Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements, Business Environment and Risk Factors
The following discussion should be read in conjunction with Part II, Item 8, “Financial Statements and Supplementary Data” of this report. Information contained in the following discussion of our results of operations and financial condition contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and, as such, is based on current expectations and is subject to certain risks and uncertainties. The reader should not place undue reliance on these forward-looking statements for many reasons, including those risks discussed under Item 1A, “Risk Factors,” and elsewhere in this report. See “Cautionary Statement Regarding Forward-Looking Information” that precedes Part I of this report. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.
References in this item to “we,” “our,” or “us” are to the Company and its subsidiaries on a consolidated basis unless the context otherwise requires. The term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars, the term “PLN” refers to Polish zloty and the term “GBP” refers to British pounds. Certain terms used in this Item 7 without definition are defined in Item 1, “Business” of this report.
Amounts presented in this Item 7 are rounded. As such, there may be rounding differences in period over period changes and percentages reported throughout this Item 7.
EXECUTIVE OVERVIEW
Overview
Since our inception in 1992, we have been primarily engaged in developing and operating gaming establishments and related lodging, restaurant and entertainment facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming and entertainment facilities that are in most instances a part of the casinos.
During the fourth quarter of 2025, due to changes in expected long-term future economic characteristics, we determined that the aggregation of operating segments within the United States reportable segment was no longer appropriate. As a result, we reorganized our reportable segments to provide greater specificity within the United States. We aggregate all operating segments into five reportable segments based on the geographical locations in which our casinos operate: US East, US Midwest, US West, Canada and Poland. We view each casino or other operation within those markets as a reporting unit. The reporting units, except for Century Downs Racetrack and Casino and Casinos Poland, are owned, operated and managed through wholly-owned subsidiaries. Our ownership and operation of Century Downs Racetrack and Casino and Casinos Poland are discussed below. The table below provides information about the aggregation of our operating segments and reporting units into reportable segments as of December 31, 2025.
Reportable Segment and
Operating Segment
Reporting Unit
US East
Mountaineer Casino, Resort & Races (1)
Rocky Gap Casino, Resort & Golf (1)
US Midwest
Century Casino & Hotel Central City
Century Casino & Hotel Cripple Creek
Century Casino & Hotel Cape Girardeau and The Riverview (1)
Century Casino & Hotel Caruthersville and The Farmstead (1)
US West
Nugget Casino Resort and Smooth Bourbon, LLC
Canada
Century Casino & Hotel Edmonton (1)
Century Casino St. Albert (1)
Century Mile Racetrack and Casino (1)
Century Downs Racetrack and Casino (1)
Poland
Casinos Poland
(1) The real estate assets, except The Riverview hotel in Cape Girardeau and The Farmstead hotel in Caruthersville, are owned by VICI PropCo and leased to us under the Master Lease.
We have controlling financial interests through our subsidiary CRM in the following reporting units:
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% in 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 and owns and operates casinos throughout Poland. See Item 2, “Properties”, above for a list of casinos operating as of December 31, 2025.
We have a 75% ownership interest in CDR and we consolidate CDR as a majority-owned subsidiary for which we have a controlling financial interest. We account for and report the remaining 25% ownership interest in CDR as a non-controlling financial interest. CDR operates Century Downs Racetrack and Casino, a REC in Balzac, a north metropolitan area of Calgary, Alberta, Canada.
We have additional business activities including certain other corporate and management operations that are not included in our reportable segments that are presented for reconciliation purposes as Corporate and Other.
Strategic Review Process
In August 2025, we announced that our Board initiated a comprehensive strategic review of our operations, capital structure and strategic growth options. The review is exploring a range of potential strategic alternatives for our assets and businesses aimed at enhancing shareholder value and supporting long-term growth. These alternatives may include opportunities to unlock value within our existing property portfolio, optimize our capital structure, evaluate potential mergers, strategic partnerships, or the sale of the Company, and to analyze potential divestments of assets or other asset-level transactions. The Board has not set a timetable for the conclusion of this review. At this stage, no commitments or decisions have been made and there can be no assurance that the review will result in any transaction or particular change to our business. We do not intend to make further public comments on the process unless and until we determine that further disclosure is appropriate or necessary.
Recent Developments Related to Economic Uncertainty
Current macroeconomic conditions remain very dynamic, including volatile changes in stock markets, foreign currency exchange rates, political unrest and armed conflicts, inflation, US domestic and other international economic policies, such as tariffs and other factors. Both customer visits and customer spending at our casinos are key drivers of our revenue and profitability, and reductions in either could have a material adverse effect on our business, financial condition and results of operations. The actual or perceived impact of macroeconomic conditions on consumer spending could lead to fewer customer visits and decreased discretionary spending by our customers. Any worsening in economic conditions in the regions in which we operate or globally, or the perception
that conditions may worsen, could reduce consumer discretionary spending or increase our costs and erode our net earnings and cash flows.
Other Projects and Developments
As detailed further in Item 1, “2025 Business Developments”, on December 1, 2025 through a partnership with BetMGM we began operating a sports book at Cape Girardeau and an online and mobile sports betting application under our license in Missouri.
Additional Gaming Projects
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.
Presentation of Foreign Currency Amounts
The average exchange rates to the US dollar used to translate balances during each reported period are as follows:
For the year
ended December 31,
% Change
Average Rates
Canadian dollar (CAD)
Euros (EUR)
Polish zloty (PLN)
Source: Xe Currency Converter
We recognize in our statement of loss, foreign currency transaction gains or losses resulting from the translation of casino operations and other transactions that are denominated in a currency other than US dollars. Our casinos in Canada and Poland represent a significant portion of our business, and the revenue generated and expenses incurred by our casinos in Canada and Poland are generally denominated in Canadian dollars and Polish zloty, respectively. A decrease in the value of these currencies in relation to the value of the US dollar would decrease the earnings from our foreign operations when translated into US dollars. An increase in the value of these currencies in relation to the value of the US dollar would increase the earnings from our foreign operations when translated into US dollars. See Note 2 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.
