously reported net income.

Lessee Arrangements

The Company is the lessee under non-cancelable real estate leases, equipment leases and space lease agreements. Beginning on January 1, 2019 (the date of the Company's adoption of Topic 842, as defined and discussed further in “Accounting Standards Issued and Adopted”, below), operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The Company’s lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of reasonably certain. For leases where the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. Additionally, for certain vehicle and equipment leases, a portfolio approach is utilized to effectively account for the operating lease ROU assets and liabilities.

As mostof the Company’s leases do not provide an implicit rate, the incremental borrowing rate is estimated based on the information available at the commencement date in determining the present value of lease payments. The implicit rate will be used when readily determinable. The operating lease ROU assets also includes any lease payments made and excludes lease incentives. The Company does not record an asset or liability for operating leases with a term of less than one year. Prior to the adoption of Topic 842 on January 1, 2019, the Company did not record an asset or liability for any of its operating leases.

Lessor Arrangements

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space within its resort casino properties. The lease arrangements generally include minimum base rent and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. Generally, the terms of the leases range between five and 10 years, with options to extend the leases. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and non-lease components for the purpose of measuring lease revenue. Revenue is recorded in other operating revenue on the consolidated statements of operations.

Net Income Per Share

For all periods, basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income per share in profitable periods reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding. Due to the net losses for the three and six months ended June 30, 2019, the effect of all potential common share equivalents was anti-dilutive, and therefore all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods. The amount of potential common share equivalents were 739,934 and 892,282 for three and six months ended June 30, 2019, respectively.

Accounting Standards Issued and Adopted

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), as amended, as of January 1, 2019, and elected the option to apply the transition requirements in the new standard at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to retained earnings on January 1, 2019. As a result, the balance sheet presentation is not comparable to the prior period in this first year of adoption.

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows the carry forward of the Company’s Leases – Topic 840 assessment regarding definition of a lease, lease classification, and initial direct costs. The Company also elected the short-term lease exception, which allows leases with a lease term of 12 months or less to be accounted for similar to existing operating leases. The Company elected not to separate non-lease components from lease components and, instead, to account for each separate lease component and the non-lease components associated with it as a single lease component, recognized on the balance sheet. The Company did not elect the use-of-hindsight, which requires an entity to use hindsight in determining the lease term and in assessing impairment of right-of-use assets, or the practical expedient pertaining to land easements, which is not applicable.

The standard did not materially impact the Company’s consolidated net earnings and had no impact on cash flows. The effect of adopting Topic 842 on the January 1, 2019 consolidated balance sheet is as follows:

(In thousands)	Prior to Adoption			Effect of Adoption(1)			Post Adoption
Prepaid expenses	$	17,722		$	(194	)	$	17,528
Property and equipment, net		894,953			2,503			897,456
Operating lease right-of-use assets, net		—			140,715			140,715
Intangible assets, net		141,128			(2,503	)		138,625
Operating lease liability		—			155,878			155,878
Other long-term obligations		4,801			(3,085	)		1,716
Accumulated deficit		(120,361	)		(12,272	)		(132,633	)

(1) Prepaid expenses, favorable lease intangible and deferred lease expense included in other long-term obligations were reclassed to the related right-of-use asset upon adoption of Topic 842 and represents a non-cash investing activity.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Compensation – Stock Compensation, which expands previous guidance to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. The Company adopted the standard as of January 1, 2019, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

Accounting Standards Issued but Not Yet Adopted

See Note 2, Summary of Significant Accounting Policies, to the Company’s audited consolidated financial statements for the year ended December 31, 2018 for a discussion of accounting standards issued but not yet adopted. No other recently issued accounting standards that are not yet effective have been identified that management believes are likely to have a material impact on the Company’s financial statements.

XML

Acquisitions

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisitions

Note 2 – Acquisitions

Laughlin Acquisition

Overview

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC (the “Acquired Entities”) from Marnell Gaming, LLC (“Marnell”) for $156.2 million in cash (after giving effect to the post-closing adjustment provisions in the purchase agreement) and the issuance of 911,002 shares of the Company’s common stock to certain assignees of Marnell (the “Acquisition”). The results of operations of the Acquired Entities are included in the Company’s results subsequent to the acquisition date.

In connection with the Acquisition, the Company borrowed $145.0 million under its revolving credit facility.

Purchase Price

The Acquisition has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”), which, among other things, establishes that equity issued to effect the acquisition be measured at the closing date of the transaction at the then-current market price. Accordingly, the fair value of the Company's common stock issued was based on the closing price of the Company's common stock on January 14, 2019 of $18.23.

The following is a summary of the components of the purchase price paid by the Company to Marnell in the Acquisition (after taking into account the adjustment to the cash portion of the purchase price pursuant to the post-closing adjustment provisions of the purchase agreement, as described above):

(In thousands)	Amount
Cash	$	156,152
Fair value of common stock issued (911,002 shares)		16,608
Total purchase price	$	172,760

Purchase Price Allocation

Under ASC 805, the purchase price of the acquisition is allocated to the identified tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date which are determined in accordance with the applicable accounting guidance for business combinations and with the services of third-party valuation consultants. The excess of the purchase price over the fair values is recorded as goodwill which is expected to be deductible for tax purposes.

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Balances subject to adjustment primarily include current assets, property and equipment, intangible assets, liabilities, as well as tax-related matters, including tax basis of acquired assets and liabilities.

The following table summarizes the preliminary allocation of the purchase price:

(In thousands)
Current assets	$	12,615
Property and equipment		126,198
Right-of-use assets		2,620
Intangible assets		19,234
Goodwill		24,736
Liabilities		(10,023	)
Lease liabilities		(2,620	)
Total assets acquired, net of liabilities assumed	$	172,760

The following table summarizes the preliminary amounts assigned to property and equipment and estimated useful life by category:

(In thousands)	UsefulLife (Years)
Land	Not applicable	$	4,160
Building and site improvements	10-30		102,450
Furniture and equipment	2-13		18,185
Construction in process	Not applicable		1,403
Total property and equipment		$	126,198

The following table summarizes the preliminary values assigned to acquired intangible assets and estimated useful lives by category:

(In thousands)	Useful Life (Years)
Non-compete agreements	5	$	3,630
Trade names	Indefinite		6,980
Player loyalty program	2		8,600
Other	4		24
Total intangible assets		$	19,234

Pro Forma Combined Financial Information

The following unaudited pro forma combined financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Acquisition had occurred on January 1, 2018, or what such results or financial condition will be for any future periods. The unaudited pro forma combined financial information is based on preliminary estimates and assumptions and on the information available at the time of the preparation thereof. These preliminary estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the Acquisition. The unaudited pro forma combined financial information does not reflect non-recurring charges that were incurred in connection with the Acquisition, nor any cost savings and synergies expected to result from the Acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the Acquisition.

The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of the Acquired Entities for the three and six months ended June 30, 2018, adjusted to give effect to the Acquisition, related transactions, and the adoption of ASC 606 for the Acquired Entities.

	Three Months Ended		Six Months Ended
(In thousands, except per share data)	June 30, 2018		June 30, 2018
Pro forma combined revenues	$	242,473	$	480,705
Pro forma combined net income		2,364		7,519
Weighted-average common shares outstanding:
Basic		28,317		28,189
Diluted		30,575		30,439
Pro forma combined net income per share:
Basic	$	0.08	$	0.27
Diluted		0.08		0.25

In connection with the Acquisition, the Company incurred approximately $0.9 million and $1.3 million of acquisition costs during the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2019, the Acquired Entities contributed revenue of approximately $25.3 million and $46.8 million, respectively. For the three and six months ended June 30, 2019, operating expenses related to the Acquired Entities were approximately $13.6 million and $25.0 million, respectively.

XML

Property and Equipment, Net

6 Months Ended

Jun. 30, 2019

Property Plant And Equipment [Abstract]

Property and Equipment, Net

Note 3 – Property and Equipment, Net

Property and equipment, net, consisted of the following:

(In thousands)	June 30, 2019			December 31, 2018
Land	$	125,240		$	121,081
Building and site improvements		858,855			723,354
Furniture and equipment		197,067			154,663
Construction in process		33,401			35,151
Property and equipment		1,214,563			1,034,249
Less: Accumulated depreciation		(184,415	)		(139,296	)
Property and equipment, net	$	1,030,148		$	894,953

Depreciation expense for property and equipment, including finance leases, was $24.3 million and $18.5 million for the three months ended June 30, 2019 and 2018, respectively, and $45.9 million and $39.4 million for the six months ended June 30, 2019 and 2018, respectively.

XML

Accrued Liabilities

6 Months Ended

Jun. 30, 2019

Payables And Accruals [Abstract]

Accrued Liabilities

Note 4 – Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	June 30, 2019		December 31, 2018
Gaming liabilities	$	13,676	$	12,473
Interest		6,306		305
Deposits		3,589		2,652
Other accrued liabilities		4,789		3,418
Total accrued and other current liabilities	$	28,360	$	18,848

XML

Long-Term Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Note 5 – Long-Term Debt

Long-term debt, net, consisted of the following: 

(In thousands)	June 30, 2019			December 31, 2018
Term loan	$	772,000		$	992,000
Senior notes due 2026		375,000			—
Finance lease liabilities		7,086			7,127
Notes payable		231			1,111
Total long-term debt		1,154,317			1,000,238
Less unamortized discount		(20,394	)		(25,658	)
Less unamortized debt issuance costs		(8,609	)		(3,537	)
		1,125,314			971,043
Less current maturities		(1,875	)		(10,480	)
Long-term debt, net	$	1,123,439		$	960,563

Senior Secured Credit Facility

In October 2017, the Company entered into a senior secured credit facility consisting of a $900 million senior secured first lien credit facility (consisting of an $800 million term loan and a $100 million revolving credit facility) with JPMorgan Chase Bank, N.A. (as administrative agent and collateral agent), the lenders party thereto and the other entities party thereto (the “Credit Facility”). The revolving credit facility was subsequently increased from $100 million to $200 million in 2018.

As of June 30, 2019, the Company had $772 million in principal amount of outstanding term loan borrowings under its Credit Facility, no letters of credit outstanding under the Credit Facility, and the Company’s revolving credit facility was undrawn, leaving borrowing availability under the revolving credit facility as of June 30, 2019 of $200 million.

As of June 30, 2019, the weighted-average effective interest rate on the Company’s outstanding borrowings under the Credit Facility was approximately 5.5%.

