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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax provision (benefit) is summarized as follows:
| Year Ended December 31,
(In thousands) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 87,840 |  |  | $ | 13,877 |  |  | $ | — |
State | 6,106 |  |  | 274 |  |  | 95 |
Total current tax provision | $ | 93,946 |  |  | $ | 14,151 |  |  | $ | 95 |
Deferred: |  |  |  |  |
Federal | $ | (17,846) |  |  | $ | (13,462) |  |  | $ | 325 |
State | 107 |  |  | (168) |  |  | 16 |
Total deferred tax (benefit) provision | (17,739) |  |  | (13,630) |  |  | 341 |
Income tax provision | $ | 76,207 |  |  | $ | 521 |  |  | $ | 436 |
Reconciliation of the statutory federal income tax rate to the Company’s actual rate based on income before income tax provision is summarized below:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Statutory federal tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State income taxes, net of federal income taxes | 2.53 |  |  | 0.62 |  |  | 1.41 |
Permanent tax differences – stock compensation | (2.12) |  |  | (6.31) |  |  | (3.93) |
Permanent tax differences – business meals | 0.17 |  |  | 0.44 |  |  | 0.23 |
Permanent tax differences – executive compensation and other | 2.60 |  |  | 9.27 |  |  | 2.13 |
Change in valuation allowance | (1.71) |  |  | (23.99) |  |  | (19.69) |
FICA credit generated | (0.28) |  |  | (1.09) |  |  | (0.28) |
Change in tax rate and apportionment | 0.43 |  |  | (0.26) |  |  | (0.03) |
Deferred only adjustment to beginning deferred balances | 0.34 |  |  | 0.95 |  |  | (0.57) |
Effective tax rate | 22.96 | % |  | 0.63 | % |  | 0.27 | %
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
| December 31,
(In thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Accruals and reserves | $ | 5,128 |  |  | $ | 6,350 |
Share-based compensation expense | 2,137 |  |  | 966 |
State tax credits | — |  |  | 3,867 |
Net operating loss carryforwards | — |  |  | 753 |
Operating lease obligation | 27,092 |  |  | 36,483 |
Depreciation of fixed assets | 18,631 |  |  | 6,532 |
Uncertain tax position | 6,245 |  |  | — |
Other | 1,553 |  |  | 493 |
| 60,786 |  |  | 55,444 |
Valuation allowances | — |  |  | (5,680) |
| $ | 60,786 |  |  | $ | 49,764 |
Deferred tax liabilities: |  |  |
Prepaid services | $ | (1,771) |  |  | $ | (2,116) |
Amortization of intangible assets | (5,778) |  |  | (2,895) |
Right-of-use assets | (23,729) |  |  | (32,984) |
| (31,278) |  |  | (37,995) |
Net deferred tax assets | $ | 29,508 |  |  | $ | 11,769 |
Non-current deferred tax assets | $ | 29,508 |  |  | $ | 11,822 |
Non-current deferred tax liabilities | — |  |  | (53) |
Net deferred tax assets | $ | 29,508 |  |  | $ | 11,769 |
Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. As of December 31, 2023, the Company determined that it was more likely than not that the Company would generate sufficient taxable income to conclude that deferred tax assets of $29.5 million are realizable. As of December 31, 2022, the Company had recorded a valuation allowance of $5.7 million against Maryland net operating loss carryforwards (“NOLs”) and tax credits. As a result of the sale of Rocky Gap, the Maryland NOLs and attributes were utilized. The Company’s financial results for the year ended December 31, 2023 include a net decrease in valuation allowance of $5.7 million related to the usage of the Maryland tax attributes. The Company’s income tax returns from 2020 onward are subject to examination. In addition, the statute of limitation for assessment for years with NOLs is determined by reference to the year the NOLs were used to reduce the Company’s taxable income. NOLs from the 2012-2014 and 2017-2020 income tax returns were used to reduce taxable income in 2021 and 2022. Consequently, the 2012-2014 and 2017-2020 income tax returns remain subject to examination by taxing authorities. As of December 31, 2023, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS. The IRS has proposed adjustments to the Company’s fixed asset classification, which resulted in recording of $7.2 million in uncertain tax positions (“UTP”) with an additional $0.6 million of UTP payable related to interest. The following table summarizes the Company’s reconciliation of the beginning and ending unrecognized tax benefits:
| December 31,
(In thousands) | 2023 |  | 2022
Balance – beginning of period | $ | — |  |  | $ | — |
Tax positions related to current year additions | 884 |  |  | — |
Additions for tax positions of prior years | 6,281 |  |  | — |
Tax positions related to prior year reductions | — |  |  | — |
Reductions due to lapse of statute of limitations on tax positions | — |  |  | — |
Settlements | — |  |  | — |
Balance – end of period | $ | 7,165 |  |  | $ | — |
The Company anticipates that it is reasonably possible that the Company will reach a resolution with the IRS such that no UTP will remain by December 31, 2024. The effect of the UTP on the effective tax rate has been recorded in 2023. The resolution of the UTP would result in a reclassification of the existing deferred tax assets or a cash tax payment with little or no impact on the effective income tax rate.

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