Strat Owner Golden Entertainment Goes Private, as Boring as It Sounds
The owner of Strat Las Vegas, Golden Entertainment, has been taken private and it’s as boring as it sounds.
The deal involved two parts: the real estate and the operating business. Also known as a “sale-leaseback.”
As part of the deal, Vici Properties bought the real estate underneath seven Golden Entertainment venues, including Strat. Golden Entertainment will continue to operate its casinos, but they’ll pay rent, like most casinos on The Strip.
Beyond the phallic Strat, Golden owns 73 locals casinos and taverns. We only really care about The Strat, though. And possibly Arizona Charlie’s Decatur and Arizona Charlie’s Boulder, but only if we’re very drunk.
Golden Entertainment (previously Golden Gaming) going private is mostly bookkeeping, and won’t really affect your Strat experience.
Why would a public company go private?
Golden, and its founder and CEO Blake Sartini, will now be free from quarterly earnings pressures, for starters. Sartini gets his mojo back.
Why would a company sell its land to Vici Properties?
Uh, money, hello.
The leaseback deal was worth $1.16 billion.
Another key element of the deal: Vici paid off Golden Entertainment’s $426 million in debt.
Things were not looking good at Golden Entertainment prior to this deal. This is a fresh start.
The only caveat?
These deals are awesome, but only if revenue goes up.
Vivi will get $87 million in annual rent from Golden Entertainment. That rent increases 2% a year. It’s a 30-year contract.
Basically, casinos don’t own physical assets anymore. They own their databases.
If business stalls or decreases, casinos are going to be in a pickle.
The good thing is that in Las Vegas, nothing bad ever happens, so everyone’s going to live happily ever after!
Despite the headlines about Strat going private, the uncomfortable truth is the struggle at Strat endures.
Golden has given lip service to things like F1 and its adjoining attraction, Atomic Golf. But that’s been what industry experts refer to as a “steaming pile of hooey.”
Revenue has declined in recent years, and the Vici deal was desperation, a bailout, plain and simple.
According to Golden’s own SEC filing, “Full-year revenue fell from about $1.1 billion in 2023 to roughly $667 million in 2024, while adjusted EBITDA dropped from $222.5 million to $155.4 million.”
This is why you take a company private! So people can’t be all up in your business when things are tanking.
Strat’s location is its biggest challenge. It’s technically downtown, but sits a few blocks away from The Strip. It’s surrounded by blight, making it isolated and not particularly walkable from other casinos.
People visit the Strat for its architecture, its thrill rides and Top of the World restaurant, but they don’t stay to gamble. This problem isn’t new. It has plagued Strat since it opened in 1996.
As far as we can tell, Blake Sartini didn’t reap a giant windfall from taking Golden private. He has about a 35% stake in the company, which is worth hundreds of millions on paper. It sounds like Sartini rolled his ownership into the new private company rather than cashing out.
As a basis of comparison, former Harrah’s/Caesars CEO Gary Loveman received $94 million in one day when then-Harrah’s Entertainment was privatized in a deal with Apollo and TPG in 2008.
We trust we have covered any questions you have about the privatization of Golden Entertainment and its sale-leaseback deal.
You still have to pay for parking at Strat, an otherwise perfectly fine Las Vegas casino resort.
And if you participate in those rides on top of The Strat, you have lost your gawtdamned mind.
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