Leases

9 Months Ended

Sep. 30, 2021

12.LEASES

The Company determines if an arrangement is a lease at inception. The right-of-use (“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				For the nine months ended
	September 30,				September 30,
Amounts in thousands	2021		2020		2021		2020
Operating lease expense	$	1,463	$	1,484	$	4,445	$	4,134

Finance lease expense:
Amortization of right-of-use assets	$	31	$	39	$	97	$	120
Interest on lease liabilities		1		3		5		11
Total finance lease expense	$	32	$	42	$	102	$	131

Variable lease expense	$	554	$	543	$	942	$	1,112

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 nine months ended
	September 30,
Amounts in thousands	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	5	$	3
Operating cash flows from operating leases		3,960		4,915
Financing cash flows from finance leases		93		118

Supplemental balance sheet information related to leases was as follows:


	As of		As of
Amounts in thousands	September 30, 2021		December 31, 2020
Operating leases
Leased right-of-use assets, net	$	30,086	$	34,074

Current portion of operating lease liabilities		4,229		4,327
Operating lease liabilities, net of current portion		28,547		32,277
Total operating lease liabilities		32,776		36,604

Finance leases
Finance lease right-of-use assets, gross		424		552
Accumulated depreciation		(311)		(338)
Property and equipment, net		113		214

Current portion of finance lease liabilities		58		131
Finance lease liabilities, net of current portion		53		83
Total finance lease liabilities		111		214

Weighted-average remaining lease term
Operating leases		11.1 years		11.3 years
Finance leases		2.0 years		2.1 years

Weighted-average discount rate
Operating leases		4.7%		4.5%
Finance leases		4.2%		4.7%

Maturities of lease liabilities as of September 30, 2021 were as follows:


Amounts in thousands		Operating Leases	Finance Leases
2021	$	1,373	$	31
2022		5,730		40
2023		4,630		25
2024		3,914		20
2025		2,835		—
Thereafter		26,115		—
Total lease payments		44,597		116
Less imputed interest		(11,821)		(5)
Total	$	32,776	$	111