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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Participation Agreements and Space Lease Agreements with Revenue Share Provisions The Company enters into slot placement contracts in the form of participation agreements and space lease agreements with revenue share provisions. Under participation agreements, both the Company and the business location generally hold the applicable gaming license. The business location retains a percentage of the gaming revenue generated from the Company’s slot machines. Space lease agreements with revenue share provisions are a hybrid model that has both space lease and participation elements and the Company pays the business location a percentage of the gaming revenue generated from the Company’s slot machines placed at the location, rather than a fixed monthly rental fee. Under such arrangements, the Company holds the applicable gaming license to conduct gaming at the business location and the business location is required to obtain separate regulatory approval to receive a percentage of the gaming revenue. The Company concluded it retains control over the slot machines placed at the business location’s premises due to its control over the hold percentage, types of slot machines and games made available on such machines, physical access to the contents of the gaming devices, and its responsibility for repair and servicing of the slot machines. The Company is considered to be the principal in these arrangements and therefore records its share of revenue generated under participation agreements and space lease agreements with revenue share provisions on a gross basis with the business location’s share of revenue recorded as gaming expenses. The aggregate contingent payments recognized by the Company as gaming expenses under participation agreements and space lease agreements with revenue share provisions were $57.6 million and $171.2 million for the three and nine months ended September 30, 2021, respectively. The aggregate contingent payments recognized by the Company as gaming expenses under revenue share and participation agreements were $37.4 million and $87.3 million for the three and nine months ended September 30, 2020, respectively. Legal Matters From time to time, the Company is involved in a variety of lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of business, including proceedings concerning labor and employment matters, personal injury claims, breach of contract claims, commercial disputes, business practices, intellectual property, tax and other matters for which the Company records reserves. Although lawsuits, claims, investigations and other legal proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of its currently pending matters should not have a material adverse effect on its business, financial condition, results of operations or liquidity. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect the Company’s business, financial condition, results of operations or liquidity in a particular period. Other Matters In January 2021, the Company was affected by a ransomware cyber-attack that temporarily disrupted the Company’s access to certain information located on the Company’s network and incurred expenses relating thereto. The Company’s financial information and business operations were not materially affected. The Company implemented a variety of measures to further enhance its cybersecurity protections and minimize the impact of any future cyber incidents. The Company has insurance related to this event and has recovered a portion of the costs it incurred to remediate this matter. The payment was received during the three months ended September 30, 2021. In September 2018, the Company entered into an agreement with American Wagering, Inc. and William Hill U.S. HoldCo, Inc. (collectively, “William Hill”), which contemplated that William Hill would be obligated to make a one-time payment to the Company in the event of a change of control transaction with respect to William Hill. Under this agreement, as amended, the April 22, 2021 acquisition of William Hill PLC by Caesars Entertainment, Inc. (“Caesars”) constituted the change of control event triggering this payment. On May 26, 2021, the Company, William Hill and Caesars executed an amendment to the agreement requiring William Hill and Caesars, as the acquiring party, to make an initial payment in the amount of $60 million by July 15, 2021 and to provide for a second contingent payment in the event of a sale of the William Hill business in the United Kingdom, as discussed below. There were no remaining contingencies associated with the initial payment and the Company recognized non-operating income for this initial amount in June 2021. The Company received this amount on July 14, 2021.The May 26, 2021 amendment also provides for a contingent payment to be paid by Caesars to the Company of up to $15 million, in the event Caesars completes a sale of the William Hill business in the United Kingdom. Under the amendment, the amount of this contingent payment is calculated in accordance with the terms set forth in the amendment and will depend on the amount of proceeds Caesars would receive from the sale, if any. In September 2021, Caesars announced that it executed an agreement to sell the non-US assets of William Hill to 888 Holdings Plc, and based upon the announced sales price, the Company does not expect to receive any additional payments related to the contingency. Accordingly, as of September 30, 2021, the Company does not expect to realize any of the remaining contingent payment related to the purchase of William Hill by Caesars.

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