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Segment Information
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Information 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
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:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2023202220232022
Revenues
Nevada Casino Resorts
Gaming$38,625 $46,114 $80,918 $90,344 
Food and beverage24,473 23,123 48,704 44,507 
Rooms26,353 28,573 52,563 50,602 
Other13,111 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 beverage6,564 6,301 13,255 12,480 
Rooms2,416 2,529 5,238 4,773 
Other2,053 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 beverage2,348 2,222 4,214 3,870 
Rooms2,149 2,072 3,694 3,545 
Other687 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 beverage12,962 12,630 26,267 25,683 
Other1,170 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 beverage187 175 365 367 
Other1,571 1,278 3,188 3,457 
Distributed Gaming revenues$89,084 $93,225 $179,485 $183,993 
Corporate and other8,282 174 8,797 380 
Total revenues$286,681 $289,372 $564,732 $563,016 
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2023202220232022
Adjusted EBITDA
Nevada Casino Resorts$28,044 $38,892 $59,755 $72,467 
Nevada Locals Casinos19,471 19,795 39,631 39,833 
Maryland Casino Resort5,898 7,242 11,026 12,814 
Nevada Taverns8,450 10,654 16,988 21,430 
Distributed Gaming9,950 11,540 19,734 22,817 
Corporate and other(13,403)(13,107)(26,557)(27,020)
Total Adjusted EBITDA58,410 75,016 120,577 142,341 
Adjustments
Depreciation and amortization(21,454)(25,332)(44,962)(51,608)
Non-cash lease expense9 (230)(24)(411)
Share-based compensation(3,288)(3,311)(7,181)(6,983)
Gain (loss) on disposal of assets34 (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, net2,168 (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 ResortsNevada Locals CasinosMaryland Casino ResortNevada TavernsDistributed GamingCorporate and OtherConsolidated
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