DISCUSSION OF RESULTS
Years ended December 31, 2025 and 2024
Century Casinos, Inc. and Subsidiaries
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming revenue
Pari-mutuel, sports betting and iGaming revenue
Hotel Revenue
Food and beverage revenue
Other revenue
Net operating revenue
Gaming expenses
Pari-mutuel, sports betting and iGaming expenses
Hotel expenses
Food and beverage expenses
Other expenses
General and administrative expenses
Depreciation and amortization
Impairment - goodwill
Total operating costs and expenses
Earnings (loss) from operations
Income tax expense
Net earnings attributable to non-controlling interests
Net loss attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR (1)
Net loss per share attributable to Century Casinos, Inc. shareholders
Basic
Diluted
(1) For a discussion of Adjusted EBITDAR and reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders, see “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” below in this Item 7.
Comparability Impacts
Items impacting year-over-year comparability of the results include the following:
Impairment of Goodwill (US East and US West - 2024) – We determined that goodwill related to the Nugget and Rocky Gap was impaired during the year ended December 31, 2024. As a result of the impairments, we recorded $70.2 million to impairment – goodwill for the year ended December 31, 2024.
On July 30, 2024, we announced we were replacing the management team at the Nugget. During the annual forecast process that began in mid-fourth quarter 2024, the new management team revised the future operating results assumptions due to revised future performance expectations based on estimated future market conditions and analysis of the property’s sustained decrease in performance since its acquisition. As a result, we fully impaired goodwill at the Nugget based on these updated assumptions.
During the annual forecast process that began mid-fourth quarter 2024, the management team at Rocky Gap revised the future operating results assumptions due to delays in the execution of the planned player engagement strategy. As a result, we fully impaired goodwill at Rocky Gap based on these updated assumptions.
Valuation Allowance (2024) – Income tax expense was primarily impacted by the recording of a valuation allowance on our net deferred tax assets related to our operations within the United States for the year ended December 31, 2024.
Sports Betting (Colorado - 2024) – In 2024, we mutually agreed to cancel two of our sports betting agreements in Colorado. The Circa Sports (“Circa”) agreement was terminated in May 2024 and the Tipico Group Ltd. (“Tipico”) agreement was terminated in July 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. As part of the Tipico termination agreement, we received a payment of $1.6 million that included 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 consolidated statement of loss, resulting in $1.7 million in other revenue for the year ended December 31, 2024.
Sports Betting (Missouri - 2025) – On December 1, 2025, we opened a retail sportsbook at Cape Girardeau and began offering online sports betting through an agreement with BetMGM. The agreement includes a percentage of net gaming revenue payable to us, with a guaranteed minimum.
Weather – Inclement weather impacted revenue for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 for all of our North American properties.
Summary of Changes by Reportable Segment
Net operating revenue decreased by ($2.9) million, or (0.5%), for the year ended December 31, 2025 compared to the year ended December 31, 2024. Following is a breakout of net operating revenue by reportable segment for the year ended December 31, 2025 compared to the year ended December 31, 2024.
US East decreased by ($2.1) million, or (1.2%).
US Midwest increased by $3.3 million, or 2.0%.
US West decreased by ($7.9) million, or (9.1%).
Canada decreased by ($0.4) million, or (0.5%).
Poland increased by $4.3 million, or 5.3%.
Operating costs and expenses decreased by ($76.4) million, or (12.8%), for the year ended December 31, 2025 compared to the year ended December 31, 2024. Following is a breakout of operating costs and expenses by reportable segment for the year ended December 31, 2025 compared to the year ended December 31, 2024. Corporate and Other is included for reconciliation purposes.
US East decreased by ($29.8) million, or (15.9%).
US Midwest increased by $3.0 million, or 2.5%.
US West decreased by ($50.6) million, or (37.6%).
Canada decreased by ($0.5) million, or (0.8%).
Poland increased by $1.9 million, or 2.3%.
Corporate and Other decreased by ($0.3) million, or (2.2%).
Earnings from operations increased by $73.4 million, or 331.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. Following is a breakout of earnings from operations by reportable segment for the year ended December 31, 2025 compared to the year ended December 31, 2024. Corporate and Other is included for reconciliation purposes.
US East increased by $27.7 million, or 175.4%.
US Midwest increased by $0.3 million, or 0.7%.
US West increased by $42.7 million, or 90.5%.
Canada increased by $0.1 million, or 0.6%.
Poland increased by $2.4 million, or 63.6%.
Corporate and Other increased by $0.3 million, or 2.0%.
Net loss attributable to Century Casinos, Inc. shareholders decreased by ($92.2) million, or (60.0%), for the year ended December 31, 2025 compared to the year ended December 31, 2024. 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. In 2024, net loss attributable to Century Casinos, Inc. shareholders was impacted by the valuation allowance on our net deferred tax assets related to our United States operations during the second quarter of 2024, and by the impairment of goodwill at the Nugget and Rocky Gap during the fourth quarter of 2024 as detailed above. Interest expense, primarily from the Goldman Credit Agreement and the Master Lease, negatively impacts net loss attributable to Century Casinos, Inc. shareholders. For a discussion of these items, see “Non-Operating Income (Expense)” and “Taxes” below in this Item 7.
For details regarding these results, see “Reportable Segments” below.
