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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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, 2023
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 of incorporation or organization) | (I.R.S. Employer 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 July 31, 2023, the registrant had 28,863,577 shares of common stock, $0.01 par value per share, outstanding.

GOLDEN ENTERTAINMENT, INC.
FORM 10-Q
INDEX

| Page
PART I. | FINANCIAL INFORMATION | 1
ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | 1
| Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 | 1
| Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 | 2
| Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022 | 3
| Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 | 4
| Condensed Notes to Consolidated Financial Statements | 6
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 20
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 31
ITEM 4. | CONTROLS AND PROCEDURES | 31
PART II. | OTHER INFORMATION | 32
ITEM 1. | LEGAL PROCEEDINGS | 32
ITEM 1A. | RISK FACTORS | 32
ITEM 5. | OTHER INFORMATION | 32
ITEM 6. | EXHIBITS | 33
SIGNATURES | 34

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GOLDEN ENTERTAINMENT, INC.
Consolidated Balance Sheets
(In thousands, except per share data)

|  | June 30, 2023 |  | December 31, 2022
|  | (unaudited) |  |
ASSETS |  |  |  |
Current assets |  |  |  |
Cash and cash equivalents |  | $ | 120,823 |  |  | $ | 136,889 |
Accounts receivable, net of allowance for credit losses of $1,090 and $775 at June 30, 2023 and December 31, 2022, respectively |  | 12,616 |  |  | 20,495 |
Prepaid expenses |  | 18,391 |  |  | 25,900 |
Inventories |  | 7,778 |  |  | 8,117 |
Other |  | 565 |  |  | 13,610 |
Assets held for sale |  | 289,810 |  |  | 39,562 |
Total current assets |  | 449,983 |  |  | 244,573 |
Property and equipment, net |  | 815,239 |  |  | 840,731 |
Operating lease right-of-use assets, net |  | 77,717 |  |  | 147,893 |
Goodwill |  | 80,751 |  |  | 158,396 |
Intangible assets, net |  | 49,376 |  |  | 89,552 |
Deferred income tax assets |  | 11,822 |  |  | 11,822 |
Other assets |  | 9,358 |  |  | 15,703 |
Total assets |  | $ | 1,494,246 |  |  | $ | 1,508,670 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |
Current liabilities |  |  |  |
Current portion of long-term debt and finance leases |  | $ | 1,296 |  |  | $ | 555 |
Current portion of operating leases |  | 13,074 |  |  | 42,200 |
Accounts payable |  | 18,521 |  |  | 25,168 |
Accrued payroll and related |  | 17,968 |  |  | 21,227 |
Accrued liabilities |  | 28,832 |  |  | 33,365 |
Liabilities related to assets held for sale |  | 69,932 |  |  | 10,187 |
Total current liabilities |  | 149,623 |  |  | 132,702 |
Long-term debt, net and non-current finance leases |  | 895,602 |  |  | 900,464 |
Non-current operating leases |  | 80,517 |  |  | 121,979 |
Deferred income tax liabilities |  | 53 |  |  | 53 |
Other long-term obligations |  | 407 |  |  | 552 |
Total liabilities |  | 1,126,202 |  |  | 1,155,750 |
Commitments and contingencies (Note 10) |  |  |  |
Shareholders’ equity |  |  |  |
Common stock, $.01 par value; authorized 100,000 shares; 28,857 and 28,179 common shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |  | 289 |  |  | 282 |
Additional paid-in capital |  | 471,265 |  |  | 480,060 |
Accumulated deficit |  | (103,510) |  |  | (127,422) |
Total shareholders’ equity |  | 368,044 |  |  | 352,920 |
Total liabilities and shareholders’ equity |  | $ | 1,494,246 |  |  | $ | 1,508,670 |

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,
| 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  |  |  |  |  |  |
Gaming | $ | 182,355 |  |  | $ | 196,679 |  |  | $ | 370,442 |  |  | $ | 387,466 |
Food and beverage | 46,534 |  |  | 44,451 |  |  | 92,805 |  |  | 86,907 |
Rooms | 30,918 |  |  | 33,174 |  |  | 61,495 |  |  | 58,920 |
Other | 26,874 |  |  | 15,068 |  |  | 39,990 |  |  | 29,723 |
Total revenues | 286,681 |  |  | 289,372 |  |  | 564,732 |  |  | 563,016 |
Expenses |  |  |  |  |  |  |
Gaming | 105,380 |  |  | 109,740 |  |  | 212,306 |  |  | 215,391 |
Food and beverage | 33,645 |  |  | 32,546 |  |  | 67,667 |  |  | 64,003 |
Rooms | 15,359 |  |  | 13,816 |  |  | 30,140 |  |  | 26,290 |
Other operating | 7,905 |  |  | 5,346 |  |  | 11,735 |  |  | 9,322 |
Selling, general and administrative | 67,093 |  |  | 57,287 |  |  | 129,129 |  |  | 118,197 |
Depreciation and amortization | 21,454 |  |  | 25,332 |  |  | 44,962 |  |  | 51,608 |
(Gain) loss on disposal of assets | (34) |  |  | 710 |  |  | (120) |  |  | 669 |
Preopening expenses | 141 |  |  | 4 |  |  | 525 |  |  | 59 |
Total expenses | 250,943 |  |  | 244,781 |  |  | 496,344 |  |  | 485,539 |
Operating income | 35,738 |  |  | 44,591 |  |  | 68,388 |  |  | 77,477 |
Non-operating expense |  |  |  |  |  |  |
Interest expense, net | (18,803) |  |  | (14,738) |  |  | (37,039) |  |  | (29,856) |
Loss on debt extinguishment and modification | (405) |  |  | (1,073) |  |  | (405) |  |  | (1,254) |
Total non-operating expense, net | (19,208) |  |  | (15,811) |  |  | (37,444) |  |  | (31,110) |
Income before income tax (provision) benefit | 16,530 |  |  | 28,780 |  |  | 30,944 |  |  | 46,367 |
Income tax (provision) benefit | (4,248) |  |  | (7,560) |  |  | (7,032) |  |  | 10,919 |
Net income | $ | 12,282 |  |  | $ | 21,220 |  |  | $ | 23,912 |  |  | $ | 57,286 |
Weighted-average common shares outstanding |  |  |  |  |  |  |
Basic | 28,845 |  |  | 28,877 |  |  | 28,578 |  |  | 28,885 |
Diluted | 30,717 |  |  | 31,633 |  |  | 30,831 |  |  | 31,889 |
Net income per share |  |  |  |  |  |  |
Basic | $ | 0.43 |  |  | $ | 0.73 |  |  | $ | 0.84 |  |  | $ | 1.98 |
Diluted | $ | 0.40 |  |  | $ | 0.67 |  |  | $ | 0.78 |  |  | $ | 1.80 |

The accompanying notes are an integral part of these consolidated financial statements.
2

GOLDEN ENTERTAINMENT, INC.
Consolidated Statements of Shareholders’ Equity
(In thousands)
(Unaudited)

| Common stock |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Total Shareholders’ Equity
| Shares |  | Amount |  |  |
Balance, January 1, 2022 | 28,830 |  |  | $ | 288 |  |  | $ | 477,829 |  |  | $ | (158,576) |  |  | $ | 319,541 |
Issuance of stock on options exercised and restricted stock units vested | 419 |  |  | 4 |  |  | — |  |  | — |  |  | 4 |
Repurchase of common stock | (269) |  |  | (2) |  |  | — |  |  | (15,194) |  |  | (15,196) |
Share-based compensation | — |  |  | — |  |  | 3,141 |  |  | — |  |  | 3,141 |
Tax benefit from share-based compensation | — |  |  | — |  |  | (10,298) |  |  | — |  |  | (10,298) |
Net income | — |  |  | — |  |  | — |  |  | 36,066 |  |  | 36,066 |
Balance, March 31, 2022 | 28,980 |  |  | $ | 290 |  |  | $ | 470,672 |  |  | $ | (137,704) |  |  | $ | 333,258 |
Issuance of stock on options exercised and restricted stock units vested | 36 |  |  | — |  |  | — |  |  | — |  |  | — |
Repurchase of common stock | (515) |  |  | (5) |  |  | — |  |  | (22,469) |  |  | (22,474) |
Share-based compensation | — |  |  | — |  |  | 3,295 |  |  | — |  |  | 3,295 |
Tax benefit from share-based compensation | — |  |  | — |  |  | (271) |  |  | — |  |  | (271) |
Net income | — |  |  | — |  |  | — |  |  | 21,220 |  |  | 21,220 |
Balance, June 30, 2022 | 28,501 |  |  | $ | 285 |  |  | $ | 473,696 |  |  | $ | (138,953) |  |  | $ | 335,028 |

| Common stock |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Total Shareholders’ Equity
| Shares |  | Amount |  |  |
Balance, January 1, 2023 | 28,179 |  |  | $ | 282 |  |  | $ | 480,060 |  |  | $ | (127,422) |  |  | $ | 352,920 |
Issuance of stock on options exercised and restricted stock units vested | 658 |  |  | 6 |  |  | — |  |  | — |  |  | 6 |
Share-based compensation | — |  |  | — |  |  | 3,290 |  |  | — |  |  | 3,290 |
Tax benefit from share-based compensation | — |  |  | — |  |  | (15,373) |  |  | — |  |  | (15,373) |
Net income | — |  |  | — |  |  | — |  |  | 11,630 |  |  | 11,630 |
Balance, March 31, 2023 | 28,837 |  |  | $ | 288 |  |  | $ | 467,977 |  |  | $ | (115,792) |  |  | $ | 352,473 |
Issuance of stock on options exercised and restricted stock units vested | 20 |  |  | 1 |  |  | — |  |  | — |  |  | 1 |
Share-based compensation | — |  |  | — |  |  | 3,288 |  |  | — |  |  | 3,288 |
Net income | — |  |  | — |  |  | — |  |  | 12,282 |  |  | 12,282 |
Balance, June 30, 2023 | 28,857 |  |  | $ | 289 |  |  | $ | 471,265 |  |  | $ | (103,510) |  |  | $ | 368,044 |

The accompanying notes are an integral part of these consolidated financial statements.
3

