Commission clears BrightStar takeover of PlayAGS, approving private-investor registration

The Nevada Gaming Commission on June 26 approved registrations and waivers that permit BrightStar Capital Partners, via a series of holding and intermediary companies, to take PlayAGS Inc. private and convert it from a publicly traded to a privately held gaming supplier.

BrightStar founders and management told the commission they are experienced local investors and that the firm plans to support PlayAGSgrowth while preserving and potentially expanding local employment. BrightStar said it had arranged financing, completed debt placements and carved out a management incentive program typical of private-equity-led take-privates. The firm said management incentives would likely aggregate in the mid-single-digit percentage range of the equity, with periodic reporting and transparency required by Nevada rules.

Counsel and company executives addressed the commission's questions about licensing structure, compliance and the role of management, and said the private investment company structure is organized to maintain effective regulatory control over licensed subsidiaries while allowing investors to hold economic, non-voting interests. The transaction includes waivers under Nevada Gaming Commission regulation 15C due to incentive interests that fall outside a strict private-investment-company definition.

Outcome: Following the presentation and board discussion, a commissioner moved for approval of nonrestricted item number 4 with the conditions recommended by the Gaming Control Board. The motion carried by voice vote with no opposition.

Compliance and operations: BrightStar and PlayAGS executives said they intend to maintain AGS's existing compliance programs and staffing. The buyer committed to local presence and to working with regulators on license transfers. Agreed conditions include reporting and notification obligations consistent with prior private-equity transactions approved by the commission.