What the changes say
- Accel Entertainment faces heavy regulatory scrutiny across multiple gaming jurisdictions, significant debt leverage of $612 million, and extreme dependence on discretionary consumer spending and location partners.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Industry
Our ability to operate in existing markets and to expand into new jurisdictions depends on obtaining, maintaining and renewing a complex set of licenses and regulatory approvals, which vary widely by jurisdiction and can be extensive
Our operations require complex licensing and regulatory approvals for us and our stakeholders, which can be time-consuming or revoked at any time.
- NewRisks Related to Our Business and Industry
Our revenue growth and future success depends on successfully entering and scaling in new markets and introducing new and appealing products and services amid uncertain market demand and regulatory outcomes, none of which is assured
Entering and scaling in new markets with unproven gaming demand or entrenched competitors may fail and hurt our revenue growth.
- NewRisks Related to Our Business and Industry
Most of our revenue has been attributable to the efforts of our sales force, which consists of both in-house personnel and independent agents
Our sales force of in-house personnel and independent agents may take months to become productive, risking our revenue growth projections.
- NewRisks Related to Our Business and Industry
Our results of operations are highly sensitive to discretionary consumer spending and broader macroeconomic and socio-political conditions; our concentration in Illinois, Montana and Nevada heightens exposure to local conditions
New tariffs imposed by the U.S. and foreign countries could increase costs and reduce discretionary consumer spending and gaming play levels.
- NewRisks Related to Our Business and Industry
Our operations have historically been subject to seasonal fluctuations in operating results, and we can expect to experience such fluctuations in the future
Our revenues fluctuate seasonally, with colder months driving indoor play while horse racing and sports betting face specific weather and calendar constraints.
- NewRisks Related to Compliance and Regulatory Matters
Our success depends on the security, integrity and regulatory compliance of our products, services and systems; technical incidents, cyber events, product defects or integrity failures could result in regulatory action, liability and reputational harm
Cyber-attacks, software anomalies, or security breaches of our products and systems could cause regulatory action, liability, and reputational harm.
- NewRisks Related to our Financial Condition
Our level of indebtedness could adversely affect our results of operations, cash flows and financial condition
We have total indebtedness of approximately $612 million under our New Credit Facility, exposing us to variable interest rate risk and restricted flexibility.
- NewRisks Related to our Financial Condition
commitments thereunder. The failure to pay certain amounts owing under the New Credit Facility may result in an increase in the interest rate applicable thereto
A breach of debt covenants under the New Credit Facility could trigger cross-defaults and accelerate repayments that exceed our available assets.
- NewRisks Related to Our Common Stock
Clairvest Group Inc. (“Clairvest”) and members of the Rubenstein Family own a significant portion of Common Stock and have representation on the Board, which could limit the ability of other stockholders to influence corporate matters
Clairvest and the Rubenstein Family beneficially own significant portions of our common stock and exert major influence over corporate actions.
- NewRisks Related to Our Common Stock
Provisions in our Charter and Bylaws designate certain state and federal courts as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders or that arise under the Securities Act, which may discourage stockholders from bringing such claims
Our Charter designates Delaware courts for certain actions and federal district courts for Securities Act claims, which may discourage stockholder lawsuits.
Dropped
- DroppedRisks Related to Our Business and Industry
Our ability to operate in existing markets or expand into new jurisdictions could be adversely affected by difficulties, delays, or failures by us or our stakeholders in obtaining or maintaining required licenses or approvals
Gaming industry extensive governmental regulation and licensing screening.
- DroppedRisks Related to Our Business and Industry
Our success depends on our ability to offer new and innovative products and services that fulfill the needs of location partners and create strong and sustained player appeal
Need to offer new and innovative products meeting location and player appeal.
- DroppedRisks Related to Our Business and Industry
We are dependent on relationships with key manufacturers, developers and third parties to obtain gaming terminals, amusement machines, and related supplies, programs, and technologies for our business on acceptable terms
Dependence on key terminal and amusement device manufacturers.
- DroppedRisks Related to Our Business and Industry
Our future results of operations may be negatively impacted by slow growth in demand for gaming terminals and by the slow growth of new gaming jurisdictions
Slow growth in demand for gaming terminals and new jurisdictions.
- DroppedRisks Related to Our Business and Industry
In addition, we may not be able to obtain new or renewed contracts with location partners that contain terms that are as favorable as our current terms in its current contracts, and any less favorable contract terms or diminution in scope could negatively impact our business
- DroppedRisks Related to Our Business and Industry
Our revenue growth and future success depends on our ability to expand into new markets, which may not occur as anticipated or at all. In addition, we may expand into new businesses, which may subject us to additional risks
Risks from location partner sales, mergers, or switching to competitors.
- DroppedRisks Related to Our Business and Industry
Our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions
Expansion into new markets and businesses facing entrenched competitors.
- DroppedRisks Related to Our Business and Industry
Our revenue growth and ability to achieve and sustain profitability will depend, in part on being able to expand our sales force and increase the productivity of our sales force
Geographic concentration in Illinois, Montana, and Nevada.