GOLDEN ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

| Six Months Ended June 30,
| 2023 |  | 2022
Cash flows from operating activities |  |  |
Net income | $ | 23,912 |  |  | $ | 57,286 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 44,962 |  |  | 51,608 |
Non-cash lease expense | 24 |  |  | 411 |
Share-based compensation | 6,578 |  |  | 6,436 |
Amortization of debt issuance costs and discounts on debt | 2,133 |  |  | 2,236 |
(Gain) loss on disposal of assets | (120) |  |  | 669 |
Provision for credit losses | 501 |  |  | 300 |
Deferred income taxes | — |  |  | (16,914) |
Loss on debt extinguishment and modification | 405 |  |  | 1,254 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable | 4,652 |  |  | (139) |
Prepaid expenses, inventories and other current assets | 16,364 |  |  | (5,727) |
Other assets | 515 |  |  | (1,985) |
Accounts payable and other accrued expenses | 1,139 |  |  | (3,279) |
Other liabilities | (202) |  |  | (1,104) |
Net cash provided by operating activities | 100,863 |  |  | 91,052 |
Cash flows from investing activities |  |  |
Purchase of property and equipment, net of change in accounts payables | (53,946) |  |  | (21,015) |
Proceeds from disposal of property and equipment | 291 |  |  | 102 |
Net cash used in investing activities | (53,655) |  |  | (20,913) |
Cash flows from financing activities |  |  |
Repayments of term loan | (400,000) |  |  | (25,000) |
Issuance of new term loan | 400,000 |  |  | — |
Repurchases of senior notes | — |  |  | (37,539) |
Repayments of notes payable | (260) |  |  | (464) |
Principal payments under finance leases | (280) |  |  | (266) |
Payment for debt extinguishment and modification costs | (7,818) |  |  | (12) |
Tax withholding on share-based payments | (15,373) |  |  | (10,569) |
Proceeds from issuance of common stock, net of costs | 7 |  |  | 4 |
Repurchases of common stock | — |  |  | (37,670) |
Net cash used in financing activities | (23,724) |  |  | (111,516) |
Change in cash and cash equivalents | 23,484 |  |  | (41,377) |
Balance, beginning of period | 142,034 |  |  | 220,540 |
Balance, end of period | $ | 165,518 |  |  | $ | 179,163 |
Cash and cash equivalents |  |  |
Cash and cash equivalents | $ | 120,823 |  |  | $ | 179,163 |
Cash and cash equivalents included in assets held for sale | 44,695 |  |  | — |
Balance, end of period | $ | 165,518 |  |  | $ | 179,163 |

4

| Six Months Ended June 30,
| 2023 |  | 2022
Supplemental cash flow disclosures |  |  |
Cash paid for interest | $ | 35,518 |  |  | $ | 27,418 |
Cash paid for income taxes | — |  |  | 6,084 |
Non-cash investing and financing activities |  |  |
Payables incurred for capital expenditures | $ | 2,605 |  |  | $ | 3,272 |
Notes payable incurred for capital expenditures | 3,571 |  |  | — |
Loss on debt extinguishment and modification | 405 |  |  | 1,254 |
Operating lease right-of-use assets obtained in exchange for lease obligations | 479 |  |  | 6,750 |

The accompanying notes are an integral part of these consolidated financial statements.
5

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 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 eight casino properties located in Nevada. The Company’s Nevada Taverns segment is comprised of the operation of its branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Company’s distributed gaming operations involve the installation, maintenance and 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 in Nevada and Montana. Unless otherwise indicated, the terms “Golden” and the “Company,” refer to Golden Entertainment, Inc. together with its subsidiaries.
The Company conducts its business through five reportable segments: Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, Nevada Taverns, 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 Casino Resort (“Edgewater”) |  | 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”) (1) |  | Flintstone, Maryland
Nevada Taverns |  |
65 branded tavern locations |  | Nevada
Distributed Gaming |  |
Nevada distributed gaming |  | Nevada
Montana distributed gaming |  | Montana

(1) Rocky Gap was sold subsequent to the end of the second quarter, as described below.
On July 25, 2023, the Company completed the sale of Rocky Gap to Century Casinos, Inc. (“Century”) and VICI Properties, L.P. (“VICI”), an affiliate of VICI Properties Inc., for aggregate consideration of $260 million (the “Rocky Gap Transactions”). Specifically, Century acquired the operations of Rocky Gap from Golden for $56.1 million in cash (subject to adjustment based on Rocky Gap’s working capital and cage cash at closing), and VICI acquired the real estate assets relating to Rocky Gap from Golden for $203.9 million in cash. Refer to discussion in “Note 2 — Assets Held for Sale” for further information.
On March 3, 2023, the Company entered into definitive agreements to sell its distributed gaming operations in Nevada and Montana (the “Distributed Gaming Operations”) to J&J Ventures Gaming, LLC (“J&J Gaming”), for aggregate consideration of $322.5 million. Specifically, J&J Gaming will acquire the Company’s Distributed Gaming Operations in Nevada for $213.5 million in cash plus purchased cash, comprised of cash and cash equivalents related to such operations at the time of closing (subject to adjustment based on working capital and purchased cash at closing), and the Company’s Distributed Gaming operations in Montana for $109 million in cash plus purchased cash, comprised of cash and cash equivalents related to such operations at the time of closing (subject to adjustment based on working capital and purchased cash at closing), subject in each case to the conditions and terms set forth therein (the “Distributed Gaming Transactions”). The sale of the Nevada Distributed Gaming Operations is contingent upon the closing of the sale of the Montana Distributed Gaming Operations. The Company expects the Distributed Gaming Transactions to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions. Refer to discussion in “Note 2 — Assets Held for Sale” for further information.
6

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, refer to the audited consolidated financial statements of the Company for the year ended December 31, 2022 and the notes thereto included in the Company’s Annual Report on Form 10-K (the “Annual Report”) previously filed with the SEC. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which included 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 and should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report.
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. Reclassifications were made to the Company’s prior period consolidated financial statements to conform to the current period presentation, where applicable. These reclassifications had no effect on previously reported net income.
Significant Accounting Policies
There have been no changes to the significant accounting policies disclosed in the Company’s Annual Report.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and in banks and highly liquid investments with original maturities of three months or less. As of June 30, 2023, the Company had $165.5 million in cash and cash equivalents, which included $44.7 million of cash and cash equivalents related to assets held for sale. Although cash and cash equivalents balances may at times exceed the federal insured deposit limit, the Company believes such risk is mitigated by the quality of the institutions holding such deposits.
Net Income Per Share
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. In the event of a net loss, diluted shares are not considered because of their anti-dilutive effect. For the three and six months ended June 30, 2023, diluted net income per share excluded the weighted average effect of 74,231 and 4,408 shares of common stock, respectively, related to time-based and performance-based restricted stock units due to such shares being anti-dilutive. No shares of common stock related to time-based and performance-based restricted stock units were anti-dilutive for the three and six months ended June 30, 2022.
Recent Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs.
Accounting Standards Issued and Adopted
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU improves the accounting for revenue contracts with customers acquired in a business combination by addressing diversity in practice and inconsistency related to recognition of contract assets and liabilities acquired in a business combination. The provisions of this ASU require that an acquiring entity account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. The Company adopted the standard effective January 1, 2023, and the adoption did not have a material impact on the Company’s financial statements or disclosures.
Management does not believe that any other recently issued accounting standards that are not yet effective are likely to have a material impact on the Company’s financial statements.
Note 2 — Assets Held for Sale
The Company classifies assets as held for sale when a sale is probable, is expected to be completed within one year, and the asset group meets all of the accounting criteria to be classified as held for sale.
7

As discussed in “Note 1 — Nature of Business and Basis of Presentation,” on July 25, 2023, the Company sold Rocky Gap. The definitive agreements for the Rocky Gap sale were entered into in August 2022 and, as a result, the assets related to the Rocky Gap property were classified as held for sale as of September 30, 2022 and the Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreements. Operations of Rocky Gap have historically been presented in the Company’s Maryland Casino Resort reportable segment. The Company incurred $0.3 million in transactions costs since the announcement of the sale, which were recorded in selling, general and administrative expenses during the fourth quarter of 2022 and for the six months ended June 30, 2023. In July 2023, the Company incurred an additional $8.0 million in transaction costs, $1.9 million of which were paid upon closing. Refer to “Note 13 — Subsequent Events” for further information.
As discussed in “Note 1 — Nature of Business and Basis of Presentation,” on March 3, 2023, the Company entered into definitive agreements to sell its Distributed Gaming Operations. The Distributed Gaming Transactions are expected to close during the fourth quarter of 2023, subject to satisfaction or waiver of customary regulatory approvals and closing conditions. As a result, the assets related to the Distributed Gaming Operations were classified as held for sale as of March 31, 2023 and the Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreements. Distributed Gaming Operations have historically been presented in the Company’s Distributed Gaming reportable segment.
The carrying amounts of the assets and liabilities held for sale in the Rocky Gap Transactions and Distributed Gaming Transactions consisted of the following:

| June 30, 2023
(In thousands) | Maryland Casino Resort |  | Distributed Gaming |  | Total
ASSETS |  |  |  |  |
Current assets |  |  |  |  |
Cash and cash equivalents | $ | 6,297 |  |  | $ | 38,398 |  |  | $ | 44,695 |
Accounts receivables, net | 2,027 |  |  | 3,053 |  |  | 5,080 |
Prepaid expenses | 605 |  |  | 1,795 |  |  | 2,400 |
Inventories | 760 |  |  | — |  |  | 760 |
Other | 60 |  |  | 2,442 |  |  | 2,502 |
Total current assets held for sale | 9,749 |  |  | 45,688 |  |  | 55,437 |
Property and equipment, net | 24,441 |  |  | 33,868 |  |  | 58,309 |
Operating lease right-of-use assets, net | 5,980 |  |  | 46,326 |  |  | 52,306 |
Goodwill | — |  |  | 77,645 |  |  | 77,645 |
Intangible assets, net | 1,064 |  |  | 38,506 |  |  | 39,570 |
Other assets | 2 |  |  | 6,541 |  |  | 6,543 |
Total assets held for sale | $ | 41,236 |  |  | $ | 248,574 |  |  | $ | 289,810 |
LIABILITIES |  |  |  |  |
Current liabilities |  |  |  |  |
Current portion of long-term debt and finance leases | $ | 105 |  |  | $ | 2,433 |  |  | $ | 2,538 |
Current portion of operating leases | 436 |  |  | 24,203 |  |  | 24,639 |
Accounts payable | 1,585 |  |  | 3,630 |  |  | 5,215 |
Accrued payroll and related | 923 |  |  | 1,370 |  |  | 2,293 |
Other accrued liabilities | 2,631 |  |  | 4,758 |  |  | 7,389 |
Total current liabilities related to assets held for sale | 5,680 |  |  | 36,394 |  |  | 42,074 |
Non-current finance leases | 153 |  |  | — |  |  | 153 |
Non-current operating leases | 5,206 |  |  | 22,433 |  |  | 27,639 |
Other long-term obligations | — |  |  | 66 |  |  | 66 |
Total liabilities related to assets held for sale | $ | 11,039 |  |  | $ | 58,893 |  |  | $ | 69,932 |

8

Revenues and pretax income generated by the assets held for sale were as follows:

| Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Maryland Casino Resort |  |  |  |  |  |  |
Revenues | $ | 19,605 |  |  | $ | 20,546 |  |  | $ | 37,733 |  |  | $ | 38,438 |
Pretax income | 5,693 |  |  | 6,049 |  |  | 10,810 |  |  | 10,537 |
Distributed Gaming |  |  |  |  |  |  |
Revenues | $ | 89,084 |  |  | $ | 93,225 |  |  | $ | 179,485 |  |  | $ | 183,993 |
Pretax income | 9,400 |  |  | 8,191 |  |  | 16,943 |  |  | 16,555 |

Note 3 — Property and Equipment
Property and equipment, net, consisted of the following:

