Golden Entertainment takes next step toward going private

Golden Entertainment Inc., the parent company of the Strat, Arizona Charlies and the PT’s chain of neighborhood pubs, is one step closer to transitioning from a public company to private operation Wednesday following a unanimous vote of the Nevada Gaming Control Board.

Board members recommended a series of suitability, transfer and licensing measures for Golden and top executive Blake Sartini and the deregistration of Golden as a publicly traded corporation following a 70-minute hearing.

The Nevada Gaming Commission will consider final approval at its April 23 meeting.

Meeting in Carson City, Sartini said the future focus of Golden is expected to continue in Southern Nevada.

Focus on Nevada

“We intentionally reset in Southern Nevada,” Sartini said. “I’m a big proponent of being able to drive and visit, touch our properties on a daily basis. And when we were spread out from Maryland to Montana to Northern Nevada and Southern Nevada, that’s taxing on a management team. It’s uncomfortable for me being an operator, which is where I initially started, not being able to be on those properties every day and being able to drive your car from your home to your property, I think is a huge advantage.”

Sartini said he would “never say never” to expanding outside Nevada’s borders “but I think we are pretty focused on Southern Nevada in particular and Nevada as to where we would continue to plant our flag in terms of growth.”

Golden partners with Vici Properties Inc., a real estate investment trust that serves as a landlord on the land beneath the properties and collects rent through a master agreement. Sartini explained that the partnership agreement enables Golden to keep rent payments constant.

Board member George Assad asked Sartini to assess the current locals and tourism market and give his view on why visitation numbers are down while gross gaming revenue is up.

“There is a dynamic occurring, which you see the numbers publicly now, that fewer people are coming to Las Vegas but spending more,” he said. “There’s a bit of a disconnect there. And I think maybe the expectation is when the Strip gets a cough, the local markets get a cold.

“I think the local market, and I’m speaking particularly right now in Clark County that I’m most familiar with, is Clark County is 3 million-plus people now. It’s a very diversified, thriving economy with massive amounts of construction, new residents moving, commercial and retail business being built up all the time.”

Local market resilient

He views the local market as resilient and no longer as reliant on the Strip as it once was.

“I think there are some remnants of what’s occurring on the Strip that do bleed over into the locals here and there,” he said. “But generally speaking, I would say the local economy is not only stable, but I might dare say consistent to strong, given what’s going on in the rest of the gaming community.”

Assad said he was happy that Golden is going private and it’ll give the company better opportunities over time.

“As far as you wanting to go private, I don’t blame you,” Assad said. “I think it’s a great idea. You don’t have to deal with 10Ks, quarterly reports, Wall Street breathing down your neck, looking for prognosis in terms of which type of growth and numbers you’re going to be projecting forward. It’s just basically taking the yoke around your neck and getting rid of it.”