(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in its ~~Charter)~~charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August ~~6, 2019,~~3, 2020, the registrant had ~~27,802,033~~28,124,174 shares of common stock, $0.01 par value per share, outstanding.

	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
	(unaudited)						(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	116,689		$	116,071		$	86,159		$	111,678
Accounts receivable, net of allowance of $670 and $503		15,348			12,779
Accounts receivable, net of allowance of $1,068 and $599, respectively								13,763			16,247
Prepaid expenses		21,309			17,722			15,238			19,879
Inventories		8,557			6,759			6,649			8,237
Other		3,580			3,428			5,435			4,388
Total current assets		165,483			156,759			127,244			160,429
Property and equipment, net		1,030,148			894,953			1,018,297			1,046,536
Operating lease right-of-use assets, net		158,085			—			188,041			203,531
Goodwill		182,870			158,134			159,053			184,325
Intangible assets, net		146,806			141,128			121,260			135,151
Other assets		11,278			15,595			10,041			10,945
Total assets	$	1,694,670		$	1,366,569		$	1,623,936		$	1,740,917
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt and finance leases	$	1,875		$	10,480		$	7,173		$	8,497
Current portion of operating leases		29,351			—			33,703			33,883
Accounts payable		30,581			27,812			39,936			30,146
Accrued taxes, other than income taxes		8,066			6,540			2,429			7,495
Accrued payroll and related		24,545			19,780			19,718			27,221
Accrued liabilities		28,360			18,848			25,465			25,522
Total current liabilities		122,778			83,460			128,424			132,764
Long-term debt, net and finance leases		1,123,439			960,563			1,140,086			1,130,374
Non-current operating leases		143,426			—			169,246			184,301
Deferred income taxes		598			2,593			1,717			1,088
Other long-term obligations		1,340			4,801			2,423			2,646
Total liabilities		1,391,581			1,051,417			1,441,896			1,451,173
Commitments and contingencies (Note 10)
Shareholders' equity
Common stock, $.01 par value; authorized 100,000 shares; 27,800 and 26,779 common shares issued and outstanding, respectively		278			268
Shareholders’ equity
Common stock, $.01 par value; authorized 100,000 shares; 28,124 and 27,879 common shares issued and outstanding, respectively								281			279
Additional paid-in capital		457,870			435,245			465,123			461,643
Accumulated deficit		(155,059	)		(120,361	)		(283,364	)		(172,178	)
Total shareholders' equity		303,089			315,152
Total liabilities and shareholders' equity	$	1,694,670		$	1,366,569
Total shareholders’ equity								182,040			289,744
Total liabilities and shareholders’ equity							$	1,623,936		$	1,740,917

The accompanying condensed notes are an integral part of these consolidated financial statements.

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Revenues
Gaming	$	146,246		$	132,546		$	290,038		$	266,409		$	56,677		$	146,246		$	183,892		$	290,038
Food and beverage		52,104			43,422			101,862			86,025			10,168			52,104			51,715			101,862
Rooms		35,514			27,660			66,801			53,787			5,987			35,514			31,592			66,801
Other		14,206			12,915			29,261			25,111			3,142			14,206			15,932			29,261
Total revenues		248,070			216,543			487,962			431,332			75,974			248,070			283,131			487,962
Expenses
Gaming		84,007			78,510			166,355			156,198			35,231			84,007			113,343			166,355
Food and beverage		40,216			35,351			78,430			68,943			9,739			40,216			44,626			78,430
Rooms		16,008			12,291			30,409			23,856			4,586			16,008			18,541			30,409
Other operating		5,160			3,655			11,594			7,651			1,404			5,160			6,531			11,594
Selling, general and administrative		56,235			43,615			113,182			87,821			32,548			56,235			80,158			113,182
Depreciation and amortization		29,976			22,854			57,241			48,091			31,930			29,976			63,086			57,241
Impairment of goodwill and intangible assets														21,411			—			27,872			—
Acquisition and severance expenses		1,123			565			2,667			1,864			367			1,123			3,343			2,667
Loss on disposal of assets														702			585			1,291			832
Preopening expenses		738			389			1,516			837			9			738			114			1,516
Loss on disposal of assets		585			218			832			295
Total expenses		234,048			197,448			462,226			395,556			137,927			234,048			358,905			462,226
Operating income		14,022			19,095			25,736			35,776
Non-operating income (expense)
Operating (loss) income														(61,953	)		14,022			(75,774	)		25,736
Non-operating expense
Interest expense, net		(19,135	)		(16,066	)		(37,270	)		(30,809	)		(16,407	)		(19,135	)		(35,153	)		(37,270	)
Loss on extinguishment and modification of debt		(9,150	)		—			(9,150	)		—			—			(9,150	)		—			(9,150	)
Change in fair value of derivative		(1,489	)		1,462			(3,737	)		4,673			—			(1,489	)		(1	)		(3,737	)
Total non-operating expense, net		(29,774	)		(14,604	)		(50,157	)		(26,136	)		(16,407	)		(29,774	)		(35,154	)		(50,157	)
Income (loss) before income tax benefit		(15,752	)		4,491			(24,421	)		9,640
Income tax benefit (provision)		1,344			(897	)		1,995			(2,116	)
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524
Loss before income tax (provision) benefit														(78,360	)		(15,752	)		(110,928	)		(24,421	)
Income tax (provision) benefit														(206	)		1,344			(258	)		1,995
Net loss													$	(78,566	)	$	(14,408	)	$	(111,186	)	$	(22,426	)

Weighted-average common shares outstanding
Basic		27,762			27,406			27,667			27,278			28,072			27,762			28,001			27,667
Dilutive impact of stock options and restricted stock units		—			2,258			—			2,250			—			—			—			—
Diluted		27,762			29,664			27,667			29,528			28,072			27,762			28,001			27,667
Net income (loss) per share
Net loss per share
Basic	$	(0.52	)	$	0.13		$	(0.81	)	$	0.28		$	(2.80	)	$	(0.52	)	$	(3.97	)	$	(0.81	)
Diluted	$	(0.52	)	$	0.12		$	(0.81	)	$	0.25		$	(2.80	)	$	(0.52	)	$	(3.97	)	$	(0.81	)

The accompanying condensed notes are an integral part of these consolidated financial statements.

Additional

Total

Common stock

Paid-In

Accumulated

Shareholders'

Shares

Amount

Capital

Deficit

Equity

Balances, March 31, 2019

27,743

$
277

$
455,696

$
(140,651
)

$
315,322

Cumulative effect, change in accounting
   for leases, net of tax

—

—

—

—

—

Issuance of common stock related to business
   combination

—

—

—

—

—

Proceeds from issuance of stock on
   options exercised

57

1

55

—

56

Share-based compensation

—

—

2,122

—

2,122

Tax benefit from share-based
   compensation

—

—

(3
)

—

(3
)
Net loss

—

—

—

(14,408
)

(14,408
)
Balances, June 30, 2019

27,800

$
278

$
457,870

$
(155,059
)

$
303,089

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders’
	Shares		Amount		Capital			Deficit			Equity
Balance, January 1, 2019		26,779	$	268	$	435,245		$	(120,361	)	$	315,152
Cumulative effect, change in accounting for leases, net of tax		—		—		—			(12,272	)		(12,272	)
Issuance of stock on options exercised and restricted stock units vested		53		—		—			—			—
Share-based compensation		—		—		4,140			—			4,140
Share issuance related to business combination		911		9		16,599			—			16,608
Tax benefit from share-based compensation		—		—		(288	)		—			(288	)
Net loss		—		—		—			(8,018	)		(8,018	)
Balance, March 31, 2019		27,743	$	277	$	455,696		$	(140,651	)	$	315,322
Issuance of stock on options exercised and restricted stock units vested		57		1		55			—			56
Share-based compensation		—		—		2,122			—			2,122
Tax benefit from share-based compensation		—		—		(3	)		—			(3	)
Net loss		—		—		—			(14,408	)		(14,408	)
Balance, June 30, 2019		27,800	$	278	$	457,870		$	(155,059	)	$	303,089

Additional

Total

Common stock

Paid-In

Accumulated

Shareholders'

Shares

Amount

Capital

Deficit

Equity

Balances, December 31, 2017

26,413

$
264

$
399,510

$
(79,861
)

$
319,913

Proceeds from issuance of stock on
   options exercised

42

—

417

—

417

Share-based compensation

—

—

4,562

—

4,562

Issuance of common stock, net of
   offering costs

975

10

25,598

—

25,608

Tax benefit from share-based
   compensation

—

—

(1,237
)

—

(1,237
)
Net income

—

—

—

7,524

7,524

Balances, June 30, 2018

27,430

$
274

$
428,850

$
(72,337
)

$
356,787

					Additional						Total
	Common stock				Paid-In			Accumulated			Shareholders’
	Shares		Amount		Capital			Deficit			Equity
Balance, January 1, 2020		27,879	$	279	$	461,643		$	(172,178	)	$	289,744
Issuance of stock on options exercised and restricted stock units vested		172		2		—			—			2
Share-based compensation		—		—		2,153			—			2,153
Tax benefit from share-based compensation		—		—		(428	)		—			(428	)
Net loss		—		—		—			(32,620	)		(32,620	)
Balance, March 31, 2020		28,051	$	281	$	463,368		$	(204,798	)	$	258,851
Issuance of stock on options exercised and restricted stock units vested		73		—		—			—			—
Share-based compensation		—		—		1,755			—			1,755
Net loss		—		—		—			(78,566	)		(78,566	)
Balance, June 30, 2020		28,124	$	281	$	465,123		$	(283,364	)	$	182,040

The accompanying notes are an integral part of these consolidated financial statements.

GOLDEN ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2020			2019
Cash flows from operating activities
Net income	$	(22,426	)	$	7,524
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss							$	(111,186	)	$	(22,426	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		57,241			48,091			63,086			57,241
Impairment of goodwill and intangible assets								27,872			—
Share-based compensation								3,908			6,262
Amortization of debt issuance costs and discounts on debt		2,471			2,551			2,236			2,471
Share-based compensation		6,262			4,562
Loss on disposal of property and equipment		832			295
Loss on disposal of assets								1,291			832
Provision for bad debts								461			431
Loss on extinguishment of debt		9,150			—			—			9,150
Change in fair value of derivative		3,737			(4,673	)		1			3,737
Deferred income taxes		(1,995	)		107			629			(1,995	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(953	)		1,395			2,023			(1,384	)
Income taxes receivable		193			2,008			(370	)		193
Prepaid expenses		(943	)		2,547			4,614			(943	)
Inventories and other current assets		(1,203	)		(959	)		911			(1,203	)
Other assets								893			379
Accounts payable and other accrued expenses		8,715			(6,165	)		(1,790	)		8,715
Accrued taxes, other than income taxes		755			41			(5,066	)		755
Other		(467	)		(133	)
Net cash provided by operating activities		61,369			57,191
Other liabilities								32			(846	)
Net cash (used in) provided by operating activities								(10,455	)		61,369
Cash flows from investing activities
Purchase of property and equipment, net of change in construction payables		(53,221	)		(27,448	)		(22,224	)		(53,221	)
Acquisition of business, net of cash acquired		(148,952	)		—			—			(148,952	)
Proceeds from disposal of property and equipment		93			—			353			93
Other investing activities		(295	)		—			—			(295	)
Net cash used in investing activities		(202,375	)		(27,448	)		(21,871	)		(202,375	)
Cash flows from financing activities
Repayments of revolving credit facility		(145,000	)		—			(190,000	)		(145,000	)
Borrowings under revolving credit facility		145,000			—			200,000			145,000
Repayments of term loans		(220,000	)		(4,000	)
Repayments of term loan								—			(220,000	)
Proceeds from issuance of senior notes		375,000			—			—			375,000
Repayments of notes payable		(881	)		(217	)		(1,842	)		(881	)
Principal payments under finance leases		(829	)		(468	)		(925	)		(829	)
Payments for debt issuance costs		(6,668	)		(95	)		—			(6,668	)
Debt extinguishment and modification costs		(4,763	)		—			—			(4,763	)
Proceeds from issuance of common stock, net of issuance costs		56			25,608
Tax withholding on share-based payments		(291	)		(820	)		(428	)		(291	)
Proceeds from exercise of common stock								2			56
Net cash provided by financing activities		141,624			20,008			6,807			141,624
Cash and cash equivalents
Change in cash and cash equivalents		618			49,751			(25,519	)		618
Balance, beginning of period		116,071			90,579			111,678			116,071
Balance, end of period	$	116,689		$	140,330		$	86,159		$	116,689

						Six Months Ended June 30,
						2020		2019
Supplemental cash flow disclosures
Cash paid for interest	$	28,752		$	29,455	$	26,346	$	28,752
Cash received for income taxes, net		(193	)		—		—		(193	)
Non-cash investing and financing activities
Payables incurred for capital expenditures	$	9,877		$	3,636	$	2,940	$	9,877
Assets acquired under finance lease obligations		3,352			62		—		3,352
Loss on extinguishment of debt		4,388			—		—		4,388
Impairment of right-of-use asset		12,272			—		—		12,272
Operating lease right-of-use assets obtained in exchange for lease obligations ⁽¹⁾							3,491		36,117
Common stock issued in connection with acquisition		16,608			—		—		16,608

The accompanying condensed notes are an integral part of these consolidated financial statements.

Golden Entertainment, Inc. and its wholly-owned subsidiaries ~~(collectively, the “Company”)~~ own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on resort casino operations and distributed gaming (including gaming in the Company’s branded taverns). Unless otherwise indicated, the terms “Golden” and the “Company,” refer to Golden Entertainment, Inc. together with its subsidiaries.

The Company conducts its business through ~~two~~2 reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the operation of ~~ten~~10 resort casino properties in Nevada and Maryland, comprising:

The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.

In December 2019, an outbreak of COVID-19 began in Wuhan, Hubei Province, China. The disease has since spread rapidly across the world, causing the World Health Organization to declare COVID-19 a pandemic on March 11, 2020. Since that time, people across the globe have been advised to avoid non-essential travel, and steps have been taken by governmental authorities, including in the States in which the Company ~~completed~~operates, to implement closures of non-essential operations to contain the ~~acquisition~~spread of ~~Edgewater~~the virus. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. Following emergency executive orders issued by the Governors of Nevada, Maryland, and Montana, in the week of March 16, 2020, all of the Company’s properties were temporarily closed to the public and the Company’s Distributed Gaming ~~LLC~~operations at third-party locations were suspended. The Company’s Distributed Gaming operations in Montana and Nevada resumed on May 4, 2020 and June 4, 2020, respectively, and the Company’s Casino operations in Nevada and Maryland resumed on June 4, 2020 and June 19, 2020, respectively. However, as a result of the impact of the COVID-19 pandemic, the operations of the Colorado Belle ~~Gaming, LLC, which own~~remained suspended as of June 30, 2020. While all of the ~~Edgewater and~~Company’s properties except for Colorado Belle had been re-opened as of June 30, 2020, the Company’s implementation of protocols intended to protect patrons and guests from potential COVID-19 exposure continues to limit the Company’s operations. These measures include enhanced sanitization, public gathering limitations of less than 50% of casino and tavern capacity, patron social distancing requirements, limitations on casino operations, which include disabling electronic gaming machines, and face mask and temperature check requirements for patrons. Certain amenities at the Company’s casinos may remain closed or operate in ~~Laughlin,~~a limited capacity, including restaurants, bars, and other food and beverage outlets, as well as table games, spas and pools. These measures limit the number of patrons that are able to attend these venues. Subsequent to fiscal quarter end, effective July 10, 2020, the Governor of the State of Nevada issued a new emergency executive order mandating the closure of all bars, pubs, taverns, breweries, distilleries and wineries in seven counties, including Clark County (the location of most of the Company’s branded taverns) (refer to “Note 13 — Subsequent Events”). The Company cannot predict when these restrictions on its operations will be changed or eliminated.

