Century Casinos Inc: Form 10-Q for the period ended Sep 30, 2025

Forward-Looking Statements, Business Environment and Risk Factors

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, 2024. 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.

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, and the term “PLN” refers to Polish zloty. Certain terms used in this Item 2 without definition are defined in Item 1. Amounts presented in this Item 2 are rounded. As such, rounding differences could occur in period over period changes and percentages reported throughout this Item 2.

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.

We aggregate all operating segments into three reportable segments based on the geographical locations in which our casinos operate: United States, Canada and Poland. We have additional business activities including certain other corporate and management operations that we report as Corporate and Other. In the United States, we view our operating segments as East, Midwest and West. 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.

(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.

(2) Corporate and Other is not a reportable segment and is presented for reconciliation purposes only.

We have controlling financial interests through our subsidiary CRM in the following reporting units:

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. CDR is the only horse racetrack in the Calgary area and is located less than one mile north of the city limits of Calgary and seven miles from the Calgary International Airport.

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, 2025, CPL had casino licenses for six casinos and operated five casinos throughout Poland. We closed the Hilton Hotel casino in Warsaw in June 2025 after we were notified that we had not received a new license for the casino. The following table summarizes information about CPL’s casinos as of September 30, 2025.

(1) 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 received regulatory approval to reopen the full gaming floor at the Katowice casino in May 2025.

(2) 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 in October 2024.

(3) We were awarded a license for a second location in Wroclaw in March 2025. We anticipate opening the casino in January 2026 with 50 slot machines and four table games.

Through our wholly-owned subsidiary Century Nevada Acquisition, Inc., we have a 50% equity interest in Smooth Bourbon, LLC (“Smooth Bourbon”) which we consolidate as a subsidiary for which we have a controlling financial interest. The remaining 50% of Smooth Bourbon is owned by Marnell Gaming, LLC (“Marnell”) and is reported as a non-controlling financial interest.

Restatement of Previously Issued Consolidated Financial Statements

We concluded that our previously issued consolidated financial statements for the year ended December 31, 2024 should be restated to reflect the correction of a calculation of the carrying value of invested capital used in the valuation of our Rocky Gap reporting unit that resulted in an impairment of goodwill for this reporting unit of $26.5 million in the fourth quarter of the year ended December 31, 2024. Certain previously issued financial statements as and for the year ended December 31, 2024 and the quarters ended March 31, 2025 and June 30, 2025 were restated. The restated periods do not affect the financial statements presented in this Form 10-Q. See also Part I, Item 4, “Controls and Procedures,” of this report.

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 the US government shutdown, 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

Sports Betting – Missouri

In May 2025, we announced that we have partnered with BetMGM to operate an online and mobile sports betting application under our license in Missouri. The agreement includes a percentage of net gaming revenue payable to us, with a guaranteed minimum, as well as retail sportsbook options to be exercised at our discretion. Sports betting is expected to begin in Missouri on December 1, 2025.

Caruthersville Land-Based Casino

On November 1, 2024, we opened our new land-based casino with a 38 room hotel in Caruthersville, Missouri. 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. We previously amended our Master Lease in December 2022 to provide for an increase in initial annualized rent of approximately $4.2 million upon completion of the Caruthersville project. See Part I, Item 1. Note 5, “Long-Term Financing Obligation” for a discussion of the Master Lease as amended to date.

Cape Girardeau Hotel

On April 4, 2024, we opened our 69 room hotel at our Cape Girardeau location called The Riverview. The Riverview is a six story building with 68,000 square feet that is adjacent to and connected with the existing casino building. The project cost approximately $30.5 million. We financed the project with cash on hand.

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.

Strategic Review Process

In August 2025, we announced that our Board of Directors (the “Board”) initiated a comprehensive strategic review of our operations, capital structure and strategic growth options. The review will explore 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.

Presentation of Foreign Currency Amounts

The average exchange rates to the US dollar used to translate balances during each reported period are as follows:

We recognize in our condensed consolidated statements 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 these operations are generally denominated in Canadian dollars and Polish zloty. 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.

DISCUSSION OF RESULTS

Century Casinos, Inc. and Subsidiaries

Amounts in thousands

(1) For a discussion of Adjusted EBITDAR and reconciliation of Adjusted EBITDAR to net loss attributable to Century Casinos, Inc. shareholders, see “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” below.

