Century Casinos Inc /Co/ CNTY US Equity☆

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 document. 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, bowling and entertainment facilities that are in most instances a part of the casinos.

We view each market in which we operate as a separate operating segment and each casino within those markets as a reporting unit. 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 concession agreements and certain other corporate and management operations that we report as Corporate and Other.

The table below provides information about the aggregation of our operating segments and reporting units into reportable segments as of December 31, 2021. 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 real estate assets at our West Virginia and Missouri operating segments are owned by VICI PropCo and leased to us under the Master Lease. The land on which the REC and racetracks at Century Downs and Century Mile are located is leased.

Reportable Segment Operating Segment Reporting Unit

United States Colorado Century Casino & Hotel - Central City

Century Casino & Hotel - Cripple Creek

West Virginia Mountaineer Casino, Racetrack & Resort

Missouri Century Casino Cape Girardeau

Century Casino Caruthersville

Canada Edmonton Century Casino & Hotel - Edmonton

Century Casino St. Albert

Century Mile Racetrack and Casino

Calgary Century Downs Racetrack and Casino

Century Sports

Poland Poland Casinos Poland

Corporate and Other Corporate and Other Cruise Ships & Other

Corporate Other

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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, as of December 31, 2021, owned and operated eight casinos throughout Poland.

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.

Prior to August 2019, we had a 75% controlling financial interest in Century Bets through CRM. In August 2019, we purchased the remaining 25% non-controlling financial interest from Rocky Mountain Turf Club for CAD 0.2 million ($0.2 million based on the exchange rate in effect on August 5, 2019), resulting in CBS becoming a wholly-owned subsidiary. In September 2021, we transferred operation of the southern Alberta pari-mutuel network from CBS to CMR. CMR now operates both the northern and southern Alberta pari-mutuel off-track betting networks.

We also have a concession agreement for ship-based casinos which are detailed further under “Corporate and Other” below.

Recent Developments Related to COVID-19

The COVID-19 pandemic had an adverse effect on our 2020 results of operations and financial condition, and negatively impacted our results of operations to a lesser extent in 2021 because our United States properties were open and operating during this period. Our casinos have varied their operations based on the governmental health and safety requirements in the jurisdictions in which they are located. Our operations currently have limited health and safety requirements for entry.

Although all of our facilities are currently open, temporary closures of all of our facilities during 2020 and some of our facilities in the first half of 2021 due to COVID-19 negatively impacted results for the years ended December 31, 2021 and 2020. We estimate that, for the years ended December 31, 2021 and 2020, net operating revenue was adversely impacted by approximately $35.9 million and $100.5 million, respectively, and Adjusted EBITDA was adversely impacted by approximately $13.1 million and $36.0 million, respectively, due to the closures. See “Discussion of Results” below for a discussion of the impact of the closures in each operating segment.

The duration and impact of the COVID-19 pandemic otherwise remains uncertain. We cannot predict the negative impacts that COVID-19 will have on our consumer demand, workforce, suppliers, contractors and other partners and whether future closures will be required. Such closures have had a material impact on us. The effects of COVID-19, ongoing governmental health and safety requirements and any future closures could have a material impact on us. We will continue to monitor our liquidity and make reductions to marketing and operating expenditures, where possible, if future government mandates or closures are required that would have an adverse impact on us.

2019 Acquisition

On December 6, 2019, we completed the 2019 Acquisition of the operations of Cape Girardeau, Caruthersville and Mountaineer from Eldorado Resorts, Inc. for an aggregate purchase price of approximately $111.9 million, which consisted of $110.7 million at closing and an additional $1.2 million in working capital adjustments. Immediately prior to the 2019 Acquisition, the real estate assets underlying the Acquired Casinos were sold to VICI PropCo, and we and VICI PropCo subsidiaries entered into a triple net Master Lease for the three Acquired Casino properties. See “Master Lease” in Item 2 for more information.

Other Acquisitions and Development Projects

Nugget Casino Resort in Sparks, Nevada

On February 22, 2022, we entered into a definitive agreement with Marnell Gaming, LLC (“Marnell”), pursuant to which a newly formed subsidiary of the Company will purchase from Marnell (i) 50% of the membership interests in Smooth Bourbon, LLC (“PropCo”), and (ii) 100% of the membership interests in Nugget Sparks, LLC (“OpCo”). OpCo owns and operates the Nugget Casino Resort in Sparks, Nevada, and PropCo owns the real property on which the casino is located. At the First Closing (as defined below), PropCo will enter into a lease with OpCo for an annual rent of $15.0 million.

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We will purchase 50% of the membership interests in PropCo for approximately $95.0 million (subject to certain adjustments) at the first closing, which is expected to occur early in the second quarter of 2022 (the “First Closing”). Subject to approval from the Nevada Gaming Commission, our purchase of 100% of the membership interests in OpCo for approximately $100.0 million (subject to certain adjustments) is expected to close within one year after the First Closing (the “Second Closing”). Following the Second Closing, we will own the operating assets of Nugget Casino Resort and 50% of the membership interests in PropCo (the “Nugget Acquisition”). We also will have a five-year option to acquire the remaining 50% of the membership interests in PropCo for $105 million plus 2% per annum.

Caruthersville Hotel – On July 16, 2021, we announced that we had purchased land and a small two-story hotel near Century Casino Caruthersville with plans to refurbish the existing hotel’s 36 rooms by mid-2022. We estimate the cost of the remodel to be $3.6 million. As of December 31, 2021, we have spent $0.6 million on this project.

Missouri –We plan to build hotels at our Cape Girardeau and Caruthersville locations. In July 2021, the Missouri law requiring each casino to be a floating facility was amended to allow casino facilities to be built as a standard building with a container with at least 2,000 gallons of water beneath the facility. This change provides an opportunity for Century Casino Caruthersville, the last remaining riverboat casino on open water in Missouri, to move to a non-floating facility. We plan to move the casino from the riverboat to a new land-based casino. In December 2021, a lawsuit was filed by the City of St. Louis to block the implementation of the omnibus bill that included the amendment to the definition of a floating facility. The land-based casino project is delayed pending a resolution of the lawsuit or a stand-alone bill amending the definition of a floating facility. We estimate the cost of the projects to be $73.0 million. We plan to finance the projects with cash on hand, financing, or a combination of the two. Construction in Cape Girardeau is expected to start in the summer of 2022 with completion expected in late 2023 and, subject to resolution of a pending lawsuit by the City of St. Louis, the Caruthersville project construction is expected to start in 2022 with completion expected in mid-2024.

Additional Gaming Projects

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

Terminated Projects

Century Casino Calgary – In August 2020, we announced that we had entered into an agreement to sell the casino operations of Century Casino Calgary for CAD 10.0 million ($7.5 million based on the exchange rate on August 5, 2020) plus a three-year quarterly earn out as specified in the agreement. The transaction closed on December 1, 2020. During the first quarter of 2021, we paid CAD 0.1 million ($0.1 million based on the exchange rate on February 12, 2021) in working capital adjustments under the agreement. We recorded quarterly earn outs of CAD 0.1 million (less than $0.1 million based on the exchange rate in effect on December 31, 2021) to general and administrative expenses on our consolidated statement of earnings (loss) for the year ended December 31, 2021.

In January 2022, we announced that we had entered into an agreement to sell the land and building that we own in Calgary for CAD 8.1 million ($6.5 million based on the exchange rate on January 12, 2022). The transaction closed on February 10, 2022, at which time we ceased operating Century Sports and transferred the lease agreement for the casino premises to the buyer. The assets held for sale on our consolidated balance sheet as of December 31, 2021 included $4.8 million in land and $3.6 million in buildings and improvements net of accumulated depreciation.

Century Casino Bath (“CCB”) –In March 2020, CCB was closed due to COVID-19. Due to challenging conditions that included historical and forecasted losses due to changes in the regulatory environment for casinos in England requiring enhanced due diligence of customers, CCB’s board of directors determined that it would enter into creditors voluntary liquidation and control of CCB was relinquished. We deconsolidated CCB effective as of May 6, 2020. See Note 1 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report for further discussion of CCB.

