Lakes Entertainment shareholders approved the company’s merger with Las Vegas-based tavern and slot machine route operator Golden Gaming during a vote on June 17, the company said in a securities filing.
The transaction will create a new publicly traded company, Golden Entertainment. The Sartini family owns Golden Gaming, which is Nevada’s largest slot machine route company. The company also owns the Pahrump Nugget Hotel and Casino, Gold Town Casino and Lakeside Casino &RV Park, which account for more than 70 percent of Nye County gaming revenue.
Nevada gaming regulators are expected to consider the merger in July.
The $128 million deal also requires approval by regulators in Montana, where Sartini Gaming is licensed to operate a slot machine route. Maryland gaming regulators approved the merger last week. Lakes Entertainment owns the Rocky Gap Casino Resort near Cumberland.
The companies have said they hope to close the deal in the fall.
Golden Gaming CEO Blake Sartini and his family, which built the company in 2001 on the foundation of Southwest Services, will own 35.7 percent of the newly formed Golden Entertainment. Current shareholders in Lakes will get the remaining 64.3 percent of the business.
Lakes operates the Rocky Gap Casino Resort in Maryland. The transaction was valued at $9.57 per share on Jan. 26 — a market capitalization of more than $128.1 million.
The merger is expected to be completed by the end of the year and Golden Entertainment will be listed on Nasdaq. That transition into a publicly traded entity pulled the cover off Golden’s previously private financials.
On a conference call with analysts and investors in February, Sartini, who will become CEO and chairman of the new company, gave some color to the company’s status in Nevada.
Golden operates more than 7,600 slot machines in 650 locations statewide through its route business — more than double its nearest competitor. The company owns 48 taverns through five brands and the three Pahrump casinos.
“Collectively, Golden Gaming owns and operates nearly 8,700 gaming machines, has approximately 2,000 employees and is expected to generate nearly $300 million in net revenue and over $36 million of (cash flow) in 2015,” Sartini said in prepared remarks.
The merger is about the future. Sartini said the company will seek additional regional casino opportunities and will look to extend route operations outside of Nevada. He sees opportunity in 70,000 gaming machines and video lottery terminals in states such as Illinois, Louisiana, Montana, Oregon, West Virginia and South Dakota.
The new access to the public markets also means an additional vehicle for financing.