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What changed in CENTURY CASINOS INC /CO/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CENTURY CASINOS INC /CO/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+485 added−477 removedSource: 10-K (2024-03-14) vs 10-K (2023-03-10)

Top changes in CENTURY CASINOS INC /CO/'s 2023 10-K

485 paragraphs added · 477 removed · 304 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+34 added−55 removed22 unchanged
Biggest changeCaruthersville includes a 27-space RV park. The majority of Caruthersville’s customers reside in Tennessee. The closest competitor to Caruthersville, with the exception of our Cape Girardeau casino, is located in Arkansas and is 90 miles away. A casino expansion at that location in Arkansas, which was completed at the end of 2022, could increase competition with our Caruthersville casino.
Biggest changeWhile we saw a small decline in revenue and customer visits in the first few weeks of the competitor’s operations, we believe that our marketing efforts have been effective in offsetting this competition to date. The majority of Caruthersville’s customers reside in Tennessee. The closest competitor to Caruthersville is located in Arkansas and is 90 miles away.
Century Mile Racetrack and Casino – Edmonton, Alberta, Canada (“CMR” or “Century Mile”). Century Mile is a one-mile horse racetrack and a multi-level REC located on Edmonton International Airport land close to the city of Leduc, south of Edmonton. In addition to the casino, the REC has two restaurants, two bars and an off-track betting parlor.
Century Mile Racetrack and Casino – Edmonton, Alberta, Canada (“CMR” or “Century Mile”). CMR is located on Edmonton International Airport land close to the city of Leduc, south of Edmonton. CMR is a multi-level REC with a one mile horse racetrack. In addition to the casino, the REC has two restaurants, two bars and an off-track betting parlor.
Our main goal is to grow our business by actively pursuing the development or acquisition of new gaming opportunities and growing and reinvesting in our existing operations. We began operating land-based casinos in 1996 with the acquisition of our casino in Cripple Creek, Colorado. In 2006, we opened casinos in Central City, Colorado and Alberta, Canada.
Our main goal is to grow our business by actively pursuing the development or acquisition of new gaming opportunities and growing and reinvesting in our existing operations. We began operating casinos in 1996 with the acquisition of our casino in Cripple Creek, Colorado. In 2006, we opened casinos in Central City, Colorado and Alberta, Canada.
None of the information posted to our website is incorporated by reference into this report. ‎ 11
None of the information posted to our website is incorporated by reference into this report.
In addition to the casino, the facility has an off-track betting parlor, 26 hotel rooms, a 10,700 square foot showroom that can seat approximately 500 customers, a 3,000 square foot showroom that can seat approximately 200 customers where we host Yuk Yuks Comedy Club comedic performances, two restaurants, three bars, 600 surface parking spaces and a complimentary underground heated parking garage with 300 additional s paces.
In addition to the casino and hotel, the facility has an off-track betting parlor, a 10,700 square foot showroom that can seat approximately 500 customers, a 3,000 square foot showroom that can seat approximately 200 customers where we host Yuk Yuks Comedy Club comedic performances, two restaurants, a sports bar and lounge and two additional bars, 600 surface parking spaces and a complimentary underground heated parking garage with 300 additional s paces.
In addition, there is a proposal to build a casino near Lake of the Ozarks, which requires approval by the US Department of the Interior; however, that project is not expected to directly compete with our casinos as it is over 200 miles from our properties.
There is a proposal to build a casino near Lake of the Ozarks, which requires approval by the US Department of the Interior; however, that project is not expected to directly compete with our casinos because it is over 200 miles from our properties.
Century Casino St. Albert – Edmonton, Alberta, Canada (“CSA” or “St. Albert”). St. Albert is located 13 miles from CRA, northwest of Edmonton. In addition to the casino, the facility has an off-track betting parlor, a restaurant, a bar, a lounge, a banquet facility and 585 surface parking spaces.
Century Casino St. Albert – Edmonton, Alberta, Canada (“CSA” or “St. Albert”). CSA is located in St. Albert, Alberta northwest of Edmonton. In addition to the casino, the facility has an off-track betting parlor, a restaurant, a bar, a lounge, a banquet facility and 585 surface parking spaces.
OpCo owns and operates the Nugget Casino Resort in Sparks, Nevada, and PropCo owns the real property on which the casino is located. We purchased 50% of the membership interests in PropCo for approximately $95.0 million at the first closing on April 1, 2022 (the “First Closing”).
Nugget owns and operates the Nugget Casino Resort in Reno-Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located. We purchased 50% of the membership interests in Smooth Bourbon for approximately $95.0 million at the first closing on April 1, 2022 (the “First Closing”).
On February 28, 2023, the AGLC approved a temporary increase from the current 15% of slot machines net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. The increase in slot machine net sales is expected to have a positive impact on net operating revenue and results of operations at our Canadian properties.
On February 28, 2023, the AGLC approved a temporary increase from 15% of slot machines net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. The increase in the slot machine net sales percentage had a positive impact on net operating revenue and results of operations at our Canadian properties.
CMR operates the Alberta pari-mutuel network under which CMR provides pari-mutuel content and live video to 25 off-track betting parlors throughout Alberta and has agreements with over 90 racetracks world-wide to broadcast races through the off-track betting network. Through August 2021, we operated the southern Alberta pari-mutuel off-track betting network through Century Bets! Inc. (“CBS” or “Century Bets”).
CMR operates the majority of the Alberta pari-mutuel network under which CMR provides pari-mutuel content and live video to 25 off-track 4 betting parlors throughout Alberta and has agreements with over 90 racetracks world-wide to broadcast races through the off-track betting network. Through August 2021, we operated the southern Alberta pari-mutuel off-track betting network through Century Bets! Inc.
As of December 31, 2022, 50% of our workforce and 37% of our leadership roles were held by women. Focusing on employee development and creating a positive work environment is one of our main priorities. We have training and development programs to provide our employees with the opportunity to succeed and thrive at our company.
As of December 31, 2023, 49% of our workforce and 41% of our leadership roles were held by women. 9 Focusing on employee development and creating a positive work environment is one of our main priorities. We have training and development programs to provide our employees with the opportunity to succeed and thrive at our company.
Any violations of anti-money laundering laws or regulations by any of our properties could have an adverse effect on our business. Employees and Human Capital Employees – As of December 31, 2022, we had approximately 2,292 full-time employees and 512 part-time employees . During busier months, a casino may supplement its permanent staff with seasonal employees.
Any violations of anti-money laundering laws or regulations by any of our properties could have an adverse effect on our business. Employees and Human Capital Employees – As of December 31, 2023, we had approximately 3,243 full-time employees and 910 part-time employees . During busier months, a casino may supplement its permanent staff with seasonal employees.
The loss or suspension of a liquor license could significantly impair our operations. Local building, parking and fire codes and similar regulations also could impact our operations and any proposed development of our properties. We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering laws and regulations.
Local building, parking and fire codes and similar regulations also could impact our operations and any proposed development of our properties. We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering laws and regulations.
We have not experienced a negative impact to our results of operations in Canada from online gaming; however, increased competition from online gaming could occur and adversely affect our results of operations in Alberta in the future. Poland There are 52 casino licenses available throughout Poland.
We have not experienced a negative impact to our results of operations in Canada from online gaming; however, increased competition from online gaming could occur and adversely affect our results of operations in Alberta in the future.
Poland – CPL generally attracts more customers from October through March because domestic customers generally vacation during the summer months. Governmental Regulation and Licensing The ownership and operation of casino gaming facilities are subject to extensive state, local, foreign, provincial or federal regulations.
Our off-track betting parlors attract more customers during the peak racing season from May through August. Poland – CPL generally attracts more customers from October through March because domestic customers generally vacation during the summer months. Governmental Regulation and Licensing The ownership and operation of casino gaming facilities are subject to extensive state, local, foreign, provincial or federal regulations.
In addition to the casino and racetrack, the REC has a bar, a lounge, a restaurant facility, an off-track betting parlor, an entertainment area and 700 surface parking spaces. CDR is consolidated as a majority-owned subsidiary for which we have a controlling financial interest. Poland Casinos Poland – Poland (“CPL” or “Casinos Poland”).
In addition to the casino and racetrack, the REC has a bar, a lounge, a restaurant facility, an off-track betting parlor, an entertainment area and 700 surface parking spaces. We have a 75% ownership interest in CDR and consolidate CDR as a majority-owned subsidiary for which we have a controlling financial interest.
Century Sports was included in the Canada reportable segment. ‎ 6 Mendoza Central Entretenimientos S.A. (“MCE”) In November 2021, our subsidiary CRM sold its ownership of 7.5% of MCE for nominal consideration. In addition, the consulting services agreement between CRM and MCE, under which CRM provided advice on casino matters and received a service fee from MCE, has been terminated.
There were no earn out payments in 2022. ‎ 6 Mendoza Central Entretenimientos S.A. (“MCE”) In November 2021, our subsidiary CRM sold its ownership of 7.5% of MCE for nominal consideration. In addition, the consulting services agreement between CRM and MCE, under which CRM provided advice on casino matters and received a service fee from MCE, was terminated.
We maintain a proprietary database that consists primarily of slot machine customers that allows us to create effective targeted marketing and promotional programs, cash and merchandise giveaways, coupons, downloadable promotional credits, preferred parking, food, lodging, game tournaments and other special events.
All visitors to our properties are offered the opportunity to join our players’ club . We maintain a proprietary database that consists primarily of slot machine customers that allows us to create effective targeted marketing and promotional programs, point incentives, cash and merchandise giveaways, coupons, downloadable promotional credits, preferred parking, food, lodging, game tournaments and other special events.
Online gaming – In October 2020, t he AGLC launched an online gaming website, “Play Alberta” offering online slot and table games. In September 2021, the AGLC added online sports wagering, including single event sports wagering, to its “Play Alberta” website. The website competes primarily with unregulated online gaming websites that are currently available to Alberta residents.
In September 2021, the AGLC added online sports wagering, including single event sports wagering, to its “Play Alberta” website. The website competes primarily with unregulated online gaming websites that are currently available to Alberta residents.
We expect this transaction to close in the second quarter of 2023. ‎ 5 Recent Developments Related to Century Casino Caruthersville On October 26, 2022, the Missouri Gaming Commission (“MGC”) approved the relocation of the casino at Century Casino Caruthersville from the riverboat and the barge to a land-based pavilion until the new land-based casino and hotel discussed below are completed.
On October 26, 2022, the Missouri Gaming Commission (“MGC”) approved the relocation of the casino at Century Casino Caruthersville from the riverboat and barge to a land-based pavilion until the new land-based casino and hotel (discussed below) are completed.
Missouri – Century Casino Caruthersville – Caruthersville, Missouri (“CCV” or “Caruthersville”). Caruthersville is located in southeast Missouri along the Mississippi River approximately 95 miles north of Memphis, Tennessee. In December 2022, we moved the casino into a 40,000 square foot land-based pavilion following record low water levels in the Mississippi River that made access to the riverboat dangerous.
Caruthersville and our neighboring hotel, The Farmstead, are located in southeast Missouri along the Mississippi River approximately 95 miles north of Memphis, Tennessee. In December 2022, we relocated the casino from a riverboat into a 40,000 square foot land-based pavilion following record low water levels in the Mississippi River that made access to the riverboat difficult.
Except as described below, we aggregate our operating segments into three reportable segments based on the geographical locations in which our casinos operate. We have additional business activities, including our cruise ship concession agreement and certain other corporate and management operations, which we report as Corporate and Other.
We aggregate all operating segments into three reportable segments based on the geographical locations in which our casinos operate: United States, Canada and Poland. We have additional business activities including certain other corporate and management operations that we report as Corporate and Other.
CPL has been in operation since 1989 and currently is the owner and operator of eight casinos throughout Poland. Our subsidiary CRM owns 66.6% of Casinos Poland and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest. Corporate and Other Cruise Ship.
Poland Casinos Poland – Poland (“CPL” or “Casinos Poland”). CPL has been in operation since 1989 and currently has eight casino licenses throughout Poland. Our subsidiary CRM owns 66.6% of Casinos Poland and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest.
The trade unions in Poland do not currently have any collective bargaining agreements with CPL, but changes in pay of union employees at CPL require approval of the unions. The trade unions at Mountaineer have collective bargaining agreements with Mountaineer.
Approximately 252 employees at our CPL casinos in Poland, 42 employees at Mountaineer and 217 employees at Rocky Gap belong to trade unions. The trade unions in Poland do not currently have any collective bargaining agreements with CPL, but changes in pay of union employees at CPL require approval of the unions.
In 2007, we purchased a 33.3% ownership interest in Casinos Poland, Ltd. (“CPL”), the owner and operator of eight casinos throughout Poland, and in 2013 we purchased an additional 33.3% ownership interest in CPL, resulting in a majority 66.6% ownership interest.
In 2007, we purchased a 33.3% ownership interest in Casinos Poland, Ltd. (“CPL”), the owner and operator of casinos throughout Poland, and in 2013 we purchased an additional 33.3% ownership interest in CPL, resulting in a majority 66.6% ownership interest. Between 2015 and 2019, we acquired an additional casino and developed two racing and entertainment centers (“RECs”) in Alberta, Canada.
We are aware that much of our success is based on our employees’ combined talents, skills and ideas. As an international casino entertainment company, we cater to very different markets with different customer expectations. In order to meet these expectations, we strive to build a workforce that is as diversified as our customers.
As an international casino entertainment company, we cater to different markets with different customer expectations. In order to meet these expectations, we strive to build a workforce that is as diversified as our customers.
Our subsidiary Century Resorts Management GmbH (“CRM”) owns 75% of United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino, which in turn owns and operates a REC. The REC is in metropolitan Calgary, the largest city in the province of Alberta, seven miles from the Calgary International Airport.
Our subsidiary Century Resorts Management GmbH (“CRM”) owns 75% of United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino, which in turn owns and operates a REC and horse racetrack.
Additional Projects We currently are exploring additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects or acquisitions, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.
Along with the capital needs of potential projects or acquisitions, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether. For more information on these and other risks related to our business, see Item 1A, “Risk Factors” below .
As a result, we have had to adjust hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels.
We have experienced difficulties attracting and retaining staff at some locations in the US and Canada. As a result, we have had to adjust hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We consider our current staffing levels as normal .
Our agreement to operate that ship-based casino ends in the second quarter of 2023. 2022 Business Developments Nugget Casino Resort in Sparks, Nevada On February 22, 2022, we entered into a definitive agreement with Marnell Gaming, LLC (“Marnell”), pursuant to which we, through a newly formed subsidiary, (i) purchased from Marnell 50% of the membership interests in Smooth Bourbon, and (ii) will purchase 100% of the membership interests in Nugget Sparks, LLC (“OpCo”).
Business Developments Nugget Casino Resort in Reno-Sparks, Nevada In February 2022, we entered into a definitive agreement with Marnell Gaming, LLC (“Marnell”), pursuant to which we agreed to purchase from Marnell (i) 50% of the membership interests in Smooth Bourbon, LLC (“Smooth Bourbon”), and (ii) 100% of the membership interests in Nugget.
In West Virginia, we attract more customers from March to August during the racing season. Our casinos in Missouri attract customers throughout the year with the highest business volumes in February and March. Canada – Prior to the COVID-19 closures, o ur casinos in Alberta, Canada attracted more customers from September through April.
Seasonality United States – Our casinos in Colorado attract more customers during the warmer months from May through September. In West Virginia, we attract more customers from March to August during the racing season. Our casinos in Missouri attract customers throughout the year with the highest business volumes in February and March.
On October 13, 2022, the riverboat, which had operated since 1994, had to be closed as it was no longer accessible from the barge because of record low water levels in the Mississippi River. Prior to its closure, the riverboat casino had 519 slot machines and seven table games.
Recent Developments Related to Century Casino Caruthersville The Caruthersville casino had been operating on a riverboat and barge since 1994. On October 13, 2022, the riverboat had to be closed as it was no longer accessible from the barge because of the record low water levels in the Mississippi River.
We believe that our expansion projects at both Missouri locations will allow us to compete for individuals or groups that desire a multi-day visit to Cape Girardeau or Caruthersville. Canada Edmonton – CRA, St. Albert and Century Mile have five competitors, all casinos, in the Edmonton market.
We believe that our expansion projects at both Missouri locations will allow us to continue to compete for individuals or groups that desire a multi-day visit to Cape Girardeau or Caruthersville.
Mountaineer has four competitors within 50 miles; two in Pennsylvania, one in West Virginia and one in Ohio. Mountaineer primarily attracts customers from neighboring Ohio and from the greater Pittsburgh area. We market this casino as a destination for year-round entertainment. Mountaineer also hosts the annual West Virginia Derby horse racing event.
Mountaineer is the area’s only full-service casino resort located on the Ohio River in the northern panhandle of West Virginia. We market this casino as a destination for year-round entertainment. Mountaineer primarily attracts customers from neighboring Ohio and from the greater Pittsburgh area. Mountaineer also hosts the annual West Virginia Derby horse racing event.
Cape Girardeau Hotel We plan to build a 69-room hotel at our Cape Girardeau location. The hotel is planned as a six-story building with 68,000 square feet that will be adjacent to and connected with the existing casino building. The hotel project has been approved by the City of Cape Girardeau.
Cape Girardeau Hotel We are building a 69 room hotel at our Cape Girardeau location called The Riverview. The Riverview is planned as a six-story building with 68,000 square feet that will be adjacent to and connected with the existing casino building. Construction on this project began in September 2022 and is expected to be completed in April 2024.
We have not made, and do not anticipate making, material expenditures with respect to these laws, regulations and ordinances. However, the coverage of, and attendant compliance costs associated with, such laws, regulations and ordinances may result in future additional costs to our operations. Rules and regulations regarding the service of alcoholic beverages are strict.
However, the coverage of, and attendant compliance costs associated with, such laws, regulations and ordinances may result in future additional costs to our operations. Rules and regulations regarding the service of alcoholic beverages are strict. The loss or suspension of a liquor license could significantly impair our operations.
In addition to our players’ clubs, we also have various cash and prize promotions and market our casinos through a variety of media outlets including internet, television, radio, print and billboard advertising. Our marketing focuses on competition and other facts and circumstances of each market area in which we operate.
We seek to compete through promotion of our players’ clubs, enhancement of social networking initiatives and other marketing efforts. In addition to our players’ clubs, we also have various cash and prize promotions. Our marketing focuses on competition and other facts and circumstances of each market area in which we operate.
