CENTURY CASINOS INC /CO/

Century Casinos, Inc. operates in the casino entertainment industry, developing and operating gaming establishments along with related lodging, restaurant, horse racing (including off-track betting), and entertainment facilities primarily in North America. The company faces intense competition from other casinos within the jurisdictions in which it operates, with many competitors being larger and having substantially greater name recognition and financial and marketing resources. The company seeks to compete through promotion of players' clubs, enhancement of social networking initiatives, and other targeted marketing efforts.

Primary competitors named in the filing include numerous casinos in each market: Mountaineer has four competitors within 50 miles; Rocky Gap has five competitors within 80 miles; Cape Girardeau and Caruthersville have competitors in Missouri, Arkansas, and Illinois; Cripple Creek has 11 competitors located within a half mile; Central City has 20 competitors within a mile; the Nugget faces more than 20 casinos in the Reno-Sparks market; the Edmonton market has five competitors; the Calgary market has seven competitors; and in Poland, there are 52 casino licenses available throughout the country with additional casinos in each district in which CPL operates. The company's stated competitive advantages include being the area's only full-service casino resort on the Ohio River for Mountaineer, having a AAA 4-Diamond Award designation for 23 years at Rocky Gap, being the only casino in the Edmonton market with a horse racetrack at Century Mile, and being the only property in the Calgary market with a horse racetrack at Century Downs.

The company's primary source of revenue is from the net proceeds of gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming, and entertainment facilities that are in most instances a part of the casinos. The company maintains a proprietary database that consists primarily of slot machine customers that allows it to create effective targeted marketing and promotional programs. In the United States, players' club cards allow the company to update its database and track member gaming preferences including maximum, minimum, and total amounts wagered and frequency of visits.

The company operates through five reportable segments based on geographical locations: US East, US Midwest, US West, Canada, and Poland. The US East segment includes Mountaineer Casino, Resort & Races in New Cumberland, West Virginia, which has a casino, hotel, golf course, racetrack holding live thoroughbred races from April to December, on-site pari-mutuel wagering, a sports book, five dining venues, a bar, and more than 5,200 surface parking spaces, and Rocky Gap Casino, Resort & Golf in Flintstone, Maryland, which has a casino, hotel, five food and beverage venues, an 18-hole golf course, a 5,000 square foot events center, several meeting spaces, a spa, and approximately 750 surface parking spaces. The US Midwest segment includes Century Casino & Hotel Caruthersville in Missouri with a casino, hotel, food and beverage venue, 27-space RV park, and 1,343 surface parking spaces; Century Casino & Hotel Cape Girardeau in Missouri with a casino, hotel, two dining venues, a conference and entertainment center, and 1,058 surface parking spaces; Century Casino & Hotel Central City in Colorado with a casino, hotel, a bar, one restaurant, and a 500-space on-site covered parking garage; and Century Casino & Hotel Cripple Creek in Colorado with a casino, hotel, two bars, a restaurant, and 271 surface parking spaces. The US West segment includes the Nugget Casino Resort in Reno-Sparks, Nevada, which is a full-service resort including 120,000 square feet of convention space, an 8,555 seat outdoor amphitheater, seven food and beverage venues, a 5-story 1,200 space parking garage, and 1,272 additional parking spaces. The Canada segment includes Century Casino & Hotel Edmonton with a casino, hotel, off-track betting parlor, a 10,700 square foot showroom seating approximately 500 customers, a 3,000 square foot showroom seating approximately 200 customers, a restaurant, a sports bar and lounge, two additional bars, 600 surface parking spaces, and a complimentary underground heated parking garage with 300 additional spaces; Century Casino St. Albert with a casino, off-track betting parlor, a restaurant, a bar, a sports bar and lounge, a banquet facility, and 585 surface parking spaces; Century Mile Racetrack and Casino in Edmonton with a casino, one mile horse racetrack, two restaurants, two bars, an off-track betting parlor, and operates the majority of the Alberta pari-mutuel network providing pari-mutuel content and live video to 23 off-track betting parlors throughout Alberta with agreements with over 90 racetracks world-wide; and Century Downs Racetrack and Casino in Calgary with a casino, racetrack, bar, lounge, restaurant facility, off-track betting parlor, entertainment area, and 700 surface parking spaces. The Poland segment includes Casinos Poland, which has been in operation since 1989 and currently has six casino licenses throughout Poland.