Temporary closures of the Company’s operations due to the COVID-19 pandemic resulted in lease concessions for certain of the Company’s taverns and route locations. Such concessions provided for deferral of rent payments with no substantive changes to the consideration due per the terms of the original contract and did not result in a substantial increase in the Company’s obligations under such leases. The Company elected to account for the deferred rent payments as ~~further described~~variable lease payments, which resulted in ~~Note 2,~~ ~~Acquisitions, below.~~an $8.8

million reduction in rent expense for the three and six months ended June 30, 2020. Such rent expense will be recorded in future periods as these deferred payments are paid to the Company’s lessors.

The disruptions arising from the COVID-19 pandemic had a significant adverse impact on the Company’s financial condition and results of operations for the three and six months ended June 30, 2020. The duration and intensity of this global health emergency and related disruptions is uncertain. The impact of COVID-19 on the Company’s consolidated results of operations, cash flows and financial condition in 2020 will be material, but cannot be reasonably estimated at this time, as it is unknown when the COVID-19 pandemic will end, when or how quickly the current travel restrictions and tavern closures will be modified or cease to be necessary, and how these uncertainties will impact the Company’s business and the willingness of customers to spend on travel and entertainment.

The impact of the COVID-19 pandemic on the Company’s operations qualified as a triggering event necessitating an evaluation of long-lived assets, goodwill, and indefinite-lived intangible assets for indicators of impairment as discussed in “Note 3 — Property and Equipment, Net” and “Note 4 — Goodwill and Intangible Assets, Net.”

On March 12, 2019, the Company’s Board of Directors authorized the repurchase of up to $25.0 million additional shares of common stock, which replaced the prior share repurchase program authorized in November 2018. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the Company’s finance agreements. There is no minimum number of shares that16, 2020, the Company ~~is required~~fully drew the available capacity of $200 million under its revolving credit facility (the “Revolving Credit Facility”) as a precautionary measure in order to ~~repurchase~~increase its cash position and preserve financial flexibility in light of uncertainty in the ~~repurchase program may be suspended or discontinued at any time without prior notice.~~

~~On April 25, 2019,~~global markets resulting from the COVID-19 pandemic. During the second quarter of 2020, the Company ~~issued $375~~repaid $190 million ~~in principal amount~~ of ~~7.625% Senior Notes due 2026 in~~its borrowings under the Revolving Credit Facility, and as of June 30, 2020, $190 million remained available to the Company for reborrowing. In addition, the Company has implemented various mitigating actions to preserve liquidity, including delaying material capital expenditures, reducing cash operating expenses and implementing a non-essential cost reduction program. To further enhance its liquidity position or to finance any future acquisition or other business investment initiatives, the Company may obtain additional financing, which could consist of debt, convertible debt or equity financing from public or private ~~placement to institutional buyers, as further described in Note 5,~~ ~~Long-Term Debt, below.~~credit and capital markets.

The unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) has been condensed and/or omitted. For further information, ~~please~~ refer to the audited consolidated financial statements of the Company for the year ended December 31, ~~2018~~2019 and the notes thereto included in the Company’s Annual Report on Form 10-K (the “Annual Report”) previously filed with the SEC. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which ~~include~~included only normal recurring adjustments, necessary to present fairly the Company’s results for the periods presented. Results for interim periods should not be considered indicative of the results to be expected for the full ~~year.~~year and should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. ~~Certain amounts~~

There have been no changes to the significant accounting policies disclosed in the consolidated financial statements for the previous year period have been reclassified to be consistent with current year presentation. These reclassifications had no effect on previously reported net income.

The Company is the lessee under non-cancelable real estate leases, equipment leases and space lease agreements. Beginning on January 1, 2019 (the date of the Company's adoption of Topic 842, as defined and discussed further in “~~Accounting Standards Issued and Adopted”, below),~~ ~~operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The~~ Company’s ~~lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of reasonably certain. For leases where the~~

Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. Additionally, for certain vehicle and equipment leases, a portfolio approach is utilized to effectively account for the operating lease ROU assets and liabilities.

As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is estimated based on the information available at the commencement date in determining the present value of lease payments. The implicit rate will be used when readily determinable. The operating lease ROU assets also includes any lease payments made and excludes lease incentives. The Company does not record an asset or liability for operating leases with a term of less than one year. Prior to the adoption of Topic 842 on January 1, 2019, the Company did not record an asset or liability for any of its operating leases.

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space within its resort casino properties. The lease arrangements generally include minimum base rent and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. Generally, the terms of the leases range between five and 10 years, with options to extend the leases. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and non-lease components for the purpose of measuring lease revenue. Revenue is recorded in other operating revenue on the consolidated statements of operations.Annual Report.

For all periods, basic net ~~income~~loss per share is calculated by dividing net ~~income~~loss by the weighted-average common shares outstanding. Diluted net ~~income~~loss per share in profitable periods reflects the effect of all potentially dilutive common shares outstanding by dividing net ~~income~~loss by the weighted-average of all common and potentially dilutive shares outstanding. Due to the net losses for the three and six months ended June 30, 2020 and 2019, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods. The amount of potential common share equivalents excluded were 345,655 and 758,984 for three and six months ended June 30, 2020, respectively, and 739,934 and 892,282 for the three and six months ended June 30, 2019, respectively.

Reclassifications were made to the Company’s consolidated financial statements for the three and six months ended June 30, 2019 to conform to the current period presentation, where applicable.

~~The Company adopted Accounting Standards Update (“ASU”) No. 2016-02,~~ ~~Leases~~ (“Topic 842”), as amended, as of January 1, 2019, and elected the option to apply the transition requirements in the new standard at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to retained earnings on January 1, 2019. As a result, the balance sheet presentation is not comparable to the prior period in this first year of adoption.

~~The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows the carry forward of the Company’s~~ ~~Leases – Topic 840~~ assessment regarding definition of a lease, lease classification, and initial direct costs. The Company also elected the short-term lease exception, which allows leases with a lease term of 12 months or less to be accounted for similar to existing operating leases. The Company elected not to separate non-lease components from lease components and, instead, to account for each separate lease component and the non-lease components associated with it as a single lease component, recognized on the balance sheet. The Company did not elect the use-of-hindsight, which requires an entity to use hindsight in determining the lease term and in assessing impairment of right-of-use assets, or the practical expedient pertaining to land easements, which is not applicable.

The standard did not materially impact the Company’s consolidated net earnings and had no impact on cash flows. The effect of adopting Topic 842 on the January 1, 2019 consolidated balance sheet is as follows:

In June ~~2018,~~2016, the Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) No. ~~2018-07,~~ ~~Compensation – Stock Compensation~~,2016-13, Financial Instruments - Credit Losses (Topic 326) (“Topic 326”). The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial

instruments, the Company is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which ~~expands previous guidance to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees.~~reflects losses that are probable. The Company adopted the standard as of January 1, ~~2019,~~2020, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“Topic 820”). The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the standard as of January 1, 2020, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The ASU is intended to eliminate potential diversity in practice in accounting for costs incurred to implement cloud computing arrangements that are service contracts by requiring customers in such arrangements to follow internal-use software guidance with respect to such costs, with any resulting deferred implementation costs recognized over the term of the contract in the same income statement line item as the fees associated with the hosting element of the arrangement. The Company adopted the standard as of January 1, 2020, and the adoption did not have a material impact on the Company’s financial statements and disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU is intended to simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of ~~Significant Accounting Policies, to~~applying Topic 740. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the ~~Company’s audited consolidated~~impact of adopting this ASU on its financial statements ~~for~~and disclosures; however, it does not expect the ~~year ended December 31, 2018 for a discussion of accounting standards issued but not yet adopted.~~ impact to be material.

No other recently issued accounting standards that are not yet effective have been identified that management believes are likely to have a material impact on the Company’s financial statements.

The Company had 0 material acquisitions for the three and six months ended June 30, 2020.

On January 14, 2019, the Company completed the acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC (the ~~“Acquired~~“Laughlin Entities”) from Marnell Gaming, LLC (“Marnell”) for $156.2 million in cash (after giving effect to the post-closing adjustment provisions in the purchase agreement) and the issuance of 911,002 shares of the Company’s common stock to certain assignees of Marnell (the ~~“Acquisition”~~“Laughlin Acquisition”). The results of operations of the ~~Acquired~~Laughlin Entities are included in the Company’s results subsequent to the acquisition date.

~~In connection with the Acquisition, the Company borrowed $145.0 million under its revolving credit facility.~~

The ~~Acquisition has been accounted for using the acquisition method~~determination of ~~accounting in accordance with Accounting Standards Codification 805,~~ ~~Business Combinations~~ ~~(“ASC 805”), which, among other things, establishes that equity issued to effect the acquisition be measured at the closing date of the transaction at the then-current market price. Accordingly,~~ the fair value of ~~the Company's common stock issued was based on the closing price of the Company's common stock on January 14, 2019 of $18.23.~~

The following is a summary of the components of the purchase price paid by the Company to Marnell in the Acquisition (after taking into account the adjustment to the cash portion of the purchase price pursuant to the post-closing adjustment provisions of the purchase agreement, as described above):

Under ASC 805, the purchase price of the acquisition is allocated to the identified tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date which are determined in accordance with the applicable accounting guidance for business combinations and with the services of third-party valuation consultants. The excess of the purchase price over the fair values is recorded as goodwill which is expected to be deductible for tax purposes.

~~During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to~~ the assets acquired and liabilities assumed ~~with a corresponding offset to goodwill.~~ ~~Balances subject to adjustment primarily include current assets, property~~(and the related determination of estimated lives of depreciable tangible and ~~equipment,~~identifiable intangible ~~assets, liabilities, as well as tax-related matters, including tax basis~~assets) was completed in the fourth quarter of ~~acquired assets and liabilities.~~2019.

~~The following table summarizes the preliminary allocation of the purchase price:~~

~~The following table summarizes the preliminary amounts assigned to property and equipment and estimated useful life by category:~~

~~The following table summarizes the preliminary values assigned to acquired intangible assets and estimated useful lives by category:~~

The following unaudited pro forma combined financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Acquisition had occurred on January 1, 2018, or what such results or financial condition will be for any future periods. The unaudited pro forma combined financial information is based on preliminary estimates and assumptions and on the information available at the time of the preparation thereof. These preliminary estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the Acquisition. The unaudited pro forma combined financial information does not reflect non-recurring charges that were incurred in connection with the Acquisition, nor any cost savings and synergies expected to result from the Acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the Acquisition.

The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of the Acquired Entities for the three and six months ended June 30, 2018, adjusted to give effect to the Acquisition, related transactions, and the adoption of ASC 606 for the Acquired Entities.

In connection with the Acquisition, the Company incurred approximately $0.9 million and $1.3 million of acquisition costs during the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2019, the Acquired Entities contributed revenue of approximately $25.3 million and $46.8 million, respectively. For the three and six months ended June 30, 2019, operating expenses related to the Acquired Entities were approximately $13.6 million and $25.0 million, respectively.

(In thousands)	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Land	$	125,240		$	121,081		$	125,240		$	125,240
Building and site improvements		858,855			723,354			922,625			880,662
Furniture and equipment		197,067			154,663			243,452			222,938
Construction in process		33,401			35,151			9,615			49,869
Property and equipment		1,214,563			1,034,249			1,300,932			1,278,709
Less: Accumulated depreciation		(184,415	)		(139,296	)
Accumulated depreciation								(282,635	)		(232,173	)
Property and equipment, net	$	1,030,148		$	894,953		$	1,018,297		$	1,046,536

Depreciation expense for property and equipment, including finance leases, was $26.3 million and $51.8 million for the three and six months ended June 30, 2020, and $24.3 million and ~~$18.5~~$45.9 million for the three and six months ended June 30, 2019, respectively.

The Company concluded that the impact of the current COVID-19 pandemic on its operations and financial results is an indicator that impairment may exist related to its long-lived assets. As a result, the Company revised its cash flow projections to reflect the current economic environment, including the uncertainty around the nature, timing and extent of elimination or change of the restrictions on its operations, and utilized such projections in performing an interim qualitative assessment of its property and equipment for potential impairment. The Company completed an undiscounted cash flow analysis for each of its properties based on these revised cash flow projections, and the cash flows were sufficient to recover the Company’s assets such that there was 0 impairment of the Company’s long-lived assets as of June 30, 2020.

To the extent the Company becomes aware of new facts and circumstances arising from the COVID-19 pandemic that impact its operations, the Company will revise its cash flow projections accordingly, as its estimates of future cash flows are highly dependent upon certain assumptions, including, but not limited to, the nature, timing, and extent of elimination or change of the restrictions on the Company’s operations and the extent and timing of the economic recovery globally, nationally, and specifically within the gaming industry. If such assumptions are not accurate, the Company may be required to record impairment charges in future periods, whether in connection with its regular review procedures, or earlier, if an indicator of an impairment is present prior to such evaluation.

The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the last quarter of the year, unless events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. Finite-lived intangible assets are evaluated for potential impairment whenever there is an indicator that the carrying value of an asset group may not be recoverable.

During the first quarter of 2020, the Company concluded that the COVID-19 pandemic had an adverse impact on its operations and financial results, particularly within the Company’s Casinos segment due to the mandatory property closures, which management considered an indicator of impairment, and necessitated a performance of interim qualitative and quantitative impairment tests. The Company’s interim assessment resulted in recognition of a non-cash impairment of its Casinos segment goodwill of $6.5 million.

Mandatory shut-down of the Company’s properties for a majority of the second quarter of 2020 resulted in deterioration of performance of the Company’s casino properties in particular, which required the Company to revise its cash flow projections to reflect the current economic environment, including the uncertainty surrounding the nature, timing, and extent of elimination or change of the restrictions on the Company’s operations. As a result of the impact of the COVID-19 pandemic, the operations of the Colorado Belle remained suspended as of June 30, 2020. The Company conducted an interim qualitative and quantitative assessment of its goodwill and intangible assets for potential impairment, which resulted in recognition of an additional non-cash impairment of the Company’s Casinos segment in the amount of $18.8 million for the three months ended June 30, ~~2019~~2020. The assessment also indicated that the carrying value of an indefinite-lived trade name for certain of the Company’s properties within the Casinos segment exceeded its fair value and ~~2018,~~resulted in recognition of a non-cash impairment charge of $2.6 million.

The estimated fair value of goodwill and indefinite-lived intangible assets for the first and second quarter was determined using discounted cash flow models which utilized Level 3 inputs as follows: discount rate of 12.0%; long-term revenue growth rate of 2.0% to 3.0%.

There was 0 impairment of the remaining goodwill or other intangible assets for the three and six months ended June 30, 2020.

	June 30, 2020
		Gross
	Useful Life	Carrying		Cumulative						Intangible
(In thousands)	(Years)	Value		Amortization			Impairment			Assets, Net
Indefinite-lived intangible assets
Trade names	Indefinite	$	53,690	$	—		$	(2,600	)	$	51,090
Gaming licenses	Indefinite		960		—			—			960
Other	Indefinite		185		—			—			185
			54,835		—			(2,600	)		52,235
Amortizing intangible assets
Customer relationships	4-16		81,104		(27,076	)		—			54,028
Player relationships	2-14		42,989		(33,628	)		—			9,361
Non-compete agreements	2-5		9,840		(6,426	)		—			3,414
Gaming license ⁽¹⁾	15		2,100		(999	)		—			1,101
In-place lease value	4		1,171		(784	)		—			387
Leasehold interest	4		570		(424	)		—			146
Other	4-25		1,769		(1,181	)		—			588
			139,543		(70,518	)		—			69,025
Balance, June 30, 2020		$	194,378	$	(70,518	)	$	(2,600	)	$	121,260

	December 31, 2019
		Gross
	Useful Life	Carrying		Cumulative			Intangible
(In thousands)	(Years)	Value		Amortization			Assets, Net
Indefinite-lived intangible assets
Trade names	Indefinite	$	53,690	$	—		$	53,690
Gaming licenses	Indefinite		960		—			960
Liquor Licenses	Indefinite		185		—			185
			54,835		—			54,835
Amortizing intangible assets
Customer relationships	4-16		81,105		(24,140	)		56,965
Player relationships	2-14		42,990		(26,649	)		16,341
Non-compete agreements	2-5		9,840		(5,467	)		4,373
Gaming license ⁽¹⁾	15		2,100		(929	)		1,171
In-place lease value	4		1,301		(724	)		577
Leasehold interest	4		570		(345	)		225
Other	4-25		1,814		(1,150	)		664
			139,720		(59,404	)		80,316
Balance, December 31, 2019		$	194,555	$	(59,404	)	$	135,151

Total amortization expense related to intangible assets was $5.6 million and $11.3 million for the three and six months ended June 30, 2020, respectively, and ~~$45.9~~$5.7 million and ~~$39.4~~$11.3 million for the three and six months ended June 30, 2019, respectively.