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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

Source: Pacific Exchange Rate Service

We recognize in our statement of earnings (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. 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, 2021, 2020 and 2019

Century Casinos, Inc. and Subsidiaries

For the year

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

Loss from Equity Investment — — (1) — — 1 100.0%

Earnings (Loss) Per Share Attributable to Century Casinos, Inc. Shareholders

(1)For a discussion of Adjusted EBITDA and reconciliation of Adjusted EBITDA to net earnings (loss) attributable to Century Casinos, Inc. shareholders, see “Non-GAAP Measures – Adjusted EBITDA” below in this Item 7.

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Items impacting year-over-year comparability of the results include the following:

COVID-19 – Closures of all or a portion of our facilities due to COVID-19 had a significant negative impact on our results for the year ended December 31, 2020 and, to a lesser extent, in 2021. See “Executive Overview-Recent Developments Related to COVID-19” above for details regarding the closures. In addition to the impacts on our revenue, expenses and results of operations, COVID-19 had the following impacts:

We impaired goodwill and intangible assets in the year ended December 31, 2020 due to a quantitative and qualitative impairment analysis performed related to the triggering events caused by COVID-19. We impaired $30.7 million in the United States segment and $3.4 million in the Canada segment.

We impaired the $1.0 million MCE investment in the Corporate and Other segment in the year ended December 31, 2020 due to assessments made related to the impact of COVID-19 on MCE.

We recorded valuation allowances on our net deferred tax assets in the United States, Canada and Corporate and Other segments in the year ended December 31, 2020, which resulted in $1.0 million, $1.5 million and $1.1 million of tax expense in the United States, Canada and Corporate and Other segments, respectively.

United States – We acquired the operations at MTR, CCG and CCV in the 2019 Acquisition in December 2019. MTR is reported in the West Virginia operating segment and CCG and CCV are reported in the Missouri operating segment. Results in these operating segments were as follows:

In West Virginia:

$115.0 million in net operating revenue and $6.2 million in net earnings for the year ended December 31, 2021.

$90.2 million in net operating revenue and ($5.9) million in net losses for the year ended December 31, 2020.

$8.7 million in net operating revenue and $0.4 million in net earnings for the year ended December 31, 2019, which consisted of the month of December 2019.

In Missouri:

$123.0 million in net operating revenue and $28.4 million in net earnings for the year ended December 31, 2021.

$79.6 million in net operating revenue and ($31.3) million in net losses for the year ended December 31, 2020.

$7.4 million in net operating revenue and $1.0 million in net earnings for the year ended December 31, 2019, which consisted of the month of December 2019.

Canada – In Edmonton, we began operating CMR in April 2019. Results from CMR, impacting the Edmonton operating segment, were as follows:

$14.8 million in net operating revenue and ($3.0) million in net losses for the year ended December 31, 2021.

$14.7 million in net operating revenue and ($3.9) million in net losses for the year ended December 31, 2020.

$18.9 million in net operating revenue and ($2.4) million in net losses for the year ended December 31, 2019.

Corporate and Other

We began operating CCB in May 2018. CCB was closed in March 2020 due to COVID-19 and CCB’s board of directors determined that CCB would enter into creditors voluntary liquidation, which occurred in May 2020. CCB was deconsolidated as a subsidiary in May 2020. We recorded a $7.4 million gain related to the deconsolidation to general and administrative expenses for the year ended December 31, 2020. Due to historical and forecast losses at CCB due to changes in the current regulatory environment for casinos in England requiring enhanced due diligence of customers, we determined that the long-lived assets, right-of-use (“ROU”) operating lease asset and intangible asset were impaired and wrote-off $16.5 million to impairment – intangible and tangible assets in December 2019. CCB contributed a total of $0.5 million in net operating revenue and $6.9 million in net earnings for the year ended December 31, 2020, primarily related to the gain on deconsolidation, and $3.2 million in net operating revenue and ($20.0) million in net losses for the year ended December 31, 2019.

We wrote-down $0.7 million related to the portion of the liability that we had sought to collect from LOT Polish Airlines (“LOT”) and a $0.3 million receivable related to MCE in the year ended December 31, 2020.

All cruise ships on which our ship-based casinos are located suspended operations in March 2020 due to COVID-19. One of our ship-based casinos began operating in September 2020, suspended operations in November 2020 and began operating again in June 2021.

We incurred $5.4 million in acquisition costs in 2019 related to the 2019 Acquisition.

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Net operating revenue increased by $84.2 million, or 27.7%, and by $86.0 million, or 39.4%, for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively. Following is a breakout of net operating revenue by segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019.

United States increased by $84.9 million, or 42.8%, and by $148.3 million, or 296.7%.

Canada decreased by ($3.8) million, or (7.6%), and by ($30.4) million, or (37.7%).

Poland increased by $4.0 million, or 7.3%, and decreased by ($27.6) million, or (33.7%).

Corporate Other decreased by ($0.8) million, or (59.9%), and by ($4.3) million, or (75.1%).

Operating costs and expenses increased by $15.6 million, or 5.1%, and by $80.9 million, or 36.2%, for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively. Following is a breakout of operating costs and expenses by segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019.

United States increased by $6.7 million, or 3.4%, and by $159.0 million, or 392.4%.

Canada increased by $1.0 million, or 2.5%, and decreased by ($23.6) million, or (36.6%).

Poland increased by $1.6 million, or 2.8%, and decreased by ($18.9) million, or (24.9%).

Corporate Other increased by $6.2 million, or 90.3%, and decreased by ($35.5) million, or (83.7%).

Earnings from operations increased by $68.6 million, or 54051.2%, and by $5.1 million, or 97.6%, for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively. Following is a breakout of earnings (loss) from operations by segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019.

United States increased by $78.2 million, or 6566.9%, and decreased by ($10.7) million, or (112.6%).

Canada decreased by ($4.8) million, or (51.5%), and by ($6.8) million, or (42.0%).

Poland increased by $2.3 million, or 84.1%, and decreased by ($8.7) million, or (147.0%).

Corporate Other decreased by ($7.1) million, or (128.9%), and increased by $31.2 million, or 85.0%.

Net earnings increased by $68.6 million, or 143.0%, and decreased by ($28.8) million, or (150.6%), for the year ended December 31, 2021 compared to the year ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively. Items deducted from or added to earnings from operations to arrive at net earnings include interest income, interest expense, gains (losses) on foreign currency transactions and other, income tax expense and non-controlling interests. For a discussion of these items, see “Non-Operating Income (Expense)” and “Taxes” below in this Item 7.

Non-GAAP Measures – Adjusted EBITDA

We define Adjusted EBITDA as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation and amortization, non-controlling interests net earnings (loss) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Expense related to the Master Lease is included in the interest expense (income), net line item. 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 EBITDA reported for each 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”). Adjusted EBITDA is not considered a measure of performance recognized under US GAAP.

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Management believes that Adjusted EBITDA is a valuable measure of the relative performance of the Company and its properties. The gaming industry commonly uses Adjusted EBITDA as a method of arriving at the economic value of a casino operation. Management uses Adjusted EBITDA to evaluate and forecast the operating performance of the Company and its properties as well as to compare results of current periods to prior periods. Management believes that presenting Adjusted EBITDA 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. Management believes that using Adjusted EBITDA is a useful way to compare the relative operating performance of separate reportable segments by eliminating the above-mentioned items associated with the varying levels of capital expenditures for infrastructure required to generate revenue, and the often high cost of acquiring existing operations. Our computation of Adjusted EBITDA may be different from, and therefore may not be comparable to, similar measures used by other companies within the gaming industry.

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

For the year ended December 31, 2021

Amounts in thousands United States Canada Poland Corporate and Other Total

Net earnings attributable to non-controlling interests — 932 224 — 1,156

Non-cash stock-based compensation — — — 2,652 2,652

Loss (gain) on disposition of fixed assets 341 43 44 (37) 391

(1)Expense of $28.2 million related to our Master Lease is included in interest expense (income), net in the United States segment. Expense of $1.8 million related to our CDR land lease is included in interest expense (income), net in the Canada segment. Cash payments related to our Master Lease and CDR land lease were $25.3 million and $2.0 million, respectively, for the period presented.

(2)Income of $0.8 million is included in the United States segment related to the sale of excess land at Mountaineer, net of related expenses.

