About Golden Entertainment

Golden Entertainment, Inc. owns and operates an entertainment platform, including a portfolio of gaming assets that focus on casino and distributed gaming operations (including gaming in the company’s branded taverns). The company’s portfolio includes ten casino properties located in Nevada and Maryland. Its distributed gaming operations involve the installation, maintenance and operation of slot machines and amusement devices in non-casino locations, such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana. The company also operates branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. Segments The company operates through five segments: Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, Nevada Taverns, and Distributed Gaming. Nevada Casino Resorts segment This segment includes destination casino resort properties offering a variety of food and beverage outlets, entertainment venues and other amenities. The casino resort properties in this segment cater primarily to a regional drive-in customer base seeking a value-oriented vacation experience, with guests typically traveling from Southern California or Arizona. The company’s casino resort properties in Nevada have a significantly larger number of hotel rooms compared to the other casino properties in its portfolio. While hotel stays at these casino resorts are typically longer, the overall frequency of visitation from guests is lower when compared to its Nevada Locals Casinos. The STRAT The STRAT (The STRAT Hotel, Casino & SkyPod) is the company’s premier casino resort property, located on Las Vegas Boulevard on the north end of the Las Vegas Strip. The STRAT comprises a casino, a hotel and the iconic SkyPod, which includes indoor and outdoor observation decks, thrill rides and the SkyJump attraction. In addition to hotel rooms, gaming and sportsbook facilities in an 80,000 square foot casino, The STRAT offers restaurants, rooftop pools, fitness center, retail shops and entertainment facilities. Laughlin Casinos The company owns and operates casino resorts in Laughlin, Nevada, which is located approximately 90 miles from Las Vegas on the western bank of the Colorado River. In addition to hotel rooms, gaming and sportsbook facilities, the Aquarius (Aquarius Casino Resort) has restaurants, and the Edgewater (Edgewater Hotel & Casino Resort) offers restaurants. The Edgewater also offers dedicated entertainment venues, including the Edge Pavilion and the Laughlin Event Center. Nevada Locals Casinos segment This segment includes casino properties that cater to local customers who generally live within a five-mile radius. The company’s locals casino properties typically experience a higher frequency of customer visits compared to its casino resort properties in Nevada and Maryland, with many of its customers visiting its Nevada Locals Casinos on a weekly basis. The casino properties within this reportable segment have no or a limited number of hotel rooms and offer fewer food and beverage outlets or other amenities, with revenues primarily generated from slot machine play. Arizona Charlie’s casinos The company’s Arizona Charlie’s Boulder and Arizona Charlie’s Decatur casino properties primarily serve local Las Vegas gaming patrons, and provide an alternative experience to the Las Vegas Strip. In addition to hotel rooms, gaming, sportsbook and bingo facilities, Arizona Charlie’s Boulder offers restaurants and an RV park with RV hook-up sites and Arizona Charlie’s Decatur offers restaurants. Pahrump Casinos The company owns and operates casino properties in Pahrump, Nevada, which is located approximately 60 miles from Las Vegas and is a gateway to Death Valley National Park. In addition to gaming, sportsbook and bingo facilities at the company’s Pahrump casino properties, Pahrump Nugget (Pahrump Nugget Hotel Casino) offers hotel rooms, a bowling center and a 5,200 square foot banquet and event center, and Lakeside Casino & RV Park offers RV hook-up sites. Maryland Casino Resort segment This segment includes the company’s AAA Four Diamond Award winning Rocky Gap casino resort, which is geographically disparate from its Nevada properties, operates in a separate regulatory jurisdiction and has only a limited number of hotel rooms compared to its Nevada Casino Resorts. Rocky Gap (Rocky Gap Casino Resort) caters to a regional drive-in customer base traveling from mid-Atlantic areas (i.e., Maryland, Virginia, Washington DC, Pennsylvania and West Virginia). Rocky Gap is situated on approximately 270 acres in the Rocky Gap State Park in Maryland, which the company leases from the Maryland Department of Natural Resources (the Maryland DNR) under a 40-year ground lease expiring in 2052 (plus a 20-year renewal option). In addition to hotel rooms and gaming, Rocky Gap offers a full range of amenities, including various food and beverage outlets, a Jack Nicklaus signature golf course, spa and pool and an event and conference center. In August 2022, the company entered into definitive agreements to sell Rocky Gap Casino Resort (Rocky Gap) to Century Casinos, Inc. (Century) and VICI Properties, L.P. (VICI), an affiliate of VICI Properties Inc. The Rocky Gap Transactions are required by their terms to close concurrently, and the company expects the Rocky Gap Transactions to close during the second quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions. Nevada Taverns segment This segment includes branded tavern locations, where the company controls the food and beverage operations, as well as the slot machines located within the tavern. The company’s branded taverns offer a casual, upscale environment catering to local patrons offering superior food, craft beer and other alcoholic beverages, and are typically limited to 15 slot machines. Most of the company’s branded 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. The company’s tavern patrons are typically younger than traditional casino customers, which diversifies its customer demographic. The company’s tavern brands include PT’s Pub, PT’s Gold, PT’s Ranch, Sean Patrick’s, Sierra Gold and SG Bar. As of December 31, 2022, the company owned and operated branded taverns, which offered onsite slot machines. The company continues to look for opportunities to pursue additional tavern openings and acquisitions. Distributed Gaming segment This segment includes the operation of slot machines and amusement devices in third-party non-casino locations, such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores, across Nevada and Montana, with a limited number of slot machines in each location. The company owns and operates slot machines and amusement devices as part of its Distributed Gaming segment, with the majority of gaming devices offered at these locations being video poker machines. Distributed Gaming operations cater to local residents with high frequency visitation to these locations. The