We also have a five-year option through April 1, 2027 to acquire the remaining 50% of the membership interests in PropCo for $105.0 million plus 2% per annum. At the First Closing, PropCo also entered into a lease with OpCo for an annual rent of $15.0 million.
Following the Second Closing, we own the Nugget Casino Resort and 50% of the membership interests in Smooth Bourbon. We also have a five-year option through April 1, 2027 to acquire the remaining 50% of the membership interests in Smooth Bourbon for $105.0 million plus 2% per annum.
West Virginia – Mountaineer Casino, Racetrack & Resort – New Cumberland, West Virginia (“MTR” or “Mountaineer”). Mountaineer is located on the Ohio River bank at the northern tip of West Virginia’s northwestern panhandle approximately 30 miles from Pittsburgh International Airport and a one hour drive from downtown Pittsburgh.
Mountaineer is located on the Ohio River at the northern tip of West Virginia’s northwestern panhandle approximately 30 miles from Pittsburgh International Airport and a one hour drive from downtown Pittsburgh. In addition to the casino and hotel, Mountaineer has a golf course and a racetrack that holds live thoroughbred races from April to December.
Pursuant to a real estate purchase agreement dated August 24, 2022, by and between Evitts Resort, LLC (“Evitts”) and an affiliate of VICI PropCo (“VICI PropCo Buyer”), VICI PropCo Buyer agreed to acquire the real estate assets relating to Rocky Gap for approximately $203.9 million, subject to the conditions and terms set forth therein.
Pursuant to a real estate purchase agreement dated August 24, 2022, by and between Evitts Resort, LLC, a subsidiary of Golden and an affiliate of VICI PropCo (“VICI PropCo Buyer”), VICI PropCo Buyer agreed to acquire a related interest in the land and building associated with Rocky Gap.
In September 2021, we transferred these contracts to Century Mile. Century Bets was reported in the Canada reportable segment in the Calgary operating segment. ‎ 4 Calgary – Century Downs Racetrack and Casino – Calgary, Alberta, Canada (“CDR” or “Century Downs”).
(“CBS” or “Century Bets”). In September 2021, we transferred these contracts to Century Mile. Century Downs Racetrack and Casino – Calgary, Alberta, Canada (“CDR” or “Century Downs”). CDR is located in Calgary, Alberta, seven miles from the Calgary International Airport.
Central City is located approximately 35 miles west of Denver. CTL is located at the end of the Central City Parkway, an eight mile four-lane highway that connects I-70, the main east/west interstate highway in Colorado, to Central City.
CTL is located at the end of the Central City Parkway, an eight mile four-lane highway that connects I-70, the main east/west interstate highway in Colorado, to Central City. In addition to the casino and hotel, the facility has a bar, two restaurants and a 500 -space on-site covered parking garage.
Century Casino Cape Girardeau – Cape Girardeau, Missouri (“CCG” or “Cape Girardeau”). Cape Girardeau is located along the Mississippi River three and a half miles from Interstate 55 in southeast Missouri, approximately 120 miles south of St. Louis, Missouri.
Cape Girardeau is located along the Mississippi River three and a half miles from Interstate 55 in southeast Missouri, approximately 120 miles south of St. Louis, Missouri. In addition to the casino, the facility has two dining venues, a conference and entertainment center and 1,058 surface parking spaces neighboring the casino.
Such laws and regulations apply in all jurisdictions in which we may do business. Management believes that we are in compliance with all applicable gaming and non-gaming regulations.
Such laws and regulations apply in all jurisdictions in which we may do business. Management believes that we are in compliance with all applicable gaming and non-gaming regulations. A detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this report, which is incorporated herein by reference.
In addition to the casino, Mountaineer has a racetrack that holds live thoroughbred races from April to December. The facility also has on-site pari-mutuel wagering, a sports book, 357 hotel rooms, five dining venues, a bar, a golf course and 5,248 surface parking spaces neighboring the casino. Sports betting and online gaming (“iGaming”) are also available through mobile apps.
The facility also has on-site pari-mutuel wagering, a sports book, five dining venues, a bar and 5,248 surface parking spaces neighboring the casino. Sports betting and online gaming (“iGaming”) are also available through mobile apps. Rocky Gap Casino, Resort & Golf – Flintstone, Maryland (“ROK” or “Rocky Gap”) . Rocky Gap is located in Rocky Gap State Park.
The town of Cripple Creek is located approximately 45 miles southwest of Colorado Springs, the second largest city in the state of Colorado. In addition to the casino, the facility has 21 hotel rooms, two bars, a restaurant and 271 surface parking spaces neighboring the casino. Sports betting is available through two mobile sports betting apps.
Sports betting is available through a mobile sports betting app. Century Casino & Hotel – Cripple Creek, Colorado (“CRC” or “Cripple Creek”). The town of Cripple Creek is located approximately 45 miles southwest of Colorado Springs, the second largest city in the state of Colorado.
Human Capital – Our company is led by two gaming industry professionals with a combined industry experience of more than 75 years. Due to extensive industry experience, the team’s diversity of experience gives us the ability to tailor our gaming-based entertainment developments and operations to the unique needs and circumstances of each specific location.
Due to extensive industry experience, the team’s diversity of experience gives us the ability to tailor our gaming-based entertainment developments and operations to the unique needs and circumstances of each specific location. We are aware that much of our success is based on our employees’ combined talents, skills and ideas.
Missouri – Cape Girardeau and Caruthersville have competitors in Missouri, Arkansas and Illinois. The distance between our Cape Girardeau and Caruthersville properties is 85 miles. While our two properties share a small portion of our customer database, we do not believe that our properties compete against one another for customers.
While our two properties share a small portion of our customer database, we do not believe that our properties compete against one another for customers in any material way. The closest competitor to Cape Girardeau is located approximately 56 miles away in southern Illinois. This new competitor opened in August 2023.
Construction on this project began in September 2022 and is expected to be completed in the first half of 2024. We estimate the project will cost $30.5 million, and we plan to finance this cost with cash on hand. As of December 31, 2022, we have spent $2.8 million on this project.
We estimate the project will cost $30.5 million, and we are financing the project with cash on hand. As of December 31, 2023, we have spent approximately $22.8 million on this project. We expect the remaining $7.7 million will be spent in the first half of 2024. Additional Projects We continue to explore additional potential gaming projects and acquisition opportunities.
The following are our reportable segments: United States Canada Poland Corporate and Other 3 The general characteristics of our properties, including machine and table counts at our casinos, are provided in Part I, Item 2. “Properties”. United States Colorado – Century Casino & Hotel – Central City, Colorado (“CTL” or “Central City”).
The general characteristics of our properties, including machine and table counts and the number of hotel rooms at our casinos, are provided in Part I, Item 2. “Properties”. 3 United States East – Mountaineer Casino, Resort & Races – New Cumberland, West Virginia (“MTR” or “Mountaineer”).
Upon closing of the transaction, we entered into a three year lease agreement with the purchaser of the casino operations for annual net rent for the land and building of CAD 0.5 million ($0.4 million based on the exchange rate on December 31, 2022). After the sale, we continued to operate Century Sports, and to own the underlying real estate.
We had previously sold the casino operations at this location in December 2020 and entered into a lease agreement with the purchaser for annual net rent of CAD 0.5 million ($0.4 million based on the exchange rate on December 31, 2023).
There are competitors in each city that offer covered parking and more hotel rooms, which may negatively impact our Colorado casinos, particularly during inclement weather and the peak tourist season. In Cripple Creek, a casino across the street from ours is undergoing an expansion.
There are competitors in each city that offer covered parking and more hotel rooms, which may negatively impact our Colorado casinos, particularly during inclement weather and the peak tourist season. In addition, some of our competitors may offer larger betting limits or certain games not offered by us, which could attract customers to those competitors.
Those who qualify for VIP status receive additional benefits compared to regular club membership, such as invitations to exclusive VIP events.
Those who qualify for VIP status receive additional benefits compared to regular club membership, such as invitations to exclusive VIP events. United States East – Mountaineer has four competitors within 50 miles, two in Pennsylvania, one in West Virginia and one in Ohio. Sports betting in Ohio also impacts Mountaineer.
The pavilion provides for easier access to the casino for customers, and we anticipate it will bring operating efficiencies and cost savings. We have not experienced a negative impact on results following the move to the pavilion and have had a positive reaction from customers.
Although we are operating fewer slot machines from the pavilion than we were from the riverboat, we have not experienced a negative impact on results following the move to the pavilion and have had a positive reaction from customers. The riverboat and barge were removed in February 2023.
A detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this report, which is incorporated herein by reference. 9 Other Regulations We are subject to certain foreign, federal, state, provincial and local safety and health, employment and environmental laws, regulations and ordinances that apply to our non-gaming operations.
Other Regulations We are subject to certain foreign, federal, state, provincial and local safety and health, employment and environmental laws, regulations and ordinances that apply to our non-gaming operations. We have not made, and do not anticipate making, material expenditures with respect to these laws, regulations and ordinances.
The distance between CRA and CSA is approximately 13 miles, and CMR is approximately 30 miles from each of CRA and CSA. We do not believe that our properties compete against one another for customers.
Canada Our casinos in the Edmonton market have five competitors. Our casinos within the Edmonton market are within 30 miles of each other; however, we do not believe that our properties compete against one another for customers.
Caruthersville also has a food and beverage outlet, 27 space RV park and 1,343 surface parking spaces neighboring the casino. Also neighboring the casino is our newly renovated hotel, The Farmstead, which has 36 hotel rooms. See “2022 Business Developments – Recent Developments Related to Century Casino Caruthersville”, “— Caruthersville Land-Based Casino and Hotel” and “—Caruthersville Hotel” below.
Caruthersville also has a food and beverage venue, 27 space RV park and 1,343 surface parking spaces neighboring the casino. We are currently building a new land-based casino with a small hotel near the pavilion site. See “Business Developments – Caruthersville Land-Based Casino and Hotel” below. Century Casino Cape Girardeau – Cape Girardeau, Missouri (“CCG” or “Cape Girardeau”).
Our main marketing activities for these properties focus on casino branding, promoting the racetrack, the player’s club program and promotions made through various marketing channels such as print, television, billboard, mail and social media. CRA is one of two casinos in the city of Edmonton that have both a hotel and showrooms.
Our main marketing activities for these properties focus on casino branding, promoting the racetracks, the player’s club program and promotions made through various marketing channels. Our casinos in Alberta participate in the Winner’s Edge, an Alberta-wide casino loyalty program implemented by the AGLC.
See Note 1 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report for additional information about MCE. Bermuda In August 2017, we announced that we had entered into a long-term casino management agreement with the owner of the Hamilton Princess Hotel & Beach Club in Hamilton, Bermuda.
Bermuda In August 2017, we announced that we had entered into a long-term casino management agreement with the owner of the Hamilton Princess Hotel & Beach Club in Hamilton, Bermuda. We would also provide a $5.0 million loan for the purchase of casino equipment if the gaming license was awarded.
Calgary - Century Downs has seven competitors (two of which have a combination of hotel and casino) in the Calgary market. Unique to this property is a 5.5 furlong (0.7 mile) horse racetrack. Our casino is one of two casinos in the market with an off-track betting parlor.
Unique to this property is its horse racetrack, and it is one of two casinos in the market with an off-track betting parlor. A casino recently relocated approximately eight miles from CDR, and the increased competition has had a negative impact on financial results at this location.
In connection with the closing of this transaction, one of our subsidiaries and a subsidiary of VICI PropCo will enter into an amendment to the Master Lease to (i) add Rocky Gap to the Master Lease, (ii) provide for an initial annual rent for Rocky Gap of approximately $15.5 million, and (iii) extend the initial Master Lease term for 15 years from the date of the amendment (subject to the existing four five-year renewal options).
In connection with the closing of this transaction, one of our subsidiaries and a subsidiary of VICI PropCo entered into an amendment to the Master Lease. See Part I, Item 2. “Properties – Master Lease” for a discussion of the Master Lease as amended to date.
Rocky Gap Casino Resort in Flintstone, Maryland On August 24, 2022, we entered into a definitive agreement with Lakes Maryland Development LLC (“Lakes Maryland”), Golden Entertainment, Inc. (“Golden”), and VICI PropCo, pursuant to which we agreed to acquire the operations of Rocky Gap Casino Resort (“Rocky Gap”) for approximately $56.1 million, subject to the conditions and terms set forth therein.
(“Golden”), Lakes Maryland Development LLC, a subsidiary of Golden, and VICI PropCo, pursuant to which we agreed to acquire the operations of Rocky Gap.
In connection with the 2019 Acquisition, we entered into a triple net lease agreement (the “Master Lease”) with subsidiaries of VICI Properties Inc. (“VICI PropCo”). In 2022, we acquired 50% of Smooth Bourbon LLC (“Smooth Bourbon” or “PropCo”), which leases the land and building for the Nugget Casino Resort in Sparks, Nevada in which it operates.
In 2022, we acquired 50% of Smooth Bourbon LLC (“Smooth Bourbon”), which leases the land and building for the Nugget Casino Resort (“Nugget”) in Reno-Sparks, Nevada. In 2023, we acquired the operations of the Nugget and Rocky Gap Casino, Resort & Golf (“Rocky Gap”) in Flintstone, Maryland.
Terminated Projects Century Casino Calgary and Century Sports In August 2020, we announced that we had entered into an agreement to sell the casino operations of Century Casino Calgary for CAD 10.0 million ($7.5 million based on the exchange rate on August 5, 2020) plus a three year quarterly earn out as specified in the agreement.
The definitive agreement to sell the casino operations of Century Casino Calgary provided for a three year quarterly earn out that ended on August 4, 2023.
We have partnered with sports betting operators that are conducting sports wagering under each of the three Colorado master licenses for sports wagering held by our Colorado subsidiaries. 7 Our marketing objective for the casinos in Colorado is to create public awareness by positioning our casinos as the premier provider of personal service, convenient parking, the latest gaming products and superior food.
We have partnered with sports betting operators that conduct sports wagering under each of the three Colorado master licenses for sports wagering held by our Colorado subsidiaries. 7 In Cripple Creek, a casino across the street from ours completed an expansion at the end of 2023.
From October to December 2022, Caruthersville operated the casino from the barge with 299 slot machines and four table games. The move to the pavilion, which has 425 slot machines and six table games, was completed in late December 2022. The pavilion building will not be affected by water levels and is protected by a flood wall.
The pavilion building will not be affected by water levels, is protected by a flood wall and provides for easier access to the casino for customers than the riverboat.
Between 2015 and 2019, we acquired an additional casino and developed two Racing and Entertainment Centers (“RECs”) in Alberta, Canada. In December 2019, we completed our largest acquisition to date, adding three properties to our United States (“US”) portfolio (the “2019 Acquired Casinos”), two in Missouri and one in West Virginia (the “2019 Acquisition”).
In December 2019, we added three properties to our United States (“US”) portfolio, two in Missouri and one in West Virginia (the “2019 Acquisition”). In connection with this acquisition, we entered into a triple net lease agreement (the “Master Lease”) with subsidiaries of VICI Properties Inc. (“VICI PropCo”).
In addition to the casino, the facility has 26 hotel rooms, a bar, two restaurants and a 500 -space on-site covered parking garage. Sports betting is available through a mobile sports betting app. Century Casino & Hotel – Cripple Creek, Colorado (“CRC” or “Cripple Creek”).
In addition to the casino and hotel, the facility has two bars, a restaurant and 271 surface parking spaces neighboring the casino. Sports betting is available through two mobile sports betting apps. West – Nugget Casino Resort – Reno-Sparks, Nevada (“NUG” or “Nugget”) .
Subject to approval from the Nevada Gaming Commission, our purchase of 100% of the membership interests in OpCo for approximately $100.0 million (subject to certain adjustments) is expected to close in the second quarter of 2023 (the “Second Closing”).
We purchased 100% of the membership interests in Nugget (the “Nugget Acquisition”) for approximately $104.7 million (subject to certain adjustments) at the second closing (the “Second Closing”) on April 3, 2023. In August 2023, we paid from cash on hand an additional $0.8 million related to working capital adjustments.
Following completion, VICI PropCo will own the real estate improvements associated with the Caruthersville project. As of December 31, 2022, we have spent $2.2 million on this project and received $5.0 million from VICI PropCo.
We are funding this project through financing provided by VICI PropCo. Following completion, VICI PropCo will own the real estate improvements associated with the Caruthersville project, which will become part of the Master Lease. See Part I, Item 2. “Properties – Master Lease” for a discussion of the Master Lease as amended to date.
Removed
We currently have a pending acquisition of the operations of the Nugget Casino Resort and another pending acquisition of casino operations in Maryland. See “2022 Business Developments” below. Operations We view each jurisdiction in which our casinos are located as separate operating segments and each casino within those jurisdictions as reporting units.
Added
See “Business Developments – Nugget Casino Resort” and “– Rocky Gap Casino Resort” below. Operations We view each region in which we operate as a separate operating segment and each casino or other operation within those markets as a reporting unit.
Removed
In addition to the casino, the facility has two dining venues, a conference and entertainment center and 1,058 surface parking spaces neighboring the casino. See “2022 Business Developments – Cape Girardeau Hotel” below. Canada Edmonton – Century Casino & Hotel – Edmonton, Alberta, Canada (“CRA” or “Edmonton”). CRA is located in Edmonton, the capital of the province of Alberta.
Added
In addition to the casino and hotel, the facility has five food and beverage venues, an 18-hole golf course, a 5,000 square foot events center, several meeting spaces, a spa, several outdoor activities and approximately 750 surface parking spaces neighboring the casino. Midwest – Century Casino Caruthersville – Caruthersville, Missouri (“CCV” or “Caruthersville”).
Removed
We have a concession agreement with TUI Cruises to operate one ship-based casino.
Added
We are currently building a hotel connected to the casino. See “Business Developments – Cape Girardeau Hotel” below. Century Casino & Hotel – Central City, Colorado (“CTL” or “Central City”). Central City is located approximately 35 miles west of Denver.
Removed
We used approximately $29.3 million of cash on hand in connection with the First Closing.
Added
Nugget is located in Reno-Sparks, Nevada on Interstate 80 approximately three miles from the Reno-Tahoe International Airport. In addition to the casino and hotel, the full-service resort includes 110,000 square feet of convention space, an 8,555 seat outdoor amphitheater, seven food and beverage venues, a 5-story 1,200 space parking garage and 1,272 additional parking spaces.