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For the year ended December 31, 2020

Amounts in thousands United States Canada Poland Corporate and Other Total

Non-cash stock-based compensation — — — (214) (214)

Loss (gain) on disposition of fixed assets 64 (43) 4 1 26

Acquisition costs — — — 266 266

(1)Expense of $28.4 million related to our Master Lease is included in interest expense (income), net in the United States segment. Expense of $1.5 million related to our CDR land lease is included in interest expense (income), net in the Canada segment. Cash payments related to our Master Lease and CDR land lease were $25.0 million and $1.3 million, respectively, for the period presented.

(2)Income of $6.5 million is included in the Canada segment related to the gain on sale of the casino operations of Century Casino Calgary.

For the year ended December 31, 2019

Amounts in thousands United States Canada Poland Corporate and Other Total

Non-cash stock-based compensation — — — 1,303 1,303

Impairment - intangible and tangible assets — — — 16,486 16,486

Pre-opening expenses — 538 — — 538

(1)Expense of $1.6 million related to our Master Lease is included in interest expense (income), net in the United States segment. Expense of $2.2 million related to our CDR land lease is included in interest expense (income), net in the Canada segment. Cash payments related to our Master Lease and CDR land lease were $3.8 million and $2.0 million, respectively, for the period presented.

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Non-GAAP Measures – 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 becomes due simultaneously. The reconciliation of Net Debt is presented below.

Total long-term debt, including current portion $ 181,484 $ 184,550

REPORTABLE SEGMENTS

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

United States

For the year

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

We acquired MTR in West Virginia and CCG and CCV in Missouri in the 2019 Acquisition in December 2019.

Sports wagering in Colorado became legal on May 1, 2020. We have partnered with sports betting operators that will conduct sports wagering under each of the three Colorado master licenses for sports wagering held by our Colorado subsidiaries. One of these mobile sports betting apps launched in July 2020 and a second launched in August 2021. The third sports betting app is expected to launch in mid-2022. Each agreement with the sports betting operators provides for a share of net gaming revenue and a minimum revenue guarantee each year.

New table games and unlimited betting began in May 2021 in Colorado.

In December 2020, we entered into an agreement with an iGaming partner to utilize our license with the state of West Virginia to operate an internet and mobile interactive gaming app. The iGaming app launched in April 2021. The agreement provides for a share of net gaming revenue.

In December 2021, we entered into an agreement to sell excess land at Mountaineer. The sale proceeds were shared between us and VICI PropCo and we recorded income related to the sale net of related expenses of $0.8 million in gain (loss) on foreign currency transactions, cost recovery income and other on our consolidated statement of earnings (loss) for the year ended December 31, 2021.

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The table below provides the closure and reopen dates for casinos in the United States due to COVID-19.

Operating Segment Closure Date Reopen Date

The results below are presented to illustrate the changes in net operating revenue, primarily due to COVID-19, in the United States segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 as well as the year ended December 31, 2020 compared to the year ended December 31, 2019. Because we did not acquire the West Virginia and Missouri properties until December 2019, the differences between 2020 and 2019 for those operating segments are not presented in the table below.

Amounts in millions Q1 Q2 Q3 Q4 YTD

Colorado

West Virginia

Missouri

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The results below are presented to illustrate the changes in operating expenses, primarily due to COVID-19, in the United States segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 as well as the year ended December 31, 2020 compared to the year ended December 31, 2019, excluding depreciation and amortization expense and impairment – intangible and tangible assets. Because we did not acquire the West Virginia and Missouri properties until December 2019, the differences between 2020 and 2019 for those operating segments are not presented in the table below.

Amounts in millions Q1 Q2 Q3 Q4 YTD

Colorado

West Virginia

Missouri

During the closures of our United States properties in 2020, we suspended marketing initiatives, furloughed employees and reduced operating costs and expenses as much as possible. Additional savings related to gaming-related expenses.

2020 COVID-19 Restrictions

Colorado – In Cripple Creek, table games were closed through December 2020 but the full slot floor was open by the end of the year. In Central City, table games were closed from June to September 2020 and closed again in December 2020. In addition, after reopening in 2020, CTL’s slot floor was operating at approximately 65% from June to December 2020. Both properties reopened table games in February 2021 with restrictions on the number of gaming positions through the first quarter of 2021.

West Virginia – During 2020, the gaming floor was operating with reduced hours and at approximately 85% capacity. Food and beverage outlets were operating with reduced hours and capacity, the hotel was operating at reduced capacity and the convention spaces were closed.

Missouri – After reopening in 2020, the casinos operated with reduced hours and approximately 94% of the gaming floors open. In addition, there were state-wide smoking restrictions in place.

2021 Results

Our United States properties operated with very few COVID-19 restrictions in 2021. In Colorado, gaming revenue has increased due to increased player visits and the elimination of betting limits. Colorado’s operating costs and expenses have increased due to increased payroll resulting from increased table game operation in 2021 as compared to the table game closures in 2020, the elimination of restrictions on food and beverage outlets as well as increased gaming-related expenses. In West Virginia, we continue to adjust operating hours for the casino, food and beverage outlets, hotel and convention spaces as we have been impacted by staffing challenges in this market. West Virginia’s operating costs and expenses have increased primarily due to gaming-related expenses. In Missouri, we saw an immediate increase in revenue, particularly in table game revenue, when the smoking restrictions were lifted in the second quarter of 2021. Missouri’s operating costs and expenses increased due to minimum wage increases in Missouri and gaming-related expenses.

A reconciliation of net earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDA can be found in the “Non-GAAP Measures – Adjusted EBITDA” discussion above in this Item 7.

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Canada

For the year

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

In January 2019, CMR began operating the Northern Alberta off-track betting network. The CMR casino in Edmonton opened on April 1, 2019, and the first horse race was held on April 28, 2019. In September 2021, CMR assumed the contracts of CBS and began operating the Southern Alberta off-track betting network.

We sold the casino operations of CAL in December 2020, which impacts comparability of the Calgary operating segment in 2021. We sold the land and building of CAL in February 2022, as a result of which we transferred the lease agreement for the casino premises to the buyer and stopped operating Century Sports.

The AGLC approved the relocation of a competing casino to a new site approximately eight miles south of Century Downs. We anticipate the casino will open in late 2022. Currently, the closest competitor to Century Downs is 11 miles away. An increase in competitors close to our casino at Century Downs could have an impact on financial results at this location.

In addition, in January 2022, the AGLC removed the moratorium on gaming facilities. While we do not expect new gaming facilities in the markets in which we operate, an increase in competitors could have a negative impact on our results of operations in Alberta.

Results in US dollars were impacted by a 6.5% exchange rate increase and (1.1%) exchange rate decrease in the average rates between the US dollar and the Canadian dollar for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively.

The table below provides the closure and reopen dates for casinos in Canada due to COVID-19.

Closure Date Reopen Date

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The results below are presented to illustrate changes in net operating revenue, primarily due to COVID-19, in the Canada segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively.

Amounts in millions Q1 Q2 Q3 Q4 YTD

Edmonton - CAD

Edmonton - USD

Amounts in millions Q1 Q2 Q3 Q4 YTD

Calgary - CAD

Calgary - USD

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The results below are presented to illustrate the changes in operating expenses, primarily due to COVID-19, in the Canada segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively, excluding depreciation and amortization expense, impairment – intangible and tangible assets and gain on sale of casino operations.

Amounts in millions Q1 Q2 Q3 Q4 YTD

Edmonton - CAD

Edmonton - USD

Amounts in millions Q1 Q2 Q3 Q4 YTD

Calgary - CAD

Calgary - USD

Net operating revenue for the years ended December 31, 2021 and 2020 compared to the year ended December 31, 2019 was impacted negatively by closures due to COVID-19 as detailed in the table above. Following the March 2020 closures, table games were reopened in mid-September 2020 and closed again in November 2020. Our casinos in Canada were operating with approximately 71% of the slot floor open prior to the second closures in December 2020. Closures of our showroom at CRA also negatively impacted food and beverage revenue at that property in 2021 and 2020. From September 2021 to early February 2022, we required patrons to provide proof of vaccination, a negative rapid test result or an original medical exception letter for entry in order to comply with a government mandate. In accordance with a government mandate, all patrons and employees are required to wear masks while indoors. In addition, we sold the casino operations of CAL in December 2020, which decreased net operating revenue in the Calgary operating segment by approximately $2.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.

