State gaming regulators are expected Thursday to approve two requests by the operators of Rocky Gap Casino in western Maryland to merge with a Las Vegas company and add more than four dozen slot machines to the 2-year-old facility.
Both the merger between Lakes Entertainment, which operates Rocky Gap, and Golden Gaming, and the request for 54 additional slot machines has the support of staff at the Maryland State Lottery and Gaming Control Commission.
The commission is required to sign off on the proposed $128 million merger which will result in the creation of a new company called Golden Entertainment. The largest single shareholder of the new company will be the Blake L. Sartini and Delise F. Sartini Family Trust, which will hold 37.5 percent of the new company, according to a report compiled by state gaming analysts.
Blake L. Sartini will become president of and chairman of the board of Golden Entertainment.
The balance of the shares will be held by shareholders of Lakes Entertainment.
Golden Gaming currently operates three casinos — the Golden Pahrump, Gold Town Pahrump and the Lakeside Casino and RV Park. All three are located in Pahrump, Nev., an unincorporated town of more than 36,400 people about 63 miles west of Las Vegas. The company also operates 48 taverns in Las Vegas, each featuring about 15 slot machines, and a company that installs, operates and services gaming machines under lease agreements with privately-owned taverns, convenience stores, supermarkets and pharmacies in Nevada, according to the report.
Over the past four years, the company has struggled to reach profitability. The biggest drag on Golden Entertainment’s finances is “substantial debt at high interest rates” resulting in annual interest totaling $20 million annually, according to the report.
Gaming commission staff notes that debt restructuring coupled with the purchase of Lakes Entertainment, which has “significant amounts of cash and other liquid assets and are not highly leveraged,” will put the new company on better financial footing.
Overall, state gaming analysts reported that the Las Vegas company was improving and there was “no indication that Golden Gaming is experiencing any overwhelming financial difficulty.”
The casino will also seek state approval to add 54 slot machines to the 558 machines already located at the facility effective July 1.
The request comes even as Hollywood Casino in Perryville, Horseshoe Casino in Baltimore and Maryland Live Casino in Hanover have each reduced the number of slot machines in their casinos. All three opted to eliminate under-performing machines and replace them with table games that are in higher demand, but pay lower percentages of revenue to the state.
Rocky Gap’s plan is to move 24 of the machines onto the existing gaming floor. The additional 30 machines would be located in a new semi-enclosed outdoor gaming area that could be used by gamblers who also smoke. The casino plans to install a pressurized HVAC system that will force smoke away from the casino while also keeping out the inclement weather, according to plans filed with the commission.
Staff for the commission recommended that the gaming commission approve the plans.
The western Maryland venue started with 558 machines when it was awarded a license in 2013. The venue added 19 more in a year later.
The license agreement allows the facility to operate as many as 850 machines as long as they are all in operation by Jan. 31, 2018.