Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s goodwill balance as of September 30, 2021 and December 31, 2020 was $158.4 million, of which $60.3 million related to the Casinos reportable segment and $98.1 million related to the Distributed Gaming reportable segment.

Intangible assets, net, consisted of the following:


	September 30, 2021
(In thousands)	Useful Life (Years)	Gross Carrying Value		Cumulative Amortization		Cumulative Impairment		Intangible Assets, Net
Indefinite-lived intangible assets
Trade names	Indefinite	$	53,690	$	—	$	(6,890)	$	46,800
		53,690		—		(6,890)		46,800
Amortizing intangible assets
Customer relationships	4-16	81,105		(34,414)		—		46,691
Player relationships	2-14	42,990		(39,652)		—		3,338
Non-compete agreements	2-5	9,840		(8,154)		—		1,686
Gaming license (1)	15	2,100		(1,174)		—		926
In-place lease value	4	1,170		(1,116)		—		54
Leasehold interest	4	570		(570)		—		—
Other	4-25	1,814		(1,339)		—		475
		139,589		(86,419)		—		53,170
Balance, September 30, 2021		$	193,279	$	(86,419)	$	(6,890)	$	99,970

(1)Relates to Rocky Gap.


	December 31, 2020
(In thousands)	Useful Life (Years)	Gross Carrying Value		Cumulative Amortization		Cumulative Impairment		Intangible Assets, Net
Indefinite-lived intangible assets
Trade names	Indefinite	$	53,690	$	—	$	(6,890)	$	46,800
		53,690		—		(6,890)		46,800
Amortizing intangible assets
Customer relationships	4-16	81,105		(30,012)		—		51,093
Player relationships	2-14	42,990		(39,116)		—		3,874
Non-compete agreements	2-5	9,840		(7,385)		—		2,455
Gaming license (1)	15	2,100		(1,070)		—		1,030
In-place lease value	4	1,170		(918)		—		252
Leasehold interest	4	570		(504)		—		66
Other	4-25	1,814		(1,275)		—		539
		139,589		(80,280)		—		59,309
Balance, December 31, 2020		$	193,279	$	(80,280)	$	(6,890)	$	106,109

(1)Relates to Rocky Gap.

Total amortization expense related to intangible assets was $1.9 million and $6.1 million for the three and nine months ended September 30, 2021, respectively, and $5.7 million and $16.9 million for the three and nine months ended September 30, 2020, respectively.

The Company tests goodwill and indefinite-lived intangible assets for impairment annually, in the last quarter of the year, unless events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. Finite-lived intangible assets are evaluated for potential impairment whenever there is an indicator that the carrying value of an asset group may not be recoverable. While the impact of the COVID-19 pandemic on the Company’s operations is ongoing, management determined that there were no new indicators of impairment for the three and nine months ended September 30, 2021 and the Company concluded that there was no impairment of the Company’s goodwill and intangible assets as of September 30, 2021.

Mandatory shut-down of the Company’s properties commencing in March 2020 that lasted for a majority of the second quarter of 2020 resulted in a deterioration in the performance of the Company’s casino properties in particular, which required the Company to revise its cash flow projections to reflect the then-current economic environment, including the uncertainty surrounding the nature, timing, and extent of elimination of or change to the restrictions on the Company’s operations. As a result, the Company conducted an interim qualitative and quantitative assessment of its goodwill and intangible assets for potential impairment at March 31, 2020, June 30, 2020 and September 30, 2020 and recorded a non-cash impairment of the Company’s Casinos segment goodwill in the amount of $25.3 million for the nine months ended September 30, 2020. The assessment also indicated that the carrying value of an indefinite-lived trade name for certain of the Company’s properties within the Casinos segment exceeded its fair value and resulted in recognition of a non-cash impairment charge of $2.6 million.

The estimated fair value of goodwill and indefinite-lived intangible assets was determined using discounted cash flow models which utilized Level 3 inputs as follows: discount rate of 12.0%; long-term revenue growth rate of 2.0% to 3.0%. The impairment charge was included in “Impairment of goodwill and intangible assets” on the consolidated statements of operations.

To the extent the Company becomes aware of new facts and circumstances arising from the COVID-19 pandemic or other matters that would result in a triggering event, the Company will revise its cash flow projections accordingly, as its estimates of future cash flows are highly dependent upon certain assumptions, including, but not limited to, the nature, timing, and extent of elimination or change of the restrictions on the Company’s operations and the extent and timing of the economic recovery globally, nationally, and specifically within the gaming industry. If such assumptions are not accurate, the Company may be required to record impairment charges in future periods, whether in connection with its regular review procedures, or earlier, if an indicator of an impairment is present prior to such evaluation.