Other
Pari-Mutuel
Pari-mutuel revenue includes live racing, export, advanced deposit wagering and off-track betting. Pari-mutuel expenses relate to pari-mutuel revenue and the operation of our racetracks.
Other
Other revenue and other expenses include gift shops, entertainment, golf and spa. Other revenue also includes revenue from ATM and credit card commissions.
Non-GAAP Measures Definitions and Calculations
Adjusted EBITDAR
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, termination expenses related to closing a casino, 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 () 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”).
The Master Lease is accounted for as a financing obligation. As such, a portion of the periodic payment under the Master Lease is recognized as interest expense with the remainder of the payment impacting the financing obligation using the effective interest method.
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.
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 earnings, 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-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 earnings, because it excludes the rent expense associated with our Master Lease and certain other items.
The reconciliation of Adjusted EBITDAR to net (loss) earnings attributable to Century Casinos, Inc. shareholders is presented below.
For the year ended December 31, 2025
Amounts in thousands
East
Midwest
West
Canada
Poland
Other (1)
Total
Net (loss) earnings attributable to Century Casinos, Inc. shareholders
Interest income
Interest expense (2)
Income tax expense
Depreciation and amortization
Net earnings (loss) attributable to non-controlling interests
Non-cash stock-based compensation
Loss (gain) on foreign currency transactions, cost recovery income and other (3)
Loss (gain) on disposition of fixed assets
Pre-opening and termination expenses
Adjusted EBITDAR
(1) Represents additional business activities including certain other corporate and management operations that are not included in our reportable segments. Information is presented for reconciliation purposes.
(2) See “Non-Operating (Expense) Income – Interest expense” below for a breakdown of interest expense and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
(3) Includes $1.0 million related to cost recovery income for CDR in the Canada segment .
For the year ended December 31, 2024
Amounts in thousands
East
Midwest
West
Canada
Poland
Other (1)
Total
Net (loss) earnings attributable to Century Casinos, Inc. shareholders
Interest income
Interest expense (2)
Income tax expense (benefit)
Depreciation and amortization
Net earnings (loss) attributable to non-controlling interests
Non-cash stock-based compensation
Loss (gain) on foreign currency transactions, cost recovery income and other (3)
Impairment - goodwill (4)
Loss (gain) on disposition of fixed assets
Acquisition costs
Pre-opening and termination expenses
Adjusted EBITDAR
(1) Represents additional business activities including certain other corporate and management operations that are not included in our reportable segments. Information is presented for reconciliation purposes.
(2) See “Non-Operating (Expense) Income – Interest expense” below for a breakdown of interest expense and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.
(3) Includes $1.1 million related to cost recovery income for CDR in the Canada segment .
(4) Related to the impairment of goodwill at the Nugget and Rocky Gap.
Net Debt
We define Net Debt as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is not considered a liquidity measure recognized under US GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt were it to become due simultaneously. The reconciliation of Net Debt is presented below.
Amounts in thousands
December 31, 2025
December 31, 2024
Total long-term debt, including current portion
Deferred financing costs
Total principal
Less: Cash and cash equivalents
Net Debt
RESULTS OF OPERATIONS - REPORTABLE SEGMENTS
The following discussion provides further detail of consolidated results by reportable segment.
US East
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming revenue
Pari-mutuel, sports betting and iGaming revenue
Hotel revenue
Food and beverage revenue
Other revenue
Net operating revenue
Gaming expenses
Pari-mutuel, sports betting and iGaming expenses
Hotel expenses
Food and beverage expenses
Other expenses
General and administrative expenses
Depreciation and amortization
Impairment - goodwill
Total operating costs and expenses
Earnings (loss) from operations
Income tax expense
Net loss attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
The Happy Valley Casino in Pennsylvania is expected to open in spring 2026. This casino, which is 112 miles from Rocky Gap, is expected to increase competition for Rocky Gap and could have a negative impact on our results of operations in Maryland. We believe our marketing efforts to surrounding areas such as Baltimore and Washington D.C. and the other non-casino amenities that our property offers, such as our golf course, will minimize the potential impact of this competitor on Rocky Gap's performance.
We partner with sports betting operators that conduct sports wagering at our West Virginia location. The agreement provides for a share of net gaming revenue. 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.
2025 compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Winter weather negatively impacted the properties during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 .
Decreased net operating revenue was due to increased promotional allowances at both properties and decreased gaming revenue at our Mountaineer property, offset by increased gaming revenue and increased hotel revenue due to increases in room rates at our Rocky Gap property and increased pari-mutuel revenue at our Mountaineer property. At our Rocky Gap property, the golf course was closed for the majority of the first quarter of 2025 due to winter weather, which impacted gaming, hotel and food and beverage
revenue. Decreased operating costs and expenses were due to decreased gaming-related, maintenance and insurance expenses, partially offset by increased payroll expense.
Additional information about pari-mutuel, sports betting and iGaming revenue in the US East reportable segment is provided below.
For the year
ended December 31,
Amounts in millions
Pari-mutuel revenue
Sports betting revenue
iGaming revenue
A reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders for this reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7.
US Midwest
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming revenue
Pari-mutuel, sports betting and iGaming revenue
Hotel revenue
Food and beverage revenue
Other revenue
Net operating revenue
Gaming expenses
Pari-mutuel, sports betting and iGaming expenses
Hotel expenses
Food and beverage expenses
Other expenses
General and administrative expenses
Depreciation and amortization
Total operating costs and expenses
Earnings from operations
Income tax expense
Net earnings attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
We opened the new land-based casino and hotel in Caruthersville on November 1, 2024. The casino has 579 slot machines and seven live table games, which is approximately a 50% increase in gaming positions compared with the prior temporary location. The number of hotel rooms doubled to 74.
