CENTURY CASINOS INC CO

Previous wording

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, the “Company”) may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management at the time such statements are made. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Current wording

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, the “Company”) may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends, ongoing projects and capital investments, cost savings initiatives, casino licensing matters and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management at the time such statements are made. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Previous wording

We have a 66.6% ownership interest in CPL and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest. Polish Airports owns the remaining 33.3% of CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest. CPL has been in operation since 1989. As of June 30, 2024, CPL had casino licenses for seven casinos and operated six casinos throughout Poland. We closed the Krakow casino in May 2024 due to the expiration of the gaming license. The following table summarizes information about CPL’s casinos as of June 30, 2024.

Current wording

We have a 66.6% ownership interest in CPL and we consolidate CPL as a majority-owned subsidiary for which we have a controlling financial interest. Polish Airports owns the remaining 33.3% of CPL. We account for and report the 33.3% Polish Airports ownership interest as a non-controlling financial interest. CPL has been in operation since 1989. As of September 30, 2024, CPL had casino licenses for six casinos and operated five casinos throughout Poland. We closed the Krakow casino in May 2024 and the LIM Center casino in Warsaw in July 2024 due to the expiration of the gaming licenses. CPL applied for new casino licenses for these locations but was notified in October 2024 that it was not awarded the licenses at either location. The following table summarizes information about CPL’s casinos as of September 30, 2024.

Previous wording

(2)We closed the casinos in Katowice and Bielsko-Biala in October 2023 due to the expiration of the gaming licenses. We were awarded both licenses in February 2024. The Bielsko-Biala casino reopened in February 2024, and the Katowice casino reopened in March 2024 with a reduced gaming floor. We anticipate reopening the full gaming floor at the Katowice casino in the third quarter of 2024 once we receive approval.

Current wording

(2)We closed the casinos in Katowice and Bielsko-Biala in October 2023 due to the expiration of the gaming licenses. We were awarded both licenses in February 2024. The Bielsko-Biala casino reopened in February 2024, and the Katowice casino reopened in March 2024 with a reduced gaming floor. We are waiting on regulatory approval to reopen the full gaming floor at the Katowice casino.

Previous wording

(3)We closed the Wroclaw casino in November 2023 due to the expiration of the gaming license. We were awarded the license in December 2023; however, we have not reopened the casino because we are relocating it to a new location. The Wroclaw casino is expected to reopen in October 2024.

Current wording

(3)We closed the Wroclaw casino in November 2023 due to the expiration of the gaming license. We were awarded the license in December 2023. We relocated the casino to a new location and opened the casino on October 24, 2024 with 70 slots and 13 tables.

Previous wording

In February 2022, we entered into a definitive agreement with Marnell, pursuant to which we agreed to purchase from Marnell (i) 50% of the membership interests in Smooth Bourbon, and (ii) 100% of the membership interests in Nugget. Nugget owns and operates the Nugget Casino Resort in Reno-Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located.

Current wording

In February 2022, we entered into a definitive agreement with Marnell, pursuant to which we agreed to purchase from Marnell (i) 50% of the membership interests in Smooth Bourbon, and (ii) 100% of the membership interests in Nugget. Nugget owns and operates the Nugget Casino Resort in Reno-Sparks, Nevada, and Smooth Bourbon owns the real property on which the casino is located. See Part I, Item 1. Note 3, “Acquisition and Equity Interest” for more information on the acquisition of Nugget.

Previous wording

In August 2022, we entered into a definitive agreement with Golden, Lakes Maryland, a subsidiary of Golden, and VICI PropCo, pursuant to which we agreed to acquire the operations of Rocky Gap. Pursuant to a real estate purchase agreement, dated August 24, 2022, by and between Evitts and VICI PropCo Buyer, VICI PropCo Buyer agreed to acquire a related interest in the land and building associated with Rocky Gap.

Current wording

In August 2022, we entered into a definitive agreement with Golden, Lakes Maryland, a subsidiary of Golden, and VICI PropCo, pursuant to which we agreed to acquire the operations of Rocky Gap. Pursuant to a real estate purchase agreement, dated August 24, 2022, by and between Evitts and VICI PropCo Buyer, VICI PropCo Buyer agreed to acquire a related interest in the land and building associated with Rocky Gap. See Part I, Item 1. Note 3, “Acquisition and Equity Interest” for more information on the acquisition of Rocky Gap.

