Does anyone have experience with Video Gaming Terminal Operator Valuations?

May 11, 2023

by a searcher from University of Illinois at Urbana-Champaign in Champaign-Urbana, IL, IL, USA

I have been presented with an off market opportunity to buy a stand-alone Video Gaming Terminal Operator. I do not have all of the detail yet, but I will be able to get all of my questions answered if I decide to get serious.

At a high level, the Net Terminal Income (NTI) was right around $240-260k the last two years, and the Net Income for the last couple years was just slightly north of $100k.

I believe Rent and Labor to be the two major costs, though I don't yet have cost detail. The seller also owns the strip mall in which the 'slot parlor' is located and as such, the rent terms will be part of the discussion as well. The facility does serve some alcohol, but not a full bar.

Major Question: Can someone point me to common multiples used in valuating this type of business?

Extra credit: Are there any experiences in adding additional revenue to a site such as this? Things they may not be doing already.

Thanks!

Reply by a professional
from Oregon State University in Kuna, ID, USA

^redacted‌- Try using NAICS code###-###-#### using the DealStats platform on Searchfunder. Let me know if I have the industry wrong. I am assuming this is an arcade, or coin-operated amusement devise as defined by the NAICS code.

https://www.searchfunder.com/bvr/sector/957

Reply by a searcher
from University of Illinois at Urbana in Champaign-Urbana, IL, IL, USA

Thanks folks. Looks like NAICS code###-###-#### & ###-###-#### are the most relevant I could find. I'll keep digging. Gotta say, the EBITDA multiples on a lot of these are quite low. Of course I think the risks are also high and personal control over certain aspects of the business is also fairly low, so that could make a lot of sense.

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