To the extent the Company becomes aware of new facts and ~~2018, respectively.~~circumstances arising from the COVID-19 pandemic that impact its operations, the Company will revise its cash flow projections accordingly, as its estimates of future cash flows are highly dependent upon certain assumptions, including, but not limited to, the nature, timing, and extent of elimination or change of the restrictions on the Company’s operations and the extent and timing of the economic recovery globally, nationally, and specifically within the gaming industry. If such assumptions are not accurate, the Company may be required to record impairment charges in future periods, whether in connection with its regular review procedures, or earlier, if an indicator of an impairment is present prior to such evaluation.

(In thousands)	June 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
Gaming liabilities	$	13,676	$	12,473	$	11,918	$	12,353
Interest		6,306		305		6,362		6,562
Other accrued liabilities						4,156		3,873
Deposits		3,589		2,652		3,029		2,734
Other accrued liabilities		4,789		3,418
Total accrued and other current liabilities	$	28,360	$	18,848
Total current accrued liabilities					$	25,465	$	25,522

In October 2017, the Company entered into a senior secured credit facility consisting of a $900 million senior secured first lien credit facility (consisting of an $800 million term loan (the “Term Loan”) and a $100 million ~~revolving credit facility)~~Revolving Credit Facility) with JPMorgan Chase Bank, N.A. (as administrative agent and collateral agent), the lenders party thereto and the other entities party thereto (the “Credit Facility”). The ~~revolving credit facility~~Revolving Credit Facility was subsequently increased from $100 million to $200 million in ~~2018.~~2018 increasing the total Credit Facility capacity to $1.0 billion.

As of June 30, ~~2019,~~2020, the Company had $772 million in principal amount of outstanding ~~term loan~~Term Loan borrowings under its Credit Facility, no letters of credit outstanding, and $10 million in principal amount of outstanding borrowings under the Revolving Credit Facility, ~~and the Company’s revolving credit facility was undrawn,~~ leaving borrowing availability under the ~~revolving credit facility~~Revolving Credit Facility as of June 30, ~~2019~~2020 of ~~$200 million.~~

~~As of June 30, 2019, the weighted-average effective interest rate on the Company’s outstanding borrowings under the Credit Facility was approximately 5.5%~~$190 million.

The ~~revolving credit facility~~Revolving Credit Facility matures on October 20, 2022, and the ~~term loan under the Credit Facility~~Term Loan matures on October 20, 2024. The ~~term loan under the Credit Facility~~Term Loan is repayable in 27 quarterly installments of $2 million each, which commenced in March 2018, followed by a final installment of $746 million at maturity.

The Company was in compliance with its financial covenants under the Credit Facility as of June 30, ~~2019.~~2020.

On April 15, 2019, the Company issued $375 million in principal amount of 7.625% Senior Notes due 2026 (“2026 Unsecured Notes”) in a private placement to institutional buyers at face value. The 2026 Unsecured Notes bear interest at 7.625%, payable semi-annually on April 15^th and October 15^th of each year.

In conjunction with the issuance of the 2026 Notes, the Company incurred approximately $6.7 million in debt financing costs and fees that have been deferred and are being amortized over the term of the 2026 Notes using theThe weighted-average effective interest ~~method.~~

~~The net proceeds of the 2026 Notes were used to (i) repay~~rate on the Company’s ~~$200 million second lien term loan~~ ~~(the “Second Lien Term Loan”), (ii) repay~~ outstanding borrowings ~~under the revolving credit facility, (iii) repay $18 million of the outstanding term loan indebtedness~~ under the Credit Facility and ~~(iv) pay accrued interest, fees~~the 2026 Unsecured Notes was approximately 5.37% and ~~expenses related~~5.74% for the three and six months ended June 30, 2020, respectively.

On March 12, 2019, the Company’s Board of Directors authorized the repurchase of up to ~~each~~$25.0 million additional shares of ~~the foregoing.~~

~~The 2026 Notes~~common stock. Share repurchases may be ~~redeemed,~~made from time to time in ~~whole~~open market transactions, block trades or in ~~part,~~private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the Company’s finance agreements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program

may be suspended or discontinued at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. Prior to April 15, 2022, the Company may redeem up to 40% of the 2026 Notes at a redemption price of 107.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. Prior to April 15, 2022, the Company may also redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and an Applicable Premium (as defined in the indenture governing the 2026 Notes (the “Indenture”)), if any, thereon to the redemption date.

Under the Indenture, the Company and its restricted subsidiaries are subject to certain limitations, including limitations on their respective ability to: incur additional debt. grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments. In addition, in the event of a change of control (as defined in the Indenture), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2026 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase.

In April 2019, the Company recognized a $5.5 million loss on extinguishment of debt and $3.7 million of expense related to modification of debt, related to the repayment of the Company’s Second Lien Term Loan and $18 million prepayment of the term loan under its Credit Facility.

without prior notice. As of June 30, ~~2019, a total of 1,359,129~~2020, the Company had 0t repurchased any shares ~~of the Company’s common stock remained available for grants of awards~~ under the ~~Golden Entertainment, Inc. 2015 Incentive Award Plan (the “2015 Plan”), which includes the annual increase in the number of shares available for grant on January 1,~~March 12, 2019 ~~of 1,119,924 shares.~~authorization.

	Stock Options					Stock Options
				Weighted-					Weighted-
				Average					Average
	Shares			Exercise Price		Shares			Exercise Price
Outstanding at January 1, 2019		3,424,755		$	11.49
Outstanding at January 1, 2020							3,126,521		$	11.61
Granted		—		$	—		—		$	—
Exercised		(52,390	)	$	9.06		(40,000	)	$	2.07
Cancelled		(21,875	)	$	11.41		(7,604	)	$	13.07
Outstanding at June 30, 2019		3,350,490		$	11.53
Exercisable at June 30, 2019		2,668,865		$	11.31
Expired							(176,660	)	$	24.11
Outstanding at June 30, 2020							2,902,257		$	10.98
Exercisable at June 30, 2020							2,724,687		$	10.84

Share-based compensation expense, net related to stock options was ~~$0.9~~$0.5 million and ~~$1.4~~$1.1 million for the three and six months ended June 30, ~~2019~~2020, respectively, and ~~2018, respectively,~~$0.9 million and $3.4 million ~~and $2.9 million~~ for the three and six months ended June 30, 2019, ~~and 2018,~~ respectively. The Company’s unrecognized share-based compensation expense related to stock options was ~~approximately $3.6~~$1.0 million as of June 30, ~~2019,~~2020, which is expected to be recognized over a weighted-average period of 0.6 years. The unrecognized share-based compensation expense related to stock options was $3.6 million as of June 30, 2019, which was expected to be recognized over a weighted-average period of 1.4 years.

The following table summarizes the Company’s activity related to time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”):

	RSUs					PSUs				RSUs					PSUs
				Weighted-				Weighted-					Weighted-					Weighted-
				Average Grant				Average Grant					Average Grant					Average Grant
	Shares			Date Fair Value		Shares⁽¹⁾		Date Fair Value		Shares			Date Fair Value		Shares ⁽¹⁾			Date Fair Value
Outstanding at January 1, 2019		232,299		$	29.10		171,748	$	28.41
Outstanding at January 1, 2020											661,258		$	16.44		376,328		$	20.65
Granted		461,606		$	14.06		204,580	$	14.13		624,415		$	9.65		404,880		$	8.86
Vested		(102,218	)	$	29.59		—	$	—		(252,268	)	$	17.06		(5,254	)	$	28.72
Cancelled		(12,827	)	$	26.80		—	$	—		(27,557	)	$	17.37		(32,235	)	$	28.72
Outstanding at June 30, 2019		578,860		$	17.07		376,328	$	20.65
Outstanding at June 30, 2020											1,005,848		$	12.04		743,719		$	13.82

Additionally, 108,957 of the PSUs included in the outstanding balance at January 1, 2020 represent PSUs granted in March 2018 (the “2018 PSU Awards”). During the first quarter of 2020, the Company’s financial results for the applicable performance goals were certified, with 70.4% of the “target” number of PSUs for the 2018 PSU Awards “earned” based on the Company’s performance, subject to one additional year of time-based vesting. Accordingly, the total number of PSUs granted in the 2018 PSU Awards that are eligible to vest was reduced by 32,235 shares from 108,957 shares to 76,722 shares.

Share-based compensation expense, net related to RSUs was ~~$1.0~~$1.1 million and ~~$1.0~~$2.1 million for the three ~~months ended June 30, 2019~~ and ~~2018, respectively, and $2.1 million and $1.1 million for the~~ six months ended June 30, ~~2019~~2020, respectively, and ~~2018,~~$1.0 million and $2.1 million for the three and six months ended June 30, 2019, respectively. Share-based compensation expense related to PSUs was $0.2 million and ~~$0.4~~$0.7 million for the three and six months ended June 30, ~~2019~~2020, respectively, and ~~2018, respectively,~~$0.2 million and $0.6 million ~~and $0.5 million~~ for the three and six months ended June 30, 2019, ~~and 2018,~~ respectively.

As of June 30, ~~2019,~~2020, there was ~~$7.4~~$9.8 million and ~~$4.0~~$5.1 million of unamortized share-based compensation expense related to RSUs and PSUs, respectively, which is expected to be recognized over a weighted-average period of 2.3 years for both RSUs and PSUs. As of June 30, 2019, there was $7.4 million and $4.0 million of unamortized share-based compensation expense related to RSUs and PSUs, respectively, which was expected to be recognized over a weighted-average period of 2.3 years and 2.4 years for RSUs and PSUs, respectively.

As of June 30, 2020, a total of 1,529,029 sharesof the Company’s common stock remained available for grants of awards under the Golden Entertainment, Inc. 2015 Incentive Award Plan, which includes the annual increase in the number of shares available for grant on January 1, 2020 of 1,066,403 shares.

The Company’s effective income tax rate was ~~8.2%~~0.3% and ~~22.0%~~0.2% for the three and six months ended June 30, 2020, respectively, and (8.5)% and (8.2)% for the three and six months ended June 30, 2019, ~~and 2018,~~ respectively.

Income tax ~~benefit~~expense of ~~$2.0~~$0.2 million and $0.3 million for the three and six months ended June 30, ~~2019~~2020, respectively, was primarily due to the change in valuation allowance against the Company’s deferred tax assets during the ~~first~~three and six months of ~~2019.~~2020. Income tax ~~expense~~benefit of ~~$2.1~~$1.3 million and $2.0 million for the three and six months ended June 30, ~~2018~~2019, respectively, was primarily due to ~~expenses~~ ~~that are not deductible for~~the change in valuation allowance against the Company’s deferred tax ~~purposes~~assets during the three and six months of 2019.

Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income, and the impact of tax planning strategies. The Company continues to evaluate its deferred tax asset valuation allowance on a quarterly basis.

As of June 30, 2020, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS.

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). ~~Management's~~Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

The carrying values of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the short duration of these financial instruments.

The following table summarizes the fair value measurement ~~information about~~of the Company’s long-term debt:

	June 30, 2019					June 30, 2020
	Carrying		Fair		Fair Value	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy	Amount		Value		Hierarchy
Term loan	$	772,000	$	770,070	Level 2
Senior notes due 2026		375,000		383,438	Level 2
Revolving Credit Facility						$	10,000	$	9,100	Level 2
Term Loan							772,000		702,520	Level 2
2026 Unsecured Notes							375,000		347,100	Level 2
Finance lease liabilities		7,086		7,086	Level 3		11,267		11,267	Level 3
Notes payable		231		231	Level 3		3,717		3,717	Level 3
Total debt	$	1,154,317	$	1,160,825		$	1,171,984	$	1,073,704

	December 31, 2018					December 31, 2019
	Carrying		Fair		Fair Value	Carrying		Fair		Fair Value
(In thousands)	Amount		Value		Hierarchy	Amount		Value		Hierarchy
Term loan	$	992,000	$	952,300	Level 2
Term Loan						$	772,000	$	776,806	Level 2
2026 Unsecured Notes							375,000		401,250	Level 2
Finance lease liabilities		7,127		7,127	Level 3		12,463		12,463	Level 3
Notes payable		1,111		1,111	Level 3		6,369		6,369	Level 3
Total debt	$	1,000,238	$	960,538		$	1,165,832	$	1,196,888

The estimated fair value of the Company’s ~~term loan debt~~Term Loan, Revolving Credit Facility and 2026 Unsecured Notes is based on a relative value analysis performed as of June 30, ~~2019~~2020 and December 31, ~~2018.~~2019. The finance lease liabilities and ~~note~~notes payable ~~debt~~ are fixed-rate debt, are not traded and do not have observable market inputs, therefore, the fair value is estimated to be equal to the carrying value.

As of June 30, ~~2019,~~2020, the Company had an interest rate cap agreement that was outstanding with a notional amount of $650 million, which expires on December 31, 2020. Using Level 2 inputs, the Company adjusts the carrying value of the interest rate cap agreement to estimated fair value quarterly based upon observable market-based inputs that reflect the present values of the difference between estimated future fixed rate payments and future variable receipts. The fair value of the Company’s interest rate cap agreement was ~~$0.5 million and $5.0 million~~immaterial as of June 30, ~~2019~~2020 and December 31, ~~2018, respectively.~~2019. As the Company elected to not apply hedge accounting, the change in fair value of its interest rate cap agreement was recorded in the consolidated statement of operations.

~~The Company has operating and finance leases for offices, taverns, land, vehicles, slot machines, and equipment.~~ In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slots at business locations, which are recorded in gaming expenses. The leases, excluding land, have remaining lease terms of 1 year to 28 years, some of which include options to extend the leases for an additional 5 to 15 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days’ to 1 year’s notice. The Company leases slot machines from gaming equipment manufacturers under short-term agreements. Most of the slot machine leases have variable rent structures, with amounts determined based on the performance of those machines. Certain others are short-term in nature, with fixed payment amounts. The Company has an operating ground lease with the Maryland Department of Natural Resources for approximately 270 acres in the Rocky Gap State Park on which Rocky Gap is situated. The Company leases approximately 20 acres of land in Laughlin, Nevada for the Laughlin Event Center and four parcels of land in Pahrump, Nevada on which the Gold Town Casino is located.

The Company leases approximately 4.5 acres of undeveloped land in Carson City. Upon the adoption of Topic 842, the Company wrote off the associated ROU asset for this land lease of $9 million to its beginning balance of retained earnings as of January 1, 2019. The Company is also lessee for nine taverns and locations subject to space lease agreements that it does not plan to develop, operate, or sub-lease. The Company wrote off the associated ROU asset for these eleven leases of $3 million to its beginning balance of retained earnings as of January 1, 2019.

~~The Company leases one of its tavern locations and its office headquarters building from a related party. See Note 12,~~ ~~Related Party Transactions,~~ ~~for more detail.~~

The current and long-term obligations under finance leases are included in “current portion of long-term debt, net and finance leases” and “long-term debt, net and finance leases”, respectively. The majority of the finance leases relate to vehicles used within the Company’s Distributed Gaming business and equipment for the Company’s casinos.

