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Related Party Transactions | 9 Months Ended
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Sep. 30, 2017
Related Party Transactions [Abstract] |
Related Party Transactions | Note 12 – Related Party Transactions As of September 30, 2017, the Company leased its office headquarters building and two tavern locations 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, and leased one tavern location, from companies controlled by Mr. Sartini through a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee. We had two related party tavern locations, of which one was sold in July of the third quarter to a non-related third party. The lease for the Company’s office headquarters building expires on July 31, 2025. The rent expense for the office headquarters building was $0.3 million during each of the three months ended September 30, 2017 and 2016. The rent expense for the office headquarters building was $0.9 million and $0.8 million during the nine months ended September 30, 2017 and 2016, respectively. There was no amount owed by the Company with respect to such lease as of September 30, 2017. The leases for the tavern locations have remaining terms of up to 10 years. The rent expense for the tavern locations was $0.2 million and $0.3 million during the three months ended September 30, 2017 and 2016, respectively, and $0.7 million and $1.0 million during the nine months ended September 30, 2017 and 2016, respectively. There was no amount owed by the Company with respect to such leases as of September 30, 2017. Additionally, a portion of the office headquarters building was sublet to a company owned or controlled by Mr. Sartini through February 28, 2017. There was zero and less than $0.1 million of rental income for the three months ended September 30, 2017 and 2016, respectively. Rental income for the sublet portion of the office headquarters building during each of the nine months ended September 30, 2017 and 2016 was less than $0.1 million. Mr. Sartini serves as the Chairman of the Board, President and Chief Executive Officer of the Company and is co-trustee of the Sartini Trust, which is a significant shareholder of the Company. Mr. Arcana serves as the Executive Vice President and Chief Operating Officer of the Company. All of these related party lease agreements were in place prior to the consummation of the Merger, other than two lease agreements entered into in 2016. In April 2016, the Audit Committee of the Board of Directors approved the Company’s entering into an aircraft timesharing agreement between the Company and Sartini Enterprises, Inc., a company controlled by Mr. Sartini. Pursuant to the agreement, the Company will reimburse Sartini Enterprises, Inc. for direct costs and expenses incurred by Company employees traveling on Company business on the private aircraft owned by Sartini Enterprises Inc. In June 2017, the Audit Committee approved the Company’s entering into a second aircraft timesharing agreement between the Company and Sartini Enterprises, Inc. on similar terms for a private aircraft leased by Sartini Enterprises Inc. During each of the three months ended September 30, 2017 and 2016, the Company paid less than $0.1 million under the aircraft timesharing agreements. During the nine months ended September 30, 2017 and 2016, the Company paid $0.1 million and less than $0.1 million, respectively, under the aircraft timesharing agreements. As of September 30, 2017, there was no amount owed by the Company under the aircraft timesharing agreements. Mr. Sartini’s son, Blake L. Sartini, II (“Mr. Sartini II”), serves as Senior Vice President of Distributed Gaming of the Company. Mr. Sartini II has an employment agreement that was approved by both the Audit Committee and Compensation Committee of the Board of Directors, which was amended and restated in March 2017. The amended and restated employment agreement provides for an annual base salary of $375,000, of which approximately $267,000 was earned during the nine months ended September 30, 2017. Additionally, Mr. Sartini II is eligible for a target annual bonus equal to 50% of his base salary. Mr. Sartini II also participates in the Company's equity award and benefit programs. In 2017, Mr. Sartini II received a grant of 75,000 options to purchase the Company’s common stock with an exercise price of $13.50 per share, which stock options will vest over a four-year period (but pursuant to the 2015 Plan such stock options may not be exercised prior to August 1, 2018 except in limited circumstances). One of the distributed gaming locations at which the Company’s gaming devices are located is owned in part by Sean T. Higgins, who serves as the Company’s Chief Legal Officer and Executive Vice President of Development, Compliance and Government Affairs. This arrangement was in place prior to Mr. Higgins joining the Company on March 28, 2016. Net revenues and gaming expenses recorded by the Company from the use of the Company’s gaming devices at this location during the period in which the agreement was with a related party were each $0.3 million during the three months ended September 30, 2017 and were $0.3 million and $0.2 million, respectively, during the three months ended September 30, 2016. Net revenues and gaming expenses recorded by the Company from the use of the Company’s gaming devices at this location during the period in which the agreement was with a related party were $0.9 million and $0.8 million, respectively, during the nine months ended September 30, 2017, and were $0.6 million and $0.5 million, respectively, during the nine months ended September 30, 2016. No amounts were owed to the Company and no amounts were due and payable by the Company related to this arrangement as of September 30, 2017. Three of the distributed gaming locations at which the Company’s gaming devices are located are owned in part by the spouse of Matthew W. Flandermeyer, the former Executive Vice President and Chief Financial Officer of the Company. Net revenues and gaming expenses recorded by the Company from the use of the Company’s gaming devices at these three locations were $0.3 million and $0.2 million, respectively, during the three months ended September 30, 2016 and $1.1 million and $1.0 million, respectively, during the nine months ended September 30, 2016. Mr. Flandermeyer ceased to be an employee of the Company and a related party in November 2016. The gaming expenses recorded by the Company represent amounts retained by the counterparty (with respect to the two locations that are subject to participation agreements) or paid to the counterparty (with respect to the location that is subject to a revenue share agreement) from the operation of the gaming devices. All of the agreements were in place prior to the consummation of the Merger. One distributed gaming location at which the Company’s gaming devices are located was owned in part by Terrence L. Wright, who serves on the Board of Directors of the Company, who divested his interest in such distributed gaming location in March 2016. Net revenues and gaming expenses recorded by the Company from the use of the Company’s gaming devices at this location during the period in which the agreement was with a related party were each $0.1 million during the nine months ended September 30, 2016. This agreement was in place prior to the consummation of the Merger. In connection with the Merger, Lyle A. Berman, who serves on the Board of the Directors of the Company, entered into a three-year consulting agreement with the Company that pays his wholly owned consulting firm $200,000 annually, plus reimbursements for certain health insurance, administrative assistant and office costs. Expenses recorded by the Company for the agreement with Mr. Berman were less than $0.1 million for each of the three months ended September 30, 2017 and 2016 and $0.2 million for each of the nine months ended September 30, 2017 and 2016. There were no amounts due and payable by the Company at September 30, 2017. Additionally, in connection with the Merger, Timothy J. Cope, who serves on the Board of Directors of the Company, entered into a short-term consulting agreement for the period from July 31, 2015 to April 1, 2016 under which Mr. Cope was paid a total of $140,000, plus reimbursement of certain health insurance costs. Expenses recorded by the Company for the agreement with Mr. Cope were $0.1 million for the nine months ended September 30, 2016.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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