The company's subsidiary Century Resorts Management GmbH owns 75% of United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino, which is consolidated as a majority-owned subsidiary. The company's subsidiary CRM owns 66.6% of Casinos Poland, which is consolidated as a majority-owned subsidiary. In May 2025, the company announced a partnership with BetMGM, LLC to operate a sports book at Cape Girardeau and an online and mobile sports betting application under its license in Missouri, and on December 1, 2025, the sports book at Cape Girardeau opened and online betting started, with the agreement including a percentage of net gaming revenue payable to the company with a guaranteed minimum. In August 2025, the company announced that its Board of Directors initiated a comprehensive strategic review of its operations, capital structure, and strategic growth options exploring a range of potential strategic alternatives including opportunities to unlock value within its existing property portfolio, optimize its capital structure, evaluate potential mergers, strategic partnerships, or the sale of the Company, and to analyze potential divestments of assets or other asset-level transactions. During the year ended December 31, 2025, the company repurchased shares under 10b5-1 trading plans, with a plan adopted on May 14, 2025 for repurchasing up to $3.0 million ¹ of shares that expired on July 31, 2025, and a plan adopted on August 11, 2025 for repurchasing up to $2.5 million ² of shares that expired on December 31, 2025, and during the three months ended December 31, 2025, the company repurchased 922,298 ³ shares at an average price of $1.64 ⁴ per share. On January 2, 2026, the company announced a new plan for repurchasing up to $1.5 million ⁵ of shares, expiring on May 10, 2026. As of December 31, 2025, the repurchase program had approximately $10.8 million ⁶ remaining.

Net operating revenue for the year ended December 31, 2025 was $572,975,000 ⁷, a decrease of $2,944,000 ⁸ or 0.5% ⁹ compared to $575,919,000 ¹⁰ for the year ended December 31, 2024. Net loss attributable to Century Casinos, Inc. shareholders was $61,416,000 ¹¹ for 2025, compared to $153,601,000 ¹² for 2024, a decrease of $92,185,000 ¹³ or 60.0% ¹⁴. Diluted net loss per share attributable to Century Casinos, Inc. shareholders was $2.04 ¹⁵ for 2025, compared to $5.02 ¹⁶ for 2024. Adjusted EBITDAR was $105,377,000 ¹⁷ for 2025, compared to $102,678,000 ¹⁸ for 2024, an increase of $2,699,000 ¹⁹ or 2.6% ²⁰. Earnings from operations were $51,279,000 ²¹ for 2025, compared to a loss from operations of $22,157,000 ²² for 2024, an increase of $73,436,000 ²³ or 331.4% ²⁴.

The company continues to explore additional potential gaming projects and acquisition opportunities, though along with the capital needs of potential projects or acquisitions, there are various other risks which could affect the company's ability to complete a proposed project or acquisition or could eliminate its feasibility altogether. In Missouri, the company partnered with BetMGM to operate a sports book at Cape Girardeau and an online and mobile sports betting application under its license, which began on December 1, 2025, with the agreement including a percentage of net gaming revenue payable to the company with a guaranteed minimum. In Alberta, Bill 48 regulating iGaming passed in June 2025, which will create an open market for online sports betting and iGaming with retail sports betting available at casinos and specific sports venues, and the company plans to offer retail sports betting at its locations in Alberta through either a licensed third-party provider or the AGLC. In Poland, the company was awarded a license for a second location in Wroclaw in March 2025, and opened the casino in February 2026 with 41 slot machines and five table games.The Master Lease requires the company to make specific minimum investments in capital expenditures. The scheduled 2026 rent payments under the Master Lease, including a CPI increase, are approximately $67.3 million ²⁵. The rent payments are subject to annual escalations during the lease term. The Master Lease has an initial term of 15 years with no purchase option, and the company exercised its first five year renewal term in the December 2022 amendment. At the company's option, the Master Lease may be extended for up to three additional five year renewal terms beyond the 20 year term. The Nugget Lease has an initial term of 35 years and a purchase option if Century purchases the remaining 50% of Smooth Bourbon, and at the company's option, may be extended for up to four additional five year renewal terms. The scheduled 2026 rent payments under the Nugget Lease attributable to Marnell's 50% ownership of Smooth Bourbon are $7.9 million ²⁶.