We opened The Riverview in Cape Girardeau in April 2024. The Riverview is a 69 room, six-story hotel with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau.
We partner with sports betting operators that conduct sports wagering at our Colorado and Missouri locations. Each agreement with the sports betting operators provides for a share of net gaming revenue with a minimum revenue guarantee each year. We have partnered with BetMGM to operate a sports book at Cape Girardeau and an online and mobile sports betting application under our license in Missouri. Sports betting began in Missouri on December 1, 2025. As stated above in “Comparability Impacts”, our sports betting agreements in Colorado with Circa and Tipico ended in May 2024 and July 2024, respectively.
The Cripple Creek and Central City casinos in Colorado stopped offering table gaming in January 2025. Through December 2025, the removal of table games has not had a material impact on earnings from operations at our Colorado casinos as the expense savings have offset the decrease in revenue. Table games revenue in Colorado was $1.6 million for the year ended December 31, 2024.
2025 Compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Winter weather negatively impacted the properties during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 .
In Missouri, net operating revenue increased by approximately $9.7 million primarily due to increased revenue at our new casino in Caruthersville and increased hotel and food and beverage revenue at our Cape Girardeau property due to the new hotel opened in 2024, offset by decreased gaming revenue at our Cape Girardeau property. The increases in Missouri were offset by decreased net operating revenue of approximately $6.4 million in Colorado. Decreased net operating revenue in Colorado was primarily due to the termination of two sports betting agreements in 2024, as detailed above, decreased gaming revenue due to the elimination of table games at both properties, and the inclement weather in February 2025. Operating costs and expenses in the Midwest operating segment increased due to increased payroll and gaming-related expenses at the Missouri locations due to opening our new hotels and the new Caruthersville casino in 2024, partially offset by decreased payroll at the Colorado locations due to the closure of table games.
A reconciliation of Adjusted EBITDAR to net earnings attributable to Century Casinos, Inc. shareholders for this reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7.
US West
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming revenue
Pari-mutuel, sports betting and iGaming revenue
Hotel revenue
Food and beverage revenue
Other revenue
Net operating revenue
Gaming expenses
Hotel expenses
Food and beverage expenses
Other expenses
General and administrative expenses
Depreciation and amortization
Impairment - goodwill
Total operating costs and expenses
Loss from operations
Income tax expense
Net earnings attributable to non-controlling interests
Net loss attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
We partner with sports betting operators that conduct sports wagering at our Nevada location. The agreement provides for a share of net gaming revenue.
2025 Compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Winter weather negatively impacted the property during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 .
Net operating revenue at the Nugget decreased primarily due to fewer events held at our outdoor event center and decreased gaming, hotel and food and beverage revenue, offset by decreased promotional allowances. We continue to focus our efforts on marketing group and convention sales for the hotel and our new loyalty program in an effort to drive revenue growth. Operating costs and expenses decreased primarily due to decreased payroll and cost of goods sold from the cost saving measures and operating efficiencies that we began implementing mid-April 2024 and decreased production costs as a result of fewer events at the outdoor event center. The cost saving measures included staffing changes and changes to hotel operations.
A reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders for this reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7.
Canada
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming revenue
Pari-mutuel, sports betting and iGaming revenue
Hotel revenue
Food and beverage revenue
Other revenue
Net operating revenue
Gaming expenses
Pari-mutuel, sports betting and iGaming expenses
Hotel expenses
Food and beverage expenses
Other expenses
General and administrative expenses
Depreciation and amortization
Total operating costs and expenses
Earnings from operations
Income tax expense
Net earnings attributable to non-controlling interests
Net earnings attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
In February 2023, the AGLC approved a temporary increase from 15% of slot machine net sales retained by casinos to 17% beginning April 1, 2023. In January 2026, the temporary increase was extended through March 31, 2029. We estimate that the additional 2% of slot machine net sales retained by the casinos resulted in net operating revenue of approximately $2.9 million during each of the years ended December 31, 2025 and 2024.
A competitor has received conditional approval to relocate its casino from Camrose, Alberta, to south Edmonton, approximately 11 miles from our Century Mile property. We anticipate the casino will open in 2027 once construction is complete and final approvals are received. An increase in competitors to the Edmonton market and near our Century Mile property could lead to a decrease in visitors at our casinos and have a negative impact on our results of operations in Canada.
In June 2025, Alberta’s Bill 48 regulating iGaming in Alberta passed. The bill will create an open market for online sports betting and iGaming with retail sports betting available at casinos and specific sports venues. The regulatory framework is still being finalized but it is expected that casinos will have the option to select a licensed third-party provider or partner with AGLC to provide sports betting and iGaming products. We plan to offer retail sports betting at our locations in Alberta through either a licensed third-party provider or the AGLC.
Results in US dollars were impacted by a (2.1%) decrease in the average exchange rate between the US dollar and Canadian dollar for the year ended December 31, 2025 compared to the year ended December 31, 2024. The tables below provide results for the Canada reportable segment.
For the year
ended December 31,
Amounts in CAD, in millions
Change
Change
Net operating revenue
Canada
Operating costs and expenses (1)
Canada
For the year
ended December 31,
Amounts in millions
$ Change
% Change
Net operating revenue
Canada
Operating costs and expenses (1)
Canada
(1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
2025 Compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024. Unless otherwise indicated, explanations below are provided based on CAD results.
Net operating revenue increased due to increased gaming revenue at our St. Albert and Century Downs properties, increased pari-mutuel revenue at both of our racetracks and increased food and beverage revenue at our St. Albert property, offset by decreased gaming revenue at our Edmonton and Century Mile properties. Operating costs and expenses increased due to increased payroll costs.
