Leases

3 Months Ended

Mar. 31, 2021

12.LEASES

In January 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), and the subsequent amendments using the alternative modified retrospective method. When adopting the leasing standard, the Company made the following policy elections:

The Company elected the practical expedient to account for the lease and non-lease components as a single lease component for all asset classes;

The Company elected the short-term lease measurement and recognition exemption and did not establish right-of-use (“ROU”) assets or lease liabilities for operating leases with terms of 12 months or less;

The Company used its original assumptions for operating leases entered into prior to adoption, electing not to use the hindsight practical expedient;

The Company elected to use the package of practical expedients for transition and did not reassess (i) whether expired or existing contracts were leases or contained leases, (ii) the classification of its existing leases, or (iii) initial direct costs for existing leases; and

The Company elected not to evaluate existing or expired land easements under the leasing standard prior to the date of adoption.

The Company determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate in each of the jurisdictions in which its subsidiaries operate to calculate the present value of lease payments. Lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise those options. Operating lease expense is recorded on a straight-line basis over the lease term.

The Company accounts for lease agreements with lease and non-lease components as a single lease component for all asset classes. The Company does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

The Company’s operating and finance leases include land, casino space, corporate offices, and gaming and other equipment. The leases have remaining lease terms of one month to 16 years.

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The components of lease expense were as follows:


	For the three months ended
	March 31,
Amounts in thousands	2021		2020
Operating lease expense	$	1,463	$	1,519

Finance lease expense:
Amortization of right-of-use assets	$	35	$	40
Interest on lease liabilities		2		4
Total finance lease expense	$	37	$	44

Short-term lease expense	$	35	$	75

Variable lease expense	$	177	$	759

Variable lease expense relates primarily to rates based on a percentage of gaming revenue, changes in indexes that are excluded from the lease liability and fluctuations in foreign currency related to leases in Poland.

Supplemental cash flow information related to leases was as follows:


	For the three months
	March 31,
Amounts in thousands	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1	$	4
Operating cash flows from operating leases		1,581		1,822
Financing cash flows from finance leases		33		43

Supplemental balance sheet information related to leases was as follows:


	As of		As of
Amounts in thousands	March 31, 2021		December 31, 2020
Operating leases
Leased right-of-use assets, net	$	32,196	$	34,074

Current portion of operating lease liabilities		4,134		4,327
Operating lease liabilities, net of current portion		30,700		32,277
Total operating lease liabilities		34,834		36,604

Finance leases
Finance lease right-of-use assets, gross		429		552
Accumulated depreciation		(254)		(338)
Property and equipment, net		175		214

Current portion of finance lease liabilities		100		131
Finance lease liabilities, net of current portion		72		83
Total finance lease liabilities		172		214

Weighted-average remaining lease term
Operating leases		11.4 years		11.3 years
Finance leases		2.1 years		2.1 years

Weighted-average discount rate
Operating leases		4.6%		4.5%
Finance leases		4.6%		4.7%

Maturities of lease liabilities as of March 31, 2021 were as follows:


Amounts in thousands		Operating Leases	Finance Leases
2021	$	4,097	$	95
2022		5,247		41
2023		4,608		25
2024		3,872		19
2025		2,786		—
Thereafter		26,405		—
Total lease payments		47,015		180
Less imputed interest		(12,181)		(8)
Total	$	34,834	$	172