6. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the future economic benefits of a business combination to the extent that the purchase price exceeds the fair value of the net identified tangible and intangible assets acquired and liabilities assumed. The Company determines the estimated fair value of the net identified tangible and intangible assets acquired and liabilities assumed after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management.

The Company tests goodwill for impairment as of October 1 each year, or more frequently as circumstances indicate it is necessary. Testing compares the estimated fair values of the reporting units to the reporting units’ carrying values. The reportable segments with goodwill balances as of December 31, 2019 include the United States, Canada and Poland. For the quantitative goodwill impairment test, the current fair value of each reporting unit with goodwill balances is estimated using a combination of (i) the income approach using the discounted cash flow method for projected revenue, EBITDA and working capital, (ii) the market approach observing the price at which comparable companies or shares of comparable companies are bought or sold, and (iii) fair value measurements using either quoted market price or an estimate of fair value using a present value technique. The cost approach, estimating the cost of reproduction or replacement of an asset, was considered but not used because it does not adequately capture an operating company’s intangible value. If the carrying value of a reporting unit exceeds its estimated fair value, the fair value of each reporting unit is allocated to the reporting unit’s assets and liabilities to determine the implied fair value of the reporting unit’s goodwill and whether impairment is necessary. No impairment charges related to goodwill have been recorded for the year ended December 31, 2019.

The Company tests its indefinite-lived intangible assets as of October 1 each year, or more frequently as circumstances indicate it is necessary. The fair value is determined primarily using the multi period excess earnings model and the relief from royalty method under the income approach. No impairment charges related to the Company’s indefinite-lived intangible assets have been recorded for the year ended December 31, 2019, with the exception of the casino license at Century Casino Bath.

The evaluation of goodwill and other indefinite-lived intangible assets requires the use of estimates about future operating results, valuation multiples and discount rates to determine the estimated fair value. Changes in the assumptions can materially affect these estimates. Thus, to the extent that gaming volumes deteriorate in the near future, discount rates increase significantly, or reporting units do not meet projected performance, the Company could have impairments to record in the future and such impairments could be material.

Changes in the carrying amount of goodwill related to United States, Canada and Poland are as follows:


	For the year ended December 31, 2019
Amounts in thousands		Balance at January 1		Acquisitions		Currency translation		Balance at December 31,
Goodwill, net by segment:
United States	$	—	$	18,629	$	—	$	18,629
Canada		7,188		—		362		7,550
Poland		6,805		—		(48)		6,757
	$	13,993	$	18,629	$	314	$	32,936

	For the year ended December 31, 2018
Amounts in thousands		Balance at January 1		Acquisitions		Currency translation		Balance at December 31,
Goodwill, net by segment:
United States	$	—	$	—	$	—	$	—
Canada		7,817		—		(629)		7,188
Poland		7,345		—		(540)		6,805
	$	15,162	$	—	$	(1,169)	$	13,993

Intangible Assets

Trademarks

The Company currently owns three trademarks, the Century Casinos trademark, the Mountaineer trademark and the Casinos Poland trademark, which are reported as intangible assets on the Company’s consolidated balance sheets. Trademarks at December 31, 2019 and 2018 consisted of the following:


	December 31,
Amounts in thousands	2019		2018
Finite-lived
Trademarks	$	2,368	$	—
Less: accumulated amortization		(19)		—
Total finite-lived trademarks, net		2,349		—
Indefinite-lived
Trademarks		1,719		1,730
Total indefinite-lived trademarks		1,719		1,730
Trademarks, net	$	4,068	$	1,730

Trademarks: Finite-Lived

The Company has determined that the Mountaineer trademark, reported in the United States segment, has a useful life of ten years after considering, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to promote and support the trade name. As such the trademark will be amortized over its useful life. Costs incurred to renew trademarks that are indefinite-lived are expensed over the renewal period to general and administrative expenses on the Company’s consolidated statement of (loss) earnings. Changes in the carrying amount of the Mountaineer trademark are as follows:


Amounts in thousands		Balance at January 1, 2019		Acquisition		Amortization		Balance at December 31, 2019
United States	$	—	$	2,368	$	(19)	$	2,349

As of December 31, 2019, estimated amortization expense for the Mountaineer trademark over the next five years was as follows:


Amounts in thousands
2020	$	237
2021		237
2022		237
2023		237
2024		237
Thereafter		1,164
	$	2,349

The weighted-average amortization period of the Mountaineer trademark is 9.9 years.