The revolving credit facility matures on October 20, 2022, and the term loan under the Credit Facility matures on October 20, 2024. The term loan under the Credit Facility is repayable in 27 quarterly installments of $2 million each, which commenced in March 2018, followed by a final installment of $746 million at maturity.

The Company was in compliance with its financial covenants under the Credit Facility as of June 30, 2019.

Senior Notes due 2026

On April 15, 2019, the Company issued $375 million in principal amount of 7.625% Senior Notes due 2026 (“2026 Notes”) in a private placement to institutional buyers at face value. The 2026 Notes bear interest at 7.625%, payable semi-annually on April 15^th and October 15^th of each year.

In conjunction with the issuance of the 2026 Notes, the Company incurred approximately $6.7 million in debt financing costs and fees that have been deferred and are being amortized over the term of the 2026 Notes using the effective interest method.

The net proceeds of the 2026 Notes were used to (i) repay the Company’s $200 million second lien term loan (the “Second Lien Term Loan”), (ii) repay outstanding borrowings under the revolving credit facility, (iii) repay $18 million of the outstanding term loan indebtedness under the Credit Facility, and (iv) pay accrued interest, fees and expenses related to each of the foregoing.

The 2026 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. Prior to April 15, 2022, the Company may redeem up to 40% of the 2026 Notes at a redemption price of 107.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. Prior to April 15, 2022, the Company may also redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and an Applicable Premium (as defined in the indenture governing the 2026 Notes (the “Indenture”)), if any, thereon to the redemption date.

Under the Indenture, the Company and its restricted subsidiaries are subject to certain limitations, including limitations on their respective ability to:  incur additional debt. grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments.In addition, in the event of a change of control (as defined in the Indenture), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2026 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase.

Expenses Related to Extinguishment and Modification of Debt

In April 2019, the Company recognized a $5.5 million loss on extinguishment of debt and $3.7 million of expense related to modification of debt, related to the repayment of the Company’s Second Lien Term Loan and $18 million prepayment of the term loan under its Credit Facility.

XML

Stock Incentive Plans and Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Incentive Plans and Share-Based Compensation

Note 6 – Stock Incentive Plans and Share-Based Compensation

As of June 30, 2019, a total of 1,359,129 shares of the Company’s common stock remained available for grants of awards under the Golden Entertainment, Inc. 2015 Incentive Award Plan (the “2015 Plan”), which includes the annual increase in the number of shares available for grant on January 1, 2019 of 1,119,924 shares.

Stock Options

The following table summarizes the Company’s stock option activity: 

	Stock Options
				Weighted-
				Average
	Shares			Exercise Price
Outstanding at January 1, 2019		3,424,755		$	11.49
Granted		—		$	—
Exercised		(52,390	)	$	9.06
Cancelled		(21,875	)	$	11.41
Outstanding at June 30, 2019		3,350,490		$	11.53
Exercisable at June 30, 2019		2,668,865		$	11.31

Share-based compensation expense related to stock options was $0.9 million and $1.4 million for the three months ended June 30, 2019 and 2018, respectively, and $3.4 million and $2.9 million for the six months ended June 30, 2019 and 2018, respectively. The Company’s unrecognized share-based compensation expense related to stock options was approximately $3.6 million as of June 30, 2019, which is expected to be recognized over a weighted-average period of 1.4 years.

Restricted Stock Units

The following table summarizes the Company’s activity related to time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”):

	RSUs					PSUs
				Weighted-				Weighted-
				Average Grant				Average Grant
	Shares			Date Fair Value		Shares(1)		Date Fair Value
Outstanding at January 1, 2019		232,299		$	29.10		171,748	$	28.41
Granted		461,606		$	14.06		204,580	$	14.13
Vested		(102,218	)	$	29.59		—	$	—
Cancelled		(12,827	)	$	26.80		—	$	—
Outstanding at June 30, 2019		578,860		$	17.07		376,328	$	20.65

__________________

(1) The number of shares for 62,791 of the PSUs listed as outstanding at January 1, 2019 represents the actual number of PSUs granted to each recipient eligible to vest if the Company meets its performance goals for the applicable period. The number of shares for the remainder of the PSUs listed as outstanding at January 1, 2019 and for all of the PSUs granted in 2019 represents the “target” number of PSUs granted to each recipient eligible to vest if the Company meets its “target” performance goals for the applicable period. The actual number of PSUs eligible to vest for those PSUs will vary depending on whether or not the Company meets or exceeds the applicable threshold, target or maximum performance goals for the PSUs, with 200% of the “target” number of PSUs will be eligible to vest at “maximum” performance levels.

Share-based compensation expense related to RSUs was $1.0 million and $1.0 million for the three months ended June 30, 2019 and 2018, respectively, and $2.1 million and $1.1 million for the six months ended June 30, 2019 and 2018, respectively. Share-based compensation expense related to PSUs was $0.2 million and $0.4 million for the three months ended June 30, 2019 and 2018, respectively, and $0.6 million and $0.5 million for the six months ended June 30, 2019 and 2018, respectively.

As of June 30, 2019, there was $7.4 million and $4.0 million of unamortized share-based compensation expense related to RSUs and PSUs, respectively, which is expected to be recognized over a weighted-average period of 2.3 years and 2.4 years for RSUs and PSUs, respectively.

XML

Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 – Income Taxes

The Company’s effective tax rate was 8.2% and 22.0% for the six months ended June 30, 2019 and 2018, respectively.

Income tax benefit of $2.0 million for the six months ended June 30, 2019 was primarily due to the change in valuation allowance against the Company’s deferred tax assets during the first six months of 2019. Income tax expense of $2.1 million for the six months ended June 30, 2018 was primarily due to expenses that are not deductible for tax purposes.

Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. The Company continues to evaluate its deferred tax asset valuation allowance on a quarterly basis.

XML

Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Note 8 – Financial Instruments and Fair Value Measurements

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short duration of these financial instruments.

The following table summarizes the fair value measurement information about the Company’s long-term debt:

	June 30, 2019
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	772,000	$	770,070	Level 2
Senior notes due 2026		375,000		383,438	Level 2
Finance lease liabilities		7,086		7,086	Level 3
Notes payable		231		231	Level 3
Total debt	$	1,154,317	$	1,160,825

	December 31, 2018
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	992,000	$	952,300	Level 2
Finance lease liabilities		7,127		7,127	Level 3
Notes payable		1,111		1,111	Level 3
Total debt	$	1,000,238	$	960,538

The estimated fair value of the Company’s term loan debt is based on a relative value analysis performed as of June 30, 2019 and December 31, 2018. The finance lease liabilities and note payable debt are fixed-rate debt, are not traded and do not have observable market inputs, therefore, the fair value is estimated to be equal to the carrying value.

As of June 30, 2019, the Company had an interest rate cap agreement that was outstanding with a notional amount of $650 million, which expires on December 31, 2020. Using Level 2 inputs, the Company adjusts the carrying value of the interest rate cap agreement to estimated fair value quarterly based upon observable market-based inputs that reflect the present values of the difference between estimated future fixed rate payments and future variable receipts. The fair value of the Company’s interest rate cap agreement was $0.5 million and $5.0 million as of June 30, 2019 and December 31, 2018, respectively. As the Company elected to not apply hedge accounting, the change in fair value of its interest rate cap agreement was recorded in the consolidated statement of operations.

XML

Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Note 9 – Leases

Company as Lessee

The Company has operating and finance leases for offices, taverns, land, vehicles, slot machines, and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slots at business locations, which are recorded in gaming expenses. The leases, excluding land, have remaining lease terms of1 year to 28 years, some of which include options to extend the leases for an additional 5 to 15 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days’ to 1 year’s notice. The Company leases slot machines from gaming equipment manufacturers under short-term agreements. Most of the slot machine leases have variable rent structures, with amounts determined based on the performance of those machines. Certain others are short-term in nature, with fixed payment amounts. The Company has an operating ground lease with the Maryland Department of Natural Resources for approximately 270 acres in the Rocky Gap State Park on which Rocky Gap is situated. The Company leases approximately 20 acres of land in Laughlin, Nevada for the Laughlin Event Center and four parcels of land in Pahrump, Nevada on which the Gold Town Casino is located.

The Company leases approximately 4.5 acres of undeveloped land in Carson City. Upon the adoption of Topic 842, the Company wrote off the associated ROU asset for this land lease of $9 million to its beginning balance of retained earnings as of January 1, 2019. The Company is also lessee for nine taverns and locations subject to space lease agreements that it does not plan to develop, operate, or sub-lease. The Company wrote off the associated ROU asset for these eleven leases of $3 million to its beginning balance of retained earnings as of January 1, 2019.

The Company leases one of its tavern locations and its office headquarters building from a related party. See Note 12, Related Party Transactions, for more detail.

The current and long-term obligations under finance leases are included in “current portion of long-term debt, net and finance leases” and “long-term debt, net and finance leases”, respectively. The majority of the finance leases relate to vehicles used within the Company’s Distributed Gaming business and equipment for the Company’s casinos.

The components of lease expense are follows:

		Three Months Ended		Six Months Ended
(In thousands)	Classification	June 30, 2019		June 30, 2019
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	11,416	$	23,056
Variable lease cost	Operating and SG&A expenses		4,468		8,654
Short-term lease cost	Operating and SG&A expenses		1,112		2,161
Total operating lease cost		$	16,996	$	33,871
Finance lease cost
Amortization of lease assets	Depreciation and amortization	$	505	$	999
Interest on lease liabilities	Interest expense, net		100		198
Total finance lease cost		$	605	$	1,197

Supplemental cash flow information related to leases is as follows:

	Six Months Ended
(In thousands)	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,255
Operating cash flows from finance leases		198
Financing cash flows from finance leases		829
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	36,117
Finance leases		849

Supplemental balance sheet information related to leases is as follows:

(In thousands, except lease term and discount rate)	June 30, 2019
Operating leases
Operating lease right-of-use assets, gross	$	175,898
Accumulated amortization		17,813
Operating lease right-of-use assets, net	$	158,085
Current portion of operating leases	$	29,351
Noncurrent operating leases		143,426
Total operating lease liabilities	$	172,777
Finance leases
Property and equipment, gross	$	13,290
Accumulated depreciation		(2,785	)
Property and equipment, net	$	10,505
Current portion of finance leases, net	$	1,763
Noncurrent finance leases, net		5,323
Total finance lease liabilities	$	7,086

Weighted Average Remaining Lease Term
Operating leases	11.2 years
Finance leases	22.4 years
Weighted Average Discount Rate
Operating leases		6.3	%
Finance leases		5.8	%

Maturity of Lease Liabilities

	Operating			Finance
(In thousands)	Leases			Leases			Total
Remaining 2019	$	23,164		$	1,146		$	24,310
2020		30,778			1,954			32,732
2021		29,443			1,460			30,903
2022		22,906			589			23,495
2023		17,469			553			18,022
Thereafter		117,243			7,339			124,582
Total lease payments		241,003			13,041			254,044
Less: interest		(68,226	)		(5,955	)		(74,181	)
Present value of lease liabilities	$	172,777		$	7,086		$	179,863

As of June 30, 2019, the Company does not have any leases that have not yet commenced but that create significant rights and obligations.