Previous wording

In May 2023, we entered into definitive agreements for subsidiaries of VICI to acquire the real estate assets of the Century Canadian Portfolio. The sale was completed on September 6, 2023 for an aggregate purchase price of CAD 221.7 million ($162.6 million based on the exchange rate on September 6, 2023). The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. Simultaneous with the closing of the transaction, our existing Master Lease was amended. See Part I, Item 1. Note 6, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.

Current wording

In May 2023, we entered into definitive agreements for subsidiaries of VICI to acquire the real estate assets of the Century Canadian Portfolio. Simultaneous with the closing of the transaction in September 2023, our existing Master Lease was amended. Part I, Item 1. Note 1, “Canada Real Estate Sale” for more information on the Canada Real Estate Sale, and Part I, Item 1. Note 6, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.

Previous wording

We are building a new land-based casino with a 38 room hotel adjacent to and connected with the existing casino pavilion building. We estimate the project will cost $51.9 million. Construction started in December 2022 with completion expected in mid-November 2024. We are funding this project with financing provided by VICI PropCo. Following completion, VICI PropCo will own the real estate improvements associated with the Caruthersville project. See Part I, Item 1. Note 6, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date. As of June 30, 2024, we had received $50.0 million from VICI PropCo and have spent approximately $36.0 million of those funds on this project.

Current wording

We opened our new land-based casino with a 38 room hotel in Caruthersville, Missouri on November 1, 2024. The new land-based casino is adjacent to and connected with the temporary casino pavilion building. The project cost approximately $51.9 million and was funded with financing provided by VICI PropCo in conjunction with the Master Lease. VICI PropCo owns the real estate improvements associated with the Caruthersville project. As of September 30, 2024, we had received $51.9 million from VICI PropCo and have spent approximately $40.9 million of those funds on this project. We previously amended our Master Lease in December 2022 to provide for an increase in initial annualized rent of approximately $4.2 million related to the Caruthersville project. See Part I, Item 1. Note 6, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date. The pavilion building that was the temporary casino location will return to being used as event space.

Previous wording

We currently are exploring additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.

Current wording

We periodically explore additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.

Previous wording

Valuation Allowance (US) – We recorded a valuation allowance on our net deferred tax assets related to the United States resulting in $23.8 million of tax expense for the three and six months ended June 30, 2024.

Current wording

Valuation Allowance (US) – We recorded a valuation allowance on our net deferred tax assets related to the United States resulting in $23.8 million of tax expense for the nine months ended September 30, 2024.

Previous wording

United States (Nugget)– We acquired the operations of the Nugget on April 3, 2023. The Nugget is reported in the United States reportable segment. Nugget’s operating results for the three and six months ended June 30, 2024 and 2023 were as follows:

Current wording

United States (Nugget)– We acquired the operations of the Nugget on April 3, 2023. The Nugget is reported in the United States reportable segment. Nugget’s operating results for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

United States (Rocky Gap) – We acquired the operations of Rocky Gap on July 25, 2023. Rocky Gap is reported in the United States reportable segment. Interest expense related to the Master Lease of $4.1 million and $8.3 million for the three and six months ended June 30, 2024 contributed to the net loss attributable to Century Casinos, Inc. shareholders for the same periods. Rocky Gap’s operating results for the three and six months ended June 30, 2024 were as follows:

Current wording

United States (Rocky Gap) – We acquired the operations of Rocky Gap on July 25, 2023. Rocky Gap is reported in the United States reportable segment. Interest expense related to the Master Lease of $4.1 million and $12.4 million for the three and nine months ended September 30, 2024, respectively, and $4.5 million for the three and nine months ended September 30, 2023 contributed to the net loss attributable to Century Casinos, Inc. shareholders for the same periods. Rocky Gap’s operating results for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

Increased Interest Expense – Interest expense increased by $7.4 million and $15.6 million in the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively, due to the addition of Rocky Gap and the Century Canadian Portfolio to the Master Lease and increased interest rates under the Goldman Credit Agreement.

Current wording

Increased Interest Expense – Excluding a one-time interest expense of $7.3 million related to the purchase of land at our Century Downs property during the third quarter 2023, interest expense increased by $1.7 million and $17.3 million for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, respectively. The increase was due to the addition of Rocky Gap and the Century Canadian Portfolio to the Master Lease as well as increased interest rates under the Goldman Credit Agreement.

