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Related Party Transactions
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

Note 12 – Related Party Transactions

As of June 30, 2020, 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 lease for the Company’s office headquarters building expires on December 31, 2030. The rent expense for the office headquarters building was $0.3 million and $0.6 million for the three and six months ended June 30, 2020 and 2019, respectively. No amount was owed to the Company, and $0.3 million was due and payable by the Company under this lease as of June 30, 2020. No amount was owed to the Company, and no amount was due and payable by the Company as of December 31, 2019. Additionally, a portion of the office headquarters building was sublet to a company owned or controlled by Mr. Sartini. Rental income during each of the three and six months ended June 20, 2020 and 2019 for the sublet portion of the office headquarters building was insignificant. An insignificant amount was owed to the Company under such sublease as of June 30, 2020 and no amount was owed as of December 31, 2019. Mr. Sartini serves as the Chairman of the Board 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 2020 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. The rent expense for the tavern location leased from a related party (for the period in which the lease was with a related party) was less than $0.1 million for the three months ended June 30, 2019 and $0.2 million for the six months ended June 30, 2019. No tavern locations were leased from related parties for the three and six months ended June 30, 2020.

For the three and six months ended June 30, 2020, the Company paid $0.1 million and $0.3 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. For the three and six months ended June 30, 2019, the Company paid $0.2 million and $0.4 million, respectively, under the aircraft time-sharing, co-user and cost-sharing agreements. The Company owed no amount under the aircraft time-sharing, co-user and cost-sharing agreements and no amount was owed to the Company under such agreements as of June 30, 2020 and December 31, 2019.

The Company recorded revenues of $0.1 million and $0.3 million for the three and six months ended June 30, 2020, respectively, and gaming expenses of $0.1 million and $0.3 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 Government Affairs. The Company recorded revenues of $0.3 million and $0.6 million for the three and six months ended June 30, 2019, respectively, and gaming expenses of $0.3 million and $0.5 million, respectively, related to the use of the Company’s slots at this distributed gaming location. An insignificant amount was owed to the Company and due and payable by the Company related to this arrangement as of June 30, 2020 and December 31, 2019.