Comparability Impacts

Items impacting comparability of the results include the following:

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.

Sports Betting (Colorado) – In 2024, we mutually agreed to cancel two of our sports betting agreements in Colorado. The Circa Sports agreement was terminated in May 2024 and the Tipico agreement was terminated in July 2024 after its exit from the U.S. market. Prior to the termination of the agreements, revenue from these agreements was $1.8 million per year in our United States segment. As part of the Circa Sports 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 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.

Weather – Increased 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 ($2.0) million, or (1.3%), and by ($3.2) million, or (0.7%), for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024. Following is a breakout of net operating revenue by segment for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

United States decreased by ($2.1) million, or (1.8%), and by ($5.3) million, or (1.7%).

Canada increased by $0.3 million, or 1.5%, and decreased by ($1.3) million, or (2.3%).

Poland decreased by ($0.1) million, or (0.8%), and increased by $3.5 million, or 5.7%.

Corporate and Other remained constant.

Operating costs and expenses decreased by ($1.2) million, or (0.9%), and by ($3.5) million, or (0.9%), for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024. Following is a breakout of operating costs and expenses by segment for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

United States decreased by ($2.0) million, or (2.0%), and by ($4.6) million, or (1.7%).

Canada decreased by ($0.1) million, or (0.9%), and by ($1.3) million, or (2.8%).

Poland increased by $0.4 million, or 2.1%, and by $3.5 million, or 5.6%.

Corporate and Other increased by $0.5 million, or 18.7%, and decreased by ($1.1) million, or (9.7%).

Earnings from operations decreased by ($0.8) million, or (4.4%), and increased by $0.4 million, or 0.9%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024. Following is a breakout of earnings from operations by segment for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

United States decreased by ($0.2) million, or (0.8%), and by ($0.7) million, or (1.6%).

Canada increased by $0.5 million, or 12.1%, and remained constant.

Poland loss from operations increased by $0.6 million, or 46.2%, and remained constant.

Corporate and Other loss from operations increased by $0.5 million, or 18.7%, and decreased by ($1.1) million, or (9.6%).

Net loss attributable to Century Casinos, Inc. shareholders increased by $2.4 million, or 29.9%, and decreased by ($19.8) million, or (31.3%), for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 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. Interest expense, primarily from the Master Lease, negatively impacts net loss attributable to Century Casinos, Inc. shareholders. Income tax expense decreased significantly for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to the valuation allowance noted above. For a discussion of these items, see “Non-Operating (Expense) Income” and “Taxes” below in this Item 2 and Note 7, “Income Taxes,” to our condensed consolidated financial statements included in Part I, Item 1 of this report.

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-US 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 (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”).

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-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.

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.

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

Amounts in thousands

(1) See “Non-Operating (Expense) Income – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

Amounts in thousands

(1) See “Non-Operating (Expense) Income – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

Amounts in thousands

(1) See “Non-Operating (Expense) Income – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

(2) Includes $1.0 million related to cost recovery income for CDR in the Canada segment.

Amounts in thousands

(1) See “Non-Operating (Expense) Income – Interest income” and “– Interest expense” below for a breakdown of interest expense (income), net and “Liquidity and Capital Resources” below for more information on the rent payments related to the Master Lease.

(2) Includes $1.1 million related to cost recovery income for CDR in the Canada segment.

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 if it became due simultaneously. The reconciliation of Net Debt is presented below.

Amounts in thousands

Reportable Segments

The following discussion provides further detail of consolidated results by reportable segment.

Amounts in thousands

We opened the new land-based casino and hotel in Caruthersville on November 1, 2024. The casino has 574 slot machines and nine live table games, which is almost 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 building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau.

The Happy Valley Casino in Pennsylvania is expected to open in early 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 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. Sports betting in Missouri was approved by voters in November 2024, and we have partnered with BetMGM to conduct online sports betting at our Missouri casinos with an option for a retail sportsbook. Sports betting is expected to begin in Missouri on December 1, 2025.