A reconciliation of Adjusted EBITDAR to net earnings attributable to Century Casinos, Inc. shareholders for this reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7.
Poland
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Gaming
Food and beverage
Other revenue
Net operating revenue
Gaming expenses
Food and beverage expenses
General and administrative expenses
Depreciation and amortization
Total operating costs and expenses
Loss from operations
Income tax (expense) benefit
Net loss attributable to non-controlling interests
Net loss attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable. Before a gaming license expires in a particular city, there is a public notification of the available license and any gaming company can apply for a new license for that city. We closed our Hilton Hotel casino in Warsaw in June 2025 after we were notified that we had not received a new license.
The table below provides information about the closures due to licensing delays and failure to receive license awards during the periods discussed below.
Casino
Closure Date
Reopen Date
Katowice (1)
October 2023
March 2024
Bielsko-Biala
October 2023
February 2024
Wroclaw (2)
November 2023
October 2024
Krakow (3)
May 2024
LIM Center in Warsaw (3)
July 2024
Hilton Hotel in Warsaw (4)
June 2025
(1) The Katowice casino reopened in March 2024 with a reduced gaming floor. We reopened the full gaming floor in May 2025 following regulatory approval.
(2) T he Wroclaw casino reopened at a new location following the closure.
(3) We were notified in October 2024 that we were not awarded casino licenses for these locations.
(4) We were notified in June 2025 that we were not awarded a casino license for this location.
We were awarded a second license in Wroclaw in March 2025, and the casino opened in February 2026.
We have not seen a material negative impact on our operations as a result of the war in Ukraine. Although Poland borders Ukraine, our casinos are not located near the border. However, continued conflict in that region could have a negative impact on our results of operations.
Results in US dollars were impacted by a 5.5% increase in the average exchange rate between the US dollar and the Polish zloty for the year ended December 31, 2025 compared to the year ended December 31, 2024. The tables below provide results for the Poland reportable segment.
For the year
ended December 31,
Amounts in PLN, in millions
Change
Change
Net operating revenue
Poland
Operating costs and expenses (1)
Poland
For the year
ended December 31,
Amounts in millions
$ Change
% Change
Net operating revenue
Poland
Operating costs and expenses (1)
Poland
(1) Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
2025 Compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024. Unless otherwise indicated, explanations below are provided based on PLN results.
Net operating revenue decreased primarily due to licensing-related closures of our LIM Center and Krakow casinos and Hilton Hotel casino in Warsaw, offset by increased revenue due to the casinos that reopened in 2024 in Wroclaw, Bielsko-Biala and Katowice. The decreased revenue due to the closure of the casino at the Hilton Hotel in Warsaw was partially offset by increased revenue at the Warsaw Presidential Hotel. Operating costs and expenses decreased due to the decrease in payroll expenses from casino closures.
A reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders for this reportable segment can be found in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above in this Item 7.
RESULTS OF OPERATIONS – CORPORATE AND OTHER
The following discussion provides further detail of consolidated results of our additional business activities including certain other corporate and management operations that are not included in our reportable segments.
Corporate and Other
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Other revenue
Net operating revenue
General and administrative expenses
Depreciation and amortization
Total operating costs and expenses
Loss from operations
Income tax (expense) benefit
Net loss attributable to Century Casinos, Inc. shareholders
Adjusted EBITDAR
2025 Compared to 2024
The following discussion highlights results for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Total operating costs and expenses, including general and administrative expenses, remained relatively constant. Net loss attributable to Century Casinos, Inc. shareholders in the table above is driven primarily by interest expense under the Goldman Credit Agreement.
Corporate and Other is presented for reconciliation purposes only. The reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR can be found under “Other” in the “Non-GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.
Non-Operating (Expense) Income
Non-operating (expense) income for the years ended December 31, 2025 and 2024 was as follows:
For the year
ended December 31,
Amounts in thousands
$ Change
% Change
Interest income
Interest expense
Gain on foreign currency transactions, cost recovery income and other
Non-operating (expense) income
Interest income
Interest income is related to interest earned on our cash reserves.
Interest expense
Interest expense is directly related to interest owed on the borrowings under our Goldman Credit Agreement, CRM’s term loan with UniCredit Bank Austria AG (“UniCredit”), the CPL credit agreement and credit facility with mBank S.A. (“mBank”, the “CPL Credit Agreement” and the “CPL Credit Facility”), our financing obligation under the Master Lease with VICI PropCo, deferred financing costs and our finance lease agreements. Interest expense in the US East, US Midwest and Canada reportable segments primarily relates to the Master Lease. Interest expense not attributable to our reportable segments and presented in “Corporate and Other” primarily relates to the Goldman Credit Agreement.
A breakdown of interest expense is below.
For the year
ended December 31,
Amounts in thousands
Interest expense - credit agreements
Interest expense - VICI PropCo financing obligation
Interest expense - deferred financing costs
Interest expense - miscellaneous
Total interest expense
Gain on foreign currency transactions, cost recovery income and other
Cost recovery income is related to infrastructure built during the development of CDR. The infrastructure was built by the non-controlling shareholders prior to our acquisition of our controlling ownership interest in CDR. Cost recovery income of $1.0 million and $1.1 million was received by CDR for the years ended December 31, 2025 and 2024, respectively. The distribution to CDR’s non-controlling shareholders through non-controlling interest is part of an agreement between CRM and CDR.