Company as Lessor

Minimum and contingent operating lease income is as follows:

	Three Months Ended		Six Months Ended
(In thousands)	June 30, 2019		June 30, 2019
Minimum rental income	$	1,973	$	3,798
Contingent rental income		384		585
Total rental income	$	2,357	$	4,383

Future minimum rental payments to be received under operating leases:

(In thousands)	Operating Leases
Remaining 2019	$	2,635
2020		4,211
2021		3,272
2022		2,433
2023		1,763
Thereafter		2,546
Total future minimum rentals	$	16,860

Disclosures related to periods prior to adoption of Topic 842

For the three months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $10.0 million, $0.4 million and $3.8 million for space lease agreements, related party leases and other operating leases, respectively. For the six months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $19.4 million, $0.8 million, and $7.4 million for space lease agreements, related party leases and other operating leases, respectively. The Company recorded rental revenue of $1.9 million and $3.6 million for the three and six months ended June 30, 2018, respectively.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10 – Commitments and Contingencies

Participation and Revenue Share Agreements

In addition to the space lease agreements described above in Note 9, Leases, the Company also enters into slot placement contracts in the form of participation and revenue share agreements. Under participation agreements, the business location holds the applicable gaming license and retains a percentage of the gaming revenue that it generates from the Company’s slots. Under revenue share agreements, the Company pays the business location a percentage of the gaming revenue generated from the Company’s slots placed at the location, rather than a fixed monthly rental fee. During the three and six months ended June 30, 2019, the aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $39.4 million and $77.9 million, respectively, including $0.3 million and $0.5 million, respectively, under revenue share and participation agreements with related parties, as described in Note 12, Related Party Transactions. During the three and six months ended June 30, 2018, the aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $37.5 million and $74.6 million, respectively, including $0.2 million and $0.5 million, respectively, under revenue share and participation agreements with related parties.

The Company also enters into amusement device and ATM placement contracts in the form of participation agreements. Under these agreements, the Company pays the business location a percentage of the non-gaming revenue generated from the Company’s amusement devices and ATMs placed at the location. During the three months ended June 30, 2019 and 2018, the total contingent payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.4 million and $0.3 million, respectively. During the six months ended June 30, 2019 and 2018, the total contingent payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.8 million and $0.7 million, respectively.

Legal Matters

From time to time, the Company is involved in a variety of lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of business, including proceedings concerning labor and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which the Company recorded reserves of $1.0 million for claims as of June 30, 2019. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of its currently pending matters should not have a material adverse effect on its business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect the Company’s business, financial condition, results of operations or liquidity in a particular period.

In February and April 2017, several former employees filed two separate purported class action lawsuits against the Company in the District Court of Clark County, Nevada, on behalf of similarly situated individuals employed by the Company in the State of Nevada. The lawsuits allege that the Company violated certain Nevada labor laws including payment of an hourly wage below the statutory minimum wage without providing a qualified health insurance plan and an associated failure to pay proper overtime compensation. The complaints seek, on behalf of the plaintiffs and members of the putative class, an unspecified amount of damages (including punitive damages), injunctive and equitable relief, and an award of attorneys’ fees, interest and costs. The Company agreed to settle the first of these cases in the fourth quarter of 2017 and the second of these cases in the third quarter of 2018. In February 2019, the court approved the settlement for the first case for $0.5 million. In July 2019, the court approved the settlement for the second case for $1.1 million, which is included in the Company’s recorded reserves at June 30, 2019.

On August 31, 2018, prior guests of The Strat filed a purported class action complaint against the Company in the District Court, Clark County, Nevada, on behalf of similarly situated individuals and entities that paid the Clark County Combined Transient Lodging Tax (“Tax”) on the portion of a resort fee that constitutes charges for Internet access, during the period of February 6, 2014 through the date the alleged conduct ceases. The lawsuit alleged that the Tax was charged in violation of the federal Internet Tax Freedom Act, which imposed a national moratorium on the taxation of Internet access by states and their political subdivisions, and sought, on behalf of the plaintiff and the putative class, damages equal to the amount of the Tax collected on the Internet access component of the resort fee, injunctive relief, disgorgement, interest, fees and costs. All defendants to this matter, including Golden Entertainment, Inc., filed a joint motion to dismiss this matter for lack of merit. The District Court granted this joint motion to dismiss on February 21, 2019. The plaintiffs appealed the District Court decision on April 10, 2019 to the Supreme Court of Nevada.

While legal proceedings are inherently unpredictable and no assurance can be given as to the ultimate outcome of any of the above matters, based on management’s current understanding of the relevant facts and circumstances, the Company believes that these proceedings should not have a material adverse effect on its financial position, results of operations or cash flows.

XML

Segment Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Information

Note 11 – Segment Information

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the ownership and operation of resort casino properties in Nevada and Maryland. The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Corporate and Other segment includes the Company’s cash and cash equivalents, miscellaneous receivables and corporate overhead. Costs recorded in the Corporate and Other segment have not been allocated to the Company’s reportable operating segments because these costs are not easily allocable and to do so would not be practical.

The Company evaluates each segment’s profitability based upon such segment’s Adjusted EBITDA, which represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, preopening expense, acquisition expenses, share-based compensation expenses, executive severance, rebranding, class action litigation expenses, gain/loss on disposal of property and equipment, gain on change in fair value of derivative and other losses, calculated before corporate overhead (which is not allocated to each segment).

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles net income (loss) to Adjusted EBITDA:

	Three Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	72,237	$	74,009	$	—		$	146,246
Food and beverage		39,049		13,055		—			52,104
Rooms		35,514		—		—			35,514
Other		11,916		2,089		201			14,206
Total revenues	$	158,716	$	89,153	$	201		$	248,070
Net income (loss)	$	22,471	$	7,347	$	(44,226	)	$	(14,408	)
Depreciation and amortization		24,052		5,569		355			29,976
Preopening and related expenses(1)		700		660		137			1,497
Acquisition and severance expenses		101		9		1,013			1,123
Asset disposal and other writedowns		511		74		—			585
Share-based compensation		—		—		2,134			2,134
Other, net		81		—		406			487
Interest expense, net		64		23		19,048			19,135
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		1,489			1,489
Income tax benefit		—		—		(1,344	)		(1,344	)
Adjusted EBITDA	$	47,980	$	13,682	$	(11,838	)	$	49,824

	Three Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	61,929	$	70,617	$	—		$	132,546
Food and beverage		30,743		12,679		—			43,422
Rooms		27,660		—		—			27,660
Other		10,594		2,101		220			12,915
Total revenues	$	130,926	$	85,397	$	220		$	216,543
Net income (loss)	$	24,236	$	7,552	$	(28,194	)	$	3,594
Depreciation and amortization		17,412		4,979		463			22,854
Preopening expenses(1)		—		88		301			389
Acquisition and severance expenses		168		2		395			565
Asset disposal and other writedowns		218		—		—			218
Share-based compensation		—		—		2,758			2,758
Other, net		123		195		99			417
Interest expense, net		25		26		16,015			16,066
Change in fair value of derivative		—		—		(1,462	)		(1,462	)
Income tax provision		—		—		897			897
Adjusted EBITDA	$	42,182	$	12,842	$	(8,728	)	$	46,296

	Six Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	143,122	$	146,916	$	—		$	290,038
Food and beverage		75,491		26,371		—			101,862
Rooms		66,801		—		—			66,801
Other		24,676		4,223		362			29,261
Total revenues	$	310,090	$	177,510	$	362		$	487,962
Net income (loss)	$	45,160	$	14,953	$	(82,539	)	$	(22,426	)
Depreciation and amortization		45,695		10,898		648			57,241
Preopening and related expenses(1)		2,354		1,226		149			3,729
Acquisition and severance expenses		387		35		2,245			2,667
Asset disposal and other writedowns		767		65		390			1,222
Share-based compensation		11		5		6,302			6,318
Other, net		92		—		1,259			1,351
Interest expense, net		116		39		37,115			37,270
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		3,737			3,737
Income tax benefit		—		—		(1,995	)		(1,995	)
Adjusted EBITDA	$	94,582	$	27,221	$	(23,539	)	$	98,264

	Six Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	126,388	$	140,021	$	—		$	266,409
Food and beverage		60,739		25,286		—			86,025
Rooms		53,787		—		—			53,787
Other		20,499		4,251		361			25,111
Total revenues	$	261,413	$	169,558	$	361		$	431,332
Net income (loss)	$	48,077	$	15,000	$	(55,553	)	$	7,524
Depreciation and amortization		37,047		10,127		917			48,091
Preopening expenses(1)		—		236		601			837
Acquisition and severance expenses		219		37		1,608			1,864
Asset disposal and other writedowns		280		15		—			295
Share-based compensation		—		—		4,602			4,602
Other, net		160		362		203			725
Interest expense, net		49		72		30,688			30,809
Change in fair value of derivative		—		—		(4,673	)		(4,673	)
Income tax provision		—		—		2,116			2,116
Adjusted EBITDA	$	85,832	$	25,849	$	(19,491	)	$	92,190

(1) Preopening expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

Total Segment Assets

The Company’s assets by segment consisted of the following amounts:

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at June 30, 2019	$	1,213,701	$	431,956	$	49,013	$	1,694,670
Balance at December 31, 2018	$	1,006,292	$	299,697	$	60,580	$	1,366,569

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Note 12 – Related Party Transactions

As of June 30, 2019, the Company leased its office headquarters building from a company 33% beneficially owned by Blake L. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Stephen A. Arcana. The rent expense for the office headquarters building was $0.3 million for each of the three months ended June 30, 2019 and 2018, and $0.6 million and $0.8 million during the six months ended June 30, 2019 and 2018, respectively. There were no amounts owed by the Company, and no amount was due and payable by the Company, under this lease as of June 30, 2019 and December 31, 2018. Additionally, a portion of the office headquarters building was sublet to a company owned or controlled by Mr. Sartini. There was less than $0.1 million of rental income under such sublease for each of the three and six months ended June 30, 2019 and 2018. No amount was owed to the Company under such sublease as of June 30, 2019 and December 31, 2018. Mr. Sartini serves as the Chairman of the Board, President and Chief Executive Officer of the Company and is co-trustee of The Blake L. Sartini and Delise F. Sartini Family Trust, which is a significant shareholder of the Company. Mr. Arcana serves as the Executive Vice President and Chief Operating Officer of the Company.

