Description Of Business And Basis Of Presentation

3 Months Ended

Mar. 31, 2025

Description Of Business And Basis Of Presentation [Abstract]

Description Of Business And Basis Of Presentation

1.DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Century Casinos, Inc. (the “Company”) is a casino entertainment company with operations primarily in North America. The Company’s operations as of March 31, 2025 are detailed below.

The Company owns, operates and manages the following casinos through wholly-owned subsidiaries in North America:

Century Casino & Hotel Central City in Colorado (“Central City” or “CTL”)

Century Casino & Hotel Cripple Creek in Colorado (“Cripple Creek” or “CRC”)

Mountaineer Casino, Resort & Races in New Cumberland, West Virginia (“Mountaineer” or “MTR”) ⁽¹⁾

Century Casino & Hotel Cape Girardeau in Missouri (“Cape Girardeau” or “CCG”) ⁽¹⁾

Century Casino & Hotel Caruthersville in Missouri (“Caruthersville” or “CCV”) ⁽¹⁾

Nugget Casino Resort in Reno-Sparks, Nevada (“Nugget” or “NUG”) ⁽²⁾

Rocky Gap Casino, Resort & Golf in Flintstone, Maryland (“Rocky Gap” or “ROK”)⁽¹⁾

Century Casino & Hotel Edmonton in Alberta, Canada (“Century Resorts Alberta” or “CRA”) ⁽¹⁾

Century Casino St. Albert in St. Albert, Alberta, Canada (“St. Albert” or “CSA”)⁽¹⁾

Century Mile Racetrack and Casino in Edmonton, Alberta, Canada (“Century Mile” or “CMR”) ⁽¹⁾

(1)Subsidiaries of VICI Properties Inc. (“VICI PropCo”), an unaffiliated third party, own the real estate assets underlying these properties, except The Riverview hotel in Cape Girardeau and The Farmstead hotel in Caruthersville, and subsidiaries of the Company lease these properties under a triple net master lease agreement (“Master Lease”) with subsidiaries of VICI PropCo.

(2)Smooth Bourbon, LLC (“Smooth Bourbon”), a 50% owned subsidiary of the Company, owns the real estate assets underlying this property. Smooth Bourbon is consolidated as a subsidiary for which the Company has a controlling financial interest. See discussion below.

The Company’s Colorado, West Virginia and Nevada subsidiaries have partnered with sports betting and iGaming operators to offer sports wagering and online betting through mobile apps. During 2024, two of the Company’s sports betting partners requested early termination of their agreements, and the Company agreed to cancel the agreements. The agreement with Circa Sports was cancelled in May 2024 and the agreement with Tipico Group Ltd. was cancelled in July 2024. Prior to the termination of the agreements, revenue from these agreements was $1.8 million per year in our United States segment.

The Company has a controlling financial interest through its wholly-owned subsidiary Century Resorts Management GmbH (“CRM”) in the following majority-owned subsidiaries:

The Company owns 66.6% of Casinos Poland Ltd (“CPL” or “Casinos Poland”). CPL owns and operates casinos throughout Poland. As of March 31, 2025, CPL operated six casinos throughout Poland. CPL is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. Polish Airports Company (“Polish Airports”) owns the remaining 33.3% of CPL, which is reported as a non-controlling financial interest. See Note 3 for additional information regarding CPL’s gaming licenses and casinos.

The Company owns 75% of United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino (“CDR” or “Century Downs”). CDR operates Century Downs Racetrack and Casino, a racetrack and entertainment center (“REC”) in Balzac, a north metropolitan area of Calgary, Alberta, Canada. CDR is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. The remaining 25% of CDR is owned by unaffiliated shareholders and is reported as a non-controlling financial interest. A subsidiary of VICI PropCo owns the real estate assets underlying this property, and the Company leases the assets under the Master Lease.