Removed
On April 1, 2022 (the “Closing Date”), we entered into a Credit Agreement (the “Goldman Credit Agreement”) by and among the Company, as borrower, the subsidiary guarantors party thereto, Goldman Sachs Bank USA, as administrative agent (the “Administrative Agent”) and collateral agent, Goldman Sachs Bank USA and BOFA Securities, Inc., as joint lead arrangers and joint bookrunners, and the Lenders and L/C Lenders party thereto.
Added
Sports betting is available in the casino’s sports book. Canada Century Casino & Hotel – Edmonton, Alberta, Canada (“CRA” or “Edmonton”). CRA is located in Edmonton, Alberta.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur collection and use of personal data are governed by state and federal privacy laws as well as the applicable laws of the countries in which we operate. Various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning privacy, data retention, data transfer, and data protection.
Biggest changeVarious federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning privacy, data retention, data transfer, and data protection. Compliance with applicable 15 privacy regulations may increase our operating costs or adversely impact our ability to market our products, properties and services to our guests.
Our current and future projects could also experience: failure to obtain necessary licenses, permits, entitlements or other governmental approvals; changes to plans and specifications, some of which may require the approval of regulatory agencies; delays and significant cost increases; shortages of materials; shortages of skilled labor or work stoppages for contractors and subcontractors; labor disputes or work stoppages; disputes with and defaults by contractors and subcontractors; health and safety incidents and site accidents; engineering problems, including defective plans and specifications; poor performance or nonperformance by our partners or other third parties on whom we place reliance; changes in laws and regulations, or in the interpretation and enforcement of laws and regulations, applicable to gaming and other facilities, real estate development or construction projects; unforeseen construction scheduling, engineering, environmental, permitting, construction or geological problems; environmental issues, including the discovery of unknown environmental contamination; weather interference, floods, fires or other casualty losses; and other unanticipated circumstances or cost increases.
Our current and future projects could also experience: failure to obtain necessary licenses, permits, entitlements or other governmental approvals; changes to plans and specifications, some of which may require the approval of regulatory agencies; delays and significant cost increases; shortages of materials; shortages of skilled labor, labor disputes, or work stoppages for contractors and subcontractors; disputes with and defaults by contractors and subcontractors; health and safety incidents and site accidents; engineering problems, including defective plans and specifications; poor performance or nonperformance by our partners or other third parties on whom we place reliance; changes in laws and regulations, or in the interpretation and enforcement of laws and regulations, applicable to gaming and other facilities, real estate development or construction projects; unforeseen construction scheduling, engineering, environmental, permitting, construction or geological problems; environmental issues, including the discovery of unknown environmental contamination; weather interference, floods, fires or other casualty losses; and other unanticipated circumstances or cost increases.
We renew our insurance policies on an annual basis. The cost of coverage may become so high that we may need to further reduce our policy limits or agree to certain exclusions from our coverage or self-insure.
We renew our insurance policies on an annual basis. The cost of coverage may become so high that we may need to further reduce our policy limits, agree to certain exclusions from our coverage, or self-insure.
Risks associated with international operations include: fluctuations in foreign currency exchange rates; changes in laws and policies that govern our foreign operations; possible failure to comply with anti-bribery laws such as the US Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions; difficulty in establishing staffing and managing non-United States operations; different labor regulations; changes in environmental, health and safety laws; potentially negative consequences from changes in or interpretations of tax laws; political instability and actual or anticipated military or political conflicts; economic instability and inflation, recession or interest rate fluctuations; 15 uncertainties regarding judicial systems and procedures; different time zones; and culture, management and language differences.
Risks associated with international operations include: fluctuations in foreign currency exchange rates; changes in laws and policies that govern our foreign operations; possible failure to comply with anti-bribery laws such as the US Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions; difficulty in establishing staffing and managing non-United States operations; different labor regulations; changes in environmental, health and safety laws; potentially negative consequences from changes in or interpretations of tax laws; political instability and actual or anticipated military or political conflicts; economic instability and inflation, recession or interest rate fluctuations; uncertainties regarding judicial systems and procedures; different time zones; and culture, management and language differences.
Additional risks before commencing operations include the time and expense incurred and unforeseen difficulties from construction delays and cost overruns, in obtaining liquor licenses, building permits, materials, competent and able contractors, supplies, employees, gaming devices and related matters. In addition, acquisitions require significant management attention and resources to integrate new properties, businesses and operations.
Additional risks before commencing operations include the time and expense incurred and unforeseen difficulties from construction delays and cost overruns, in obtaining liquor licenses, building permits, materials, competent and able contractors, supplies, employees, gaming devices and related matters. Acquisitions require significant management attention and resources to integrate new properties, businesses and operations.
Extreme weather conditions, potentially exacerbated by climate change, may cause property damage or interrupt business, which could harm our business and results of operations. High winds, flooding, blizzards and sub-zero temperatures, such as those experienced in Colorado, Missouri and Alberta from time to time, can limit access to our properties.
Extreme weather conditions, potentially exacerbated by climate change, may cause property damage or interrupt business, which could harm our business and results of operations. High winds, flooding, blizzards and sub-zero temperatures, such as those experienced in 14 Colorado, Missouri and Alberta from time to time, can limit access to our properties.
Additionally, the agreements governing our existing debt restrict sale of assets and limit the use of the proceeds from any disposition and our Master Lease limits our ability to dispose of leased properties; as a result, we may not be allowed, under these documents, to dispose of certain of our properties and use proceeds from such dispositions to satisfy all current debt service obligations.
Additionally, the agreements governing our existing debt restrict sale of assets and limit the use of the proceeds from any disposition and our Master Lease limits our ability to dispose of leased properties; as a result, we may not be allowed, 13 under these documents, to dispose of certain of our properties and use proceeds from such dispositions to satisfy all current debt service obligations.
These financial obligations could: limit our ability to satisfy our obligations; limit our ability to obtain additional indebtedness or financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general corporate or other obligations; limit our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on our outstanding debt; expose us to interest rate risk due to the variable interest rate on borrowings under our credit agreements; place us at a competitive disadvantage compared to competitors that have less debt; subject us to restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds, and make capital expenditures and other investments; cause our failure to comply with financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under such indebtedness and which, if not cured or waived, could have a material adverse effect on us; 17 increase our vulnerability to general adverse economic and industry changes; limit our flexibility in planning for, or reacting to, changes in our businesses, changing market conditions, changes in our industry and economic downturns; and affect our ability to renew gaming and other licenses necessary to conduct our business.
The significance of the above financial obligations could: limit our ability to satisfy our obligations; limit our ability to obtain additional indebtedness or financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general corporate or other obligations; limit our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on our outstanding debt; expose us to interest rate risk due to the variable interest rate on borrowings under our credit agreements; place us at a competitive disadvantage compared to competitors that have less debt; subject us to restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds, and make capital expenditures and other investments; cause our failure to comply with financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under such indebtedness and which, if not cured or waived, could have a material adverse effect on us; increase our vulnerability to general adverse economic and industry changes; limit our flexibility in planning for, or reacting to, changes in our businesses, changing market conditions, changes in our industry and economic downturns; and affect our ability to renew gaming and other licenses necessary to conduct our business.
Non-compliance with applicable privacy regulations by us (or in some circumstances non-compliance by third parties engaged by us) or a breach of security on systems storing our data may result in a loss of customers and subject us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data.
Additionally, non-compliance with applicable privacy regulations by us (or in some circumstances non-compliance by third parties engaged by us) or a breach of security on systems storing our data may result in a loss of customers and subject us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data.
The unauthorized use or reproduction of our trademarks could diminish the value of our brand and its market acceptance, competitive advantages or goodwill, which could adversely affect our business. ‎ 20 Human Capital Risks The loss of key personnel could have a material adverse effect on us.
The unauthorized use or reproduction of our trademarks could diminish the value of our brand and its market acceptance, competitive advantages or goodwill, which could adversely affect our business. Human Capital Risks The loss of key personnel could have a material adverse effect on us.
The occurrence of any of these development and construction risks could increase the total costs of our construction projects or delay or prevent the construction or opening or otherwise affect the design and features of our construction projects. This could materially adversely affect our plan of operations, financial condition and ability to satisfy our debt obligations.
The occurrence of any of these development and construction risks could increase the total costs of our construction projects or delay or prevent the construction or opening or otherwise affect the design and features of our construction projects. This could 11 materially adversely affect our plan of operations, financial condition and ability to satisfy our debt obligations.
Regulations adopted by the Financial Crimes Enforcement Network require us to report currency transactions at our US locations in excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number.
Regulations adopted by the Financial Crimes Enforcement Network require us to report currency transactions at our US locations in excess of $10,000 occurring within a gaming day, including 17 identification of the patron by name and social security number.
Decreases in the value of these currencies in relation to the value of the US dollar have decreased the operating profit from our foreign operations when translated into US dollars, which has adversely affected our consolidated results of operations, and such decreases may occur in the future.
Decreases in the value of these currencies in relation to the value of the US dollar have decreased the operating profit from our foreign operations when translated into US dollars, which has adversely affected our consolidated results 20 of operations, and such decreases may occur in the future.
If we fail to present evidence of an agreement with 19 approved horsepersons, we may not be permitted to conduct live racing, export simulcasting and teletheatre wagering. If we are unable to conduct live racing, our license to operate a REC may not be renewed.
If we fail to present evidence of an agreement with approved horsepersons, we may not be permitted to conduct live racing, export simulcasting and teletheatre wagering. If we are unable to conduct live racing, our license to operate a REC may not be renewed.
In addition, construction at our operating casinos may disrupt our customers’ experience and cause a decline in our revenue. 12 Actual costs and construction periods for any of our projects can differ significantly from initial expectations.
In addition, construction at our operating casinos may disrupt our customers’ experience and cause a decline in our revenue. Actual costs and construction periods for any of our projects can differ significantly from initial expectations.
If we are not able to successfully commence operations at these properties, our results of operations may be adversely affected. 13 In addition, we periodically review our business to identify properties or other assets that we believe no longer complement our business, are in markets that may not benefit us or could be sold at significant premiums.
If we are not able to successfully commence operations at these properties, our results of operations may be adversely affected. 12 In addition, we periodically review our business to identify properties or other assets that we believe no longer complement our business, are in markets that may not benefit us or could be sold at significant premiums.
Any expansion of the gaming industry that results in increased competition and any restriction on or prohibition of our gaming operations could have a material adverse effect on our operating results or cause us to record an impairment of our assets. We depend on agreements with our horsemen and pari-mutuel clerks.
Any expansion of the gaming industry that results in increased competition and any restriction on or prohibition of our gaming operations could have a material adverse effect on our operating results or cause us to record an impairment of our assets. We depend on agreements with our horsepersons and pari-mutuel clerks.
Our reputation and business may be harmed by cybersecurity breaches, and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our customers', our business partners' or our own information or other breaches of our information security.
Our reputation and business may be harmed by interruptions or cybersecurity breaches of our information systems, and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our customers', our business partners' or our own information or other breaches of our information security.
While our business as a whole is not dependent on either of our trademarks or other intellectual property, we seek to establish and maintain our proprietary rights in our business operation through the use of trademarks. We file applications for, and obtain trademarks in, the United States and in foreign countries where we believe filing for such protection is appropriate.
Although our business as a whole is not dependent on our trademarks or other intellectual property, we seek to establish and maintain our proprietary rights in our business operation through the use of trademarks. We file applications for, and obtain trademarks in, the United States and in foreign countries where we believe filing for such protection is appropriate.
Further, COVID-19 may also affect our operating and financial results in ways that are not presently known to us or that we currently do not consider present significant risks to our operations. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Further, outbreaks of disease may also affect our operating and financial results in ways that are not presently known to us or that we currently do not consider present significant risks to our operations. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Failure to renew or modify agreements on satisfactory terms could materially affect our financial position and results of operations. In the US, the Federal Interstate Horseracing Act of 1978, as amended (“FIHA”), and state law in West Virginia require that, in order to simulcast races, we have certain agreements with the horse owners and trainers at our racetrack.
Failure to renew or modify agreements on satisfactory terms could materially adversely affect us. In the US, the Federal Interstate Horseracing Act of 1978, as amended (“FIHA”), and state law in West Virginia require that, in order to simulcast races, we have certain agreements with the horse owners and trainers at our racetrack.
If we cannot raise adequate funds to satisfy our capital requirements, we may have to reduce, dispose of or eliminate certain operations. Some of our casinos are located on leased property.
If we cannot raise adequate funds to satisfy our capital requirements, we may have to reduce, dispose of or eliminate certain operations. A majority of our casinos are located on leased property.
Events such as terrorist and war activities in the countries in which we are located and other acts of violence, such as the mass shooting in Las Vegas in 2017, could have a negative impact on travel and leisure expenditures, including gaming, lodging and tourism, especially if these events occur in a region in which we operate.
Events such as terrorist and war activities in the countries in which we are located and other acts of violence, such as the mass shooting that occurred at a Las Vegas casino, could have a negative impact on travel and leisure expenditures, including gaming, lodging and tourism, especially if these events occur in a region in which we operate.
The extent of the effects of the outbreak on our business and the casino industry at large is highly uncertain and will ultimately depend on future developments, including, but not limited to, future recurrences of the outbreak, the continued availability and effectiveness of COVID-19 vaccines, and the length of time it takes for normal economic and operating conditions to resume, if at all.
The extent of the effects of the disease outbreaks on our business and the casino industry at large is highly uncertain and will ultimately depend on future developments, including, but not limited to, future recurrences of outbreaks, the availability and effectiveness of vaccines, and the length of time it takes for normal economic and operating conditions to resume, if at all.
We could incur special charges relating to the closing of such facilities, including lease termination costs, impairment charges and other charges that would reduce our net income and could have a material adverse effect on our business, financial condition and results of operations. 18 Our RECs and racetracks in Calgary and Edmonton are located on leased parcels of land, and our casinos in Poland are located within leased building spaces.
We could incur special charges relating to the closing of such facilities, including lease termination costs, impairment charges and other charges that would reduce our net income and could have a material adverse effect on our business, financial condition and results of operations. Our casinos in Poland are located within leased building spaces.
The pending Nugget Acquisition and Rocky Gap Acquisition and new developments may not generate revenue that will be sufficient to pay related expenses, or, even if such revenue is sufficient to pay related expenses, the acquisitions and new developments may not yield an adequate return or any return on our significant investments.
New developments may not generate revenue that will be sufficient to pay related expenses, or, even if such revenue is sufficient to pay related expenses, the acquisitions and new developments may not yield an adequate return or any return on our significant investments.
In addition, generating returns on acquisitions, including the Nugget Acquisition and the Rocky Gap Acquisition, and new investments may take significantly longer than we expect and may negatively impact our operating results and financial condition. Furthermore, we may pursue any of these opportunities in alliance with third parties.
In addition, generating returns on acquisitions and new investments may take significantly longer than we expect and may negatively impact our operating results and financial condition. Furthermore, we may pursue any of these opportunities in alliance with third parties.
If we default on one or more leases or if we are unable to secure renewals of those leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino. We lease the land and buildings for our casinos in Missouri and West Virginia under a “triple-net” Master Lease.
If we default on one or more leases or if we are unable to secure renewals of those leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino. We lease the real estate assets for our casinos in Missouri, West Virginia, Maryland and Canada under a “triple-net” Master Lease.
Even after the COVID-19 pandemic subsides, we could experience a longer-term impact on our costs, such as, for example, the need for enhanced health and hygiene requirements in one or more regions in attempts to counteract future outbreaks.
We could experience a longer-term impact on our costs, such as, for example, the need for enhanced health and hygiene requirements in one or more regions in attempts to counteract future outbreaks.
We may pursue gaming opportunities that would require us to obtain a gaming license, such as the Nugget Acquisition and the Rocky Gap Acquisition. While our management believes that we are licensable in any jurisdiction that allows gaming operations, each licensing process is unique and requires a significant amount of funds and management time.
We may pursue gaming opportunities that would require us to obtain a gaming license. While our management believes that we are licensable in any jurisdiction that allows gaming operations, each licensing process is unique and requires a significant amount of funds and management time.
See Notes 6 and 7 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report for more information on our long-term debt and Master Lease.
Our rent payments are subject to annual escalation. See Notes 6 and 7 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report for more information on our long-term debt and Master Lease.
From time to time, we have experienced attempts to unionize certain of our non-union employees. If a union seeks to organize any of our employees, we could experience disruption in our business and incur significant costs, both of which could have a material adverse effect on our results of operation and financial condition.
If a union seeks to organize any of our employees, we could experience disruption in our business and incur significant costs, both of which could have a material adverse effect on our results of operation and financial condition.
We are subject to risks related to corporate social responsibility and reputation. Many factors influence our reputation and the value of our brand, including the perceptions held by our customers, business partners, other key stakeholders and the communities in which we do business.
We are subject to risks related to corporate social responsibility, environmental, social and governance (“ESG”) matters and our business reputation and may negatively affect our business and operations. Many factors influence our reputation and the value of our brand, including the perceptions held by our customers, business partners, other key stakeholders and the communities in which we do business.
Like all gaming operators in the jurisdictions in which we operate or plan to operate, we must periodically apply to renew our gaming licenses or registrations and in North America we must have the suitability of certain of our directors, officers and employees approved.
Like all gaming operators in the jurisdictions in which we operate or plan to operate, we must periodically apply to renew our gaming licenses or registrations and in North America we must have the suitability of certain of our directors, officers and employees approved. We are scheduled for renewals for our casino license at Mountaineer in 2024.
If we were to default on any one or more of the leases or if we are unable to secure renewal terms for these locations, the lessors could terminate the affected leases and we could lose possession of the land or building and any improvements on the land and buildings, including the RECs that we have built in Canada.
If we were to default on any one or more of the leases or if we are unable to secure renewal terms for these locations, the lessors could terminate the affected leases and we could lose possession of the any improvements on the buildings.
We are responsible for incurring these costs notwithstanding the fact that many of the benefits received in exchange for such costs shall in part accrue to the lessor as the owner of the associated facilities.
We are responsible for incurring these costs even though many of the benefits received in exchange for such costs accrue to the lessor as the owner of the associated facilities.
Our business faces increasing scrutiny related to environmental, social and governance factors, and we risk damage to our reputation and the value of our brand if we fail to act responsibly in a number of areas including diversity and inclusion, community engagement and philanthropy, environmental sustainability, climate change, responsible gaming, supply chain management, workplace conduct, human rights and many others, some of which may be unforeseen.