In November 2018, the Company entered into a lease agreement for office space in a building to be constructed and owned by a company 33% beneficially owned by Mr. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Mr. Arcana. The lease is intended to commence in 2019 and expires on December 31, 2030. The rent expense for the space is expected to be approximately $0.3 million per year. Additionally, the lease agreement includes a right of first refusal for additional space on the second floor of the building.

One tavern location that the Company had previously leased from a related party was sold in the second quarter of 2019 to an unrelated third party. A second tavern location that the Company had previously leased from a related party was sold in 2018 to an unrelated third party. The rent expense for tavern locations leased from related parties (for the periods in which the leases were with related parties) was less than $0.1 million and $0.2 million for the three months ended June 30, 2019 and 2018, respectively, and $0.2 million and $0.3 million during the six months ended June 30, 2019 and 2018, respectively. There were no amounts owed by the Company, and no amount was due and payable by the Company, under such leases as of December 31, 2018. No tavern locations were leased from related parties as of June 30, 2019.

During the three months ended June 30, 2019 and 2018, the Company paid $0.2 million and less than $0.1 million, respectively, under aircraft time-sharing, co-user and cost-sharing agreements between the Company and Sartini Enterprises, Inc. a company controlled by Mr. Sartini. During the six months ended June 30, 2019 and 2018, the Company paid $0.4 million and less than $0.1 million, respectively, under the aircraft time-sharing, co-user and cost-sharing agreements. The Company owed less than $0.1 million under the aircraft time-sharing, co-user and cost-sharing agreements as of June 30, 2019 and December 31, 2018.

During the three months ended June 30, 2019 and 2018, the Company recorded revenues of $0.3 million in each period, and the Company recorded gaming expenses of $0.3 million and $0.2 million, respectively, related to the use of the Company’s slots at a distributed gaming location owned in part by Sean T. Higgins, who serves as the Company’s Executive Vice President of Compliance and Governmental Affairs and Chief Legal Officer. During each of the six months ended June 30, 2019 and 2018, the Company recorded revenues of $0.6 million and $0.5 million, respectively, and the Company recorded gaming expenses of $0.5 million in each period, related to the use of the Company’s slots at this distributed gaming location.De minimis amounts were owed to the Company and were due and payable by the Company related to this arrangement as of June 30, 2019 and December 31, 2018.

During the three months ended June 30, 2018, the Company recorded expenses of less than $0.1 million related to a three-year consulting agreement between the Company and Lyle A. Berman, who serves on the Board of Directors of the Company. During the six months ended June 30, 2018, the Company recorded $0.1 million of SG&A expenses related to Mr. Berman’s consulting agreement. No amount was due and payable by the Company as of December 31, 2018 related to this agreement. The consulting agreement expired on July 31, 2018.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Note 13 – Subsequent Events

The Company’s management evaluates subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the consolidated financial statements as of and for the six months ended June 30, 2019.

XML

Nature of Business and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) has been condensed and/or omitted. For further information, please refer to the audited consolidated financial statements of the Company for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K previously filed with the SEC. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s results for the periods presented. Results for interim periods should not be considered indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements for the previous year period have been reclassified to be consistent with current year presentation. These reclassifications had no effect on previously reported net income.

Lessee Arrangements

Lessee Arrangements

The Company is the lessee under non-cancelable real estate leases, equipment leases and space lease agreements. Beginning on January 1, 2019 (the date of the Company's adoption of Topic 842, as defined and discussed further in “Accounting Standards Issued and Adopted”, below), operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The Company’s lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of reasonably certain. For leases where the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. Additionally, for certain vehicle and equipment leases, a portfolio approach is utilized to effectively account for the operating lease ROU assets and liabilities.

As mostof the Company’s leases do not provide an implicit rate, the incremental borrowing rate is estimated based on the information available at the commencement date in determining the present value of lease payments. The implicit rate will be used when readily determinable. The operating lease ROU assets also includes any lease payments made and excludes lease incentives. The Company does not record an asset or liability for operating leases with a term of less than one year. Prior to the adoption of Topic 842 on January 1, 2019, the Company did not record an asset or liability for any of its operating leases.

Lessor Arrangements

Lessor Arrangements

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space within its resort casino properties. The lease arrangements generally include minimum base rent and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. Generally, the terms of the leases range between five and 10 years, with options to extend the leases. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and non-lease components for the purpose of measuring lease revenue. Revenue is recorded in other operating revenue on the consolidated statements of operations.

Net Income Per Share

Net Income Per Share

For all periods, basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income per share in profitable periods reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding. Due to the net losses for the three and six months ended June 30, 2019, the effect of all potential common share equivalents was anti-dilutive, and therefore all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods. The amount of potential common share equivalents were 739,934 and 892,282 for three and six months ended June 30, 2019, respectively.

New Accounting Pronouncements

Accounting Standards Issued and Adopted

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), as amended, as of January 1, 2019, and elected the option to apply the transition requirements in the new standard at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to retained earnings on January 1, 2019. As a result, the balance sheet presentation is not comparable to the prior period in this first year of adoption.

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows the carry forward of the Company’s Leases – Topic 840 assessment regarding definition of a lease, lease classification, and initial direct costs. The Company also elected the short-term lease exception, which allows leases with a lease term of 12 months or less to be accounted for similar to existing operating leases. The Company elected not to separate non-lease components from lease components and, instead, to account for each separate lease component and the non-lease components associated with it as a single lease component, recognized on the balance sheet. The Company did not elect the use-of-hindsight, which requires an entity to use hindsight in determining the lease term and in assessing impairment of right-of-use assets, or the practical expedient pertaining to land easements, which is not applicable.

The standard did not materially impact the Company’s consolidated net earnings and had no impact on cash flows. The effect of adopting Topic 842 on the January 1, 2019 consolidated balance sheet is as follows:

(In thousands)	Prior to Adoption			Effect of Adoption(1)			Post Adoption
Prepaid expenses	$	17,722		$	(194	)	$	17,528
Property and equipment, net		894,953			2,503			897,456
Operating lease right-of-use assets, net		—			140,715			140,715
Intangible assets, net		141,128			(2,503	)		138,625
Operating lease liability		—			155,878			155,878
Other long-term obligations		4,801			(3,085	)		1,716
Accumulated deficit		(120,361	)		(12,272	)		(132,633	)

(1) Prepaid expenses, favorable lease intangible and deferred lease expense included in other long-term obligations were reclassed to the related right-of-use asset upon adoption of Topic 842 and represents a non-cash investing activity.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Compensation – Stock Compensation, which expands previous guidance to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. The Company adopted the standard as of January 1, 2019, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

Accounting Standards Issued but Not Yet Adopted

See Note 2, Summary of Significant Accounting Policies, to the Company’s audited consolidated financial statements for the year ended December 31, 2018 for a discussion of accounting standards issued but not yet adopted. No other recently issued accounting standards that are not yet effective have been identified that management believes are likely to have a material impact on the Company’s financial statements.

XML

Nature of Business and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2019

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Summary of Effect of Adopting Topic 842 on Consolidated Balance Sheet

The standard did not materially impact the Company’s consolidated net earnings and had no impact on cash flows. The effect of adopting Topic 842 on the January 1, 2019 consolidated balance sheet is as follows:

(In thousands)	Prior to Adoption			Effect of Adoption(1)			Post Adoption
Prepaid expenses	$	17,722		$	(194	)	$	17,528
Property and equipment, net		894,953			2,503			897,456
Operating lease right-of-use assets, net		—			140,715			140,715
Intangible assets, net		141,128			(2,503	)		138,625
Operating lease liability		—			155,878			155,878
Other long-term obligations		4,801			(3,085	)		1,716
Accumulated deficit		(120,361	)		(12,272	)		(132,633	)

(1) Prepaid expenses, favorable lease intangible and deferred lease expense included in other long-term obligations were reclassed to the related right-of-use asset upon adoption of Topic 842 and represents a non-cash investing activity.

XML

Acquisitions (Tables) - Marnell Gaming,LLC [Member]

6 Months Ended

Jun. 30, 2019

Summary of Components of Purchase Price Paid to Seller in Acquisition

The following is a summary of the components of the purchase price paid by the Company to Marnell in the Acquisition (after taking into account the adjustment to the cash portion of the purchase price pursuant to the post-closing adjustment provisions of the purchase agreement, as described above):

(In thousands)	Amount
Cash	$	156,152
Fair value of common stock issued (911,002 shares)		16,608
Total purchase price	$	172,760

Schedule of Acquisition Purchase Price Preliminary Allocation

The following table summarizes the preliminary allocation of the purchase price:

(In thousands)
Current assets	$	12,615
Property and equipment		126,198
Right-of-use assets		2,620
Intangible assets		19,234
Goodwill		24,736
Liabilities		(10,023	)
Lease liabilities		(2,620	)
Total assets acquired, net of liabilities assumed	$	172,760

Summary of Preliminary Amounts Assigned to Property and Equipment Acquired and Estimated Useful Life by Category

The following table summarizes the preliminary amounts assigned to property and equipment and estimated useful life by category:

(In thousands)	UsefulLife (Years)
Land	Not applicable	$	4,160
Building and site improvements	10-30		102,450
Furniture and equipment	2-13		18,185
Construction in process	Not applicable		1,403
Total property and equipment		$	126,198

Summary of Preliminary Values of Intangible Assets Acquired and Estimated Useful Lives by Category

The following table summarizes the preliminary values assigned to acquired intangible assets and estimated useful lives by category:

(In thousands)	Useful Life (Years)
Non-compete agreements	5	$	3,630
Trade names	Indefinite		6,980
Player loyalty program	2		8,600
Other	4		24
Total intangible assets		$	19,234

Summary of Unaudited Pro Forma Combined Financial Information

The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of the Acquired Entities for the three and six months ended June 30, 2018, adjusted to give effect to the Acquisition, related transactions, and the adoption of ASC 606 for the Acquired Entities.