Through its wholly-owned subsidiary Century Nevada Acquisition, Inc., the Company has a 50% equity interest in Smooth Bourbon. The Company consolidates Smooth Bourbon as a subsidiary for which it has a controlling financial interest. The Company determined it has a controlling financial interest in Smooth Bourbon based on the Nugget being the primary beneficiary of Smooth Bourbon. The remaining 50% of Smooth Bourbon is owned by Marnell Gaming, LLC (“Marnell”) and is reported as a non-controlling financial interest.

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Other Projects and Developments

Caruthersville Land-Based Casino and Hotel

On November 1, 2024, the Company opened its new land-based casino with a 38 room hotel adjacent to and connected with the existing casino pavilion building in Caruthersville, Missouri. The project cost approximately $51.9 million and was funded through financing provided by VICI PropCo in conjunction with the Master Lease. The Company previously amended its Master Lease on December 1, 2022 to provide for an increase in initial annualized rent of approximately $4.2 million upon completion of the Caruthersville project. See Note 5, “Long-Term Financing Obligation” for additional information regarding the amendment to the Master Lease.

Cape Girardeau Hotel

On April 4, 2024, the Company opened its 69 room hotel in Cape Girardeau, Missouri called The Riverview. The Riverview is a six story building with 68,000 square feet that is adjacent to and connected with the existing casino building. The project cost approximately $30.5 million. The Company financed the project with cash on hand.

Preparation of Financial Statements

The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial reporting, the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.

In the opinion of management, all adjustments considered necessary for the fair presentation of financial position, results of operations and cash flows of the Company have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results for the full year.

Reclassifications – Certain prior period amounts have been reclassified to conform to the current presentation in the condensed consolidated financial statements and the accompanying notes thereto.

Cash, Cash Equivalents and Restricted Cash – A reconciliation of cash, cash equivalents and restricted cash as stated in the Company’s condensed consolidated statements of cash flows is presented in the following table:


	March 31,		March 31,
Amounts in thousands	2025		2024
Cash and cash equivalents	$	84,705	$	136,543
Restricted cash included in deposits and other		281		262
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$	84,986	$	136,805

As of March 31, 2025, the Company had $0.2 million related to payments of prizes and giveaways for Casinos Poland and $0.1 million related to an insurance policy in restricted cash included in deposits and other on its condensed consolidated balance sheet. As of March 31, 2024, the Company had $0.2 million related to payments of prizes and giveaways for Casinos Poland and $0.1 million related to an insurance policy in restricted cash included in deposits and other on its condensed consolidated balance sheet.

Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Management’s use of estimates includes estimates for property and equipment, goodwill, intangible assets and income tax.

Presentation of Foreign Currency Amounts – The Company’s functional currency is the US dollar (“USD” or “$”). Foreign subsidiaries with a functional currency other than the US dollar translate assets and liabilities at current exchange rates at the end of the reporting periods, while income and expense accounts are translated at average exchange rates for the respective periods. The Company and its subsidiaries enter into various transactions made in currencies different from their functional currencies. These transactions are typically denominated in the Canadian dollar (“CAD”), Euro (“EUR”) and Polish zloty (“PLN”). Gains and losses resulting from changes in foreign currency exchange rates related to these transactions are included in income from operations as they occur.

The exchange rates to the US dollar used to translate balances at the end of the reported periods are as follows:


	As of March 31,	As of December 31,
Ending Rates	2025	2024
Canadian dollar (CAD)	1.4313	1.4349
Euros (EUR)	0.9230	0.9611
Polish zloty (PLN)	3.8587	4.1106

The average exchange rates to the US dollar used to translate balances during each reported period are as follows:


	For the three months
	ended March 31,
Average Rates	2025	2024	% Change
Canadian dollar (CAD)	1.4350	1.3476	(6.5%)
Euros (EUR)	0.9516	0.9209	(3.3%)
Polish zloty (PLN)	4.0005	3.9899	(0.3%)
Source: Xe Currency Converter

Cost Recovery Income – Cost recovery income is related to infrastructure built during the development of CDR. The infrastructure was built by the non-controlling shareholders prior to the Company’s acquisition of its controlling ownership interest in CDR. Income received by CDR related to cost recoveries is included in gain on foreign currency transactions, cost recovery income and other. The distribution of cost recovery income to CDR’s non-controlling shareholders is recorded as distributions to non-controlling interests.