(In thousands) | June 30, 2023 |  | December 31, 2022
Land | $ | 125,240 |  |  | $ | 125,240 |
Building and improvements | 951,191 |  |  | 923,157 |
Furniture and equipment | 187,550 |  |  | 244,735 |
Construction in process | 16,294 |  |  | 23,224 |
Property and equipment | 1,280,275 |  |  | 1,316,356 |
Accumulated depreciation | (465,036) |  |  | (475,625) |
Property and equipment, net | $ | 815,239 |  |  | $ | 840,731 |

Depreciation expense for property and equipment, includ ing finance leases, was $21.1 million and $43.3 million for the three and six months ended June 30, 2023, respectively, and $23.4 million and $47.8 million for the three and six months ended June 30, 2022, respectively.
The Company reviews the carrying amounts of its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Based on the results of its interim impairment assessments conducted during the three and six months ended June 30, 2023 and 2022, the Company concluded that there was no impairment of the Company’s long-lived assets.
Note 4 — Goodwill and Intangible Assets
The Company tests goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. Finite-lived intangible assets are evaluated for potential impairment whenever there is an indicator that the carrying value of an asset group may not be recoverable. Based on the results of its interim impairment assessments conducted during the three and six months ended June 30, 2023 and 2022, the Company concluded that there was no impairment of the Company’s goodwill and intangible assets.
The following table summarizes goodwill balances by reportable segment:

(In thousands) |  | Nevada Casino Resorts |  | Nevada Locals Casinos |  | Maryland Casino Resort |  | Nevada Taverns |  | Distributed Gaming |  | Total Goodwill
Balance, December 31, 2022 |  | $ | 22,105 |  |  | $ | 38,187 |  |  | $ | — |  |  | $ | 20,459 |  |  | $ | 77,645 |  |  | $ | 158,396 |
Balance, June 30, 2023 |  | $ | 22,105 |  |  | $ | 38,187 |  |  | $ | — |  |  | $ | 20,459 |  |  | $ | — |  |  | $ | 80,751 |

9

Intangible assets, net, consisted of the following:

| June 30, 2023
(In thousands) | Useful Life (Years) |  | Gross Carrying Value |  | Cumulative Amortization |  | Cumulative Impairment |  | Intangible Assets, Net
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |
Trade names | Indefinite |  | $ | 53,690 |  |  | $ | — |  |  | $ | (6,890) |  |  | $ | 46,800 |
|  |  | 53,690 |  |  | — |  |  | (6,890) |  |  | 46,800 |
Amortizing intangible assets |  |  |  |  |  |  |  |  |
Player relationships | 2-14 |  | 42,990 |  |  | (40,777) |  |  | — |  |  | 2,213 |
Non-compete agreements | 2-5 |  | 3,957 |  |  | (3,594) |  |  | — |  |  | 363 |
Other | 4-25 |  | 45 |  |  | (45) |  |  | — |  |  | — |
|  |  | 46,992 |  |  | (44,416) |  |  | — |  |  | 2,576 |
Balance, June 30, 2023 |  |  | $ | 100,682 |  |  | $ | (44,416) |  |  | $ | (6,890) |  |  | $ | 49,376 |

| December 31, 2022
(In thousands) | Useful Life (Years) |  | Gross Carrying Value |  | Cumulative Amortization |  | Cumulative Impairment |  | Intangible Assets, Net
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |
Trade names | Indefinite |  | $ | 53,690 |  |  | $ | — |  |  | $ | (6,890) |  |  | $ | 46,800 |
|  |  | 53,690 |  |  | — |  |  | (6,890) |  |  | 46,800 |
Amortizing intangible assets |  |  |  |  |  |  |  |  |
Customer relationships | 4-16 |  | 81,105 |  |  | (41,743) |  |  | — |  |  | 39,362 |
Player relationships | 2-14 |  | 42,990 |  |  | (40,455) |  |  | — |  |  | 2,535 |
Non-compete agreements | 2-5 |  | 9,840 |  |  | (9,114) |  |  | — |  |  | 726 |
Other | 4-25 |  | 1,366 |  |  | (1,237) |  |  | — |  |  | 129 |
|  |  | 135,301 |  |  | (92,549) |  |  | — |  |  | 42,752 |
Balance, December 31, 2022 |  |  | $ | 188,991 |  |  | $ | (92,549) |  |  | $ | (6,890) |  |  | $ | 89,552 |

Total amortization expense related to intangible assets was $0.4 million and $1.7 million for the three and six months ended June 30, 2023, respectively, and $1.9 million and $3.8 million for the three and six months ended June 30, 2022, respectively.
Note 5 — Accrued Liabilities
Accrued liabilities consisted of the following:

(In thousands) | June 30, 2023 |  | December 31, 2022
Gaming liabilities | $ | 10,398 |  |  | $ | 10,952 |
Interest | 5,890 |  |  | 6,036 |
Accrued taxes, other than income taxes | 4,896 |  |  | 9,291 |
Other accrued liabilities | 5,419 |  |  | 5,027 |
Deposits | 2,229 |  |  | 2,059 |
Total current accrued liabilities | $ | 28,832 |  |  | $ | 33,365 |

10

Note 6 — Long-Term Debt
Long-term debt, net, consisted of the following:

(In thousands) | June 30, 2023 |  | December 31, 2022
Term Loan B | $ | 175,000 |  |  | $ | 575,000 |
Term Loan B-1 | 400,000 |  |  | — |
2026 Unsecured Notes | 335,461 |  |  | 335,461 |
Finance lease liabilities | 1,925 |  |  | 2,157 |
Notes payable | 969 |  |  | 90 |
Total long-term debt and finance leases | 913,355 |  |  | 912,708 |
Unamortized discount | (9,167) |  |  | (7,899) |
Unamortized debt issuance costs | (7,290) |  |  | (3,790) |
Total long-term debt and finance leases after debt issuance costs and discount | 896,898 |  |  | 901,019 |
Current portion of long-term debt and finance leases | (1,296) |  |  | (555) |
Long-term debt, net and finance leases | $ | 895,602 |  |  | $ | 900,464 |

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 (the “Term Loan B”) maturing on October 20, 2024 and a $100 million revolving credit facility (the “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, increasing the total Credit Facility capacity to $1 billion. On October 12, 2021, the Company further modified the terms of the Revolving Credit Facility by increasing its size to $240 million and extending the maturity date from October 20, 2022 to April 20, 2024. On May 26, 2023, the Company further modified the terms of the Credit Facility by (1) extending the maturity date of the existing Revolving Credit Facility from April 20, 2024 to the earlier of May 26, 2028 and 91 days prior to April 15, 2026, the stated maturity date of the Company’s 7.625% Senior Notes due 2026 (“2026 Unsecured Notes”), for so long as any indebtedness remains outstanding under the 2026 Unsecured Notes (the “Springing Maturity Date”), and (2) establishing a new senior secured term loan B-1 credit facility (the “Term Loan B-1”) in the amount of $400 million with a maturity date of the earlier of May 26, 2030 and the Springing Maturity Date, which was fully drawn at closing with the proceeds thereof used to repay a portion of the Company’s existing Term Loan B. The Company incurred $10 million in fees and recorded a non-cash charge of $0.4 million for the debt issuance costs and discount related to the Term Loan B as a result of the 2023 modification of the Credit Facility. The Company recognized $8 million of the debt issuance costs for the 2023 modification of the Credit Facility, which will be amortized over the terms of the Term Loan B-1 facility and Revolving Credit Facility.
Under the Credit Facility, as amended in May 2023: (a) the Term Loan B bears interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.75%), plus a margin of 2.00% or (2) the LIBOR rate for the applicable interest period (subject to a floor of 0.75%), plus a margin of 3.00%, (b) the Term Loan B-1 bears interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.50%), plus a margin of 1.75% or (2) the Term SOFR rate for the applicable interest period plus a credit spread adjustment of 0.10% (subject to a floor of 0.50%), plus a margin of 2.75%, and (c) borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.00%), plus a margin ranging from 1.00% to 1.50% based on the Company’s net leverage ratio, or (2) the Term SOFR rate for the applicable interest period plus a credit spread adjustment of 0.10%, plus a margin ranging from 2.00% to 2.50% based on the Company’s net leverage ratio.
The weighted-average effective interest rate on the Company’s outstanding borrowings under the Credit Facility was 7.97% and 7.75% for the three and six months ended June 30, 2023, respectively.
As of June 30, 2023, the Company had $175 million in principal amount of outstanding Term Loan B borrowings, $400 million in principal amount of outstanding Term Loan B-1 borrowings, no outstanding letters of credit and no borrowings under the Revolving Credit Facility, such that the full borrowing availability of $240 million under the Revolving Credit Facility was available to the Company. O n July 26, 2023, the Company used a portion of the net cash proceeds from the sale of Rocky Gap to repay in full and discharge the Term Loan B under the Credit Facility. Due to multiple prepayments of the Term Loan B principal made by the Company under the Credit Facility, the Company is not required to make any quarterly installment payments under the Term Loan B-1 facility prior to maturity.
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The Company recorded a non-cash charge of $0.2 million for the accelerated amortization of the debt issuance costs and discount related to the prepayment of the Term Loan B for the six months ended June 30, 2022.
The Company was in compliance with its financial and other covenants under the Credit Facility as of June 30, 2023.
Senior Unsecured Notes
On April 15, 2019, the Company issued $375 million in principal amount of 2026 Unsecured Notes in a private placement to institutional buyers at face value. The 2026 Unsecured Notes bear interest at 7.625%, payable semi-annually on April 15 th and October 15 th of each year.
During the six months ended June 30, 2022, the Company repurchased $37.5 million in principal amount of 2026 Unsecured Notes in open market transactions and recorded a non-cash charge in the amount of $1.1 million for accelerated amortization of the debt issuance costs and discount related to the repurchase of 2026 Unsecured Notes. The Company repurchased an additional $2.0 million in principal amount of 2026 Unsecured Notes in open market transactions during the remainder of 2022, thereby reducing the final principal payment due at maturity to $335.5 million.
Note 7 — Shareholders’ Equity and Stock Incentive Plans
Share Repurchase Program
On August 3, 2021, the Company’s Board of Directors authorized a share repurchase program of $50 million, which was re-authorized on May 3, 2022 and subsequently increased to $75 million on November 1, 2022. 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. As of June 30, 2023, the Company had $61.5 million of remaining share repurchase availability under its November 1, 2022 authorization. On July 27, 2023, the Company’s Board of Directors increased its share repurchase program to $100 million.
The Company did not repurchase any of its shares during the three and six months ended June 30, 2023. The following table includes the Company’s share repurchase activity for the three and six months ended June 30, 2022:

|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2022 |  | 2022
(In thousands, except per share data) |  |  |  |
Shares repurchased (1) |  | 515 |  |  | 784 |
Total cost, including brokerage fees |  | $ | 22,474 |  |  | $ | 37,670 |
Average repurchase price per share (2) |  | $ | 43.63 |  |  | $ | 50.08 |

