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New Accounting Pronouncements (Tables) | 12 Months Ended
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Dec. 31, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
Schedule of impact of adoption of ASU-2014-09 | In accordance with the new revenue standard requirement, the disclosure of the impact of adoption on our Consolidated Statement of Operations and Consolidated Balance Sheet as of and for the year ended December 31, 2018 is as follows:
| For the year ended December 31, 2018
| As Reported |  | Impacts of: |  | Balances Without Adoption of ASC 606 |  | Effect of Change Higher / (Lower)
(in thousands) |  | Loyalty Points (1) |  | Promotional Allowances (2) |  | Reimbursable Expense - Casino Rama (3) |  | Racing Revenue (4) |  | Tier Status and Other Benefits (5) |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gaming | $ | 2,894,861 |  |  | $ | (2,608 | ) |  | $ | 206,137 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,575 |  |  | $ | 3,100,965 |  |  | $ | (206,104 | )
Food, beverage, hotel and other | 629,733 |  |  | (252 | ) |  | 30,629 |  |  | — |  |  | 38,975 |  |  | — |  |  | 699,085 |  |  | (69,352 | )
Management service and license fees | 6,043 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,043 |  |  | — |
Reimbursable management costs | 57,281 |  |  | — |  |  | — |  |  | (46,822 | ) |  | — |  |  | — |  |  | 10,459 |  |  | 46,822 |
| 3,587,918 |  |  | (2,860 | ) |  | 236,766 |  |  | (46,822 | ) |  | 38,975 |  |  | 2,575 |  |  | 3,816,552 |  |  | (228,634 | )
Less: Promotional allowance | — |  |  | — |  |  | (236,766 | ) |  | — |  |  | — |  |  | — |  |  | (236,766 | ) |  | 236,766 |
Revenues | 3,587,918 |  |  | (2,860 | ) |  | — |  |  | (46,822 | ) |  | 38,975 |  |  | 2,575 |  |  | 3,579,786 |  |  | 8,132 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gaming | 1,551,430 |  |  | (1,443 | ) |  | — |  |  | — |  |  | — |  |  | 4,258 |  |  | 1,554,245 |  |  | (2,815 | )
Food, beverage, hotel and other | 439,253 |  |  | — |  |  | — |  |  | — |  |  | 38,975 |  |  | (1,683 | ) |  | 476,545 |  |  | (37,292 | )
General and administrative | 618,951 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 618,951 |  |  | — |
Reimbursable management costs | 57,281 |  |  | — |  |  | — |  |  | (46,822 | ) |  | — |  |  | — |  |  | 10,459 |  |  | 46,822 |
Depreciation and amortization | 268,990 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 268,990 |  |  | — |
Impairment losses, net of recovery on loan loss and unfunded loan commitments to the JIVDC | 17,921 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,921 |  |  | — |
Total operating expenses | 2,953,826 |  |  | (1,443 | ) |  | — |  |  | (46,822 | ) |  | 38,975 |  |  | 2,575 |  |  | 2,947,111 |  |  | 6,715 |
Operating income (loss) | 634,092 |  |  | (1,417 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | 632,675 |  |  | 1,417 |
Income (loss) before income taxes | 89,921 |  |  | (1,417 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | 88,504 |  |  | 1,417 |
Income tax benefit (expense) | 3,593 |  |  | 323 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,916 |  |  | (323 | )
Net income (loss) | $ | 93,514 |  |  | $ | (1,094 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 92,420 |  |  | $ | 1,094 |
(1) | As discussed in Note 3, “Summary of Significant Accounting Policies,” the Company’s loyalty reward programs allow members to utilize their reward membership cards to earn loyalty points that are redeemable for slot play and complimentaries. Under the new revenue standard, the Company is required to utilize a deferred revenue model, which defers revenue at the point in time when the loyalty points are earned by our customers and recognize revenue when the loyalty points are redeemed at the estimated standalone selling price. Prior to the adoption of the new revenue standard, the estimated liability for unredeemed points was accrued and recorded to gaming expense based on expected redemption rates and the estimated cost of the goods and services to be provided.