Trademarks: Indefinite-Lived

The Company has determined the Century Casinos trademark, reported in the Corporate and Other segment, and the Casinos Poland trademark, reported in the Poland segment, have indefinite useful lives and therefore the Company does not amortize these trademarks. Costs incurred to renew trademarks that are indefinite-lived are expensed over the renewal period as general and administrative expenses on the Company’s consolidated statement of (loss) earnings. Changes in the carrying amount of the indefinite-lived trademarks are as follows:


Amounts in thousands		Balance at January 1, 2019		Currency translation		Balance at December 31, 2019
Poland	$	1,622	$	(11)	$	1,611
Corporate and Other		108		—		108
	$	1,730	$	(11)	$	1,719

Amounts in thousands		Balance at January 1, 2018		Currency translation		Balance at December 31, 2018
Poland	$	1,751	$	(129)	$	1,622
Corporate and Other		108		—		108
	$	1,859	$	(129)	$	1,730

Casino Licenses

Casino licenses at December 31, 2019 and 2018 consisted of the following:


	December 31,
Amounts in thousands	2019		2018
Finite-lived
Casino licenses	$	2,960	$	2,883
Less: accumulated amortization		(882)		(708)
Total finite-lived casino licenses, net		2,078		2,175
Indefinite-lived
Casino licenses		40,782		12,453
Total indefinite-lived casino licenses		40,782		12,453
Casino licenses, net	$	42,860	$	14,628

Casino Licenses: Finite-Lived

As of December 31, 2019, Casinos Poland had eight casino licenses, each with an original term of six years, which are reported as finite-lived intangible assets and are amortized over their respective useful lives. Changes in the carrying amount of the Casinos Poland licenses are as follows:


Amounts in thousands		Balance at January 1, 2019		New Casino License		Amortization		Currency translation		Balance at December 31, 2019
Poland	$	2,175	$	412	$	(482)	$	(27)	$	2,078

Amounts in thousands		Balance at January 1, 2018		New Casino License		Amortization		Currency translation		Balance at December 31, 2018
Poland	$	1,558	$	1,151	$	(427)	$	(107)	$	2,175

As of December 31, 2019, estimated amortization expense for the CPL casino licenses over the next five years was as follows:


Amounts in thousands
2020	$	494
2021		494
2022		480
2023		412
2024		168
Thereafter		30
	$	2,078

These estimates do not reflect the impact of future foreign exchange rate changes or the continuation of the licenses following their expiration. The weighted average period before the next license expiration is 4.1 years. In Poland, gaming licenses are not renewable. Before a gaming license expires, the public is notified of the license availability and any gaming company can apply for the license. The Company was not awarded the licenses in Poznan and Plock, which expired and were fully amortized. No impairment charges related to the loss of the license tenders for these licenses were recorded.

Casino Licenses: Indefinite-Lived

The Company has determined that the casino licenses held in the United States segment from the Missouri Gaming Commission and the West Virginia Lottery Commission; held in the Canada segment from the AGLC and the HRA; and held in the Corporate and Other segment from the Great Britain Gambling Commission are indefinite-lived. Costs incurred to renew licenses that are indefinite-lived are expensed over the renewal period to general and administrative expenses on the Company’s consolidated statement of (loss) earnings. The Company has determined that the casino license held by CCB was impaired based on the losses incurred by the casino since operations began and future forecasts of continued losses due to the current regulatory environment for casinos in England. As a result, the Company impaired $1.2 million related to the CCB license and recorded it to impairment – intangible and tangibles assets in the Corporate and Other segment on the Company’s consolidated statement of (loss) earnings for the year ended December 31, 2019. Changes in the carrying amount of the licenses are as follows:


Amounts in thousands		Balance at January 1, 2019		Acquisition		Impairment		Currency translation		Balance at December 31, 2019
United States	$	—	$	28,922	$	—	$	—	$	28,922
Canada		11,292		—		—		568		11,860
Corporate and Other		1,161		—		(1,190)		29		—
	$	12,453	$	28,922	$	(1,190)	$	597	$	40,782

Amounts in thousands		Balance at January 1, 2018		Acquisition		Impairment		Currency translation		Balance at December 31, 2018
United States	$	—	$	—	$	—	$	—	$	—
Canada		12,280		—		—		(988)		11,292
Corporate and Other		1,227		—		—		(66)		1,161
	$	13,507	$	—	$	—	$	(1,054)	$	12,453

Player’s Club Lists

The Company has determined that the player’s club lists, reported in the United States segment, have a useful life of seven years based on estimated revenue attrition among the player’s club members as estimated by management over each property’s historical operations as estimated by management. As such the player’s club lists will be amortized over their useful lives. Changes in the carrying amount of the player’s club lists are as follows:


Amounts in thousands		Balance at January 1, 2019		Acquisition		Amortization		Balance at December 31, 2019
United States	$	—	$	20,373	$	(240)	$	20,133

As of December 31, 2019, estimated amortization expense for the player’s club lists over the next five years was as follows:


Amounts in thousands
2020	$	2,910
2021		2,910
2022		2,910
2023		2,910
2024		2,910
Thereafter		5,583
	$	20,133

The weighted-average amortization period for the player’s club lists is 6.9 years.