Golden Entertainment Could Use Route Sale Cash to Boost Pahrump Casinos
Posted on: December 26, 2023, 05:55h.
Last updated on: December 26, 2023, 05:55h.
In March of this year, Golden Entertainment (NASDAQ: GDEN) announced the sale of its distributed gaming operations in Montana and Nevada to privately held J&J Ventures Gaming.
That transaction, which was recently approved by Nevada gaming regulators, garnered a price tag of $322.5 million, plus another $39 million due upon closing. Speculation has surfaced that the Strat operator could use some of those proceeds to enhance its casino hotels in Pahrump, Nevada.
Blake Sartini II, executive vice president of operations for Golden, told the Nevada Gaming Commission (NGC) that capital derived from the sales of the Nevada and Montana route businesses could be directed to improving the operator’s trio of venues in Pahrump. He’s the son of Golden CEO Blake Sartini.
In Pahrump, which is located about 58 miles from the Las Vegas Strip, Golden owns and operates the Gold Town Casino, Lakeside Hotel & Casino and Pahrump Nugget Hotel & Casino. Las Vegas-based Golden doesn’t breakout property-level performance of its Pahrump venues in its quarterly financial updates. In the third quarter, that trio venues and two Arizona Charlie’s casinos in the Las Vegas Valley combined to generate $16.87 million in revenue.
Golden Entertainment Already Improving Pahrump Casinos
Even before the sale of the distributed gaming unit was approved by Nevada regulators, Golden was making moves to improve some of its Pahrump venues.
For example, the operator added several new dining options at the Gold Town Casino earlier this year while the Pahrump Nugget recently gained a Jimmy John’s sandwich shop. The Gold Town Casino, Lakeside Hotel & Casino and Pahrump Nugget Hotel & Casino are three of a handful of traditional casinos found in the unincoroporated town in Nye County.
Pahrump, which has a population of 38,390 and is situated on the Nevada/California border, is home to a portion of Death Valley National Park and Spring Mountains, Mt. Charleston — the fifth-highest elevation in Nevada. In addition to gaming venues, the town is home to several brothels where prostitution is legal.
Beyond Pahrump, Golden Has Other Uses for Cash
Assuming a final sale price of $361.5 million from the distributed gaming business, it is unlikely Golden Entertainment will use all of that cash on improving the three Pahrump casinos.
Executives from the company told Nevada regulators that some of the cash could be directed to enhancing the Strat, the aforementioned Arizona Charlies’ casinos as well as the operator’s Laughlin casino resorts — the Aquarius and the Edgewater.
Though not specifically mentioned to regulators, Golden could also some of the cash to fund shareholder rewards, something it did earlier this year when it announced a special dividend and an addition to a previously existing share repurchase scheme. In part, those efforts were funded by capital derived from the sale of a casino hotel in Maryland previously owned and operated by Golden.
Source: casino.org