Taxes
Income tax expense is recorded relative to the jurisdictions that recognize book earnings. During the year ended December 31, 2025, we recognized income tax expense of $2.7 million on pre-tax loss of ($51.1) million, representing an effective income tax rate of (5.4%), compared to an income tax expense of $26.6 million on pre-tax loss of ($119.9) million, representing an effective income tax rate of (22.2%), for the year ended December 31, 2024. For further discussion of our effective income tax rates and an analysis of our effective income tax rate compared to the US federal statutory income tax rate, see Note 12 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.
LIQUIDITY AND CAPITAL RESOURCES
Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow. We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities. When necessary and available, we supplement the cash flows generated by our operations with either cash on hand or funds provided by bank borrowings, other debt or equity financing activities or funding arrangements with third-party partners, such as VICI PropCo in connection with our casino project in Caruthersville.
Cash Flows – Summary
Our cash flows; cash, cash equivalents and restricted cash; and working capital consisted of the following:
For the year
ended December 31,
Amounts in thousands
Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash used in financing activities
As of December 31,
Amounts in thousands
Cash, cash equivalents and restricted cash (1)
Working capital (2)
(1) Cash, cash equivalents and restricted cash as of December 31, 2024 included $2.7 million previously funded by VICI PropCo that had not been spent on our Caruthersville project as of such date.
(2) Working capital is defined as current assets minus current liabilities.
Operating Activities
Trends in our operating cash flows tend to follow trends in earnings from operations excluding non-cash charges, offset by cash rent, income tax payments and interest payments on our long-term debt. Please refer also to the consolidated statements of cash flows in the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report and to management’s discussion of the results of operations above in this Item 7 for a discussion of earnings from operations.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 consisted of $0.7 million for a casino license in Poland, $2.7 million in slot machines and gaming related purchases for our US properties, $0.7 million for exterior renovations at our Cripple Creek property in Colorado, $0.7 million in exterior renovations at Mountaineer in West Virginia, $0.2 million for bar renovations and $0.7 million for façade and parking lot improvements at Rocky Gap in Maryland, $0.4 million for the sportsbook in Cape Girardeau, $4.0 million for our casino project in Caruthersville, Missouri, $3.4 million in elevator upgrades and $0.2 million to renovate event space at the Nugget in Nevada, $0.7 million in racing related updates at Century Downs and $0.7 million in exterior renovations at St. Albert in Canada, $1.6 million to renovate the new Wroclaw casino and $0.5 million to renovate the Bielsko-Biala casino in Poland, and $5.5 million in other fixed asset additions at our properties, offset by $0.2 million collected on a note receivable and $0.2 million in proceeds from the disposal of assets.
Net cash used in investing activities for the year ended December 31, 2024 consisted of $1.8 million for casino licenses in Poland, $4.9 million in slot machine purchases at our US properties, $0.3 million in various renovations to the Mountaineer property in West Virginia, $11.1 million for our hotel project and $0.5 million to add a Starbucks location in Cape Girardeau, $30.0 million for our casino project in Caruthersville, $0.3 million for a high limit room, $0.1 million for sportsbook improvements and $0.5 million in various renovations in Nevada, $0.5 million in gaming-related purchases and $0.7 million in hotel and exterior renovations at our Colorado properties, $1.9 million related to racing related updates at Century Downs, $0.6 million in various renovations at St. Albert in Canada, $4.9 million in renovations on the new Wroclaw casino location in Poland and $3.0 million in other fixed asset additions at our properties, offset by $0.1 million in proceeds from the disposal of assets and less than $0.1 million collected on a note receivable.
Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 consisted of $8.6 million in distributions to non-controlling interests in CDR, CPL and Smooth Bourbon, $4.0 million to repurchase and retire shares of our common stock and $2.8 million of principal payments net of proceeds from borrowings.
Net cash used in financing activities for the year ended December 31, 2024 consisted of $8.8 million in distributions to non-controlling interests in CDR, CPL and Smooth Bourbon, and $0.2 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards, offset by $4.7 million in proceeds from borrowings net of principal payments, of which $11.8 million consisted of proceeds from borrowings from VICI PropCo for the Caruthersville project.
Borrowings and Repayments of Long-Term Debt and Lease Agreements
As of December 31, 2025, our total debt under bank borrowings and other agreements net of $8.8 million related to deferred financing costs was $328.9 million, of which $321.4 million was long-term debt and $7.6 million was the current portion of long-term debt. The current portion relates to payments due within one year under our Goldman Credit Agreement, the CPL Credit Agreement and the CPL Credit Facility. The Goldman Credit Agreement provides for a $350.0 million Goldman Term Loan and a $30.0 million Revolving Facility. We intend to repay the current portion of our debt obligations with available cash. If opportunities to repurchase debt at a discount are offered, as occurred in February 2024 when we repurchased approximately $3.5 million under our Goldman Term Loan for 97% of its value, we may undertake such repurchases. We also may seek to refinance our debt if market conditions allow. For a description of our debt agreements, see Note 5 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report. Net Debt was $268.8 million as of December 31, 2025 compared to $240.8 million as of December 31, 2024. The increase in net debt is primarily due to decreased cash. For the definition and reconciliation of Net Debt to the most directly comparable US GAAP measure, see “Non-GAAP Measures Definitions and Calculations – Net Debt” above in this Item 7.
The following table lists the 2026 maturities of our debt:
Amounts in thousands
Goldman Term Loan (1)
CPL Credit Agreement (2)
CPL Credit Facility (3)
Total
(1) The Goldman Term Loan requires scheduled quarterly payments of $875,000, equal to 0.25% of the original aggregate principal amount of the Term Loan, with the balance due at maturity.
(2) The CPL Credit Agreement could be borrowed against through January 29, 2026. The repayments above are based on the payment schedule set forth in the agreement of PLN 83,000 per month (approximately $23,000 per month based on the exchange rate in effect as of December 31, 2025).