(2) | Under ASC 606, the Company is no longer permitted to report revenue for goods and services provided to customers (i) for free as an inducement to gamble or (ii) on a discretionary basis outside of gaming play (i.e., customer appeasements) as gross revenue with a corresponding reduction in promotional allowances to arrive at net revenues. The new revenue standard requires complimentaries related to an inducement to gamble to be recorded as a reduction to gaming revenues and discretionary complimentaries provided outside of gaming play to be recorded as a reduction to food, beverage, hotel and other revenues. As such, promotional allowances provided to customers (i) as an inducement to gamble or (ii) on a discretionary basis outside of gaming play are no longer netted within our Consolidated Statements of Operations. In addition, ASC 606 changed the accounting for promotional allowances with respect to non-discretionary complimentaries (i.e., a customer’s redemption of loyalty points). Under the new revenue standard, the Company is no longer permitted to report revenue for goods and services provided to a customer resulting from loyalty point redemptions with a corresponding reduction in promotional allowances to arrive at net revenue. Instead, ASC 606 requires the utilization of a deferred revenue
model in which previously deferred revenue is recognized as revenue when the loyalty points are redeemed. As such, promotional allowances related to a customer’s redemption of loyalty points is no longer netted within our Consolidated Statements of Operations.
(3) | The Company revised its accounting for reimbursable costs associated with our management service contract for Casino Rama. Under the new revenue standard, because we are the controlling entity in the arrangement, reimbursable costs, which primarily consisted of payroll costs, must be recognized as revenue on a gross basis, with an offsetting amount charged to reimbursable management costs within operating expenses. Prior to the adoption of ASC 606, the Company recorded these reimbursable amounts on a net basis.
(4) | Under ASC 606, as it pertains to our racing operations, we concluded that the Company is not the controlling entity in the arrangements; but rather, functions as an agent to the pari-mutuel pool. Consequently, fees and obligations related to the Company’s share of purse funding requirements, simulcasting fees, tote fees, certain pari-mutuel taxes and other fees directly related to the Company’s racing operations must be reported on a net basis and included as a deduction to food, beverage, hotel and other revenue. Prior to the adoption of the new revenue standard, the Company recorded these fees and obligations in food, beverage, hotel and other expense.
(5) | Under ASC 606, certain tier status and other benefits provided to our customers, most notably, an annual gift to members of our top tiers, are considered separate performance obligations associated with gaming contracts. Therefore, under the new revenue standard, the amount of the transaction price allocated to these performance obligations is recorded as a reduction to gaming revenue rather than as a gaming expense. Consequently, certain of the expenses associated with other benefits are now recorded as food, beverage, hotel and other.
(in thousands) | As Reported as of December 31, 2018 |  | Balances Without the Adoption of ASC 606 |  | Effect of Change Higher (Lower)
Balance Sheet |  |  |  |  |
Other assets - Deferred income taxes | $ | 80,612 |  |  | $ | 78,953 |  |  | $ | 1,659 |
Current liabilities - Accrued expenses | $ | 204,656 |  |  | $ | 191,404 |  |  | $ | 13,252 |
Stockholders’ equity - Accumulated deficit | $ | (967,949 | ) |  | $ | (956,418 | ) |  | $ | (11,531 | )
The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows:
(in thousands) | Balance as of December 31, 2017 |  | Adjustment due to ASC 606 |  | Balance as of January 1, 2018
Balance Sheet |  |  |  |  |
Other assets - Deferred income taxes | $ | 390,943 |  |  | $ | 2,044 |  |  | $ | 392,987 |
Current liabilities - Accrued expenses | $ | 125,688 |  |  | $ | 11,694 |  |  | $ | 137,382 |
Stockholders’ equity - Accumulated deficit | $ | (1,051,818 | ) |  | $ | (9,650 | ) |  | $ | (1,061,468 | )

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