~~As of June 30, 2019, the Company does not have any leases that have not yet commenced but that create significant rights and obligations.~~

For the three months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $10.0 million, $0.4 million and $3.8 million for space lease agreements, related party leases and other operating leases, respectively. For the six months ended June 30, 2018, operating lease rental expense, calculated on a straight-line basis, was $19.4 million, $0.8 million, and $7.4 million for space lease agreements, related party leases and other operating leases, respectively. The Company recorded rental revenue of $1.9 million and $3.6 million for the three and six months ended June 30, 2018, respectively.

~~In addition to the space lease agreements described above in Note 9,~~ ~~Leases, the~~The Company ~~also~~ enters into slot placement contracts in the form of participation and revenue share agreements. Under participation agreements, the business location holds the applicable gaming license and retains a percentage of the gaming revenue that it generates from the Company’s slots. Under revenue share agreements, the Company pays the business location a percentage of the gaming revenue generated from the Company’s slots placed at the location, rather than a fixed monthly rental fee. ~~During~~The aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $14.0 million and $50.0 million for the three and six months ended June 30, ~~2019, the~~2020,respectively, including $0.1 million and $0.3 million, respectively,under revenue share and participation agreements with related parties, as described in “Note 12 — Related Party Transactions.”The aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $39.4 million and $77.9 million for the three and six months ended June 30, 2019, respectively, including $0.3 million and $0.5 million, respectively, under ~~revenue share and participation agreements with related parties, as described in Note 12,~~ ~~Related Party Transactions.~~ ~~During~~ the three and six months ended June 30, 2018, the aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $37.5 million and $74.6 million, respectively, including $0.2 million and $0.5 million, respectively, under revenue share and participation agreements with related parties.

The Company also enters into amusement device and ATM placement contracts in the form of participation agreements. Under these agreements, the Company pays the business location a percentage of the non-gaming revenue generated from the Company’s amusement devices and ATMs placed at the location. During the three months ended June 30, 2019 and 2018, the total contingent

payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.4 million and $0.3 million, respectively. During the six months ended June 30, 2019 and 2018, the total contingent payments recognized by the Company as other operating expenses for amusement devices and ATMs under such agreements were $0.8 million and $0.7 million, respectively.

From time to time, the Company is involved in a variety of lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of business, including proceedings concerning labor and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which the Company ~~recorded reserves of $1.0 million for claims as of June 30, 2019.~~records reserves. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of its currently pending matters should not have a material adverse effect on its business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect the Company’s business, financial condition, results of operations or liquidity in a particular ~~period.~~period.

In February and April 2017, several former employees filed two separate purported class action lawsuits against the Company in the District Court of Clark County, Nevada, on behalf of similarly situated individuals employed by the Company in the State of Nevada. The lawsuits allege that the Company violated certain Nevada labor laws including payment of an hourly wage below the statutory minimum wage without providing a qualified health insurance plan and an associated failure to pay proper overtime compensation. The complaints seek, on behalf of the plaintiffs and members of the putative class, an unspecified amount of damages (including punitive damages), injunctive and equitable relief, and an award of attorneys’ fees, interest and costs. The Company agreed to settle the first of these cases in the fourth quarter of 2017 and the second of these cases in the third quarter of 2018. In February 2019, the court approved the settlement for the first case for $0.5 million. ~~In July 2019, the court approved the settlement for the second case for~~ ~~$1.1 million,~~ ~~which is included in the Company’s recorded reserves~~ ~~at June 30, 2019.~~

On August 31, 2018, prior guests of The Strat filed a purported class action complaint against the Company in the District Court, Clark County, Nevada, on behalf of similarly situated individuals and entities that paid the Clark County Combined Transient Lodging Tax (“Tax”) on the portion of a resort fee that constitutes charges for Internet access, during the period of February 6, 2014 through the date the alleged conduct ceases. The lawsuit alleged that the Tax was charged in violation of the federal Internet Tax Freedom Act, which imposed a national moratorium on the taxation of Internet access by states and their political subdivisions, and sought, on behalf of the plaintiff and the putative class, damages equal to the amount of the Tax collected on the Internet access component of the resort fee, injunctive relief, disgorgement, interest, fees and costs. All defendants to this matter, including Golden Entertainment, Inc., filed a joint motion to dismiss this matter for lack of merit. The District Court granted this joint motion to dismiss on February 21, 2019. The plaintiffs ~~appealed the District Court decision on April 10, 2019~~filed an appeal to the Supreme Court of ~~Nevada.~~Nevada on April 10, 2019. The Company, and other defendants, filed an appellate response brief on October 19, 2019. On July 29, 2020 the Supreme Court of the State of Nevada upheld the lower court’s 2019 dismissal of this case.

On August 5, 2015 a prior employee filed a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC”) and subsequently filed an Amended Charge of Discrimination on January 2016 alleging that the Company engaged in disability discrimination under the Americans with Disabilities Act of 1990, as amended. The EEOC has requested financial recovery as well as that the Company update certain policies and procedures. In late 2019 the EEOC issued a Letter of Determination and invited the Company to participate in a mediation on behalf of the plaintiff and similarly situated parties to work toward a resolution of this matter. The Company has agreed to mediation in this matter. No mediation date has yet been set.

While legal proceedings are inherently unpredictable and no assurance can be given as to the ultimate outcome of any of the above matters, based on management’s current understanding of the relevant facts and circumstances, the Company believes that these proceedings should not have a material adverse effect on its financial position, results of operations or cash flows.

The Company conducts its business through ~~two~~2 reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the ownership and operation of resort casino properties in Nevada and Maryland. The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Corporate and Other segment includes the Company’s cash and cash equivalents, miscellaneous receivables and corporate overhead. Costs recorded in the Corporate and Other segment have not been allocated to the Company’s reportable operating segments because these costs are not easily allocable and to do so would not be practical.

The Company evaluates each segment’s profitability based upon such segment’s Adjusted EBITDA, which represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, impairment of goodwill and intangible assets, acquisition and severance expenses, preopening ~~expense, acquisition~~and related expenses, asset disposal and other writedowns, share-based compensation expenses, ~~executive severance, rebranding, class action litigation expenses, gain/loss on disposal of property~~ and ~~equipment, gain on~~ change in fair value of derivative, ~~and other losses,~~ calculated before corporate overhead (which is not allocated to each segment).

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles net income (loss) to Adjusted EBITDA:

	Three Months Ended June 30, 2019										Three Months Ended June 30, 2020
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated			Casinos			Distributed Gaming			Corporate and Other			Consolidated
Revenues
Gaming	$	72,237	$	74,009	$	—		$	146,246		$	25,210		$	31,467		$	—		$	56,677
Food and beverage		39,049		13,055		—			52,104			6,016			4,152			—			10,168
Rooms		35,514		—		—			35,514			5,987			—			—			5,987
Other		11,916		2,089		201			14,206			2,219			720			203			3,142
Total revenues	$	158,716	$	89,153	$	201		$	248,070		$	39,432		$	36,339		$	203		$	75,974

Net income (loss)	$	22,471	$	7,347	$	(44,226	)	$	(14,408	)
Net loss											$	(45,979	)	$	(5,194	)	$	(27,393	)	$	(78,566	)
Depreciation and amortization		24,052		5,569		355			29,976			25,344			5,902			684			31,930
Impairment of goodwill and intangible assets												21,411			—			—			21,411
Acquisition and severance expenses												189			134			44			367
Preopening and related expenses⁽¹⁾		700		660		137			1,497			—			(1	)		10			9
Acquisition and severance expenses		101		9		1,013			1,123
Asset disposal and other writedowns		511		74		—			585			683			24			(5	)		702
Share-based compensation		—		—		2,134			2,134			—			—			1,756			1,756
Other, net		81		—		406			487			48			41			28			117
Interest expense, net		64		23		19,048			19,135			91			10			16,306			16,407
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		1,489			1,489
Income tax benefit		—		—		(1,344	)		(1,344	)
Income tax provision												—			—			206			206
Adjusted EBITDA	$	47,980	$	13,682	$	(11,838	)	$	49,824		$	1,787		$	916		$	(8,364	)	$	(5,661	)

	Three Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	72,237	$	74,009	$	—		$	146,246
Food and beverage		39,049		13,055		—			52,104
Rooms		35,514		—		—			35,514
Other		11,916		2,089		201			14,206
Total revenues	$	158,716	$	89,153	$	201		$	248,070

Net income (loss)	$	22,471	$	7,347	$	(44,226	)	$	(14,408	)
Depreciation and amortization		24,052		5,569		355			29,976
Acquisition and severance expenses		101		9		1,013			1,123
Preopening and related expenses ⁽¹⁾		700		660		137			1,497
Asset disposal and other writedowns		511		74		—			585
Share-based compensation		—		—		2,134			2,134
Other, net		81		—		406			487
Interest expense, net		64		23		19,048			19,135
Loss on extinguishment and modification of debt		—		—		9,150			9,150
Change in fair value of derivative		—		—		1,489			1,489
Income tax benefit		—		—		(1,344	)		(1,344	)
Adjusted EBITDA	$	47,980	$	13,682	$	(11,838	)	$	49,824

	Three Months Ended June 30, 2018										Six Months Ended June 30, 2020
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated			Casinos			Distributed Gaming			Corporate and Other			Consolidated
Revenues
Gaming	$	61,929	$	70,617	$	—		$	132,546		$	87,115		$	96,777		$	—		$	183,892
Food and beverage		30,743		12,679		—			43,422			35,821			15,894			—			51,715
Rooms		27,660		—		—			27,660			31,592			—			—			31,592
Other		10,594		2,101		220			12,915			12,874			2,652			406			15,932
Total revenues	$	130,926	$	85,397	$	220		$	216,543		$	167,402		$	115,323		$	406		$	283,131

Net income (loss)	$	24,236	$	7,552	$	(28,194	)	$	3,594
Net loss											$	(48,917	)	$	(4,590	)	$	(57,679	)	$	(111,186	)
Depreciation and amortization		17,412		4,979		463			22,854			50,057			11,767			1,262			63,086
Preopening expenses⁽¹⁾		—		88		301			389
Impairment of goodwill and intangible assets												27,872			—			—			27,872
Acquisition and severance expenses		168		2		395			565			2,606			612			125			3,343
Preopening and related expenses ⁽¹⁾												225			(1	)		115			339
Asset disposal and other writedowns		218		—		—			218			1,310			(14	)		(5	)		1,291
Share-based compensation		—		—		2,758			2,758			—			—			4,002			4,002
Other, net		123		195		99			417			95			238			141			474
Interest expense, net		25		26		16,015			16,066			336			25			34,792			35,153
Change in fair value of derivative		—		—		(1,462	)		(1,462	)		—			—			1			1
Income tax provision		—		—		897			897			—			—			258			258
Adjusted EBITDA	$	42,182	$	12,842	$	(8,728	)	$	46,296		$	33,584		$	8,037		$	(16,988	)	$	24,633

Six Months Ended June 30, 2019

(In thousands)

Casinos

Distributed
Gaming

Corporate and
Other

Consolidated

Revenues

Gaming

$
143,122

$
146,916

$
—

$
290,038

Food and beverage

75,491

26,371

—

101,862

Rooms

66,801
��

—

—

66,801

Other

24,676

4,223

362

29,261

Total revenues

$
310,090

$
177,510

$
362

$
487,962

Net income (loss)

$
45,160

$
14,953

$
(82,539
)

$
(22,426
)
Depreciation and amortization

45,695

10,898

648

57,241

Preopening and related expenses⁽¹⁾

2,354

1,226

149

3,729

Acquisition and severance expenses

387

35

2,245

2,667

Asset disposal and other writedowns

767

65

390

1,222

Share-based compensation

11

5

6,302

6,318

Other, net

92

—

1,259

1,351

Interest expense, net

116

39

37,115

37,270

Loss on extinguishment and modification of debt

—

—

9,150

9,150

Change in fair value of derivative

—

—

3,737

3,737

Income tax benefit

—

—

(1,995
)

(1,995
)
Adjusted EBITDA

$
94,582

$
27,221

$
(23,539
)

$
98,264

	Six Months Ended June 30, 2018										Six Months Ended June 30, 2019
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated			Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	126,388	$	140,021	$	—		$	266,409		$	143,122	$	146,916	$	—		$	290,038
Food and beverage		60,739		25,286		—			86,025			75,491		26,371		—			101,862
Rooms		53,787		—		—			53,787			66,801		—		—			66,801
Other		20,499		4,251		361			25,111			24,676		4,223		362			29,261
Total revenues	$	261,413	$	169,558	$	361		$	431,332		$	310,090	$	177,510	$	362		$	487,962

Net income (loss)	$	48,077	$	15,000	$	(55,553	)	$	7,524		$	45,160	$	14,953	$	(82,539	)	$	(22,426	)
Depreciation and amortization		37,047		10,127		917			48,091			45,695		10,898		648			57,241
Preopening expenses⁽¹⁾		—		236		601			837
Acquisition and severance expenses		219		37		1,608			1,864			387		35		2,245			2,667
Preopening and related expenses ⁽¹⁾												2,354		1,226		149			3,729
Asset disposal and other writedowns		280		15		—			295			767		65		390			1,222
Share-based compensation		—		—		4,602			4,602			11		5		6,302			6,318
Other, net		160		362		203			725			92		—		1,259			1,351
Interest expense, net		49		72		30,688			30,809			116		39		37,115			37,270
Loss on extinguishment and modification of debt												—		—		9,150			9,150
Change in fair value of derivative		—		—		(4,673	)		(4,673	)		—		—		3,737			3,737
Income tax provision		—		—		2,116			2,116
Income tax benefit												—		—		(1,995	)		(1,995	)
Adjusted EBITDA	$	85,832	$	25,849	$	(19,491	)	$	92,190		$	94,582	$	27,221	$	(23,539	)	$	98,264

As of June 30, ~~2019,~~2020, the Company leased its office headquarters building from a company 33% beneficially owned by Blake L. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Stephen A. Arcana. The lease for the Company’s office headquarters building expires on December 31, 2030. The rent expense for the office headquarters building was $0.3 million ~~for each of the three months ended June 30, 2019 and 2018,~~ and $0.6 million for the three and ~~$0.8 million during the~~ six months ended June 30, 2020 and 2019, ~~and 2018,~~ respectively. ~~There were no amounts~~NaN amount was owed byto the Company, and ~~no amount~~$0.3 million was due and payable by the Company under this lease as of June 30, ~~2019~~2020. NaN amount was owed to the Company, and no amount was due and payable by the Company as of December 31, ~~2018.~~2019. Additionally, a portion of the office headquarters building was sublet to a company owned or controlled by Mr. Sartini. ~~There was less than $0.1 million of rental~~Rental income ~~under such sublease for~~during each of the three and six months ended June ~~30,~~20, 2020 and 2019 ~~and 2018. No~~for the sublet portion of the office headquarters building was insignificant. An insignificant amount was owed to the Company under such sublease as of June 30, ~~2019~~2020 and 0 amount was owed as of December 31, ~~2018.~~2019. Mr. Sartini serves as the Chairman of the Board ~~President~~ and Chief Executive Officer of the Company and is co-trustee of The Blake L. Sartini and Delise F. Sartini Family Trust, which is a significant shareholder of the Company. Mr. Arcana serves as the Executive Vice President and Chief Operating Officer of the Company.

In November 2018, the Company entered into a lease agreement for office space in a building to be constructed and owned by a company 33% beneficially owned by Mr. Sartini, 5% owned by a trust for the benefit of Mr. Sartini’s immediate family members (including Blake L. Sartini, II) for which Mr. Sartini serves as trustee, and 3% beneficially owned by Mr. Arcana. The lease is intended to commence in ~~2019~~2020 and expires on December 31, 2030. The rent expense for the space is expected to be approximately $0.3 million per year. Additionally, the lease agreement includes a right of first refusal for additional space on the second floor of the building.