The filing does not specify R&D spending levels or capital expenditure plans with exact figures for the upcoming period. The company's Board approved a discretionary repurchase program in March 2000 for up to $5.0 million ²⁷ of outstanding common stock, increased in November 2009 to $15.0 million ²⁸, with approximately $10.8 million ²⁹ remaining as of December 31, 2025. On January 2, 2026, the company announced a new plan for repurchasing up to $1.5 million ³⁰ of shares, expiring on May 10, 2026. No dividends have been declared or paid by the company.

The company faces significant headwinds from intense competition, with new competitors expected to enter its markets. A competitor has received conditional approval to relocate its casino from Camrose, Alberta, to south Edmonton, approximately 11 miles from the company's Century Mile property, anticipated to open in 2027 once construction is complete and final approvals are received. The Happy Valley Casino in Pennsylvania is expected to open in spring 2026, which is 112 miles from Rocky Gap and is expected to increase competition. Marshall Yards, located in Kentucky, opened in February 2026, though the company does not believe this location will impact its casinos in Missouri due to its distance. The company also faces headwinds from macroeconomic conditions including inflation, economic contraction, tariffs imposed by the US on foreign goods or reciprocally imposed on the US by foreign countries during 2025 which have increased costs for consumers, and the actual or perceived impact of tariffs on consumer spending and inflation or an economic downturn could lead to fewer customer visits and decreased discretionary spending.

The company faces regulatory headwinds including the need to obtain and maintain gaming licenses in each jurisdiction, with licenses at Mountaineer and Cape Girardeau scheduled for renewal in 2026. In Poland, casino gaming licenses are granted for a term of six years and are not renewable, and before a gaming license expires for a particular city, any gaming company can apply for a new license, and the company has not always been successful in securing new licenses for its existing casinos. The company also faces foreign currency exchange rate risk as the revenue generated and expenses incurred at its casinos in Canada and Poland are generally denominated in Canadian dollars and Polish zloty, respectively, and decreases in the value of these currencies in relation to the US dollar have decreased operating profit from foreign operations when translated into US dollars.

The company faces material risks from its significant indebtedness, with outstanding debt of approximately $337.7 million ³¹ as of December 31, 2025, the majority of which is variable rate debt where each one percentage point change would result in an estimated $3.4 million ³² change to annual cash interest expenses, and a long-term financing obligation to VICI PropCo subsidiaries of $715.7 million ³³ as of December 31, 2025 with scheduled 2026 rent payments of approximately $67.3 million ³⁴ subject to annual escalation. The company faces intense competition with new entrants expected, including a competitor relocating to south Edmonton approximately 11 miles from the Century Mile property anticipated to open in 2027, and the Happy Valley Casino in Pennsylvania expected to open in spring 2026 which is 112 miles from Rocky Gap. The company is subject to extensive gaming regulation with licenses at Mountaineer and Cape Girardeau scheduled for renewal in 2026, and in Poland, casino gaming licenses are granted for a term of six years and are not renewable, and the company has not always been successful in securing new licenses. The company recorded a $70.2 million ³⁵ impairment of goodwill in 2024 related to the Nugget and Rocky Gap, and valuation allowances of $70.4 million ³⁶ in the US and $11.5 million ³⁷ in foreign jurisdictions have been provided against deferred tax assets. The company's strategic review process initiated in August 2025 may not result in any transaction and could be costly, time consuming, and disruptive.

Management's tone in the filing is cautious and forward-looking, emphasizing the initiation of a comprehensive strategic review in August 2025 to explore a range of potential strategic alternatives aimed at enhancing shareholder value and supporting long-term growth, including opportunities to unlock value within the existing property portfolio, optimize capital structure, evaluate potential mergers, strategic partnerships, or the sale of the Company, and analyze potential divestments of assets or other asset-level transactions. The key strategic priorities emphasized are growing the business by actively pursuing the development or acquisition of new gaming opportunities and growing and reinvesting in existing operations. Management also highlights the partnership with BetMGM in Missouri which began on December 1, 2025, and the opening of a new casino in Wroclaw, Poland in February 2026 with 41 slot machines and five table games.