- Lucky Bucks suffered from high interest rates and a crackdown from regulators
- The company operates over 2,300 slot machines in Georgia
- Lucky Bucks may seek a bankruptcy sale or debt restructuring
NEW YORK, June 9 (Reuters) – Georgia-based slots operator Lucky Bucks filed for bankruptcy on Friday, saying it had reached a settlement to reduce $500 million in debt and increased the company’s equity surrender to its lenders.
Lucky Bucks suffered from rising interest rates on its debt, an inflationary environment that reduced consumer slot machine usage, and a regulatory crackdown on Georgia slot machine operators, according to its court filings in bankruptcy court in Wilmington, Delaware.
According to the company, Georgia law places strict restrictions on slot machines, prohibits cash prizes and prevents locations such as gas stations and convenience stores from having more than nine slot machines or generating more than 50% of their revenue from slot machines.
Increased state oversight of these rules resulted in the removal of 500 Lucky Bucks slot machines in the first five months of 2023 alone, according to court documents.
Headquartered in Norcross, Georgia, Lucky Bucks operates approximately 2,300 slot machines at 345 locations throughout Georgia. The machines are classified as “games of skill” under Georgian law and winnings must be redeemed for non-cash goods or lottery tickets instead of cash.
James Boyden, executive vice president of corporate development at Lucky Bucks, said in a statement that the bankruptcy will not cause any disruption to the company’s employees, business partners or consumers.
According to court documents, Lucky Bucks could decide to sell its business if a buyer makes a better offer than the proposed debt reduction agreement. Lucky Bucks filed for bankruptcy with $610 million in debt. The proposed restructuring has the backing of 86% of the company’s lenders, the company said in a statement.
Lucky Bucks is owned by private equity firm Trive Capital, which acquired the company as part of its 2020 acquisition of formerly publicly traded company Seven Aces.
Before Lucky Bucks filed for bankruptcy, it was lobbying for a law in Georgia that would have protected slot operators from “predatory” competition. The bill, which was not passed by Georgia’s legislature, would have prevented the installation of a new slot machine in the nine months following the removal of another company’s slot machine.
The case is Lucky Bucks Inc, US Bankruptcy Court for the District of Delaware, No. 23-10758.
For Lucky Bucks: Dennis Dunne and Tyson Lomazow of Milbank LLP and Russell Silberlink of Richards, Layton & Finger PA
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Reporting by Dietrich Knauth
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