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Operating expenses during the years ended December 31, 2021 and 2020 compared to the year ended December 31, 2019 were impacted by COVID-19. We received wage subsidies provided by the Canadian government through the Canada Emergency Wage Subsidy that was enacted in April 2020 as a result of COVID-19 to help employers offset a portion of their employee wages for a limited period. The qualified government wage subsidies reduced operating expenses by CAD 3.1 million ($2.5 million based on the average exchange rate for the year ended December 31, 2021) and CAD 7.4 million ($5.5 million based on the average exchange rate for the year ended December 31, 2020) for the years ended December 31, 2021 and 2020, respectively. Government wage subsidies ended in October 2021. Due to the Omicron variant of COVID-19, the Canadian government temporarily reenacted wage subsidies from December 2021 to February 2022; however, we did not qualify for the subsidies during this time period. We also received rent subsidies provided by the Canadian government through the Canada Emergency Rent Subsidy that was enacted in November 2020 as a result of COVID-19 to help subsidize rent for businesses experiencing a drop in revenue for a limited period. The qualified government rent subsidies reduced operating expenses by CAD 1.6 million ($1.3 million based on the average exchange rate for the year ended December 31, 2021) and CAD 0.5 million ($0.4 million based on the average exchange rate for the year ended December 31, 2020). In addition, we sold the casino operations of CAL in December 2020, which decreased operating expenses in the Calgary operating segment by approximately $2.4 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The gain on sale of the casino operations reduced total operating costs and expenses in the Calgary operating segment by $6.5 million for the year ended December 31, 2020.

During the closures of our Canada properties, we suspended marketing initiatives, furloughed employees and reduced operating costs and expenses as much as possible. We believe that we have captured operating synergies, labor savings and cost savings following the reopening of our Canada properties in June 2021. We expect payroll costs to trend higher in 2022 due to the reopening of the casinos, growing business volumes, and the end of government wage subsidies.

A reconciliation of net earnings attributable to Century Casinos, Inc. shareholders to Adjusted EBITDA can be found in the “Non-GAAP Measures – Adjusted EBITDA” discussion above in this Item 7.

Poland

For the year

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

In Poland, casino gaming licenses are granted for a term of six years. These licenses are not renewable. Before a gaming license expires, there is a public notification of the available license and any gaming company can apply for a new license for that city. The next license expiration for a CPL casino occurs in September 2022. The casino at the LIM Center in Warsaw reopened in August 2019. We expanded the gaming floor at the Marriott Hotel and added an additional six table games in May 2019.

Results in US dollars were impacted by a 1.0% exchange rate increase and (1.6%) exchange rate decrease in the average rates between the US dollar and the Polish zloty for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively.

The table below provides the closure and reopen dates for casinos in Poland due to COVID-19.

Closure Date Reopen Date

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The results below are presented to illustrate changes in net operating revenue, primarily due to COVID-19, in the Poland segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively.

Amounts in millions Q1 Q2 Q3 Q4 YTD

PLN

USD

The results below are presented to illustrate the changes in operating expenses, primarily due to COVID-19, in the Poland segment for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019, respectively, excluding depreciation and amortization expense and impairment – intangible and tangible assets.

Amounts in millions Q1 Q2 Q3 Q4 YTD

PLN

USD

The net operating revenue decreases during the first half of 2021 and 2020 relate primarily to temporary casino closures and reduced tourism in Warsaw, primarily due to COVID-19. During the closures of our Poland casinos, we reduced operating costs and expenses as much as possible. Since reopening in 2021, we have seen increased revenue from our Warsaw casinos as tourism has returned stronger than it did following the reopening in 2020. Operating costs and expenses in the Poland segment continued to be lower during the year ended December 31, 2020 compared to the year ended December 31, 2019 because of lower payroll and marketing expenditures as well as lower gaming-related expenses corresponding to decreased gaming revenue. COVID-19 continues to impact international travel and hotel occupancy in Poland which could have a negative impact on our results. In addition, Poland neighbors Ukraine and continued conflict in that region could have a negative impact on our results of operations.

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We currently operate three casinos in Warsaw. There is proposed legislation to split the Warsaw voivodship (or province), which could limit the number of casino licenses available in Warsaw in the future. If the legislation is passed, it is expected that as licenses in Warsaw expire a new tender would not be offered until the maximum number of licenses available is reached. Any change to the number of licenses available in a city could have a negative impact on results if we are unable to obtain new casino licenses.

A reconciliation of net earnings (loss) attributable to Century Casinos, Inc. shareholders to Adjusted EBITDA can be found in the “Non-GAAP Measures – Adjusted EBITDA” discussion above in this Item 7.

Corporate and Other

For the year

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

Loss from Equity Investment — — (1) — — 1 100.0%

Net Loss Attributable to Non-controlling Interests — — 12 — — (12) (100.0%)

The following operations and agreements make up the reporting unit Cruise Ships & Other in the Corporate and Other reportable segment:

The casino at CCB opened in May 2018. CCB was permanently closed in March 2020 due to COVID-19 and CCB’s board of directors determined that CCB would enter into creditors voluntary liquidation, which occurred in May 2020. CCB was deconsolidated as a subsidiary in May 2020. We recorded a $7.4 million gain related to the deconsolidation to general and administrative expenses for the year ended December 31, 2020. Due to historical and forecast losses at CCB from changes in the regulatory environment for casinos in England requiring enhanced due diligence of customers, we determined that the long-lived assets, ROU operating lease asset and intangible asset at CCB were impaired and wrote-off $16.5 million to impairment – intangible and tangible assets in December 2019. For additional information related to CCB, see Note 1 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

As of December 31, 2021, we had a concession agreement with TUI Cruises for two ship-based casinos. From March 2020 to June 2021, neither casino operated due to COVID-19. Only one ship-based casino is currently operating. Our agreement to operate that ship-based casino ends in the second quarter of 2022 and our agreement to operate the other ship-based casino ends in the second quarter of 2023.

We have decreased our operation of ship-based casinos on cruise ships over the past few years, and mutually agreed with cruise lines with which we had concession agreements not to extend certain agreements at their termination dates. The following is a summary of concession agreements that ended between 2019 and 2021.

Cruise Ship Month of Contract Expiration

Wind Spirit January 2019

Star Pride March 2019

Star Breeze April 2019

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Through our subsidiary CRM, we had a 7.5% ownership interest in MCE that was sold in November 2021 for nominal consideration. In addition, the consulting services agreement under which CRM provided advice to MCE on casino matters was terminated in November 2021. In March 2020, due to the impact of COVID-19 on MCE, we impaired the $1.0 million MCE investment and wrote-down a $0.3 million receivable related to MCE. For additional information related to MCE, see Note 1 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

Through our subsidiary CRM, we had a 51% ownership interest in Golden Hospitality Ltd. (“GHL”), an entity that invested in Minh Chau Ltd. (“MCL”), owner of a hotel, entertainment and gaming club in Vietnam. We sold our interest in GHL to the unaffiliated shareholders of GHL in May 2019 for a $0.7 million non-interest bearing promissory note. We recognized a loss on the sale of this investment of less than ($0.1) million in general and administrative expenses on our consolidated statement of earnings (loss) for the year ended December 31, 2019. The sale of our equity interest in GHL also ended our related equity interest in MCL. For additional information related to GHL and MCL, see Note 1 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

Results at CCB were impacted by a 0.5% exchange rate increase in the GBP for the year ended December 31, 2020 compared to the year ended December 31, 2019.

Revenue Highlights

Years ended December 31, 2021 and 2020

Non-Corporate Reporting Units

Net operating revenue decreased due to the closure of CCB as detailed above. In addition, only one ship-based casino operated during a portion of 2021.

Years ended December 31, 2020 and 2019

Non-Corporate Reporting Units

Net operating revenue decreased due to the closure of CCB as detailed above. In addition, our four ship-based casinos were not operating for the majority of 2020 due to COVID-19 related shutdowns of the cruise ships on which they operate.

