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Segment Information
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
As of September 30, 2023, the Company conducted its business through four reportable segments: Nevada Casino Resorts, Nevada Locals Casinos, 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, 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 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 in third party non-casino locations, such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores, across Nevada 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 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 — Divestitures and Assets Held for Sale,” on March 3, 2023, the Company entered into definitive agreements to sell its distributed gaming operations in Nevada and Montana and classified the assets related to its Distributed Gaming segment as held for sale as of March 31, 2023. On September 13, 2023, the Company completed the sale of the distributed gaming operations in Montana for aggregate cash consideration of $109 million plus working capital adjustment and purchased cash at closing. The Company’s proposed sale of its distributed gaming operations in Nevada to J&J Gaming remains pending and is expected to close during the fourth quarter of 2023, subject to satisfaction or waiver of customary closing conditions, including receipt of gaming regulatory approvals.
As discussed in “Note 1 — Nature of Business and Basis of Presentation” and “Note 2 — Divestitures and Assets Held for Sale,” on July 25, 2023, the Company completed the sale of Rocky Gap for aggregate cash consideration of $260 million, subject to adjustments. Prior to its sale, the operations of Rocky Gap were presented in the Company’s Maryland Casino Resort reportable segment.
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 and businesses, 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 September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Revenues
Nevada Casino Resorts
Gaming$40,289 $42,812 $121,207 $133,156 
Food and beverage24,782 21,537 73,486 66,044 
Rooms28,394 26,068 80,957 76,670 
Other12,059 8,439 32,612 26,919 
Nevada Casino Resorts revenues$105,524 $98,856 $308,262 $302,789 
Nevada Locals Casinos
Gaming$27,254 $27,457 $85,699 $85,886 
Food and beverage6,482 6,208 19,737 18,688 
Rooms2,395 2,325 7,633 7,098 
Other1,770 1,745 5,899 5,737 
Nevada Locals Casinos revenues$37,901 $37,735 $118,968 $117,409 
Maryland Casino Resort (1)
Gaming$4,224 $16,027 $33,159 $45,940 
Food and beverage667 2,463 4,881 6,333 
Rooms628 2,372 4,322 5,917 
Other204 762 1,094 1,872 
Maryland Casino Resort revenues$5,723 $21,624 $43,456 $60,062 
Nevada Taverns
Gaming$12,985 $12,589 $39,197 $41,200 
Food and beverage12,387 12,657 38,654 38,340 
Other1,168 1,237 3,601 3,541 
Nevada Taverns revenue$26,540 $26,483 $81,452 $83,081 
Distributed Gaming (2)
Gaming$80,425 $89,535 $256,357 $269,704 
Food and beverage189 170 554 537 
Other1,258 1,458 4,446 4,915 
Distributed Gaming revenues$81,872 $91,163 $261,357 $275,156 
Corporate and other166 3,132 8,963 3,512 
Total revenues$257,726 $278,993 $822,458 $842,009 
(1) Comprised of the operations of Rocky Gap, which was sold on July 25, 2023.
(2) Comprised of distributed gaming operations in Nevada and Montana. On September 13, 2023, the Company completed the sale of its distributed gaming operations in Montana. The Company’s proposed sale of its distributed gaming operations in Nevada remains pending and is expected to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary closing conditions, including receipt of gaming approvals.
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Adjusted EBITDA
Nevada Casino Resorts$30,837 $30,122 $90,592 $102,589 
Nevada Locals Casinos16,878 16,818 56,509 56,651 
Maryland Casino Resort (1)
1,626 7,446 12,652 20,260 
Nevada Taverns7,519 8,306 24,507 29,738 
Distributed Gaming (2)
8,441 10,539 28,175 33,354 
Corporate and other(12,116)(12,176)(38,673)(39,196)
Total Adjusted EBITDA53,185 61,055 173,762 203,396 
Adjustments
Depreciation and amortization(22,213)(24,286)(67,175)(75,894)
Non-cash lease expense10 298 (14)(113)
Share-based compensation(3,444)(3,286)(10,625)(10,269)
Gain (loss) on disposal of assets5 (266)125 (935)
Gain on sale of business305,829 — 305,829 — 
Loss on debt extinguishment and modification— (158)(405)(1,412)
Preopening and related expenses (3)
(50)(2)(575)(61)
Severance expenses(128)(58)(128)(295)
Other, net(9,485)1,597 (9,102)(3,300)
Interest expense, net(15,306)(15,709)(52,345)(45,565)
Income tax (provision) benefit(67,187)(5,182)(74,219)5,737 
Net Income$241,216 $14,003 $265,128 $71,289 
(1) Comprised of the operations of Rocky Gap, which was sold on July 25, 2023.
(2) Comprised of distributed gaming operations in Nevada and Montana. On September 13, 2023, the Company completed the sale of its distributed gaming operations in Montana. The Company’s proposed sale of its distributed gaming operations in Nevada remains pending and is expected to close during the fourth quarter of 2023, subject to the satisfaction or waiver of customary closing conditions, including receipt of gaming approvals.
(3) 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 September 30, 2023$781,874 $159,378 $— $132,232 $204,209 $266,970 $1,544,663 
Balance at December 31, 2022$784,242 $164,580 $39,562 $145,065 $258,260 $116,961 $1,508,670