(1)All repurchased shares were retired and constitute authorized but unissued shares.
(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.
Stock Options
The following table summarizes the Company’s stock option activity:

| Stock Options
| Shares |  | Weighted-Average Exercise Price
Outstanding at January 1, 2023 | 2,071,994 |  |  | $ | 11.35 |
Granted | — |  |  | $ | — |
Exercised | (41,140) |  |  | $ | 16.37 |
Cancelled | — |  |  | $ | — |
Expired | — |  |  | $ | — |
Outstanding at June 30, 2023 | 2,030,854 |  |  | $ | 11.25 |
Exercisable at June 30, 2023 | 2,030,854 |  |  | $ | 11.25 |

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There was no share-based compensation expense related to stock options for the three and six months ended June 30, 2023 and 2022. The Company did not have any remaining unrecognized share-based compensation expense related to stock options as of June 30, 2023 and 2022.
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
|  | Shares |  | Weighted-Average Grant Date Fair Value |  | Shares (1) |  | Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2023 |  | 547,671 |  |  | $ | 26.09 |  |  | 1,076,159 |  | (2) | $ | 17.17 |
Granted |  | 159,043 |  |  | $ | 42.17 |  |  | 114,898 |  | (1) | $ | 41.92 |
Vested |  | (285,179) |  |  | $ | 22.79 |  |  | (733,574) |  | (3) | $ | 8.86 |
Cancelled |  | — |  |  | $ | — |  |  | (8,699) |  | (4) | $ | 53.51 |
Outstanding at June 30, 2023 |  | 421,535 |  |  | $ | 34.38 |  |  | 448,784 |  |  | $ | 36.40 |

(1) The number of shares for the PSUs listed as granted 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 eligible to vest at “maximum” performance levels.
(2) Includes PSUs granted in March 2020 and March 2021 at 200% of the target and PSUs granted in March 2022 at target.
(3) Represents PSUs granted in March 2020 that vested in March 2023 at 200% of the target PSUs.
(4) The Company’s financial results for the applicable performance goals were certified during the three months ended March 31, 2023 and 89.6% of the target PSUs granted in March 2022 were deemed “earned.” This resulted in the reduction of the PSUs granted in March 2022 to the number of PSUs eligible to vest from 83,579 to 74,880.
Share-based compensation expense related to RSUs was $1.9 million and $3.7 million for the three and six months ended June 30, 2023, respectively, and $1.8 million and $3.3 million for the three and six months ended June 30, 2022, respectively. Share-based compensation expense related to PSUs was $1.4 million and $2.9 million for the three and six months ended June 30, 2023, respectively, and $1.5 million and $3.1 million for the three and six months ended June 30, 2022, respectively.
As of June 30, 2023, there was $11.2 million and $8.4 million of unrecognized share-based compensati on expense related to RSUs and PSUs, respectively, which is expected to be recognized over a weighted-average period of 1.6 years and 1.4 years for RSUs and PSUs, respectively. As of June 30, 2022, there was $11.8 million and $9.8 million of unrecognized share-based compensation expense related to RSUs and PSUs, respectively, which is expected to be recognized over a weighted-average period of 2.0 years for both RSUs and PSUs.
As of June 30, 2023, a total of 3,988,688 shares of the Company’s common stock remained available for grants of awards under the Golden Entertainment, Inc. 2015 Incentive Award Plan, which includes the annual increase in the number of shares available for grant on January 1, 2023 of 1,127,160 shares.
Note 8 — Income Tax
The Company’s effective income tax rates were 25.7% and 22.7% for the three and six months ended June 30, 2023, respectively, and 26.3% and (23.5)% for the three and six months ended June 30, 2022, respectively. The Company recorded income tax expense of $4.2 million and $7.0 million for the three and six months ended June 30, 2023, respectively. The Company recorded income tax expense of $7.6 million for the three months ended June 30, 2022 and income tax benefit of $10.9 million for the six months ended June 30, 2022.
The Company performs a continuing evaluation of its deferred tax asset valuation allowance on a quarterly basis. During the three months ended March 31, 2022, the Company concluded that it was more likely than not that the Company would generate sufficient taxable income within the applicable net operating loss carry-forward periods to realize a portion of its deferred tax assets, which resulted in a partial reversal of the deferred tax asset valuation allowance in that period. The partial reversal of the deferred tax asset valuation allowance during the three months ended March 31, 2022 resulted in the negative effective income tax rate and income tax benefit for the six months ended June 30, 2022. The effective income tax rate and the income tax expense
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for the three and six months ended June 30, 2023 differed from the federal tax rate of 21% primarily due to the limitation on tax deductions for executive compensation in excess of $1 million under Section 162(m) of the Internal Revenue Code.
As of June 30, 2023, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS.
As of June 30, 2023 and December 31, 2022, the Company had no material uncertain tax positions.
Note 9 — 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.
Financial Instruments
The carrying values of the Company’s 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 of the Company’s long-term debt:

| June 30, 2023
(In thousands) | Carrying Amount |  | Fair Value |  | Fair Value Hierarchy
Term Loan B | $ | 175,000 |  |  | $ | 175,438 |  |  | Level 2
Term Loan B-1 | 400,000 |  |  | 400,000 |  |  | Level 2
2026 Unsecured Notes | 335,461 |  |  | 335,998 |  |  | Level 2
Finance lease liabilities | 1,925 |  |  | 1,925 |  |  | Level 3
Notes payable | 969 |  |  | 969 |  |  | Level 3
Total debt | $ | 913,355 |  |  | $ | 914,330 |  |  |

| December 31, 2022
(In thousands) | Carrying Amount |  | Fair Value |  | Fair Value Hierarchy
Term Loan B | $ | 575,000 |  |  | $ | 575,000 |  |  | Level 2
2026 Unsecured Notes | 335,461 |  |  | 330,630 |  |  | Level 2
Finance lease liabilities | 2,157 |  |  | 2,157 |  |  | Level 3
Notes payable | 90 |  |  | 90 |  |  | Level 3
Total debt | $ | 912,708 |  |  | $ | 907,877 |  |  |

The estimated fair value of the Company’s Term Loan B, Term Loan B-1 and 2026 Unsecured Notes is based on a relative value analysis performed as of June 30, 2023 and December 31, 2022. The finance lease liabilities and notes payable are fixed-rate debt, are not traded and do not have observable market inputs, and therefore, their fair value is estimated to be equal to the carrying value.
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Note 10 — Commitments and Contingencies
Participation Agreements
The Company enters into certain slot placement contracts in the form of participation agreements. Under participation agreements, the Company and the business location each hold a state issued gaming license in order to be able to receive a percentage of gaming revenue earned on the Company’s slot machines. The business location retains a percentage of the gaming revenue generated from the Company’s slot machines. The Company is considered to be the principal in these arrangements and therefore, records its share of revenue generated under participation agreements on a gross basis with the business location’s share of revenue recorded as gaming expenses.
The aggregate contingent payments recognized by the Company as gaming expenses under participation agreements were $52.9 million and $106.2 million for the three and six months ended June 30, 2023, respectively, and $55.2 million and $108.0 million for the three and six months ended June 30, 2022, respectively.
Legal Matters and Other
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 records reserves. 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.
During the three months ended June 30, 2023, the Company received $8.1 million related to the sale of certain of its business interruption claims and incurred $2.4 million in fees related to this matter. The proceeds from the sale were included in other revenue and the fees were included in selling, general and administrative expenses in the Company’s statement of operations.
Note 11 — Segment Information
The Company conducts its business through five reportable segments: Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, Nevada Taverns, and Distributed Gaming.
The Nevada Casino Resorts segment is comprised of 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 the Nevada Locals Casinos.
The Nevada Locals Casinos segment is comprised of 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 the customers visiting the Company’s 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.
The Maryland Casino Resort segment was comprised of the Rocky Gap casino resort, which is geographically disparate from the Company’s Nevada properties, operates in a separate regulatory jurisdiction and has only a limited number of hotel rooms compared to the Nevada Casino Resorts. On July 25, 2023, Rocky Gap was sold for aggregate cash consideration of $260 million, subject to adjustments. Refer to “Note 13 — Subsequent Events” for further information.
The Nevada Taverns segment is comprised of 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.
The Distributed Gaming segment is comprised of the operation of slot machines and amusement devices in nearly 1,000 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. Distributed Gaming operations cater to local residents with
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high frequency visitation to these locations. The Company places its slot machines and amusement devices in locations where it believes they will receive maximum customer traffic. As discussed in “Note 1 — Nature of Business and Basis of Presentation” and “Note 2 — Assets Held for Sale,” on March 3, 2023, the Company entered into definitive agreements to sell the Distributed Gaming Operations and classified the assets related to Distributed Gaming as held for sale as of March 31, 2023. The sale of the Nevada Distributed Gaming Operations is contingent upon the closing of the sale of the Montana Distributed Gaming Operations. The Company expects the Distributed Gaming Transactions to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions.
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 segments because these costs are not easily allocable and to do so would not be practical.
The Company presents Adjusted EBITDA in its segment disclosures because it is the primary metric used by the Company’s chief operating decision makers in measuring both the Company’s past and future expectations of performance. Further, the Company’s annual performance plan used to determine compensation of its executive officers and employees is tied to the Adjusted EBITDA metric. Adjusted EBITDA represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, impairment of goodwill and intangible assets, severance expenses, preopening and related expenses, gain or loss on disposal of assets, share-based compensation expenses, non-cash lease expense, and other non-cash charges that are deemed to be not indicative of the Company’s core operating results, calculated before corporate overhead (which is not allocated to each reportable segment).
Due to the Company’s use of Adjusted EBITDA as its measure of profit for its reportable segments, the Company includes a reconciliation of the total of the Company’s consolidated Adjusted EBITDA to the Company’s consolidated net income determined in accordance with GAAP. The Company also discloses Adjusted EBITDA at the reportable segment level, as set forth in the table below:
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|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  |  |  |  |  |  |  |
Nevada Casino Resorts |  |  |  |  |  |  |  |
Gaming |  | $ | 38,625 |  |  | $ | 46,114 |  |  | $ | 80,918 |  |  | $ | 90,344 |
Food and beverage |  | 24,473 |  |  | 23,123 |  |  | 48,704 |  |  | 44,507 |
Rooms |  | 26,353 |  |  | 28,573 |  |  | 52,563 |  |  | 50,602 |
Other |  | 13,111 |  |  | 9,688 |  |  | 20,553 |  |  | 18,480 |
Nevada Casino Resorts revenues |  | $ | 102,562 |  |  | $ | 107,498 |  |  | $ | 202,738 |  |  | $ | 203,933 |
Nevada Locals Casinos |  |  |  |  |  |  |  |
Gaming |  | $ | 28,796 |  |  | $ | 29,048 |  |  | $ | 58,445 |  |  | $ | 58,429 |
Food and beverage |  | 6,564 |  |  | 6,301 |  |  | 13,255 |  |  | 12,480 |
Rooms |  | 2,416 |  |  | 2,529 |  |  | 5,238 |  |  | 4,773 |
Other |  | 2,053 |  |  | 1,907 |  |  | 4,129 |  |  | 3,992 |
Nevada Locals Casinos revenues |  | $ | 39,829 |  |  | $ | 39,785 |  |  | $ | 81,067 |  |  | $ | 79,674 |
Maryland Casino Resort |  |  |  |  |  |  |  |
Gaming |  | $ | 14,421 |  |  | $ | 15,456 |  |  | $ | 28,935 |  |  | $ | 29,913 |
Food and beverage |  | 2,348 |  |  | 2,222 |  |  | 4,214 |  |  | 3,870 |
Rooms |  | 2,149 |  |  | 2,072 |  |  | 3,694 |  |  | 3,545 |
Other |  | 687 |  |  | 796 |  |  | 890 |  |  | 1,110 |
Maryland Casino Resort revenues |  | $ | 19,605 |  |  | $ | 20,546 |  |  | $ | 37,733 |  |  | $ | 38,438 |
Nevada Taverns |  |  |  |  |  |  |  |
Gaming |  | $ | 13,187 |  |  | $ | 14,289 |  |  | $ | 26,212 |  |  | $ | 28,611 |
Food and beverage |  | 12,962 |  |  | 12,630 |  |  | 26,267 |  |  | 25,683 |
Other |  | 1,170 |  |  | 1,225 |  |  | 2,433 |  |  | 2,304 |
Nevada Taverns revenue |  | $ | 27,319 |  |  | $ | 28,144 |  |  | $ | 54,912 |  |  | $ | 56,598 |
Distributed Gaming |  |  |  |  |  |  |  |
Gaming |  | $ | 87,326 |  |  | $ | 91,772 |  |  | $ | 175,932 |  |  | $ | 180,169 |
Food and beverage |  | 187 |  |  | 175 |  |  | 365 |  |  | 367 |
Other |  | 1,571 |  |  | 1,278 |  |  | 3,188 |  |  | 3,457 |
Distributed Gaming revenues |  | $ | 89,084 |  |  | $ | 93,225 |  |  | $ | 179,485 |  |  | $ | 183,993 |
Corporate and other |  | 8,282 |  |  | 174 |  |  | 8,797 |  |  | 380 |
Total revenues |  | $ | 286,681 |  |  | $ | 289,372 |  |  | $ | 564,732 |  |  | $ | 563,016 |