Previous wording

Canada (Calgary) – We received an earn out payment of CAD 0.9 million ($0.7 million based on the exchange rate on June 30, 2023) and CAD 1.7 million ($1.3 million based on the exchange rate of June 30, 2023) for the three and six months ended June 30, 2023, respectively, related to the 2020 sale of our Calgary casino operations. The earn out period ended in August 2023, and we did not receive any earn out payments during the six months ended June 30, 2024.

Current wording

Canada (Calgary) – We received earn out payments of CAD 0.5 million ($0.3 million based on the exchange rate on September 30, 2023) and CAD 2.1 million ($1.6 million based on the exchange rate of September 30, 2023) for the three and nine months ended September 30, 2023, respectively, related to the 2020 sale of our Calgary casino operations. The earn out period ended in August 2023, and we did not receive any earn out payments during the nine months ended September 30, 2024.

Previous wording

Sports Betting (Cripple Creek)- In February 2024, we mutually agreed to cancel our sports betting agreement with Circa. As part of the termination agreement, we received a payment of $1.1 million that included sports betting revenue owed from January 2024 to May 2024 and a breakage fee of $0.7 million. The breakage fee was recorded as other revenue on our condensed consolidated statements of loss for the three and six months ended June 30, 2024.

Current wording

Sports Betting (Colorado)– We mutually agreed to cancel two of our sports betting agreements in Colorado. Circa obtained its own master license in Colorado, and the Circa agreement was terminated in May 2024. As part of the Circa termination agreement, we received a payment of $1.1 million that included sports betting revenue owed from January 2024 to May 2024 and a breakage fee of $0.7 million. Tipico exited the U.S. market, and the Tipico agreement was terminated in July 2024. As part of the Tipico termination agreement, the Company received a payment of $1.6 million that includes sports betting revenue owed from November 2023 to June 2024 and a breakage fee of $1.0 million. The breakage fees were recorded as other revenue on our condensed consolidated statements of loss resulting in $1.0 million and $1.7 million in other revenue for the three and nine months ended September 30, 2024, respectively. Prior to the termination of the agreements, revenue from these agreements was $0.5 million per quarter in our United States segment.

Previous wording

Inflation and Staffing – During 2023, we saw material increases in our operating expenses at our properties, including payroll wages and benefits, insurance and utilities, maintenance costs and food and beverage costs. We also experienced difficulties attracting and retaining staff at some locations in the US and Canada. As a result, during 2023, we adjusted hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We were able to make adjustments during non-peak times to mitigate some of the impact to our operating results. We have not seen material impacts to our operations in 2024 due to inflation and staffing.

Current wording

Inflation and Staffing – During 2023, we saw material increases in our operating expenses at our properties, including payroll wages and benefits, insurance and utilities, maintenance costs and food and beverage costs. We also experienced difficulties attracting and retaining staff at some locations in the US and Canada. As a result, during 2023, we adjusted hours of some food and beverage outlets, the number of table games open and the number of rooms available at some of our hotels. We were able to make adjustments during non-peak times to mitigate some of the impact to our operating results. We have not seen material impacts to our operations in 2024 due to inflation and staffing and are not currently adjusting hours at our facilities to mitigate staffing issues.

Previous wording

Weather – Inclement weather in the United States impacted revenue for the three months ended March 31, 2024 compared to March 31, 2023 for our Colorado and West Virginia properties.

Current wording

Weather – Inclement weather in the United States impacted revenue for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 for our Colorado and West Virginia properties.

Previous wording

Net operating revenue increased by $9.7 million, or 7.1%, and by $37.2 million, or 15.2%, for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. Following is a breakout of net operating revenue by segment for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

Current wording

Net operating revenue decreased by ($5.5) million, or (3.4%), and increased by $31.7 million, or 7.8%, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023. Following is a breakout of net operating revenue by segment for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Previous wording

United States increased by $12.1 million, or 12.8%, and by $41.8 million, or 26.0%.

Current wording

United States increased by $0.3 million, or 0.2%, and by $42.0 million, or 15.1%.

Previous wording

Operating costs and expenses increased by $14.0 million, or 11.9%, and by $50.5 million, or 24.1%, for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. Following is a breakout of operating costs and expenses by segment for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

Current wording

Operating costs and expenses decreased by ($8.9) million, or (6.1%), and increased by $41.6 million, or 11.7%, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023. Following is a breakout of operating costs and expenses by segment for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Previous wording

United States increased by $15.5 million, or 20.2%, and by $51.0 million, or 39.6%.