company places its slot machines and amusement devices in locations where they will receive maximum customer traffic. In October 2022, the company surrendered its video gaming terminal operator license in Illinois due to inactivity. In October 2018, the company received a conditional license to operate in Pennsylvania, providing for potential expansion. Nevada law limits distributed gaming operations (also known as ‘restricted gaming’ operations) to certain types of non-casino locations, including grocery stores, drug stores, convenience stores, restaurants, bars, taverns and liquor stores, where gaming is incidental to the primary business being conducted at the location and games are generally limited to 15 or fewer slot machines and no other forms of gaming activity. The gaming area in these business locations is typically small, and in many instances, segregated from the primary business area, including the use of alcoves in grocery stores and drug stores and installation of slot machines into the physical bar (also known as ‘bar top’ slot machines) in bars and taverns. Such segregation provides greater oversight and supervision of the slot machines. Under Montana law, distributed gaming operations are limited to business locations licensed to sell alcoholic beverages for on-premises consumption only, with such locations generally restricted to offering a maximum of 20 slot machines. In Nevada, the company enters into two types of slot placement contracts as part of its distributed gaming business: space lease agreements and participation agreements. Under space lease agreements, the company pays a fixed monthly rental fee for the right to install, maintain and operate its slot machines at a business location and it is the sole holder of the applicable gaming license that allows it to operate such slot machines. Under participation agreements, the business location retains a percentage of the gaming revenue generated from the company’s slot machines, and as a result both the business location and Golden are required to hold a state-issued gaming license. In Montana, the company’s slot and amusement device placement contracts are all participation agreements. Sales and Marketing The company markets its Nevada Casino Resorts through both local and regional advertising, with a focus on offering a more complete resort destination experience that may include rooms, entertainment, dining and attractions. The company advertises through various media channels, including television, radio, outdoor, digital, social media and public relations. Marketing for the company’s Nevada Locals Casinos targets the local communities in which these properties operate with an emphasis on the gaming experience, casino promotions and dining. The advertising is geared towards a local audience and typically includes radio, outdoor, digital and social media with television used occasionally for promotional messaging and brand campaigns when appropriate. Rocky Gap is located in western Maryland in close proximity to the affluent and heavily populated metropolitan areas of Pittsburgh, Pennsylvania, Baltimore, Maryland and Washington, D.C., as well as two major interstate freeways. Rocky Gap serves as a premier destination for both local and out-of-market patrons. The company’s marketing efforts for Rocky Gap are primarily focused on attracting patrons through local and regional campaigns promoting both the amenities of Rocky Gap and the vast array of outdoor activities available in the Rocky Gap State Park. The customer base of the company’s Nevada Taverns and Distributed Gaming segments is primarily consisted of local patrons who frequent its branded taverns and use its slot machines and amusement devices in contracted third-party locations. The company seeks to place its slot machines and amusement devices in strategic, high-traffic areas, including its branded taverns, and the majority of its marketing efforts are focused on maximizing profitability from a high-frequency, convenience-driven customer base. The company’s sales and marketing efforts include its consolidated loyalty program, True Rewards, designed to encourage repeat business at its properties, branded taverns and other participating distributed gaming locations, as discussed below. True Rewards Loyalty Program The company offers its True Rewards loyalty program at all of its casino properties, as well as at all of its branded taverns and other participating distributed gaming locations. Members of the company’s True Rewards loyalty program earn points based on gaming activity and food and beverage purchases at its casino properties, branded taverns and participating distributed gaming locations. Loyalty points are redeemable for slot play, promotional table game chips, food and beverages and grocery gift cards. All points earned in the loyalty program roll up into a single account balance which is redeemable at over 140 participating locations. As of December 31, 2022, the company had nearly 656,000 active players in its marketing database, providing it with an avenue to drive customer engagement and cross-marketing opportunities across its casino and distributed gaming platform. Intellectual Property The company has registered and/or has pending as trademarks with the United States Patent and Trademark Office, among other trademarks and service marks, ‘Golden Entertainment’ and ‘Golden Gaming’, as well as various names, brands and logos relating to its casino properties, customer loyalty programs and branded taverns. In addition, the company has registered or applied to register numerous other trademarks in various jurisdictions in the United States in connection with its properties, facilities and development projects. The company also holds a patent in the United States related to player tracking systems. Seasonality The company’s casino properties, branded taverns and distributed gaming businesses in Nevada have historically experienced lower revenues during the summer as a result of fewer tourists due to higher temperatures, as well as increased vacation activity by local residents. Rocky Gap typically experiences higher revenues during summer months. The company’s Nevada branded taverns and distributed gaming operations typically experience higher revenues during the fall which corresponds with several professional sports seasons. The company’s Montana distributed gaming operations typically experience higher revenues during the winter due to the inclement weather in the state and less opportunity for outdoor activities, in addition to the impact from professional sports seasons during the fall. History The company was incorporated in 1998 in Minnesota. It was formerly known as GCI Lakes, Inc. and changed its name to Lakes Gaming, Inc. in August 1998 and then to Lakes Entertainment, Inc. in 2002. Further, the company changed its name to Golden Entertainment, Inc. in 2015.