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|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Adjusted EBITDA |  |  |  |  |  |  |  |
Nevada Casino Resorts |  | $ | 28,044 |  |  | $ | 38,892 |  |  | $ | 59,755 |  |  | $ | 72,467 |
Nevada Locals Casinos |  | 19,471 |  |  | 19,795 |  |  | 39,631 |  |  | 39,833 |
Maryland Casino Resort |  | 5,898 |  |  | 7,242 |  |  | 11,026 |  |  | 12,814 |
Nevada Taverns |  | 8,450 |  |  | 10,654 |  |  | 16,988 |  |  | 21,430 |
Distributed Gaming |  | 9,950 |  |  | 11,540 |  |  | 19,734 |  |  | 22,817 |
Corporate and other |  | (13,403) |  |  | (13,107) |  |  | (26,557) |  |  | (27,020) |
Total Adjusted EBITDA |  | 58,410 |  |  | 75,016 |  |  | 120,577 |  |  | 142,341 |
Adjustments |  |  |  |  |  |  |  |
Depreciation and amortization |  | (21,454) |  |  | (25,332) |  |  | (44,962) |  |  | (51,608) |
Non-cash lease expense |  | 9 |  |  | (230) |  |  | (24) |  |  | (411) |
Share-based compensation |  | (3,288) |  |  | (3,311) |  |  | (7,181) |  |  | (6,983) |
Gain (loss) on disposal of assets |  | 34 |  |  | (710) |  |  | 120 |  |  | (669) |
Loss on debt extinguishment and modification |  | (405) |  |  | (1,073) |  |  | (405) |  |  | (1,254) |
Preopening and related expenses (1) |  | (141) |  |  | (4) |  |  | (525) |  |  | (59) |
Other, net |  | 2,168 |  |  | (838) |  |  | 383 |  |  | (5,134) |
Interest expense, net |  | (18,803) |  |  | (14,738) |  |  | (37,039) |  |  | (29,856) |
Income tax (provision) benefit |  | (4,248) |  |  | (7,560) |  |  | (7,032) |  |  | 10,919 |
Net Income |  | $ | 12,282 |  |  | $ | 21,220 |  |  | $ | 23,912 |  |  | $ | 57,286 |

(1) Preopening and related expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred in connection with the opening of branded tavern and casino locations as well as food and beverage and other venues within the casino locations.
Assets
The Company’s assets by reportable segment consisted of the following amounts:

(In thousands) | Nevada Casino Resorts |  | Nevada Locals Casinos |  | Maryland Casino Resort |  | Nevada Taverns |  | Distributed Gaming |  | Corporate and Other |  | Consolidated
Balance at June 30, 2023 | $ | 780,041 |  |  | $ | 159,834 |  |  | $ | 41,236 |  |  | $ | 134,849 |  |  | $ | 248,574 |  |  | $ | 129,712 |  |  | $ | 1,494,246 |
Balance at December 31, 2022 | $ | 784,242 |  |  | $ | 164,580 |  |  | $ | 39,562 |  |  | $ | 145,065 |  |  | $ | 258,260 |  |  | $ | 116,961 |  |  | $ | 1,508,670 |

Note 12 — Related Party Transactions
In November 2018, the Company entered into a lease agreement for office space in a building adjacent to the Company’s office headquarters building to be constructed and owned by a company 33% beneficially owned by Mr. Sartini, 3% beneficially owned by Mr. Arcana, and 1.67% beneficially owned by each of Mr. Sartini’s three children (including Blake L. Sartini II). 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. The lease commenced in August 2020 and expires on December 31, 2030. The rent expense for the space was $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively, and $0.1 million for each of the three and six months ended June 30, 2022. Additionally, the lease agreement includes a right of first refusal for additional space on the second floor of the building.
A portion of the Company’s office headquarters building is sublet to Sartini Enterprises, Inc., a company controlled by Mr. Sartini. Rental income for each of the three and six months ended June 30, 2023 and 2022 for the sublet portion of the office headquarters building was less than $0.1 million. No amount was owed to the Company under such sublease as of June 30, 2023 and December 31, 2022.
From time to time, the Company’s executive officers and employees use a private aircraft leased to Sartini Enterprises, Inc. for Company business purposes pursuant to aircraft time-sharing, co-user and cost-sharing agreements between the Company and
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Sartini Enterprises, Inc., all of which have been approved by the Audit Committee of the Board of Directors. The aircraft time-sharing, co-user and cost-sharing agreements specify the maximum expense reimbursement that Sartini Enterprises, Inc. can charge the Company under the applicable regulations of the Federal Aviation Administration for the use of the aircraft and the flight crew. Such costs include fuel, landing fees, hangar and tie-down costs away from the aircraft’s operating base, flight planning and weather contract services, crew costs and other related expenses. In addition, the Company and Sartini Enterprises, Inc. participate in certain cost-sharing arrangements. The Company’s compliance department reviews the cost-sharing agreements and reimbursements on a regular basis.
The Company incurred less than $0.1 million under the aircraft time-sharing, co-user and various cost-sharing agreements with Sartini Enterprises, Inc. for each of the three months ended June 30, 2023 and 2022. The Company incurred $0.1 million and $0.4 million under such agreements for the six months ended June 30, 2023 and 2022, respectively. The Company is owed $0.3 million under such agreements as of June 30, 2023 and t he Company owed $0.1 million under such agreements as of December 31, 2022.
During the three months ended June 30, 2022, the Company repurchased 210,000 shares of its common stock from Anthony A. Marnell III, an independent non-employee member of the Company’s Board of Directors, pursuant to its share repurchase program at a price of $42.61 per share, resulting in a charge to accumulated deficit of $8.9 million. This transaction was approved by the Audit Committee of the Board of Directors prior to being executed.
Note 13 — Subsequent Events
The Company’s management evaluates subsequent events through the date of issuance of the consolidated financial statements.
O n July 25, 2023, the Company closed the Rocky Gap Transactions for aggregate cash consideration of $260 million, subject to adjustments, and incurred $0.3 million in transactions costs since the announcement of the sale, which were recorded in selling, general and administrative expenses during the fourth quarter of 2022 and for the six months ended June 30, 2023. In July 2023, the Company incurred an additional $8.0 million in transaction costs, $1.9 million of which were paid upon closing. The Company used a portion of the net cash proceeds from the sale of Rocky Gap to repay in full and discharge the Term Loan B under the Credit Facility. The Company’s $400 million Term Loan B-1 and undrawn $240 million Revolving Credit Facility remain outstanding.
On July 27, 2023, the Board of Directors re-authorized the Company’s share repurchase program as discussed in “Note 7 — Shareholders’ Equity and Stock Incentive Plans” and authorized a one-time dividend as discussed in “Liquidity and Capital Resources” in Part I, item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.
There were no additional subsequent events that occurred after June 30, 2023 but prior to the date of issuance of the consolidated financial statements that would require adjustment to or disclosure in the consolidated financial statements as of and for the three and six months ended June 30, 2023.
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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,” “us” and “our” refer to Golden Entertainment, Inc. together with 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, 2022 (the “Annual Report”) previously 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,” “may,” “plan,” “project,” “potential,” “seek,” “should,” “think,” “will,” “would” and similar expressions, or they may use future dates. In addition, forward-looking statements include statements regarding the Distributed Gaming Transactions (defined below), including the anticipated timing of the closing of the transactions and satisfaction of regulatory and other conditions; 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 f uture 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: risks and uncertainties related to the Distributed Gaming Transactions, including the failure to obtain, or delays in obtaining, required regulatory approvals or clearances; the failure to satisfy any of the closing conditions to the Distributed Gaming Transactions on a timely basis or at all; 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, President and Chief Financial Officer, and Chief Operating 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 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 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 casino and distributed gaming operations (including gaming in our branded taverns). Our portfolio includes eight casino properties located in Nevada. The Nevada Taverns segment is comprised of the operation of our branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. Our 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.
Rocky Gap Sale
On July 25, 2023, we completed the sale of Rocky Gap Casino Resort (“Rocky Gap”) to Century Casinos, Inc. (“Century”) and VICI Properties, L.P. (“VICI”), an affiliate of VICI Properties Inc., for aggregate consideration of $260 million (the “Rocky Gap Transactions”). Specifically, Century acquired the operations of Rocky Gap from us for $56.1 million in cash (subject to adjustment based on Rocky Gap’s working capital and cage cash at closing), and VICI acquired the real estate assets relating to Rocky Gap from us for $203.9 million in cash. Refer to “Note 13 — Subsequent Events” in Part I, Item 1: Financial Statements for further information.
20

Distributed Gaming Operations Sale
On March 3, 2023, we entered into definitive agreements to sell our distributed gaming operations in Nevada and Montana (the “Distributed Gaming Operations”) to J&J Ventures Gaming, LLC (“J&J Gaming”), for aggregate consideration of $322.5 million. Specifically, J&J Gaming will acquire our Distributed Gaming Operations in Nevada for $213.5 million in cash plus purchased cash, comprised of cash and cash equivalents related to such operations at the time of closing (subject to adjustment based on working capital and purchased cash at closing) and our Distributed Gaming Operations in Montana for $109 million in cash plus purchased cash, comprised of cash and cash equivalents related to such operations at the time of closing (subject to adjustment based on working capital and purchased cash at closing), subject to the conditions and terms set forth therein (the “Distributed Gaming Transactions”). The sale of the Nevada Distributed Gaming Operations is contingent upon the closing of the sale of the Montana Distributed Gaming Operations. We expect the Distributed Gaming Transactions to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions.
Operations
We conduct our business through five reportable segments: Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, Nevada Taverns, and Distributed Gaming.
The following table sets forth certain information regarding our operations by reportable segment as of June 30, 2023:

|  | Location |  | Casino Space (Sq. ft.) |  | Slot Machines |  | Table Games |  | Hotel Rooms
Nevada Casino Resorts |  |  |  |  |  |  |  |  |  |
The STRAT Hotel, Casino & SkyPod (“The STRAT”) |  | Las Vegas, NV |  | 80,000 |  | 759 |  | 41 |  |  | 2,429 |
Aquarius Casino Resort (“Aquarius”) |  | Laughlin, NV |  | 69,750 |  | 1,099 |  | 29 |  |  | 1,906 |
Edgewater Casino Resort (“Edgewater”) |  | Laughlin, NV |  | 57,457 |  | 638 |  | 13 |  |  | 1,037 |
Nevada Locals Casinos |  |  |  |  |  |  |  |  |  |
Arizona Charlie’s Boulder |  | Las Vegas, NV |  | 41,969 |  | 599 |  | — |  |  | 303 |
Arizona Charlie’s Decatur |  | Las Vegas, NV |  | 67,360 |  | 688 |  | 10 |  |  | 259 |
Gold Town Casino |  | Pahrump, NV |  | 10,000 |  | 188 |  | — |  |  | — |
Lakeside Casino & RV Park |  | Pahrump, NV |  | 11,009 |  | 173 |  | — |  |  | — |
Pahrump Nugget Hotel Casino (“Pahrump Nugget”) |  | Pahrump, NV |  | 22,528 |  | 341 |  | 9 |  |  | 69 |
Maryland Casino Resort |  |  |  |  |  |  |  |  |  |
Rocky Gap (1) |  | Flintstone, MD |  | 25,447 |  | 630 |  | 16 |  |  | 198 |
Nevada Taverns |  |  |  |  |  |  |  |  |  |
65 branded tavern locations |  | Nevada |  | — |  |  | 1,033 |  |  | — |  |  | — |
Distributed Gaming |  |  |  |  |  |  |  |  |  |
Nevada distributed gaming |  | Nevada |  | — |  |  | 6,504 |  |  | — |  |  | — |
Montana distributed gaming |  | Montana |  | — |  |  | 3,848 |  |  | — |  |  | — |
Totals |  |  |  | 385,520 |  | 16,500 |  | 118 |  | 6,201

(1) Rocky Gap was sold subsequent to the end of the second quarter, as described above.
Nevada Casino Resorts
Our Nevada Casino Resorts segment is comprised of 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. Our casino resort properties in Nevada have a significantly larger number of hotel rooms compared to the other casino properties in our portfolio. While hotel stays at these casino resorts are typically longer, the overall frequency of visitation from guests is lower when compared to our Nevada Locals Casinos.
The STRAT: The STRAT is our premier casino resort property, located on Las Vegas Boulevard on the north end of the Las Vegas
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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 ten restaurants, two rooftop pools, a fitness center, retail shops and entertainment facilities.
Laughlin casinos: We own and operate two 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, sportsbook facilities and a new bingo facility at the Edgewater, the Aquarius has nine restaurants and the Edgewater offers five restaurants. The Edgewater also offers dedicated entertainment venues, including the Edge Pavilion and the Laughlin Event Center.
The operations of Colorado Belle Hotel and Casino Resort have remained suspended since March 2020. As of June 30, 2023, we voluntarily surrendered our gaming license for the property.
Nevada Locals Casinos
Our Nevada Locals Casinos segment is comprised of casino properties that cater to local customers who generally live within a five-mile radius. Our locals casino properties typically experience a higher frequency of customer visits compared to our casino resort properties in Nevada and Maryland, with many of our customers visiting our 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: Our 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 five r estaurants and an RV park with 221 RV hook-up sites and Arizona Charlie’s Decatur offers five restaurants.
Pahrump casinos: We own and operate three 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 our Pahrump casino properties, Pahrump Nugget offers hotel rooms, a bowling center and a 5,200 square foot banquet and event center, and Lakeside Casino & RV Park offers 159 RV hook-up sites.
Maryland Casino Resort
Our Maryland Casino Resort segment was comprised of our AAA Four Diamond Award® winning Rocky Gap casino resort, which is geographically disparate from our Nevada properties, operates in a separate regulatory jurisdiction and has only a limited number of hotel rooms compared to our Nevada Casino Resorts. On July 25, 2023, we closed the Rocky Gap Transactions for aggregate cash consideration of $260 million, subject to adjustments. Refer to “Note 13 — Subsequent Events” in Part I, Item 1: Financial Statements for further information.
Nevada Taverns
Our Nevada Taverns segment is comprised of branded tavern locations, where we control the food and beverage operations as well as the slot machines located within the tavern. Our 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 our 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. Our tavern patrons are typically younger than traditional casino customers, which diversifies our customer demographic. Our tavern brands include PT’s Pub, PT’s Gold, PT’s Ranch, PT’s Place, Sean Patrick’s, SG Bar, Sierra Gold, and Sierra Junction. As of June 30, 2023, we owned and operated 65 branded taverns, which offered a total of over 1,000 onsite slot machines. We continue to look for opportunities to pursue additional tavern openings and acquisitions.
Distributed Gaming
Our Distributed Gaming segment is comprised of the operation of slot machines and amusement devices in nearly 1,000 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. We own and operate over 10,300 slot machines and amusement devices as part of our 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. We place our slot machines and amusement devices in locations where we believe they will receive maximum customer traffic.
In August 2017, we became licensed as a video gaming terminal operator in Illinois. In October 2022, we surrendered our video gaming terminal operator license in Illinois due to inactivity. In October 2018, we received a conditional license to operate in
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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, we generally enter into two types of slot placement contracts as part of our distributed gaming business: space lease agreements and participation agreements. Under space lease agreements, we pay a fixed monthly rental fee for the right to install, maintain and operate our slot machines at a business location and we are the sole holder of the applicable gaming license that allows us to operate such slot machines. Under participation agreements, the business location retains a percentage of the gaming revenue generated from our slot machines, and as a result both the business location and Golden are required to hold a state-issued gaming license. In Montana, our slot and amusement device placement contracts are all participation agreements.
On March 3, 2023, we entered into definitive agreements to sell our Distributed Gaming Operations for aggregate consideration of $322.5 million. The sale of the Nevada Distributed Gaming Operations is contingent upon the closing of the sale of the Montana Distributed Gaming Operations. We expect the Distributed Gaming Transactions to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions.
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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, 2023 and 2022.

| Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  |  |  |  |  |  |
Gaming | $ | 182,355 |  |  | $ | 196,679 |  |  | $ | 370,442 |  |  | $ | 387,466 |
Food and beverage | 46,534 |  |  | 44,451 |  |  | 92,805 |  |  | 86,907 |
Rooms | 30,918 |  |  | 33,174 |  |  | 61,495 |  |  | 58,920 |
Other | 26,874 |  |  | 15,068 |  |  | 39,990 |  |  | 29,723 |
Total revenues | 286,681 |  |  | 289,372 |  |  | 564,732 |  |  | 563,016 |
Expenses |  |  |  |  |  |  |
Gaming | 105,380 |  |  | 109,740 |  |  | 212,306 |  |  | 215,391 |
Food and beverage | 33,645 |  |  | 32,546 |  |  | 67,667 |  |  | 64,003 |
Rooms | 15,359 |  |  | 13,816 |  |  | 30,140 |  |  | 26,290 |
Other operating | 7,905 |  |  | 5,346 |  |  | 11,735 |  |  | 9,322 |
Selling, general and administrative | 67,093 |  |  | 57,287 |  |  | 129,129 |  |  | 118,197 |
Depreciation and amortization | 21,454 |  |  | 25,332 |  |  | 44,962 |  |  | 51,608 |
(Gain) loss on disposal of assets | (34) |  |  | 710 |  |  | (120) |  |  | 669 |
Preopening expenses | 141 |  |  | 4 |  |  | 525 |  |  | 59 |
Total expenses | 250,943 |  |  | 244,781 |  |  | 496,344 |  |  | 485,539 |
Operating income | 35,738 |  |  | 44,591 |  |  | 68,388 |  |  | 77,477 |
Non-operating expense |  |  |  |  |  |  |
Interest expense, net | (18,803) |  |  | (14,738) |  |  | (37,039) |  |  | (29,856) |
Loss on debt extinguishment and modification | (405) |  |  | (1,073) |  |  | (405) |  |  | (1,254) |
Total non-operating expense, net | (19,208) |  |  | (15,811) |  |  | (37,444) |  |  | (31,110) |
Income before income tax (provision) benefit | 16,530 |  |  | 28,780 |  |  | 30,944 |  |  | 46,367 |
Income tax (provision) benefit | (4,248) |  |  | (7,560) |  |  | (7,032) |  |  | 10,919 |
Net income | $ | 12,282 |  |  | $ | 21,220 |  |  | $ | 23,912 |  |  | $ | 57,286 |

