Las Vegas Strip Video Arcade Venue Declares Bankruptcy

When most people think of a trip to Las Vegas, they think of poker tables, slot machines, and maybe nightclubs and pool parties featuring some of the world’s most famous DJs. But not everyone who comes to Las Vegas wants to partake in these types of activities. That’s why there are plenty of venues along the Strip that offer tourists and locals innovative ways to enjoy themselves with friends and family. But it’s no secret that Las Vegas has been struggling recently due to falling tourism. When the cost of living shot up, discretionary budgets for Vegas trips fell by the wayside. And entertainment businesses in Las Vegas are starting to show signs of that struggle.

The Forum Shops at Caesar’s Palace provides a wide variety of options for shoppers and entertainment seekers alike. Whether visitors are on a tight budget or have money to burn, they can find something that suits their needs at this Strip mall. They can also use their visit to check out Electric Playhouse. Electric Playhouse is an entertainment venue with a video arcade, bar, and special events and exhibits that give tourists a good opportunity to get away from the casino floor. But operating a video arcade occupying several thousand square feet is an expensive endeavor. Electric Playhouse’s locations take up several thousand square feet, with the Las Vegas location spreading out over 10,000 square feet. Powering that much square footage can be almost as pricy as the real estate itself.

If there aren’t enough customers coming in to spend money, this type of business can burn through cash reserves quickly. And that’s just what happened with Electric Playhouse- opening three locations in less than three years at the same time that the post-pandemic cost of living skyrocketed and gave people a new reason to stay home. Any money in the bank was spent on keeping Electric Playhouse’s three locations up and running, despite a promising start. The company now has between $1 million and $10 million in debt, according to its chapter 11 bankruptcy petition filed in October 2025. While it intends to survive this period and emerge from bankruptcy as a profitable company, it will not be able to pay unsecured creditors after bankruptcy administration fees are paid. For now, the focus is on making sure the company’s employees are paid for their labor.

Attorney reviewing bankruptcy case for Las Vegas Strip video arcade venue declares bankruptcy

Why Chapter 11 Bankruptcy?

There is one major likely reason that Electric Playhouse filed for chapter 11 bankruptcy over its other primary option, chapter 7 bankruptcy. Chapter 11 bankruptcy gives struggling companies a chance to restructure debts and stay in business. Chapter 7 bankruptcy typically requires a company to go out of business to clear debts. There are also limitations on how much money a company can make and qualify for chapter 7 bankruptcy. In chapter 11 bankruptcy, the company strategizes a plan to address debt and become a more profitable business. Some of the most common methods businesses use to emerge from chapter 11 bankruptcy include:

Switching from brick-and-mortar to e-commerce sales
Closing underperforming locations if the business is a chain
Converting debt into equity
Finding new investors
Renegotiating loans and other contracts
Merging with another brand that is larger or also struggling
Receiving a federal bailout
Selling brands and side businesses
Using bankruptcy to cancel leases and other obligations without the typical financial penalties with doing so

Not every company that files for chapter 11 bankruptcy protection successfully stays in business. Only about a third of chapter 11 bankruptcy plans are confirmed. However, Subchapter V chapter 11 filings, or small business filings, have a higher success rate and proceed through the court system more quickly. Subchapter V businesses also have a higher chance of surviving after bankruptcy as compared to chapter 11 filings in general. Larger-scale examples of successful chapter 11 bankruptcy filings include General Motors, Marvel, and Delta Airlines.

Choosing Between Chapter 7 & Chapter 13

If reading about Electric Playhouse’s bankruptcy makes you wonder how you could benefit from debt relief, one of your first steps to discharging your liabilities will be selecting between chapter 7 and chapter 13 bankruptcy. These two forms of bankruptcy are often far more suitable for an average person than chapter 11 bankruptcy. Two major factors will be the goals you are looking to accomplish through bankruptcy, and your household income level.

Chapter 7 bankruptcy is a quick and effective form of debt relief, but it can only clear unsecured debt without priority status. Some of the most common examples of debt that fall into this category include credit cards, medical bills, and personal loans. Chapter 7 bankruptcy won’t clear priority debts like student loans and certain taxes, and only fends off creditors looking to collect on secured obligations for a limited time period. If a debtor is looking to stop a home foreclosure or other repossession, or needs bankruptcy to help address priority debts, chapter 13 bankruptcy can be more appropriate.

Income level is also a determining factor in which chapters of bankruptcy are available to a debtor. Someone with a sizeable living and valuable assets can’t just clear their debts in chapter 7 bankruptcy to save a few extra dollars. To qualify for chapter 7 bankruptcy, a debtor must be able to show either that they have a household income that falls below the state median household income, or that they pass the Means Test. The Means Test uses household income and mandatory monthly expenses to calculate disposable monthly income, or how much the debtor could theoretically be paying towards their debts. To qualify for chapter 13 bankruptcy, the debtor needs to demonstrate that they have enough income to pay off their secured and priority debts during their payment plan. That payment plan lasts 3 years if they would otherwise qualify for chapter 7 bankruptcy, and 5 years if they do not.

There are harsh consequences if you file for the wrong chapter of bankruptcy, or make other mistakes in your bankruptcy petition and throughout your case. These include case delays, charges and asset seizures by the bankruptcy trustee, and case dismissal. If you want a professional to help you avoid these types of obstacles, schedule your free consultation at 702-842-0700.

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