One tavern location that the Company had previously leased from a related party was sold in the second quarter of 2019 to an unrelated third party. ~~A second~~The rent expense for the tavern location ~~that the Company had previously~~ leased from a related party ~~was sold in 2018 to an unrelated third party.~~ ~~The rent expense for tavern locations leased from related parties~~ (for the ~~periods~~period in which the ~~leases were~~lease was with a related ~~parties)~~ party) was less than $0.1 ~~million and $0.2~~ million for the three months ended June 30, 2019 and ~~2018, respectively, and~~ $0.2 million ~~and $0.3 million during~~for the six months ended June 30, ~~2019 and 2018, respectively. There were no amounts owed by the Company, and no amount was due and payable by the Company, under such leases as of December 31, 2018.~~2019. No tavern locations were leased from related parties ~~as of June 30, 2019.~~

For the three and ~~2018,~~six months ended June 30, 2020, the Company paid ~~$0.2~~$0.1 million and ~~less than $0.1~~$0.3 million, respectively, under aircraft time-sharing, co-user and cost-sharing agreements between the Company and Sartini Enterprises, Inc., a company controlled by Mr. Sartini. ~~During~~For the three and six months ended June 30, 2019, ~~and 2018,~~ the Company paid ~~$0.4~~$0.2 million and ~~less than $0.1~~$0.4 million, respectively, under the aircraft time-sharing, co-user and cost-sharing agreements. The Company owed ~~less than $0.1 million~~0 amount under the aircraft time-sharing, co-user and cost-sharing agreements and 0 amountwas owed to the Company under such agreements as of June 30, ~~2019~~2020 and December 31, ~~2018~~2019.

~~During~~The Company recorded revenues of $0.1 million and $0.3 million for the three and six months ended June 30, ~~2019~~2020, respectively, and ~~2018, the Company recorded revenues of $0.3 million in each period, and the Company recorded~~ gaming expenses of $0.1 million and $0.3 million, ~~and $0.2 million,~~ respectively, related to the use of the Company’s slots at a distributed gaming location owned in part by Sean T. Higgins, who serves as the Company’s Executive Vice President of ~~Compliance~~Government Affairs. The Company recorded revenues of $0.3 million and ~~Governmental Affairs~~$0.6 million for the three and ~~Chief Legal Officer. During each of the~~ six months ended June 30, 2019, respectively, and ~~2018, the Company recorded revenues~~gaming expenses of ~~$0.6~~$0.3 million and $0.5 million, respectively, ~~and the Company recorded gaming expenses of $0.5 million in each period,~~ related to the use of the Company’s slots at this distributed gaming location. ~~De minimis amounts were~~An insignificant amount was owed to the Company and ~~were~~ due and payable by the Company related to this arrangement as of June 30, ~~2019~~2020 and December 31, ~~2018~~.2019.

~~During the three months ended June 30, 2018, the Company recorded expenses~~ ~~of less than $0.1 million related to a three-year consulting agreement between the Company and Lyle A. Berman, who serves on the Board of Directors of the Company.~~ ~~During the six months ended June 30, 2018, the Company recorded $0.1 million of SG&A expenses related to Mr. Berman’s consulting agreement.~~ ~~No amount was due and payable by the Company as of~~ ~~December 31, 2018~~ ~~related to this agreement. The consulting agreement expired on July 31, 2018.~~

On July 10, 2020, the Governor of the State of Nevada issued a new emergency executive order mandating the closure of bars, pubs, taverns, breweries, distilleries, and wineries in 7 counties, including Clark County. As a result of the Governor’s executive order, the Company has closed most of its tavern locations. As of the date ~~of issuance of~~hereof, the ~~consolidated financial statements. There have been no subsequent events that occurred during such period~~Company is not able to estimate when it will be able to re-open these tavern locations and is evaluating mitigating actions that would ~~require adjustment~~allow the Company to ~~or disclosure~~resume its tavern operations in ~~the consolidated financial statements as of and for the six months ended June 30, 2019.~~these locations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report on Form 10-Q, unless the context suggests otherwise, the terms “Golden,” “we,” “us” and “our” and ~~“us”~~ refer to Golden Entertainment, Inc. ~~and~~together with its subsidiaries.

The following information should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the “Annual Report”) previously filed with the Securities and Exchange Commission (“SEC”).

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “potential,” “seek,” “should,” “think,” “will,” “would” and similar ~~expressions.~~expressions, or they may use future dates. In addition, forward-looking statements include statements regarding the impact of the 2019 novel coronavirus (“COVID-19”) pandemic on our business; cost savings, synergies, growth opportunities and other financial and operating benefits of our casino and other acquisitions; our strategies, objectives, business opportunities and plans for future expansion, developments or acquisitions; anticipated future growth and trends in our business or key markets; projections of future financial condition, operating results, income, capital expenditures, costs or other financial items; anticipated regulatory and legislative changes; and other characterizations of future events or circumstances as well as other statements that are not statements of historical fact. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause our actual results to differ materially include: the uncertainty of the extent, duration and effects of the COVID-19 pandemic and the response of governments, including government-mandated closures or travel restrictions; our ability to realize the anticipated cost savings, synergies and other benefits of our casino and other acquisitions, including the casinos we recently acquired in Las Vegas and Laughlin, Nevada, and integration risks relating to such transactions; changes in national, regional and local economic and market conditions; legislative and regulatory matters (including the cost of compliance or failure to comply with applicable laws and regulations); increases in gaming taxes and fees in the jurisdictions in which we operate; litigation; increased competition; our ability to renew our distributed gaming contracts; reliance on key personnel (including our Chief Executive Officer, President and Chief ~~Operating~~Financial Officer, and Chief ~~Strategy and Financial~~Operating Officer); the level of our indebtedness and our ability to comply with covenants in our debt instruments; terrorist incidents; natural disasters; severe weather conditions (including weather or road conditions that limit access to our properties); the effects of environmental and structural building conditions; the effects of disruptions to our information technology and other systems and infrastructure; factors affecting the gaming, entertainment and hospitality industries ~~generally,~~generally; and other factors identified under the heading “Risk Factors” in our Annual Report ~~on Form 10-K~~ and in Part II, Item 1A of this report, or appearing elsewhere in this report and in our other filings with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the filing date of this report. We undertake no obligation to revise or update any forward-looking statements for any reason.

We own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on resort casino operations and distributed gaming (including gaming in our branded taverns).

We conduct our business through two reportable operating segments: Casinos and Distributed Gaming. In our Casinos segment, we own and operate ten resort casino properties in Nevada and Maryland. Our Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.

~~On January 14,~~In December 2019, an outbreak of COVID-19 began in Wuhan, Hubei Province, China. The disease has since spread rapidly across the world, causing the World Health Organization to declare COVID-19 a pandemic on March 11, 2020. Since that time, people across the globe have been advised to avoid non-essential travel, and steps have been taken by governmental authorities, including in the States in which we ~~completed~~operate, to implement closures of non-essential operations to contain the ~~acquisition~~spread of ~~Edgewater Gaming, LLC~~the virus. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and ~~Colorado Belle Gaming, LLC (the “Acquired Entities”) from Marnell Gaming, LLC (“Marnell”) for $156.2 million~~created significant volatility and disruption of financial markets. Following emergency executive orders issued by the Governors of Nevada, Maryland, and Montana, in ~~cash (after giving effect~~the week of March 16, 2020, all of our properties were temporarily closed to the ~~post-closing adjustment provisions~~public and our Distributed Gaming operations at third-party

locations were suspended. Our Distributed Gaming operations in Montana and Nevada resumed on May 4, 2020 and June 4, 2020, respectively, and our Casino operations in Nevada and Maryland resumed on June 4, 2020 and June 19, 2020, respectively. However, as a result of the ~~purchase agreement) and~~impact of the ~~issuance by us~~COVID-19 pandemic, the operations of 911,002 shares of our common stock to certain assignees of Marnell (the “Laughlin Acquisition”). The Laughlin Acquisition added two resort casino properties in Laughlin, Nevada to our casino portfolio: the ~~Edgewater Hotel & Casino Resort (the “Edgewater”) and the~~ Colorado Belle Hotel & Casino Resort (“Colorado Belle”) remained suspended as of June 30, 2020. While all of our properties except for the Colorado Belle had been re-opened as of June 30, 2020, our implementation of protocols intended to protect patrons and guests from potential COVID-19 exposure continues to limit our operations. These measures include enhanced sanitization, public gathering limitations of less than 50% of casino and tavern capacity, patron social distancing requirements, limitations on casino operations, which include disabling electronic gaming machines, and face mask and temperature check requirements for patrons. Certain amenities at our casinos may remain closed or operate in a limited capacity, including restaurants, bars, and other food and beverage outlets, as well as table games, spas and pools. These measures limit the number of patrons that are able to attend these venues. Subsequent to fiscal quarter end, effective July 10, 2020, the Governor of the State of Nevada issued a new emergency executive order mandating the closure of bars, pubs, taverns, breweries, distilleries, and wineries in seven counties, including Clark County (the ~~“Colorado Belle”), which increase~~location of most of our ~~scale~~branded taverns) (see “Note 13 — Subsequent Events” in Part I, Item 1: Financial Statements.) We cannot predict when these restrictions on our operations will be changed or eliminated.

The disruptions arising from the COVID-19 pandemic had a significant adverse impact on our financial condition and ~~presence in the Southern Nevada market. The~~ results of operations for the three and six months ended June 30, 2020. The duration and intensity of this global health emergency and related disruptions is uncertain. The impact of COVID-19 on our consolidated results of operations, cash flows and financial condition in 2020 will be material, but cannot be reasonably estimated at this time, as it is unknown when the COVID-19 pandemic will end, when or how quickly the current travel restrictions will be modified or cease to be necessary, and how these uncertainties will impact our business and the willingness of customers to spend on travel and entertainment.

The impact of the ~~Acquired Entities are included~~COVID-19 pandemic on our operations qualified as a triggering event necessitating an evaluation of long-lived assets, goodwill, and indefinite-lived intangible assets for indicators of impairment as discussed in “Note 3 — Property and Equipment, Net” and “Note 4 — Goodwill and Intangible Assets, Net” in Part I, Item 1: Financial Statements.

On March 16, 2020, we fully drew the available capacity of $200 million under our ~~results subsequent~~revolving credit facility (the “Revolving Credit Facility”) as a precautionary measure in order to ~~the acquisition date. See Note 2,~~ ~~Acquisitions,~~increase our cash position and preserve financial flexibility in light of uncertainty in the ~~accompanying unaudited consolidated financial statements~~global markets resulting from the COVID-19 pandemic. During the second quarter of 2020, we repaid $190 million of our borrowings under the Revolving Credit Facility, and as of June 30, 2020, $190 million remained available to us for reborrowing. In addition, we have implemented various mitigating actions to preserve liquidity, including delaying all material capital expenditures, reducing cash operating expenses and implementing a non-essential cost reduction program. To further enhance our liquidity position or to finance any future acquisition or other business investment initiatives, we may obtain additional ~~information.~~financing, which could consist of debt, convertible debt or equity financing from public or private credit and capital markets.

We own and operate ten resort casino properties in Nevada and ~~Maryland, comprising:~~

Maryland. In light of COVID-19, certain amenities at our resort casino properties may remain closed or operate in a limited capacity, including restaurants, bars, and other food and beverage outlets, as well as table games, spas and pools.

	Location	Slot Machines		Table Games		Hotel Rooms		Race and Sport Book		Bingo (seats)
Nevada Casinos
The STRAT Hotel, Casino & SkyPod (“The Strat”)	Las Vegas, NV		750		44		2,429		1		—
Arizona Charlie’s Boulder	Las Vegas, NV		815		—		303		1	approx. 400
Arizona Charlie’s Decatur	Las Vegas, NV		968		10		259		1	approx. 400
Aquarius Casino Resort (“Aquarius”)	Laughlin, NV		1,142		33		1,906		1		—
Colorado Belle Hotel & Casino Resort (“Colorado Belle”) ⁽¹⁾	Laughlin, NV		—		—		—		—		—
Edgewater Hotel & Casino Resort (“Edgewater”)	Laughlin, NV		680		20		1,052		1		—
Gold Town Casino	Pahrump, NV		211		—		—		—		—
Lakeside Casino & RV Park	Pahrump, NV		164		—		—		—	approx. 100
Pahrump Nugget Hotel Casino (“Pahrump Nugget”)	Pahrump, NV		323		9		69		1	approx. 200
Maryland Casino
Rocky Gap Casino Resort (“Rocky Gap”)	Flintstone, MD		655		16		198		—		—
Totals			5,708		132		6,216		6

Our Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana. We place our slots and amusement devices in locations where we believe they will receive maximum customer traffic, generally near a store’s entrance. In addition, we own and operate branded taverns with slots, which target local patrons, primarily in the greater Las Vegas, Nevada metropolitan area. As of June 30, ~~2019,~~2020, our distributed gaming operations comprised approximately ~~10,700~~11,000 slots in over 1,000 locations.

Our branded taverns offer a casual, upscale environment catering to local patrons offering superior food, craft beer and other alcoholic beverages, and typically include 15 onsite slots. As of June 30, ~~2019,~~2020, we owned and operated 6566 branded taverns, which offered a total of over 1,000 onsite slots. Most of our taverns are located in the greater Las Vegas, Nevada metropolitan area and cater to local patrons seeking more convenient entertainment establishments than traditional casino properties. Our tavern brands include PT’s Gold, PT’s Pub, Sierra Gold, Sean Patrick’s, PT’s Place, PT’s Ranch, ~~PT’s Brewing Company,~~ Sierra Junction and SG Bar. ~~We also own~~

On July 10, 2020, the Governor of the State of Nevada issued a ~~brewery~~new emergency executive order mandating the closure of bars, pubs, taverns, breweries, distilleries, and wineries in ~~Las Vegas, PT’s Brewing Company, which produces craft beer for~~seven counties, including Clark County. As a result of the Governor’s executive order, we have closed most of our ~~taverns~~tavern locations. As of the date hereof, we are not able to estimate when we will be able to re-open these tavern locations and ~~casinos.~~we are evaluating mitigating actions that would allow us to resume our tavern operations in these locations.

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three and six months ended June 30, ~~2019~~2020 and ~~2018.~~2019.

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2019			2018			2019			2018			2020			2019			2020			2019
Revenues by segment
Casinos	$	158,716		$	130,926		$	310,090		$	261,413		$	39,432		$	158,716		$	167,402		$	310,090
Distributed Gaming		89,153			85,397			177,510			169,558			36,339			89,153			115,323			177,510
Corporate and other		201			220			362			361			203			201			406			362
Total revenues		248,070			216,543			487,962			431,332			75,974			248,070			283,131			487,962
Operating expenses by segment
Casinos		77,236			62,402			150,779			123,121			19,774			77,236			86,624			150,779
Distributed Gaming		67,936			66,612			135,593			131,962			30,970			67,936			95,879			135,593
Corporate and other		219			793			416			1,565			216			219			538			416
Total operating expenses		145,391			129,807			286,788			256,648			50,960			145,391			183,041			286,788
Selling, general and administrative		56,235			43,615			113,182			87,821			32,548			56,235			80,158			113,182
Depreciation and amortization		29,976			22,854			57,241			48,091			31,930			29,976			63,086			57,241
Impairment of goodwill and intangible assets														21,411			—			27,872			—
Acquisition and severance expenses		1,123			565			2,667			1,864			367			1,123			3,343			2,667
Loss on disposal of assets														702			585			1,291			832
Preopening expenses		738			389			1,516			837			9			738			114			1,516
Loss on disposal of assets		585			218			832			295
Total expenses		234,048			197,448			462,226			395,556			137,927			234,048			358,905			462,226

Operating income		14,022			19,095			25,736			35,776
Operating (loss) income														(61,953	)		14,022			(75,774	)		25,736
Non-operating expense, net		(29,774	)		(14,604	)		(50,157	)		(26,136	)		(16,407	)		(29,774	)		(35,154	)		(50,157	)
Income tax benefit (provision)		1,344			(897	)		1,995			(2,116	)
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524
Income tax (provision) benefit														(206	)		1,344			(258	)		1,995
Net loss													$	(78,566	)	$	(14,408	)	$	(111,186	)	$	(22,426	)

Three and Six Months Ended June 30, ~~2019~~2020 Compared to Three and Six Months Ended June 30, ~~2018~~2019

The ~~$31.5~~$172.1 million, or ~~15%~~69%, ~~increase~~decrease in revenues for the three months ended June 30, ~~2019~~2020 compared to the prior year period resulted from ~~increases~~decreases of ~~$13.7~~$89.6 million, ~~$8.7~~$41.9 million, ~~$7.9~~$29.5 million and ~~$1.2~~$11.1 million in gaming, food and beverage, room and other revenues, respectively, primarily due ~~primarily~~ to the impact of the ~~Acquired Entities.~~temporary closures of all of our properties and suspension of our Distributed Gaming operations as a result of the COVID-19 pandemic.