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Three and Six Months Ended June 30, 2023 Compared to Three and Six Months Ended June 30, 2022
Revenues
The $2.7 million, or 1%, decrease in rev enues for the three months ended June 30, 2023 compared to the prior year period resulted from decreases of $14.3 million and $2.3 million in gaming and rooms revenues, respectively, offset by increases of $2.1 million and $11.8 million in food and beverage and other revenues, respectively. The decrease in gaming and rooms revenues was primarily driven by a decrease in the overall visitation to our properties during the current year period. The increase in food and beverage revenues for the three months ended June 30, 2023 was primarily related to the addition of new food and beverage outlets, revised menus and increased revenue per cover. The increase in other revenues was primarily driven by the sale of certain of our business interruption claims and an increase in the number of events hosted at our Laughlin Event Center during the current year period.
The $1.7 million, or 0.3%, increase in revenues for the six months ended June 30, 2023 compared to the prior year period resulted from increases of $5.9 million, $2.6 million, and $10.2 million in food and beverage, rooms, and other revenues, respectively, offset by a $17.0 million decrease in gaming revenues. The increases in food and b everage and rooms revenues for the six months ended June 30, 2023 were primarily related to the addition of new food and beverage outlets, revised menus and increased revenue per cover, and an increase in average daily rates during the current year period. The increase in other revenues was primarily driven by recoveries under certain of our agreements and an increase in the number of events hosted at our Laughlin Event Center during the current year period. The decrease in gaming revenues was primarily driven by a decrease in the overall visitation to our properties during the current year period.
Operating Expenses
The $0.8 million, or 1%, increase in operating expenses for the three months ended June 30, 2023 compared to the prior year period resulted from increases of $1.1 million, $1.5 million and $2.6 million in food and beverage, rooms, and other operating expenses, respectively, offset by a decrease of $4.4 million in gaming operating expenses. The increase in food and beverage and rooms operating expenses was primarily attributable to higher labor costs and cost of goods incurred during the three months ended June 30, 2023. The increase in other operating expenses was also impacted by an increase in the number of events hosted at our Laughlin Event Center during the current year period. The decrease in gaming operating expenses was primarily attributable to operational changes introduced in response to the decrease in the overall visitation to our properties and decline in demand for gaming and a reevaluation of gaming related marketing programs.
The $6.8 million, or 2%, increase in op erating expenses for the six months ended June 30, 2023 compared to the prior year period resulted f rom increases of $3.7 million, $3.8 million and $2.4 million in food and beverage, rooms, and other operating expenses, respectively, offset by a decrease of $3.1 million in gaming operating expenses. The changes in operating expenses for the six months ended June 30, 2023 compared to the prior year period were driven by the trends observed for the three months ended June 30, 2023 discussed above.
Selling, General and Administrative Expenses
The $9.8 million, or 17%, increase in selling, general and administrative (“SG&A”) expenses for the three months ended June 30, 2023 compared to the prior year period was primarily attributable to increases in payroll and related expenses, marketing and advertising primarily in connection with the special events hosted during the period, as well as an increase in costs related to utilities, vendor fees and maintenance contract fees.
The $10.9 million, or 9%, increase in SG&A expenses for the six months ended June 30, 2023 compared to the prior year period was primarily attributable to the increase in payroll and related expenses followed by an increase in costs related to marketing and advertising, utilities, and maintenance contracts. SG&A expenses are comprised of marketing and advertising, utilities, building rent, maintenance contracts, corporate office overhead, information technology, legal, accounting, third-party service providers, executive compensation, share-based compensation, payroll expenses and payroll taxes.
Depreciation and Amortization
The decrease in depreciation and amortization expenses of $3.9 million, or 15%, and $6.6 million, or 13%, for the three and six months ended June 30, 2023, respectively, compared to the prior year periods was primarily related to ceasing of depreciation and amortization for assets classified as held for sale discussed in “Note 2 — Assets Held for Sale” in Part I, Item 1: Financial Statements. In addition, long-lived assets acquired in connection with the American Casino Entertainment Properties, LLC acquisition became fully depreciated and amortized during the current year periods. The decrease in depreciation and amortization expenses for the three and six months ended June 30, 2023 was offset by the acceleration of depreciation on certain of our casino resort properties and depreciation on new assets placed in service.
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Gain on Disposal of Assets
Gain on disposal of assets for the three and six months ended June 30, 2023 was primarily driven by sales of used gaming equipment in our Distributed Gaming segment. Loss on disposal of assets for the three and six months ended June 30, 2022 was primarily driven by sales of used furniture and equipment in our Nevada Taverns segment.
Preopening Expenses
Preopening expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred in connection with the opening of branded tavern and casino locations as well as food and beverage and other venues within our casino locations. Preopening expenses for the three and six months ended June 30, 2023 primarily related to new branded tavern openings within our Nevada Taverns segment and the opening of the new bingo facility in our Nevada Casino Resorts segment. Preopening expenses for the three and six months ended June 30, 2022 primarily related to our planned expansion of our Nevada Taverns segment operations.
Non-Operating Expense, Net
The increase in non-operating expense, net, of $3.4 million, or 21%, and $6.3 million, or 20%, for the three and six months ended June 30, 2023 compared to the prior year periods primarily related to a $4.1 million, or 28%, and $7.2 million, or 24%, increase in interest expense due to the increase in interest rates for the three and six months ended June 30, 2023, respectively. The increase was offset by decreases of $0.7 million and $0.8 million in loss on debt modification and extinguishment for the three and six months ended June 30, 2023, respectively. T he loss on debt modification and extinguishment of $0.4 million recorded for the current year periods related to the amendment to our Credit Facility discussed in “Note 6 — Lo ng-Term Debt” in Part I, Item 1: Financial Statements and defined therein. Loss on debt modification and extinguishment of $1.1 million and $1.3 million for the three and six months ended June 30, 2022, respectively, related to the accelerated amortization of debt issuance costs and discount as discussed in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements.
Income Taxes
The effective income tax rates were 25.7% and 22.7% for the three and six months ended June 30, 2023, respectively, which differed from the federal income tax rate of 21% primarily due to the limitation on tax deductions for executive compensation in excess of $1 million under Section 162(m) of the Internal Revenue Code. The effective income tax rate was 26.3% for the three months ended June 30, 2022, which differed from the federal tax rate of 21% primarily due to the limitation on a tax deduction on executive compensation in excess of $1 million under Section 162(m) of the Internal Revenue Code. The negative effective income tax rate of (23.5)% for the six months ended June 30, 2022 was a result of the partial release of the valuation allowance on our deferred tax assets during the first quarter of 2022.
Revenues and Adjusted EBITDA by Reportable Segment
To supplement our consolidated financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), we use Adjusted EBITDA because it is the primary metric used by our chief operating decision makers and investors in measuring both our past and future expectations of performance. Adjusted EBITDA provides useful information to the users of our financial statements by excluding specific expenses and gains that we believe are not indicative of our core operating results. Furthermore, our annual performance plan used to determine compensation for our executive officers and employees is tied to the Adjusted EBITDA metric. It is also a measure of operating performance 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.
We define “Adjusted EBITDA” as earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, impairment of goodwill and intangible assets, severance expenses, preopening and related expenses, gain or loss on disposal of assets, share-based compensation expenses, non-cash lease expense, and other non-cash charges that are deemed to be not indicative of our core operating results, calculated before corporate overhead (which is not allocated to each reportable segment).
26

The following table presents our total revenues and Adjusted EBITDA by reportable segment and a reconciliation of net income to Adjusted EBITDA:

|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  |  |  |  |  |  |  |
Nevada Casino Resorts |  | $ | 102,562 |  |  | $ | 107,498 |  |  | $ | 202,738 |  |  | $ | 203,933 |
Nevada Locals Casinos |  | 39,829 |  |  | 39,785 |  |  | 81,067 |  |  | 79,674 |
Maryland Casino Resort |  | 19,605 |  |  | 20,546 |  |  | 37,733 |  |  | 38,438 |
Nevada Taverns |  | 27,319 |  |  | 28,144 |  |  | 54,912 |  |  | 56,598 |
Distributed Gaming |  | 89,084 |  |  | 93,225 |  |  | 179,485 |  |  | 183,993 |
Corporate and other |  | 8,282 |  |  | 174 |  |  | 8,797 |  |  | 380 |
Total Revenues |  | $ | 286,681 |  |  | $ | 289,372 |  |  | $ | 564,732 |  |  | $ | 563,016 |
Adjusted EBITDA |  |  |  |  |  |  |  |
Nevada Casino Resorts |  | $ | 28,044 |  |  | $ | 38,892 |  |  | $ | 59,755 |  |  | $ | 72,467 |
Nevada Locals Casinos |  | 19,471 |  |  | 19,795 |  |  | 39,631 |  |  | 39,833 |
Maryland Casino Resort |  | 5,898 |  |  | 7,242 |  |  | 11,026 |  |  | 12,814 |
Nevada Taverns |  | 8,450 |  |  | 10,654 |  |  | 16,988 |  |  | 21,430 |
Distributed Gaming |  | 9,950 |  |  | 11,540 |  |  | 19,734 |  |  | 22,817 |
Corporate and other |  | (13,403) |  |  | (13,107) |  |  | (26,557) |  |  | (27,020) |
Total Adjusted EBITDA |  | $ | 58,410 |  |  | $ | 75,016 |  |  | $ | 120,577 |  |  | $ | 142,341 |
Net income |  | $ | 12,282 |  |  | $ | 21,220 |  |  | $ | 23,912 |  |  | $ | 57,286 |
Adjustments |  |  |  |  |  |  |  |
Depreciation and amortization |  | 21,454 |  |  | 25,332 |  |  | 44,962 |  |  | 51,608 |
Non-cash lease expense |  | (9) |  |  | 230 |  |  | 24 |  |  | 411 |
Share-based compensation |  | 3,288 |  |  | 3,311 |  |  | 7,181 |  |  | 6,983 |
(Gain) loss on disposal of assets |  | (34) |  |  | 710 |  |  | (120) |  |  | 669 |
Loss on debt extinguishment and modification |  | 405 |  |  | 1,073 |  |  | 405 |  |  | 1,254 |
Preopening and related expenses (1) |  | 141 |  |  | 4 |  |  | 525 |  |  | 59 |
Other, net |  | (2,168) |  |  | 838 |  |  | (383) |  |  | 5,134 |
Interest expense, net |  | 18,803 |  |  | 14,738 |  |  | 37,039 |  |  | 29,856 |
Income tax provision (benefit) |  | 4,248 |  |  | 7,560 |  |  | 7,032 |  |  | (10,919) |
Adjusted EBITDA |  | $ | 58,410 |  |  | $ | 75,016 |  |  | $ | 120,577 |  |  | $ | 142,341 |