As stated above, two of our sports betting agreements in Colorado were terminated in May 2024 and July 2024. Revenue from these agreements was $0.8 million for the nine months ended September 30, 2024 in our United States segment. As part of the Circa Sports 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, we 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 $1.8 million per year in our United States segment.

The Cripple Creek and Central City casinos in Colorado stopped offering table games in January 2025. Through September 2025, the removal of table games has not impacted earnings from operations at our Colorado casinos as the expense savings have offset the decrease in revenue. Table games revenue in Colorado was $0.4 million and $1.3 million for the three and nine months ended September 30, 2024, respectively.

The table below provides results by operating segment within the United States reportable segment.

Amounts in millions

(1) Operating costs and expenses are calculated for this table as total operating costs and expenses less depreciation and amortization.

Three Months Ended September 30, 2025 and 2024

The following discussion highlights results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

East – Increased net operating revenue was primarily due to increased pari-mutuel revenue at our Mountaineer property and increased gaming and hotel revenue at our Rocky Gap property, offset by decreased gaming revenue at Mountaineer and increased promotional allowances at Rocky Gap. The increased hotel revenue at Rocky Gap was partially due to increases in room rates. Increased operating costs and expenses were due to increased payroll expense.

Midwest – In Missouri, net operating revenue increased by approximately $2.8 million primarily due to increased revenue at our new casino in Caruthersville. The increases in Missouri were partially offset by decreased net operating revenue of approximately $1.6 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, and decreased gaming revenue in Cripple Creek. Operating expenses in the Midwest operating segment remained relatively constant.

West – Net operating revenue at the Nugget decreased primarily due to fewer events held at our outdoor event center as well as decreased hotel and food and beverage revenue. We continue to focus our efforts on marketing group and convention sales for the hotel and on our new loyalty program in an effort to drive revenue growth. Operating costs and expenses decreased primarily due to decreased production costs as a result of fewer events at our outdoor event center.

Nine Months Ended September 30, 2025 and 2024

The following discussion highlights results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Winter weather negatively impacted all US properties during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

East – Decreased net operating revenue was due to increased promotional allowances at both properties, offset by increased gaming revenue, increased hotel revenue due to increases in room rates at both properties 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 is due to decreased gaming-related, maintenance and insurance expenses offset by increased payroll expense.

Midwest – In Missouri, net operating revenue increased by approximately $8.6 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. The increases in Missouri were offset by decreased net operating revenue of approximately $6.1 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, offset by decreased payroll and gaming-related expenses at the Colorado locations due to the closure of table games.

West – Net operating revenue at the Nugget decreased primarily due to fewer events held our outdoor event center as well as decreased hotel and food and beverage revenue. 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 due to the cost saving measures and operating efficiencies we began implementing mid-April 2024 and decreased production costs as a result of fewer events at our outdoor event center. The cost saving measures included staffing changes and changes to hotel operations.

A reconciliation of net earnings (loss) attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR for this reportable segment can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above

Amounts in thousands

In February 2023, the AGLC, Alberta’s gaming regulatory agency, approved a temporary increase from 15% of slot machine net sales retained by casinos to 17% effective from April 1, 2023 through March 31, 2025. In December 2024, the temporary increase was extended through March 31, 2026.

A competitor is requesting to relocate their casino from a city about 50 miles southeast of Edmonton to south Edmonton, approximately 11 miles from our Century Mile property. Additional approvals are needed before the project begins and we anticipate construction could take approximately two years if the project is approved. 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.

Results in US dollars were impacted by a (1.0%) and (2.9%) decrease in the average exchange rate between the US dollar and Canadian dollar for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively.

The tables below provide results for the Canada reportable segment.

Amounts in CAD, in millions

Amounts in USD, in millions

(1) Operating costs and expenses are calculated for this table as total operating costs and expenses less depreciation and amortization.

Three Months Ended September 30, 2025 and 2024

The following discussion highlights results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Explanations below are provided based on CAD results.

Net operating revenue increased primarily due to increased pari-mutuel revenue at both of our racetracks. Operating costs and expenses remained relatively constant.

Nine Months Ended September 30, 2025 and 2024

The following discussion highlights results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Explanations below are provided based on CAD results.

Net operating revenue and operating costs and expenses remained relatively constant.

A reconciliation of net earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR for this reportable segment can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Amounts in thousands

40

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 expirations during the periods discussed in this Item 2.

(1) The Katowice casino reopened with a reduced gaming floor in March 2024. The full gaming floor was reopened in May 2025 following regulatory approval.

(2) The Wroclaw casino reopened at a new location following the closure. We were awarded a second license in Wroclaw in March 2025 and expect to open the second casino in Wroclaw in January 2026.

(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.

Results in US dollars were impacted by a 6.5% and 4.1% increase in the average exchange rate between the US dollar and Polish zloty for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively.

The tables below provide results for the Poland reportable segment.

Amounts in PLN, in millions

Amounts in USD, in millions

(1) Operating costs and expenses are calculated for this table as total operating costs and expenses less depreciation and amortization.

Three Months Ended September 30, 2025 and 2024

The following discussion highlights results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Explanations below are provided based on PLN results.

Net operating revenue decreased primarily due to the closure of the casino at the Hilton Hotel in Warsaw, which was partially offset by increased revenue at the Warsaw Presidential Hotel and increased revenue at the casino in Wroclaw that reopened in October 2024. Operating costs and expenses decreased due to decreased gaming-related expenses and decreased payroll expense, primarily due to the closure of the casino at the Hilton Hotel in Warsaw.

Nine Months Ended September 30, 2025 and 2024

The following discussion highlights results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Explanations below are provided based on PLN results.

Net operating revenue increased primarily due to the casinos that reopened in 2024 in Wroclaw, Bielsko-Biala and Katowice, offset by decreased revenue due to licensing-related closures of our LIM Center and Krakow casinos and Hilton Hotel casino in Warsaw. 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 increased due to increased gaming-related expenses and additional costs related to the closure of the casino at the Hilton Hotel in Warsaw.

A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR for this reportable segment can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Amounts in thousands

Three Months and Nine Months Ended September 30, 2025 and 2024

The following discussion highlights results for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

Total operating costs and expenses, including general and administrative expenses, for the three months ended September 30, 2025 increased due to increased stock compensation expense. Total operating costs and expenses for the nine months ended September 30, 2025 decreased primarily due to lower accounting and insurance costs offset by increased stock compensation expense. Net loss attributable to Century Casinos, Inc. shareholders is driven primarily by interest expense under the Goldman Credit Agreement.

Corporate and Other is presented for reconciliation purposes only in the reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDAR for this segment can be found in the “Non-US GAAP Measures Definitions and Calculations – Adjusted EBITDAR” discussion above.

Non-Operating (Expense) Income

Non-operating (expense) income was as follows:

Amounts in thousands

Interest income

Interest income is primarily 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, the UniCredit Term Loan, CPL’s credit facility, our financing obligation under the Master Lease with VICI PropCo, deferred financing costs and our finance lease agreements. Interest expense in the United States and Canada reportable segments primarily relates to the Master Lease. Interest expense in the Corporate and Other segment primarily relates to the Goldman Credit Agreement.

A breakdown of interest expense is below.

Amounts in thousands

(Loss) 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 was received by CDR for the nine months ended September 30, 2025 related to infrastructure built during the development of the Century Downs REC project. The distribution to CDR’s non-controlling shareholders is part of an agreement between CRM and CDR. Cost recovery income of $1.1 million was received by CDR for the nine months ended September 30, 2024.

Taxes

Income tax expense is recorded relative to the jurisdictions that recognize book earnings. During the nine months ended September 30, 2025, we recognized income tax expense of $2.2 million on pre-tax loss of ($35.7) million, representing an effective income tax rate of (6.0%) compared to an income tax expense of $25.3 million on pre-tax loss of ($32.1) million, representing an effective income tax rate of (78.7%) for the same period in 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 7, “Income Taxes,” to our condensed consolidated financial statements included in Part I, Item 1 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:

Amounts in thousands

Amounts in thousands

(1) Cash, cash equivalents and restricted cash as of September 30, 2025 and 2024 included $0.2 million and $11.0 million, respectively, of cash 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 to the condensed consolidated statements of cash flows in Part I, Item 1 of this Form 10-Q and to management’s discussion of the results of operations above in this Item 2 for a discussion of earnings from operations.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 consisted of $0.7 million for a casino license in Poland, $2.5 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 at Rocky Gap in Maryland, $3.8 million for our casino project in Caruthersville, Missouri, $3.4 million in elevator upgrades 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, $1.0 million to renovate the new Wroclaw casino and $0.3 million to renovate the Bielsko-Biala casino in Poland, and $3.4 million in other fixed asset additions at our properties, offset by $0.2 million collected on a note receivable and $0.1 million in proceeds from the disposal of assets.

Net cash used in investing activities for the nine months ended September 30, 2024 consisted of $1.8 million for casino licenses in Poland, $4.2 million in slot machines and gaming related purchases for our US properties, $0.1 million in exterior renovations and $0.1 million for various hotel renovations to the Mountaineer property in West Virginia, $0.1 million for beach access, and $0.2 million in golf equipment for the Rocky Gap property in Maryland, $10.9 million for our hotel project and $0.2 million to add Starbucks in Cape Girardeau, $20.2 million for our casino project in Caruthersville, $0.5 million for a high limit room, $0.2 million for sportsbook improvements and $0.5 million in various renovations in Nevada, and $0.3 million in hotel renovations at our Colorado properties, $0.6 million related to racing related updates at Century Downs, $0.2 million in restaurant renovations at St. Albert and $0.1 million related to racing related updates at Century Mile in Canada, $1.9 million in renovations on the new Wroclaw casino location and $0.2 million for improvements at the Krakow casino location in Poland and $4.1 million in other fixed asset additions at our properties, offset by $0.1 million in proceeds from the disposal of assets.

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2025 consisted of $6.6 million in distributions to non-controlling interests, $2.5 million to repurchase and retire shares of our common stock and $1.6 million of principal payments net of proceeds from borrowings.

Net cash used in financing activities for the nine months ended September 30, 2024 consisted of $6.9 million in distributions to non-controlling interests and $0.2 million to repurchase shares to satisfy tax withholding related to our performance stock unit awards, offset by $4.5 million in proceeds from borrowings net of principal payments, including $11.8 million of proceeds from borrowings from VICI PropCo for the Caruthersville project.

Borrowings and Repayments of Long-Term Debt and Lease Agreements

As of September 30, 2025, our total debt under bank borrowings and other agreements, net of $9.4 million related to deferred financing costs, was $329.3 million, of which $321.3 million was long-term debt and $8.0 million was the current portion of long-term debt. The current portion relates to payments due within one year under our Goldman Credit Agreement, CPL Credit Facility, and the UniCredit Term Loan. Our Goldman Credit Agreement provides for a $350.0 million Term Loan, drawn in April 2022, and a $30.0 million Revolving Facility. No amounts are currently outstanding under the Revolving Facility. The CPL Credit Facility is a PLN 15.0 million ($4.1 million based on the exchange rate in effect on September 30, 2025) line of credit available through June 2026. For a description of our debt agreements, see Note 4, “Long-Term Debt” to our condensed consolidated financial statements included in Part I, Item 1 of this report. Net Debt was $261.1 million as of September 30, 2025 compared to $220.9 million as of September 30, 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-US GAAP Measures Definitions and Calculations – Net Debt” above.

The following table lists the amount of 2025 maturities of our debt as of September 30, 2025:

Amounts in thousands

(1) The Goldman Term Loan requires scheduled quarterly payments of $875,000, equal to 0.25% of the original aggregate principal amount of the Goldman Term Loan, with the balance due at maturity.

(2) 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 2025 based on our planned repayment schedule.

The following table lists the amount of remaining 2025 payments due under our operating and finance lease agreements:

Amounts in thousands

As of September 30, 2025, estimated cash payments due under the Master Lease for the remainder of 2025 are $15.5 million, which includes a CPI increase and a portion of the deferred Caruthersville rent increase. We have elected to defer the cash payments of $4.2 million in annual increased rent related to the Caruthersville project for 12 months and the deferred rent will be paid over a six month period beginning in December 2025. Estimated cash payments to the non-controlling partners under the lease between Smooth Bourbon and Nugget (the “Nugget Lease”) for the remainder of 2025 are $2.0 million.

The following table details cash payments under the Master Lease and 50% of the cash payments under the Nugget Lease for the three and nine months ended September 30, 2025 and three and nine months ended September 30, 2024.

Amounts in thousands

(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 condensed 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 Bourbon is recorded as non-controlling interest on our condensed consolidated statements of loss.

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 previous 10b5-1 plan announced May 14, 2025, expired by its terms on July 31, 2025. Our current 10b5-1 trading plan was announced on August 11, 2025. The current plan authorized the repurchase of up to $2.5 million of shares of our outstanding common stock and expires by its terms on December 31, 2025. During the nine months ended September 30, 2025, we repurchased and retired 1,029,657 shares of our common stock for $2.5 million on the open market under the Plans. The total amount remaining under the current plan was $1.5 million as of September 30, 2025. We intend to engage in additional stock repurchases. See Part II, Item 2 of this report for additional details.

Potential Sources and Uses of Liquidity and Short-Term Liquidity

Historically, our primary source of liquidity and capital resources has been cash flow from operations. As of September 30, 2025, we had $77.7 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 $17.8 million as discussed in “Investing Activities” above, including capital expenditures. We estimate that we have spent approximately 84% of our planned capital expenditures for 2025 through September 30, 2025. Remaining capital expenditures for 2025 are estimated to be approximately $3.2 million. Poland is negotiating a loan with mBank for PLN 4.0 million ($1.1 million based on the exchange rate in effect on September 30, 2025) for construction financing for the new casino in Wroclaw. We opened the new land-based casino and hotel at Century Casino Caruthersville on November 1, 2024. The project cost approximately $51.9 million and was funded with financing provided by VICI PropCo in conjunction with the Master Lease. We estimate approximately $0.2 million in remaining cash payments related to the Caruthersville project will be paid in 2025.

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 September 30, 2025, and therefore the Consolidated First Lien Net Leverage Ratio requirement did not apply. As of September 30, 2025, we had $30.0 million available on our Revolving Facility. See Note 4, “Long-Term Debt” to our condensed consolidated financial statements included in Part I, Item 1 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 or other debt or equity financings to supplement our working capital and investing requirements. Our access to and cost of financing will depend on, among other things, our financial performance and prospects, global economic conditions, conditions in the financing markets, the availability of sufficient amounts of financing, 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 $43.0 million of our total $77.7 million in cash and cash equivalents at September 30, 2025 is held by our foreign subsidiaries, of which $23.1 million, including $7.6 million in casino cash, is held by our Canadian subsidiaries and $3.5 million, including $2.6 million in casino cash, is held by our Poland subsidiary, the remaining $16.4 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. We expect to incur withholding tax on future repatriation of current earnings in certain non-US subsidiaries.

Critical Accounting Estimates

As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.

We had no material changes in our exposure to market risks from that previously reported in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures – Our management, with the participation of our principal executive officers and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, for the period covered by this report. Based on such evaluation, our principal executive officers and principal financial officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2025 because of the material weakness described in "Material Weakness" below.

Notwithstanding the material weakness, and based on the additional analyses and other procedures management performed, we have concluded that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

Material Weakness

We concluded that our internal control over financial reporting was not effective as of December 31, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified the following material weakness in our internal control over financial reporting as of December 31, 2024:

We did not adequately design, implement and maintain effective controls to timely review certain key inputs and assumptions used in the performance of impairment testing and related disclosures.

Remediation plan for material weakness

During impairment testing conducted in connection with its preparation of our financial statements for the three months ended September 30, 2025, we concluded that our previously filed consolidated financial statements for the year ended December 31, 2024 contained a material error related to the calculation of the carrying value of invested capital used in the valuation of the Rocky Gap reporting unit, which resulted in an impairment of goodwill for this reporting unit, and was restated. With the oversight of the Audit Committee of the Board of Directors, management is in the process of developing a detailed remediation plan to address the material weakness. Elements of the plan include the design and implementation of review attributes of the carrying value of invested capital at an increased level of precision of the calculation and additional reviews around assumptions used in the performance impairment testing. While we will devote significant time and attention to these remediation efforts, the material weakness will not be considered remediated until management completes the design and implementation of the actions described above and the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective.

Changes in Internal Control Over Financial Reporting – There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.