Current wording

United States increased by $1.9 million, or 2.0%, and by $52.9 million, or 23.4%.

Previous wording

Corporate and Other increased by $0.7 million, or 15.7%, and decreased by ($0.9) million, or (12.6%).

Current wording

Canada decreased by ($2.4) million, or (12.6%), and increased by $0.7 million, or 1.5%.

Previous wording

Corporate and Other decreased by ($0.8) million, or (16.3%), and by ($0.3) million, or (3.0%).

Current wording

Corporate and Other decreased by ($5.8) million, or (67.0%), and by ($6.1) million, or (35.4%).

Previous wording

Earnings from operations decreased by ($4.4) million, or (23.4%), and by ($14.5) million, or (39.1%), for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. Following is a breakout of earnings from operations by segment for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

Current wording

Earnings from operations increased by $3.5 million, or 23.9%, and decreased by ($11.0) million, or (21.4%), for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023. Following is a breakout of earnings from operations by segment for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Previous wording

United States decreased by ($3.4) million, or (19.6%), and by ($9.2) million, or (29.1%).

Current wording

United States decreased by ($1.6) million, or (8.2%), and by ($10.9) million, or (21.0%).

Previous wording

Net loss attributable to Century Casinos, Inc. shareholders increased by $39.7 million, or 2024.2%, and by $52.0 million, or 1622.6%, for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. Items deducted from or added to earnings from operations to arrive at net loss attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense (benefit) and non-controlling interests. Increased interest expense negatively impacted net loss attributable to Century Casinos, Inc. shareholders. Interest expense increased primarily due to additional properties added to the Master Lease. Net loss attributable to Century Casinos, Inc. shareholders also was impacted by the valuation allowance on our net deferred tax assets related to the United States, resulting in $23.8 million of tax expense. For a discussion of these items, see “Non-Operating Income (Expense)”and “Taxes”below in this Item 2.

Current wording

Net loss decreased by ($6.1) million, or (42.7%), and increased by $45.9 million, or 264.1%, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023. Items deducted from or added to earnings from operations to arrive at net loss attributable to Century Casinos, Inc. shareholders include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense (benefit) and non-controlling interests. Increased interest expense negatively impacted net loss attributable to Century Casinos, Inc. shareholders. Interest expense increased primarily due to additional properties added to the Master Lease. Net loss attributable to Century Casinos, Inc. shareholders also was impacted by the valuation allowance on our net deferred tax assets related to the United States, resulting in $23.8 million of income tax expense during the second quarter of 2024. For a discussion of these items, see “Non-Operating Income (Expense)”and “Taxes”below in this Item 2.

Previous wording

Adjusted EBITDAR is used outside of our financial statements as a valuation metric. We define Adjusted EBITDAR as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, including interest expense related to the Master Lease as discussed below, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDAR reported for each reportable segment. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US generally accepted accounting principles (“US GAAP”).

Current wording

Adjusted EBITDAR is used outside of our financial statements as a valuation metric. We define Adjusted EBITDAR as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income), net, including interest expense related to the Master Lease as discussed below, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDAR reported for each reportable segment. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US GAAP.

Previous wording

Adjusted EBITDAR information is a non-GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported US GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies. Management believes that presenting Adjusted EBITDAR to investors provides them with information used by management for financial and operational decision-making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.

Current wording

Adjusted EBITDAR information is a non-US GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported US GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies. Management believes that presenting Adjusted EBITDAR to investors provides them with information used by management for financial and operational decision-making in order to understand the Company’s operating performance and evaluate the methodology used by management to evaluate and measure such performance.

Previous wording

Adjusted EBITDAR should not be viewed as a measure of overall operating performance as an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, the most directly comparable GAAP measure, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a US GAAP basis and excludes certain expenses, including the rent expense related to our Master Lease, and is provided for the limited purposes discussed herein. In addition, Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our Master Lease and certain other items.

Current wording

Adjusted EBITDAR should not be viewed as a measure of overall operating performance, as an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, the most directly comparable US GAAP measure, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a US GAAP basis and excludes certain expenses, including the rent expense related to our Master Lease, and is provided for the limited purposes discussed herein. In addition, Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-US GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our Master Lease and certain other items.