- DroppedRisks Related to Our Business and Industry
In the distributed gaming industry, we generally operate in markets where our terminal revenue splits are either statutorily determined or negotiated. Our markets with statutory splits are Illinois, Georgia and Pennsylvania, while our markets with negotiated splits are Montana, Nevada, Nebraska, Iowa and Louisiana
- DroppedRisks Related to Our Business and Industry
We operate in the highly competitive gaming industry, and our success depends on our ability to effectively compete with numerous types of businesses in a rapidly evolving, and potentially expanding, gaming environment
Dependence on expanding and increasing productivity of sales force.
- DroppedRisks Related to Our Business and Industry
The concentration and evolution of the gaming terminal manufacturing industry could impose additional costs on us
- DroppedRisks Related to Compliance and Regulatory Matters
In addition, we are subject to other rules and regulations related to our business and operations, including rules and regulations concerning the sale and service of alcoholic beverages
- DroppedRisks Related to Compliance and Regulatory Matters
Our success depends on the security and integrity of the systems and products offered, and security breaches, including cybersecurity breaches, or other disruptions could compromise certain information and expose us to liability, which could cause our business and reputation to suffer
Statutory versus negotiated net terminal income splits by market.
- DroppedRisks Related to Compliance and Regulatory Matters
partners and players, as well as the integrity of our products and services and our games. However, these measures may not be sufficient to prevent future attacks, breaches or disruptions
- DroppedRisks related to our Financial Condition
As of December 31, 2024, we had total indebtedness of $597.4 million, all of which was borrowed under the Credit Agreement, and had approximately $143.5 million of availability
Competition from casinos, iGaming, sports betting, and lotteries.
- DroppedRisks related to our Financial Condition
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations
Concentration and consolidation in the gaming terminal manufacturing industry.
- DroppedRisks Related to Our Common Stock
The market price and trading volume of Class A-1 common stock may be volatile and could decline significantly
- DroppedRisks Related to Our Common Stock
Resales of the securities, or issuances of Class A-1 common stock following the conversion of Class A-2 common stock could depress the market price of our Class A-1 common stock
Reworded
- 100% rewrittenRisks Related to Our Common Stock
The market price of our securities may be volatile, including as a result of future issuances of debt securities and equity securities, which may depress our stock price and be dilutive to existing stockholders
Updated to explicitly cite volatility in Class A-1 common stock trading volume, listing compliance, peer performance, and specific balance-sheet dilution risks.
Was: Future issuances of debt securities and equity securities may adversely affect us, including the market price of our securities and may be dilutive to existing stockholders
- 99% rewrittenRisks Related to Our Business and Industry
We face significant competition from other gaming and entertainment operations, and our success in part relies on maintaining our competitive advantages and market share in key markets
Shifted focus from general competition to supply chain vulnerabilities, key manufacturer dependence, regulatory issues, and Chinese import tariffs.
- 93% rewrittenRisks Related to Compliance and Regulatory Matters
We are subject to strict government regulations that are constantly evolving and may be amended, repealed, or subject to new interpretations, which may limit our existing operations, have an adverse impact on our ability to grow or may expose us to fines or other penalties
Expanded specific regulatory compliance duties to include anti-money laundering, counter-terrorism financing, and fraud detection.
- 92% rewrittenRisks Related to Our Common Stock
Holders of our Class A-1 common stock are subject to certain gaming regulations, and if a holder is found unsuitable by a gaming authority, that holder would not be able to, directly or indirectly, beneficially own our Class A-1 common stock
Added explicit warnings that unsuitability findings by gaming regulators prohibit direct or indirect ownership of our stock.
Was: Holders of Class A-1 common stock are subject to certain gaming regulations, and if a holder is found unsuitable by a gaming authority, that holder would not be able to, directly or indirectly, beneficially own Class A-1 common stock
- 88% rewrittenRisks Related to Our Business and Industry
Our operations are largely dependent on the skill and experience of our management and key personnel, and the loss of management and other key personnel could negatively affect our business
Removed named executive officers (such as CEO Andrew Rubenstein) and generalized the key personnel loss risk.
Was: Our operations are largely dependent on the skill and experience of our management and key personnel. The loss of management and other key personnel could significantly harm our business, and we may not be able to effectively replace members of management who may leave us
- 86% rewrittenRisks Related to Our Business and Industry
We depend heavily on our ability to win, maintain and renew contracts with our location partners, and we could lose substantial revenue if we are unable to renew certain of our contracts on substantially similar terms or at all
Replaced detailed Illinois Gaming Board rule history with broader partnership termination factors like partner financial condition and consolidation.
- 63% rewrittenRisks Related to Our Business and Industry
Our expansion into casino operations and horse racing may not be successful
Added specific horse racing risk factors including weather, shifting consumer preferences, accidents, and litigation from injuries.
- 61% rewrittenRisks Related to our Financial Condition
We may not have sufficient cash flows from operating activities to service all of our indebtedness and other obligations, and may be forced to take other actions to satisfy obligations, which may not be successful
Retained the core risk text regarding cash flow shortfalls and debt service obligations virtually unchanged from the prior year.
