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Description Of Business And Basis Of Presentation | 9 Months Ended
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Sep. 30, 2019
Description Of Business And Basis Of Presentation [Abstract] |
Description Of Business And Basis Of Presentation | 1.DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION ﻿ Century Casinos, Inc. (the “Company”) is an international casino entertainment company. The Company’s operations as of September 30, 2019 are detailed below. ﻿ The Company owns, operates and manages the following casinos through wholly-owned subsidiaries in North America and England: ﻿
| · |  | The Century Casino & Hotel in Edmonton, Alberta, Canada (“Century Resorts Alberta” or “CRA”)
| · |  | The Century Casino St. Albert in Edmonton, Alberta, Canada (“CSA”)
| · |  | Century Mile Racetrack and Casino in Edmonton, Alberta, Canada (“CMR” or “Century Mile”)
| · |  | The Century Casino Calgary, Alberta, Canada (“CAL”)
| · |  | The Century Casino & Hotel in Central City, Colorado (“CTL”)
| · |  | The Century Casino & Hotel in Cripple Creek, Colorado (“CRC”); and
| · |  | The Century Casino Bath in Bath, England (“CCB”)
﻿ Century Mile is a multi-level racing and entertainment center (“REC”) in the Edmonton market area that the Company opened on April 1, 2019. Century Mile includes a one-mile horse racetrack. Century Mile held its first horse race on April 28, 2019. In addition, Century Mile operates the pari-mutuel off-track betting network in Northern Alberta, Canada. The project cost CAD 61.5 million ($46.4 million based on the exchange rate in effect on September 30, 2019) and was financed with cash from the Company’s equity offering in November 2017 and additional financing from the Company’s credit agreement with the Bank of Montreal (“BMO”). See Note 5 for additional information on the Company’s credit agreement with BMO. ﻿ Century Bets!, Inc. (“CBS” or “Century Bets”) operates the pari-mutuel off-track betting network in Southern Alberta, Canada. Prior to August 2019, the Company had a 75% controlling financial interest in CBS through its wholly-owned subsidiary Century Resorts Management GmbH (“CRM”). In August 2019, the Company purchased the remaining 25% non-controlling financial interest from Rocky Mountain Turf Club for CAD 0.2 million ($0.2 million based on the exchange rate in effect on August 5, 2019), resulting in CBS becoming a wholly-owned subsidiary. ﻿ The Company has a controlling financial interest through its wholly-owned subsidiary CRM in the following majority-owned subsidiaries: ﻿
| · |  | The Company owns 66.6% of Casinos Poland Ltd (“CPL” or “Casinos Poland”). As of September 30, 2019, CPL owned and operated eight casinos throughout Poland. CPL is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. Polish Airports Company (“Polish Airports”) owns the remaining 33.3% of CPL, which is reported as a non-controlling financial interest. CPL began operating a third casino in Warsaw in August 2019 in the LIM Center, where it previously operated a casino.
﻿
| · |  | The Company owns 75% of United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino (“CDR” or “Century Downs”). CDR operates Century Downs Racetrack and Casino, a REC in Balzac, a north metropolitan area of Calgary, Alberta, Canada. CDR is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. The remaining 25% of CDR is owned by unaffiliated shareholders and is reported as a non-controlling financial interest.
﻿ The Company has the following concession, management and consulting service agreements: ﻿
| · |  | As of September 30, 2019, the Company operated five ship-based casinos through concession agreements with TUI Cruises. The Company’s concession agreements to operate the ship-based casinos onboard the Wind Spirit and Star Pride ended in January 2019 and March 2019, respectively. The concession agreements to operate the ship-based casinos onboard the Wind Surf and Star Breeze ended in April 2019, and the concession agreement to operate the ship-based casino onboard the Star Legend ended in May 2019.