Regulatory developments and stakeholder expectations relating to ESG matters are rapidly changing, and our business faces increasing scrutiny related to our ESG practices, disclosures and goals, and we risk damage to our reputation and the value of our brand if we fail to act responsibly in a number of areas including diversity and inclusion, community engagement and philanthropy, environmental sustainability, climate change, responsible gaming, supply chain management, workplace conduct, human rights and many others, some of which may be unforeseen.
Negative economic conditions, coupled with high volatility and uncertainty as to the future economic landscape, have at times had a negative effect on consumers’ discretionary income and consumer confidence, and similar impacts can be expected should such conditions recur.
Difficult economic conditions and recessionary periods may have an adverse impact on our business and our financial condition. Negative economic conditions, coupled with high volatility and uncertainty as to the future economic landscape, have at times had a negative effect on consumers’ discretionary income and consumer confidence, and similar impacts can be expected should such conditions recur.
These factors make it more challenging to manage and administer a globally-dispersed business and, as a result, we must devote greater resources to operating under several regulatory and legislative regimes (See “Governmental Regulation and Licensing” in Item 1, “Business” of this report). This business model also increases our costs.
These factors make it more challenging to manage and administer a globally-dispersed business and, as a result, we must devote greater resources to operating under several regulatory and legislative regimes. See “Governmental Regulation and Licensing” in Item 1, “Business” of this report and Exhibit 99.1 to this report, which is incorporated herein by reference.
We have adjusted, and if required we plan to continue to adjust, operating hours for food and beverage outlets, and hotel and convention spaces where we are impacted by staffing challenges. There are 250 employees at our CPL casinos in Poland who belong to trade unions.
We have adjusted, and if required we plan to continue to adjust, 19 operating hours for food and beverage outlets, and hotel and convention spaces where we are impacted by staffing challenges. We have employees in Poland who belong to trade unions that have the right to approve changes in pay for union employees at CPL.
From time to time, we may attempt to sell these identified properties and assets. There can be no assurance, however, that we will be able to complete dispositions on profitable, commercially reasonable terms or at all.
From time to time, we may attempt to sell these identified properties and assets. There can be no assurance, however, that we will be able to complete dispositions on profitable, commercially reasonable terms or at all. Credit and Liquidity Risks Our obligations under our indebtedness and our Master Lease are significant.
We seek to compete through promotion of our players’ clubs and other marketing efforts. For example, for CRA, we emphasize the casino’s showroom, complimentary heated parking, players’ club program, and superior service. These marketing efforts may not be successful, which could hurt our competitive position.
We seek to compete through promotion of our players’ clubs and other marketing efforts. For example, for CRA, we emphasize the casino’s showroom, complimentary heated parking, players’ club program, and superior service.
Difficulties in managing our worldwide operations may have an adverse impact on our business. We derive our revenue principally from operations located on two continents. Our management is located in North America and Europe, and our worldwide operations pose risks to our business.
We derive our revenue from operations located on two continents. Our management is located in North America and Europe, and our worldwide operations pose risks to our business.
Our ability to attract and retain employees may cause us to reduce casino operating hours or close certain amenities at our properties which could negatively impact guest loyalty and operating results. The COVID-19 pandemic caused staffing issues to be more significant.
Our ability to attract and retain employees may cause us to reduce casino operating hours or close certain amenities at our properties which could negatively impact guest loyalty and operating results.
The markets in which we operate are generally not destination resort areas and rely on a local customer base as well as tourists during peak seasons. The number of casinos in our markets may exceed demand, which could make it difficult for us to sustain profitability.
These marketing efforts may not be successful, which could hurt our competitive position. 10 The markets in which we operate generally rely on a local customer base as well as tourists during peak seasons. The number of casinos in some of our markets may exceed demand, which could make it difficult for us to sustain profitability.
We are dependent upon technology services and electrical power to operate our business, and if we experience damage or service interruptions, we may have to cease some or all of our operations, resulting in a decrease in revenue. Our gaming operations rely heavily on technology services and an uninterrupted supply of electrical power.
This business model also increases our costs. 16 We are dependent upon technology services and electrical power to operate our business, and if we experience damage or service interruptions, we may have to cease some or all of our operations, resulting in a decrease in revenue.
Our certificate of incorporation also provides us with the right to repurchase shares of our common stock from certain beneficial owners declared by gaming regulators to be unsuitable holders of our equity securities, and the price we pay to any such beneficial owner may be below the price such beneficial owner would otherwise accept for his or her shares of our common stock. ‎ 21 General Risk Factors We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our financial condition.
Our certificate of incorporation also provides us with the right to repurchase shares of our common stock from certain beneficial owners declared by gaming regulators to be unsuitable holders of our equity securities, and the price we pay to any such beneficial owner may be below the price such beneficial owner would otherwise accept for his or her shares of our common stock.
We could be required to make rent payments under the Master Lease and scheduled debt payments if such closures occur in the future.
We could be required to make rent payments under the Master Lease and scheduled debt payments if closures of our properties, similar to those that occurred in 2020, occur in the future.
Our security system and all of our slot machines are controlled by computers and reliant on electrical power to operate. A loss of electrical power or a failure of the technology services needed to run the computers would make us unable to run all or parts of our gaming operations.
A loss of electrical power or a failure of the technology services needed to run the computers would make us unable to run all or parts of our gaming operations.
We do not currently hedge our exposure to fluctuations of these foreign currencies, and there is no guarantee that we will be able to successfully hedge any future foreign currency exposure. We may be required in the future to record impairment losses related to assets we currently carry on our balance sheet.
We do not currently hedge our exposure to fluctuations of these foreign currencies, and there is no guarantee that we will be able to successfully hedge any future foreign currency exposure.
Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows. Credit and Liquidity Risks Our obligations under our indebtedness and our Master Lease are significant.
Moreover, any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows. Difficulties in managing our worldwide operations may have an adverse impact on our business.
A lengthy strike or other work stoppage at our casino properties with unions could have an adverse effect on our business and results of operations. Our other employees in the US and Canada and in our Corporate and Other segment are not covered by collective bargaining agreements.
In the United States, there are employees at our West Virginia and Maryland casinos who belong to unions and have collective bargaining agreements with the casinos. A lengthy strike or other work stoppage at our casino properties with unions could have an adverse effect on our business and results of operations.
Compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to market our products, properties and services to our guests. 16 Our information technology and other systems that maintain and transmit customer information, or those of service providers, or our employee or business information may be compromised by a malicious third party penetration of our network security, or that of a third party service provider or business partner, or by actions or inactions by our employees.
Our information technology systems, and those of our third party service providers, that maintain and transmit customer information, or those of service providers, or our employee or business information may be compromised by a malicious third party penetration of our network security, or that of a third party service provider or business partner, or by actions or inactions by our employees.
From time to time, we are defendants in various lawsuits and gaming regulatory proceedings relating to matters incidental to our business. As with all litigation, no assurance can be provided as to the outcome of these matters and, in general, litigation can be expensive and time consuming.
As with all litigation, no assurance can be provided as to the outcome of these matters and, in general, litigation can be expensive and time consuming.
Additional risks not presently known to us or which we currently consider immaterial may also adversely affect our business, financial condition or results of operations. Business Environment and Competition Risks General economic conditions affecting discretionary consumer spending may have an adverse impact on our business, financial condition or results of operations.
Additional risks not presently known to us or which we currently consider immaterial may also adversely affect our business, financial condition or results of operations.
We cannot be sure that we will be able to identify attractive acquisition opportunities or that we will experience the return on investment that we expect. Acquisitions require significant management attention and resources to integrate new properties, businesses and operations.
We cannot be sure that we will be able to identify attractive acquisition opportunities or that we will experience the return on investment that we expect.
We may not be successful in the defense or prosecution of our current or future legal proceedings, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations. Fluctuations in currency exchange rates and currency controls in foreign countries could adversely affect our business.
We may not be successful in the defense or prosecution of our current or future legal proceedings, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations. We may be required in the future to record impairment losses related to assets we currently carry on our balance sheet.
The loss, disclosure or misappropriation of our business information may adversely affect our businesses, operating results and financial condition. We face the risk of fraud, theft, and cheating. We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings.
Additionally, substantial increases in the cost of electricity and natural gas could negatively affect our results of operations. We face the risk of fraud, theft, and cheating. We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings.
In January 2022, the AGLC removed the moratorium on gaming facilities. Consideration for additional gaming facilities will be based on a market analysis done by the AGLC.
For example, there are new casinos and expansions of existing casinos that could increase competition for our Central City and Cripple Creek properties. In January 2022, the AGLC removed the moratorium on gaming facilities. Consideration for additional gaming facilities will be based on a market analysis done by the AGLC.
If we fail to renew or modify existing agreements on satisfactory terms, this failure could have a material adverse effect on our financial position, results of operations and cash flows.
Failure to renew or modify existing agreements on satisfactory terms could have a material adverse effect on our financial position, results of operations and cash flows. The enactment of legislation implementing changes in the US taxation of international business activities or the adoption of other tax reform laws or policies could materially affect our financial position and results of operations.
Potential changes in gaming laws in jurisdictions in which we have operations include: In Missouri, several bills have been filed that would allow Class B gaming licensees and daily fantasy sports licensees to conduct sports wagering including on mobile devices so long as such devices are located within the state of Missouri.
Any such expansion of legalized gaming could adversely impact our properties. There have been several bills filed in Missouri to legalize sports betting in the state by gaming licensees and for daily fantasy sports licensees to conduct sports wagering including on mobile devices as long as such devices are located within the state.
If we are not successful in making these improvements, our facilities may be less attractive to our visitors than those of our competitors, which could have a negative impact on our business. 14 Operational Risks Our financial condition and results of operations may be adversely affected by climate change, the occurrence of severe weather, natural or man-made disasters and other catastrophic events, including war, terrorism and other acts of violence, and disease, such as the COVID-19 pandemic.
Operational Risks Our financial condition and results of operations may be adversely affected by climate change, the occurrence of severe weather, natural or man-made disasters and other catastrophic events, including war, terrorism and other acts of violence, and outbreaks of disease.
Our success depends to a large extent on discretionary consumer spending, which is heavily influenced by general economic conditions and the availability of discretionary income.
Our success depends to a large extent on discretionary consumer spending, which is heavily influenced by general economic conditions and the availability of discretionary income. Adverse macroeconomic conditions, including inflation, economic contraction, economic uncertainty or the perception by our customers of weak or weakening economic conditions may cause a decline in demand for casino resorts and other amenities we offer.
We make use of online services and centralized data processing, including through third party service providers. The secure maintenance and transmission of customer information, including credit card numbers and other personally identifiable information for marketing and promotional purposes, is a critical element of our operations.
Moreover, the secure maintenance and transmission of customer information, including credit card numbers and other personally identifiable information for marketing and promotional purposes, is a critical element of our operations. Our collection and use of personal data are governed by state and federal privacy laws as well as the applicable laws of the countries in which we operate.
Each one percentage point change associated with the variable rate debt would result in an estimated $3.5 million change to our annual cash interest expenses. In connection with the 2019 Acquisition, we entered into the Master Lease to lease the real estate assets of the 2019 Acquired Casinos.
As of December 31, 2023, our outstanding debt was approximately $346.8 million. The majority of our long-term debt outstanding as of December 31, 2023 is variable rate debt. Each one percentage point change associated with the variable rate debt would result in an estimated $3.5 million change to our annual cash interest expenses.
We have $10 million of goodwill, $30 million in casino licenses, $3 million in trademarks and $465 million in property and equipment as of December 31, 2022. Accounting rules require that we make certain estimates and assumptions related to our determinations as to the future recoverability of these assets.
Accounting rules require that we make certain estimates and assumptions related to our determinations as to the future recoverability of a significant portion of our assets.
In 2020, we impaired $35.1 million related to goodwill and other intangible assets, including our MCE cost investment, due to the impact from COVID-19. See Notes 1 and 5 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report for more information on our goodwill and other intangible assets.
See Note 5 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report for more information on our goodwill and other intangible assets. Fluctuations in currency exchange rates and currency controls in foreign countries could adversely affect our business.
This would have a significant adverse effect on our business, financial condition and results of operations as we would then be unable to operate the affected facilities.
This could adversely effect on our business, financial condition and results of operations as we would then be unable to operate the affected facilities. We may not be fully compensated to relocate the Nugget Casino and may be required to seek additional funding if the Nevada Department of Transportation (“NDOT”) project moves forward.
The enactment of legislation implementing changes in the US taxation of international business activities or the adoption of other tax reform laws or policies could materially affect our financial position and results of operations. We are subject to taxation at the federal, state, provincial and local levels in the US and various other countries and jurisdictions.
We are subject to taxation at the federal, state, provincial and local levels in the US and various other countries and jurisdictions.
Changes to gaming laws in countries or states in which we have operations and in states near our operations could increase competition and could adversely affect our operations. Any such expansion of legalized gaming could adversely impact our properties.
Changes to gaming laws in countries or states in which we have operations and in states near our operations could increase competition and could adversely affect our operations. For example, we have seen a decrease in gaming revenue in West Virginia, particularly in table games, since sports betting in Ohio began at the beginning of 2023.
The long-term financing obligation to VICI Properties, Inc. subsidiaries was $284.9 million as of December 31, 2022. Our scheduled 2023 rent payments under the Master Lease are approximately $27.5 million. Our rent payments are subject to annual escalation.
In addition, we lease the real estate assets of the majority of our North American casinos under a Master Lease with VICI PropCo The long-term financing obligation to VICI PropCo subsidiaries was $658.0 million as of December 31, 2023. Our scheduled 2024 rent payments under the Master Lease, including a Consumer Price Index (“CPI”) increase, are approximately $52.2 million.
Removed
Adverse changes in the economic climate, including inflation, higher unemployment rates, declines in income levels and loss of personal wealth resulting from business shutdowns and associated mass layoffs by businesses, and the adoption of social distancing and other policies to slow or control the spread of future outbreaks of coronavirus, COVID-19 or other health-affecting outbreaks, have had and are likely to continue to have a negative impact on demand for casinos, including ours, and these impacts could exist for an extensive period of time.
Added
Business Environment and Competition Risks We are particularly sensitive to general economic conditions, downturns or recessions as well as other issues affecting discretionary consumer spending, including geopolitical tensions, pandemics or other public health emergencies, any of which may have an adverse impact on our business, financial condition or results of operations.
Removed
In addition, the Russia-Ukraine war could negatively impact our results of operations in Poland, which neighbors Ukraine, due to the potential impacts on tourism and other economic disruptions. Difficult economic conditions and recessionary periods may have an adverse impact on our business and our financial condition.
Added
Changes in discretionary consumer spending or consumer preferences could be driven by factors such as an unstable job market, perceived or actual disposable consumer income and wealth, increased cost of travel, outbreaks of contagious diseases or fears or war and acts of terrorism or other acts of violence.
Removed
We have certain properties that generate a significant percentage of our revenue and operating income, and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
Added
There have also been several bills filed in Missouri to allow the state lottery to operate video gaming terminals . Similar bills introduced in the past have not passed the state legislature.
Removed
We derived 52% of our net operating revenue and 68% of our earnings from operations from our properties in Missouri and West Virginia during the year ended December 31, 2022.
Added
In addition to these legislative efforts, a coalition of six major sports teams and two online sports wagering companies have launched an initiative petition campaign to put sports wagering on the 2024 ballot. If the petition drive is successful, voters across the state would then determine whether to amend the state constitution to allow sports wagering.
Removed
Because our revenue and operating income are concentrated in two states, we are subject to greater risks from regional conditions than a gaming company with operating properties in a greater number of different geographic regions.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth the location, applicable reportable segment, size and description of certain types of gaming facilities at each of our casinos as of December 31, 2022: Summary of Property Information Segment/Property Year Opened / Acquired Approximate Casino Square Footage Acreage Slot / Electronic Gaming Machines (#) (1) Video Lottery Terminals (#) (1) Tables (#) (1) Racetrack ‎ (#) United States Colorado Century Casino & Hotel - Central City 2006 22,640 1.3 413 — 8 — Century Casino & Hotel - Cripple Creek 1996 19,610 3.5 372 — 6 — West Virginia Mountaineer Casino, Racetrack & Resort (2) 2019 72,380 1,528.1 1,032 — 27 1 Missouri Century Casino Cape Girardeau (2) 2019 41,530 19.1 843 — 23 — Century Casino Caruthersville (2) 2019 12,000 38.2 425 — 6 — The Farmstead 2022 — — — — — — Subtotal 168,160 1,590.2 3,085 — 70 1 Canada Edmonton Century Casino & Hotel - Edmonton 2006 29,225 6.0 800 30 23 — Century Casino St.
Biggest changeThe following table sets forth the location, applicable reportable segment, size and description of certain types of gaming facilities at each of our casinos as of December 31, 2023: Summary of Property Information Segment/Property Year Opened / Acquired Approximate Casino Square Footage Acreage Slot / Electronic Gaming Machines (#) (1) Tables (#) (1) Hotel Rooms (#) Racetrack ‎ (#) United States East Mountaineer Casino, Resort & Races (2) 2019 72,380 1,528.1 1,052 26 357 1 Rocky Gap Casino, Resort & Golf (2) 2023 25,447 270.0 630 16 198 — Midwest Century Casino Cape Girardeau (2) 2019 41,530 19.1 832 23 — — Century Casino Caruthersville (2)(3) 2019 12,000 38.2 418 6 36 — Century Casino & Hotel - Central City 2006 22,640 1.3 400 8 26 — Century Casino & Hotel - Cripple Creek 1996 19,610 3.5 367 6 21 — West Nugget Casino Resort (4) 2023 71,200 25.1 931 24 1,382 — Subtotal 264,807 1,885.3 4,630 109 2,020 1 Canada Century Casino & Hotel - Edmonton (2) 2006 29,225 6.0 800 23 26 — Century Casino St.
We do not have the ability to terminate our obligations under the Master Lease prior to its expiration without the lessor’s consent. The Master Lease has a triple-net structure, which requires us to pay substantially all costs associated with the 2019 Acquired Casino properties, including real estate taxes, insurance, utilities, maintenance and operational costs.
We do not have the ability to terminate our obligations under the Master Lease prior to its expiration without the lessor’s consent. The Master Lease has a triple-net structure, which requires us to pay substantially all costs associated with the properties, including real estate taxes, insurance, utilities, maintenance and operational costs.
