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Maverick Gaming Files for Chapter 11 Bankruptcy Protection

On Monday, Maverick Gaming, a privately held regional operator of a card club and casino, declared Chapter 11 bankruptcy.

The filing came approximately a month after S&P Global Ratings withdrew its ratings on the operator due to a lack of relevant information, and after the gambling company requested a 2024 debt restructure.  Maverick listed $100 million to $500 million in total assets and liabilities in the bankruptcy petition in Texas.

"S&P Global Ratings today withdrew all its ratings on Maverick Gaming LLC, including the ‘CCC’ issuer credit rating, because of a lack of sufficient information to maintain the ratings. At the time of the withdrawal, our outlook on the company was negative,” said the ratings agency in a June 10 statement.

Maverick, a Washington-based company, operates 27 casinos and card rooms in Nevada, Colorado, and its home state.  The CEO of the company, Eric Persson, is a skilled poker player.

One could argue that Maverick's bankruptcy was telegraphed

Maverick has been acquisitive in Washington under Persson, a former executive at Las Vegas Sands, but some industry watchers think the operator went too far with its acquisition plan.

Many of the acquisitions were made with debt, and Maverick was forced to take drastic measures, such as closing four Washington-state card rooms, when some of the venues failed to live up to expectations.  The bankruptcy case was potentially telegraphed because in a June 2024 report,S&P said the gambling company was likely heading for default or another debt restructuring, causing a “negative” outlook on the operator’s credit rating.

“The negative outlook reflects that Maverick may default or restructure in the next 12 months and that it depends on favorable business, financial, and economic conditions,” notes S&P.

S&P upgraded Maverick from D to CCC at that time, however the former still indicates a high default risk and is a highly speculative credit rating.

Maverick Gaming Was Pinched by Macroeconomic Factors

Maverick was hampered by a dismal macroeconomic climate in its native state, where it faces competition from rival card rooms and tribal casinos, which encourages significant promotional expenditures.

"This is compounded by a weaker local economy due to numerous layoffs in the region at technology companies that has constrained Maverick’s customer base and discretionary spending. In addition, its fixed-cost structure (including large fixed-rent obligations associated with various sale-leaseback transactions) is too high for its revenue base,” said S&P in June 2024.

The Bureau of Labor Statistics reports that Washington State's 4.5% unemployment rate is 37th in the United States.  That is significantly higher than the 4.1% national average.