Las Vegas headquartered Affinity Gaming is merging with a newly formed special purpose acquisition company, which plans to raise between $150m and $175m through an initial public offering. 

Gaming & Hospitality Acquisition Corp, a newly organised blank check company, filed the S-1 form with the US Securities and Exchange Commission late last week, and plans to merge with its sponsor, Affinity Gaming Holdings, and at least one other company.

The firm says that it has not yet selected any specific business combination target, nor has anyone on its behalf initiated any substantive discussions, directly or indirectly, with any such target.

It said that its efforts to identify a prospective business combination target will not be limited to a particular geographic region, but that it intends to focus on business in the gaming and hospitality sectors.

Target businesses in the sector could include regional gaming, distributed gaming, online gaming, online sports betting and gaming technology and equipment, with a particular focus stressed regarding the prospects of those former two.

The filing states: “Distributed gaming is characterised by the operation of slot machines in non-casino locations such as restaurants, bars, grocery stores and convenience stores. 

“In our view, distributed gaming is strategic to regional gaming operators and offers distinct advantages over other forms of gaming due to its scalability, low capital requirements, long-term contracts and return on investment.”

The filing says that Affinity Gaming has agreed to purchase $6.7m of units, with an intention to apply to additional units on the Nasdaq Capital Market under the symbol ‘GHACU’ detailed.

Affinity Gaming, a diversified casino gaming company based in Las Vegas, is the parent company of eight casinos, five of which are located in Nevada, two in Missouri and one in Iowa.

The SEC filing goes on to elaborate further on the potential business proposition: “We seek to acquire one or more businesses with assets that are fundamentally sound yet are underperforming their potential. 

“Our management team has extensive experience as hands-on operators in the areas of marketing, operations and finance as well as extensive networks and insights within the gaming and hospitality sectors. 

“We seek to add value by improving the productivity of any underperforming assets and/or growing operations beyond existing capabilities.”

Adding: “We seek to acquire one or more businesses that have significant embedded or underexploited expansion opportunities, have been underinvested in by current owners, or where a strategic relationship or business combination with Affinity Gaming and additional acquisitions could unlock significant potential synergies.”