The rent payments are subject to annual escalations during the lease term. The Master Lease has an initial term of 15 years with no purchase option. In December 2022, we amended the Master Lease and exercised our first five year renewal term.
The rent payments are subject to annual escalations during the lease term. The Master Lease has an initial term of 15 years with no purchase option. In the December 2022 amendment of the Master Lease we exercised our first five year renewal term.
Additional Property Information As of December 31, 2022, our subsidiaries were pledged as collateral for our obligations under our credit facility (“Goldman Credit Agreement”) with Goldman Sachs Bank USA (“Goldman”). As of December 31, 2022, a parcel of land in Kolbaskowo, Poland owned by Casinos Poland secured a bank guarantee with mBank.
Additional Property Information As of December 31, 2023, our subsidiaries were pledged as collateral for our obligations under our credit agreement (“Goldman Credit Agreement”) with Goldman Sachs Bank USA (“Goldman”). As of December 31, 2023, a parcel of land in Kolbaskowo, Poland owned by Casinos Poland secured a bank guarantee with mBank.
City Location License Expiration Number of Slots Number of Tables Warsaw Marriott Hotel September 2028 (2) 70 37 Warsaw Hilton Hotel July 2024 (2) 70 24 Warsaw LIM Center June 2025 65 4 Bielsko-Biala Hotel President October 2023 51 5 Katowice Park Inn by Radisson October 2023 70 14 Wroclaw DoubleTree by Hilton Hotel November 2023 70 18 Krakow Dwor Kosciuszko Hotel May 2024 70 5 Lodz Manufaktura Entertainment Complex June 2024 69 10 (1) A detailed description of the regulations applicable to CPL licenses and our ability to obtain new licenses for our locations on their expiration is contained in Exhibit 99.1 to this report, which is incorporated herein by reference.
City Location License Expiration Number of Slots Number of Tables Warsaw Marriott Hotel September 2028 70 37 Warsaw Hilton Hotel (2) June 2025 70 24 Warsaw LIM Center (2) July 2024 67 4 Krakow Dwor Kosciuszko Hotel May 2024 70 5 Lodz Manufaktura Entertainment Complex June 2024 70 9 (1) A detailed description of the regulations applicable to CPL licenses and our ability to obtain new licenses for our locations on their expiration is contained in Exhibit 99.1 to this report, which is incorporated herein by reference.
The Master Lease provides for the lease of land, buildings, structures and other improvements on the land (including barges and riverboats), easements and similar appurtenances to the land and improvements relating to the operations of the leased properties. The scheduled 2023 rent payments under the Master Lease are approximately $27.5 million.
The Master Lease provides for the lease of land, buildings, structures and other improvements on the land, easements and similar appurtenances to the land and improvements relating to the operations of the leased properties. The scheduled 2024 rent payments under the Master Lease, including a CPI increase, are approximately $52.2 million.
Albert 2016 13,269 7.1 410 24 10 — Century Mile Racetrack and Casino (3) 2019 19,407 100.0 570 14 — 1 Calgary Century Downs Racetrack and Casino (4) 2015 17,459 57.3 663 10 — 1 Subtotal 79,360 170.4 2,443 78 33 2 Poland Casinos Poland (5) 2007 85,560 — 535 — 117 — Corporate Other Cruise Ships (total of 1) (6) N/A 2,300 — 17 — 1 — Total 335,380 1,760.6 6,080 78 221 3 (1) Machine and table counts are reported as the total number of machines as of December 31, 2022.
Albert (2) 2016 13,269 7.1 432 10 — — Century Mile Racetrack and Casino (2) 2019 19,407 100.1 580 — — 1 Century Downs Racetrack and Casino (2) 2015 17,459 57.3 662 — — 1 Subtotal 79,360 170.5 2,474 33 26 2 Poland Casinos Poland (5) 2007 60,025 — 347 79 — — Total 404,192 2,055.8 7,451 221 2,046 3 (1) Machine and table counts are reported as the total number of machines as of December 31, 2023.
(5) As of December 31, 2022, Casinos Poland owned eight separate casinos in leased building spaces, including hotels, throughout Poland. For the locations of these casinos, see “Additional Property Information” below. (6) Operated under a concession agreement. We do not own the ship on which our casino operates. For additional information about the ship, see “Additional Property Information” below.
(5) As of December 31, 2023, Casinos Poland operated five separate casinos in leased building spaces, including hotels, throughout Poland. For the locations of these casinos, see “Additional Property Information” below.
See Note 6 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report. ‎ 23 Corporate Offices – We lease approximately 13,200 square feet of office space in Colorado Springs, Colorado and approximately 2,500 square feet of office space in Vienna, Austria for corporate and administrative purposes.
See Note 6 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report.
The Master Lease contains certain covenants, including minimum capital improvement expenditures. Century Casinos, Inc. has provided a guarantee of our subsidiaries’ obligations under the Master Lease. For additional information regarding the Master Lease, see Note 7 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report.
The Master Lease contains certain covenants, including minimum capital improvement expenditures. Century Casinos, Inc. has provided a guarantee of our subsidiaries’ obligations under the Master Lease. We account for the sale-leaseback transactions involving the Master Lease as failed sale-leasebacks, and therefore the Master Lease is accounted for as a financing obligation.
(2) The land, buildings and riverboat (as applicable) at these properties are leased under the Master Lease. For more information see “Master Lease” below. (3) Century Mile runs the pari-mutuel network in Alberta. The off-track betting parlors are located throughout Alberta and include the parlors at Century Mile, Century Casino & Hotel – Edmonton and Century Casino St. Albert.
In Canada, slot/electronic gaming machines include video lottery terminals. (2) The land and buildings (as applicable) at these properties are leased under the Master Lease. For more information see “Master Lease” below. (3) Includes The Farmstead. (4) The land and building is owned by Smooth Bourbon. We own 50% of Smooth Bourbon.
Poland – The following table summarizes information about CPL’s casinos as of December 31, 2022 (1) .
Corporate Offices – We lease approximately 13,200 square feet of office space in Colorado Springs, Colorado and approximately 2,500 square feet of office space in Vienna, Austria for corporate and administrative purposes. ‎ 22 Poland – The following table summarizes information about CPL’s casinos as of December 31, 2023 (1) .
Removed
The land on which the REC and racetrack are located is leased. (4) The land on which the REC and racetrack are located was sold by CDR to 1685258 Alberta Ltd. (“Rosebridge”) prior to our acquisition of our ownership interest in CDR. CDR leases from Rosebridge the 57.3 acres on which the REC and racetrack are located.
Added
(2) In October 2023, with approval from the Polish Minister of Finance, we exchanged the casino licenses for the LIM Center in Warsaw and the Hilton Hotel in Warsaw. The exchange of licenses extended the license for the Hilton Hotel in Warsaw from July 2024 to June 2025.
Removed
(2) In September 2022, CPL transferred the casino license for the Warsaw Marriott Hotel expiring in July 2024 to the Warsaw Hilton Hotel, and CPL was granted a new license for the Warsaw Marriott Hotel expiring in September 2028.
Added
We operated casinos in Katowice, Bielsko-Biala and Wroclaw during 2023, but closed these locations in the fourth quarter of 2023 due to the expiration of the gaming licenses. We were awarded licenses at Wroclaw in December 2023 and Katowice and Bielsko-Biala in February 2024.
Removed
Cruise Ship – The following table summarizes information about the ship-based casino for which we had a concession agreement as of December 31, 2022.
Added
The Bielsko-Biala casino reopened in February 2024 and we anticipate that the Katowice casino will reopen in mid-March 2024 and that the Wroclaw casino will reopen in a new location in the third quarter of 2024.
Removed
Cruise Line Ship Concession Agreement End Date Number of Slots Number of Tables TUI Cruises Mein Schiff Herz April 2023 (1) 17 1 (1) Estimated - The concession agreement for the casino onboard Mein Schiff Herz is scheduled to end in the second quarter of 2023.
Added
Master Lease In December 2019, certain subsidiaries of the Company and certain subsidiaries of VICI PropCo entered into a sale and leaseback transaction in connection with the 2019 Acquisition and entered into the Master Lease to lease the real estate assets.
Removed
In April 2022, a concession agreement with TUI Cruises for one other ship-based casino ended and in May 2021, a concession agreement with TUI Cruises for two other ship-based casinos ended. Master Lease Mountaineer, Cape Girardeau and Caruthersville are subject to the Master Lease.
Added
The Master Lease has been amended since 2019 as follows: • On December 1, 2022, an amendment provided for (i) modifications with respect to certain project work to be done by the Company related to Century Casino Caruthersville, (ii) modifications to rent under the Master Lease to provide for an increase in initial annualized rent by approximately $4.2 million after completion of the Caruthersville casino project and (iii) other related modifications. • On July 25, 2023, an amendment (i) added Rocky Gap to the Master Lease, (ii) increased initial annualized rent by approximately $15.5 million and (iii) extended the initial Master Lease term for 15 years from the date of the amendment (subject to the existing four five-year renewal options). • On September 6, 2023, an amendment (i) added the Century Canadian Portfolio to the Master Lease, (ii) increased initial annualized rent by approximately CAD 17.3 million ($13.1 million based on the exchange rate on December 31, 2023) and (iii) extended the initial Master Lease term for 15 years from the date of the amendment (subject to the existing four five year renewal options).
Added
In addition the portion of the Master Lease attributable to the Century Canadian Portfolio has a maximum 2.5% annual escalator increase. Mountaineer, Cape Girardeau, Caruthersville, Rocky Gap and our Canadian subsidiaries are currently subject to the Master Lease.
Added
For additional information regarding the Master Lease, see Note 7 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report. ‎ 23 Nugget Casino Lease The land, building, structures and other improvements of the Nugget Casino are leased from Smooth Bourbon (the “Nugget Lease”).
Added
We own 50% of Smooth Bourbon and consolidate it as a subsidiary for which we have a controlling interest. As such the finance lease asset, finance lease liability, revenue and expense are eliminated upon consolidation and the 50% of net rental income attributable to Marnell is recorded as non-controlling interest.
Added
The rent owed to Marnell is paid through dividends to noncontrolling partners. The scheduled 2024 rent payments under the Nugget Lease attributable to Marnell are $7.0 million. The rent payments are subject to annual escalations during the lease term.
Added
The Nugget Lease has an initial term of 35 years and a purchase option if Century purchases the remaining 50% of Smooth Bourbon. At our option, the Nugget Lease may be extended for up to four additional five year renewal terms.
Added
The Nugget Lease has a triple-net structure, which requires us to pay substantially all costs associated with the property, including real estate taxes, insurance, utilities, maintenance and operational costs. The Nugget Lease contains certain covenants, including minimum capital improvement expenditure requirements. Century Casinos, Inc. has provided a guarantee of the Nugget’s obligations under the Master Lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings . We are not a party to any pending litigation that, in management’s opinion, could have a material effect on our financial position or results of operations except as disclosed in Note 16 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report. 24 Item 4 .
Biggest changeItem 3. Legal Proceedings . We are not a party to any pending litigation that, in management’s opinion, could have a material effect on our financial position or results of operations except as disclosed in Note 16 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report. Item 4 . Mine Safety Disclosures.
Added
Information about our Executive Officers Name Age Position Held Erwin Haitzmann 70 Chairman of the Board and Co-Chief Executive Officer Peter Hoetzinger 61 Vice Chairman of the Board, Co-Chief Executive Officer and President Margaret Stapleton 62 Chief Financial Officer and Corporate Secretary Timothy Wright 53 Chief Accounting Officer and Corporate Controller Andreas Terler 54 Managing Director of Century Resorts Management GmbH and ‎ Executive Vice President Nikolaus Strohriegel 54 Managing Director of Century Resorts Management GmbH and Executive Vice President Erwin Haitzmann holds a Doctorate and a Masters degree in Social and Economic Sciences from the University of Linz, Austria (1980), and has extensive casino gaming experience ranging from dealer through various casino management positions.
Added
Dr. Haitzmann has been employed full-time by us since 1993 and has been employed as either Chief Executive Officer or Co-Chief Executive Officer since March 1994. Peter Hoetzinger received a Masters degree from the University of Linz, Austria (1986). He thereafter was employed in several managerial positions in the gaming industry with Austrian casino companies. Mr.
Added
Hoetzinger has been employed full-time by us since 1993 and has been Co-Chief Executive Officer since March 2005. Margaret Stapleton was appointed Chief Financial Officer, effective October 2019, and Corporate Secretary, effective May 2010.
Added
She holds a Bachelor of Science degree in Accounting from Regis University, Denver, Colorado (2004) and has over 30 years of experience in corporate accounting and internal audit. Mrs. Stapleton previously served as our Director of Internal Audit and Compliance from 2005 until May 2010 and as our Executive Vice President, Principal Financial/Accounting Officer from May 2010 to October 2019.
Added
Timothy Wright was appointed Chief Accounting Officer effective October 2019 and Corporate Controller effective May 2010. Mr. Wright holds a Bachelor of Science degree in Accounting from the University of Colorado, Colorado Springs, Colorado (1995) and has over 30 years of experience in corporate accounting and finance. Mr.
Added
Wright has been employed by us since 2007, including previously serving as our Vice President of Accounting from May 2010 to October 2019. Andreas Terler is a Graduate Engineer in Applied Mathematics from the University of Graz, Austria (1994). Mr. Terler has been employed by us since 2006.
Added
He has served as Managing Director of CRM since February 2007 and Executive Vice President since February 2022. Mr. Terler previously served as Vice President of Operations from May 2011 to October 2019, Chief Information 24 Officer from February 2006 to January 2022 and Senior Vice President, Operations – Missouri and West Virginia from October 2019 to February 2022.
Added
Nikolaus Strohriegel received a Masters degree from the University of Vienna, Austria (1996). Mr. Strohriegel has been employed by us since 2007. He has served as Managing Director of CRM since January 2009 and Executive Vice President since February 2022. Mr.
Added
Strohriegel previously served as Vice President of Operations from March 2017 to October 2019 and Senior Vice President, Operations – Europe from October 2019 to February 2022. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed1 unchanged
Biggest changeThis table is not intended to forecast future performance of our common stock. 12/17 12/18 12/19 12/20 12/21 12/22 CNTY 100.00 80.94 86.75 69.99 133.41 77.00 Nasdaq 100.00 96.12 129.97 186.69 226.63 151.61 Dow Jones US Gambling Index 100.00 67.36 96.55 85.49 74.51 55.50 No dividends have been declared or paid by us.
Biggest changeThis table is not intended to forecast future performance of our common stock. 12/18 12/19 12/20 12/21 12/22 12/23 CNTY 100.00 107.17 86.47 164.82 95.13 66.04 Nasdaq 100.00 135.23 194.24 235.78 157.74 226.24 Dow Jones US Gambling Index 100.00 143.34 126.92 110.62 82.39 107.03 No dividends have been declared or paid by us.
In November 2009, our board of directors approved an increase of the amount available to be repurchased under the program to $15.0 million. The amount available for repurchase as of December 31, 2022 is $14.7 million. The repurchase program has no set expiration or termination date. No repurchases were made during the year ended December 31, 2022. Item 6.
In November 2009, our board of directors approved an increase of the amount available to be repurchased under the program to $15.0 million. The amount available for repurchase as of December 31, 2023 is $14.7 million. The repurchase program has no set expiration or termination date. No repurchases were made during the year ended December 31, 2023. Item 6.
The comparison assumes a $100 investment on December 31, 2017, in our common stock and in each of the foregoing indices, and assumes reinvestment of dividends, if any.
The comparison assumes a $100 investment on December 31, 2018, in our common stock and in each of the foregoing indices, and assumes reinvestment of dividends, if any.
The following graph illustrates the cumulative shareholder return of our common stock during the period beginning December 31, 2017 through December 31, 2022, and compares it to the cumulative total return on the Nasdaq and the Dow Jones US Gambling Index.
The following graph illustrates the cumulative shareholder return of our common stock during the period beginning December 31, 2018 through December 31, 2023, and compares it to the cumulative total return on the Nasdaq and the Dow Jones US Gambling Index.
Declaration and payment of dividends, if any, in the future will be at the discretion of the board of directors. At March 3, 2023, we had 124 holders of record of our common stock. In March 2000, our board of directors approved and announced a discretionary program to repurchase up to $5.0 million of our outstanding common stock.
Declaration and payment of dividends, if any, in the future will be at the discretion of the board of directors. At March 8, 2024, we had 144 holders of record of our common stock. In March 2000, our board of directors approved and announced a discretionary program to repurchase up to $5.0 million of our outstanding common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

138 edited+99 added−94 removed31 unchanged
Biggest changeAmounts in millions Q1 Q2 Q3 Q4 YTD Edmonton - CAD 2022 13.6 16.8 17.8 15.8 64.0 2021 1.3 5.1 17.8 13.5 37.7 2020 13.1 3.9 13.5 10.2 40.7 2022/2021 12.3 11.7 — 2.3 26.3 926.4% 230.1% — 16.7% 69.5% 2021/2020 (11.8) 1.2 4.3 3.3 (3.0) (89.9%) 31.0% 32.0% 31.7% (7.3%) Edmonton - USD 2022 10.7 13.2 13.7 11.6 49.2 2021 1.0 4.2 14.2 10.7 30.1 2020 9.8 2.8 10.2 7.8 30.6 2022/2021 9.7 9.0 (0.5) 0.9 19.1 923.5% 216.8% (3.4%) 8.2% 63.4% 2021/2020 (8.8) 1.4 4.0 2.9 (0.5) (89.3%) 46.1% 39.6% 37.0% (1.7%) Amounts in millions Q1 Q2 Q3 Q4 YTD Calgary - CAD 2022 6.7 7.5 8.3 6.6 29.1 2021 1.2 3.1 9.1 7.1 20.5 2020 8.5 2.6 8.6 6.4 26.1 2022/2021 5.5 4.4 (0.8) (0.5) 8.6 449.4% 144.5% (8.3%) (7.5%) 42.0% 2021/2020 (7.3) 0.5 0.5 0.7 (5.6) (85.7%) 19.6% 5.8% 10.7% (21.5%) Calgary - USD 2022 5.3 5.8 6.4 4.9 22.4 2021 1.0 2.5 7.1 5.7 16.3 2020 6.4 1.9 6.4 4.9 19.6 2022/2021 4.3 3.3 (0.7) (0.8) 6.1 447.1% 134.9% (11.5%) (14.2%) 37.1% 2021/2020 (5.4) 0.6 0.7 0.8 (3.3) (84.9%) 33.5% 10.9% 15.1% (16.7%) ‎ 38 The results below are presented to illustrate the changes in operating expenses, primarily due to COVID-19, in the Canada segment for the year ended December 31, 2022 compared to the year ended December 31, 2021 and the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively, excluding depreciation and amortization expense, impairment – intangible and tangible assets and gain on sale of casino operations.