- 59% rewrittenRisks Related to Compliance and Regulatory Matters
If our estimates or judgments relating to accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected
- 35% rewrittenRisks Related to our Financial Condition
We may not have sufficient cash flows from operating activities, cash on hand and available borrowings under the New Credit Facility to finance our required capital expenditures under new gaming or amusement contracts and to meet our other cash needs
Was: We may not have sufficient cash flows from operating activities, cash on hand and available borrowings under the Credit Agreement to finance our required capital expenditures under new gaming or amusement contracts and to meet our other cash needs
- 27% rewrittenRisks Related to Our Business and Industry
If we fail to offer a high-quality experience, our business and reputation may suffer
All 28 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Industry
- 01Our ability to operate in existing markets and to expand into new jurisdictions depends on obtaining, maintaining and renewing a complex set of licenses and regulatory approvals, which vary widely by jurisdiction and can be extensiveNew
- 02Our revenue growth and future success depends on successfully entering and scaling in new markets and introducing new and appealing products and services amid uncertain market demand and regulatory outcomes, none of which is assuredNew
- 03We face significant competition from other gaming and entertainment operations, and our success in part relies on maintaining our competitive advantages and market share in key markets99% rewritten
- 04We depend heavily on our ability to win, maintain and renew contracts with our location partners, and we could lose substantial revenue if we are unable to renew certain of our contracts on substantially similar terms or at all86% rewritten
- 05If we fail to offer a high-quality experience, our business and reputation may suffer27% rewritten
- 06Most of our revenue has been attributable to the efforts of our sales force, which consists of both in-house personnel and independent agentsNew
- 07Our inability to complete acquisitions and integrate acquired businesses successfully could limit our growth or disrupt our plans and operations
- 08Our expansion into casino operations and horse racing may not be successful63% rewritten
- 09Our results of operations are highly sensitive to discretionary consumer spending and broader macroeconomic and socio-political conditions; our concentration in Illinois, Montana and Nevada heightens exposure to local conditionsNew
- 10Our operations are largely dependent on the skill and experience of our management and key personnel, and the loss of management and other key personnel could negatively affect our business88% rewritten
- 11We rely on assumptions and estimates to calculate certain key metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business
- 12Our results of operations, cash flows and financial condition could be affected by natural disasters or other events outside our control in the locations in which we or our location partners, suppliers or regulators operate
- 13Our operations have historically been subject to seasonal fluctuations in operating results, and we can expect to experience such fluctuations in the futureNew
Risks Related to Compliance and Regulatory Matters
- 14We are subject to strict government regulations that are constantly evolving and may be amended, repealed, or subject to new interpretations, which may limit our existing operations, have an adverse impact on our ability to grow or may expose us to fines or other penalties93% rewritten
- 15Our success depends on the security, integrity and regulatory compliance of our products, services and systems; technical incidents, cyber events, product defects or integrity failures could result in regulatory action, liability and reputational harmNew
- 16We may be liable for product defects or other claims relating to our products that we provide to our location partners
- 17Litigation may adversely affect our business, results of operations, cash flows and financial condition
- 18If our estimates or judgments relating to accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected59% rewritten
- 19Our business depends on the protection of trademarks and other intellectual property
- 20We may not be able to capitalize on trends and changes in the gaming industries, including changes due to laws and regulations governing these industries, and efforts to curtail the expansion of legalized gaming, if successful, could limit our growth of operations
Risks Related to our Financial Condition
- 21We may not have sufficient cash flows from operating activities, cash on hand and available borrowings under the New Credit Facility to finance our required capital expenditures under new gaming or amusement contracts and to meet our other cash needs35% rewritten
- 22Our level of indebtedness could adversely affect our results of operations, cash flows and financial conditionNew
- 23We may not have sufficient cash flows from operating activities to service all of our indebtedness and other obligations, and may be forced to take other actions to satisfy obligations, which may not be successful61% rewritten
- 24commitments thereunder. The failure to pay certain amounts owing under the New Credit Facility may result in an increase in the interest rate applicable theretoNew
Risks Related to Our Common Stock
- 25Clairvest Group Inc. (“Clairvest”) and members of the Rubenstein Family own a significant portion of Common Stock and have representation on the Board, which could limit the ability of other stockholders to influence corporate mattersNew
- 26Holders of our Class A-1 common stock are subject to certain gaming regulations, and if a holder is found unsuitable by a gaming authority, that holder would not be able to, directly or indirectly, beneficially own our Class A-1 common stock92% rewritten
- 27The market price of our securities may be volatile, including as a result of future issuances of debt securities and equity securities, which may depress our stock price and be dilutive to existing stockholders100% rewritten
- 28Provisions in our Charter and Bylaws designate certain state and federal courts as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders or that arise under the Securities Act, which may discourage stockholders from bringing such claimsNew
Other Accel Entertainment 10-Ks
- FY2024 10-K risk factors36 risks
Accel faces extensive regulation across multiple jurisdictions and relies heavily on key location contracts and equipment manufacturers. The December 2024 Fairmount acquisition expands the business into new casino and horse racing operations with distinct risks. Substantial indebtedness of $597.4 million requires significant cash flows for debt service and limits operating flexibility.
Filed Mar 03, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.