~~Casinos segment revenue increased $27.8~~The $119.3 million, or ~~21%~~75%, decrease in revenues related to our Casinos segment for the three months ended June 30, 2019 compared to the prior year period. Gaming revenues in the Casinos segment increased $10.3 million, which reflected the inclusion in the current year period of $9.1 million of gaming revenue from the Acquired Entities and a combined increase in slot revenue of $1.6 million at The Strat and Aquarius. The increase was offset by a decrease in the Nevada casinos’ race and sports book revenue of $0.4 million resulting from the outsourcing of our race and sports book management in the first quarter of 2019, the income from which is classified as other operating revenue. Casinos segment food and beverage revenue increased by $8.3 million due primarily to The Strat and the inclusion in the current year period of food and beverage revenues from the Acquired Entities, partially offset by decreases in food and beverage revenues at our other casino properties. Casinos segment room revenues increased by $7.9 million primarily due to The Strat and the inclusion in the current year period of room revenues from the Acquired Entities. Casinos segment other revenues increased by $1.2 million primarily due to the contribution of $1.5 million of other revenues from the Acquired Entities, and was partially offset by a decrease in other revenues at The Strat of $0.4 million.

Distributed Gaming segment revenue increased $3.8 million or 4% for the three months ended June 30, 2019 compared to the prior year period due to an increase of $3.4 million in gaming revenues (reflecting a $1.8 million increase from new sales at our additional locations and machines in Montana and a $1.6 million increase in Nevada from our six new taverns that opened since the prior year period and improved performance of our slot devices at non-casino locations) and of $0.4 million in branded tavern food and beverage revenues.

~~The $56.6~~ ~~million, or 13%, increase in revenues for the six months ended June 30, 2019~~2020 compared to the prior year period resulted primarily from ~~increases~~decreases of ~~$23.6~~$47.0 million, ~~$15.8~~$33.0 million, ~~$13.2~~$29.6 million, and ~~$4.0~~$9.7 million in gaming, food and beverage, room and other revenues, respectively, primarily due ~~primarily~~ to the ~~impact~~temporary closures of our casino properties as a result of the ~~Acquired Entities.~~COVID-19 pandemic.

~~Casinos segment revenue increased $48.7~~The $52.8 million, or ~~19%~~59%, decrease in revenues related to our Distributed Gaming segment for the three months ended June 30, 2020 compared to the prior year period resulted primarily from decreases of $42.5 million, $8.9 million, and $1.4 millionin gaming, food and beverage and other revenues, respectively, primarily due to the temporary suspension of our Distributed Gaming operations as a result of the COVID-19 pandemic.

The $204.8 million, or 42%, decrease in revenues for the six months ended June 30, ~~2019~~2020 compared to the prior year ~~period. Gaming revenues~~period resulted from decreases of $106.1 million, $50.2 million, $35.2 million and $13.3 million in ~~the Casinos segment increased $16.7 million, which reflected the inclusion in the current year period of $16.8 million of~~ gaming, revenue from the Acquired Entities and an increase in slot revenue of $1.5 million at some of our Nevada casinos. The increase was offset by a decrease in the Nevada casinos’ race and sports book revenue of $0.9 million resulting from the outsourcing of our race and sports book management in the first quarter of 2019, the income from which is classified as other operating revenue, and a decrease in table game revenue of $0.7 million at The Strat. Casinos segment food and beverage, ~~revenue~~

~~increased by $14.7 million due primarily to the inclusion in the current year period of $14.5 million in food~~room and beverage revenues from the Acquired Entities and an increase of $1.1 million in food and beverage revenue at The Strat, partially offset by decreases in food and beverage revenues at our other casino properties. Casinos segment room revenues increased by $13.2 million primarily due to increased room revenues from the Aquarius as well as the inclusion in the current year period of $10.7 million in room revenues from the Acquired Entities. Casinos segment other revenues, ~~increased by $4.0 million~~respectively, primarily due to the ~~contribution~~impact of ~~$4.8 million~~the temporary closures of ~~other revenues from the Acquired Entities,~~all of our properties and ~~was partially offset by a decrease in other revenues at The Strat~~suspension of ~~$1.0 million~~.

our Distributed Gaming ~~segment revenue increased $8.0~~operations as a result of the COVID-19 pandemic.

The $142.7 million, or 5%46%, decreasein revenues related to our Casinos segment for the six months ended June 30, ~~2019~~2020 compared to the prior year period ~~due to an increase~~resulted primarily from decreases of ~~$6.9~~$56.0 million, $39.7 million, $35.2 million, and $11.8 million in gaming, food and beverage, room and other revenues, ~~(reflecting~~respectively, primarily due to the temporary closures of our casino properties as a ~~$3.3~~result of the COVID-19 pandemic.

The $62.2 million, ~~increase from new sales at~~or 35%, decreasein revenues related to our ~~additional locations and machines in Montana and a $3.6 million increase in Nevada from our~~Distributed Gaming segment for the six ~~new taverns that opened since~~months ended June 30, 2020 compared to the prior year period resulted primarily from decreases of $50.1 million, $10.5 million, and ~~improved performance of our slot devices at non-casino locations) and of $1.1~~$1.6 million in ~~branded tavern~~gaming, food and beverage and other revenues, ~~(primarily~~respectively, due primarily to the ~~inclusion in~~temporary suspension of our Distributed Gaming operations as a result of the ~~current year period of a full period of revenues from the three taverns opened in 2018)~~.COVID-19 pandemic.

During the three and six months ended June 30, ~~2019,~~2020, Adjusted EBITDA in our Casinos segment as a percentage of segment revenues (or Adjusted EBITDA margin) was ~~30%~~5% and ~~31%~~20%, respectively, compared to Adjusted EBITDA margin in our Distributed Gaming segment of ~~15% in each period.~~3% and 7%, respectively. During the three and six months ended June 30, ~~2018,~~2019, Adjusted EBITDA margin in our Casinos segment was ~~32%~~30% and ~~33%~~31%, respectively, compared to Adjusted EBITDA margin in our Distributed Gaming segment of 15% in each period. The lower Adjusted EBITDA margin in our Distributed Gaming segment relative to our Casinos segment reflects the fixed and variable amounts paid to third parties under our space and revenue share agreements as expenses in the Distributed Gaming segment (which includes the percentage of gaming revenues paid to third parties under revenue share ~~agreements). See Note~~agreements. Refer to “Note 11 — Segment ~~Information~~,Information” in ~~the accompanying unaudited consolidated financial statements~~Part I, Item 1: Financial Statements for additional information regarding segment Adjusted EBITDA and a reconciliation of segment Adjusted EBITDA to segment net ~~income (loss).~~loss.

The ~~$15.6~~$94.4 million, or ~~12%~~65%, ~~increase~~decrease in operating expenses for the three months ended June 30, ~~2019~~2020 compared to the prior year ~~period~~ resulted primarily from ~~the inclusion of operating expenses of the Acquired Entities. Gaming expenses increased $5.5~~$48.8 million, ~~for the three months ended June 30, 2019 compared to the prior year period. Of this increase, $4.0~~$30.4 million, ~~related to the inclusion of~~$11.4 million and $3.8 million decreases in gaming, expenses relating to the Acquired Entities in the current year period, and $1.1 million related to gaming expenses in our Distributed Gaming segment, which included an increase of $1.6 million relating to our Montana distributed gaming operations, offset by $0.5 million decrease from our Nevada distributed gaming operations. The increase of $4.9 million of food and beverage, room and other expenses, respectively. These operating expense ~~compared to~~decreases primarily reflect the ~~prior year period was due primarily to the inclusion in the current year period~~temporary closures of ~~$4.7 million relating to~~ ~~the~~ ~~Acquired Entities, combined with increases of $0.7 million relating to The Strat (reflecting increased and improved offerings at The Strat), offset~~ ~~by a decrease in food and beverage revenues at~~ our ~~other~~ casino properties,~~. The $3.7 million year-over-year increase in room expense was due primarily to~~ branded taverns and distributed gaming routes as a result of the ~~inclusion in the current year period of $3.3 million relating to~~ ~~the Acquired Entities~~, combined with an increase of $0.8 million related to The Strat. The $1.5 million year-over-year increase in other operating expenses was almost entirely due to the inclusion in the current year period of other operating expenses relating to the Acquired Entities.COVID-19 pandemic.

The ~~$30.1~~$103.8 million, or ~~12%~~36%, ~~increase~~decrease in operating expenses for the six months ended June 30, ~~2019~~2020 compared to the prior year ~~period~~ resulted primarily from ~~the inclusion of operating expenses of the Acquired Entities. Gaming expenses increased $10.2~~$53.0 million, ~~for the six months ended June 30, 2019 compared to the prior year period. Of this increase, $7.1~~$33.8 million, ~~related to the inclusion of~~$11.9 million and $5.1 million decreases in gaming, expenses relating to the Acquired Entities in the current year period, and $2.7 million related to gaming expenses in our Distributed Gaming segment, which included an increase of $2.9 million relating to our Montana distributed gaming operations, offset by a slight decrease from our Nevada distributed gaming operations. The increase of $9.5 million of food and beverage, room and other expenses, respectively. These operating expense ~~compared to~~decreases primarily reflect the ~~prior year period was due primarily to the inclusion in the current year period~~temporary closures of ~~$8.5 million relating to~~ ~~the~~ ~~Acquired Entities, combined with increases of $0.6 million relating to~~ our ~~Nevada~~casino properties, branded taverns and distributed gaming ~~operations and $1.2 million relating to The Strat (reflecting increased and improved offerings at The Strat), offset~~ byroutes as a ~~decrease in food and beverage revenues at our other casino properties. The $6.6 million year-over-year increase in room expense was due primarily to~~result of the ~~inclusion in the current year period of $5.7 million relating to~~ ~~the Acquired Entities~~, combined with an increase of $1.2 million related to The Strat. The $3.9 million year-over-year increase in other operating expenses was almost entirely due to the inclusion in the current year period of other operating expenses relating to the Acquired Entities.COVID-19 pandemic.

The ~~$12.2~~$23.7 million, or ~~28%~~42.1%, ~~increase~~decrease in selling, general and administrative (“SG&A”) expenses for the three months ended June 30, ~~2019~~2020 compared to the prior year period resulted primarily from the inclusion in the current year period of $6.3 million in SG&A expenses relating to the Acquired Entities, an increase in corporate SG&A of $4.5 million and an increase in Distributed Gaming segment SG&A of $1.4 million.

Within our Casinos segment, the majority of the SG&A expenses are comprised of marketing and advertising, utilities, maintenance contracts, payroll expenses and payroll taxes. Casino segment SG&A expenses increased $7.6 million, or 29%, for the three months ended June 30, 2019, compared to the prior year period, resulting primarily from the inclusion $6.3 million in the current year period of SG&A related to the Acquired Entities. The remaining increase was primarily due to ~~increases in expenses for labor~~the temporary closures of our casino properties, branded taverns and ~~advertising at The Strat.~~

~~Within our Distributed Gaming segment, the majority~~distributed gaming routes as a result of the COVID-19 pandemic, which resulted in a decrease in payroll and other expenses. SG&A expenses are comprised of marketing and advertising, utilities, building rent, payroll expenses and payroll taxes. Distributed gaming segment SG&A expenses increased $1.4 million, or 24%, for the three months ended June 30, 2019 compared to the prior year period, primarily due to an increase in salaries and bonuses.

~~Corporate SG&A expenses represent~~maintenance contracts, corporate office overhead, information technology, legal, accounting, ~~third party~~third-party service providers, executive compensation, ~~share based~~share-based compensation and payroll expenses and payroll taxes.

The ~~$4.5~~$33.2 million, or ~~46%~~29.2%, increase in corporate SG&A for the three months ended June 30, 2019 compared to the prior year period resulted primarily from increases in outside service expenses in finance, marketing and human resources as well as in salaries and wages.

~~The $24.8 million, or 28%, increase~~decrease in SG&A expenses for the six months ended June 30, ~~2019~~2020 compared to the prior year period resulted primarily from the inclusion in the current year period of $11.2 million in SG&A expenses relating to the Acquired Entities, an increase in corporate SG&A of $9.4 million and an increase in Distributed Gaming segment SG&A of $2.6 million.

Casino segment SG&A expenses increased $14.1 million, or 27%, for the six months ended June 30, 2019, compared to the prior year period, resulting primarily from the inclusion $11.2 million in the current year period of SG&A related to the Acquired Entities. The remaining increase was primarily due to ~~increases~~the temporary closures of our casino properties, branded taverns and distributed gaming routes as a result of the COVID-19 pandemic, which resulted in ~~expenses for labor~~a decrease in payroll and ~~advertising at The Strat~~other expenses.

Distributed Gaming segment SG&A expenses increased $2.6 million, or 22%, for the six months ended June 30, 2019 compared to the prior year period, primarily due to an increase in salaries, bonuses, building rent, and expenses for marketing and cleaning supplies.

Corporate SG&A expenses increases $9.4 million, or 43%, increase in corporate SG&A for the six months ended June 30, 2019 compared to the prior year period resulted primarily from increases in outside service expenses in finance, marketing and human resources as well as in salaries and wages.

Acquisition expenses ~~during~~were incurred primarily for the three and six months ended June 30, 2019 and related ~~primarily~~ to ~~the Laughlin Acquisition,~~consulting services for our acquisition of Edgewater Gaming, LLC and Colorado Belle Gaming, LLC from Marnell Gaming, LLC, which closed on January 14, 2019 ~~and~~(the “Laughlin Acquisition”). Severance expenses ~~during~~were primarily incurred for the three and six months ended June 30, ~~2018~~2020 and related to the ~~American Acquisition.~~mitigating actions we took to preserve liquidity in light of COVID-19.

Preopening expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred. Non-capital costs associated with the opening of tavern and casino locations are also expensed as preopening expenses as incurred.

~~During~~Preopening expenses related primarily to corporate costs incurred for the three and six months ended June 30, ~~2019~~2020 and ~~2018, preopening expenses related primarily to costs incurred in the opening of new taverns in the Las Vegas Valley.~~2019.

~~The increase in depreciation~~Depreciation and amortization expenses for ~~each of~~ the three months ended June 30, ~~2019~~ 2020 increased by $2.0 million, or 6.5%,compared to the prior year period, ~~was~~ primarily due to the depreciation of the assets related to the remodel of The Strat and the amortization of the intangibles ~~acquired in~~related to the Laughlin Acquisition.

