Nature of Business

12 Months Ended

Dec. 31, 2021

Golden Entertainment, Inc. and its wholly-owned subsidiaries own and operate a diversified entertainment platform, consisting of 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. The Company’s 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, as well as the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. Unless otherwise indicated, the terms “Golden” and the “Company,” refer to Golden Entertainment, Inc. together with its subsidiaries.

The Company conducts its business through four reportable segments: Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, and Distributed Gaming. Each reportable segment is comprised of the following properties and operations:


Reportable Segment						Location
Nevada Casino Resorts
The STRAT Hotel, Casino & SkyPod (“The STRAT”)						Las Vegas, Nevada
Aquarius Casino Resort (“Aquarius”)						Laughlin, Nevada
Edgewater Hotel & Casino Resort (“Edgewater”)						Laughlin, Nevada
Colorado Belle Hotel & Casino Resort (“Colorado Belle”) (1)						Laughlin, Nevada

Nevada Locals Casinos
Arizona Charlie’s Boulder						Las Vegas, Nevada
Arizona Charlie’s Decatur						Las Vegas, Nevada
Gold Town Casino						Pahrump, Nevada
Lakeside Casino & RV Park						Pahrump, Nevada
Pahrump Nugget Hotel Casino (“Pahrump Nugget”)						Pahrump, Nevada

Maryland Casino Resort
Rocky Gap Casino Resort (“Rocky Gap”)						Flintstone, Maryland

Distributed Gaming
Nevada distributed gaming						Nevada
Nevada taverns						Nevada
Montana distributed gaming						Montana

(1) As a result of the impact of the 2019 novel coronavirus (“COVID-19”) pandemic, the operations of the Colorado Belle remain suspended.

Acquisitions

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC (the “Laughlin 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 results of operations of the Laughlin Entities are included in the Company’s results subsequent to the acquisition date.

Impact of COVID-19

The disruptions arising from the COVID-19 pandemic continue to impact the Company’s business, financial condition, results of operations, and cash flows. It is unknown when the pandemic will be fully contained and how the uncertainties associated with the pandemic will continue to impact Golden’s operations and the willingness of customers to spend on travel and

entertainment. Following emergency executive orders issued by the Governors of Nevada, Maryland and Montana in the week of March 16, 2020, all of the Company’s properties were temporarily closed to the public and distributed gaming operations at third-party locations were suspended. While the Company re-opened its casino properties and resumed its distributed gaming operations during the second and third quarters of 2020, the implementation of protocols intended to protect team members, gaming patrons and guests from potential COVID-19 exposure, including enhanced sanitization, public gathering limitations on casino, tavern and venue capacity, patron social distancing requirements, restrictions on permitted hours of operations, limitations on casino operations, which include disabling electronic gaming machines, and face mask requirements for patrons, continued to limit the Company’s operations in 2021. While some of these restrictions were eased during 2021, the Company’s properties and distributed gaming operations may be subject to temporary, complete or partial closures in the future. Further, as a result of the impact of the pandemic, the operations of the Colorado Belle property remain suspended.

Temporary closures of the Company’s operations due to the COVID-19 pandemic resulted in lease concessions for certain of the Company’s taverns and route locations. Such concessions provided for deferral and, in some instances, forgiveness of rent payments with no substantive amendments to the consideration due per the terms of the original contract and did not result in substantial changes in the Company’s obligations under such leases. The Company elected to account for the deferred rent as variable lease payments, which resulted in a reduction of the rent expense of $2.3 million and $11.9 million for the years ended December 31, 2021 and 2020, respectively. Rent expense that was not forgiven will be recorded in future periods as these deferred payments are paid to the Company’s lessors.

In response to the COVID-19 pandemic and the resulting impact on the Company’s business, the Company has implemented various mitigating actions to preserve liquidity, including delaying material capital expenditures, reducing operating expenses and implementing a cost reduction program with respect to discretionary expenditures. Such measures remained in effect throughout 2021. To further enhance its liquidity position or to finance any future acquisition or other business investment initiatives, the Company may obtain additional financing, which could consist of debt, convertible debt or equity financing from public or private credit and capital markets.