Lyle Berman’s Lakes Entertainment To Merge With Vegas Co.
The deal, expected to close by year's end, will mark a transition away from executive life for the gaming magnate.
Lyle Berman, the local entrepreneur and a titan of the gambling scene, is taking a slight step back. On Monday, he announced plans for his Minnetonka-based Lakes Entertainment Inc. to merge with Las Vegas-based Golden Gaming LLC in a deal that will see Golden Gaming become a wholly owned subsidiary of Lakes.
Lakes will meanwhile remain publicly traded and be renamed Golden Entertainment, Inc. upon its closing.
“I'm probably winding down a little in this business community here,” Berman said in an interview. Berman, who grew up in the Twin Cities but is now a Nevada resident, said he might take on a more active role in pursuing additional investment opportunities in the future but added that this is “clearly a new phase in my business life.”
Berman said he expects the deal to close within six to 12 months, pending proxy and shareholder votes. He said Lakes also must become licensed in Nevada and Golden Gaming must become licensed in Maryland, where Lakes owns the Rocky Gap Casino Resort.
Golden Gaming CEO Blake Sartini will be named chairman and CEO of the combined company. Berman will continue as a board member and sign a three-year consulting agreement with the new firm. Lakes President and Chief Financial Officer Tim Cope will also continue as a board member and consultant.
Both firms said in a news release Monday they expect Lakes' cash on hand to facilitate Golden Gaming's pursuit of growth opportunities and help refinance its debt. In a subsequent interview, Berman said that Lakes had about $80 million in cash on its balance sheet as a result of ending its 13-year contract with the Jamul Indian Village to build a casino in San Diego in 2012. As a result of that termination, he said, Lakes made it clear the past 18 to 24 months that it was looking to redefine itself. Berman called the Golden merger a “unique opportunity.”
Golden Entertainment will operate roughly 9,250 slot machines and video lottery terminals in Nevada and Maryland across four casino properties and more than 600 route locations. On a combined pro forma basis, 2015 net revenues are expected to be $348.1 million.
Lakes began as Grand Casinos Inc., which Berman founded in Hinckley in 1991. A longtime poker player who has earned nearly $1.6 million in World Series of Poker competition, Berman launched the World Poker Tour in 2003. He has also served executive stints with PokerTek and Rainforest CafÃ© Inc., which he first opened at the Mall of America in 1993.