~~The increase in depreciation~~Depreciation and amortization expenses for ~~each of~~ the six months ended June 30, ~~2019~~2020 increased $5.8 million, or 10.2%, compared to the prior year period, ~~was~~ primarily due to the depreciation of the assets related to the remodel of The Strat and the amortization of the intangibles ~~acquired in the Laughlin Acquisition, the opening of new taverns~~ ~~in the first half of 2019, and the installation of new gaming systems at some of our Nevada casinos. The increase was offset by the decrease in depreciation and amortization expense at The Strat~~ related to the ~~disposal of several assets and the change in useful life of depreciation.~~Laughlin Acquisition.

Non-operating expense, net ~~increased $15.2~~decreased $13.4 million, or 44.9%, for the three months ended June 30, ~~2019~~2020 compared to the prior year period, primarily due to a ~~$3.1~~$1.5 million ~~increase~~decrease in ~~interest expense from the substantially higher level of indebtedness following the Laughlin Acquisition, a loss on extinguishment and modification of debt of $9.2 million and a~~ loss on change in fair value of derivative, a $9.2 million decrease in loss of ~~$1.5~~extinguishment of debt, and a $2.7 million ~~versus a gain on change~~decrease in ~~fair value of derivative of $1.5 million in the~~interest expense compared to prior ~~year period.~~year.

Non-operating expense, net ~~increased $24.0~~decreased $15.0 million, or 29.9%, for the six months ended June 30, ~~2019~~2020 compared to the prior year period, primarily due to a ~~$6.5~~$3.7 million ~~increase~~decrease in ~~interest expense from the substantially higher level of indebtedness following the Laughlin Acquisition, a loss on extinguishment and modification of debt of $9.2 million and a~~ loss on change in fair value of derivative, a $9.2 million decrease in loss of ~~$3.7~~extinguishment of debt, and a $2.1 million ~~versus a gain on change~~decrease in ~~fair value of derivative of $4.7 million in the~~interest expense compared to prior ~~year period.~~year.

Our effective income tax rate was ~~8.2%~~0.3% and ~~22.0%~~0.2% for the three and six months ended June 30, 2020, respectively, and (8.5)% and (8.2)% for the three and six months ended June 30, 2019, ~~and 2018,~~ respectively. ~~For the six months ended June 30, 2019, the~~The effective ~~tax rate differed from the federal tax rate of 21% due~~ ~~primarily to~~ ~~the change in valuation allowance against our deferred tax assets during the first six months of 2019. For the six months ended June 30, 2018, the effective~~income tax rate differed from the federal tax rate of 21% due primarily to ~~expenditures that are not deductible~~the change in valuation allowance against our deferred tax assets both for ~~tax purposes.~~three and six months ended June 30, 2020 and 2019.

To supplement our consolidated financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), we use Adjusted EBITDA, a measure we believe is appropriate to provide meaningful comparison with, and to enhance an overall understanding of, our past financial performance and prospects for the future. We believe Adjusted EBITDA provides useful information to both management and investors by excluding specific expenses and gains that we believe are not indicative of our core operating results. Further, Adjusted EBITDA is a measure of operating performance used by management, as well as industry analysts, to evaluate operations and operating performance and is widely used in the gaming industry. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do. A reconciliation of net ~~income (loss)~~loss to Adjusted EBITDA is provided in the table below.

We define “Adjusted EBITDA” as earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, impairment of goodwill, acquisition and severance expenses, preopening and related expenses, ~~gain/loss on~~asset disposal ~~of property~~ and ~~equipment,~~other writedowns, share-based compensation expenses, ~~executive severance, rebranding, class action litigation expenses, other gains and losses,~~ and change in fair value of derivative.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss):

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2019			2018			2019			2018			2020			2019			2020			2019
Net income (loss)	$	(14,408	)	$	3,594		$	(22,426	)	$	7,524
Net loss													$	(78,566	)	$	(14,408	)	$	(111,186	)	$	(22,426	)
Depreciation and amortization		29,976			22,854			57,241			48,091			31,930			29,976			63,086			57,241
Impairment of goodwill and intangible assets														21,411			—			27,872			—
Acquisition and severance expenses														367			1,123			3,343			2,667
Preopening and related expenses⁽¹⁾		2,134			389			3,729			837			9			1,497			339			3,729
Acquisition and severance expenses		1,497			565			2,667			1,864
Asset disposal and other writedowns		1,123			218			1,222			295			702			585			1,291			1,222
Share-based compensation		585			2,758			6,318			4,602			1,756			2,134			4,002			6,318
Other, net		487			417			1,351			725			117			487			474			1,351
Interest expense, net		19,135			16,066			37,270			30,809			16,407			19,135			35,153			37,270
Loss on extinguishment and modification of debt		9,150			—			9,150			—			—			9,150			—			9,150
Change in fair value of derivative		1,489			(1,462	)		3,737			(4,673	)		—			1,489			1			3,737
Income tax (benefit) provision		(1,344	)		897			(1,995	)		2,116
Income tax provision (benefit)														206			(1,344	)		258			(1,995	)
Adjusted EBITDA	$	49,824		$	46,296		$	98,264		$	92,190		$	(5,661	)	$	49,824		$	24,633		$	98,264

As of June 30, ~~2019,~~2020, we had ~~$116.7~~$86.2 million in cash and cash equivalents. We currently believe that our cash and cash equivalents, cash flows from operations and borrowing availability under our ~~revolving credit facility~~Revolving Credit Facility will be sufficient to meet our capital requirements during the next 12 months. As of June 30, 2020, we had borrowing availability of $190 million under our Revolving Credit Facility.

Our operating results and performance depend significantly on national, regional and local economic conditions and their effect on consumer spending. Declines in consumer spending would cause revenues generated in both our Casinos and Distributed Gaming segments to be adversely affected.

To further enhance our liquidity position or to finance any future acquisition or other business investment initiatives, we may obtain additional financing, which could consist of debt, convertible debt or equity financing from public and/or private credit and capital markets.

In January 2018, we completed an underwritten public offering pursuant to our universal shelf registration statement, in which certain of our shareholders resold an aggregate of 6.5 million shares of our common stock, and we sold 975,000 newly issued shares of our common stock. Our net proceeds from the offering were approximately $25.6 million after deducting underwriting discounts and offering expenses.

Net cash ~~provided by~~used in operating activities was $10.5 million for the six months ended June 30, ~~2019 remained overall consistent when~~2020, compared to net cash provided by operating activities of $61.4 million for the prior year ~~period~~period. The decrease was primarily due to the impact of the COVID-19 pandemic on our operations (as described above) and the timing of ~~operating assets and liabilities.~~working capital spending.

Net cash used in investing activities was ~~$202.4~~$21.9 million for the six months ended June 30, ~~2019,~~2020, compared to ~~$27.4~~$202.4 million for the prior year period. The ~~increase~~decrease in net cash used in investing activities ~~as compared to the prior year period was primarily due to~~reflects the closing of the Laughlin Acquisition and capital expenditures made in ~~January~~ 2019, and the ~~additional~~deferral of all material capital expenditures in light of the ~~current year period.~~COVID-19 pandemic in 2020.

Net cash provided by financing activities was $6.8 million for the six months ended June 30, 2020, primarily due to the borrowing of $200 million under our Revolving Credit Facility as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic, offset by the repayment of $190 million under our Revolving Credit Facility during the second quarter of 2020. Net cash provided by financing activities was $141.6 million for the six months ended June 30, 2019, primarily due ~~primarily~~ to ~~our~~ issuance of the 7.625% Senior Notes due 2026 ~~(“2026 Notes”)~~ in April 2019, partially offset by the repayment in full of our $200 million senior secured second lien term loan ~~facility (“Second Lien Term Loan”).~~facility.

Refer to “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements and to “Liquidity and Capital Resources” in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report for discussion of our debt instruments.

~~Net cash provided by financing activities was $20.0 million for~~Other Items Affecting Liquidity

The outcome of the ~~six months ended June 30, 2018,~~following specific matters, including our commitments and ~~primarily~~contingencies, may also affect our liquidity.

We normally perform on-going refurbishment and maintenance at our facilities, of which certain maintenance costs are capitalized if such improvement or refurbishment extends the life of the related ~~to net proceeds to us in the underwritten public offering completed in January 2018, partially offset by repayments under our Credit Facility.~~

~~In October 2017, we entered into a senior secured credit facility consisting~~asset, while other maintenance costs that do not so qualify are expensed as incurred. The commitment of a $900 million senior secured first lien credit facility (consisting of a $800 million term loan and a $100 million revolving credit facility) with JPMorgan Chase Bank, N.A. (as administrative agent and collateral agent), the lenders party theretocapital and the related timing thereof are contingent upon, among other ~~entities party thereto (the “Credit Facility”). The revolving credit facility was subsequently increased~~things, negotiation of final agreements and receipt of approvals from ~~$100 million to $200 million in 2018.~~

~~As of June 30, 2019, we had $772 million in principal amount of outstanding term loan borrowings under~~the appropriate regulatory bodies. We normally fund such capital expenditures through our ~~Credit Facility, no letters of credit outstanding under the~~Revolving Credit Facility and ~~our revolving credit facility was undrawn, leaving borrowing availability under the revolving credit facility as of June 30, 2019 of $200 million.~~

~~Borrowings under the Credit Facility bear interest, at our option, at either (1) a base rate equal~~operating cash flows. However, due to the ~~greatest~~impact of the federal funds rate plus 0.50%, the applicable administrative agent’s prime rate as announced from time to time, or the LIBOR rate for a one-month interest period plus 1.00%, subject to a floor of 1.75% (with respect to the term loan) or 1.00% (with respect to borrowings under the revolving credit facility) or (2) the LIBOR rate for the applicable interest period, subject to a floor of 0.75% (with respect to the term loan only), plus in each case, an applicable margin. The applicable margin for the term loan under the Credit Facility is 2.00% for base rate loans and 3.00% for LIBOR rate loans. The applicable margin for borrowings under the revolving credit facility ranges from 1.50% to 2.00% for base rate loans and 2.50% to 3.00% for LIBOR rate loans, basedCOVID-19 pandemic on our net leverage ratio. The commitment fee for the revolving credit facility is payable quarterly at a rate of 0.375% or 0.50%, depending on our net leverage ratio, and is accrued based on the average daily unused amount of the available revolving commitment. As of June 30, 2019, the weighted-average effective interest rate on our outstanding borrowings under the Credit Facility was approximately 5.5%.

The revolving credit facility matures on October 20, 2022, and the term loan under the Credit Facility matures on October 20, 2024. The term loan under the Credit Facility is repayable in 27 quarterly installments of $2 million each, which commenced in March 2018, followed by a final installment of $746 million at maturity.

Borrowings under the Credit Facility are guaranteed by each of our existing and future wholly-owned domestic subsidiaries (other than certain insignificant or unrestricted subsidiaries), and are secured by substantiallyoperations, all ~~of the present and future assets of Golden and our subsidiary guarantors (subject to certain exceptions).~~

Under the Credit Facility, we and our restricted subsidiaries are subject to certain limitations, including limitations on our respective ability to: incur additional debt, grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments. In addition, we will be required to pay down the term loan under the Credit Facility under certain circumstances if we or our restricted subsidiaries issue debt, sell assets, receive certain extraordinary receipts or generate excess cash flow (subject to exceptions). The revolving credit facility contains a financial covenant regarding a maximum net leverage ratio that applies when borrowings under the revolving credit facility exceed 30% of the total revolving commitment. The Credit Facility also prohibits the occurrence of a change of control, which includes the acquisition of beneficial ownership of 50% or more of ourmaterial capital stock (other than by certain permitted holders, which include, among others, Blake L. Sartini, Lyle A. Berman and certain affiliated entities). If we default under the Credit Facility due to a covenant breach or otherwise, the lenders may be entitled to, among other things, require the immediate repayment of all outstanding amounts and sell our assets to satisfy the obligations thereunder. We were in compliance with our financial covenants under the Credit Facility as of June 30, 2019.

On April 15, 2019, we issued $375 million in principal amount of 2026 Notes in a private placement to institutional buyers face value. The 2026 Notes bear interest at 7.625%, payable semi-annually on April 15^th ~~and October 15~~^th ~~of each year.~~

~~In conjunction with the issuance of the 2026 Notes, we incurred approximately~~ ~~$6.7 million~~ ~~in debt financing costs and fees that~~expenditures have been ~~deferred~~deferred.

Refer to “Note 10 — Commitments and ~~are being amortized over the term of the 2026 Notes using the effective interest method.~~

~~The net proceeds of the 2026 Notes were used to (i) repay our $200 million~~ ~~Second Lien Term Loa~~n~~, (ii) repay outstanding borrowings under the revolving credit facility, (iii) repay $18 million of the outstanding term loan indebtedness under the Credit Facility,~~Contingencies” in Part I, Item 1: Financial Statements for additional information regarding commitments and ~~(iv) pay accrued interest, fees and expenses related to each of the foregoing.~~

The 2026 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 103.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.906%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. Prior to April 15, 2022, we may redeem up to 40% of the 2026 Notes at a redemption price of 107.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. Prior to April 15, 2022, wecontingencies that may also ~~redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and an Applicable Premium (as defined in the~~ ~~indenture governing the 2026 Notes (the “Indenture”)), if any, thereon to the redemption date.~~

~~The 2026 Notes are guaranteed on a senior unsecured basis by each of~~affect our existing and future wholly-owned domestic subsidiaries that guarantees the Credit Facility. The 2026 Notes are our and the subsidiary guarantors’ general senior unsecured obligations and rank equally in right of payment with all of our respective existing and future unsecured unsubordinated debt. The 2026 Notes are effectively junior in right of payment to our and the subsidiary guarantors’ existing and future secured debt, including under the Credit Facility (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of any of our subsidiaries that do not guarantee the 2026 Notes, and are senior in right of payment to all of our and the subsidiary guarantors’ existing and future subordinated indebtedness.liquidity.

Under the Indenture, we and our restricted subsidiaries are subject to certain limitations, including limitations on our respective ability to: incur additional debt, grant liens, sell assets, make certain investments, pay dividends and make certain other restricted payments. ~~In the event a change of control (~~which includes the acquisition of more than 50% of our capital stock, other than by certain permitted holders, which include, among others, Blake L. Sartini, Lyle A. Berman, Neil I. Sell and certain affiliated entities), each holder will have the right to require us to repurchase all or any part of such holder’s 2026 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase.

~~In April 2019, we~~ ~~recognized a $5.5 million~~ ~~loss on extinguishment of debt and $3.7 million of expense related to modification of debt, related to the repayment of our Second Lien Term Loa~~n ~~and an $18 million prepayment of the term loan under our Credit Facility~~.

On March 12, 2019, our Board of Directors authorized the repurchase of up to $25.0 million additional shares of common stock, subject to available liquidity, general market and economic conditions, alternate uses for the capital and other ~~factors, which replaced the prior share repurchase program authorized in November 2018.~~factors. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with our finance agreements. There is no minimum number of shares that we are required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice. During the three and six months ended June 30, ~~2019,~~2020, no shares of our common stock were repurchased under our share repurchase programs.

We perform on-going refurbishment and maintenance at our facilities, of which certain maintenance costs are capitalized if such improvement or refurbishment extends the life of the related asset, while other maintenance costs that do not so qualify are expensed as incurred. The commitment of capital and the related timing thereof are contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate regulatory bodies. We intend to fund such capital expenditures through our revolving credit facility and operating cash flows.

~~See Note 10,~~ ~~Commitments and Contingencies, in the accompanying unaudited consolidated financial statements for additional information regarding commitments and contingencies that may also affect our liquidity.~~

~~The following table summarizes our contractual obligations as of June 30, 2019:~~

We may investigate and pursue expansion opportunities in our existing or new markets from time to time. Such expansions will be influenced and determined by a number of factors, which may include licensing availability and approval, suitable investment opportunities and availability of acceptable financing. Investigation and pursuit of such opportunities may require us to make substantial investments or incur substantial costs, which we may fund through cash flows from operations or borrowing availability under our ~~revolving credit facility.~~Revolving Credit Facility. To the extent such sources of funds are not sufficient, we may also seek to raise such additional funds through public or private equity or debt financings or from other sources. No assurance can be given that additional financing will be available or that, if available, such financing will be obtainable on terms favorable to us. Moreover, we can provide no assurances that the investigation or pursuit of an opportunity will result in a completed transaction.

Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to the application of the acquisition method of accounting, long-lived assets, goodwill and indefinite-lived intangible assets, revenue recognition, income taxes and share-based compensation expenses. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.

A description of our critical accounting estimates can be found under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual ~~Report on Form 10-K for the year ended December 31, 2018, previously filed with the SEC.~~Report. For a more extensive discussion of our accounting policies, ~~see Note~~refer to “Note 2 — Summary of Significant Accounting ~~Policies~~, Policies” in ~~the audited consolidated financial statements~~Part II, Item 8: Financial Statements and Supplemental Data in our Annual Report on Form 10-K for the year ended December 31, 2018. As of January 1, 2019, we updated our lease accounting policies in conjunction with our adoption of the new lease accounting standard. A description of this change is included in Note 2 to the ~~unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q~~.Report. There were no ~~other~~ material changes to our critical accounting policies and estimates during the three and six months ended June 30, ~~2019.~~2020.

~~On April 15, 2019, we issued~~For the ~~2026 Notes~~three and six months ended June 30, 2020, there were no material changes in ~~a private placement~~our commitments under contractual obligations as compared to ~~institutional buyers, and~~those disclosed in connection therewith we repaid and discharged the Second Lien Term Loan in full, repaid $18 million in principal amount of term loan borrowings under the Credit Facility, and repaid all of the outstanding indebtedness under the revolving credit facility under the Credit Facility. Otherwise, no significant changes occurred in the second quarter of 2019 to the contractual commitments discussed under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – ~~Commitments and~~Other Items Affecting Liquidity – Contractual Obligations in our Annual ~~Report on Form 10-K for the year ended December 31, 2018.~~Report.

We believe that our Casinos and Distributed Gaming segments are affected by seasonal factors, including holidays, weather and travel conditions. Our Las Vegas and Pahrump casinos as well as our Nevada distributed gaming businesses have historically experienced lower revenues during the summer as a result of fewer tourists due to higher temperatures in addition to increased vacation activity by local residents. Our casinos in Laughlin and Rocky Gap typically experience higher revenues during summer months with increased visitation and may be adversely impacted by inclement weather during winter months. Our Montana distributed gaming operations also typically experience higher revenues during the summer due to the inclement weather in other seasons. While other factors like the COVID-19 pandemic, unemployment levels, market competition and the diversification of our business may either offset or magnify seasonal effects, some seasonality is likely to continue, which could result in significant fluctuation in our quarterly operating results.

See ~~Note~~“Note 1 —Nature of Business and Basis of ~~Presentation,~~Presentation” in ~~the accompanying unaudited consolidated financial statements~~ Part I, Item 1: Financial Statements for information regarding recently issued accounting pronouncements.

The casino and distributed gaming industries are subject to extensive regulation by state gaming authorities. Changes in applicable laws or regulations could have a material adverse effect on us.

The gaming industry represents a significant source of tax revenues to regulators. From time to time, various federal and state legislators and officials have proposed changes in tax law, or in the administration of such law, affecting the gaming industry. It is not

possible to determine the likelihood of possible changes in tax law or in the administration of such law. Such changes, if adopted, could have a material adverse effect on our future financial position, results of operations, cash flows and prospects.

We have no off balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt. As of June 30, ~~2019,~~2020, our variable rate long-term debt primarily comprised our indebtedness under the Credit ~~Facility.~~Facility (defined in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements).

As of June 30, ~~2019,~~2020, we had $772 million in principal amount of outstanding borrowings under the Term Loan (defined in “Note 6 — Long-Term Debt” in Part I, Item 1: Financial Statements) and $10 million in principal amount of outstanding borrowings under our Revolving Credit Facility. Our primary interest rate under the Credit Facility is the Eurodollar rate plus an applicable margin. ~~As of June 30, 2019, the~~The weighted-average effective interest rate on our outstanding borrowings under the Credit Facility was approximately ~~5.5%.~~3.77% and 4.17% for the three and six months ended June 30, 2020, respectively. Assuming the outstanding balance under our Credit Facility remained constant over a year, a 50 basis point increase in the applicable interest rate would increase interest incurred, prior to effects of capitalized interest, by $3.9 million over a twelve-month period.

As of June 30, ~~2019,~~2020, our investment portfolio included ~~$116.7~~$86.2 million in cash and cash ~~equivalents. As of June 30, 2019,~~equivalents and we did not hold any short-term investments.

We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of June 30, ~~2019,~~2020, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, ~~2019.~~

On January 14, 2019, the Laughlin Acquisition was completed. Management has begun the evaluation of the internal control structures of the Acquired Entities. However, SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessments of internal control over financial reporting and disclosure controls and procedures for a period not to exceed one year from the date of the acquisition. Accordingly, we excluded the Acquired Entities from our evaluation of our disclosure controls and procedures as of June 30, 2019. We have reported the operating results of the Acquired Entities in our consolidated statements of operations and cash flows from the acquisition date through June 30, 2019. As of June 30, 2019, total assets related to the Acquired Entities represented approximately 11% of our total assets, recorded on a preliminary basis as the measurement period for the business combination remained open as of June 30, 2019. Revenues from the Acquired Entities comprised approximately 10% of our consolidated revenues for both the three and six months ended June 30, 2019.2020.

During the quarter ended June 30, ~~2019,~~2020, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ~~As described above, on January 14, 2019, the Laughlin Acquisition was completed. Our integration of the Acquired Entities may lead us to modify certain internal controls in future periods.~~

~~From time to time, we are involved in a variety~~A discussion of ~~lawsuits, claims, investigations and other~~our legal proceedings ~~arising~~is contained in ~~the ordinary course of business, including proceedings concerning labor~~“Note 10 — Commitments and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which we recorded reserves of $1.0 million for claims as of June 30, 2019. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, we believe that the resolution of our currently pending matters should not have a material adverse effect on our business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings couldContingencies — Legal Matters” in ~~the future materially and adversely affect our business, financial condition, results of operations or liquidity in a particular period.~~Part I, Item 1: Financial Statements.

In February and April 2017, several former employees filed two separate purported class action lawsuits against us in the District Court of Clark County, Nevada, on behalf of similarly situated individuals employed by us in the State of Nevada. The lawsuits allege that we violated certain Nevada labor laws including payment of an hourly wage below the statutory minimum wage without providing a qualified health insurance plan and an associated failure to pay proper overtime compensation. The complaints seek, on behalf of the plaintiffs and members of the putative class, an unspecified amount of damages (including punitive damages), injunctive and equitable relief, and an award of attorneys’ fees, interest and costs. We agreed to settle the first of these cases in the fourth quarter of 2017 and the second of these cases in the third quarter of 2018. In February 2019, the court approved the settlement for the first case for $0.5 million. In July 2019, the court approved the settlement for the second case for $1.1 million, which is included in our recorded reserves at June 30, 2019.

On August 31, 2018, prior guests of The Strat filed a purported class action complaint against us in the District Court, Clark County, Nevada, on behalf of similarly situated individuals and entities that paid the Clark County Combined Transient Lodging Tax (“Tax”) on the portion of a resort fee that constitutes charges for Internet access, during the period of February 6, 2014 through the date the alleged conduct ceases. The lawsuit alleged that the Tax was charged in violation of the federal Internet Tax Freedom Act, which imposed a national moratorium on the taxation of Internet access by states and their political subdivisions, and sought, on behalf of the plaintiff and the putative class, damages equal to the amount of the Tax collected on the Internet access component of the resort fee, injunctive relief, disgorgement, interest, fees and costs. All defendants to this matter, including Golden Entertainment, Inc., filed a joint motion to dismiss this matter for lack of merit. The District Court granted this joint motion to dismiss on February 21, 2019. The plaintiffs appealed the District Court decision on April 10, 2019 to the Supreme Court of Nevada.

While legal proceedings are inherently unpredictable and no assurance can be given as to the ultimate outcome of any of the above matters, based on management’s current understanding of the relevant facts and circumstances, we believe that these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report, as updated by our Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~quarter ended ~~December~~March 31, ~~2018,~~2020, which factors could materially affect our business, financial condition, liquidity or future results. There have been no material changes to the risk factors described in the “Risk Factors” section in our Annual ~~Report on Form 10-K for the year ended December 31, 2018.~~Report. The risks described in our Annual Report ~~on Form 10-K~~ are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity, results of operations, prospects or stock price.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

Minnesota	41-1913991
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

6595 S Jones Boulevard
Las Vegas, Nevada	89118
(Address of principal executive offices)	(Zip Code)

		Page
PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1

	Consolidated Balance Sheets as of June 30, ~~2019~~2020 and December 31, ~~2018~~2019	1

	Consolidated Statements of Operations for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019	2

	Consolidated Statement of Shareholders’ Equity for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019	3

	Consolidated Statements of Cash Flows for the six months ended June 30, ~~2019~~2020 and ~~2018~~2019	54

	Condensed Notes to Consolidated Financial Statements	76

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2119

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3027

ITEM 4.	CONTROLS AND PROCEDURES	3027

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	3028

ITEM 1A.	RISK FACTORS	3128

ITEM 6.	EXHIBITS	3229

SIGNATURES		3330

(In thousands)	Prior to Adoption			Effect of Adoption⁽¹⁾			Post Adoption
Prepaid expenses	$	17,722		$	(194	)	$	17,528
Property and equipment, net		894,953			2,503			897,456
Operating lease right-of-use assets, net		—			140,715			140,715
Intangible assets, net		141,128			(2,503	)		138,625
Operating lease liability		—			155,878			155,878
Other long-term obligations		4,801			(3,085	)		1,716
Accumulated deficit		(120,361	)		(12,272	)		(132,633	)

(In thousands)
Current assets	$	12,615
Property and equipment		126,198
Right-of-use assets		2,620
Intangible assets		19,234
Goodwill		24,736
Liabilities		(10,023	)
Lease liabilities		(2,620	)
Total assets acquired, net of liabilities assumed	$	172,760

(In thousands)	Useful Life (Years)
Land	Not applicable	$	4,160
Building and site improvements	10-30		102,450
Furniture and equipment	2-13		18,185
Construction in process	Not applicable		1,403
Total property and equipment		$	126,198

The STRAT Hotel, Casino & SkyPod ~~("The Strat"~~(The “Strat”)		Las Vegas, Nevada
Arizona ~~Charlie's Decatur~~Charlie’s Boulder		Las Vegas, Nevada
Arizona ~~Charlie's Boulder~~Charlie’s Decatur		Las Vegas, Nevada
Aquarius Casino Resort ~~("Aquarius")~~		~~Laughlin, Nevada~~
~~Edgewater Hotel & Casino Resort ("Edgewater"~~(“Aquarius”)		Laughlin, Nevada
Colorado Belle Hotel & Casino Resort ("(“Colorado ~~Belle"~~Belle”)⁽¹⁾		Laughlin, Nevada
~~Pahrump Nugget~~Edgewater Hotel & Casino ~~("Pahrump Nugget"~~Resort (“Edgewater”)		~~Pahrump,~~Laughlin, Nevada
Gold Town Casino		Pahrump, Nevada
Lakeside Casino & RV Park		Pahrump, Nevada
Pahrump Nugget Hotel Casino (“Pahrump Nugget”)		Pahrump, Nevada
Rocky Gap Casino Resort ("(“Rocky ~~Gap"~~Gap”)		Flintstone, Maryland

(In thousands)	Amount
Cash	$	156,152
Fair value of common stock issued (911,002 shares)		16,608
Total purchase price	$	172,760

	Three Months Ended		Six Months Ended
(In thousands, except per share data)	June 30, 2018		June 30, 2018
Pro forma combined revenues	$	242,473	$	480,705
Pro forma combined net income		2,364		7,519
Weighted-average common shares outstanding:
Basic		28,317		28,189
Diluted		30,575		30,439
Pro forma combined net income per share:
Basic	$	0.08	$	0.27
Diluted		0.08		0.25

(In thousands)	Classification	June 30, 2019		June 30, 2019
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	11,416	$	23,056
Variable lease cost	Operating and SG&A expenses		4,468		8,654
Short-term lease cost	Operating and SG&A expenses		1,112		2,161
Total operating lease cost		$	16,996	$	33,871

Finance lease cost
Amortization of lease assets	Depreciation and amortization	$	505	$	999
Interest on lease liabilities	Interest expense, net		100		198
Total finance lease cost		$	605	$	1,197

(In thousands, except lease term and discount rate)	June 30, 2019
Operating leases
Operating lease right-of-use assets, gross	$	175,898
Accumulated amortization		17,813
Operating lease right-of-use assets, net	$	158,085

Current portion of operating leases	$	29,351
Noncurrent operating leases		143,426
Total operating lease liabilities	$	172,777

Finance leases
Property and equipment, gross	$	13,290
Accumulated depreciation		(2,785	)
Property and equipment, net	$	10,505

Current portion of finance leases, net	$	1,763
Noncurrent finance leases, net		5,323
Total finance lease liabilities	$	7,086

~~Weighted Average Remaining Lease Term~~
~~Operating leases~~	~~11.2 years~~
~~Finance leases~~	~~22.4 years~~

~~Weighted Average Discount Rate~~
~~Operating leases~~		~~6.3~~	%
~~Finance leases~~		~~5.8~~	%

	Operating			Finance
(In thousands)	Leases			Leases			Total
Remaining 2019	$	23,164		$	1,146		$	24,310
2020		30,778			1,954			32,732
2021		29,443			1,460			30,903
2022		22,906			589			23,495
2023		17,469			553			18,022
Thereafter		117,243			7,339			124,582
Total lease payments		241,003			13,041			254,044
Less: interest		(68,226	)		(5,955	)		(74,181	)
Present value of lease liabilities	$	172,777		$	7,086		$	179,863

	Remaining 2019		2020		2021		2022		2023		Thereafter		Total
(In thousands)
Term loan	$	—	$	—	$	4,000	$	8,000	$	8,000	$	752,000	$	772,000
Senior notes due 2026		—		—		—		—		—		375,000		375,000
Interest on long-term debt ⁽¹⁾		35,187		70,365		70,332		69,980		69,547		97,150		412,561
Operating leases		23,164		30,778		29,443		22,906		17,469		117,243		241,003
Notes payable and finance lease obligations⁽²⁾		1,200		2,074		1,481		612		565		7,339		13,271
	$	59,551	$	103,217	$	105,256	$	101,498	$	95,581	$	1,348,732	$	1,813,835

Exhibits		Description

~~4.1~~		Indenture, dated as of April 15, 2019, between Golden Entertainment, Inc., the Guarantors party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Golden Entertainment, Inc.’s Quarterly Report on Form 10-Q dated and filed on May 10, 2019)

~~4.2~~		Form of 7.625% Senior Note due 2026 of Golden Entertainment, Inc. (incorporated by reference to Exhibit 4.2 to Golden Entertainment, Inc.’s Quarterly Report on Form 10-Q dated and filed on May 10, 2019)

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	GOLDEN ENTERTAINMENT, INC.
	(Registrant)

Dated: August ~~8, 2019~~7, 2020	/s/ BLAKE L. SARTINI
	Blake L. Sartini
	Chairman of the Board ~~President~~ and Chief Executive Officer
	(Principal Executive Officer)

	/s/ CHARLES H. PROTELL
	Charles H. Protell
	~~Executive Vice~~ President ~~Chief Strategy Officer~~ and Chief Financial Officer
	(Principal Financial Officer)

	/s/ THOMAS E. HAAS
	Thomas E. Haas
	Senior Vice President of Accounting
	(Principal Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company