Maverick Gaming filed for Chapter 11 bankruptcy protection on July 14, citing unsustainable debt levels resulting from its aggressive growth efforts and recent unfavorable legal rulings. The Washington-based company filed with the US Bankruptcy Court for the Southern District of Texas. Public records show that the company has assets and liabilities ranging from $100 million to $500 million.
Key Takeaways
- Gambling operator Maverick Gaming has filed for bankruptcy, listing assets and liabilities worth between $100 million and $500 million.
- The company operates 2,500 slot machines and 320 table games across 17 Washington card rooms and gambling locations in Nevada and Colorado.
- The company was highlighted as “unsustainable” by S&P Global Ratings in June due to interest, high fixed charges, and lease costs.
Maverick was formed and is headed by Eric Persson. It operates 17 Washington card rooms and other casinos and hotels in Nevada and Colorado. Court filings outline the extent of its operations, which comprise approximately 2,500 slot machines, 320 table games, 1,200 hotel rooms, and 30 restaurants.
The bankruptcy comes after a frenetic acquisition push led by Persson, which was faulted by S&P Global Ratings in a June report. The ratings agency stated that the company's capital structure was "unsustainable" because high fixed charges, including interest, rent, capital expenditures, and lease costs, outpaced forecasted earnings.
The lack of an independent board and the alignment of ownership and executive control under Persson were highlighted as significant risk factors.
Maverick's liquidity problems were also mentioned as hampering its ability to invest in properties or spend money on marketing and expansion. The company may look for a takeover like Publishers Clearing House enjoyed in June with a $7.1 million acquisition from sweepstakes operator ARB Interactive.
Failed legal challenge to tribal sports betting came before collapse
Maverick Gaming's bankruptcy follows an unsuccessful legal bid that was a turning point for the company. In November of last year, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of Maverick's suit against Washington State's tribal exclusivity on sports betting.
The suit concerned the legitimacy of state-sanctioned tribal gaming compacts that give federally recognized tribes exclusive permission to conduct sports betting on their territories. Maverick claimed the arrangement was against the Indian Gaming Regulatory Act (IGRA). Maverick Gaming also claimed that arrangement broke the Equal Protection Clause, and the Tenth Amendment, as it unfairly excluded non-tribal entities such as its cardrooms.
The court did rule, however, that the Shoalwater Bay Indian Tribe was a necessary party to the lawsuit and that the tribe's sovereign immunity prevented it from being joined in the lawsuit. Judge Kim McLane Wardlaw stated the tribe was interested in the gaming compacts protected by law, as they are a vital component of their economic sovereignty and self-governance.
The ruling stated that going without the tribe would compromise such interests and determined that the federal government could not adequately represent the tribe's special stakes. Maverick's attempt to expand its reach in Washington's sports betting business eventually fell through, worsening its financial situation.
Lawmakers and organizations in Washington often look to change its sports betting laws, like with two bills introduced in January 2024 which failed to progress.