Operating Expense Highlights

Years ended December 31, 2021 and 2020

Non-Corporate Reporting Units

Total operating costs and expenses related to the ship operations decreased because only one ship operated in 2021 compared to multiple ships that operated at the beginning of 2020 until they ceased operating due to COVID-19. Total operating costs and expenses related to CCB increased due to the deconsolidation of CCB that resulted in a gain of $7.4 million that we recognized in general and administrative expenses on our statements of earnings (loss) for the year ended December 31, 2020 offset by decreased operating costs and expenses due to the closure of the casino in March 2020.

Corporate Reporting Units

General and administrative expenses increased by $1.8 million, or 16.6%, due primarily to increased payroll and stock compensation expense during the year ended December 31, 2021 offset by the write-down of a receivable related to MCE of $0.3 million during the year ended December 31, 2020. In addition, in March 2020, we assessed the collectability of a receivable from LOT, which previously owned a 33.3% interest in CPL that we acquired in 2013, related to the Poland contingent liability and determined that, due to COVID-19, it was more likely than not that LOT would be unable to repay us for LOT’s portions of payments made by CPL to the Polish Internal Revenue Service (“Polish IRS”) for tax periods in January 2009 to March 2013. Due to COVID-19, LOT grounded flights in March 2020. Based on past efforts to collect on the receivable and analysis of LOT’s ability to pay, we wrote-down the $0.7 million receivable to general and administrative expenses for the year ended December 31, 2020. For additional information related to the Poland contingent liability, see Note 16 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

In March 2020, we impaired the MCE investment due to an assessment of MCE’s operations resulting from COVID-19. As a result of the impairment, we recorded $1.0 million to impairment – intangible and tangible assets during the year ended December 31, 2020.

Years ended December 31, 2020 and 2019

Non-Corporate Reporting Units

Total operating costs and expenses decreased due to casino closures at CCB and on the ships. In addition, the deconsolidation of CCB resulted in a gain of $7.4 million that we recognized in general and administrative expenses on our consolidated statements of earnings (loss) for the year ended December 31, 2020.

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Corporate Reporting Units

General and administrative expenses decreased by ($5.1) million, or (30.4%). The decreases related to voluntary payroll decreases for certain of our corporate staff during the casino closures. In addition, in 2019, there were additional expenses totaling $6.0 million related to the 2019 Acquisition that did not reoccur in 2020. Offsetting these decreases were the additional expenses related to the impairment of MCE and the write-down of the LOT receivable detailed above.

A reconciliation of net loss attributable to Century Casinos, Inc. shareholders to Adjusted EBITDA can be found in the “Non-GAAP Measures – Adjusted EBITDA” discussion above in this Item 7.

Non-Operating Income (Expense)

Non-operating income (expense) for the years ended December 31, 2021, 2020 and 2019 was as follows:

Amounts in thousands 2021 2020 2019 $ Change % Change $ Change % Change

Interest income

Interest income is related to interest earned on our cash reserves. In addition, PLN 0.6 million ($0.2 million) in interest income relates to the Polish IRS reimbursement of CPL after CPL prevailed in a court challenge of a 2012 tax audit. See Note 16 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

Interest expense

Interest expense is related to interest owed on our borrowings under our Macquarie Credit Agreement, our financing obligation with VICI PropCo, our credit agreement with the Bank of Montreal that was replaced by the Macquarie Credit Agreement, the fair value adjustments for our interest rate swap agreements, our CPL and CRM borrowings, our capital lease agreements and interest expense related to the CDR land lease.

Gain on foreign currency transactions, cost recovery income and other

Cost recovery income of $0.7 million, $0.2 million and $0.4 million was received by CDR for the years ended December 31, 2021, 2020 and 2019, respectively, related to infrastructure built during the development of the Century Downs REC project. The distribution to CDR’s non-controlling shareholders through non-controlling interest is part of a credit agreement between CRM and CDR.

We adjusted the contingent liability related to the CPL tax audits to remove the estimated taxes accrued due to the expiration of the statute of limitations for each tax year. This adjustment reduced the contingent liability by PLN 1.8 million ($0.5 million), PLN 2.8 million ($0.7 million) and PLN 2.2 million ($0.6 million) for the years ended December 31, 2021, 2020 and 2019, respectively. In addition, PLN 0.8 million ($0.2 million) was reimbursed to CPL by the Polish IRS for the year ended December 31, 2021. See Note 16 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

Taxes

Income tax expense is recorded relative to the jurisdictions that recognize book earnings. During the year ended December 31, 2021, we recognized income tax expense of $6.4 million on pre-tax income of $28.1 million, representing an effective income tax rate of 22.6%, compared to income tax expense of $4.8 million on pre-tax loss of ($43.3) million, representing an effective income tax rate of 11.2%, and income tax expense of $4.2 million on pre-tax loss of ($12.0) million, representing an effective income tax rate of 34.9% for the same periods in 2020 and 2019, respectively. 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 13 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report.

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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 or other debt or equity financing activities. In 2020, our liquidity was adversely affected by temporary closures of all of our casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19, as discussed below.

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,

Net cash (used in) provided by financing activities (4,713) 3,129 113,869

(1)Working capital is defined as current assets minus current liabilities.

Operating Activities

Our cash flows from operations have historically been positive and sufficient to fund ordinary operations. Cash flows from operations improved in the year ended December 31, 2021 because our US facilities were open and operating for the entire period and our casinos in Canada and Poland reopened in June 2021 and May 2021, respectively. Cash flow from operations for the year ended December 31, 2020 was favorably impacted by the operations of the properties we acquired in the 2019 Acquisition and negatively impacted by the suspension of our operations due to COVID-19. Trends in our operating cash flows tend to follow trends in earnings from operations, excluding non-cash charges. 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 (loss) from operations.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2021 consisted of $0.4 million for slot machine purchases, $0.2 million in energy efficiency upgrades, and $0.4 million in gaming floor upgrades at our West Virginia property; $1.3 million for slot machine purchases, $0.4 million in other gaming equipment, $0.4 million in surveillance equipment, $0.6 million in a restaurant remodel, $0.6 million in a hotel remodel, $0.3 million to build employee housing in Caruthersville, and $0.9 million related to our hotel and land-based casino project at our Missouri properties; $0.1 million in building and improvements, $0.1 million for slot machine purchases and $0.2 million in server upgrades at our Colorado properties; $0.6 million to build employee housing in Cripple Creek; $0.3 million for RV stalls at Century Mile and $3.2 million in other fixed asset additions at our properties and $0.1 million in working capital adjustments paid to the buyer of Century Casino Calgary, offset by less than $0.1 million in proceeds from the Century Casino Calgary sale earn out and less than $0.1 million in proceeds from the sale of fixed assets.

Net cash used in investing activities for the year ended December 31, 2020 consisted of a $1.2 million payment related to the working capital adjustment in the 2019 Acquisition; $0.6 million for slot machine purchases at our Colorado properties; $0.1 million for slot chairs at CTL; $1.0 million for slot machine purchases, $0.2 million in rebranding signage, $1.8 million for player tracking systems and upgrades to the slot accounting systems, and $0.6 million in computer upgrades at our Missouri properties; $0.2 million for surveillance upgrades, $1.1 million for slot machine purchases, $0.2 million for racetrack reconditioning, and $0.3 million in computer upgrades at our West Virginia property; $0.5 million for table game equipment, $0.9 million in building updates, and $0.2 million in racetrack and barn updates at our Edmonton properties; $0.2 million for table game equipment at our Calgary properties; $0.3 million in casino improvements in Poland; and $2.5 million in other fixed asset additions at our properties; offset by $6.6 million from the sale of Century Casino Calgary, net of cash assumed by the buyer.

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Net cash used in investing activities for the year ended December 31, 2019 consisted of $96.6 million related to the 2019 Acquisition, net of cash acquired; $15.0 million for construction costs related to the Century Mile project; $4.3 million related to leasehold improvements at the Marriott Hotel in Warsaw, Poland and additional assets for the casinos in Poland; $0.8 million in Colorado for slot machines, chairs and security upgrades; $1.2 million in Calgary for the building expansion at CDR and a bar at CAL; $0.3 million in Edmonton for new carpet and surveillance equipment at CRA; $2.3 million in other fixed asset additions at our properties; and $0.2 million used to acquire the non-controlling interest in CBS.