	Three Months Ended		Six Months Ended
(In thousands, except per share data)	June 30, 2018		June 30, 2018
Pro forma combined revenues	$	242,473	$	480,705
Pro forma combined net income		2,364		7,519
Weighted-average common shares outstanding:
Basic		28,317		28,189
Diluted		30,575		30,439
Pro forma combined net income per share:
Basic	$	0.08	$	0.27
Diluted		0.08		0.25

XML

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2019

Property Plant And Equipment [Abstract]

Components of Property and Equipment, Net

Property and equipment, net, consisted of the following:

(In thousands)	June 30, 2019			December 31, 2018
Land	$	125,240		$	121,081
Building and site improvements		858,855			723,354
Furniture and equipment		197,067			154,663
Construction in process		33,401			35,151
Property and equipment		1,214,563			1,034,249
Less: Accumulated depreciation		(184,415	)		(139,296	)
Property and equipment, net	$	1,030,148		$	894,953

XML

Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Payables And Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	June 30, 2019		December 31, 2018
Gaming liabilities	$	13,676	$	12,473
Interest		6,306		305
Deposits		3,589		2,652
Other accrued liabilities		4,789		3,418
Total accrued and other current liabilities	$	28,360	$	18,848

XML

Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt, net, consisted of the following: 

(In thousands)	June 30, 2019			December 31, 2018
Term loan	$	772,000		$	992,000
Senior notes due 2026		375,000			—
Finance lease liabilities		7,086			7,127
Notes payable		231			1,111
Total long-term debt		1,154,317			1,000,238
Less unamortized discount		(20,394	)		(25,658	)
Less unamortized debt issuance costs		(8,609	)		(3,537	)
		1,125,314			971,043
Less current maturities		(1,875	)		(10,480	)
Long-term debt, net	$	1,123,439		$	960,563

XML

Stock Incentive Plans and Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity: 

	Stock Options
				Weighted-
				Average
	Shares			Exercise Price
Outstanding at January 1, 2019		3,424,755		$	11.49
Granted		—		$	—
Exercised		(52,390	)	$	9.06
Cancelled		(21,875	)	$	11.41
Outstanding at June 30, 2019		3,350,490		$	11.53
Exercisable at June 30, 2019		2,668,865		$	11.31

Summary of Activity Related To Time-based Restricted Stock Units (RSUs) and Performance-based Restricted Stock Units (PSUs)

The following table summarizes the Company’s activity related to time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”):

	RSUs					PSUs
				Weighted-				Weighted-
				Average Grant				Average Grant
	Shares			Date Fair Value		Shares(1)		Date Fair Value
Outstanding at January 1, 2019		232,299		$	29.10		171,748	$	28.41
Granted		461,606		$	14.06		204,580	$	14.13
Vested		(102,218	)	$	29.59		—	$	—
Cancelled		(12,827	)	$	26.80		—	$	—
Outstanding at June 30, 2019		578,860		$	17.07		376,328	$	20.65

__________________

(1) The number of shares for 62,791 of the PSUs listed as outstanding at January 1, 2019 represents the actual number of PSUs granted to each recipient eligible to vest if the Company meets its performance goals for the applicable period. The number of shares for the remainder of the PSUs listed as outstanding at January 1, 2019 and for all of the PSUs granted in 2019 represents the “target” number of PSUs granted to each recipient eligible to vest if the Company meets its “target” performance goals for the applicable period. The actual number of PSUs eligible to vest for those PSUs will vary depending on whether or not the Company meets or exceeds the applicable threshold, target or maximum performance goals for the PSUs, with 200% of the “target” number of PSUs will be eligible to vest at “maximum” performance levels.

XML

Financial Instruments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurement Information about Long-term Debt

The following table summarizes the fair value measurement information about the Company’s long-term debt:

	June 30, 2019
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	772,000	$	770,070	Level 2
Senior notes due 2026		375,000		383,438	Level 2
Finance lease liabilities		7,086		7,086	Level 3
Notes payable		231		231	Level 3
Total debt	$	1,154,317	$	1,160,825

	December 31, 2018
	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy
Term loan	$	992,000	$	952,300	Level 2
Finance lease liabilities		7,127		7,127	Level 3
Notes payable		1,111		1,111	Level 3
Total debt	$	1,000,238	$	960,538

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense are follows:

		Three Months Ended		Six Months Ended
(In thousands)	Classification	June 30, 2019		June 30, 2019
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	11,416	$	23,056
Variable lease cost	Operating and SG&A expenses		4,468		8,654
Short-term lease cost	Operating and SG&A expenses		1,112		2,161
Total operating lease cost		$	16,996	$	33,871
Finance lease cost
Amortization of lease assets	Depreciation and amortization	$	505	$	999
Interest on lease liabilities	Interest expense, net		100		198
Total finance lease cost		$	605	$	1,197

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases is as follows:

	Six Months Ended
(In thousands)	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,255
Operating cash flows from finance leases		198
Financing cash flows from finance leases		829
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	36,117
Finance leases		849

Summary of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

(In thousands, except lease term and discount rate)	June 30, 2019
Operating leases
Operating lease right-of-use assets, gross	$	175,898
Accumulated amortization		17,813
Operating lease right-of-use assets, net	$	158,085
Current portion of operating leases	$	29,351
Noncurrent operating leases		143,426
Total operating lease liabilities	$	172,777
Finance leases
Property and equipment, gross	$	13,290
Accumulated depreciation		(2,785	)
Property and equipment, net	$	10,505
Current portion of finance leases, net	$	1,763
Noncurrent finance leases, net		5,323
Total finance lease liabilities	$	7,086

Summary of Weighted Average Remaining Lease Term and Discount Rate

Weighted Average Remaining Lease Term
Operating leases	11.2 years
Finance leases	22.4 years
Weighted Average Discount Rate
Operating leases		6.3	%
Finance leases		5.8	%

Summary of Maturity of Lease Liabilities

Maturity of Lease Liabilities

	Operating			Finance
(In thousands)	Leases			Leases			Total
Remaining 2019	$	23,164		$	1,146		$	24,310
2020		30,778			1,954			32,732
2021		29,443			1,460			30,903
2022		22,906			589			23,495
2023		17,469			553			18,022
Thereafter		117,243			7,339			124,582
Total lease payments		241,003			13,041			254,044
Less: interest		(68,226	)		(5,955	)		(74,181	)
Present value of lease liabilities	$	172,777		$	7,086		$	179,863

Summary of Minimum and Contingent Operating Lease Income

Minimum and contingent operating lease income is as follows:

	Three Months Ended		Six Months Ended
(In thousands)	June 30, 2019		June 30, 2019
Minimum rental income	$	1,973	$	3,798
Contingent rental income		384		585
Total rental income	$	2,357	$	4,383

Summary of Future Minimum Rental Payments to be Received Under Operating Leases

Future minimum rental payments to be received under operating leases:

(In thousands)	Operating Leases
Remaining 2019	$	2,635
2020		4,211
2021		3,272
2022		2,433
2023		1,763
Thereafter		2,546
Total future minimum rentals	$	16,860

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles net income (loss) to Adjusted EBITDA:

	Three Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	72,237	$	74,009	$	—		$	146,246
Food and beverage		39,049		13,055		—			52,104
Rooms		35,514		—		—			35,514
Other		11,916		2,089		201			14,206
Total revenues	$	158,716	$	89,153	$	201		$	248,070
Net income (loss)	$	22,471	$	7,347	$	(44,226	)	$	(14,408	)
Depreciation and amortization		24,052		5,569		355			29,976
Preopening and related expenses(1)		700		660		137			1,497
Acquisition and severance expenses		101		9		1,013			1,123
Asset disposal and other writedowns		511		74		—			585
Share-based compensation		—		—		2,134			2,134
Other, net		81		—		406			487
Interest expense, net		64		23		19,048			19,135
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		1,489			1,489
Income tax benefit		—		—		(1,344	)		(1,344	)
Adjusted EBITDA	$	47,980	$	13,682	$	(11,838	)	$	49,824

	Three Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	61,929	$	70,617	$	—		$	132,546
Food and beverage		30,743		12,679		—			43,422
Rooms		27,660		—		—			27,660
Other		10,594		2,101		220			12,915
Total revenues	$	130,926	$	85,397	$	220		$	216,543
Net income (loss)	$	24,236	$	7,552	$	(28,194	)	$	3,594
Depreciation and amortization		17,412		4,979		463			22,854
Preopening expenses(1)		—		88		301			389
Acquisition and severance expenses		168		2		395			565
Asset disposal and other writedowns		218		—		—			218
Share-based compensation		—		—		2,758			2,758
Other, net		123		195		99			417
Interest expense, net		25		26		16,015			16,066
Change in fair value of derivative		—		—		(1,462	)		(1,462	)
Income tax provision		—		—		897			897
Adjusted EBITDA	$	42,182	$	12,842	$	(8,728	)	$	46,296

	Six Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	143,122	$	146,916	$	—		$	290,038
Food and beverage		75,491		26,371		—			101,862
Rooms		66,801		—		—			66,801
Other		24,676		4,223		362			29,261
Total revenues	$	310,090	$	177,510	$	362		$	487,962
Net income (loss)	$	45,160	$	14,953	$	(82,539	)	$	(22,426	)
Depreciation and amortization		45,695		10,898		648			57,241
Preopening and related expenses(1)		2,354		1,226		149			3,729
Acquisition and severance expenses		387		35		2,245			2,667
Asset disposal and other writedowns		767		65		390			1,222
Share-based compensation		11		5		6,302			6,318
Other, net		92		—		1,259			1,351
Interest expense, net		116		39		37,115			37,270
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		3,737			3,737
Income tax benefit		—		—		(1,995	)		(1,995	)
Adjusted EBITDA	$	94,582	$	27,221	$	(23,539	)	$	98,264

	Six Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	126,388	$	140,021	$	—		$	266,409
Food and beverage		60,739		25,286		—			86,025
Rooms		53,787		—		—			53,787
Other		20,499		4,251		361			25,111
Total revenues	$	261,413	$	169,558	$	361		$	431,332
Net income (loss)	$	48,077	$	15,000	$	(55,553	)	$	7,524
Depreciation and amortization		37,047		10,127		917			48,091
Preopening expenses(1)		—		236		601			837
Acquisition and severance expenses		219		37		1,608			1,864
Asset disposal and other writedowns		280		15		—			295
Share-based compensation		—		—		4,602			4,602
Other, net		160		362		203			725
Interest expense, net		49		72		30,688			30,809
Change in fair value of derivative		—		—		(4,673	)		(4,673	)
Income tax provision		—		—		2,116			2,116
Adjusted EBITDA	$	85,832	$	25,849	$	(19,491	)	$	92,190

(1) Preopening expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

Total Segment Assets

The Company’s assets by segment consisted of the following amounts:

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at June 30, 2019	$	1,213,701	$	431,956	$	49,013	$	1,694,670
Balance at December 31, 2018	$	1,006,292	$	299,697	$	60,580	$	1,366,569

XML

Nature of Business and Basis of Presentation (Details Textual)	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($) Property shares	Jun. 30, 2019 USD ($) Segment Property shares	Apr. 25, 2019 USD ($)	Apr. 15, 2019 USD ($)	Mar. 12, 2019 USD ($)	Jan. 01, 2019 USD ($)
Nature Of Business And Basis Of Presentation [Line Items]
Number of reportable operating segments | Segment		2
Operating lease ROU assets	$ 158,085,000	$ 158,085,000
Operating lease liability	$ 172,777,000	$ 172,777,000
Anti-dilutive potential common share equivalents | shares	739,934	892,282
ASU 842 [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Operating lease ROU assets	$ 0	$ 0				$ 140,715,000
Operating lease liability	$ 0	$ 0				$ 155,878,000
Senior Unsecured Notes Due 2026 [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Debt Instrument, Face Amount			$ 375,000,000	$ 375,000,000
Debt instrument interest stated percentage			7.625%	7.625%
Maximum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Common stock repurchase, authorized					$ 25,000,000
Non-cancelable operating leases term	10 years	10 years
Maximum [Member] | ASU 842 [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Operating leases term	1 year	1 year
Minimum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Non-cancelable operating leases term	5 years	5 years
Nevada and Maryland [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of resort casino properties | Property	10	10

XML

Nature of Business and Basis of Presentation - Summary of Effect of Adopting Topic 842 on Consolidated Balance Sheet (Details) - USD ($)		Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Prepaid expenses		$ 21,309,000		$ 17,722,000
Property and equipment, net		1,030,148,000		894,953,000
Operating lease right-of-use assets, net		158,085,000
Intangible assets, net		146,806,000		141,128,000
Operating lease liability		172,777,000
Other long-term obligations		1,340,000		4,801,000
Accumulated deficit		(155,059,000)		$ (120,361,000)
Prior to Adoption [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Prepaid expenses			$ 17,722,000
Property and equipment, net			894,953,000
Intangible assets, net			141,128,000
Other long-term obligations			4,801,000
Accumulated deficit			(120,361,000)
ASU 842 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Prepaid expenses			17,528,000
Property and equipment, net			897,456,000
Operating lease right-of-use assets, net		0	140,715,000
Intangible assets, net			138,625,000
Operating lease liability		$ 0	155,878,000
Other long-term obligations			1,716,000
Accumulated deficit			(132,633,000)
ASU 842 [Member] | Effect of Adoption [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Prepaid expenses	[1]		(194,000)
Property and equipment, net	[1]		2,503,000
Operating lease right-of-use assets, net	[1]		140,715,000
Intangible assets, net	[1]		(2,503,000)
Operating lease liability	[1]		155,878,000
Other long-term obligations	[1]		(3,085,000)
Accumulated deficit	[1]		$ (12,272,000)

[1] Prepaid expenses, favorable lease intangible and deferred lease expense included in other long-term obligations were reclassed to the related right-of-use asset upon adoption of Topic 842 and represents a non-cash investing activity.

XML

Summary of Components of Purchase Price Paid to Seller in Acquisition (Parenthetical) (Details)	Jan. 14, 2019 shares
Marnell Gaming,LLC [Member]
Business Acquisition [Line Items]
Fair value of common stock issued to assignees of seller, shares	911,002

XML

Acquisitions (Details Textual) - Marnell Gaming,LLC [Member] - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	6 Months Ended
	Jan. 14, 2019	Jun. 30, 2019	Jun. 30, 2019
Business Acquisition [Line Items]
Business acquisition, date of acquisition	Jan. 14, 2019
Consideration paid, cash	$ 156,152
Consideration paid, shares issued	911,002
Common stock price per share	$ 18.23
Acquisition Costs		$ 900	$ 1,300
Business acquisition, revenue contributed from acquired entity		25,300	46,800
Operating expenses		$ 13,600	$ 25,000
Maximum [Member]
Business Acquisition [Line Items]
Business acquisition measurement period	1 year
Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Amount drew from revolving credit facility	$ 145,000

XML

Summary of Components of Purchase Price Paid to Seller in Acquisition (Details) - Marnell Gaming,LLC [Member] $ in Thousands	Jan. 14, 2019 USD ($)
Business Acquisition [Line Items]
Cash	$ 156,152
Fair value of common stock issued (911,002 shares)	16,608
Total purchase price	$ 172,760

XML

Schedule of Acquisition Purchase Price Preliminary Allocation (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 14, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Operating lease right-of-use assets, net	$ 158,085
Goodwill	182,870		$ 158,134
Lease liabilities	$ (172,777)
Marnell Gaming,LLC [Member]
Business Acquisition [Line Items]
Current assets		$ 12,615
Property and equipment		126,198
Operating lease right-of-use assets, net		2,620
Intangible assets		19,234
Goodwill		24,736
Liabilities		(10,023)
Lease liabilities		(2,620)
Total assets acquired, net of liabilities assumed		$ 172,760

XML

Summary of Preliminary Amounts Assigned to Property and Equipment Acquired and Estimated Useful Life by Category (Details) - Marnell Gaming,LLC [Member] $ in Thousands	Jan. 14, 2019 USD ($)
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property and Equipment	$ 126,198
Land [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property and Equipment	4,160
Building and Site Improvements [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property and Equipment	$ 102,450
Building and Site Improvements [Member] | Minimum [Member]
Business Acquisition [Line Items]
Acquired property, plant, and equipment, useful life	10 years
Building and Site Improvements [Member] | Maximum [Member]
Business Acquisition [Line Items]
Acquired property, plant, and equipment, useful life	30 years
Furniture and Equipment [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property and Equipment	$ 18,185
Furniture and Equipment [Member] | Minimum [Member]
Business Acquisition [Line Items]
Acquired property, plant, and equipment, useful life	2 years
Furniture and Equipment [Member] | Maximum [Member]
Business Acquisition [Line Items]
Acquired property, plant, and equipment, useful life	13 years
Construction in process [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property and Equipment	$ 1,403

XML

Summary of Preliminary Values of Intangible Assets Acquired and Estimated Useful Lives by Category (Details) - Marnell Gaming,LLC [Member] $ in Thousands	Jan. 14, 2019 USD ($)
Acquired Finite Lived Intangible Assets [Line Items]
Intangible assets	$ 19,234
Noncompete Agreements [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Intangible Assets, Useful Life (Years)	5 years
Intangible assets	$ 3,630
Player Loyalty Program [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Intangible Assets, Useful Life (Years)	2 years
Intangible assets	$ 8,600
Trade Names [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Intangible assets	$ 6,980
Other [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Intangible Assets, Useful Life (Years)	4 years
Intangible assets	$ 24

XML

Summary of Unaudited Pro Forma Combined Financial Information (Details) - American Acquisition [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Pro forma combined revenues	$ 242,473	$ 480,705
Pro forma combined net income	$ 2,364	$ 7,519
Weighted-average common shares outstanding:
Basic	28,317	28,189
Diluted	30,575	30,439
Pro forma combined net income per share:
Basic	$ 0.08	$ 0.27
Diluted	$ 0.08	$ 0.25

XML

Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Property Plant And Equipment [Abstract]
Land	$ 125,240	$ 121,081
Building and site improvements	858,855	723,354
Furniture and equipment	197,067	154,663
Construction in process	33,401	35,151
Property and equipment	1,214,563	1,034,249
Less: Accumulated depreciation	(184,415)	(139,296)
Property and equipment, net	$ 1,030,148	$ 894,953

XML

Property and Equipment, Net (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Property Plant And Equipment [Abstract]
Depreciation Expense	$ 24.3	$ 18.5	$ 45.9	$ 39.4

XML

Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Payables And Accruals [Abstract]
Gaming liabilities	$ 13,676	$ 12,473
Interest	6,306	305
Deposits	3,589	2,652
Other accrued liabilities	4,789	3,418
Total accrued and other current liabilities	$ 28,360	$ 18,848

XML

Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Term loan	$ 772,000	$ 992,000
Senior notes due 2026	375,000
Finance lease liabilities	7,086	7,127
Notes payable	231	1,111
Total long-term debt	1,154,317	1,000,238
Less unamortized discount	(20,394)	(25,658)
Less unamortized debt issuance costs	(8,609)	(3,537)
Long-term Debt	1,125,314	971,043
Less current maturities	(1,875)	(10,480)
Long-term debt, net	$ 1,123,439	$ 960,563

XML

Long-term Debt (Parenthetical) (Details)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Senior notes maturity year	2026

XML

Long-Term Debt (Details Textual)			1 Months Ended	6 Months Ended
	Apr. 14, 2022	Apr. 15, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jun. 30, 2019 USD ($) Installment	Jun. 30, 2018 USD ($)	Apr. 25, 2019 USD ($)	Dec. 31, 2018 USD ($)	Oct. 31, 2017 USD ($)
Debt Instrument [Line Items]
Debt Instrument, Outstanding Amount				$ 1,125,314,000			$ 971,043,000
Debt financing cost and fees				8,609,000			3,537,000
Repayment of debt				220,000,000	$ 4,000,000
Loss on extinguishment of debt				$ (9,150,000)
Senior Secured First Lien Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount								$ 900,000,000
Senior Secured First Lien Credit Facility [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity							$ 200,000,000	100,000,000
Senior Secured First Lien Credit Facility [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount								$ 800,000,000
Credit Facility [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate				5.50%
Repayment of debt		$ 18,000,000	$ 18,000,000
Credit Facility [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Undrawn				$ 200,000,000
Line of Credit Facility, Expiration Date				Oct. 20, 2022
Credit Facility [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Debt Instrument, Outstanding Amount				$ 0
Credit Facility [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Outstanding Amount				$ 772,000,000
Debt Instrument, Maturity Date				Oct. 20, 2024
Debt Instrument, Number of Quarterly Payments | Installment				27
Debt Instrument, Periodic Payment				$ 2,000,000
Debt Instrument, Commencement Date of Quarterly Payments				Mar. 31, 2018
Debt Instrument, Final Installment				$ 746,000,000
Senior Secured Second Lien Credit Facility [Member]
Debt Instrument [Line Items]
Repayment of debt		200,000,000
Senior Secured Second Lien Credit Facility [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Loss on extinguishment of debt			(5,500,000)
Debt modification expenses			$ 3,700,000
Senior Unsecured Notes Due 2026 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 375,000,000				$ 375,000,000
Debt instrument interest stated percentage		7.625%				7.625%
Debt instrument frequency of periodic payment		semi-annually
Debt financing cost and fees		$ 6,700,000
Senior Notes due 2026 [Member]
Debt Instrument [Line Items]
Debt instrument redemption description				The 2026 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.
Senior Notes due 2026 [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Debt instrument repurchase price percentage	101.00%
Senior Notes due 2026 [Member] | Debt Instrument, Redemption, Period One [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Debt instrument redemption price percentage	107.625%
Senior Notes due 2026 [Member] | Debt Instrument, Redemption, Period One [Member] | 12 Months Beginning on April 15, 2022 [Member]
Debt Instrument [Line Items]
Debt instrument redemption price percentage	103.813%
Debt instrument redemption period start date	Apr. 15, 2022
Senior Notes due 2026 [Member] | Debt Instrument, Redemption, Period Two [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Debt instrument redemption price percentage	100.00%
Senior Notes due 2026 [Member] | Debt Instrument, Redemption, Period Two [Member] | 12 Months Beginning on April 15, 2023 [Member]
Debt Instrument [Line Items]
Debt instrument redemption price percentage	101.906%
Debt instrument redemption period start date	Apr. 15, 2023
Senior Notes due 2026 [Member] | Debt Instrument, Redemption, Period Three [Member] | On or After April 15, 2024 [Member]
Debt Instrument [Line Items]
Debt instrument redemption price percentage	100.00%
Debt instrument redemption period start date	Apr. 15, 2024
Senior Notes due 2026 [Member] | Maximum [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Debt instrument redemption percentage	40.00%