(3) The CPL Credit Facility is a line of credit available through June 2026. There is no set repayment schedule for the line of credit. We have included the balance in 2026 based on our planned repayment schedule.
Estimated interest payments based on principal amounts and expected maturities of long-term debt outstanding and management’s forecasted rates for our long-term debt agreements for the year ending December 31, 2026 are $33.2 million. Estimated interest payments do not reflect the impact of future foreign exchange rate changes.
Cash payments due under the Master Lease for 2026 are estimated to be $67.3 million, which includes a CPI increase and deferred rent on the Caruthersville project that will be repaid through May 2026. Estimated cash payments to the non-controlling partners under the lease between Smooth Bourbon and the Nugget for 2026 are estimated to be $7.9 million.
The following table details cash payments under the Master Lease, and 50% of the cash payments under the Nugget Lease for the years ended December 31, 2025 and 2024.
For the year ended
December 31,
Amounts in thousands
Master Lease
Nugget Lease (1)
(1) Represents payments with respect to the 50% interest in the Nugget Lease owned by Marnell through Smooth Bourbon. Smooth Bourbon is a 50% owned subsidiary of the Company that owns the real estate assets underlying the Nugget Casino Resort.
Rent expense related to the Master Lease is included in interest expense on our consolidated statements of loss. The Nugget Lease is considered an intercompany lease and income and expense related to the lease are eliminated in consolidation. The 50% interest in the Nugget Lease owned by Marnell through Smooth Bourdon is recorded as non-controlling interest on our consolidated statements of loss.
The following table lists the amount of 2026 payments due under our operating and finance lease agreements:
Amounts in thousands
Operating Leases
Finance Leases
Common Stock Repurchase Program
Since March 2000, our Board has had a discretionary program to repurchase our outstanding common stock. Beginning in May 2025, we have entered into 10b5-1 trading plans (the “Plans”) for the purpose of repurchasing shares of our outstanding common stock in accordance with the share repurchase program previously authorized by the Board. The Plans are intended to comply with Rule 10b5-1(c) under the Exchange Act. Repurchases of common stock under the Plans are being administered through an independent broker and are subject to certain price, market, volume and timing constraints specified in the Plans.
The Plan announced May 14, 2025 expired by its terms on July 31, 2025, and the Plan announced August 11, 2025 expired by its terms on December 31, 2025. Our current Plan was announced on January 2, 2026. The current Plan authorizes the repurchase of up to $1.5 million of shares of our outstanding common stock and expires by its terms on May 10, 2026. During the year ended December 31, 2025, we repurchased and retired 1,951,955 shares of our common stock for $4.0 million on the open market under the Plans . We intend to engage in additional stock repurchases through our current Plan that expires in May 2026 and also may undertake additional stock repurchases in the future. See Part II, Item 5 of this report for additional details.
Potential Sources and Uses of Liquidity, and Short-Term and Long-Term Liquidity
Historically, our primary source of liquidity and capital resources has been cash flow from operations. As of December 31, 2025, we had $68.9 million in cash and cash equivalents compared to $98.8 million in cash and cash equivalents at December 31, 2024. Cash and cash equivalents decreased primarily due to net cash used in investing activities of $22.3 million as discussed in “Investing Activities” above, including capital expenditures. Capital expenditures in 2025 were approximately $22.0 million . We plan to decrease our 2026 capital expenditures and estimate capital expenditures in 2026 to be approximately $14.7 million, including elevator upgrades at the Nugget and other maintenance expenditures at our properties. We may also utilize available cash to pay down debt or repurchase our common stock.
A substantial portion of our operating cash flow also is used to fund our debt repayments and lease payments as described in “Borrowings and Repayments of Long-Term Debt and Lease Agreements” above. When necessary and available, we supplement the cash flows generated by our operations with funds provided by bank borrowings or other debt or equity financing activities. If we have aggregate outstanding revolving loans, swingline loans, and letters of credit under the Goldman Credit Agreement greater than $10.5 million as of the last day of any fiscal quarter, we are required to maintain a Consolidated First Lien Net Leverage Ratio of 5.50 to 1.00 or less for such fiscal quarter. We had no outstanding revolving loans, swingline loans, or letters of credit as of December 31, 2025, and therefore the Consolidated First Lien Net Leverage Ratio requirement did not apply. As of December 31, 2025, we had $30.0 million available on our Revolving Facility. S ee Note 5, “Long-Term Debt” to the Consolidated Financial Statements included in Part II, Item 8 of this report.
We may be required to raise additional capital to address our liquidity and capital needs. We have a shelf registration statement with the SEC that became effective in June 2023 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities. We intend to renew the shelf registration statement in 2026.
If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks, sale and leaseback transactions of property we own or acquire, or other debt financings or refinancings or equity financings to supplement our working capital and investing requirements. Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. A financing transaction may not be available on terms acceptable to us, or at all, and a financing transaction may be dilutive to our current stockholders. The failure to raise the funds necessary to fund our debt service and rent obligations and finance our operations and other capital requirements could have a material and adverse effect on our business, financial condition and liquidity.
We estimate that approximately $36.7 million of our total $68.9 million in cash and cash equivalents at December 31, 2025 is held by our foreign subsidiaries, of which $21.4 million, including $8.8 million in casino cash, is held by our Canadian subsidiaries and $3.7 million, including $3.4 million in casino cash, is held by our Poland subsidiary, and the remaining $11.5 million is held by our foreign corporate subsidiaries. The cash and cash equivalents held by our foreign subsidiaries are not available to fund US operations unless repatriated. Due to management’s anticipation of repatriating certain current earnings from its foreign subsidiaries, we recorded a deferred tax liability of $4.2 million for the foreign withholding tax required on a potential cash dividend to the US related to earnings from the sale and leaseback of our Canadian properties in 2023, as well as current earnings from foreign subsidiaries.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our consolidated financial statements.
