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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes [Abstract] |
Income Taxes | 14. INCOME TAXES ﻿ The Company’s US and foreign pre-tax income is summarized in the table below: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿Amounts in thousands |  | 2019 |  | 2018 |  | 2017
﻿Income before taxes: |  |  |  |  |  |  |  |  |
﻿ US |  | $ | (3,736) |  | $ | 1,329 |  | $ | 1,059
﻿Foreign |  |  | (8,231) |  |  | 4,594 |  |  | 11,392
﻿Total income before taxes |  | $ | (11,967) |  | $ | 5,923 |  | $ | 12,451
﻿ ﻿ The Company’s provision for income taxes is summarized as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |
﻿ |  | For the year ended December 31,
﻿Amounts in thousands |  |  | 2019 |  |  | 2018 |  |  | 2017
﻿US - Current |  | $ | 316 |  | $ | 682 |  | $ | 1,283
﻿US - Deferred |  |  | (199) |  |  | 12 |  |  | (786)
﻿Provision for US income taxes |  | $ | 117 |  | $ | 694 |  | $ | 497
﻿ |  |  |  |  |  |  |  |  |
﻿Foreign - Current |  | $ | 3,748 |  | $ | 1,257 |  | $ | 3,094
﻿Foreign - Deferred |  |  | 309 |  |  | (34) |  |  | 969
﻿Provision for foreign income taxes |  |  | 4,057 |  |  | 1,223 |  |  | 4,063
﻿Total provision for income taxes |  | $ | 4,174 |  | $ | 1,917 |  | $ | 4,560
﻿ ﻿ The Company’s effective income tax rate differs from the statutory federal income tax rate as follows: ﻿ ﻿
﻿ |  |  |
﻿Amounts in thousands | 2019 | 2018 | 2017
﻿US federal income tax statutory rate | (21.0%) | 21.0% | 35.0%
﻿Foreign income taxes | 6.8% | 8.9% | (9.1%)
﻿State income tax (net of federal benefit) | (0.3%) | 0.9% | 2.4%
﻿Meals, entertainment, gifts & giveaways | 2.4% | 3.1% | 2.0%
﻿Statutory to US GAAP adjustments, including foreign currency | 3.7% | (16.0%) | 2.8%
﻿Valuation allowance | 32.3% | — | (45.9%)
﻿Unrecognized tax benefit | — | 1.1% | 0.1%
﻿Stock options | 1.9% | 2.5% | 1.6%
﻿Tax Act impact | 5.6% | 7.0% | 43.5%
﻿Permanent and other items | 3.5% | 3.9% | 4.2%
﻿Total provision for income taxes | 34.9% | 32.4% | 36.6%
﻿ The Company’s current year effective income tax rate was impacted by a decrease in pre-tax income in the United States, Canada, Mauritius and the United Kingdom. The comparison of pre-tax loss of ($12.0) million for the year ended December 31, 2019 compared to pre-tax income of $5.9 million for the year ended December 31, 2018 should be considered when comparing tax rates year-over-year. The Company’s overall effective tax rate of 34.9% was significantly driven by statutory to US GAAP adjustments, including foreign currency adjustments for foreign subsidiaries. The federal corporate income tax rate in the United States for 2019 was 21%; additionally, the Company is subject to Colorado, Missouri and West Virginia state jurisdictions that had corporate tax rates ranging from 4.5% to 6.5% in 2019. The effective tax rate in the United States for 2019 was (3.1%) due to permanent addbacks including the current tax on global intangible low-taxed income (“GILTI”) and nondeductible stock option expense. A majority of the earnings recognized by the Company during the year ended December 31, 2019 were from the Company’s properties in Poland and Canada, which accounted for 80.9% of the total tax expense recorded. The effective tax rate of 31.1% related to 2019 earnings in Canada, which has a 26.5% income tax rate, was due primarily to the impact of foreign currency exchange rates. The effective tax rate of 23.4% related to 2019 earnings in Poland, which has a 19% income tax rate, was due to nondeductible payments to certain governing authorities as well as nondeductible meals, entertainment, gifts and giveaways. The effective tax rate of (2.4%) related to 2019 earnings in the UK, which has a 19% income tax rate, was due primarily to a valuation allowance of deferred tax assets. The effective tax rate of 1.1% related to 2019 earnings in Mauritius, which has a 3% income tax rate, was due to various permanent addbacks. The effective tax rate of 41.8% related to 2019 earnings in Austria, which has a 25% income tax rate, was due to various permanent addbacks. The effective tax rate of 