Previous wording

The reconciliation of Adjusted EBITDAR to net (loss) earnings attributable to Century Casinos, Inc. shareholders is presented below.

Current wording

The reconciliation of Adjusted EBITDAR to net earnings (loss) attributable to Century Casinos, Inc. shareholders is presented below.

Previous wording

(2)Includes $0.7 million related to the earn out payment from the sale of casino operations in Calgary in 2020.

Current wording

(2)Includes $0.3 million in the Canada segment related to the earn out payment from the sale of casino operations in Calgary in 2020.

Previous wording

(2)Includes $1.2 million related to the earn out payment from the sale of casino operations in Calgary in 2020 and $3.5 million related to cost recovery income for CDR.

Current wording

(2)Includes $1.6 million related to the earn out payment from the sale of casino operations in Calgary in 2020 and $3.5 million related to cost recovery income for CDR in the Canada segment.

Previous wording

We opened The Riverview on April 4, 2024. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau. We estimate that the hotel will incrementally increase our annual net revenue by $10.0 million to $12.0 million, net of an estimated impact from the Walker’s Bluff Casino in Illinois, which opened in August 2023. The Walker’s Bluff Casino has increased competition for our Missouri casinos, primarily our Cape Girardeau casino. However, we believe that our marketing efforts have been effective in offsetting this competition to date.

Current wording

We opened The Riverview in Cape Girardeau in April 2024. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau. The Walker’s Bluff Casino in Illinois, which opened in August 2023, has increased competition for our Missouri casinos, primarily our Cape Girardeau casino. However, we believe that our marketing efforts have been effective in offsetting this competition to date.

Previous wording

We partner with sports betting operators that conduct sports wagering at our Colorado, West Virginia and Nevada locations. Each agreement with the sports betting operators provides for a share of net gaming revenue and the Colorado agreements also provide for a minimum revenue guarantee each year. As stated above, our sports betting agreement with Circa ended in May 2024. In addition, we operate internet and mobile interactive gaming applications in West Virginia with two iGaming partners. The agreements provide for a share of net iGaming revenue. A petition campaign in Missouri to allow voters to determine whether to amend the state constitution to allow sports wagering in the state has gained sufficient signatures and will appear on the November 2024 ballot. If approved, sports betting could be legalized in Missouri by mid-2025. We have partnered with sports betting operators to conduct sports betting at our Missouri casinos if legalized.

Current wording

We partner with sports betting operators that conduct sports wagering at our Colorado, West Virginia and Nevada locations. Each agreement with the sports betting operators provides for a share of net gaming revenue, and the Colorado agreement also provides for a minimum revenue guarantee each year. In addition, we operate internet and mobile interactive gaming applications in West Virginia with two iGaming partners. The agreements provide for a share of net iGaming revenue. A petition campaign in Missouri to allow voters to determine whether to amend the state constitution to allow sports wagering in the state has gained sufficient signatures and will appear on the November 2024 ballot. If approved, sports betting could be legalized in Missouri by mid-2025. We have partnered with sports betting operators to conduct sports betting at our Missouri casinos if legalized.

Previous wording

In Cripple Creek, a competitor across the street from our casino completed an expansion in late December 2023. The increased availability of hotel rooms in Cripple Creek increased the overall Cripple Creek market, and revenue at our Cripple Creek property increased for the first quarter of 2024 compared to the first quarter of 2023 but remained constant for the second quarter of 2024 compared to the second quarter of 2023. We believe that we will continue to benefit from any increases in the overall market from nearby expanded hotels or otherwise; however, future periods also could be negatively impacted by this new competitor, either through decreased market share or revenue or increased costs of promotional offers by us in order to compete.

Current wording

In Cripple Creek, a competitor across the street from our casino completed an expansion in late December 2023. The increased availability of hotel rooms in Cripple Creek increased the overall Cripple Creek market. We believe that we can benefit from any increases in the overall market from nearby expanded hotels or otherwise; however, future periods also could be negatively impacted by this competitor or others, either through decreased market share or revenue or increased costs of promotional offers by us in order to compete.

Previous wording

In Central City, one potential competing casino may open in late 2024. An increase in competitors in that market could lead to a decrease in visitors at our casino and have a negative impact on our results of operations in Central City.

Current wording

In Central City, one potential competing casino may open in 2025. An increase in competitors in that market could lead to a decrease in visitors at our casino and have a negative impact on our results of operations in Central City.