Critical Accounting Estimates
Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements. To prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we must make estimates and assumptions that affect the amounts reported in the consolidated financial statements. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this report. Critical estimates inherent in these accounting policies are discussed in the following paragraphs.
Property and Equipment – We have significant capital invested in our property and equipment, which represented approximately 81% of our total assets as of December 31, 2025. Judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation expense recognized in our financial results and the extent to which we have a gain or loss on the disposal of the asset. We assign lives to our assets based on our standard policy, which we believe is representative of the useful life of each category of assets. As of December 31, 2025, we have made no changes to our estimates related to useful lives.
We use judgment in estimating future cash flows when we review the carrying value of our property and equipment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable. The factors we consider in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition and other economic factors. The accuracy of these estimates affects the carrying value of our property and equipment on our consolidated balance sheets. As of December 31, 2025, we believe that our investments in property and equipment are recoverable.
Goodwill and Intangible Assets – We test goodwill and indefinite-lived intangible assets for impairment as of October 1 each year, or more frequently as circumstances indicate it is necessary. Our identifiable intangible assets include trademarks, player’s club lists and casino licenses. Testing compares the estimated fair values of our reporting units to the reporting units’ carrying values. Assessing goodwill and intangible assets for impairment requires significant judgment and involves detailed qualitative and quantitative business-specific analysis and many individual assumptions that may fluctuate between assessments. Our properties’ estimated future cash flows are a primary assumption in the respective impairment analyses. Cash flow estimates include assumptions regarding factors such as recent and budgeted operating performance, growth percentages as well as competitive impacts from current and anticipated competition, operating margins and current regulatory, social and economic climates. The most significant of the assumptions used in our valuations include revenue growth/decline percentages, discount rates, future terminal values and capital expenditure assumptions. These assumptions are developed for each property based on historical trends, the current markets in which they operate and projections of future performance and competition.
We believe we have used reasonable estimates and assumptions to calculate the fair value of our goodwill and indefinite-lived intangible assets; however, these estimates and assumptions could be materially different from actual results. Unforeseen events, changes in circumstances and market conditions and material differences in estimates of future cash flows could negatively affect the fair value of our assets. If actual market conditions are less favorable than those projected, or if events occur or circumstances change that could reduce the fair value of our goodwill of intangible assets below the carrying value, we will recognize an impairment for the amount by which the carrying value exceeds the reporting unit’s fair value, which may be material.
Our reporting units with goodwill balances as of December 31, 2025 are included within the Canada and Poland reportable segments. We performed a qualitative goodwill impairment test of each reporting unit with goodwill balances using a combination of (i) actual results compared to previously forecast estimates and (ii) analysis of the markets in which the casinos operate. A downturn in the economies in which these casinos operate could negatively affect key assumptions management used in its analysis. We make a variety of estimates and judgments about the relevance of these factors to the reporting units in estimating their fair values.
During 2024 we determined that goodwill at the Nugget and Rocky Gap was impaired. The impairments resulted in a $70.2 million impairment of goodwill for the year ended December 31, 2024. For information about the impairments, see Note 4 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.
Our indefinite-lived intangible assets are not amortized. We performed a qualitative impairment test of each reporting unit with indefinite-lived intangible assets using a combination of (i) actual results compared to previously forecast estimates and (ii) analysis of the markets in which the casinos operate. A downturn in the economies in which these casinos operate could negatively affect key assumptions management used in its analysis.
Our finite-lived intangible assets are amortized over their respective useful lives. Finite-lived intangibles are evaluated for impairment annually or more frequently if necessary. There were no impairment charges recorded for the finite-lived intangible assets for the periods presented in this report.
Income Taxes – The determination of our provision for income taxes requires management’s judgment in the use of estimates and the interpretation and application of complex tax laws. Judgment is also required in assessing the timing and amounts of deductible and taxable items. We establish contingency reserves for material, known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item. Our reserves reflect our judgment as to the resolution of the issues involved if subject to judicial review. Several years may elapse before a particular matter, for which we have established a reserve, is audited and finally resolved or clarified. While we believe that our reserves are adequate to cover reasonably expected tax risks, issues raised by a tax authority may be finally resolved at an amount different from the related reserve. Such differences could materially increase or decrease our income tax provision in the current and/or future periods. When facts and circumstances change (including a resolution of an issue or statute of limitations expiration), these reserves are adjusted through the provision for income taxes in the period of change. To the extent we determine that we will not realize the benefit of some or all of the deferred tax assets, then these assets will be adjusted through our provision for income taxes in the period in which this determination is made.
Additionally, evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all the positive and negative evidence available to determine whether all or some portion of deferred tax assets will not be realized. Because management believes it is more likely than not that the benefit from certain deferred tax assets will not be realized, a valuation allowance of $11.5 million and $11.0 million as of December 31, 2025 and 2024, respectively, in foreign jurisdictions has been recorded in recognition of these risks. Further, a valuation allowance of $70.4 million and $55.7 million as of December 31, 2025 and 2024, respectively, has been recorded to recognize the portion of US deferred tax assets more likely than not to be realized.
We have recorded a deferred tax liability of $4.2 million on the estimated foreign withholding tax required as part of a cash dividend to the US related to earnings from the sale and leaseback of our Canadian properties in 2023, as well as current earnings from foreign subsidiaries. Management continues to consider historical foreign earnings in Canada, as well as accumulated earnings in other jurisdictions, indefinitely reinvested outside of the US.