0.0% related to 2019 earnings in Hong Kong, which has a 16.5% income tax rate, was due to earnings derived from outside sources that were not subject to the jurisdiction’s tax. The movement of exchange rates for intercompany loans denominated in US dollars further impacts the effective income tax rate because foreign currency gains and losses generally are not taxed until realized. Therefore, the overall effective income tax rate was significantly impacted in 2019 and can be significantly impacted by foreign currency gains or losses in the future. ﻿ The Tax Act created a new requirement that certain income, such as global intangible low-taxed income (“GILTI”), earned by a controlled foreign corporation (“CFC”) must be included currently in the gross income of the CFC’s US shareholder, effective in 2018. Under US GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future US inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected to account for GILTI as a period cost and recorded a net tax expense of $0.5 million and less than $0.1 million for the years ended December 31, 2019 and 2018, respectively. ﻿ The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to be taxable or reversed. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company’s internal estimates for future taxable income. The Company assesses the need for a valuation allowance based on its ability to realize the benefits of the Company’s deferred tax assets. ﻿ The Company’s deferred income taxes at December 31, 2019 and 2018 are summarized as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿Amounts in thousands |  |  | 2019 |  |  | 2018
﻿Deferred tax assets (liabilities) - US Federal and state: |  |  |  |  |  |
﻿Deferred tax assets |  |  |  |  |  |
﻿Amortization of goodwill for tax |  | $ | 1,243 |  | $ | 140
﻿Amortization of startup costs |  |  | 39 |  |  | 70
﻿Financing obligation to VICI Properties, Inc. subsidiaries |  |  | 68,759 |  |  | —
﻿Property and equipment |  |  | — |  |  | 471
﻿NOL carryforward |  |  | 62 |  |  | 45
﻿Operating and finance leases |  |  | 302 |  |  | —
﻿Accrued liabilities and other |  |  | 255 |  |  | 188
﻿ |  |  | 70,660 |  |  | 914
﻿Valuation allowance |  |  | — |  |  | —
﻿ |  | $ | 70,660 |  | $ | 914
﻿Deferred tax liabilities |  |  |  |  |  |
﻿Property and equipment |  | $ | (69,164) |  | $ | —
﻿Operating and finance leases |  |  | (292) |  |  | —
﻿Prepaid expenses |  |  | (231) |  |  | (140)
﻿ |  | $ | (69,687) |  | $ | (140)
﻿Long-term deferred tax asset |  | $ | 973 |  | $ | 774
﻿ |  |  |  |  |  |
﻿Deferred tax assets (liabilities) - foreign |  |  |  |  |  |
﻿Deferred tax assets |  |  |  |  |  |
﻿Property and equipment |  | $ | 2,064 |  | $ | 977
﻿ NOL carryforward |  |  | 3,236 |  |  | 2,247
﻿ Tax credits |  |  | — |  |  | —
﻿Accrued liabilities and other |  |  | 734 |  |  | 864
﻿Contingent liability |  |  | 64 |  |  | 157
﻿Operating and finance leases |  |  | 10,498 |  |  | —
﻿Exchange rate gain |  |  | 839 |  |  | 1,035
﻿ |  |  | 17,435 |  |  | 5,280
﻿Valuation allowance |  |  | (3,870) |  |  | —
﻿ |  | $ | 13,565 |  | $ | 5,280
﻿Deferred tax liabilities |  |  |  |  |  |
﻿Property and equipment |  | $ | (2,294) |  | $ | (2,606)
﻿Exchange rate loss |  |  | (347) |  |  | (55)
﻿Intangibles |  |  | (1,083) |  |  | (1,211)
﻿Operating and finance leases |  |  | (8,953) |  |  | —
﻿Others |  |  | (428) |  |  | (637)
﻿ |  | $ | (13,105) |  | $ | (4,509)
﻿Long-term deferred tax asset |  | $ | 460 |  | $ | 771
﻿ |  |  |  |  |  |
﻿ The Acquired Casinos were treated as asset acquisitions for tax purposes and the assets and liabilities were stepped up to fair value. As a result, there were limited deferred tax assets or liabilities recorded upon acquisition. ﻿ The Company has analyzed filing positions in all of the US federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its US federal tax return, its state tax return in Colorado and its foreign tax returns in Canada and Poland as “major” tax jurisdictions, as defined by the Internal Revenue Code. ﻿ The Company is not currently under an income tax audit in any US or foreign jurisdiction. The Company does not maintain a valuation allowance related to its US or foreign entities other than Century Casino Bath, and as a result any adjustment made by a taxing authority in the future could impact the effective tax rate. ﻿ The Company’s income tax returns for the following periods are currently subject to examination: ﻿