Restatement of Previously Issued Interim Condensed Consolidated Financial Statements (Unaudited and Restated)

Subsequent to the issuance of the Company’s condensed consolidated financial statements as of and for the three months ended March 31, 2025, included in the Quarterly Report on Form 10-Q filed with the SEC on May 12, 2025, an error was identified resulting from the miscalculation of the carrying value of invested capital for Rocky Gap during impairment testing. As such, adjustments were necessary to accurately reflect our financial position and results of operations as of and for the three months ended March 31, 2025. The carrying value was corrected, which exceeded Rocky Gap’s fair value, therefore resulting in an impairment of goodwill for the Company’s Rocky Gap reporting unit and a related income tax adjustment. The impairment was recorded in the fourth quarter of the year ended December 31, 2024 and had no impact on the previously reported results of operations during the three months ended March 31, 2025 and 2024.

The error has been corrected in the accompanying condensed consolidated balance sheets as of March 31, 2025, the condensed consolidated statements of equity and the notes to condensed consolidated financial statements for the quarter then ended.

The following table summarizes the effect of the error on the Company's condensed consolidated balance sheets as of March 31, 2025:


	March 31,				March 31,
	2025				2025
	As Previously
Amounts in thousands	Reported		Adjustments		As Restated
Goodwill	$	36,672	$	(26,473)	$	10,199
Total Assets	$	1,212,570	$	(26,473)	$	1,186,097

Deferred income taxes	$	5,226	$	(1,042)	$	4,184
Total Liabilities		1,149,998		(1,042)		1,148,956

Retained loss		(139,716)		(25,431)		(165,147)
Total Century Casinos, Inc. Shareholders' Equity (Deficit)		(28,917)		(25,431)		(54,348)
Total Equity		62,572		(25,431)		37,141
Total Liabilities and Equity	$	1,212,570	$	(26,473)	$	1,186,097

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The following table summarizes the effect of the error on the Company's condensed consolidated statements of equity for the three months ended March 31, 2025:


	March 31,				March 31,
	2025				2025
	As Previously
Amounts in thousands	Reported		Adjustments		As Restated
Retained (Loss) Earnings
Balance, beginning of period	$	(119,103)	$	(25,431)	$	(144,534)
Balance, end of period		(139,716)		(25,431)		(165,147)

Total Century Casinos, Inc. Shareholder's Equity (Deficit)	$	(28,917)	$	(25,431)	$	(54,348)

Total Equity	$	62,572	$	(25,431)	$	37,141

The following table summarizes the effect of the error on the Company's notes to condensed consolidated financial statements Note 3. Goodwill and Intangible Assets for the period ended March 31, 2025:


	United States		Total				United States		Total
	As Previously		As Previously
Amounts in thousands	Reported		Reported		Adjustments		As Restated		As Restated
Accumulated impairment losses January 1, 2025		(63,502)		(66,877)		(26,473)		(89,975)		(93,350)
Accumulated impairment losses March 31, 2025		(63,502)		(66,877)		(26,473)		(89,975)		(93,350)

Net carrying value at January 1, 2025	$	26,473	$	36,256	$	(26,473)	$	—	$	9,783
Net carrying value at March 31, 2025	$	26,473	$	36,672	$	(26,473)	$	—	$	10,199

The following table summarizes the effect of the error on the Company's notes to condensed consolidated financial statements Note 12. Segment Information for the three months ended March 31, 2025:


	United States		Total				United States		Total
	As Previously		As Previously
Amounts in thousands	Reported		Reported		Adjustments		As Restated		As Restated
Long-lived assets		903,100		1,074,075		(26,473)		876,627		1,047,602
Total assets		952,952		1,212,570		(26,473)		926,479		1,186,097

CENTURY CASINOS INC /CO/ 10-Q/A