XML

Stock Incentive Plans and Share-Based Compensation (Details Textual) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jan. 01, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Employee Stock Option [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Expense		$ 0.9	$ 1.4	$ 3.4	$ 2.9
Stock Options, Unrecognized Share-based Compensation Expense		3.6		$ 3.6
Share-based Compensation Expense Not yet Recognized, Weighted-average Period for Recognition				1 year 4 months 24 days
Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Expense		1.0	1.0	$ 2.1	1.1
Share-based Compensation Expense Not yet Recognized, Weighted-average Period for Recognition				2 years 3 months 18 days
Unamortized share-based compensation expense		7.4		$ 7.4
Performance Stock Units (PSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Expense		0.2	$ 0.4	$ 0.6	$ 0.5
Share-based Compensation Expense Not yet Recognized, Weighted-average Period for Recognition				2 years 4 months 24 days
Unamortized share-based compensation expense		$ 4.0		$ 4.0
2015 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common Stock Avialable for Grants of Awards		1,359,129		1,359,129
Number of Shares Available for Grant Annual Increase	1,119,924

XML

Summary of Stock Option Activity (Details) - $ / shares	6 Months Ended
	Jun. 30, 2019
Stock Options Outstanding
Stock Options Outstanding, Beginning of year	3,424,755
Stock Options Outstanding, Exercised	(52,390)
Stock Options Outstanding, Cancelled	(21,875)
Stock Options Outstanding, End of year	3,350,490
Stock Options Outstanding, Exercisable	2,668,865
Weighted-Average Exercise Price
Weighted-Average Exercise Price, beginning of year	$ 11.49
Weighted Average Exercise Price, Exercised	9.06
Weighted Average Exercise Price, Cancelled	11.41
Weighted-Average Exercise Price, end of year	11.53
Weighted Average Exercise Price, Exercisable	$ 11.31

XML

Summary of Activity Related To Time-based Restricted Stock Units (RSUs) and Performance-based Restricted Stock Units (PSUs) (Details) - 2015 Plan [Member]	6 Months Ended
	Jun. 30, 2019 $ / shares shares
RSUs
Restricted Stock Units Outstanding
Restricted Stock Units Outstanding, Beginning of year	232,299
Restricted Stock Units Outstanding, Granted	461,606
Restricted Stock Units Outstanding, Vested	(102,218)
Restricted Stock Units Outstanding, Cancelled	(12,827)
Restricted Stock Units Outstanding, End of year	578,860
Weighted Average Grant Date Fair Value
Weighted Average Grant Date Fair Value, Beginning of year | $ / shares	$ 29.10
Weighted Average Grant Date Fair Value, Granted | $ / shares	14.06
Weighted Average Grant Date Fair Value, Vested | $ / shares	29.59
Weighted Average Grant Date Fair Value, Cancelled | $ / shares	26.80
Weighted Average Grant Date Fair Value, End of year | $ / shares	$ 17.07
Performance Stock Units (PSUs) [Member]
Restricted Stock Units Outstanding
Restricted Stock Units Outstanding, Beginning of year	171,748	[1]
Restricted Stock Units Outstanding, Granted	204,580	[1]
Restricted Stock Units Outstanding, End of year	376,328	[1]
Weighted Average Grant Date Fair Value
Weighted Average Grant Date Fair Value, Beginning of year | $ / shares	$ 28.41
Weighted Average Grant Date Fair Value, Granted | $ / shares	14.13
Weighted Average Grant Date Fair Value, End of year | $ / shares	$ 20.65
Actual number of PSUs granted to each recipient, eligible to vest	62,791
Percentage of target number of PSU's eligible to vest at "maximum" performance level	200.00%

[1] The number of shares for 62,791 of the PSUs listed as outstanding at January 1, 2019 represents the actual number of PSUs granted to each recipient eligible to vest if the Company meets its performance goals for the applicable period. The number of shares for the remainder of the PSUs listed as outstanding at January 1, 2019 and for all of the PSUs granted in 2019 represents the “target” number of PSUs granted to each recipient eligible to vest if the Company meets its “target” performance goals for the applicable period. The actual number of PSUs eligible to vest for those PSUs will vary depending on whether or not the Company meets or exceeds the applicable threshold, target or maximum performance goals for the PSUs, with 200% of the “target” number of PSUs will be eligible to vest at “maximum” performance levels.

XML

Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Line Items]
Income Tax Expense (Benefit)	$ (1,344)	$ 897	$ (1,995)	$ 2,116
Latest Tax Year [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Income Tax Disclosure [Line Items]
Effective Tax Rate, Percent			8.20%	22.00%
Income Tax Expense (Benefit)				$ 2,100
Latest Tax Year [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Change in Valuation Allowance on Deferred Tax Assets [Member]
Income Tax Disclosure [Line Items]
Income Tax Expense (Benefit)			$ (2,000)

XML

Financial Instruments and Fair Value Measurements - Schedule of Fair Value Measurement Information about Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Term loan	$ 772,000	$ 992,000
Senior notes due 2026	375,000
Finance lease liabilities	7,086	7,127
Notes payable	231	1,111
Long-term Debt	1,125,314	971,043
Carrying Amount [Member]
Debt Instrument [Line Items]
Long-term Debt	1,154,317	1,000,238
Carrying Amount [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Term loan	772,000	992,000
Senior notes due 2026	375,000
Carrying Amount [Member] | Level 3 [Member]
Debt Instrument [Line Items]
Finance lease liabilities	7,086	7,127
Notes payable	231	1,111
Fair Value [Member]
Debt Instrument [Line Items]
Long-term Debt	1,160,825	960,538
Fair Value [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Term loan	770,070	952,300
Senior notes due 2026	383,438
Fair Value [Member] | Level 3 [Member]
Debt Instrument [Line Items]
Finance lease liabilities	7,086	7,127
Notes payable	$ 231	$ 1,111

XML

Financial Instruments and Fair Value Measurements (Details Textual) - Interest Rate Swap [Member] - Not Designated as Accounting Hedge [Member] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative instrument, notional amount	$ 650.0
Derivative instrument, expiration date	Dec. 31, 2020
Fair value liability	$ 0.5	$ 5.0

XML

Leases (Details Textual) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) a Parcel Lease	Jun. 30, 2018 USD ($)
Lessor Lease Description [Line Items]
ROU asset write off		$ 9.0
Number of tavern leases | Lease		9
Rental revenue	$ 1.9		$ 3.6
Space Lease Agreements [Member]
Lessor Lease Description [Line Items]
Operating lease rental expense	10.0		19.4
Related Party Leases [Member]
Lessor Lease Description [Line Items]
Operating lease rental expense	0.4		0.8
Other Operating Leases [Member]
Lessor Lease Description [Line Items]
Operating lease rental expense	$ 3.8		$ 7.4
Carson City [Member]
Lessor Lease Description [Line Items]
Acres of undeveloped land | a		4.5
Gold Town Casino [Member] | Nevada [Member]
Lessor Lease Description [Line Items]
Number of leased parcels of land | Parcel		4
Tavern Leases [Member]
Lessor Lease Description [Line Items]
ROU asset write off		$ 3.0
Rocky Gap State Park [Member] | Maryland DNR [Member]
Lessor Lease Description [Line Items]
Area of the Property | a		270
Laughlin Event Center [Member] | Nevada [Member]
Lessor Lease Description [Line Items]
Area of the Property | a		20
Minimum [Member]
Lessor Lease Description [Line Items]
Lease remaining term of contract excluding land		1 year
Operating leases renewal term		5 years
Operating leases, termination period		60 days
Maximum [Member]
Lessor Lease Description [Line Items]
Lease remaining term of contract excluding land		28 years
Operating leases renewal term		15 years
Operating leases, termination period		1 year

XML

Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Lease Cost [Abstract]
Operating lease cost	$ 11,416	$ 23,056
Variable lease cost	4,468	8,654
Short-term lease cost	1,112	2,161
Total operating lease cost	16,996	33,871
Finance lease cost
Amortization of lease assets	505	999
Interest on lease liabilities	100	198
Total finance lease cost	$ 605	$ 1,197

XML

Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 23,255
Operating cash flows from finance leases	198
Financing cash flows from finance leases	829	$ 468
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	36,117
Finance leases	$ 849

XML

Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating leases
Operating lease right-of-use assets, gross	$ 175,898
Accumulated amortization	17,813
Operating lease right-of-use assets, net	158,085
Current portion of operating leases	29,351
Non-current operating leases	143,426
Total operating lease liabilities	172,777
Finance leases
Property and equipment, gross	13,290
Accumulated depreciation	(2,785)
Property and equipment, net	10,505
Current portion of finance leases, net	1,763
Noncurrent finance leases, net	5,323
Total finance lease liabilities	$ 7,086	$ 7,127

XML

Summary of Weighted Average Remaining Lease Term and Discount Rate (Details)	Jun. 30, 2019
Weighted Average Remaining Lease Term
Operating leases	11 years 2 months 12 days
Finance leases	22 years 4 months 24 days
Weighted Average Discount Rate
Operating leases	6.30%
Finance leases	5.80%