﻿ |  |  |
﻿ |  |  |
﻿Jurisdiction |  | Periods |
﻿US Federal |  | 2007-201 8 |
﻿US State - Colorado |  | 2007-2018 |
US State – Missouri |  | Not applicable |
US State – West Virginia |  | Not applicable |
﻿Canada |  | 2006-2018 |
﻿Mauritius |  | 2016-2018 |
﻿Poland |  | 201 4-2018 |
﻿Austria |  | 2014-2018 |
﻿United Kingdom |  | 2017-2018 |
﻿ The Company had income tax net operating loss carryforwards related to its domestic and international operations of approximately $18.5 million as of December 31, 2019. The Company had recorded $3.3 million of deferred tax assets related to the net operating loss carryforwards, excluding the impact of the adjustment of unrecognized tax benefits. The deferred tax assets expire as follows: ﻿ ﻿ ﻿
﻿ |  |  |
﻿Amounts in thousands |  |  |
﻿2020 - 2030 |  | $ | 13
﻿2031 - 2039 |  |  | 1,478
﻿No expiration |  |  | 1,838
﻿Total deferred tax assets |  | $ | 3,329
﻿ Certain net operating loss carryforwards in the Company’s filed income tax returns include unrecognized tax benefits. The deferred tax assets recognized for those net operating loss carryforwards are presented net of these unrecognized tax benefits. ﻿ As of December 31, 2019, the Company has accumulated undistributed earnings generated by its foreign subsidiaries that significantly exceed the approximately $24.6 million of cash and cash equivalents held by its foreign subsidiaries. Because substantially all of these accumulated undistributed earnings have previously been subject to the one-time transition tax on foreign earnings required by the Tax Act or have been subject to tax under the GILTI regime, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of the Company’s foreign investments would generally be limited to foreign and state taxes. The determination of the additional deferred taxes that would be provided for undistributed earnings has not been determined because the hypothetical calculation is not practicable. The Company intends, however, to indefinitely reinvest these earnings and expects its future US cash generation to be sufficient to meet its future US cash needs. ﻿ As of December 31, 2019, the Company’s unrecognized tax benefit totaled $0.8 million. The current year unrecognized tax benefit increased due to an unfavorable change in foreign exchange rates. A portion of this adjustment has been recorded as a component of taxes payable, and a portion of this adjustment has been recorded as a reduction to deferred tax assets in the accompanying consolidated balance sheet as of December 31, 2019. It is not anticipated that certain tax positions will be resolved within the next 12 months, which would decrease the Company’s balance of unrecognized tax benefits. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. The Company’s total amount of unrecognized tax benefit and changes to unrecognized tax benefit during the years ended December 31, 2019 and 2018 are summarized in the table below: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿Amounts in thousands |  | 2019 |  | 2018
﻿Unrecognized tax benefit - January 1 |  | $ | 820 |  | $ | 803
﻿Gross increases - tax positions in prior period |  |  | 1 |  |  | 66
﻿Gross decreases - tax positions in prior period |  |  | — |  |  | (49)
﻿Gross increases - tax positions in current period |  |  | — |  |  | —
﻿Settlements |  |  | — |  |  | —
﻿Lapse of statute of limitations |  |  | — |  |  | —
﻿Unrecognized tax benefit - December 31 |  | $ | 821 |  | $ | 820
﻿ The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued penalties and interest of less than $0.1 million during 2019 and 2018. The $0.8 million balance of unrecognized tax benefits, if recognized, would affect the effective tax rate.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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