Biggest changeFor the year 2023/2022 2022/2021 ended December 31, % % Amounts in CAD, in millions 2023 2022 2021 Change Change Change Change Net Operating Revenue Canada 101.8 93.1 58.2 8.7 9.4% 34.9 60.0% Operating Costs and Expenses (1) Canada 77.4 69.2 46.5 8.2 11.8% 22.7 48.8% For the year ended December 31, 2023/2022 2022/2021 Amounts in millions 2023 2022 2021 $ Change % Change $ Change % Change Net Operating Revenue Canada $ 75.5 $ 71.6 $ 46.4 $ 3.9 5.4% $ 25.2 54.3% Operating Costs and Expenses (1) Canada $ 57.4 $ 53.2 $ 37.0 $ 4.2 7.9% $ 16.2 43.8% (1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization and gain on sale of casino operations and loss on sale of assets. 2023 Compared to 2022 The following discussion highlights results for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The sale proceeds were shared between us and VICI PropCo and we recorded income related to the sale net of related expenses of $0.8 million in gain (loss) on foreign currency transactions, cost recovery income and other on our consolidated statement of earnings (loss) for the year ended December 31, 2021.
The sale proceeds were shared between us and VICI PropCo and we recorded income related to the sale net of related expenses of $0.8 million in gain (loss) on foreign currency transactions, cost recovery income and other on our consolidated statement of (loss) earnings for the year ended December 31, 2021.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2022 consisted of $178.5 million in proceeds from borrowings net of principal payments, $5.0 million proceeds from borrowing from VICI PropCo for construction at CCV and $0.3 million in proceeds from the exercise of stock options, offset by $18.9 million in payments of deferred financing costs, $0.4 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards and $3.3 million in distributions to non-controlling interests in CDR and CPL.
Net cash provided by financing activities for the year ended December 31, 2022 consisted of $178.5 million in proceeds from borrowings net of principal payments, $5.0 million proceeds from borrowing from VICI PropCo for construction at CCV and $0.3 million in proceeds from the exercise of stock options, offset by $18.9 million in payments of deferred financing costs, $0.4 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards and $3.3 million in distributions to non-controlling interests in CDR and CPL.
In addition, revenue at our Caruthersville location was negatively impacted by disruptions in operations due to the record low water levels in the Mississippi River that caused us to relocate the casino from the riverboat and barge to a land-based pavilion. During the transition, there were fewer slot machines and table games operating.
In addition, revenue at our Caruthersville location was negatively impacted in 2022 by disruptions in operations due to the record low water levels in the Mississippi River that caused us to relocate the casino from the riverboat and barge to a land-based pavilion. During the transition, there were fewer slot machines and table games operating.
Cash flow estimates include assumptions regarding factors such as recent and budgeted operating performance, growth percentages as well as competitive impacts from current and anticipated competition, operating margins and current regulatory, social and economic climates. The most significant of the assumptions used in our valuations include revenue growth/decline percentages, discount rates, future terminal values and capital expenditure assumptions.
Cash flow estimates include assumptions regarding factors such as recent and budgeted operating performance, growth percentages as well as competitive impacts from current and anticipated competition, operating margins and current regulatory, social and economic climates. The most significant of the assumptions used in our valuations include revenue growth/decline percentages, discount rates, future 45 terminal values and capital expenditure assumptions.
The reader should not place undue reliance on these forward-looking statements for many reasons, including those risks discussed under Item 1A, “Risk Factors,” and elsewhere in this document. See “Cautionary Statement Regarding Forward-Looking Information” that precedes Part I of this report.
The reader should not place undue reliance on these forward-looking statements for many reasons, including those risks discussed under Item 1A, “Risk Factors,” and elsewhere in this report. See “Cautionary Statement Regarding Forward-Looking Information” that precedes Part I of this report.
Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming, bowling and entertainment facilities that are in most instances a part of the casinos.
Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming and entertainment facilities that are in most instances a part of the casinos.
Please refer also to the consolidated statements of cash flows in the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report and to management’s discussion of the results of operations above in this Item 7 for a discussion of earnings (loss) from operations.
Please refer also to the consolidated statements of cash flows in the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report and to management’s discussion of the results of operations above in this Item 7 for a discussion of earnings from operations.
If our assumptions change and it is determined that we will be able to realize tax benefits related to these deferred tax assets, we will realize a reduction in income tax expense in the year such valuation allowances are reversed.
If our assumptions change and it is determined that we will be able to realize tax benefits related to these foreign deferred tax assets, we will realize a reduction in income tax expense in the year such valuation allowances are reversed.
Interest expense Interest expense is related to interest owed on our borrowings under our Goldman Credit Agreement, Macquarie Credit Agreement, our financing obligation with VICI PropCo, our CPL and CRM borrowings, our capital lease agreements and interest expense related to the CDR land lease.
Interest expense Interest expense is directly related to interest owed on our borrowings under our Goldman Credit Agreement, Macquarie Credit Agreement, our financing obligation with VICI PropCo, our CPL and CRM borrowings, our capital lease agreements and interest expense related to the CDR land lease.
For the quantitative goodwill impairment test, the current fair value of each reporting unit with goodwill balances is estimated using a combination of (i) the income approach using the discounted cash flow method for projected revenue, EBITDA and working capital, (ii) the market approach observing the price at which comparable companies or shares of comparable companies are bought or sold, and (iii) fair value measurements using either quoted market price or an estimate of fair value using a present value technique.
For the quantitative goodwill impairment test, the current fair value of each reporting unit with goodwill balances is estimated using a combination of (i) the income approach using the discounted cash flow method for projected revenue, EBITDAR and working capital, (ii) the market approach observing the price at which comparable companies or shares of comparable companies are bought or sold, and (iii) fair value measurements using either quoted market price or an estimate of fair value using a present value technique.
As of December 31, 2022, we believe that our investments in property and equipment are recoverable. Goodwill and Intangible Assets – We test goodwill and indefinite-lived intangible assets for impairment as of October 1 each year, or more frequently as circumstances indicate it is necessary. Our identifiable intangible assets include trademarks, player’s club lists and casino licenses.
As of December 31, 2023, we believe that our investments in property and equipment are recoverable. Goodwill and Intangible Assets – We test goodwill and indefinite-lived intangible assets for impairment as of October 1 each year, or more frequently as circumstances indicate it is necessary. Our identifiable intangible assets include trademarks, player’s club lists and casino licenses.
As of December 31, 2022, we have made no changes to our estimates related to useful lives. We use judgment in estimating future cash flows when we review the carrying value of our property and equipment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.
As of December 31, 2023, we have made no changes to our estimates related to useful lives. We use judgment in estimating future cash flows when we review the carrying value of our property and equipment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.
When necessary and available, we supplement the cash flows generated by our operations with funds provided by bank borrowings or other debt or equity financing activities. As of December 31, 2022, we had $30.0 million available on our Revolving Facility.
When necessary and available, we supplement the cash flows generated by our operations with funds provided by bank borrowings or other debt or equity financing activities. As of December 31, 2023, we had $30.0 million available on our Revolving Facility.
The decrease in gaming revenue was due to the positive impact of the stimulus payments in 2021 and decreases in the second half of 2022 due to lower customer volumes believed to be from economic and inflationary factors and decreased table game offerings due to staffing issues.
The decreased gaming revenue in Missouri was due to the positive impact of the stimulus payments in 2021 and decreases in the second half of 2022 due to lower customer volumes believed to be from economic and inflationary factors and decreased table game offerings due to staffing issues.
Management believes that presenting Adjusted EBITDA to investors provides them with information used by management for financial and operational decision making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.
Management believes that presenting Adjusted EBITDAR to investors provides them with information used by management for financial and operational decision-making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.
We drew the $350.0 million under the Goldman Term Loan on April 1, 2022 and used the proceeds as well as approximately $29.3 million of cash on hand to fund the PropCo Acquisition, repay the $166.2 million outstanding on the Macquarie Credit Agreement, fund $100.0 million of Acquisition Escrow for the Nugget Acquisition and for related fees and expenses.
We drew the $350.0 million under the Goldman Term Loan on April 1, 2022 and used the proceeds as well as approximately $29.3 million of cash on hand to fund the Smooth Bourbon Acquisition, repay the $166.2 million outstanding on the Macquarie Credit Agreement, fund $100.0 million of Acquisition Escrow for the Nugget Acquisition and for related fees and expenses.
Tax Act During 2018, the Company completed its accounting of the one-time transition tax on undistributed and previously untaxed post-1986 foreign earnings and profits imposed by the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act permits a company to pay the one-time transition tax over eight years on an interest free basis.
Tax Act During 2018, we completed our accounting of the one-time transition tax on undistributed and previously untaxed post-1986 foreign earnings and profits imposed by the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act permits a company to pay the one-time transition tax over eight years on an interest free basis.
Because management believes it is more likely than not that the benefit from certain deferred tax assets will not be realized, a valuation allowance of $9.9 million in foreign jurisdictions has been provided in recognition of these risks.
Because management believes it is more likely than not that the benefit from certain deferred tax assets will not be realized, a valuation allowance of $11.4 million in foreign jurisdictions has been provided in recognition of these risks.
The remaining cash payments due related to the transition tax total $0.9 million and are expected to be paid $0.2 million in 2023, $0.3 million in 2024, and $0.4 million in 2025. Critical Accounting Estimates Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements.
The remaining cash payments due related to the transition tax total $0.7 million and are expected to be paid $0.3 million in 2024 and $0.4 million in 2025. Critical Accounting Estimates Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements.
Property and Equipment – We have significant capital invested in our property and equipment, which represented approximately 56% of our total assets as of December 31, 2022. Judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets and if or when an asset has been impaired.
Property and Equipment – We have significant capital invested in our property and equipment, which represented approximately 69% of our total assets as of December 31, 2023. Judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets and if or when an asset has been impaired.
As a result, we have had to adjust hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We have been able to make adjustments during non-peak times and have not seen a material impact to our operating results.
As a result, we have had to adjust hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We have been able to make adjustments during non-peak times to mitigate some of the impact to our operating results.
For the definition and reconciliation of Net Debt to the most directly comparable GAAP measure, see “Non-GAAP Measures – Net Debt” above in this Item 7.
For the definition and reconciliation of Net Debt to the most directly comparable US GAAP measure, see “Non-GAAP Measures Definitions and Calculations – Net Debt” above in this Item 7.
This adjustment reduced the contingent liability by PLN 1.8 million ($0.5 million) and PLN 2.8 million ($0.7 million) for the years ended December 31, 2021 and 2020, respectively. In addition, the Polish IRS reimbursed CPL PLN 1.8 million ($0.4 million) and PLN 0.8 million ($0.2 million) for the years ended December 31, 2022 and 2021, respectively.
This adjustment reduced the contingent liability by PLN 1.8 million ($0.5 million) for the 40 year ended December 31, 2021. In addition, the Polish IRS reimbursed CPL PLN 1.8 million ($0.4 million) and PLN 0.8 million ($0.2 million) for the years ended December 31, 2022 and 2021, respectively.
During the year ended December 31, 2022, we recognized an income tax benefit of ($7.7) million on pre-tax income of $6.0 million, representing an effective income tax rate of (127.5%), compared to income tax expense of $6.4 million on pre-tax income of $28.1 million, representing an effective income tax rate of 22.6%, and income tax expense of $4.8 million on pre-tax loss of ($43.3) million, representing an effective income tax rate of 11.2% for the years ended December 31, 2021 and 2020, respectively.
During the year ended December 31, 2023, we recognized an income tax benefit of ($5.3) million on pre-tax loss of ($23.8) million, representing an effective income tax rate of 22.4%, compared to income tax benefit of ($7.7) million on pre-tax income of $6.0 million, representing an effective income tax rate of (127.5%), and income tax expense of $6.4 million on pre-tax income of $28.1 million, representing an effective income tax rate of 22.6% for the years ended December 31, 2022 and 2021, respectively.
Gain (loss) on foreign currency transactions, cost recovery income and other Cost recovery income of $1.9 million, $0.7 million and $0.2 million was received by CDR for the years ended December 31, 2022, 2021 and 2020, respectively, related to infrastructure built during the development of the Century Downs REC project.
Gain on foreign currency transactions, cost recovery income and other Cost recovery income of $3.5 million, $1.9 million and $0.7 million was received by CDR for the years ended December 31, 2023, 2022 and 2021, respectively, related to infrastructure built during the development of the Century Downs REC project.
We have a shelf registration statement with the SEC that became effective in July 2020 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities. We intend to renew the shelf registration statement in 2023.
We have a shelf registration statement with the SEC that became effective in June 2023 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities.
Terminated Projects As detailed further in Item 1, “Business – 2022 Business Developments”, we sold the casino operations of Century Casino Calgary as well as the land and building in which we operated Century Sports.
Terminated Projects As detailed further in Item 1, “Business – Business Developments – Terminated Projects”, we sold the casino operations of Century Casino Calgary as well as the land and building in which we operated Century Sports.
Non-GAAP Measures – Adjusted EBITDA We define Adjusted EBITDA as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions.
We define Adjusted EBITDAR as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, including interest expense related to the Master Lease as discussed below, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions.
Net Debt is not considered a liquidity measure recognized under US GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it becomes due simultaneously. The reconciliation of Net Debt is presented below.
Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it becomes due simultaneously. The reconciliation of Net Debt is presented below.
Following is a breakout of operating costs and expenses by segment for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020. United States increased by $1.4 million, or 0.7%, and by $6.7 million, or 3.4%. Canada increased by $18.2 million, or 43.5%, and by $1.0 million, or 2.5%. Poland increased by $22.3 million, or 38.0%, and by $1.6 million, or 2.8%. Corporate Other increased by $4.2 million, or 32.2%, and by $6.2 million, or 90.3%.
Following is a breakout of operating costs and expenses by reportable segment for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021. United States increased by $108.9 million, or 52.4%, and by $1.4 million, or 0.7%. Canada increased by $0.3 million, or 0.4%, and by $18.2 million, or 43.5%. Poland increased by $7.6 million, or 9.4%, and by $22.3 million, or 38.0%. Corporate and Other increased by $4.4 million, or 25.1%, and by $4.2 million, or 32.2%.
For the year ended December 31, 2021 Amounts in thousands United States Canada Poland Corporate and Other Total Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 49,628 $ 1,124 $ 440 $ (30,570) $ 20,622 Interest expense (income), net (1) 28,229 1,796 (477) 13,110 42,658 Income taxes — 1,256 257 4,858 6,371 Depreciation and amortization 18,398 4,904 3,028 432 26,762 Net earnings attributable to non-controlling interests — 932 224 — 1,156 Non-cash stock-based compensation — — — 2,652 2,652 Gain on foreign currency transactions, cost recovery income and other (2) (836) (545) (887) (418) (2,686) Loss (gain) on disposition of fixed assets 341 43 44 (37) 391 Adjusted EBITDA $ 95,760 $ 9,510 $ 2,629 $ (9,973) $ 97,926 (1) Expense of $28.2 million related to our Master Lease is included in interest expense (income), net in the United States segment.
For the year ended December 31, 2021 Amounts in thousands United States Canada Poland Corporate and Other Total Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 49,628 $ 1,124 $ 440 $ (30,570) $ 20,622 Interest expense (income), net (1) 28,229 1,796 (477) 13,110 42,658 Income tax expense — 1,256 257 4,858 6,371 Depreciation and amortization 18,398 4,904 3,028 432 26,762 Net earnings attributable to non-controlling interests — 932 224 — 1,156 Non-cash stock-based compensation — — — 2,652 2,652 Gain on foreign currency transactions, cost recovery income and other (2) (836) (545) (887) (418) (2,686) Loss (gain) on disposition of fixed assets 341 43 44 (37) 391 Adjusted EBITDAR $ 95,760 $ 9,510 $ 2,629 $ (9,973) $ 97,926 (1) See “Non-Operating Income (Expense) – Interest” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
CEWS and CERS reduced operating expenses by CAD 3.1 million ($2.5 million based on the average exchange rate for the year ended December 31, 2021) and by CAD 1.6 million ($1.3 million based on the average exchange rate for the year ended December 31, 2021), respectively, for the year ended December 31, 2021.
CEWS and CERS reduced operating expenses by CAD 3.1 million ($2.5 million) and by CAD 1.6 million ($1.3 million), respectively, for the year ended December 31, 2021.
In 2020, we closed Century Casino Bath. ‎ 27 Presentation of Foreign Currency Amounts The average exchange rates to the US dollar used to translate balances during each reported period are as follows: For the year ended December 31, % Change Average Rates 2022 2021 2020 2022/2021 2021/2020 Canadian dollar (CAD) 1.3011 1.2537 1.3412 (3.8%) 6.5% Euros (EUR) 0.9506 0.8456 0.8776 (12.4%) 3.6% Polish zloty (PLN) 4.4559 3.8608 3.8989 (15.4%) 1.0% British pound (GBP) N/A 0.7270 0.7798 N/A 6.8% Source: 2022 Xe Currency Converter, 2021 and 2020 Pacific Exchange Rate Service We recognize in our statement of earnings (loss), foreign currency transaction gains or losses resulting from the translation of casino operations and other transactions that are denominated in a currency other than US dollars.
Presentation of Foreign Currency Amounts The average exchange rates to the US dollar used to translate balances during each reported period are as follows: For the year ended December 31, % Change Average Rates 2023 2022 2021 2023/2022 2022/2021 Canadian dollar (CAD) 1.3496 1.3011 1.2537 (3.7%) (3.8%) Euros (EUR) 0.9248 0.9506 0.8456 2.7% (12.4%) Polish zloty (PLN) 4.2034 4.4559 3.8608 5.7% (15.4%) Source: 2023 and 2022 Xe Currency Converter, 2021 Pacific Exchange Rate Service 27 We recognize in our statement of (loss) earnings, foreign currency transaction gains or losses resulting from the translation of casino operations and other transactions that are denominated in a currency other than US dollars.
For the year ended December 31, 2022 Amounts in thousands United States Canada Poland Corporate and Other Total Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 24,759 $ 6,070 $ 5,811 $ (28,664) $ 7,976 Interest expense (income), net (1) 28,531 2,281 (686) 34,854 64,980 Income taxes (benefit) 7,595 2,354 2,326 (19,935) (7,660) Depreciation and amortization 19,364 4,754 2,606 385 27,109 Net earnings attributable to non-controlling interests — 2,787 2,907 — 5,694 Non-cash stock-based compensation — — — 3,335 3,335 (Gain) loss on foreign currency transactions, cost recovery income and other (2) (1) 123 (1,153) (205) (1,236) Loss (gain) on disposition of fixed assets 49 27 63 (121) 18 Acquisition costs — — — 3,124 3,124 Adjusted EBITDA $ 80,297 $ 18,396 $ 11,874 $ (7,227) $ 103,340 (1) Expense of $28.5 million related to our Master Lease is included in interest expense (income), net in the United States segment.
(2) Included in the Canada segment is $1.7 million gain related to the earn out payment from the sale of casino operations in Calgary in 2020 and $3.5 million cost recovery income for CDR. ‎ 31 For the year ended December 31, 2022 Amounts in thousands United States Canada Poland Corporate and Other Total Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 24,759 $ 6,070 $ 5,811 $ (28,664) $ 7,976 Interest expense (income), net (1) 28,531 2,281 (686) 34,854 64,980 Income tax expense (benefit) 7,595 2,354 2,326 (19,935) (7,660) Depreciation and amortization 19,364 4,754 2,606 385 27,109 Net earnings attributable to non-controlling interests — 2,787 2,907 — 5,694 Non-cash stock-based compensation — — — 3,335 3,335 (Gain) loss on foreign currency transactions, cost recovery income and other (2) (1) 123 (1,153) (205) (1,236) Loss (gain) on disposition of fixed assets 49 27 63 (121) 18 Acquisition costs — — — 3,124 3,124 Adjusted EBITDAR $ 80,297 $ 18,396 $ 11,874 $ (7,227) $ 103,340 (1) See “Non-Operating Income (Expense) – Interest” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
We wrote off approximately $7.3 million of deferred financing costs to interest expense in the year ended December 31, 2022 in connection with the prepayment of the Macquarie Term Loan.
We wrote off approximately $7.3 million of deferred financing costs to interest expense in the second quarter of 2022 in connection with the prepayment of the Macquarie Term Loan.
The transition was completed in December 2022 and we believe that there will not be a material impact to operations in this temporary location while we are constructing the new land-based casino.
The transition was completed in December 2022 and to date there has not been a material impact to operations in this temporary location while we are constructing the new land-based casino.
Following is a breakout of net operating revenue by segment for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020. United States decreased by ($14.7) million, or (5.2%), and increased by $84.9 million, or 42.8%. Canada increased by $25.1 million, or 54.2%, and decreased by ($3.8) million, or (7.6%). Poland increased by $31.9 million, or 54.9%, and by $4.0 million, or 7.3%. Corporate Other decreased by ($0.4) million, or (63.7%), and by ($0.8) million, or (59.9%). 29 Operating costs and expenses increased by $46.2 million, or 14.4%, and by $15.6 million, or 5.1%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively.
Following is a breakout of net operating revenue by reportable segment for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021. United States increased by $112.0 million, or 41.7%, and decreased by ($14.7) million, or (5.2%). Canada increased by $3.9 million, or 5.4%, and by $25.1 million, or 54.2%. Poland increased by $3.9 million, or 4.4%, and by $31.9 million, or 54.9%. Corporate and Other decreased by ($0.1) million, or (70.4%), and by ($0.4) million, or (63.7%). ‎ 29 Operating costs and expenses increased by $121.1 million, or 33.1%, and by $46.2 million, or 14.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively.
Earnings from operations decreased by ($0.9) million, or (1.3%), and increased by $68.6 million, or 54051.2%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively.
Earnings from operations decreased by ($3.6) million, or (5.3%), and by ($0.9) million, or (1.3%), for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively.
Following is a breakout of earnings (loss) from operations by segment for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020. United States decreased by ($16.1) million, or (21.0%), and increased by $78.2 million, or 6566.9%. Canada increased by $6.9 million, or 152.8%, and decreased by ($4.8) million, or (51.5%). Poland increased by $9.6 million, or 2177.9%, and by $2.3 million, or 84.1%. Corporate Other decreased by ($1.3) million, or (10.7%), and by ($7.1) million, or (128.9%).
Following is a breakout of earnings from operations by reportable segment for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021. United States increased by $3.1 million, or 5.1%, and decreased by ($16.1) million, or (21.0%). Canada increased by $3.6 million, or 31.5%, and by $6.9 million, or 152.8%. Poland decreased by ($3.7) million, or (39.7%), and increased by $9.6 million, or 2177.9%. Corporate and Other decreased by ($6.6) million, or (47.6%), and by ($1.3) million, or (10.7%).
Additional Gaming Projects We currently are exploring additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.
We also continued our construction projects in Caruthersville and Cape Girardeau. Additional Gaming Projects We continue to explore additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.
Operating Expense Highlights Years ended December 31, 2022 and 2021 General and administrative expenses increased by $4.3 million, or 33.7%, due primarily to increased payroll and stock compensation expense during the year ended December 31, 2022 as well as $3.1 million in acquisition costs related to the pending Nugget Acquisition and Rocky Gap Acquisition.
Operating costs and expenses increased by $4.2 million, or 32.2%, due primarily to increased payroll and stock compensation expense during the year ended December 31, 2022 as well as $3.1 million in acquisition costs related to the Nugget Acquisition and Rocky Gap Acquisition.
We will continue to monitor our liquidity and make reductions to marketing and operating expenditures, where possible, if future government mandates or closures due to COVID-19 or other health-related issues are required that would have an adverse impact on us.
If future government mandates or closures are required that would have an adverse impact on us, we will monitor our liquidity and make reductions to marketing and operating expenditures, where possible, similar to our response to COVID-19 in 2021.
See “Discussion of Results” below for a discussion of the impact of the closures in each operating segment. The duration and impact of the COVID-19 pandemic otherwise remains uncertain. We cannot predict the negative impacts that COVID-19 will have on our consumer demand, workforce, suppliers, contractors and other partners and whether future closures will be required.
See “Discussion of Results” below for a discussion of the impact of the 2021 closures in each impacted reportable segment . We cannot predict the negative impacts that additional variants of COVID-19 may have on our consumer demand, workforce, suppliers, contractors and other partners and whether future closures will be required.
We recorded a loss on the sale of the land and building of CAD 2.7 million ($2.2 million based on the average exchange rate for the month ended February 28, 2022). Corporate and Other We began operating CCB in May 2018.
We recorded a loss on the sale of the land and building of CAD 2.7 million ($2.2 million based on the average exchange rate for the month ended February 28, 2022).
On February 28, 2023, the AGLC approved a temporary increase from the current 15% of slot machines net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. The increase in slot machine net sales is expected to have a positive impact on net operating revenue and results of operations at our Canadian properties.
In February 2023, the AGLC approved a temporary increase from 15% of slot machine net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. The increase in the slot machine net sales retention percentage had a positive impact on net operating revenue and results of operations at our Canadian properties during this time period.
Our casino licenses related to CPL, our Mountaineer trademark and our player’s club lists are finite-lived intangible assets and are amortized over their respective useful lives. Finite-lived intangibles are evaluated for impairment annually or more frequently if necessary. There were no impairment charges recorded for the finite-lived intangible assets for the periods presented in this report.
Our finite-lived intangible assets are amortized over their respective useful lives. Finite-lived intangibles are evaluated for impairment annually or more frequently if necessary. There were no impairment charges recorded for the finite-lived intangible assets for the periods presented in this report.
Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US generally accepted accounting principles (“US GAAP”). Adjusted EBITDA is not considered a measure of performance recognized under US GAAP.
Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US generally accepted accounting principles (“US GAAP”). The Master Lease is accounted for as a financing obligation.
Expense related to the Master Lease is included in the interest expense (income), net line item. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDA reported for each segment.
Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDAR reported for each reportable segment.
If actual market conditions are less favorable than those projected, or if events occur or circumstances change that could reduce the fair value of our goodwill of intangible assets below the carrying value, we will recognize an impairment for the amount by which the carrying value exceeds the reporting unit’s fair value, which may be material. 49 Our reporting units with goodwill balances as of December 31, 2022 are included within Canada and Poland reportable segments.
If actual market conditions are less favorable than those projected, or if events occur or circumstances change that could reduce the fair value of our goodwill of intangible assets below the carrying value, we will recognize an impairment for the amount by which the carrying value exceeds the reporting unit’s fair value, which may be material.
Construction began in September 2022 and is expected to be completed in the first half of 2024. We estimate this project will cost approximately $30.5 million. W e plan to fund the project with cash on hand . As of December 31, 2022, we have spent approximately $2.8 million on this project.
Construction began in September 2022 and is expected to be completed in April 2024. We estimate this project will cost approximately $30.5 million. We are funding the project with cash on hand. As of December 31, 2023, we have spent approximately $22.8 million on this project.
Investing Activities Net cash used in investing activities for the year ended December 31, 2022 consisted of $95.0 million for the purchase of the 50% equity interest in Smooth Bourbon, $0.4 million for the purchase of a casino license in Poland, $1.7 million for slot machine purchases, $0.2 million in gaming-related purchases, $0.1 million for outdoor pool and patio furniture and $0.1 million for hotel carpet in West Virginia, $2.4 million for our hotel remodel in Cape Girardeau, $1.6 million for our casino project in Caruthersville, $2.9 million for our stand-alone hotel project in Caruthersville, $0.4 million for renovations to the pavilion in Caruthersville to relocate the casino from the riverboat and barge, $1.8 million for slot machine purchases at our Missouri properties, $0.7 million for slot machine purchases, $0.2 million in gaming-related purchases and $0.3 million in camera upgrades at our Colorado properties, $1.6 million for employee housing in Cripple Creek, $0.7 million in slot machine and table game purchases in Poland, $0.2 million for carpet at Century Downs, $0.2 million for drainage at Century Mile, and $4.1 million in other fixed asset additions at our properties, offset by $6.3 million in proceeds from the sale of the land and building in Calgary, $5.0 million in dividends from Smooth Bourbon and $0.1 million in proceeds from the disposition of assets. 45 Net cash used in investing activities for the year ended December 31, 2021 consisted of $0.4 million for slot machine purchases, $0.2 million in energy efficiency upgrades, and $0.4 million in gaming floor upgrades at our West Virginia property; $1.3 million for slot machine purchases, $0.4 million in other gaming equipment, $0.4 million in surveillance equipment, $0.6 million in a restaurant remodel, $0.6 million in a hotel remodel, and $0.9 million related to our hotel and land-based casino project at our Missouri properties; $0.1 million in building and improvements, $0.1 million for slot machine purchases and $0.2 million in server upgrades at our Colorado properties; $0.6 million to build employee housing in Cripple Creek; $0.3 million for recreational vehicle stalls at Century Mile and $3.5 million in other fixed asset additions at our properties and $0.1 million in working capital adjustments paid to the buyer of Century Casino Calgary, offset by less than $0.1 million in proceeds from the Century Casino Calgary sale earn out and less than $0.1 million in proceeds from the sale of fixed assets.
Net cash used in investing activities for the year ended December 31, 2022 consisted of $95.0 million for the purchase of the 50% equity interest in Smooth Bourbon, $0.4 million for the purchase of a casino license in Poland, $1.7 million for slot machine purchases, $0.2 million in gaming-related purchases, $0.1 million for outdoor pool and patio furniture and $0.1 million for hotel carpet in West Virginia, $2.4 million for our hotel remodel in Cape Girardeau, $1.6 million for our casino project in Caruthersville, $2.9 million for our stand-alone hotel project in Caruthersville, $0.4 million for renovations to the pavilion in Caruthersville which is funded by VICI PropCo (the proceeds funded from VICI PropCo are recognized as financing activities) to relocate the casino from the riverboat and barge, $1.8 million for slot machine purchases at our Missouri properties, $0.7 million for slot machine purchases, $0.2 million in gaming-related purchases and $0.3 million in camera upgrades at our Colorado properties, $1.6 million for employee housing in Cripple Creek, $0.7 million in slot machine and table game purchases in Poland, $0.2 million for carpet at Century Downs, $0.2 million for drainage at Century Mile, and $4.1 million in other fixed asset additions at our properties, offset by $6.3 million in proceeds from the sale of the land and building in Calgary, $5.0 million in dividends from Smooth Bourbon and $0.1 million in proceeds from the disposition of assets.
From September 2021 to early February 2022, we required patrons to provide proof of vaccination, a negative rapid test result or an original medical exception letter for entry in order to comply with a government mandate. In accordance with a government mandate, all patrons and employees were required to wear masks while indoors.
COVID-19 (Canada) – Through early February 2022 we required customers to provide proof of vaccination, a negative rapid test result or an original medical exemption letter for entry to comply with a government mandate. In accordance with a government mandate, all customers and employees were required to wear masks while indoors through early March 2022.
Results in US dollars were impacted by a (3.8%) exchange rate decrease and 6.5% exchange rate increase in the average rates between the US dollar and the Canadian dollar for the year ended December 31, 2022 compared to the year ended December 31, 2021 and the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively.
Results in US dollars were impacted by (3.7%) and (3.8%) decreases in the average exchange rate between the US dollar and Canadian dollar for the year ended December 31, 2023 compared to the year ended December 31, 2022, and the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively.
Key assumptions in the valuation of intangible assets at the CSA reporting unit relate to future earnings at CSA. A downturn in the Alberta economy could negatively affect the key assumptions management used in its analysis.
Intangible assets related to our CSA reporting unit were $9.2 million as of December 31, 2023. Key assumptions in the valuation of intangible assets at the CSA reporting unit relate to future earnings at CSA. A downturn in the Alberta economy could negatively affect the key assumptions management used in its analysis.
Cash Flows – Summary Our cash flows; cash, cash equivalents and restricted cash; and working capital consisted of the following: For the year ended December 31, Amounts in thousands 2022 2021 2020 Net cash provided by operating activities $ 37,397 $ 59,190 $ 9,005 Net cash used in investing activities (103,140) (9,992) (5,287) Net cash provided by (used in) financing activities 161,162 (4,713) 3,129 Cash, cash equivalents and restricted cash (1) $ 202,131 $ 108,041 $ 63,677 Working capital (2) $ 162,606 $ 80,247 $ 34,459 (1) Cash, cash equivalents and restricted cash as of December 31, 2022 includes $100.2 million related to the Acquisition Escrow.
Cash Flows – Summary Our cash flows; cash, cash equivalents and restricted cash; and working capital consisted of the following: For the year ended December 31, Amounts in thousands 2023 2022 2021 Net cash provided by operating activities $ 24,055 $ 37,397 $ 59,190 Net cash used in investing activities (206,997) (103,140) (9,992) Net cash provided by (used in) financing activities 149,857 161,162 (4,713) As of December 31, Amounts in thousands 2023 2022 2021 Cash, cash equivalents and restricted cash (1) $ 171,590 $ 202,131 $ 108,041 Working capital (2) $ 113,398 $ 162,606 $ 80,247 (1) Cash, cash equivalents and restricted cash as of December 31, 2022 included $100.2 million related to the Acquisition Escrow.
Net operating revenue increased by $42.0 million, or 10.8%, and by $84.2 million, or 27.7%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively.
Summary of Changes by Reportable Segment Net operating revenue increased by $119.7 million, or 27.8%, and by $42.0 million, or 10.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively.
Borrowings and Repayments of Long-Term Debt and Lease Agreements As of December 31, 2022, our total debt under bank borrowings and other agreements net of $16.8 million related to deferred financing costs was $349.6 million, of which $344.3 million was long-term debt and $5.3 million was the current portion of long-term debt.
Borrowings and Repayments of Long-Term Debt and Lease Agreements As of December 31, 2023, our total debt under bank borrowings and other agreements net of $14.1 million related to deferred financing costs was $332.7 million, of which $324.2 million was long-term debt and $8.5 million was the current portion of long-term debt.
Polish Airports owns the remaining 33.3% in CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest.
Polish Airports owns the remaining 33.3% in CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest. CPL has been in operation since 1989 and owns and operates casinos throughout Poland.
Net earnings decreased by ($12.6) million, or (61.3%), and increased by $68.6 million, or 143.0%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 and for the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively.
Net earnings decreased by ($36.2) million, or (453.5%), and by ($12.6) million, or (61.3%), for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively.
We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities.
LIQUIDITY AND CAPITAL RESOURCES Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow. We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities.
(2) Working capital is defined as current assets minus current liabilities and includes the $100.2 million related to the Acquisition Escrow. Operating Activities Our cash flows from operations have historically been positive and sufficient to fund ordinary operations.
(2) Working capital is defined as current assets minus current liabilities. Working capital as of December 31, 2022 included the $100.2 million related to the Acquisition Escrow. Operating Activities Our cash flows from operations have historically been positive and sufficient to fund ordinary operations. Cash flows from operations decreased in the years presented primarily because of increased interest payments.
If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks; sell and leaseback property at our casinos in which we own the land and buildings; or other debt or equity financings to supplement our working capital and investing requirements.
We intend to renew the shelf registration statement in 2026. 44 If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks, sale and leaseback transactions of property we own or acquire, or other debt or equity financings to supplement our working capital and investing requirements.
For further discussion of our effective income tax rates and an analysis of our effective income tax rate compared to the US federal statutory income tax rate, see Note 13 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report. ‎ 44 LIQUIDITY AND CAPITAL RESOURCES Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow.
For further discussion of our effective income tax rates and an analysis of our effective income tax rate compared to the US federal statutory income tax rate, see Note 13 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.
Before a gaming license expires, there is a public notification of the available license and any gaming company can apply for a new license for that city.
Before a gaming license expires, there is a public notification of the available license and any gaming company can apply for a new license for that city. The licenses in Krakow, Lodz and for the LIM Center in Warsaw all expire in 2024.
Amounts in thousands December 31, 2022 December 31, 2021 Total long-term debt, including current portion $ 349,580 $ 181,484 Deferred financing costs 16,844 7,695 Total principal $ 366,424 $ 189,179 Less: Cash and cash equivalents $ 101,785 $ 107,821 Net Debt $ 264,639 $ 81,358 ‎ 32 REPORTABLE SEGMENTS The following discussion provides further detail of consolidated results by reportable segment.
Amounts in thousands December 31, 2023 December 31, 2022 Total long-term debt, including current portion $ 332,680 $ 349,580 Deferred financing costs 14,149 16,844 Total principal $ 346,829 $ 366,424 Less: Cash and cash equivalents $ 171,327 $ 101,785 Net Debt $ 175,502 $ 264,639 32 REPORTABLE SEGMENTS The following discussion provides further detail of consolidated results by reportable segment.
Inflation – We have seen operating expenses, such as utilities, maintenance costs and food and beverage costs, increase at our properties but the increases have not been material to date. Staffing – We have experienced difficulties attracting and retaining staff at some locations in the US and Canada.
Inflation and Staffing – We have seen material increases in our operating expenses at our properties, including payroll wages and benefits, insurance and utilities, maintenance costs and food and beverage costs. We have also experienced difficulties attracting and retaining staff at some locations in the US and Canada.
See “Corporate and Other” below for additional information on the closures. Deferred Financing – We wrote-off approximately $7.3 million of deferred financing costs to interest expense in the second quarter of 2022 in connection with the prepayment of the $170.0 million term loan (the “Macquarie Term Loan”) issued under the Macquarie Credit Agreement.
In 2022, we wrote-off approximately $7.3 million of deferred financing costs to interest expense in connection with the prepayment of the $170.0 million term loan (the “Macquarie Term Loan”) issued under a credit agreement with Macquarie Capital (the “Macquarie Credit Agreement”).
A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDA can be found in the “Non-GAAP Measures – Adjusted EBITDA” discussion above in this Item 7. ‎ 43 Non-Operating Income (Expense) Non-operating income (expense) for the years ended December 31, 2022, 2021 and 2020 was as follows: For the year ended December 31, 2022/2021 2021/2020 Amounts in thousands 2022 2021 2020 $ Change % Change $ Change % Change Interest Income $ 851 $ 174 $ 6 $ 677 389.1% $ 168 2800.0% Interest Expense (65,831) (42,832) (43,104) 22,999 53.7% (272) (0.6%) Gain (Loss) on Foreign Currency Transactions, Cost Recovery Income and Other 3,378 2,289 (63) 1,089 47.6% 2,352 3733.3% Non-Operating (Expense) $ (61,602) $ (40,369) $ (43,161) $ (21,233) (52.6%) $ 2,792 6.5% Interest income Interest income is related to interest earned on our cash reserves and, for 2022, the Acquisition Escrow.
A reconciliation of Adjusted EBITDAR to net (loss) earnings attributable to Century Casinos, Inc. shareholders for the Corporate and Other reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7. ‎ 39 Non-Operating Income (Expense) Non-operating income (expense) for the years ended December 31, 2023, 2022 and 2021 was as follows: For the year ended December 31, 2023/2022 2022/2021 Amounts in thousands 2023 2022 2021 $ Change % Change $ Change % Change Interest Income $ 2,114 $ 851 $ 174 $ 1,263 148.4% $ 677 389.1% Interest Expense (93,925) (65,831) (42,832) 28,094 42.7% 22,999 53.7% Gain on Foreign Currency Transactions, Cost Recovery Income and Other 3,933 3,378 2,289 555 16.4% 1,089 47.6% Non-Operating (Expense) $ (87,878) $ (61,602) $ (40,369) $ (26,276) (42.7%) $ (21,233) (52.6%) Interest income Interest income is related to interest earned on our cash reserves.
We are constructing a new land-based casino with a small hotel adjacent to and connected with the existing building in Caruthersville. Construction began in December 2022 with completion expected in late 2024. We estimate this project will cost $51.9 million. T his project is being financed through VICI PropCo .
Construction Projects and Capital Expenditures We are constructing a new land-based casino with a small hotel adjacent to and connected with the existing pavilion building at Century Casino Caruthersville. Construction began in December 2022 with completion expected in the fourth quarter of 2024. We estimate this project will cost $51.9 million.
Operating costs and expenses decreased due to decreased gaming-related expenses offset by minimum wage increases in Missouri and expenses at Caruthersville related to low water levels in the Mississippi River beginning in August 2022.
Operating costs and expenses decreased due to decreased gaming-related expenses offset by minimum wage increases in Missouri and expenses at Caruthersville related to low water levels in the Mississippi River beginning in August 2022. 34 A breakdown of pari-mutuel, sports betting and iGaming revenue by operating segment is provided below.
The reporting units except for Century Downs Racetrack and Casino and Casinos Poland are owned, operated and managed through wholly-owned subsidiaries. Our ownership and operation of Century Downs Racetrack and Casino and Casinos Poland are discussed below.
The reporting units, except for Century Downs Racetrack and Casino and Casinos Poland, are owned, operated and managed through wholly-owned subsidiaries. Our ownership and operation of Century Downs Racetrack and Casino and Casinos Poland are discussed below. The table below provides information about the aggregation of our operating segments and reporting units into reportable segments as of December 31, 2023.
Shareholders 5,811 440 (1,373) 5,371 1220.7% 1,813 132.0% Adjusted EBITDA $ 11,874 $ 2,629 $ 344 $ 9,245 351.7% $ 2,285 664.2% In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable.
Shareholders 3,446 5,811 440 (2,365) (40.7%) 5,371 1220.7% Adjusted EBITDAR $ 8,062 $ 11,874 $ 2,629 $ (3,812) (32.1%) $ 9,245 351.7% In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable.
We estimate that, for the years ended December 31, 2021 and 2020, net operating revenue was adversely impacted by approximately $35.9 million and $100.5 million, respectively, and Adjusted EBITDA was adversely impacted by approximately $13.1 million and $36.0 million, respectively, due to the closures.
COVID Closures (2021) – We estimate that for the year ended December 31, 2021 net operating revenue was adversely impacted by approximately $35.9 million and Adjusted EBITDAR was adversely impacted by approximately $13.1 million due to the closures in Canada and Poland during the year.
Cash flows from operations decreased in the year ended December 31, 2022 compared to the year ended December 31, 2021 because of increased interest payments. We entered into the Goldman Credit Agreement on April 1, 2022 in connection with the Nugget Acquisition, and the principal amount of our debt increased by $183.8 million.
We entered into the Goldman Credit Agreement on April 1, 2022 in connection with the Nugget Acquisition, and the principal amount of our debt increased by $183.8 million. Trends in our operating cash flows tend to follow trends in earnings from operations, excluding non-cash charges.
We continued closures of our showroom and hotel at CRA. These closures and the COVID-19 restrictions on restaurants and hotels through the third quarter of 2021 negatively impacted food and beverage revenue at our casinos.
In accordance with a government mandate, all patrons and employees were required to wear masks while indoors. We continued closures of our showroom and hotel at CRA. These closures and the COVID-19 restrictions on restaurants and hotels through the third quarter of 2021 negatively impacted food and beverage revenue at our casinos.
Poland For the year ended December 31, 2022/2021 2021/2020 Amounts in thousands 2022 2021 2020 $ Change % Change $ Change % Change Gaming $ 88,959 $ 56,724 $ 53,228 $ 32,235 56.8% $ 3,496 6.6% Food and Beverage 843 421 462 422 100.2% (41) (8.9%) Other Revenue 367 1,081 581 (714) (66.0%) 500 86.1% Net Operating Revenue 90,169 58,226 54,271 31,943 54.9% 3,955 7.3% Gaming Expenses (56,025) (35,963) (34,700) 20,062 55.8% 1,263 3.6% Food and Beverage Expenses (3,113) (2,018) (2,037) 1,095 54.3% (19) (0.9%) General and Administrative Expenses (19,220) (17,660) (17,193) 1,560 8.8% 467 2.7% Depreciation and Amortization (2,606) (3,028) (3,124) (422) (13.9%) (96) (3.1%) Total Operating Costs and Expenses (80,964) (58,669) (57,054) 22,295 38.0% 1,615 2.8% Earnings (Loss) from Operations 9,205 (443) (2,783) 9,648 2177.9% 2,340 84.1% Income Tax (Expense) Benefit (2,326) (257) 518 2,069 805.1% 775 149.6% Net (Earnings) Loss Attributable to Non-controlling Interests (2,907) (224) 687 2,683 1197.8% 911 132.6% Net Earnings (Loss) Attributable to Century Casinos, Inc.
Poland For the year ended December 31, 2023/2022 2022/2021 Amounts in thousands 2023 2022 2021 $ Change % Change $ Change % Change Gaming $ 92,957 $ 88,959 $ 56,724 $ 3,998 4.5% $ 32,235 56.8% Food and Beverage 927 843 421 84 10.0% 422 100.2% Other Revenue 221 367 1,081 (146) (39.8%) (714) (66.0%) Net Operating Revenue 94,105 90,169 58,226 3,936 4.4% 31,943 54.9% Gaming Expenses (60,595) (56,025) (35,963) 4,570 8.2% 20,062 55.8% Food and Beverage Expenses (3,695) (3,113) (2,018) 582 18.7% 1,095 54.3% General and Administrative Expenses (21,784) (19,220) (17,660) 2,564 13.3% 1,560 8.8% Depreciation and Amortization (2,482) (2,606) (3,028) (124) (4.8%) (422) (13.9%) Total Operating Costs and Expenses (88,556) (80,964) (58,669) 7,592 9.4% 22,295 38.0% Earnings (Loss) from Operations 5,549 9,205 (443) (3,656) (39.7%) 9,648 2177.9% Income Tax Expense (1,534) (2,326) (257) (792) (34.0%) 2,069 805.1% Net Earnings Attributable to Non-controlling Interests (1,724) (2,907) (224) (1,183) (40.7%) 2,683 1197.8% Net Earnings Attributable to Century Casinos, Inc.
Valuation Allowance – We released a $10.2 million US valuation allowance, which contributed to an income tax benefit of $7.7 million for the year ended December 31, 2022.
Valuation Allowance – We released a $10.2 million US valuation allowance against deferred tax assets, resulting in an income tax benefit of $7.7 million for the year ended December 31, 2022 in the Corporate and Other reportable segment.
Results in US dollars were impacted by a (15.4%) exchange rate decrease and 1.0% exchange rate increase in the average rates between the US dollar and the Polish zloty for the year ended December 31, 2022 compared to the year ended December 31, 2021 and the year ended December 31, 2021 compared to the year ended December 31, 2020, respectively. ‎ 40 The table below provides the closure and reopen dates for casinos in Poland due to COVID-19.
Closure Date Reopen Date December 29, 2020 February 12, 2021 March 20, 2021 May 28, 2021 Results in US dollars were impacted by a 5.7% exchange rate increase and (15.4%) exchange rate decrease in the average rates between the US dollar and the Polish zloty for the year ended December 31, 2023 compared to the year ended December 31, 2022 and the year ended December 31, 2022 compared to the year ended December 31, 2021, respectively. ‎ 37 The tables below provide results for the Poland reportable segment.
DISCUSSION OF RESULTS Years ended December 31, 2022, 2021 and 2020 Century Casinos, Inc. and Subsidiaries For the year ended December 31, 2022/2021 2021/2020 Amounts in thousands 2022 2021 2020 $ Change % Change $ Change % Change Gaming Revenue $ 365,986 $ 331,877 $ 253,281 $ 34,109 10.3% $ 78,596 31.0% Pari-mutuel, Sports Betting and iGaming Revenue 19,607 18,848 17,660 759 4.0% 1,188 6.7% Hotel Revenue 9,628 8,286 5,910 1,342 16.2% 2,376 40.2% Food and Beverage Revenue 24,097 17,788 16,194 6,309 35.5% 1,594 9.8% Other Revenue 11,211 11,707 11,223 (496) (4.2%) 484 4.3% Net Operating Revenue 430,529 388,506 304,268 42,023 10.8% 84,238 27.7% Gaming Expenses (183,841) (161,119) (131,563) 22,722 14.1% 29,556 22.5% Pari-mutuel, Sports Betting and iGaming Expenses (22,149) (19,735) (19,301) 2,414 12.2% 434 2.2% Hotel Expenses (2,815) (2,360) (2,125) 455 19.3% 235 11.1% Food and Beverage Expenses (22,631) (16,523) (15,962) 6,108 37.0% 561 3.5% General and Administrative Expenses (105,467) (93,489) (80,246) 11,978 12.8% 13,243 16.5% Depreciation and Amortization (27,109) (26,762) (26,534) 347 1.3% 228 0.9% Impairment - Intangible and Tangible Assets — — (35,121) — — (35,121) (100.0%) Gain on Sale of Casino Operations — — 6,457 — — (6,457) (100.0%) (Loss) on Sale of Assets (2,154) — — (2,154) (100.0%) — — Total Operating Costs and Expenses (366,166) (319,988) (304,395) 46,178 14.4% 15,593 5.1% Earnings from Equity Investment 3,249 — — 3,249 100.0% — — Earnings (Loss) from Operations 67,612 68,518 (127) (906) (1.3%) 68,645 54051.2% Income Tax Benefit (Expense) 7,660 (6,371) (4,848) (14,031) (220.2%) 1,523 31.4% Net (Earnings) Loss Attributable to Non-controlling Interests (5,694) (1,156) 134 4,538 392.6% 1,290 962.7% Net Earnings (Loss) Attributable to Century Casinos, Inc.
DISCUSSION OF RESULTS Years ended December 31, 2023, 2022 and 2021 Century Casinos, Inc. and Subsidiaries For the year ended December 31, 2023/2022 2022/2021 Amounts in thousands 2023 2022 2021 $ Change % Change $ Change % Change Gaming Revenue $ 412,388 $ 365,986 $ 331,877 $ 46,402 12.7% $ 34,109 10.3% Pari-mutuel, Sports Betting and iGaming Revenue 20,165 19,607 18,848 558 2.8% 759 4.0% Hotel Revenue 42,269 9,628 8,286 32,641 339.0% 1,342 16.2% Food and Beverage Revenue 50,262 24,097 17,788 26,165 108.6% 6,309 35.5% Other Revenue 25,122 11,211 11,707 13,911 124.1% (496) (4.2%) Net Operating Revenue 550,206 430,529 388,506 119,677 27.8% 42,023 10.8% Gaming Expenses (216,475) (183,841) (161,119) 32,634 17.8% 22,722 14.1% Pari-mutuel, Sports Betting and iGaming Expenses (21,752) (22,149) (19,735) (397) (1.8%) 2,414 12.2% Hotel Expenses (14,379) (2,815) (2,360) 11,564 410.8% 455 19.3% Food and Beverage Expenses (45,065) (22,631) (16,523) 22,434 99.1% 6,108 37.0% Other Expenses (9,722) (1,205) (1,300) 8,517 706.8% (95) (7.3%) General and Administrative Expenses (140,505) (104,262) (92,189) 36,243 34.8% 12,073 13.1% Depreciation and Amortization (41,043) (27,109) (26,762) 13,934 51.4% 347 1.3% Gain on Sale of Casino Operations 1,660 — — (1,660) (100.0%) — — (Loss) on Sale of Assets — (2,154) — (2,154) (100.0%) 2,154 100.0% Total Operating Costs and Expenses (487,281) (366,166) (319,988) 121,115 33.1% 46,178 14.4% Earnings from Equity Investment 1,121 3,249 — (2,128) (65.5%) 3,249 100.0% Earnings from Operations 64,046 67,612 68,518 (3,566) (5.3%) (906) (1.3%) Income Tax Benefit (Expense) 5,343 7,660 (6,371) (2,317) (30.2%) 14,031 220.2% Net Earnings Attributable to Non-controlling Interests (9,709) (5,694) (1,156) 4,015 70.5% 4,538 392.6% Net (Loss) Earnings Attributable to Century Casinos, Inc.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring the years ended December 31, 2022, 2021 and 2020, the change in the relative value of the US dollar against all foreign currencies in which our foreign subsidiaries operate resulted in a $9.7 million increase, $0.5 million increase, and ($3.4) million decrease in accumulated other comprehensive loss within shareholder’s equity, respectively.
Biggest changeDuring the years ended December 31, 2023, 2022 and 2021, the change in the relative value of the US dollar against all foreign currencies in which our foreign subsidiaries operate resulted in a ($3.8) million decrease, $9.7 million increase, and $0.5 million increase, respectively, in accumulated other comprehensive loss within shareholders equity.
For the year ended December 31, 2022, a 10% depreciation in the value of the US dollar relative to the Canadian dollar and the Polish zloty would have resulted in an increase in earnings from operations of $2.3 million. As of December 31, 2022, our debt is primarily held in US dollars. Item 8. Financial Statements and Supplementary Data.
For the year ended December 31, 2023, a 10% depreciation in the value of the US dollar relative to the Canadian dollar and the Polish zloty would have resulted in an increase in earnings from operations of $2.3 million. As of December 31, 2023, our debt is primarily held in US dollars. Item 8. Financial Statements and Supplementary Data.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Our earnings, cash flows and financial position are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates. All of the potential changes noted below are based on information available at December 31, 2022.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Our earnings, cash flows and financial position are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates. All of the potential changes noted below are based on information available at December 31, 2023.
See Index to Financial Statements on page F-1. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.
See Index to Financial Statements on page F-1. 47 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.
We translate revenue and expenses at each period’s average exchange rate on our consolidated statement of earnings (loss) and the gains and losses from translation are included in the results of operations as incurred.
We translate revenue and expenses at each period’s average exchange rate on our consolidated statements of (loss) earnings and the gains and losses from translation are included in the results of operations as incurred.
The majority of our $349.6 million face value of debt outstanding as of December 31, 2022 is variable-rate debt. Each one percentage point change associated with the variable rate debt would result in a $3.5 million change to our annual cash interest expenses.
The majority of our $346.8 million face value of debt outstanding as of December 31, 2023 is variable-rate debt. Each one percentage point change associated with the variable rate debt would result in a $3.5 million change to our annual cash interest expenses.
The timing of the changes in the relative value of the US dollar combined with the operations that are impacted by that change can affect the magnitude of the impact that fluctuations in foreign exchange rates have on our earnings from operations. In 2022, earnings from operations were $67.6 million.
The timing of the changes in the relative value of the US dollar combined with the operations that are impacted by that change can affect the magnitude of the impact that fluctuations in foreign exchange rates have on our earnings from operations. In 2023, earnings from operations were $64.0 million.

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