XML

Summary of Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating
Remaining 2019	$ 23,164
2020	30,778
2021	29,443
2022	22,906
2023	17,469
Thereafter	117,243
Total lease payments	241,003
Less: interest	(68,226)
Operating lease liability	172,777
Finance
Remaining 2019	1,146
2020	1,954
2021	1,460
2022	589
2023	553
Thereafter	7,339
Total lease payments	13,041
Less: interest	(5,955)
Finance lease liabilities	7,086	$ 7,127
Leases Liablities
Remaining 2019	24,310
2020	32,732
2021	30,903
2022	23,495
2023	18,022
Thereafter	124,582
Total lease payments	254,044
Less: interest	(74,181)
Present value of lease liabilities	$ 179,863

XML

Summary of Minimum and Contingent Operating Lease Income (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Minimum rental income	$ 1,973	$ 3,798
Contingent rental income	384	585
Total rental income	$ 2,357	$ 4,383

XML

Summary of Future Minimum Rental Payments to be Received Under Operating Leases (Detail) $ in Thousands	Jun. 30, 2019 USD ($)
Operating Leases
Remaining 2019	$ 2,635
2020	4,211
2021	3,272
2022	2,433
2023	1,763
Thereafter	2,546
Total future minimum rentals	$ 16,860

XML

Commitments and Contingencies (Details Textual) $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	Jul. 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Apr. 14, 2022 USD ($)
Commitments And Contingencies [Line Items]
Other Operating Expenses			$ 5,160	$ 3,655	$ 11,594	$ 7,651
Amount recorded for claims							$ 1,000
Class action lawsuits filed by former employees					February and April 2017
Number of class action lawsuits filed by former employees					2
First Case [Member]
Commitments And Contingencies [Line Items]
Litigation settlement amount		$ 500
Second Case [Member]
Commitments And Contingencies [Line Items]
Litigation settlement amount	$ 1,100
Gaming [Member]
Commitments And Contingencies [Line Items]
Gaming Expenses			84,007	78,510	$ 166,355	156,198
Participation and Revenue Share Agreements [Member] | Gaming [Member]
Commitments And Contingencies [Line Items]
Gaming Expenses			39,400	37,500	77,900	74,600
Participation and Revenue Share Agreements [Member] | Related Party Transaction, Revenue Share and Participation Agreement [Member] | Gaming [Member]
Commitments And Contingencies [Line Items]
Gaming Expenses			300	200	500	500
Revenue Share Agreements [Member]
Commitments And Contingencies [Line Items]
Other Operating Expenses			$ 400	$ 300	$ 800	$ 700

XML

Segment Information (Details Textual)	6 Months Ended
	Jun. 30, 2019 Segment
Segment Reporting [Abstract]
Number of reportable operating segments	2

XML

Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018		Jun. 30, 2019	Jun. 30, 2018		Dec. 31, 2018
Revenues
Total revenues		$ 248,070	$ 216,543		$ 487,962	$ 431,332
Net income (loss)		(14,408)	3,594		(22,426)	7,524
Depreciation and amortization		29,976	22,854		57,241	48,091
Preopening and related expenses	[1]	1,497			3,729
Preopening expenses		738	389	[1]	1,516	837	[1]
Acquisition and severance expenses		1,123	565		2,667	1,864
Asset disposal and other writedowns		585	218		1,222	295
Share-based compensation		2,134	2,758		6,318	4,602
Other, net		487	417		1,351	725
Interest expense, net		19,135	16,066		37,270	30,809
Change in fair value of derivative		1,489	(1,462)		3,737	(4,673)
Income tax benefit (provision)		(1,344)	897		(1,995)	2,116
Adjusted EBITDA		49,824	46,296		98,264	92,190
Loss on extinguishment and modification of debt		9,150			9,150
Assets		1,694,670			1,694,670			$ 1,366,569
Gaming [Member]
Revenues
Total revenues		146,246	132,546		290,038	266,409
Food and beverage [Member]
Revenues
Total revenues		52,104	43,422		101,862	86,025
Rooms [Member]
Revenues
Total revenues		35,514	27,660		66,801	53,787
Other [Member]
Revenues
Total revenues		14,206	12,915		29,261	25,111
Operating Segments [Member] | Casinos [Member]
Revenues
Total revenues		158,716	130,926		310,090	261,413
Net income (loss)		22,471	24,236		45,160	48,077
Depreciation and amortization		24,052	17,412		45,695	37,047
Preopening and related expenses	[1]	700			2,354
Acquisition and severance expenses		101	168		387	219
Asset disposal and other writedowns		511	218		767	280
Share-based compensation					11
Other, net		81	123		92	160
Interest expense, net		64	25		116	49
Adjusted EBITDA		47,980	42,182		94,582	85,832
Assets		1,213,701			1,213,701			1,006,292
Operating Segments [Member] | Casinos [Member] | Gaming [Member]
Revenues
Total revenues		72,237	61,929		143,122	126,388
Operating Segments [Member] | Casinos [Member] | Food and beverage [Member]
Revenues
Total revenues		39,049	30,743		75,491	60,739
Operating Segments [Member] | Casinos [Member] | Rooms [Member]
Revenues
Total revenues		35,514	27,660		66,801	53,787
Operating Segments [Member] | Casinos [Member] | Other [Member]
Revenues
Total revenues		11,916	10,594		24,676	20,499
Operating Segments [Member] | Distributed Gaming [Member]
Revenues
Total revenues		89,153	85,397		177,510	169,558
Net income (loss)		7,347	7,552		14,953	15,000
Depreciation and amortization		5,569	4,979		10,898	10,127
Preopening and related expenses	[1]	660			1,226
Preopening expenses	[1]		88			236
Acquisition and severance expenses		9	2		35	37
Asset disposal and other writedowns		74			65	15
Share-based compensation					5
Other, net			195			362
Interest expense, net		23	26		39	72
Adjusted EBITDA		13,682	12,842		27,221	25,849
Assets		431,956			431,956			299,697
Operating Segments [Member] | Distributed Gaming [Member] | Gaming [Member]
Revenues
Total revenues		74,009	70,617		146,916	140,021
Operating Segments [Member] | Distributed Gaming [Member] | Food and beverage [Member]
Revenues
Total revenues		13,055	12,679		26,371	25,286
Operating Segments [Member] | Distributed Gaming [Member] | Other [Member]
Revenues
Total revenues		2,089	2,101		4,223	4,251
Corporate and Other [Member]
Revenues
Total revenues		201	220		362	361
Net income (loss)		(44,226)	(28,194)		(82,539)	(55,553)
Depreciation and amortization		355	463		648	917
Preopening and related expenses	[1]	137			149
Preopening expenses	[1]		301			601
Acquisition and severance expenses		1,013	395		2,245	1,608
Asset disposal and other writedowns					390
Share-based compensation		2,134	2,758		6,302	4,602
Other, net		406	99		1,259	203
Interest expense, net		19,048	16,015		37,115	30,688
Change in fair value of derivative		1,489	(1,462)		3,737	(4,673)
Income tax benefit (provision)		(1,344)	897		(1,995)	2,116
Adjusted EBITDA		(11,838)	(8,728)		(23,539)	(19,491)
Loss on extinguishment and modification of debt		9,150			9,150
Assets		49,013			49,013			$ 60,580
Corporate and Other [Member] | Other [Member]
Revenues
Total revenues		$ 201	$ 220		$ 362	$ 361

[1] Preopening expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the TrueRewards loyalty program.

XML

Related Party Transactions (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Nov. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Revenues		$ 248,070,000	$ 216,543,000	$ 487,962,000	$ 431,332,000
Mr. Sartini [Member]
Related Party Transaction [Line Items]
Reimbursement expense paid		200,000		400,000
Mr. Sartini [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Due to related parties		100,000		100,000		$ 100,000
Reimbursement expense paid			100,000		100,000
Executive Vice President and Chief Legal Officer [Member]
Related Party Transaction [Line Items]
Revenues		$ 300,000	$ 300,000	$ 600,000	$ 500,000
Type of Revenue [Extensible List]		us-gaap:CasinoMember	us-gaap:CasinoMember	us-gaap:CasinoMember	us-gaap:CasinoMember
Gaming Expenses		$ 300,000	$ 200,000	$ 500,000	$ 500,000
Type of Cost, Good or Service [Extensible List]		us-gaap:CasinoMember	us-gaap:CasinoMember	us-gaap:CasinoMember	us-gaap:CasinoMember
Mr.Berman's [Member]
Related Party Transaction [Line Items]
Due to related parties						0
Consulting agreement expiry date				Jul. 31, 2018
Due from related parties						0
Mr.Berman's [Member] | SG&A Expenses [Member]
Related Party Transaction [Line Items]
Consulting agreement expenses, related party					$ 100,000
Mr.Berman's [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Consulting agreement expenses, related party			$ 100,000
Office Headquarters and Tavern Lease [Member] | Mr. Sartini [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party				33.00%
Office Headquarters and Tavern Lease [Member] | Mr. Sartini's Immediate Family Members [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party				5.00%
Office Headquarters and Tavern Lease [Member] | Stephen Arcana [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party				3.00%
Office Headquarters [Member]
Related Party Transaction [Line Items]
Related party transaction, due from (to) related party		$ 0		$ 0		0
Office Headquarters [Member] | Mr. Sartini [Member]
Related Party Transaction [Line Items]
Related party transaction, amounts of transaction		300,000	300,000	600,000	800,000
Due to related parties		0		0		0
Related party transaction, due from (to) related party		0		0		0
Office Headquarters Lease [Member] | Mr. Sartini [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Rental income for sublet portion		100,000	100,000	$ 100,000	100,000
Office Space Lease [Member]
Related Party Transaction [Line Items]
Lease expiration date				Dec. 31, 2030
Office Space Lease [Member] | Mr. Sartini [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party	33.00%
Related party transaction, amounts of transaction	$ 300,000
Office Space Lease [Member] | Mr. Sartini's Immediate Family Members [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party	5.00%
Office Space Lease [Member] | Mr. Arcana [Member]
Related Party Transaction [Line Items]
Percentage of counterparty ownership by related party	3.00%
Tavern Leases [Member] | Mr. Sartini [Member]
Related Party Transaction [Line Items]
Related party transaction, amounts of transaction			$ 200,000	$ 200,000	$ 300,000
Due to related parties						0
Related party transaction, due from (to) related party						$ 0
Tavern Leases [Member] | Mr. Sartini [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Related party transaction, amounts of transaction		$ 100,000