Financing Activities

Net cash used in financing activities for the year ended December 31, 2021 consisted of $4.2 million in principal payments and a $0.8 million distribution to non-controlling interests in CDR, offset by $0.2 million from the exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2020 consisted of $4.2 million in proceeds from borrowings net of principal payments, offset by $0.9 million in deferred financing costs and a $0.2 million distribution to non-controlling interests in CDR.

Net cash provided by financing activities for the year ended December 31, 2019 consisted of $124.7 million in proceeds from borrowings net of principal repayments and $0.3 million from the exercise of stock options, offset by $10.1 million of deferred financing costs paid and $1.0 million in distributions to non-controlling interests in CBS and CPL.

Borrowings and Repayments of Long-term Debt and Lease Agreements

As of December 31, 2021, our total debt under bank borrowings and other agreements net of $7.7 million related to deferred financing costs was $181.5 million, of which $177.5 million was long-term debt and $4.0 million was the current portion of long-term debt. The current portion relates to payments due within one year under our Macquarie Credit Agreement, CPL credit agreements and term loans with UniCredit Bank Austria AG (“UniCredit”). We intend to repay the current portion of our debt obligations with available cash. For a description of our debt agreements, see Note 6 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report. Net Debt was $81.4 million as of December 31, 2021 compared to $130.4 million as of December 31, 2020. The decrease in Net Debt was primarily due to a $44.4 million increase in cash and cash equivalents. For the definition and reconciliation of Net Debt to the most directly comparable GAAP measure, see “Non-GAAP Measures – Net Debt” above in this Item 7.

The following table lists the 2022 maturities of our debt:

Amounts in thousands

Our Macquarie Credit Agreement matures in December 2026 at which time the $158.5 million principal balance will be due. We currently plan to refinance this debt as described below under “Potential Sources and Uses of Liquidity, and Short-Term and Long-Term Liquidity.”

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 ended December 31, 2022 are $13.0 million. Estimated interest payments do not reflect the impact of future foreign exchange rate changes. The estimate excludes the variable payments related to the CDR land lease and payments under the Master Lease.

The first option to purchase the land that is currently leased at CDR is on July 1, 2023.

The following table lists the amount of 2022 payments due under our operating and finance lease agreements and our Master Lease:

Amounts in thousands

Operating Leases Finance Leases Master Lease

Cash payments related to the Master Lease were $25.3 million for the year ended December 31, 2021.

Common Stock Repurchase Program

The total amount remaining under our stock repurchase program was $14.7 million as of December 31, 2021. We did not repurchase any common stock in 2021, 2020 or 2019. The repurchase program has no set expiration or termination date.

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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. 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. In addition, we have generated cash from sales of existing casino operations and proceeds from the issuance of equity securities upon the exercise of stock options.

Impact of COVID-19

The COVID-19 pandemic had an adverse effect on our results of operations, financial condition and liquidity for 2020 and the first half of 2021. Between March 13, 2020 and March 17, 2020, we closed all of our casinos, hotels and other facilities to comply with quarantines issued by governments to contain the spread of COVID-19. Our Polish locations reopened on May 18, 2020, and our North American operations reopened between June 1, 2020 and June 17, 2020. Additional closures of our Canada and Poland casinos were required in December 2020 to comply with quarantines issued by governments. Our Poland casinos reopened in February 2021, closed in March 2021, and reopened again on May 28, 2021. Our Canada casino properties reopened on June 10, 2021. We estimate that the net cash outflows related to operations during the time they were fully suspended in the first two quarters of 2020 were, on average, approximately $8.0 million per month and that the net cash outflows related to Canada and Poland operations during the time they were fully suspended in 2021 were, on average, approximately $2.7 million per month. As described in “Results of Operations” above, our casinos have varied their operations based on the governmental health and safety requirements in the jurisdictions in which they are located.

In March 2020, as a proactive measure to increase our cash position and preserve financial flexibility in light of the uncertainty resulting from the COVID-19 pandemic, we borrowed $9.95 million on our revolving credit facility with Macquarie and $7.4 million on our credit agreement with UniCredit. We repaid the Macquarie revolving credit facility in July 2020 except for a $50,000 letter of credit that we repaid in May 2021. The $7.4 million credit agreement with UniCredit was refinanced in June 2021 to a EUR 6.0 million term loan repayable through December 31, 2025. As of December 31, 2021 we had $10.0 million available to borrow on the Macquarie revolving credit facility. CPL’s PLN 5.0 million line of credit, which had no outstanding balance as of December 31, 2021, is available through April 28, 2022. See Note 6 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report for further discussion of the Macquarie Credit Agreement and the UniCredit credit agreement, including discussion of an amendment to the Macquarie Credit Agreement that, among other things, waived compliance with a financial covenant under the Macquarie Credit Agreement.

The duration and impact of the COVID-19 pandemic remains uncertain. We cannot predict the negative impacts that COVID-19 will have on our consumer demand, workforce, suppliers, contractors and other partners and whether future closures will be required. While the severity and duration of such business impacts cannot currently be estimated, the effects of COVID-19, governmental health and safety requirements and any future closures are expected to have a material impact on our business. We continue to monitor our liquidity and plan to make reductions to marketing and operating expenditures, where possible, if future government mandates or closures are required that would have an adverse impact on us.

Planned Projects, the Nugget Acquisition and Sources of Liquidity

Planned capital expenditures in 2022 include approximately $8.0 million in gaming equipment, renovations to various properties and security system upgrades. We are refurbishing a hotel near Century Casino Caruthersville at a cost of approximately $3.6 million. As of December 31, 2021, we have spent approximately $0.7 million on this project. We plan to move our Century Casino Caruthersville riverboat casino to a new land-based casino with a small hotel adjacent to and connected with the existing building and to build a hotel at our Cape Girardeau location. We estimate the projects will cost approximately $73.0 million and we plan to finance the costs of these projects with cash on hand, financing, or a combination of the two. As of December 31, 2021, we have spent approximately $1.0 million on these projects.

On February 22, 2022, we entered into a definitive agreement to purchase (i) 50% of the membership interests in PropCo, and (ii) 100% of the membership interests of OpCo. OpCo owns and operates the Nugget Casino Resort in Sparks, Nevada, and PropCo owns the real property on which the casino is located. At the First Closing, which is expected to occur early in the second quarter of 2022, we will purchase 50% of the membership interests in PropCo for approximately $95.0 million (subject to certain adjustments) and PropCo will enter into a lease with OpCo for an annual rent of $15.0 million. Subject to approval from the Nevada Gaming Commission, our purchase of 100% of the membership interests in OpCo for approximately $100.0 million (subject to certain adjustments) is expected to close within one year after the First Closing, at which point we will own the operating assets of Nugget Casino Resort and 50% of the membership interests in PropCo and have a five-year option to acquire the remaining 50% of the membership interests in PropCo for $105 million plus 2% per annum.

In connection with the Nugget Acquisition, we have received a commitment letter from Goldman Sachs Bank USA for (i) $350.0 million in senior secured term loan debt financing to support the Nugget Acquisition, refinance our existing debt under the Macquarie Credit Agreement and for general corporate purposes, and (ii) a $30.0 million senior secured revolving credit facility.

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We may be required to raise additional capital to address our liquidity and capital needs or in connection with acquisitions or other development opportunities. We have a shelf registration statement with the SEC that became effective in July 2020 under which we may issue, from time to time, up to $100 million of common stock, preferred stock, debt securities and other securities.

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, 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.

In addition, we expect our US domestic cash resources will be sufficient to fund our US operating activities and cash commitments for investing and financing activities. While we currently do not have an intent nor foresee a need to repatriate funds, we could require more capital in the US than is generated by our US operations for operations, capital expenditures or significant discretionary activities such as acquisitions of businesses and share repurchases. If so, we could elect to repatriate earnings from foreign jurisdictions in the form of a cash dividend, which would generally be exempt from taxation with the exception of the adverse impact of withholding taxes. We also could elect to raise capital in the US through debt or equity issuances. We estimate that approximately $32.1 million of our total $107.8 million in cash and cash equivalents at December 31, 2021 is held by our foreign subsidiaries and is not available to fund US operations unless repatriated.

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.