﻿ In June 2019, the Company evaluated its agreement with Diamond Cruises related to the operation of the ship-based casino onboard the Glory Sea. The Company determined that it was more likely than not that the agreement was impaired and wrote-down $1.0 million in property and equipment and net receivables in June 2019. The Glory Sea is currently not sailing, and the Company has not determined whether it will continue to operate this ship-based casino if the ship begins sailing again. ﻿
| · |  | The Company, through its subsidiary CRM, has a 7.5% ownership interest in Mendoza Central Entretenimientos S.A., an Argentinian company (“MCE”). In addition, CRM provides advice to MCE on casino matters pursuant to a consulting agreement in exchange for a fixed fee plus a percentage of MCE’s earnings before interest, taxes, depreciation and amortization (“EBITDA”). See Note 3 for additional information related to MCE.
﻿
| · |  | The Company, through its subsidiary CRM, had a 51% ownership interest in Golden Hospitality Ltd. (“GHL”). The Company sold its interest in GHL to the unaffiliated shareholders of GHL in May 2019 for a $0.7 million non-interest bearing promissory note. The Company recognized a loss on the sale of its investment of less than $0.1 million in general and administrative expenses on its condensed consolidated statement of earnings for the nine months ended September 30, 2019. The sale of the Company’s equity interest in GHL also ended its equity interest in Minh Chau Ltd. (“MCL”). See the discussion in “Note Receivable, Net of Current Portion and Unamortized Discount” below and Note 3 for additional information related to GHL and MCL.
﻿ Additional Projects and Other Developments ﻿ United States On June 17, 2019, the Company entered into a definitive agreement to acquire the operations of Isle Casino Cape Girardeau (“Cape Girardeau”), Lady Luck Caruthersville (“Caruthersville”) and Mountaineer Casino, Racetrack and Resort (“Mountaineer”) from Eldorado Resorts, Inc. (“Eldorado Resorts”) for approximately $107.0 million (the “Acquisition”), which it expects to finance through a new credit facility. Simultaneous with the closing of the Acquisition, VICI Properties Inc. (“VICI”) will acquire the real estate assets of the three properties for approximately $278.0 million and the Company will enter into a triple net lease agreement with VICI for the three casino properties. The lease will have an initial annual rent of approximately $25.0 million and an initial term of 15 years, with four five-year renewal options. The transaction, which is expected to close by year end, is subject to approvals of the Missouri Gaming Commission as well as other customary closing conditions. ﻿ Bermuda In August 2017, the Company announced that, together with the owner of the Hamilton Princess Hotel & Beach Club in Hamilton, Bermuda, it had submitted a license application to the Bermudan government for a casino at the Hamilton Princess Hotel & Beach Club. The casino will feature approximately 200 slot machines, 17 live table games, one or more electronic table games and a high limit area and salon privé. In September 2017, the Bermuda Casino Gaming Commission granted a provisional casino gaming license, which is subject to certain conditions and approvals including the adoption of certain rules and regulations by the Parliament of Bermuda. The Company’s subsidiary, CRM, entered into a long-term management agreement with the owner of the hotel to manage the operations of the casino and receive a management fee if a license is awarded. CRM will also provide a $5.0 million loan for the purchase of casino equipment if the license is awarded. ﻿ Preparation of Financial Statements ﻿ The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial reporting, the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. ﻿ In the opinion of management, all adjustments considered necessary for the fair presentation of financial position, results of operations and cash flows of the Company have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The results of operations for the quarter ended September 30, 2019 are not necessarily indicative of the operating results for the full year. ﻿ Cash, Cash Equivalents and Restricted Cash ﻿ A reconciliation of cash, cash equivalents and restricted cash as stated in the Company’s condensed consolidated statements of cash flows is presented in the following table: ﻿
﻿ |  |  |  |  |  |
﻿ |  | September 30, |  | September 30,
﻿Amounts in thousands |  | 2019 |  | 2018
﻿Cash and cash equivalents |  | $ | 44,029 |  | $ | 46,818
﻿Restricted cash included in deposits and other |  |  | 874 |  |  | 721
﻿Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |  | $ | 44,903 |  | $ | 47,539
﻿ As of September 30, 2019, restricted cash included $0.6 million in deposits and other related to a cash guarantee for the Company’s CCB loan agreement and $0.3 million in deposits and other related to payments of prizes and giveaways for Casinos Poland. ﻿ Note Receivable, Net of Current Portion and Unamortized Discount ﻿ In May 2019, the Company sold its interest in GHL for a non-interest bearing promissory note of $0.7 million. The remaining balance will be repaid with annual payments of $0.1 million due under the note beginning in June 2020 with a final payment of $0.3 million in June 2023. The current portion of the note receivable is presented in other current assets on the Company’s condensed consolidated balance sheets. ﻿ A reconciliation of the note receivable, net of current portion and unamortized discount in the Company’s condensed consolidated balance sheets is presented in the following table: ﻿ ﻿
﻿ |  |  |
﻿ |  | September 30,
﻿Amounts in thousands |  | 2019
﻿Non-interest bearing note issued |  | $ | 650
﻿Less payments |  |  | (25)
﻿Non-interest bearing note due June 2023 |  | $ | 625
﻿Less unamortized discount based on imputed interest rate of 6% |  |  | (102)
﻿Note receivable less unamortized discount |  | $ | 523
﻿Less current portion of note receivable |  |  | (100)
﻿Note receivable, net of current portion and unamortized discount |  | $ | 423
﻿ ﻿ Presentation of Foreign Currency Amounts ﻿ The Company’s functional currency is the US dollar (“USD” or “$”). Foreign subsidiaries with a functional currency other than the US dollar translate assets and liabilities at current exchange rates at the end of the reporting periods, while income and expense accounts are translated at average exchange rates for the respective periods. The Company and its subsidiaries enter into various transactions made in currencies different from their functional currencies. These transactions are typically denominated in the Canadian dollar (“CAD”), Euro (“EUR”), Polish zloty (“PLN”) and British pound (“GBP”). Gains and losses resulting from changes in foreign currency exchange rates related to these transactions are included in income from operations as they occur. ﻿ The exchange rates to the US dollar used to translate balances at the end of the reported periods are as follows: ﻿ ﻿ ﻿ ﻿
﻿ |  |  |  |
﻿ |  | September 30, |  | December 31,
﻿Ending Rates |  | 2019 |  | 2018
﻿Canadian dollar (CAD) |  | 1.3243 |  | 1.3642
﻿Euros (EUR) |  | 0.9172 |  | 0.8738
﻿Polish zloty (PLN) |  | 4.0100 |  | 3.7606
﻿British pound (GBP) |  | 0.8130 |  | 0.7823
﻿ The average exchange rates to the US dollar used to translate balances during each reported period are as follows: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | For the three months |  |  |  | For the nine months |  |
﻿ |  | ended September 30, |  |  |  | ended September 30, |  |
﻿Average Rates |  | 2019 |  | 2018 |  | % Change |  | 2019 |  | 2018 |  | % Change
﻿Canadian dollar (CAD) |  | 1.3205 |  | 1.3068 |  | (1.0%) |  | 1.3292 |  | 1.2874 |  | (3.2%)
﻿Euros (EUR) |  | 0.8997 |  | 0.8601 |  | (4.6%) |  | 0.8901 |  | 0.8377 |  | (6.3%)
﻿Polish zloty (PLN) |  | 3.8850 |  | 3.6981 |  | (5.1%) |  | 3.8270 |  | 3.5581 |  | (7.6%)
﻿British pound (GBP) |  | 0.8111 |  | 0.7676 |  | (5.7%) |  | 0.7859 |  | 0.7405 |  | (6.1%)
﻿Source: Pacific Exchange Rate Service |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |
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