Previous wording

East – Increased net operating revenue and operating costs and expenses were due to the acquisition of Rocky Gap. Net operating revenue from our West Virginia operations decreased due to decreased gaming, hotel and food and beverage revenue, offset by increased pari-mutuel revenue. Revenue in West Virginia has not rebounded to the levels we saw prior to the legalization of sports betting in Ohio in January 2023. Operating expenses in West Virginia decreased primarily due to gaming-related expenses.

Current wording

East – Increased net operating revenue and operating costs and expenses were due to the acquisition of Rocky Gap in July 2023. Net operating revenue from our West Virginia operations decreased due to decreased gaming, hotel and food and beverage revenue, offset by increased pari-mutuel revenue. Revenue in West Virginia has not rebounded to the levels we saw prior to the legalization of sports betting in Ohio in January 2023. Operating expenses in West Virginia decreased primarily due to decreased gaming-related expenses.

Previous wording

Midwest – Net operating revenue increased primarily due to increased gaming, hotel and food and beverage revenue at our Cape Girardeau location due to the opening of The Riverview in April 2024. In addition, net operating revenue increased by $0.7 million due to a breakage fee from the termination of our sports betting agreement with Circa. Revenue from the sports betting agreement was approximately $0.3 million per quarter. Operating expenses in the Midwest operating segment increased due to increased payroll, marketing and operating costs, primarily at the Cape Girardeau location due to the opening of The Riverview.

Current wording

Midwest – Net operating revenue increased primarily due to increased hotel and food and beverage revenue at our Cape Girardeau location due to the opening of The Riverview in April 2024. In addition, net operating revenue increased by $1.0 million due to a breakage fee from the termination of our sports betting agreement with Tipico. Revenue from the sports betting agreement was approximately $0.2 million per quarter. The increased revenue was partially offset by decreased gaming revenue at all locations. Operating expenses in the Midwest operating segment increased due to increased payroll, marketing and operating costs, primarily at the Cape Girardeau location due to the opening of The Riverview.

Previous wording

West –Gaming, hotel and other revenue at the Nugget decreased in part due to three fewer entertainment shows and decreased hotel group bookings in the second quarter of 2024 compared to the second quarter of 2023. Beginning mid-April 2024, we began implementing cost saving measures at the Nugget. These measures include marketing improvements, staffing changes and a change to our housekeeping program in the hotel. We estimate these cost savings will be approximately $1.0 million per quarter.

Current wording

West –Gaming, hotel and other revenue at the Nugget decreased primarily due to decreased hotel group bookings in the third quarter of 2024 compared to the third quarter of 2023, which also impacted food and beverage revenue. Beginning mid-April 2024, we began implementing cost saving measures at the Nugget. These measures include marketing improvements, staffing changes and a change to our housekeeping program in the hotel. The cost saving measures have decreased operating expenses by approximately $1.0 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Midwest – Net operating revenue increased primarily due to increased hotel and food and beverage revenue at our Cape Girardeau location due to the opening of The Riverview in April 2024. In addition, net operating revenue increased by $0.7 million due to a breakage fee from the termination of our sports betting agreement with Circa. Revenue at our Central City property was negatively impacted by inclement weather in the first quarter of 2024. Despite the casino closing for two days due to inclement weather, revenue at our Cripple Creek property increased during the first quarter of 2024 compared to the first quarter of 2023 due to the increase in the Cripple Creek market size from our competitor’s casino and hotel expansion as well as events in the city. Operating expenses in the Midwest operating segment increased due to increased payroll, marketing and operating costs, primarily at the Cape Girardeau location due to the opening of The Riverview.

Current wording

Midwest – Net operating revenue increased primarily due to increased hotel and food and beverage revenue at our Cape Girardeau location due to the opening of The Riverview in April 2024. In addition, net operating revenue increased by $1.7 million due to breakage fees from the termination of our sports betting agreements with Circa and Tipico. Revenue from these sports betting agreements was approximately $0.5 million per quarter. Revenue at our Central City property was negatively impacted by inclement weather in the first quarter of 2024. Revenue at our Cripple Creek property has been relatively flat year to date compared to 2023. Operating expenses in the Midwest operating segment increased due to increased payroll, marketing and operating costs, primarily at the Cape Girardeau location due to the opening of The Riverview.