(1)Preopening and related expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred in connection with the opening of branded tavern and casino locations as well as food and beverage and other venues within our casino locations.
Nevada Casino Resorts
Revenues decreased by $4.9 million, or 5%, for the three months ended June 30, 2023 compared to the prior year period primarily due to decreases of $7.5 million and $2.2 million in gaming and rooms revenues, respectively, offset by increases of $1.4 million and $3.4 million in food and beverage and other revenues, respectively. The decrease in gaming and rooms revenues for the three months ended June 30, 2023 was primarily driven by a decrease in the overall visitation to our Nevada Casino Resorts properties during the current year period and a reevaluation of gaming related marketing programs. The increase in food and beverage revenues was primarily driven by t he addition of new food and beverage outlets, revised menus and increased revenue per cover. The increase in other revenues was primarily driven by an increase in the number of events hosted at our Laughlin Event Center and the introduction of charged parking at certain of our Nevada Casino Resorts properties during the current year period.
Revenues decreased by $1.2 million, or 1%, for the six months ended June 30, 2023 compared to the prior year period primarily due to a $9.4 million decrease in gaming revenues, offset by increases of $4.2 million in food and beverage revenues and increases of $2.0 million each in rooms and other revenues. The decrease in gaming revenues was primarily driven by a decrease
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in the overall visitation to our Nevada Casino Resorts properties during the current year period and a reevaluation of the gaming related marketing programs. The increase in food and beverage revenues was primarily driven by the addition of new food and beverage outlets, revised menus and increased revenue per cover. The increase in rooms revenues was attributable to an increase in average daily rates during the current year period. Other revenues were positively impacted by a higher number of events hosted at our Laughlin Event Center and the introduction of charged parking at certain of our Nevada Casino Resorts properties during the current year period.
Adjusted EBITDA decreased by $10.8 million, or 28%, and $12.7 million, or 18%, for the three and six months ended June 30, 2023, respectively, compared to the prior year period primarily due to higher labor costs and cost of goods in the current year period.
Nevada Locals Casinos
For the three months ended June 30, 2023, revenues remained relatively consistent with the prior year period. Revenues increased by $1.4 million, or 2%, for the six months ended June 30, 2023 compared to the prior year period primarily due to increases of $0.8 million, $0.5 million, and $0.1 million in food and beverage, rooms, and other revenues, respectively. The increase in revenues was attributable to a higher hotel occupancy at higher average daily rates which resulted in an increase in food and beverage revenues during the current year period.
Adjusted EBITDA decreased by $0.3 million, or 2%, and $0.2 million, or 1%, for the three and six months ended June 30, 2023, respectively, compared prior year period primarily due to higher labor costs and cost of goods in the current year periods.
Maryland Casino Resort
For the three months ended June 30, 2023, revenues decreased by $0.9 million, or 5%, compared to the prior year period primarily due to decreases of $1.0 million and $0.1 million in gaming and other revenues, respectively, offset by increases of $0.1 million each in food and beverage and rooms revenues. The decrease in revenues is primarily driven by a decrease in overall visitation during the current year period.
Revenues decreased by $0.7 million, or 2%, for the six months ended June 30, 2023 compared to the prior year period primarily due to decreases of $1.0 million and $0.2 million in gaming and other revenues, respectively, offset by increases of $0.3 million and $0.2 million in food and beverage and rooms revenues, respectively. The decrease in revenues is primarily driven by a decrease in overall visitation during the current year period.
Adjusted EBITDA decreased $1.3 million, or 19%, and $1.8 million, or 14%, for the three and six months ended June 30, 2023, respectively, compared to the prior year period primarily due to an increase in labor costs and cost of goods in the current year periods.
Nevada Taverns
Revenues decreased by $0.8 million, or 3%, and $1.7 million, or 3%, for the three and six months ended June 30, 2023, respectively, and Adjusted EBITDA decreased by $2.2 million, or 21%, and $4.4 million, or 21%, for the three and six months ended June 30, 2023, respectively, compared to the prior year periods. The decrease in revenues for the three and six months ended June 30, 2023 was primarily attributable to the decrease in visitation to our tavern locations during the current year period. The decrease in Adjusted EBITDA for the three and six months ended June 30, 2023 was attributable to higher labor costs and cost of goods compared to the prior year periods.
Distributed Gaming
Revenues decreased by $4.1 million, or 4%, and $4.5 million, or 2%, for the three and six months ended June 30, 2023, respectively, and Adjusted EBITDA decreased by $1.6 million, or 14%, and $3.1 million, or 14%, for the three and six months ended June 30, 2023, respectively, compared to the prior year periods. The decrease in revenues for the three and six months ended June 30, 2023 was primarily attributable to the decrease in demand for gaming during the current year periods. The decrease in Adjusted EBITDA for the three and six months ended June 30, 2023 was attributable to higher labor costs and an increase in costs of providing gaming related services to third parties under our space lease and participation agreements.
Adjusted EBITDA Margin
For the three months ended June 30, 2023, Adjusted EBITDA as a percentage of segment revenues (or Adjusted EBITDA margin) was 27%, 49%, 30%, 31%, and 11% for Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino, Nevada Taverns, and Distributed Gaming segments, respectively, compared to Adjusted EBITDA margins of 36%, 50%, 35%, 38%, and 12%, respectively, for the prior year period. For the six months ended June 30, 2023, Adjusted EBITDA margin was 29%, 49%,
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29%, 31%, and 11% for Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino, Nevada Taverns, and Distributed Gaming segments, respectively, compared to Adjusted EBITDA margins of 36%, 50%, 33%, 38%, and 12%, respectively, for the prior year period. The lower Adjusted EBITDA margins for the three and six months ended June 30, 2023 were primarily attributable to increases in labor costs and cost of goods. In addition, lower Adjusted EBITDA margins in our Distributed Gaming segment reflect the fixed and variable amounts paid to third parties under our space lease and participation agreements as expenses.
Liquidity and Capital Resources
As of June 30, 2023, we had $165.5 million in cash and cash equivalents, which included $44.7 million of cash and cash equivalents related to assets held for sale. We believe that our cash and cash equivalents, cash flows from operations and borrowing availability under our $240 million revolving credit facility (the “Revolving Credit Facility”) will be sufficient to meet our capital requirements during the next 12 months. As of June 30, 2023, we had borrowing availability of $240 million under our Revolving Credit Facility (refer to “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements for additional information regarding our Revolving Credit Facility). As discussed above, in July 2023, we sold Rocky Gap for aggregate consideration of $260 million in cash, and have entered into definitive agreements to sell Distributed Gaming Operations for aggregate consideration of $322.5 million in cash plus purchased cash, comprised of cash and cash equivalents related to such operations at the time of closing, which transactions are expected to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary regulatory approvals and closing conditions. We used a portion of the net cash proceeds from the sale of Rocky Gap to repay in full and discharge the Term Loan B under our Credit Facility (defined in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements). Refer to “Note 13 — Subsequent Events” in Part I, Item 1: Financial Statements for further information. Subsequent to the end of the second quarter, on July 27, 2023, the Board of Directors declared a one-time cash dividend of $2.00 per share of our outstanding common stock. The one-time cash dividend is payable on August 25, 2023 to our shareholders of record as of August 11, 2023.
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 by our operations 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.
Cash Flows
Net cash provided by operating activities w as $100.9 million and $91.1 million for the six months ended June 30, 2023 and 2022, respectively. The $9.8 million, or 11%, increase in operating cash flows for the six months ended June 30, 2023 compared to the prior year period primarily related to the timing of working capital spending.
Net cash used in investing activities was $53.7 million and $20.9 million for the six months ended June 30, 2023 and 2022, respectively. The $32.8 million, or 157%, increase in net cash used in investing activities for the six months ended June 30, 2023 compared to the prior year period related to the increase in our capital expenditures, primarily at The STRAT.
Net cash used in financing activities was $23.7 million and $111.5 million f or the six months ended June 30, 2023 and 2022, respectively. The $87.8 million, or 79%, decrease in net cash used in financing activities during the six months ended June 30, 2023 compared to the prior year period primarily related to the prepayment of outstanding Term Loan borrowings with a principal amount of $25 million, $37.5 million in repurchases of principal amount of our 7.625% Senior Notes due 2026 in open market transactions and $37.7 million in repurchases of our common stock pursuant to our share repurchase program during the six months ended June 30, 2022. The current period decrease in net cash used in financing activities was partially offset by a $4.8 million increase in cash paid for tax withholding on option exercises and the vesting of RSUs and PSUs during the current year period as well as $7.8 million paid in connection with the second amendment to our Credit Facility discussed in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements.
Long-Term Debt
Refer to “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements of this Quarterly Report for discussion of our debt instruments.
Share Repurchase Program
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
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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. Refer to “Note 7 — Shareholders’ Equity and Stock Incentive Plans” in Part I, Item 1: Financial Statements of this Quarterly Report for additional information regarding our share repurchase program and common stock purchases made pursuant to our share repurchase program.
Other Items Affecting Liquidity
The outcome of the following specific matters, including our commitments and contingencies, 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 operating cash flows and Revolving Credit Facility.
Refer to “Note 10 — Commitments and Contingencies” in Part I, Item 1: Financial Statements for additional information regarding commitments and contingencies that may also affect our liquidity.
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 and assumptions 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. We believe that our estimates and assumptions are reasonable, based upon information presently available; however, actual results may differ from these estimates under different assumptions or conditions.
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. For a more extensive discussion of our accounting policies, refer to “Note 2 — Summary of Significant Accounting Policies” in Part II, Item 8: Financial Statements and Supplemental Data in our Annual Report. There were no material changes to our critical accounting policies and estimates during the three and six months ended June 30, 2023.
Seasonality
We believe that our businesses are affected by seasonal factors, including holidays, weather and travel conditions. Our 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 and may be significantly adversely impacted by inclement weather during winter months. Our Nevada branded taverns and distributed gaming operations typically experience higher revenues during the fall which corresponds with several professional sports seasons. Our 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. While other factors like unemployment levels, market competition and the diversification of our business may either offset or magnify seasonal effects, some seasonality is
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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 Part I, Item 1: 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 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, 2023, our variable rate long-term debt primarily comprised our indebtedness under the Credit Facility (refer to “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements).
As of June 30, 2023, we had $175 million in principal amount of outstanding Term Loan B borrowings and $400 million in principal amount of outstanding Term Loan B-1 borrowings under the Credit Facility with no outstanding borrowings under our $240 million Revolving Credit Facility (defined in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements). Subsequent to the end of the second quarter, we used a portion of the net cash proceeds from the sale of Rocky Gap to repay in full and discharge the Term Loan B under the Credit Facility. Our primary interest rate under the Credit Facility is the SOFR rate plus an applicable margin. The weighted-average effective interest rates on our outstanding borrowings under the Credit Facility were 7.97% and 7.75% for the three and six months ended June 30, 2023, respectively. Assuming the outstanding balance under our Credit Facility (after giving effect to the repayment in full of the Term Loan B-1 loans in July 2023) 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 $2.0 million over a twelve-month period.
As of June 30, 2023, we had $165.5 million in cash and cash equivalents, which included $44.7 million of cash and cash equivalents related to assets held for sale.
As discussed in “Note 13 — Subsequent Events” in Part I, Item 1: Financial Statements, we repaid the Term Loan B loans in full in July 2023. As a result, we no longer have any loans and other financial instruments that are linked to LIBOR.
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, 2023, 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, 2023.
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During the quarter ended June 30, 2023, 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.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A discussion of our legal proceedings is contained in “Note 10 — Commitments and Contingencies — Legal Matters and Other” in Part I, Item 1: Financial Statements.
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, as supplemented by the risk factors discussed in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, 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 and such Quarterly Report on Form 10-Q. The risks described in our Annual Report and such Quarterly Report on Form 10-Q 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.
ITEM 5. OTHER INFORMATION
Our directors and officers (as defined in Rule 16a-1(f)) did not adopt or terminate any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements (as such terms are defined in Item 408(c) of Regulation S-K) during the three months ended June 30, 2023.
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ITEM 6. EXHIBITS

Exhibits |  | Description
10.1 |  | Second Amendment to First Lien Credit Agreement, dated as of May 26, 2023, by and among Golden Entertainment, Inc. (as the borrower), the subsidiaries of Golden Entertainment, Inc. party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A. (as administrative agent) (incorporated by reference to Exhibit 10.1 to Golden Entertainment, Inc.’s Form 8-K dated May 26, 2023 and filed on May 30, 2023).
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 |  | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Extension Calculation Definition Document
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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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 4, 2023 | /s/ BLAKE L. SARTINI
| Blake L. Sartini
| Chairman of the Board and Chief Executive Officer
| (Principal Executive Officer)
| /s/ CHARLES H. PROTELL
| Charles H. Protell
| President and Chief Financial Officer
| (Principal Financial Officer)
| /s/ THOMAS E. HAAS
| Thomas E. Haas
| Senior Vice President of Accounting
| (Principal Accounting Officer)

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