Tax Act

During 2018, the Company completed its accounting of the one-time transition tax on undistributed and previously untaxed post-1986 foreign earnings and profits imposed by the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act permits a company to pay the one-time transition tax over eight years on an interest free basis. The remaining cash payments due related to the transition tax total $0.9 million and are expected to be paid $0.2 million in 2023, $0.3 million in 2024, and $0.4 million in 2025.

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 71% of our total assets as of December 31, 2021. Judgments are made in determining whether an expenditure is a maintenance expense or a capital asset, 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, 2021, 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, 2021, we believe that our investments in property and equipment are recoverable. For the year ended December 31, 2019, we wrote down the long-lived assets at CCB due to historical and forecast losses at the casino and charged $8.0 million to impairment – intangible and tangible assets on our consolidated statement of earnings (loss).

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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, 2021 are included within Canada and Poland reportable segments. For the quantitative goodwill impairment test, the current fair value of each reporting unit with goodwill balances is estimated using a combination of (i) the income approach using the discounted cash flow method for projected revenue, EBITDA and working capital, (ii) the market approach observing the price at which comparable companies or shares of comparable companies are bought or sold, and (iii) fair value measurements using either quoted market price or an estimate of fair value using a present value technique. The cost approach, estimating the cost of reproduction or replacement of an asset, was considered but not used because it does not adequately capture an operating company’s intangible value. We make a variety of estimates and judgments about the relevance of these factors to the reporting units in estimating their fair values. During 2020, as a result of the COVID-19 pandemic and associated closures of our casinos, we determined that goodwill was impaired related to certain reporting units. For information about the 2020 impairments, see Note 5 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report. As of December 31, 2021, the estimated fair value of our CDR reporting unit exceeded its carrying value by 34%. Goodwill related to our CDR reporting unit was $0.1 million as of December 31, 2021. Key assumptions in the valuation of the CDR reporting unit relate to future earnings at CDR. A downturn in the Alberta economy could negatively affect the key assumptions management used in its analysis.

Our Century Casinos and Casinos Poland trademarks and our casino licenses, with the exception of CPL, are indefinite-lived intangible assets and therefore are not amortized. The fair values are determined primarily using the multi-period excess earnings methodology (“MPEEM”) and the relief from royalty method under the income approach. For information about impairments in 2020 and 2019, see Note 5 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report. As of December 31, 2021, the fair value of our indefinite-lived intangible assets at our CSA reporting unit was 11% in excess of its related carrying value. Intangible assets related to our CSA reporting unit were $9.6 million as of December 31, 2021. Key assumptions in the valuation of intangible assets at the CSA reporting unit relate to future earnings at CSA. A downturn in the Alberta economy could negatively affect the key assumptions management used in its analysis.

Our casino licenses related to CPL, our Mountaineer trademark and our player’s club lists are finite-lived intangible assets and 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.

49

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 $10.2 million in the US and $10.1 million in foreign jurisdictions has been provided in recognition of these risks. If our assumptions change and it is determined that we will be able to realize tax benefits related to these deferred tax assets, we will realize a reduction in income tax expense in the year such valuation allowances are reversed. Management continues to monitor the profitability of the US operations, and the valuation allowance in the US may be released within the next 12 months. If this occurs, we would recognize a $10.2 million tax benefit for the year ended December 31, 2022.

The Tax Act created a new requirement that certain income earned by a controlled foreign corporation (“CFC”) referred to as global intangible low-taxed income (“GILTI”) must be included currently in the gross income of the CFC’s US shareholder. We have elected to account for GILTI in the year the tax is incurred as a current period expense and recorded net tax expense of $0.5 million for the year ended December 31, 2019. We did not record a net tax expense related to GILTI for the years ended December 31, 2021 and 2020.

Based on our estimate of future domestic cash generation, debt, liquidity position, and specific plans for reinvestment of foreign subsidiary earnings, there is no expected need for cash repatriation. Therefore, we continue to consider our foreign earnings indefinitely reinvested outside the United States, and no US taxes have been provided for.

See Note 13 to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this report for additional discussion of the Tax Act.

Business Combinations – In accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”), we record acquisitions using the acquisition method of accounting. We include the operating results in our consolidated results from the date of acquisition. We recognize and measure the identifiable assets acquired, liabilities assumed and any non-controlling interest acquired at fair value at the acquisition date. The valuation of intangible assets requires management judgment, the utilization of independent valuation experts and often involves the use of significant estimates and assumptions with respect to timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other things. If the subsequent projections of the underlying business activity change compared with the assumptions and projections used to develop these fair values, we could record impairment charges. The valuation of intangible assets was determined using an income approach methodology. Our key assumptions used in valuing the intangible assets included projected future revenues, customer attrition rates and market recognition. The excess of total consideration transferred over the fair value of identifiable assets acquired and liabilities assumed was recognized as goodwill. Costs incurred as the result of acquisitions other than costs related to the issuance of debt are recorded in the period the costs are incurred.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Our earnings, cash flows and financial position are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates. All of the potential changes noted below are based on information available at December 31, 2021. The majority of our $181.5 million face value of debt outstanding as of December 31, 2021 is variable-rate debt. Each one percentage point change associated with the variable rate debt would result in a $1.7 million change to our annual cash interest expenses.

Foreign Currency Exchange Risk

As a result of our international business presence, we are exposed to foreign currency exchange risk. We transact in foreign currencies and have assets and liabilities denominated in foreign currencies. Therefore, our earnings experience volatility related to movements in foreign currency exchange rates. We have not hedged against foreign currency exchange rate changes related to our international operations. Our foreign subsidiaries transact in their local currencies and hold the majority of their assets and liabilities in their local currency.

The majority of our foreign currency exposure is related to the US dollar versus the Canadian dollar and the Polish zloty. The assets and liabilities of our foreign subsidiaries that are measured in foreign currencies are translated at the applicable period-end exchange rate on our consolidated balance sheets. The resulting translation adjustment is included in accumulated other comprehensive loss as a component of shareholders’ equity. During the years ended December 31, 2021, 2020 and 2019, the change in the relative value of the US dollar against all foreign currencies in which our foreign subsidiaries operate resulted in a $0.5 million increase, ($3.4) million decrease, and ($5.0) million decrease in accumulated other comprehensive loss within shareholder’s equity, respectively.

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We translate revenue and expenses at each period’s average exchange rate on our consolidated statement of earnings (loss) and the gains and losses from translation are included in the results of operations as incurred. A depreciation in the value of the US dollar in relation to all foreign currencies in which our foreign subsidiaries operate would increase the earnings from our foreign operations when translated into US dollars. The timing of the changes in the relative value of the US dollar combined with the operations that are impacted by that change can affect the magnitude of the impact that fluctuations in foreign exchange rates have on our earnings from operations. In 2021, earnings from operations were $68.5 million. For the year ended December 31, 2021, a 10% depreciation in the value of the US dollar relative to the Canadian dollar and the Polish zloty would have resulted in an increase in earnings from operations of $0.5 million.

As of December 31, 2021, our debt is primarily held in US dollars.

Item 8. Financial Statements and Supplementary Data.

See Index to Financial Statements on page F-1.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

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, as of December 31, 2021. Based on such evaluation, our principal executive officers and principal financial officer have concluded that as of December 31, 2021, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting –Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements.

Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria set forth in the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013). Based on this assessment, our management believes that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report which is included herein on the following page.

Changes in Internal Control Over Financial Reporting – There were no changes in our internal control over financial reporting during the three months ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Century Casinos, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Century Casinos, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated March 7, 2022 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

San Francisco, California

March 7, 2022

‎

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Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, 2021 and is incorporated herein by reference. Information required by Regulation S-K Item 401 concerning executive officers is included in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.”

We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including our Co-Chief Executive Officers, our Principal Financial Officer and our Principal Accounting Officer. A complete text of this Code of Business Conduct and Ethics is available on our web site (www.cnty.com/investor/governance/facts-overview). Any future amendments to or waivers of the Code of Business Conduct and Ethics will be posted to the Corporate Governance section of our web site.

Item 11. Executive Compensation.

