This Fan-Favorite Restaurant Arcade Chain Just Filed For Bankruptcy And The Reason Is Clear

Velocity Esports opened its doors in 2022 with a simple promise: mash buttons, make friends, then share a plate of something fun. It had rows of neon‑framed gaming pods where you could jump straight into a Mario Kart showdown against total strangers. Win or lose, everyone eventually drifted to the bar for truffle‑topped sliders and drinks like the "Dragon Belly Punch" or an "Electric Lemon Drop." The venue's unique mix hit a sweet spot. Millennials loved the throwback vibe, Gen Z showed up for the community feel, and food‑lovers came just to explore the quirky menu. In short, Velocity aimed to turn game night into a full‑blown social experience, with controllers in one hand and craft cocktails in the other.

Thanks to early success, Velocity expanded its business with three massive locations in different cities. The first branch in Newport, Velocity Esports Kentucky, was opened in March 2022, followed by a Las Vegas location in October 2022, and a Schaumburg, Illinois branch in March 2024. These venues all featured around 20,000 square feet of the same and each arcade‑meets‑lounge blueprint.

Despite Velocity looking unstoppable, the arcade‑bar chain filed for Chapter 11 bankruptcy on May 7, 2025, with court papers showing that the company has between $1 million to $10 million in both assets and debts. It's the latest domino to fall in a wave of restaurant industry bankruptcies that started in 2024.

Velocity's big gamble was real estate. Each "arena" stretched between 15,000 and 22,000 square feet, which ultimately meant sky‑high rent and nonstop maintenance. The Schaumburg location, inside Woodfield Mall, didn't even make it to its first birthday before closing its doors in early March 2025. A probable cause for Velocity's sudden downfall stems from the fact the company had three splashy location openings in under three years — which more than likely drained its cash reserves. This left Velocity without a cushion as consumer spending slowed post-pandemic.

Adding to this, the cost of living rose, inflation drove food costs up, and insurance premiums increased for entertainment venues. These factors further strained margins across the entertainment industry, and Velocity — with its oversized venues and high overhead costs — couldn't keep up.

Despite Velocity arenas containing enough room to host a mini Comic-Con, foot traffic never caught up. Dave & Buster's saw the shift early and pivoted to smaller venues backed by aggressive loyalty perks, while other brands adopted different techniques altogether like two popular restaurant chains that merged into one. However, since most Velocity locations were anchored in malls — the company suffered the same fate as many former mall anchors.

According to the Velocity Esports website, the only still-listed location is it's Newport, Kentucky location — however there has been no official announcement regarding whether or not it's Las Vegas location will close or not. A planned location for Orlando, Florida has also been left in limbo. With that said, for now it seems a bankruptcy label doesn't change your ability to enjoy a night out at Velocity, with reservation options still listed as available at the company's two locations.

According to Bankruptcy Observer, Velocity Esports doesn't anticipate having enough assets to pay off its unsecured creditors, so it's difficult to say if the company will exist restructuring successfully. If restructuring succeeds, Velocity could emerge leaner, but with a streamlined focus on its more profitable hubs. While some companies have come back from bankruptcy, Velocity could instead be heading for liquidation given it's spread-too-thin financial situation.