The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, 2021 and is incorporated herein by reference.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item relating to securities ownership of certain beneficial owners and management will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, 2021 and is incorporated herein by reference. Information relating to securities authorized for issuance under equity compensation plans as of December 31, 2021 is as follows:

(a) (b) (c)

Equity compensation plans not approved by security holders — — —

(1)These plans consist of the 2005 Equity Incentive Plan, as amended (the “2005 Plan”), which expired in June 2015, and the 2016 Equity Incentive Plan (the “2016 Plan”), which was approved by our stockholders on June 9, 2016.

(2)As of December 31, 2021, there were (i) 1,153,200 shares of our common stock issuable upon exercise of outstanding options issued under the 2005 Plan, (ii) 75,000 shares of our common stock issuable upon exercise of outstanding options issued under the 2016 Plan, and (iii) 815,164 performance stock units (the “PSUs”) issued under the 2016 Plan that, if and when vested, will be settled in shares of our common stock. The amount reported in the table assumes target level performance for the PSUs. Assuming maximum level performance for the PSUs, the number of shares of common stock would increase by 815,164.

(3)The weighted-average exercise price relates only to outstanding stock options.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, 2021 and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, 2021 and is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) List of documents filed with this report

1. Financial Statements

2. Financial Statement Schedules

None.

3. List of Exhibits

(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession

(3) Articles of Incorporation and Bylaws

(4) Instruments defining the rights of security holders, including indentures

(10) Material Contracts

55

56

(21) Subsidiaries of the Registrant

21† Subsidiaries of the Registrant

(23) Consents of Experts and Counsel

57

(32) Section 1350 Certifications

(99) Additional Exhibits

99.1† Governmental Regulation and Licensing.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

* A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.

† Filed herewith.

†† Furnished herewith.

PFiled on Paper

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CENTURY CASINOS, INC.

By:/s/ Erwin Haitzmann By:/s/ Peter Hoetzinger

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 7, 2022.

Signature Title Signature Title

/s/ Timothy WrightTimothy Wright Chief Accounting Officer

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Item 8. Financial Statements and Supplementary Data.

Index to Financial Statements

Financial Statements:

Consolidated Balance Sheets as of December 31, 2021 and 2020 F5

Notes to Consolidated Financial Statements F11

Financial Statement Schedules:

-F1-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

‎Century Casinos, Inc.

‎

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Century Casinos, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of earnings (loss), comprehensive income (loss), equity, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 7, 2022 expressed “an unqualified opinion”.

‎Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Indefinite-Lived Intangible Asset Impairment Analysis - Century Casino St. Albert

As of December 31, 2021, the Company had a $9.6 million indefinite-lived intangible asset related to Century Casino St. Albert.

The principal considerations for our determination that the impairment analysis of this indefinite-lived intangible asset is a critical audit matter are (i) the significant judgment by management when determining assumptions used in the fair value measurement of the asset, (ii) the high degree of auditor judgment and subjectivity in performing procedures and evaluating management’s significant assumptions relating to forecasted revenue, EBITDA and discount rate, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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-F2-

Our audit procedures related to impairment analysis included the following, among others:

–we tested the design and operating effectiveness of the Company’s internal controls over the indefinite-lived assets impairment analysis process, including evaluation of the valuation models and significant assumptions used, and the completeness and accuracy of the underlying data used

–we tested the forecasted revenues and EBITDA by assessing the reasonableness of management’s forecasts compared to historical results and forecasted industry trends

–with the assistance of our valuation specialists, we assessed the discount rate.

/s/ GRANT THORNTON LLP

We have served as the Company's auditor since 2020.

San Francisco, California

‎March 7, 2022

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-F3-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

‎Century Casinos, Inc.

‎Colorado Springs, Colorado

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of earnings (loss), comprehensive income (loss), equity, and cash flows of Century Casinos, Inc. and subsidiaries (the "Company") for the year ended December 31, 2019, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Denver, Colorado

‎March 12, 2020

We began serving as the Company's auditor in 2013. In 2020 we became the predecessor auditor.

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-F4-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, December 31,

Amounts in thousands, except for share and per share information 2021 2020

ASSETS

Current Assets:

Note receivable, net of current portion and unamortized discount 358 381

LIABILITIES AND EQUITY

Current Liabilities:

Current portion of long-term debt $ 3,958 $ 10,718

Current portion of operating lease liabilities 3,915 4,327

Current portion of finance lease liabilities 38 131

Contingent liability (Note 16) — 476

Operating lease liabilities, net of current portion 27,229 32,277

Finance lease liabilities, net of current portion 43 83

Commitments and Contingencies (Note 16)

Equity:

Accumulated other comprehensive loss (6,430) (6,379)

Total Century Casinos, Inc. Shareholders' Equity 141,624 118,154

See notes to consolidated financial statements.

‎

-F5-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

For the year

ended December 31,

Amounts in thousands, except for per share information 2021 2020 2019

Operating revenue:

Operating costs and expenses:

Impairment - intangible and tangible assets — 35,121 16,486

(Gain) on sale of casino operations (Note 1) — (6,457) —

Loss from equity investment — — (1)

Non-operating (expense) income:

Earnings (loss) per share attributable to Century Casinos, Inc. shareholders:

See notes to consolidated financial statements.

-F6-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the year

ended December 31,

Other comprehensive income (loss)

Foreign currency translation adjustments (495) 3,415 4,975

Comprehensive income (loss) attributable to non-controlling interests

Foreign currency translation adjustments 444 (352) (174)

See notes to consolidated financial statements.

-F7-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

For the year

ended December 31,

Amounts in thousands, except for share information 2021 2020 2019

Common Stock

Balance, beginning of period $ 296 $ 295 $ 294

Exercise of options — — 1

Performance stock unit issuance — 1 —

Additional Paid-in Capital

Amortization of stock-based compensation 2,652 (214) 1,303

Accumulated Other Comprehensive Loss

Foreign currency translation adjustment (51) 3,063 4,801

Retained Earnings

Cumulative effect of accounting change (1) — — (232)

Noncontrolling Interests

Foreign currency translation adjustment (444) 352 174

Distribution to non-controlling interest (808) (158) (989)

Cumulative effect of accounting change (1) — — (49)

Changes in non-controlling interest (2) — — (443)

(1)In January 2019, the Company recognized the cumulative effect of the accounting change related to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842). The Company used the alternative modified retrospective method, also known as the transition relief method, which did not require the restatement of prior periods and instead recognized a $0.3 million cumulative effect adjustment to retained earnings upon transition.

(2)In May 2019, the Company sold its interest in Golden Hospitality Limited (“GHL”) to the unaffiliated shareholders of GHL resulting in a $0.4 million decrease to non-controlling interests on the Company’s consolidated balance sheet as of December 31, 2019. In July 2019, the Company purchased the remaining 25% non-controlling interest in Century Bets!, Inc. resulting in a less than $0.1 million decrease to non-controlling interest on the Company’s consolidated balance sheet as of December 31, 2019.

-F8-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year

ended December 31,

Cash Flows provided by Operating Activities:

Loss on disposition of fixed assets 389 24 902

Adjustment of contingent liability (Note 16) (436) 51 (484)

Unrealized loss on interest rate swaps — — 169

Amortization of stock-based compensation expense 2,652 (214) 1,303

Gain on deconsolidated subsidiary, excluding cash (Note 1) — (7,848) —

Gain on sale of operations (Note 1) — (6,457) —

Changes in Operating Assets and Liabilities:

Other operating liabilities — — (1,282)

Cash Flows used in Investing Activities:

Acquisition of non-controlling interest of Century Bets!, Inc. (Note 1) — — (44)

Proceeds from disposition of assets 44 — —

Century Casino Calgary sale (Note 1) (75) 6,575 —

Century Casino Calgary sale earn out 51 — —

Note receivable proceeds — — 25

-F9-

CENTURY CASINOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

For the year

ended December 31,

Cash Flows (used in) provided by Financing Activities:

Payment of deferred financing costs — (876) (10,080)

Distribution to non-controlling interest (808) (158) (989)

Proceeds from exercise of stock options 247 — 267

Net cash (used in) provided by financing activities (4,713) 3,129 113,869

Increase in Cash, Cash Equivalents and Restricted Cash $ 44,364 $ 8,037 $ 9,356

Supplemental Disclosure of Cash Flow Information:

Non-Cash Investing Activities: