10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016

Commission File Number 000-54085

Affinity Gaming

Nevada	02-0815199
State of Incorporation	IRS Employer Identification Number

3755 Breakthrough Way, Suite 300

Las Vegas, Nevada 89135

(Address, including zip code, of principal executive offices)

702-341-2400

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	þ	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  þ    No  ¨

No established public trading market for our common stock currently exists. As of August 8, 2016, there were 20,462,329 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative And Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signatures

Table of Contents i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the U.S. federal securities laws.  You can identify forward-looking statements by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects,” “may,” “will” or “should,” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties, and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding:

• the Z Capital proposal and the Special Committee of the Board of Directors;

• our expectations regarding the effects of our promotional campaigns and marketing programs on driving revenue, reducing costs and improving operating margins;

• estimated and projected costs, capital expenditures and expense savings;

• the adequacy of cash flows from operations, available cash and available amounts under our credit facility to meet future liquidity needs; and

• our continued viability, our operations and results of operations.

We base these and other forward-looking statements on our current expectations and assumptions regarding our business, the economy and other future conditions; however, our actual results may differ materially from those contemplated by the forward-looking statements.  We caution you, therefore, that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.  Forward-looking statements, which by their nature relate to the future, are subject to inherent uncertainties, risks and changes in circumstances which we cannot easily predict. Important factors that could cause actual results to differ materially and adversely from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, as well as the following:

• our debt service requirements, which may adversely affect our operations and ability to compete;

• our ability to generate cash to service our substantial indebtedness, which depends on many factors that we cannot control;

• the impact of restrictions under, and results of noncompliance with, the terms of our credit agreement and notes indenture;

• intense competition;

• extensive regulation from gaming and other government authorities;

• changes to applicable gaming and tax laws;

• severe weather conditions and other natural disasters that affect visitation to our casinos;

• environmental contamination and remediation costs;

• pending and potential litigation;

• reductions in spending as a result of economic downturns and other factors;

• changes in income tax, payroll tax and health care benefits laws;

• additional gaming licenses being granted in or adjacent to jurisdictions where we operate;

• breaches of our information systems resulting in loss or compromise of customer data;

• changes in the smoking laws; and

• other factors as described in “Part I. Item 1A. — Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 23, 2016 (“2015 Form 10-K”).

Any forward-looking statement made by us in this report speaks only as of the date of this report.  Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

Table of Contents ii

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets	2
Unaudited Condensed Consolidated Statements of Operations	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	5

Table of Contents 1 Financial Statement Index

AFFINITY GAMING

Condensed Consolidated Balance Sheets

(in thousands)

	June 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Cash and cash equivalents	$	74,678		$	157,779
Restricted cash	95,553			608
Accounts receivable, net of reserve of $117 and $147, respectively	2,603			3,217
Income tax receivable	24			16
Prepaid expense	8,682			10,079
Inventory	2,832			2,798
Total current assets	184,372			174,497
Property and equipment, net	245,153			251,908
Other assets, net	3,971			3,530
Intangibles, net	122,791			124,042
Goodwill	48,287			48,287
Total assets	$	604,574		$	602,264
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	9,391		$	13,220
Accrued interest	2,365			2,327
Accrued expense	22,082			24,158
Current maturities of long-term debt	—			11,383
Other current liabilities	8			23
Total current liabilities	33,846			51,111
Long-term debt, less current portion	374,261			364,204
Other liabilities	1,984			1,932
Deferred income taxes	18,764			14,758
Total liabilities	428,855			432,005
Commitments and contingencies (Note 11)
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued or outstanding	—			—
Common stock, $0.001 par value; 200,000,000 shares authorized; 20,462,329 and 20,377,247 shares issued and outstanding for 2016 and 2015, respectively	20			20
Additional paid-in-capital	208,805			208,239
Accumulated deficit	(33,106		)	(38,000		)
Total owners’ equity	175,719			170,259
Total liabilities and owners’ equity	$	604,574		$	602,264

See notes to condensed consolidated financial statements

Table of Contents 2 Financial Statement Index

AFFINITY GAMING

Unaudited Condensed Consolidated Statements of Operations

(in thousands)

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
REVENUE
Casino	$	69,448		$	75,505		$	141,331		$	150,602
Food and beverage	10,384			12,082			21,208			24,043
Lodging	6,031			7,190			12,429			14,222
Fuel and retail	13,390			15,676			25,530			28,252
Other	3,608			3,268			6,922			6,163
Total revenue	102,861			113,721			207,420			223,282
Promotional allowances	(8,203		)	(12,210		)	(17,012		)	(24,793		)
Net revenue	94,658			101,511			190,408			198,489
EXPENSE
Casino	26,181			29,956			53,562			59,690
Food and beverage	10,378			11,800			21,170			23,627
Lodging	4,205			4,197			8,553			8,106
Fuel and retail	9,106			11,675			17,403			20,939
Other	1,956			1,838			3,463			3,368
General and administrative	18,850			19,601			37,563			38,318
Depreciation and amortization	7,312			7,205			14,696			14,368
Corporate	4,932			5,358			9,816			9,295
Write downs, reserves and recoveries	(91		)	(204		)	(39		)	(69		)
Total expense	82,829			91,426			166,187			177,642
Operating income	11,829			10,085			24,221			20,847
Other expense
Interest expense, net	(7,656		)	(7,653		)	(15,321		)	(15,258		)
Total other expense, net	(7,656		)	(7,653		)	(15,321		)	(15,258		)
Income before income tax	4,173			2,432			8,900			5,589
Provision for income taxes	(2,390		)	(1,635		)	(4,006		)	(5,032		)
Net income	$	1,783		$	797		$	4,894		$	557

See notes to condensed consolidated financial statements

Table of Contents 3 Financial Statement Index

AFFINITY GAMING

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	4,894		$	557
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,696			14,368
Amortization of debt costs and discounts	1,587			1,459
Loss (gain) on sale of property and equipment	9			(1		)
Share-based compensation	700			667
Deferred income taxes	4,006			5,001
Changes in operating assets and liabilities:
Accounts receivable, net	614			506
Prepaid expense	1,397			1,484
Inventory	(34		)	(75		)
Other assets	114			100
Accounts payable	(1,967		)	836
Accrued interest	38			(26		)
Accrued expense	(2,076		)	(511		)
Income tax receivable	(8		)	116
Other liabilities	(27		)	(20		)
Net cash provided by operating activities	23,943			24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	18			8
Purchases of property and equipment	(8,601		)	(6,718		)
Net cash used in investing activities	(8,583		)	(6,710		)
Cash flows from financing activities:
Restricted cash	(94,945		)	—
Payment on capital lease	(15		)	(16		)
Payment on long-term debt	(2,913		)	—
Loan origination fees	(515		)	—
Repurchases of vested share-based awards	(73		)	(47		)
Net cash used in financing activities	(98,461		)	(63		)
Net (decrease) increase in cash and cash equivalents	(83,101		)	17,688
Cash and cash equivalents:
Beginning of period	157,779			135,175
End of period	$	74,678		$	152,863
Supplemental cash flow information:
Cash paid during the period for interest	$	13,851		$	13,916
Supplemental schedule of non-cash investing and financing activities:
Purchase of property and equipment financed through accounts payable	$	706		$	402
Non-cash loan origination fees	6			—

See notes to condensed consolidated financial statements.

Table of Contents 4 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

Organization and Business

Affinity Gaming (together with its subsidiaries, “Affinity” or “we”) is a Nevada corporation, headquartered in Las Vegas, which owns and operates 11 casinos, five of which are located in Nevada, three in Colorado, two in Missouri and one in Iowa. We also provided consulting services to Hotspur Casinos Nevada, Inc. (“Hotspur”), the operator of the Rampart Casino at the JW Marriott Resort in Las Vegas until the expiration of the related consulting agreement on April 1, 2015. Hotspur previously paid us a fixed annual fee in monthly installments.

Consolidation

We include all of our subsidiaries in our consolidated financial statements, eliminating all intercompany balances and transactions during consolidation.

Basis of Presentation

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). While preparing our financial statements, we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expense during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require us to make extensive use of estimates include the fair values of assets and liabilities related to depreciation and amortization, the estimates used when computing share-based compensation expense, the estimated allowance for doubtful accounts receivable and the estimated cash flows we use in assessing the recoverability of long-lived assets, as well as the estimated fair values of certain assets related to write downs and impairments, contingencies and litigation, and claims and assessments.

We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, with the audited Consolidated Balance Sheet amounts as of December 31, 2015 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Statements of Cash Flows in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP, though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading.

Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period.

Management believes our unaudited condensed consolidated interim financial statements include all the normal recurring adjustments necessary to fairly present our unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, our unaudited Condensed Consolidated Statements of Operations and our unaudited Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within our 2015 Form 10-K.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

We have made no material changes to our significant accounting policies as reported in our 2015 Form 10-K.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases, that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Lessor accounting will remain largely unchanged,

Table of Contents 5 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. Lessees and lessors are required to apply a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, and early application is permitted. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2014-09 stipulate that an entity should recognize revenue in an amount which reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers, and they provide a five-step process to assist entities with achieving that core principle. The ASU also specifies the accounting for some costs to obtain or fulfill a contract with a customer. With regard to disclosures, ASU 2014-09 states that entities should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, and it requires qualitative and quantitative disclosures concerning contracts with customers, significant judgments and changes therein, and assets recognized from the costs incurred to obtain or fulfill a contract. The amendments in ASU 2014-09, have been deferred for one year and are effective for annual reporting periods beginning after December 15, 2017, including interim periods therein, and they permit either retrospective application to all prior periods or retrospective application with the cumulative effect of application recognized on the initial application date. Early adoption is permitted for annual and interim periods beginning after December 31, 2016. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

We have reviewed all other recently issued accounting pronouncements and, other than those we have disclosed above or in previous filings with the SEC, we do not believe any of such pronouncements will have a material effect on our operations.

Reclassifications

The unaudited condensed consolidated financial statements and related notes reflect certain reclassifications to prior year amounts in order to conform with current year presentation. The reclassifications have no effect on previously reported net income.

In November 2015, the FASB issued an accounting standards update which changes the presentation of deferred taxes in classified balance sheets. The new guidance requires classification of all deferred tax assets and liabilities as well as applicable valuation allowances as non-current. The effective date for this guidance is for financial statements issued for annual and interim periods beginning after December 15, 2016. Early application is permitted. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have applied the guidance in the accompanying condensed consolidated financial statements with retrospective application for the Consolidated Balance Sheet at December 31, 2015. The effect of the accounting change in the prior year resulted in current deferred income taxes of $1.7 million, previously presented separately in current liabilities, to be added to $13.1 million in long-term deferred income taxes, for a revised $14.8 million in long-term deferred income taxes at December 31, 2015.

NOTE 3. RESTRICTED CASH

Restricted cash balances at June 30, 2016 and December 31, 2015 include cash or certificates of deposit required for gaming activity in certain jurisdictions in which we operate, and for self-insured retention obligations under some of our workers compensation insurance policies. In addition, restricted cash includes $94.9 million held at June 30, 2016 in contemplation of the refinancing of our outstanding debt, which was completed on July 1, 2016.

Table of Contents 6 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands, except estimated lives):

	Estimated Life (Years)	June 30, 2016			December 31, 2015
Building and improvements	7 - 40	$	187,106		$	185,875
Gaming equipment	3 - 10	78,671			75,527
Furniture, fixtures, and equipment	3 - 10	51,475			49,571
Leasehold improvements	7	196			196
Land	—	39,513			39,513
Barge	30	15,019			15,019
Construction-in-progress		3,027			3,185
Total property and equipment		375,007			368,886
Less accumulated depreciation		(129,854		)	(116,978		)
Total property and equipment, net		$	245,153		$	251,908

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

We determine the fair value of the indefinite-lived intangible assets other than goodwill using the discounted cash flow method, a form of the income approach.  In determining the fair values, we make significant assumptions relating to variables based on past experiences and judgments about future performance.  These variables include, but are not limited to: (1) the forecast earnings growth rate of each market, (2) risk-adjusted discount rate, and (3) expected growth rates in perpetuity to estimated terminal values.

The following table summarizes intangible assets by category (in thousands):

	June 30, 2016							December 31, 2015
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Finite-lived intangible assets
Customer loyalty programs	$	12,164	$	(9,583	)	$	2,581	$	12,164	$	(8,583	)	$	3,581
Trademarks	2,982		(2,649		)	333		2,982		(2,398		)	584
	15,146		$	(12,232	)	2,914		15,146		$	(10,981	)	4,165
Indefinite-lived intangible assets
Gaming license rights	110,646					110,646		110,646					110,646
Local tradenames	9,231					9,231		9,231					9,231
	119,877					119,877		119,877					119,877
Total intangible assets	$	135,023				$	122,791	$	135,023				$	124,042

Table of Contents 7 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the changes in goodwill by reportable segment during the six months endedJune 30, 2016:

	Nevada		Midwest		Total
Balance at December 31, 2015	$	33,665	$	14,622	$	48,287
Impairment of goodwill	—		—		—
Balance at June 30, 2016	$	33,665	$	14,622	$	48,287

We amortize definite-lived intangible assets ratably over their expected lives which, for customer loyalty programs, approximate seven years and, for trademarks, approximate 3.75 years. Overall, we are amortizing definite-lived intangible assets over a weighted-average expected life of approximately 6.5 years.

We obtain gaming license rights when we acquire gaming entities that operate in gaming jurisdictions where competition is limited, such as states where the law only allows a certain number of operators.  We do not currently amortize gaming license rights and local tradenames because we have determined they have an indefinite useful life.

NOTE 6. OTHER ASSETS, NET

Other assets, net consist of the following (in thousands):

	June 30, 2016		December 31, 2015
Long-term deposits	$	2,924	$	2,919
Other assets	1,047		611
Total	$	3,971	$	3,530

NOTE 7. ACCRUED EXPENSE

Accrued expense consists of the following (in thousands):

	June 30, 2016		December 31, 2015
Progressive jackpot liabilities	$	3,093	$	2,984
Accrued payroll and related	7,198		7,441
Slot club point liability	2,993		3,213
Litigation reserve	3,100		3,100
Other accrued expense	5,698		7,420
Total	$	22,082	$	24,158

Table of Contents 8 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 8. LONG-TERM DEBT

The following table presents long-term debt balances (in thousands):

	June 30, 2016			December 31, 2015
9% Senior Unsecured Notes due 2018	$	200,000		$	200,000
Unamortized debt issuance cost, net	(2,448		)	(3,028		)
Unamortized discount	(684		)	(847		)
9% Senior Unsecured Notes due 2018, net	196,868			196,125
Term loan due 2017	179,832			182,745
Unamortized debt issuance cost, net	(2,439		)	(3,283		)
Term loan due 2017, net	177,393			179,462
Total debt, including current maturities	374,261			375,587
Less: current maturities of long-term debt	—			(11,383		)
Total long-term debt	$	374,261		$	364,204

The current maturities of long-term debt at December 31, 2015, includes the mandatory excess cash flow payment as calculated for the year ended December 31, 2015 on the 2012 Term Loan (defined below). The actual payment required by the lenders was $2.9 million, which was paid in April 2016.

On May 9, 2012, we issued $200.0 million of 9.00% senior unsecured notes due 2018 (the “2018 Notes”), and entered into a Credit Agreement, dated May 9, 2012 (the “2012 Credit Agreement”), which provided for a $200.0 million term loan (the “2012 Term Loan”) due in 2017, the entirety of which the lenders disbursed to us on the closing date of the 2012 Credit Agreement, and a $35.0 million revolving credit facility (the “2012 Revolving Credit Facility” and, together with the 2012 Term Loan, the “2012 Credit Facility”) which remained undrawn as of June 30, 2016. Proceeds from the 2012 Term Loan and the 2018 Notes were used to repay debt then outstanding.

On July 22, 2014, we completed the second amendment to the 2012 Credit Agreement (the “Second Amended Credit Agreement”) governing our 2012 Credit Facility. We incur and pay interest on the 2012 Term Loan under the Second Amended Credit Agreement at an uncommitted floating rate of LIBOR plus 4.00%, subject to a LIBOR floor of 1.25%. The Second Amended Credit Agreement also requires us to pay commitment fees related to the Revolving Credit Facility equal to an annualized rate of 0.50% on undrawn amounts when the Total Net Leverage Ratio is greater than 3.50 to 1.00, or equal to an annualized rate of 0.375% on undrawn amounts when the Total Net Leverage Ratio is less than or equal to 3.50 to 1.00. The 2012 Credit Facility provides an accordion feature which allows us to seek additional borrowings of up to $80.0 million subject to certain customary terms and conditions, including pro forma compliance with a maximum leverage ratio, as defined in the Second Amended Credit Agreement.

Unamortized debt issuance cost, which we are amortizing over the life of the 2018 Notes and the 2012 Term Loan, totaled $4.9 million at June 30, 2016. In April 2015, the FASB issued guidance that debt issuance costs should be presented in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Under the new guidance, effective for annual and interim periods beginning after December 15, 2015, we have reclassified $1.5 million in unamortized debt issuance costs previously presented in other assets to be deducted from the long-term debt balances at December 31, 2015.

The Second Amended Credit Agreement contains customary covenants including, but not limited to, a maximum total net leverage ratio, a maximum secured leverage ratio, a minimum interest coverage ratio and maximum total annual capital expenditures. Additionally, the 2012 Term Loan is subject to mandatory annual prepayments based on generation of excess cash flow (as defined), equal to 50% of excess cash flow when the Total Net Leverage Ratio is greater than 4.00 to 1.00, equal to 25% of excess cash flow when the Total Net Leverage Ratio is greater than 3.00 to 1.00, but less than or equal to 4.00 to 1.00,

Table of Contents 9 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

and equal to zero when the Total Net Leverage Ratio is less than or equal to 3.00 to 1.00. At June 30, 2016, the First Lien Senior Secured Net Leverage Ratio was 1.95 to 1.00, and the Interest Expense Coverage Ratio was 2.57 to 1.00. As of June 30, 2016, we remained in compliance with all debt covenants.

We issued the 2018 Notes pursuant to an indenture dated May 9, 2012 (“2018 Notes Indenture”). Under the 2018 Notes Indenture, the Issuers are entitled to redeem all or a portion of the 2018 Notes upon providing not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth in the table below.

Year	Percentage
2015	104.50	%
2016	102.25	%
2017 and thereafter	100.00	%

We based the estimated fair value of the 2018 Notes and the 2012 Credit Facility on Level 2 inputs using quoted prices in inactive markets and observable market data for similar, but not identical, instruments. The following table presents the carrying values and estimated fair values of our long-term debt at June 30, 2016 (in thousands):

	Carrying Value		Estimated Fair Value
9% Senior Unsecured Notes due 2018	$	196,868	$	201,298
Term loan due 2017	177,393		177,180
Total	$	374,261	$	378,478

Subsequent to the quarter end, on July 1, 2016, we entered into a Credit Agreement (the “2016 Credit Agreement”) which provides for a $300.0 million term loan facility (the “2016 Term Loan”) and a $75 million revolving credit facility (the “2016 Revolving Credit Facility” and, together with the 2016 Term Loan, the “2016 Credit Facility”), which remained undrawn on the closing date of the 2016 Credit Agreement. The 2016 Term Loan will be payable in quarterly installments, commencing on September 30, 2016, in an amount equal to 0.25% of the 2016 Term Loan until the maturity date, July 1, 2023, upon which date the remaining balance will come due. Amounts outstanding under the 2016 Revolving Credit Facility will be due and payable on July 1, 2021. The interest rate under the 2016 Term Loan is at a floating rate not less than 5.0%. We used the proceeds of the 2016 Term Loan together with $94.9 million in cash from our balance sheet to repay all amounts outstanding under the 2012 Term Loan and redeem the 2018 Notes. The Company is currently determining the impact of this third quarter refinancing on its results of operations.

NOTE 9. INCOME TAXES

We continually evaluate our deferred tax assets to determine if any portion of those assets would not be realized in a future period. Based on our analysis of all available evidence, which included consideration of our cumulative consolidated pre-tax losses as well as other data, we concluded that it is more likely than not that we will be unable to realize all of our net deferred tax assets and, as a result, we recorded a full valuation allowance against its net deferred tax assets in 2014. For the quarters ended June 30, 2016 and 2015, our effective income tax rates varied from the federal statutory rate primarily due to the amortization of indefinite-lived intangibles. We recorded a provision for income taxes of $2.4 million and $1.6 million for the quarters ended June 30, 2016 and 2015, respectively. For the six months endedJune 30, 2016 and 2015, our effective income tax rates varied from the federal statutory rate primarily due to the amortization of indefinite-lived intangibles. We recorded a provision for income taxes of $4.0 million and $5.0 million for the six months endedJune 30, 2016 and 2015, respectively.

Table of Contents 10 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

We have analyzed our filing positions in each jurisdiction where we are required to file income tax returns. We believe our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments which will result in a material change to our financial position.

We filed income tax returns in the United States federal jurisdiction and in several state jurisdictions. Our 2014 United States federal return is currently under examination. No adjustments have been proposed as of June 30, 2016.

NOTE 10. SHARE-BASED COMPENSATION

We designed our share-based compensation arrangements to advance our long-term interests; for example, by allowing us to attract and retain employees and directors by aligning their interests with those of our stockholders. The amount, frequency, and terms of share-based awards may vary based on competitive practices, our operating results, government regulations and availability under our equity incentive plans. Depending upon the form of the share-based award, new shares of our common stock may be issued upon grant, option exercise or vesting of the award.

The Affinity Gaming Amended and Restated 2011 Long-Term Incentive Plan (“LTIP”), which the Compensation Committee of our Board of Directors approved, allows us to issue up to 2,000,000 shares of common stock, subject to stock options, or as restricted stock, to employees, officers, directors and consultants. Awards vest upon the passage of time, the attainment of performance criteria, or both. Stock options awarded under the LTIP expire five years from the grant date. Awards granted to management generally vest ratably over three years from the date of the grant and those granted to directors generally vest in two equal tranches, the first upon issuance and the second during January of the calendar year following the year of grant. Holders of restricted stock may vote their shares and receive their proportionate share of any dividends. Restricted stock remains subject to the terms and conditions contained in the applicable award agreement and our LTIP until the recipient vests in the award.

The following table summarizes the activity related to our outstanding stock options and non-vested restricted stock for the period ended June 30, 2016:

	Stock Options				Restricted Stock
	Outstanding				Non-Vested
	Shares		Weighted Average Exercise Price Per Share		Shares		Weighted Average Fair Value Per Share
December 31, 2015	330,605		$	10.24	82,290		$	10.54
Granted	272,500		12.00		85,082		12.00
Vested	—		—		(81,660	)	10.96
Forfeited	(36,364	)	10.00		—		—
June 30, 2016	566,741		$	11.10	85,712		$	11.59

As of June 30, 2016, awards representing 1,029,070 shares or potential shares of our common stock remained outstanding; therefore, awards representing 970,930 shares or potential shares of our common stock remained available for issuance under our Amended 2011 Long-Term Incentive Plan.

We account for stock option awards as liabilities as a result of our past practice of settling stock options for cash. As of June 30, 2016 and December 31, 2015, we have reported $1.3 million and $1.2 million, respectively, of share-based compensation liability in Other liabilities on the condensed consolidated balance sheet.

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AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 11. COMMITMENTS AND CONTINGENCIES

Data Security Events

In October 2013, Affinity was contacted by law enforcement regarding fraudulent credit and debit card charges which may have been linked to a data security breach in Affinity’s information technology system. We immediately initiated a thorough investigation, supported by an independent professional forensic investigation firm, to determine the nature and scope of the compromise. In December 2013, we issued a press release advising that our payment processing system had become infected by malware, which resulted in a compromise of credit card and debit card information belonging to individuals who used their cards at restaurants, hotels and gift shops at our facilities between March 14 and October 16, 2013. As of November 14, 2013, our forensics expert advised us that our credit card processing systems were free of functioning malware. We encouraged our patrons to protect against possible identity theft or other financial loss by reviewing account statements for potential fraudulent activity during the period of exposure. In April 2014, we again learned that an unauthorized intrusion and installation of malware compromising the credit card processing environment had occurred. We then hired a different professional forensics investigation firm to conduct a thorough investigation of the more recently discovered event, and the security of our information technology environment as it related to both incidents. As a result of the second investigation, we have reason to believe credit card and debit card information from individuals who used their cards at restaurants, hotels and gift shops at our properties between December 7, 2013 and April 28, 2014, also may have been compromised. In May 2014, we issued another press release and encouraged our patrons to protect against possible identity theft or other financial loss by reviewing account statements for potential fraudulent activity during the period of exposure.

We carry insurance coverage of $5.0 million for liability resulting from network security events. As of June 30, 2016, we have incurred $1.2 million in expense, including deductibles, for the security breaches. We do not expect to incur additional material expenses that are not covered by insurance. However, we cannot estimate the total amount which we will ultimately incur and be reimbursed by insurance carriers because, although the independent forensic investigation has concluded, we have not received all of the monetary assessments and evaluations from the credit card processors and issuing banks seeking to recover the cost of replacement cards and a portion of fraudulent charges, nor have we received any third-party claims as of this date. In addition, several state attorneys general are investigating the data breach events, including how they occurred, their consequences and our responses. We are cooperating in the governmental investigation, and could be subject to fines or other obligations. We have not concluded that a loss from the governmental investigation is probable, however, and therefore have not recorded an accrual for governmental investigation or regulatory action. We will continue to evaluate information as it becomes known and will record an estimate for loss at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. We have commenced a lawsuit in federal court in Nevada against the firm that conducted the initial forensic investigation for recovery of the costs and assessments we incurred as a result of the April 2014 data breach discovery.

Litigation

In March 2012, the Clarke County Development Corp. (“CCDC”), the local non-profit Iowa licensee for which we manage the Lakeside Hotel & Casino (“Lakeside”) in Osceola, Iowa, filed an action in Iowa state court against Affinity and Lakeside, seeking a declaratory judgment that the management contract between CCDC and Lakeside is non-assignable. We removed the case to federal court and contested CCDC's position even though we had no plans to assign the agreement. CCDC also named Lakeside, Affinity and the Iowa Racing & Gaming Commission (“IRGC”) in a separate petition in Iowa state court seeking judicial review of the IRGC's ruling, in November 2010, which approved our predecessor's creditors to become the owners of Affinity Gaming, LLC, and thereby the indirect owners of Lakeside, prior to our emergence from bankruptcy and notwithstanding CCDC’s objection that an assignment of the management agreement had occurred which required its consent. On July 29, 2013, just two weeks before the hearing on judicial review, CCDC filed a voluntary dismissal without prejudice of the petition for judicial review.  On July 30, 2013, CCDC filed a motion to dismiss the federal court action without prejudice, which was granted.  CCDC’s dismissal of the state court petition and the federal court action was based upon its filing in Iowa state court on August 5, 2013 of a third lawsuit, since removed to federal court in Iowa, in which it seeks to enforce a settlement agreement it alleges was reached with us during a non-binding mediation held in June 2013.  On April 21, 2015, following discovery in the new lawsuit, the District Court for the Southern District of Iowa granted summary judgment in favor of the Company and against CCDC. CCDC appealed the grant of summary judgment to the 8^th Circuit U.S. Court of Appeals, and on

Table of Contents 12 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

June 24, 2016, the Court of Appeals reversed the District Court’s decision and remanded the case for trial. A trial date has not yet been set.

In November 2013, Chartwell Advisory Group, Ltd. (“Chartwell”), a professional services firm that facilitated filing refund requests with the Nevada Tax Commission for sales and use tax paid by certain casinos on the cost of complimentary meals for periods beginning in 2004, filed a lawsuit against numerous Nevada casino operators, including one of our subsidiaries, alleging that it is owed a percentage of the tax casinos did not have to pay as a result of a 2012 state tax regulation and related settlement agreement. Our subsidiary had entered into an agreement with this firm prior to the bankruptcy whereby Chartwell would receive a percentage of any refund we received from the state of sales tax previously paid by our subsidiary. We settled this matter in May 2016 for $0.2 million.

We are party to certain other claims, legal actions and complaints arising in the ordinary course of business or asserted by way of defense or counterclaim in actions we filed. We believe that our defenses are substantial in each of these matters and that we can successfully defend our legal position without material adverse effect on our consolidated financial statements.

Environmental Remediation

In 2011, during excavation at the site of our travel center at Whiskey Pete’s Hotel and Casino (“Whiskey Pete’s”) in Primm, Nevada, we encountered several contaminated underground sites which required soil remediation and groundwater testing. Much of the contamination resulted from underground fuel storage tanks related to a gas station operated more than 35 years ago, as well as from abandoned underground fuel lines. We also began testing at the direction of the Nevada Division of Environmental Protection (the “NDEP”) to determine the extent to which the contamination has affected the groundwater, and we have agreed to continue monitoring the groundwater for a period of at least two more years.

For the six months ended June 30, 2016 and 2015, we incurred $43 thousand and $0.1 million, respectively, in costs on remediation work at the Whiskey Pete’s site. We have an insurance policy which provides coverage for environmental remediation costs of up to $5.0 million. From the beginning of construction through June 30, 2016, we have incurred $4.0 million in costs on remediation work and received $2.0 million from our insurer. Insurance proceeds were received in 2015 and prior years.

Although we believe that incurring additional cost related to the testing and ongoing monitoring of groundwater for contamination is probable, we cannot reasonably estimate an amount to accrue at this time because the NDEP has not told us what additional work, if any, it will require us to perform. Additionally, we believe some or all of the ongoing monitoring costs will be reimbursed by insurance as part of our initial claim. We also filed suit in Nevada state district court for partial recovery against the environmental consultant that managed the initial remediation. The ultimate cost to us will depend on the extent of contamination found, if any, as a result of our ongoing testing, the amount of remediation we are required to perform, and the amount we are reimbursed. The litigation against the environmental consultant is in the discovery phase. As we complete our ongoing monitoring obligation, we intend to analyze any cost incurred, and we will expense or capitalize it as necessary.

Table of Contents 13 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12. SEGMENT INFORMATION

The following table presents the components of net revenue by segment (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Gross revenue
Nevada	$	61,119		$	68,704		$	122,900		$	133,754
Midwest	32,189			34,473			65,310			67,738
Colorado	9,553			10,544			19,210			21,790
Total gross revenue	102,861			113,721			207,420			223,282
Promotional allowances
Nevada	(5,786		)	(8,378		)	(11,682		)	(17,166		)
Midwest	(1,744		)	(2,629		)	(3,758		)	(5,167		)
Colorado	(673		)	(1,203		)	(1,572		)	(2,460		)
Total promotional allowances	(8,203		)	(12,210		)	(17,012		)	(24,793		)
Net revenue
Nevada	55,333			60,326			111,218			116,588
Midwest	30,445			31,844			61,552			62,571
Colorado	8,880			9,341			17,638			19,330
Total net revenue	$	94,658		$	101,511		$	190,408		$	198,489

We use earnings before interest expense, net; income tax; depreciation and amortization; share-based compensation; pre-opening costs; write offs, reserves and recoveries; loss on extinguishment or modification of debt; loss on impairment of assets; gains or losses on the disposition of assets; and restructuring and reorganization costs (“Adjusted EBITDA”) as a measure of profit and loss to manage the operational performance of our segments.

Adjusted EBITDA is a measure which does not conform to generally accepted accounting principles in the United States (“GAAP”). You should not consider this information as an alternative to any measure of performance as promulgated under GAAP, such as operating income and net income. Our calculation of Adjusted EBITDA may be different from the calculations used by other companies; therefore, comparability may be limited. We have included a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, which in our case is operating income.

Table of Contents 14 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents Adjusted EBITDA by segment and by corporate and other (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Adjusted EBITDA
Nevada	$	12,120		$	10,915		$	25,014		$	21,437
Midwest	10,388			10,560			21,062			20,129
Colorado	1,474			969			2,618			2,875
Corporate and other	(4,606		)	(4,853		)	(9,116		)	(8,628		)
Total Adjusted EBITDA	$	19,376		$	17,591		$	39,578		$	35,813

The following tables reconcile Adjusted EBITDA to operating income (in thousands):

	Quarter Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	12,120		$	(3,649	)	$	—		$	105		$	8,576
Midwest	10,388			(2,012		)	—			(14		)	8,362
Colorado	1,474			(1,421		)	—			—			53
Corporate and other	(4,606		)	(230		)	(326		)				(5,162		)
Total operations	$	19,376		$	(7,312	)	$	(326	)	$	91		$	11,829

	Quarter Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries		Operating Income
Nevada	$	10,915		$	(3,698	)	$	—		$	197	$	7,414
Midwest	10,560			(1,898		)	—			—		8,662
Colorado	969			(1,297		)	—			—		(328		)
Corporate and other	(4,853		)	(312		)	(505		)	7		(5,663		)
Total operations	$	17,591		$	(7,205	)	$	(505	)	$	204	$	10,085

Table of Contents 15 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

	Six Months Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	25,014		$	(7,300	)	$	—		$	70		$	17,784
Midwest	21,062			(4,042		)	—			(7		)	17,013
Colorado	2,618			(2,879		)	—			—			(261		)
Corporate and other	(9,116		)	(475		)	(700		)	(24		)	(10,315		)
Total operations	$	39,578		$	(14,696	)	$	(700	)	$	39		$	24,221

	Six Months Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	21,437		$	(7,386	)	$	—		$	120		$	14,171
Midwest	20,129			(3,793		)	—			—			16,336
Colorado	2,875			(2,566		)	—			(58		)	251
Corporate and other	(8,628		)	(623		)	(667		)	7			(9,911		)
Total operations	$	35,813		$	(14,368	)	$	(667	)	$	69		$	20,847

The following table presents total assets by reportable segment (in thousands):

	June 30, 2016		December 31, 2015
Total assets by reportable segment
Nevada	$	218,749	$	224,731
Midwest	203,691		207,414
Colorado	55,812		57,242
Reportable segment total assets	478,252		489,387
Corporate and other	126,322		112,877
Total assets	$	604,574	$	602,264

Total assets in Corporate and other consist primarily of cash at the corporate entity.

Table of Contents 16 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents additions to property and equipment by reportable segment (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cash paid for capital expenditures by reportable segment
Nevada	$	2,748	$	854	$	5,223	$	2,999
Midwest	1,178		1,385		1,932		1,829
Colorado	178		1,043		585		1,291
Reportable segment additions	4,104		3,282		7,740		6,119
Corporate	15		311		861		599
Total cash paid for capital expenditures	$	4,119	$	3,593	$	8,601	$	6,718

NOTE 13. CONDENSED CONSOLIDATED GUARANTOR DATA

All of our current and future domestic subsidiaries which guarantee the 2012 Credit Facility also fully and unconditionally guarantee our payment obligations under the 2018 Notes on a senior unsecured basis (see Note 8 for more information regarding our debt). All of the guarantees are joint and several, and all of the guarantor subsidiaries are wholly-owned by us.

We prepared and are presenting the condensed consolidating financial statements in this footnote using the same accounting policies which we used to prepare the financial information located elsewhere in our unaudited condensed consolidated interim financial statements and related footnotes. Although Affinity Gaming Finance Corp. (“AG Finance”), a wholly-owned subsidiary of the Company, is a co-issuer of the 2018 Notes, we present our indebtedness as an obligation of Affinity Gaming only. AG Finance reflects no activity during any period presented, and we did not have any non-guarantor subsidiaries during any period presented.

Table of Contents 17 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Unaudited Condensed Consolidating Balance Sheet

June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	25,906	$	—	$	48,772	$	—		$	74,678
Restricted cash	95,414		—		139		—			95,553
Accounts receivable, net	206		—		2,397		—			2,603
Income tax receivable	24		—		—		—			24
Prepaid expense	1,012		—		7,670		—			8,682
Inventory	—		—		2,832		—			2,832
Total current assets	122,562		—		61,810		—			184,372
Property and equipment, net	1,262		—		243,891		—			245,153
Intercompany receivables	—		—		133,862		(133,862		)	—
Investment in subsidiaries	564,158		—		—		(564,158		)	—
Other assets, net	2,498		—		1,473		—			3,971
Intangibles, net	—		—		122,791		—			122,791
Goodwill	—		—		48,287		—			48,287
Total assets	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	1,162	$	—	$	8,229	$	—		$	9,391
Intercompany payables	133,862		—		—		(133,862		)	—
Accrued interest	2,365		—		—		—			2,365
Accrued expense	1,253		—		20,829		—			22,082
Other current liabilities	—		—		8		—			8
Total current liabilities	138,642		—		29,066		(133,862		)	33,846
Long-term debt, less current portion	374,261		—		—		—			374,261
Other liabilities	1,431		—		553		—			1,984
Deferred income taxes	427		—		18,337		—			18,764
Total liabilities	514,761		—		47,956		(133,862		)	428,855
Common stock	20		—		—		—			20
Other equity	175,699		—		564,158		(564,158		)	175,699
Total owners’ equity	175,719		—		564,158		(564,158		)	175,719
Total liabilities and owners’ equity	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574

Table of Contents 18 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Condensed Consolidating Balance Sheet

December 31, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	106,384	$	—	$	51,395	$	—		$	157,779
Restricted cash	469		—		139		—			608
Accounts receivable, net	220		—		2,997		—			3,217
Income tax receivable	16		—		—		—			16
Prepaid expense	1,813		—		8,266		—			10,079
Inventory	—		—		2,798		—			2,798
Total current assets	108,902		—		65,595		—			174,497
Property and equipment, net	2,002		—		249,906		—			251,908
Intercompany receivables	—		—		110,150		(110,150		)	—
Investment in subsidiaries	551,953		—		—		(551,953		)	—
Other assets, net	1,974		—		1,556		—			3,530
Intangibles, net	—		—		124,042		—			124,042
Goodwill	—		—		48,287		—			48,287
Total assets	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	3,483	$	—	$	9,737	$	—		$	13,220
Intercompany payables	110,150		—		—		(110,150		)	—
Accrued interest	2,327		—		—		—			2,327
Accrued expense	1,455		—		22,703		—			24,158
Current maturities of long-term debt	11,383		—		—		—			11,383
Other current liabilities	—		—		23		—			23
Total current liabilities	128,798		—		32,463		(110,150		)	51,111
Long-term debt, less current portion	364,204		—		—		—			364,204
Other liabilities	1,397		—		535		—			1,932
Deferred income taxes	173		—		14,585		—			14,758
Total liabilities	494,572		—		47,583		(110,150		)	432,005
Common stock	20		—		—		—			20
Other equity	170,239		—		551,953		(551,953		)	170,239
Total owners’ equity	170,259		—		551,953		(551,953		)	170,259
Total liabilities and owners’ equity	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264

Table of Contents 19 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	69,448		$	—		$	69,448
Food and beverage	—			—		10,384			—			10,384
Lodging	—			—		6,031			—			6,031
Fuel and retail	—			—		13,390			—			13,390
Other	—			—		3,608			—			3,608
Total revenue	—			—		102,861			—			102,861
Promotional allowances	—			—		(8,203		)	—			(8,203		)
Net revenue	—			—		94,658			—			94,658
EXPENSE
Casino	—			—		26,181			—			26,181
Food and beverage	—			—		10,378			—			10,378
Lodging	—			—		4,205			—			4,205
Fuel and retail	—			—		9,106			—			9,106
Other	—			—		1,956			—			1,956
General and administrative	—			—		18,850			—			18,850
Depreciation and amortization	230			—		7,082			—			7,312
Corporate	4,932			—		—			—			4,932
Write downs, reserves and recoveries	—			—		(91		)	—			(91		)
Total expense	5,162			—		77,667			—			82,829
Operating income (loss)	(5,162		)	—		16,991			—			11,829
Other income (expense)
Interest expense, net	(7,656		)	—		—			—			(7,656		)
Intercompany interest income	7,727			—		—			(7,727		)	—
Intercompany interest expense	—			—		(7,727		)	7,727			—
Income from equity investments in subsidiaries	5,929			—		—			(5,929		)	—
Total other income (expense), net	6,000			—		(7,727		)	(5,929		)	(7,656		)
Income (loss) before income tax	838			—		9,264			(5,929		)	4,173
Benefit (provision) for income taxes	945			—		(3,335		)	—			(2,390		)
Net income (loss)	$	1,783		$	—	$	5,929		$	(5,929	)	$	1,783

Table of Contents 20 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	75,505		$	—		$	75,505
Food and beverage	—			—		12,082			—			12,082
Lodging	—			—		7,190			—			7,190
Fuel and retail	—			—		15,676			—			15,676
Other	—			—		3,268			—			3,268
Total revenue	—			—		113,721			—			113,721
Promotional allowances	—			—		(12,210		)	—			(12,210		)
Net revenue	—			—		101,511			—			101,511
EXPENSE
Casino	—			—		29,956			—			29,956
Food and beverage	—			—		11,800			—			11,800
Lodging	—			—		4,197			—			4,197
Fuel and retail	—			—		11,675			—			11,675
Other	—			—		1,838			—			1,838
General and administrative	—			—		19,601			—			19,601
Depreciation and amortization	312			—		6,893			—			7,205
Corporate	5,358			—		—			—			5,358
Write downs, reserves and recoveries	(7		)	—		(197		)	—			(204		)
Total expense	5,663			—		85,763			—			91,426
Operating income (loss)	(5,663		)	—		15,748			—			10,085
Other income (expense)
Interest expense, net	(7,653		)	—		—			—			(7,653		)
Intercompany interest income	7,693			—		—			(7,693		)	—
Intercompany interest expense	—			—		(7,693		)	7,693			—
Income from equity investments in subsidiaries	2,096			—		—			(2,096		)	—
Total other income (expense), net	2,136			—		(7,693		)	(2,096		)	(7,653		)
Income (loss) before income tax	(3,527		)	—		8,055			(2,096		)	2,432
Benefit (provision) for income taxes	4,324			—		(5,959		)	—			(1,635		)
Net income (loss)	$	797		$	—	$	2,096		$	(2,096	)	$	797

Table of Contents 21 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2016 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	141,331		$	—		$	141,331
Food and beverage	—			—		21,208			—			21,208
Lodging	—			—		12,429			—			12,429
Fuel and retail	—			—		25,530			—			25,530
Other	—			—		6,922			—			6,922
Total revenue	—			—		207,420			—			207,420
Promotional allowances	—			—		(17,012		)	—			(17,012		)
Net revenue	—			—		190,408			—			190,408
EXPENSE
Casino	—			—		53,562			—			53,562
Food and beverage	—			—		21,170			—			21,170
Lodging	—			—		8,553			—			8,553
Fuel and retail	—			—		17,403			—			17,403
Other	—			—		3,463			—			3,463
General and administrative	—			—		37,563			—			37,563
Depreciation and amortization	475			—		14,221			—			14,696
Corporate	9,816			—		—			—			9,816
Write downs, reserves and recoveries	24			—		(63		)	—			(39		)
Total expense	10,315			—		155,872			—			166,187
Operating income (loss)	(10,315		)	—		34,536			—			24,221
Other income (expense)
Interest expense, net	(15,321		)	—		—			—			(15,321		)
Intercompany interest income	15,465			—		—			(15,465		)	—
Intercompany interest expense	—			—		(15,465		)	15,465			—
Income from equity investments in subsidiaries	12,205			—		—			(12,205		)	—
Total other income (expense), net	12,349			—		(15,465		)	(12,205		)	(15,321		)
Income (loss) before income tax	2,034			—		19,071			(12,205		)	8,900
Benefit (provision) for income taxes	2,860			—		(6,866		)	—			(4,006		)
Net income (loss)	$	4,894		$	—	$	12,205		$	(12,205	)	$	4,894

Table of Contents 22 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2015 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	150,602		$	—		$	150,602
Food and beverage	—			—		24,043			—			24,043
Lodging	—			—		14,222			—			14,222
Fuel and retail	—			—		28,252			—			28,252
Other	—			—		6,163			—			6,163
Total revenue	—			—		223,282			—			223,282
Promotional allowances	—			—		(24,793		)	—			(24,793		)
Net revenue	—			—		198,489			—			198,489
EXPENSE
Casino	—			—		59,690			—			59,690
Food and beverage	—			—		23,627			—			23,627
Lodging	—			—		8,106			—			8,106
Fuel and retail	—			—		20,939			—			20,939
Other	—			—		3,368			—			3,368
General and administrative	—			—		38,318			—			38,318
Depreciation and amortization	623			—		13,745			—			14,368
Corporate	9,295			—		—			—			9,295
Write downs, reserves and recoveries	(7		)	—		(62		)	—			(69		)
Total expense	9,911			—		167,731			—			177,642
Operating income (loss)	(9,911		)	—		30,758			—			20,847
Other income (expense)
Interest expense, net	(15,258		)	—		—			—			(15,258		)
Intercompany interest income	15,341			—		—			(15,341		)	—
Intercompany interest expense	—			—		(15,341		)	15,341			—
Income from equity investments in subsidiaries	1,536			—		—			(1,536		)	—
Total other income (expense), net	1,619			—		(15,341		)	(1,536		)	(15,258		)
Income (loss) before income tax	(8,292		)	—		15,417			(1,536		)	5,589
Benefit (provision) for income taxes	8,849			—		(13,881		)	—			(5,032		)
Net income (loss)	$	557		$	—	$	1,536		$	(1,536	)	$	557

Table of Contents 23 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(20,603	)	$	—	$	44,546		$	23,943
Cash flows from investing activities:
Proceeds from sale of property and equipment	—			—		18			18
Purchases of property and equipment	(861		)	—		(7,740		)	(8,601		)
Net cash used in investing activities	$	(861	)	$	—	$	(7,722	)	$	(8,583	)
Cash flows from financing activities:
Restricted cash	(94,945		)	—		—			(94,945		)
Change in intercompany accounts	39,432			—		(39,432		)	—
Payments on capital lease	—			—		(15		)	(15		)
Payments on long-term debt	(2,913		)	—		—			(2,913		)
Loan origination fees	(515		)	—		—			(515		)
Repurchases of vested share-based awards	(73		)	—		—			(73		)
Net cash provided by (used in) financing activities	$	(59,014	)	$	—	$	(39,447	)	$	(98,461	)
Net decrease in cash and cash equivalents	(80,478		)	—		(2,623		)	(83,101		)
Cash and cash equivalents
Beginning of year	106,384			—		51,395			157,779
End of period	$	25,906		$	—	$	48,772		$	74,678

Table of Contents 24 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(12,095	)	$	—	$	36,556		$	24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	3			—		5			8
Purchases of property and equipment	(599		)	—		(6,119		)	(6,718		)
Net cash used in investing activities	$	(596	)	$	—	$	(6,114	)	$	(6,710	)
Cash flows from financing activities:
Change in intercompany accounts	25,248			—		(25,248		)	—
Payments on capital lease	—			—		(16		)	(16		)
Repurchases of vested share-based awards	(47		)	—		—			(47		)
Net cash provided by (used in) financing activities	$	25,201		$	—	$	(25,264	)	$	(63	)
Net increase in cash and cash equivalents	12,510			—		5,178			17,688
Cash and cash equivalents
Beginning of year	88,737			—		46,438			135,175
End of period	$	101,247		$	—	$	51,616		$	152,863

Table of Contents 25 Financial Statement Index

AFFINITY GAMING

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 14. SUBSEQUENT EVENTS

On July 29, 2016 the Board of Directors received a non-binding proposal from Z Capital Partners, L.L.C., on behalf of its affiliated investment funds and/or designees (“Z Capital”), in which, among other things, Z Capital proposed to acquire all of the outstanding common shares of the Company that are not already owned by Z Capital at a purchase price of $15.00 per share in cash. On August 9, 2016, Z Capital increased its offer to $17.35 per share in cash. In connection with Z Capital’s non-binding proposal, the Board appointed a Special Committee of independent directors authorized to, among other things, review Z Capital’s proposal as well as other proposals or strategic alternatives that may be available to the Company. The Company entered into a 15-day exclusivity agreement with Z Capital commencing on August 9, 2016.

Table of Contents 26 Financial Statement Index

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW

Headquartered in Las Vegas, Nevada, Affinity Gaming (together with its subsidiaries, “Affinity” or “we” ) is a diversified, multi-jurisdictional Nevada corporation which operates casinos through wholly-owned subsidiaries in Nevada, Missouri, Iowa and Colorado. Casino operations as of June 30, 2016 included the following wholly-owned casinos (by segment):

Nevada
Silver Sevens Hotel & Casino	Las Vegas, NV	(“Silver Sevens”)
Primm Valley Resort & Casino	Primm, NV	(“Primm Valley”)
Buffalo Bill’s Resort & Casino	Primm, NV	(“Buffalo Bill’s”)
Whiskey Pete’s Hotel & Casino	Primm, NV	(“Whiskey Pete’s”)
Rail City Casino	Sparks, NV	(“Rail City”)
(Collectively, Primm Valley, Buffalo Bill’s and Whiskey Pete’s are referred to as the “Primm Casinos.”)
Midwest
St Jo Frontier Casino	St. Joseph, MO	(“St Jo”)
Mark Twain Casino	La Grange, MO	(“Mark Twain”)
Lakeside Hotel & Casino	Osceola, IA	(“Lakeside”)
Colorado
Golden Mardi Gras Casino	Black Hawk, CO	(“Golden Mardi Gras”)
Golden Gulch Casino	Black Hawk, CO	(“Golden Gulch”)
Golden Gates Casino	Black Hawk, CO	(“Golden Gates”)
(Collectively, Golden Mardi Gras, Golden Gulch and Golden Gates are referred to as the “Black Hawk Casinos.”)

As of June 30, 2016, casino operations collectively offered approximately 288,400 square feet of gaming space with approximately 6,500 slot machines and 124 table games, while lodging operations offered approximately 3,100 hotel rooms.

Prior to April 1, 2015 we also provided consulting services to Hotspur Casinos Nevada, Inc. (“Hotspur”), the operator of the Rampart Casino at the JW Marriott Resort in Las Vegas. Under the terms of the consulting agreement, which expired on April 1, 2015, Hotspur previously paid us a fixed annual fee in monthly installments.

Seasonality

Our casinos in Northern Nevada, the Midwest and Colorado occasionally experience extreme weather conditions which interrupt our operations. Additionally, our casinos in Missouri are subject to flooding depending on the water levels of the Missouri and Mississippi Rivers. Snow and other adverse weather resulted in a significant number of days with lost or reduced business at our Midwest and Colorado properties during the winter of 2014-2015. If there is a prolonged disruption at any of our properties or if there are a disproportionate number of weekends affected by extreme weather, our results of operations and financial condition could be materially adversely affected.

Table of Contents 27

Matters Affecting Comparability of Results

Significant factors or events have had a material impact on our results of operations for the periods discussed below and affect the comparability of our results of operations from period to period.

Marketing programs. We continue to focus on our marketing programs and promotional spending to engage more profitable customers and control our marketing expenses.

Operational efficiencies. Operational efficiency initiatives have resulted in decreased costs including payroll and benefit costs.

Key Performance Indicators

We assess a variety of financial and operational performance indicators to manage our business, but the key performance indicators which we use include gross gaming revenue, promotional allowances and marketing expense, net revenue and controllable operating costs.

Key volume indicators such as slot machine win per unit per day, table game win per unit per day, and promotional allowances as a percentage of gross gaming revenue are analyzed in connection with our casino operations. In addition to the volume indicators, we also analyze the number of patron trips and the amount of money spent per patron trip. The industry uses the term “average daily rate” (“ADR”) to define the average amount of hotel revenue per occupied room per day, and the term “occupancy percentage” to define the total percentage of rooms occupied (i.e., the number of rooms occupied divided by the total number of rooms available). We use ADR and occupancy percentage to analyze the performance of our hotel operations. Fuel and retail operations include revenue from gas stations and convenience stores which we own and operate. Management measures the performance of fuel operations based on gallons sold and profit margin per gallon.

We use earnings before interest expense, net; income tax; depreciation and amortization; share-based compensation expense; pre-opening costs; write offs, reserves and recoveries; loss on extinguishment or modification of debt; loss on impairment of assets; gains or losses on the disposition of assets; and restructuring and reorganization costs (“Adjusted EBITDA”) as a measure of profit and loss to manage the operational performance of each geographical region in which we operate, and to discuss our results with the investment community.

Adjusted EBITDA is a measure which does not conform to generally accepted accounting principles in the United States (“GAAP”). You should not consider this information as an alternative to any measure of performance as promulgated under GAAP, such as operating income and net income. Our calculation of Adjusted EBITDA may be different from the calculations used by other companies; therefore, comparability may be limited. We have included a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, which in our case is operating income from operations.

Table of Contents 28

RESULTS OF OPERATIONS

Reportable Segment Results

The following tables present financial information by reportable segment and by corporate and other (in thousands):

	Quarter Ended June 30,								Six Months Ended June 30,
	2016			2015			Percent Change		2016			2015			Percent Change
Gross revenue
Nevada	$	61,119		$	68,704		(11.0	)%	$	122,900		$	133,754		(8.1	)%
Midwest	32,189			34,473			(6.6	)%	65,310			67,738			(3.6	)%
Colorado	9,553			10,544			(9.4	)%	19,210			21,790			(11.8	)%
Total gross revenue	102,861			113,721			(9.5	)%	207,420			223,282			(7.1	)%
Promotional allowances
Nevada	(5,786		)	(8,378		)	(30.9	)%	(11,682		)	(17,166		)	(31.9	)%
Midwest	(1,744		)	(2,629		)	(33.7	)%	(3,758		)	(5,167		)	(27.3	)%
Colorado	(673		)	(1,203		)	(44.1	)%	(1,572		)	(2,460		)	(36.1	)%
Total promotional allowances	(8,203		)	(12,210		)	(32.8	)%	(17,012		)	(24,793		)	(31.4	)%
Net revenue
Nevada	55,333			60,326			(8.3	)%	111,218			116,588			(4.6	)%
Midwest	30,445			31,844			(4.4	)%	61,552			62,571			(1.6	)%
Colorado	8,880			9,341			(4.9	)%	17,638			19,330			(8.8	)%
Total net revenue	$	94,658		$	101,511		(6.8	)%	$	190,408		$	198,489		(4.1	)%

	Quarter Ended June 30,								Six Months Ended June 30,
	2016			2015			Percent Change		2016			2015			Percent Change
Adjusted EBITDA
Nevada	$	12,120		$	10,915		11.0	%	$	25,014		$	21,437		16.7	%
Midwest	10,388			10,560			(1.6	)%	21,062			20,129			4.6	%
Colorado	1,474			969			52.1	%	2,618			2,875			(8.9	)%
Corporate and other	(4,606		)	(4,853		)	(5.1	)%	(9,116		)	(8,628		)	5.7	%
Total Adjusted EBITDA	$	19,376		$	17,591		10.1	%	$	39,578		$	35,813		10.5	%

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The following tables reconcile Adjusted EBITDA to operating income (in thousands):

	Quarter Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write downs, Reserves and Recoveries			Operating Income
Nevada	$	12,120		$	(3,649	)	$	—		$	105		$	8,576
Midwest	10,388			(2,012		)	—			(14		)	8,362
Colorado	1,474			(1,421		)	—			—			53
Corporate and other	(4,606		)	(230		)	(326		)				(5,162		)
Total operations	$	19,376		$	(7,312	)	$	(326	)	$	91		$	11,829

	Quarter Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write downs, Reserves and Recoveries		Operating Income
Nevada	$	10,915		$	(3,698	)	$	—		$	197	$	7,414
Midwest	10,560			(1,898		)	—			—		8,662
Colorado	969			(1,297		)	—			—		(328		)
Corporate and other	(4,853		)	(312		)	(505		)	7		(5,663		)
Total operations	$	17,591		$	(7,205	)	$	(505	)	$	204	$	10,085

Quarter Ended June 30, 2016 Compared to Quarter Ended June 30, 2015

Overall. We recorded net revenue of $94.7 million during the quarter ended June 30, 2016, a decrease of $6.9 million, or 6.8%, compared to the same quarter in the prior year. Adjusted EBITDA during the second quarter was $19.4 million, an increase of $1.8 million, or 10.1%, compared to the same quarter of 2015. Adjusted EBITDA, excluding corporate expense, increased $1.5 million, or 6.9%. These changes were primarily due to our continuing efforts during 2016 to analyze the effectiveness of our promotional campaigns and refine our marketing programs and implementing volume-based labor scheduling, which have had the effect of reducing costs, decreasing gaming activity from less profitable customers and increasing more profitable play on the gaming floor. While we can provide no assurances, we believe this trend will continue through 2016.

Nevada. Nevada operations include Rail City, Silver Sevens and the Primm Casinos. In addition to casino, lodging and food and beverage operations, our results from the Primm Casinos include the operation of three gas station/convenience stores and a California lottery outlet.  Nevada operations accounted for 59% of our gross revenue during each of the quarters ended June 30, 2016 and 2015.

In our Nevada segment, net revenue decreased $5.0 million, or 8.3%. Casino revenue decreased $3.1 million, or 8.6%. Excluding complimentary revenue, lodging revenue increased $0.2 million. We continue to focus our promotional campaigns to convert complimentary customers to cash customers. Fuel and retail revenue decreased $2.2 million, or 14.0%, due to decreased fuel prices during the quarter ended June 30, 2016 and lower traffic volumes on Interstate 15 through Primm.

Nevada Adjusted EBITDA increased $1.2 million, or 11.0%. The Adjusted EBITDA contribution from casino operations increased $1.6 million, or 10.6%, primarily as a result of implementing volume-based labor scheduling as well as our ongoing

Table of Contents 30

efforts to reduce promotional campaigns and refine marketing programs in 2016 compared to 2015. We also reported an increase in the Adjusted EBITDA contribution from fuel and retail operations of $0.3 million, or 7.8%.

Midwest. Midwest operations include St Jo and Mark Twain in Missouri, and Lakeside in Iowa. Midwest operations accounted for 31% and 30% of our gross revenue during the quarters ended June 30, 2016 and 2015, respectively.

Net revenue from our Midwest segment decreased $1.4 million, or 4.4%. Adjusted EBITDA from our Midwest segment decreased $0.2 million, or 1.6%. Although Adjusted EBITDA from our Midwest segment decreased during the quarter, we are encouraged by increases in Adjusted EBITDA margin at our Midwest properties during the same period and we anticipate the improved operating margins in the Midwest to continue through 2016. Both the decreases in net revenue and Adjusted EBITDA and the increases in Adjusted EBITDA margin are primarily due to our ongoing efforts to refine marketing programs.

Colorado. Colorado operations include the Golden Gates, the Golden Gulch and the Golden Mardi Gras casinos in Black Hawk. Colorado operations accounted for 9% of our gross revenue during each of the quarters ended June 30, 2016 and 2015.

Net revenue from our Colorado segment decreased $0.5 million, or 4.9%. The decrease in net revenue was primarily the result of a $0.9 milliondecrease in casino revenue related to competitive pressures in the market. Colorado Adjusted EBITDA increased $0.5 million, or52.1%, driven primarily by a $0.6 million decrease in gaming tax expense due to lower revenues and normalized gaming tax expense recorded in the current quarter compared to the prior year period. In addition, Adjusted EBITDA has benefited from our efforts to improve operational efficiencies in payroll and other operating costs, as well as lower slot participation fees as we change the variety of games on our casino floor.

The following tables reconcile Adjusted EBITDA to operating income (in thousands):

	Six Months Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	25,014		$	(7,300	)	$	—		$	70		$	17,784
Midwest	21,062			(4,042		)	—			(7		)	17,013
Colorado	2,618			(2,879		)	—			—			(261		)
Corporate and other	(9,116		)	(475		)	(700		)	(24		)	(10,315		)
Total operations	$	39,578		$	(14,696	)	$	(700	)	$	39		$	24,221

	Six Months Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	21,437		$	(7,386	)	$	—		$	120		$	14,171
Midwest	20,129			(3,793		)	—			—			16,336
Colorado	2,875			(2,566		)	—			(58		)	251
Corporate and other	(8,628		)	(623		)	(667		)	7			(9,911		)
Total operations	$	35,813		$	(14,368	)	$	(667	)	$	69		$	20,847

Table of Contents 31

Six Months Ended June 30,2016 Compared to Six Months Ended June 30,2015

Overall. We recorded net revenue from operations of $190.4 million during the six months endedJune 30, 2016, compared to net revenue from operations of $198.5 million for the same period in the prior year, a decrease of $8.1 million, or 4.1%. Adjusted EBITDA was $39.6 million compared to $35.8 million during the same period of 2015, an increase of $3.8 million, or 10.5%. Adjusted EBITDA, excluding corporate expense, increased $4.3 million, or 9.6%. These increases were primarily due to our efforts to continue to analyze the effectiveness of our promotional campaigns and refine our marketing programs, which have had the effect of reducing costs and driving more profitable play on the gaming floor. While we can provide no assurances, we believe this trend will continue through 2016.

Nevada. Nevada operations accounted for approximately 59% of our gross revenue from operations during each of the six months endedJune 30, 2016 and 2015.

In our Nevada segment, net revenue decreased $5.4 million, or 4.6%. Casino revenue decreased $4.5 million, or 6.3%, while lodging revenue decreased $1.8 million, or 13.9%. Excluding complimentary revenue, lodging revenue increased $1.0 million compared to the same period in the prior year. We continue to focus our promotional campaigns to convert complimentary customers to cash customers. Fuel and retail revenue decreased $2.5 million, or 9.0%, due to decreased fuel prices during the six months endedJune 30, 2016 and lower traffic volumes on Interstate 15 through Primm.

Nevada Adjusted EBITDA increased $3.6 million, or 16.7%. The Adjusted EBITDA contribution from casino operations increased $4.3 million, or 14.9%, primarily as a result of implementing volume-based labor scheduling and optimizing our slot floor, as well as our ongoing effort to reduce promotional campaigns and refine marketing programs in 2016 compared to 2015. In addition, the Adjusted EBITDA contribution from fuel and retail operations increased $0.8 million, or 11.8%.

Midwest. Midwest operations accounted for approximately 31% of our gross revenue from operations during each of the six months endedJune 30, 2016 and 2015.

Net revenue from our Midwest segment decreased $1.0 million, or 1.6%. Adjusted EBITDA from our Midwest segment increased $0.9 million, or 4.6%. These increases primarily resulted from more focused marketing campaigns, which drove more profitable play on the gaming floor. We are encouraged by our Midwest properties’ performance and we anticipate improved operating margins in the Midwest as we continue to analyze and refine our marketing campaigns.

Colorado. Colorado operations accounted for approximately 9% of our gross revenue from operations during each of the six month periods presented.

Net revenue from our Colorado segment decreased $1.7 million, or 8.8%. The decrease in net revenue was primarily related to lower gaming volumes in 2016 as a result of competitive pressures in the market. Colorado Adjusted EBITDA decreased $0.3 million, or 8.9%, driven primarily by a decrease of $0.2 million, or 3.5%, in the Adjusted EBITDA contribution from casino operations, the result of more focused marketing campaigns on profitable players in 2016.

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Revenue and Expense by Category

The following table presents detail of our consolidated gross revenue and expense by category (in thousands):

	Quarter Ended June 30,								Six Months Ended June 30,
	2016			2015			Percent Change		2016			2015			Percent Change
Total revenue
Casino	$	69,448		$	75,505		(8.0	)%	$	141,331		$	150,602		(6.2	)%
Food and beverage	10,384			12,082			(14.1	)%	21,208			24,043			(11.8	)%
Lodging	6,031			7,190			(16.1	)%	12,429			14,222			(12.6	)%
Fuel and retail	13,390			15,676			(14.6	)%	25,530			28,252			(9.6	)%
Other	3,608			3,268			10.4	%	6,922			6,163			12.3	%
Total revenue	102,861			113,721			(9.5	)%	207,420			223,282			(7.1	)%
Promotional allowances	(8,203		)	(12,210		)	(32.8	)%	(17,012		)	(24,793		)	(31.4	)%
Net revenue	$	94,658		$	101,511		(6.8	)%	$	190,408		$	198,489		(4.1	)%
Departmental cost and expense
Casino	$	26,181		$	29,956		(12.6	)%	$	53,562		$	59,690		(10.3	)%
Food and beverage	10,378			11,800			(12.1	)%	21,170			23,627			(10.4	)%
Lodging	4,205			4,197			0.2	%	8,553			8,106			5.5	%
Fuel and retail	9,106			11,675			(22.0	)%	17,403			20,939			(16.9	)%
Other	1,956			1,838			6.4	%	3,463			3,368			2.8	%
General and administrative	18,850			19,601			(3.8	)%	37,563			38,318			(2.0	)%
Depreciation and amortization	7,312			7,205			1.5	%	14,696			14,368			2.3	%
Corporate	4,932			5,358			(8.0	)%	9,816			9,295			5.6	%
Write downs, reserves and recoveries	(91		)	(204		)	(55.4	)%	(39		)	(69		)	(43.5	)%
Departmental cost and expense	$	82,829		$	91,426		(9.4	)%	$	166,187		$	177,642		(6.4	)%
Departmental Adjusted EBITDA Margins
Gaming	62.3		%	60.3		%			62.1		%	60.4		%
Food and beverage	0.1		%	2.3		%			0.2		%	1.7		%
Lodging	30.3		%	41.6		%			31.2		%	43.0		%
Fuel and retail	32.0		%	25.5		%			31.8		%	25.9		%
Other	45.8		%	43.8		%			50.0		%	45.4		%

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Gross Revenue. Generally, the casino gaming industry defines gaming revenue as gaming wins less gaming losses.  We derive the majority of our gaming revenue, which we report in the Casino line item, from slot machines. Casino revenue also includes table game revenue and bingo, keno and poker revenue, where offered. Our gross revenue also includes:

• food and beverage revenue, which we earn from sales in restaurants and outlets we own and operate at our casinos and from room service sales;

• lodging revenue, which we earn from rooms we provide to customers;

• fuel and retail revenue, which we earn from sales of fuel, food and beverage items at franchised food outlets, lottery tickets and other retail items at facilities we own at the Primm Casinos, and at facilities we own and lease to third-parties at the Primm Casinos and Lakeside; and

• other revenue, which we earn from sources such as consulting agreements, leasing agreements, entertainment services, and ATMs at our casino properties.

We recognize revenue at the time we provide the product, room or service to the guest or the third-party.

Promotional allowances consist primarily of food, beverage, lodging and entertainment furnished gratuitously to customers, as well as incentives earned in our guest rewards program such as cash rewards or complimentary goods and services. We include the retail value of items or services furnished gratuitously to customers in the respective revenue classifications, then we deduct the total amount of promotional allowances from total revenue.

Cost and Expense. We aggregate our direct costs and expense, including selling, general and administrative expense for each of our operations, and include them in the expense of our reportable segments, as discussed in “Reportable Segment Results.”

Corporate expense represents unallocated payroll, professional fees and other expense which we do not directly attribute to our reportable segments, as well as share-based compensation. We present corporate expense net of management fees or expense charged to our properties and cash fees earned under our consulting agreement with Hotspur, the operator of the Rampart Casino at the JW Marriott Resort in Las Vegas, from which we collected $0.5 million in management fees during the six months endedJune 30, 2015. The consulting agreement with Hotspur expired on April 1, 2015.

Quarter Ended June 30, 2016 Compared to Quarter Ended June 30, 2015

Corporate expense, excluding share-based compensation, decreased by $0.2 million, or 5.1%, primarily as a result of decreased payroll and benefits expense in the current quarter. These items were partially offset by a decrease in expenses we incurred as part of activities that we do not consider part of regular operations. During the second quarter of 2016, such activities included a legal settlement related to a lawsuit filed by a professional services firm against us, and numerous Nevada casino operators, in 2013. During the second quarter of 2015, such activities included evaluating strategic initiatives and searching for a new Chief Financial Officer. The Second Amended Credit Agreement allows us to add back such non-recurring expense to arrive at EBITDA, as defined in the credit agreement, when calculating our debt covenants. We incurred $0.5 million of non-recurring expense during the quarter ended June 30, 2016, compared to $0.8 million in the same period of the prior year. Excluding the non-recurring expense items and share-based compensation, we incurred $4.1 million of corporate expense during each of the quarters ended June 30, 2016 and 2015.

Net interest expense of $7.7 million for the each of the quarters ended June 30, 2016 and 2015, includes amortization of costs associated with the second amendment to the Credit Agreement and the modification of the indenture governing the 2018 Notes, which occurred in July 2014.

The income tax provision for the quarters ended June 30, 2016 and 2015, was $2.4 million and $1.6 million, respectively. Our effective income tax rate varied from the federal statutory rate for the quarters ended June 30, 2016 and 2015, primarily due to the amortization of indefinite-lived intangibles.

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Six Months EndedJune 30, 2016 Compared to Six Months EndedJune 30, 2015

Corporate expense, excluding share-based compensation, increased by $0.5 million, or 5.7%, primarily as a result of increased payroll and benefits expense in the current period, as well as the decrease in management fee income due to the expiration of our consulting agreement with the JW Marriott Resort on April 1, 2015. These items were partially offset by a decrease in expenses we incurred as part of activities that we do not consider part of regular operations. During the six months endedJune 30, 2016, such activities included evaluation of strategic transactions initiatives. During the same period in 2015, such activities included evaluating third party proposals to acquire the Company as well as other strategic alternatives and strategic initiatives. The Second Amended Credit Agreement allowed us to add back such non-recurring expense to EBITDA, as defined in the credit agreement, when calculating our debt covenants. We incurred $1.1 million of non-recurring expense during the six months endedJune 30, 2016, compared to $1.6 million in the same period of the prior year. Excluding the non-recurring expense items and share-based compensation, we incurred $8.0 million and $7.1 million of corporate expense during the six months endedJune 30, 2016 and 2015, respectively.

Net interest expense increased $0.1 million, or 0.4%, as a result of costs associated with the second amendment to the 2012 Credit Facility and the modification of the indenture governing the 2018 Notes.

The income tax provision for the six months endedJune 30, 2016 and 2015, was $4.0 million, and $5.0 million, respectively. Our effective income tax rates varied from the federal statutory rate for the six months endedJune 30, 2016 and 2015, primarily due to the amortization of indefinite-lived intangibles.

LIQUIDITY AND CAPITAL RESOURCES

Overview

We rely on cash flows from operations as our primary source of liquidity. Subsequent to the quarter end, on July 1, 2016, we entered into a Credit Agreement (the “2016 Credit Agreement”), which provides for a $300.0 million term loan facility (the “2016 Term Loan”) and a $75 million revolving credit facility (the “2016 Revolving Credit Facility” and, together with the 2016 Term Loan, the “2016 Credit Facility”) which remained undrawn on the closing date of the 2016 Credit Agreement. The 2016 Term Loan will be payable in quarterly installments, commencing on September 30, 2016, in an amount equal to 0.25% of the 2016 Term Loan until the maturity date, July 1, 2023, upon which date the remaining balance will come due. Amounts outstanding under the 2016 Revolving Credit Facility will be due and payable on July 1, 2021. The interest rate under the 2016 Term Loan is at a floating rate not less than 5.0%. We used the proceeds of the 2016 Term Loan together with $94.9 million in cash from our balance sheet to repay all amounts outstanding under our prior term loan due 2017 (the “2012 Term Loan”) and redeem the $200.0 million of 9.00% senior unsecured notes due 2018 (the “2018 Notes”). We are currently determining the impact of this refinancing on its results of operations.

The 2016 Credit Facility permits us to incur limited indebtedness for trade payables and capital leases in the ordinary course of business, and provides an accordion feature, whereby we may borrow additional amounts subject to certain terms and conditions under the 2016 Credit Agreement). We cannot assure you that, if required, we will be able to obtain the necessary approval for additional borrowing under our 2016 Credit Facility.

The 2016 Amended Credit Agreement requires us to make a mandatory prepayment of amounts outstanding under certain circumstances.

The 2016 Credit Facility also contains various covenants which limit our ability to take certain actions including, among other things, our ability to:

• incur additional debt;

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• pay dividends or make other distributions or certain restricted payments;

• make certain investments;

• create liens;

• make certain dispositions; merge or consolidate with other entities; and

• enter into transactions with affiliates.

Prior to the entry into the 2016 Credit Facility, we incurred and paid interest on the 2012 Term Loan under a Second Amended Credit Agreement at an uncommitted floating rate of LIBOR plus 4.00%, subject to a LIBOR floor of 1.25%.  The Second Amended Credit Agreement also required us to pay commitment fees related to the 2012 Revolving Credit Facility equal to an annualized rate of 0.50% on undrawn amounts when the net leverage ratio was greater than 3.50 to 1.00, or equal to an annualized rate of 0.375% on undrawn amounts when the net leverage ratio was less than or equal to 3.50 to 1.00.  Unamortized loan fees, which we have amortized over the life of the 2018 Notes and the 2012 Term Loan, totaled $4.9 million at June 30, 2016, and are reported as an offset to the related debt. As of June 30, 2016, we remained in compliance with all covenants specified in the Second Amended Credit Agreement.

Our primary cash needs for the next twelve months of operation include quarterly interest and principal payments on our debt and capital expenditures. Our capital expenditure needs include maintenance capital and capital for the acquisition of slot machines and of other equipment required to keep our facilities competitive. The most significant components of our working capital are cash, prepaid expense, accounts payable and accrued expense. Our liquidity position benefits from the fact that we generally collect cash from transactions with customers the same day or, in the case of credit or debit card transactions, within a few days of the related transaction.

A variety of factors, many of which are outside of our control, affect our cash flow; those factors include litigation, regulatory issues, competition, financial markets, smoking bans (particularly in Missouri where the bans are determined by municipalities) and other general business conditions.  We believe that we will have sufficient liquidity through available cash, which as of June 30, 2016 was $74.7 million, trade credit and cash flow to fund our cash requirements and maintenance capital expenditures for at least the next twelve months.  However, we cannot assure you that we will generate sufficient income and cash flow to meet all of our liquidity requirements.

Cash Flows from Operating Activities

Operating activities provided $23.9 million through June 30, 2016, compared to $24.5 million provided through June 30, 2015. The decrease in cash provided by operating activities was driven by payment timing related to the elements of working capital.

Cash Flows from Investing Activities

Investing activities used $8.6 million through June 30, 2016, compared to using $6.7 million through June 30, 2015.  Net cash used in investing activities through June 30, 2016 is primarily comprised of capital expenditures, which were $8.6 million and $6.7 million during the six months ended June 30, 2016 and 2015, respectively.

Cash Flows from Financing Activities

Financing activities used $98.5 million and $0.1 million, respectively, during the six months ended June 30, 2016 and 2015. Net cash used in financing activities through June 30, 2016 is primarily comprised of the transfer of $94.9 million in restricted cash to fund the refinancing of our existing debt that occurred on July 1, 2016. Financing activities also include repayments of long-term debt and repurchases of vested share based awards.

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Off-Balance Sheet Arrangements

We currently have no material off-balance sheet arrangements.

Critical Accounting Policies

For a discussion of our critical accounting policies and the means by which we develop estimates therefrom, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the SEC on March 23, 2016 (“2015 Form 10-K”), and as clarified in Note 2 to our financial statements in relation to our accounting for income taxes.

Recently Issued Accounting Pronouncements

Please refer to Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere in this report for a discussion regarding recently issued accounting pronouncements which may affect us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, primarily related to interest rate exposure of our debt obligations that bear interest based on floating rates. None of our cash or cash equivalents as of June 30, 2016 are subject to market risk based on changes in interest rates. We are exposed to market risk due to floating or variable interest rates on our indebtedness under the 2016 Term Loan.  The interest rate on the outstanding balance of the 2016 Term Loan is determined by, at the Company’s option, either: (i) the Eurodollar rate (not less than 1.00%) plus 4.00%, or (ii) an adjusted base rate (not less than 2.00%) plus 3.00%. The interest rate on the outstanding balance from time to time of the 2016 Revolving Credit Facility is determined by, at the Company’s option, either: (i) the Eurodollar rate plus 4.00%, or (ii) an adjusted base rate plus 3.00%; provided that for any period ending on or after the Company’s financial statements are delivered for the fiscal quarter ending September 30, 2016, the interest rate is determined by, at the Company’s option, either: (i) the Eurodollar rate plus a variable margin based upon the Company’s first lien leverage ratio, or (ii) an adjusted base rate plus a variable margin based upon the Company’s first lien leverage ratio. At July 1, 2016, the principal amount of the related borrowings under our 2016 Credit Facility was $300.0 million. A hypothetical 1.0% increase in LIBOR (or base rate) above the current floor would result in an approximately $3.0 million annual increase in interest expense.

The carrying values of our cash, trade receivables, and trade payables approximate their fair value primarily because of the short maturities of these instruments. We estimate the fair value of our long-term debt based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. Based on the borrowing rates currently available to us for debt with similar terms and average maturities, we estimated the fair value of outstanding debt to be $378.5 million as of June 30, 2016.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that the information we must disclose in reports we file or submit under the Securities Exchange Act of 1934, as amended (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. We designed our disclosure controls with the objective of ensuring we accumulate and communicate this information to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and

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procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under Exchange Act, as of the end of the period covered by this report. Based on our evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Changes in Internal Control over Financial Reporting

We made no change in our internal control over financial reporting during the fiscal quarter ended June 30, 2016, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our previously reported legal proceedings, refer to “Part I.  Item 3. — Legal Proceedings” in our 2015 Form 10-K, as updated in Note 11 to the accompanying unaudited condensed consolidated financial statements.

We are party to other ordinary and routine litigation incidental to our business. We do not expect the outcome of any pending litigation to have a material adverse effect on our consolidated financial position or results of operations.

ITEM 1A. RISKFACTORS

Other than as described below, we have not identified any material changes to the risk factors described in our 2015 Form 10-K. Risks other than those in our 2015 Form 10-K may materially adversely affect our business, financial condition or future results, including risks and uncertainties not currently known to us or those that we currently believe are immaterial.

There are risks and uncertainties as a result of Z Capital’s non-binding proposal to acquire the Company.

On July 29, 2016 the Board of Directors received a non-binding proposal from Z Capital Partners, L.L.C., on behalf of its affiliated investment funds and/or designees (“Z Capital”), in which, among other things, Z Capital proposed to acquire all of the outstanding common shares of the Company that are not already owned by Z Capital at a purchase price of $15.00 per share in cash. On August 9, 2016, Z Capital increased its offer to $17.35 per share in cash. In connection with Z Capital’s non-binding proposal, the Board appointed a Special Committee of independent directors authorized to, among other things, review Z Capital’s proposal as well as other proposals or strategic alternatives that may be available to the Company. The Company entered into a 15-day exclusivity agreement with Z Capital commencing on August 9, 2016.

The Special Committee has not entered into any definitive agreement with respect to Z Capital’s non-binding proposal. There can be no assurance that any agreement on terms satisfactory to the Special Committee or the Board of Directors will result from the proposal, or that any other transaction will be approved or completed. In addition, the Company expects to incur significant costs, expenses and fees for professional services and other transaction costs in connection with Z Capital’s proposal, and many of these fees and costs will be payable by the Company regardless of whether or not any potential transaction is consummated.

RISKS RELATED TO OUR INDEBTEDNESS

We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business.

We have a substantial amount of debt, which requires significant principal and interest payments. As of June 30, 2016, we had $379.8 million of debt outstanding, excluding unamortized debt issuance costs and issue discount and including $200.0 million outstanding under the 2018 Notes and$179.8 million of secured debt outstanding under our 2012 Term Loan. On July 1, 2016, the full amount of the 2018 Notes and the 2012 Term Loan were repaid in connection with our entry into the 2016 Credit Agreement and draw down of $300.0 million under the 2016 Term Loan. As of July 1, 2016, we had $300 million of debt outstanding.

Our significant amount of debt could have important consequences. For example, it could:

• make it more difficult for us to satisfy our obligations with respect to the instruments governing our then outstanding indebtedness;

• increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings, including those under our 2016 Credit Facility, are and will continue to be at variable rates of interest;

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• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures, strategic acquisitions or other general corporate purposes;

• limit our flexibility in planning for, or reacting to, competitive pressures and changes in the business and industry in which we operate;

• place us at a disadvantage compared to competitors that may have proportionately less debt;

• limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and

• increase our cost of borrowing.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations, or that these actions would be permitted under the terms of our existing or future debt agreements. In the absence of such cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our debt instruments restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them, and any proceeds may not be adequate to meet any debt service obligations then due.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

• our debt holders could declare all outstanding principal and interest to be due and payable;

• the lenders under our 2016 Credit Facility could terminate their commitments to loan us money and foreclose against the assets securing their borrowings; and

• we could be forced into bankruptcy or liquidation.

The agreements and instruments governing our debt contain restrictions and limitations that impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The 2016 Credit Facility imposes significant operating and financial restrictions on us. These restrictions limit our ability, among other things, to:

• incur additional debt;

• pay dividends and make other distributions;

• make certain investments;

• make certain restricted payments;

• create liens;

• enter into transactions with affiliates;

• make certain dispositions; and

• merge or consolidate.

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In addition, the 2016 Credit Facility contains certain financial covenants, including a first lien secured net leverage ratio covenant, a maximum capital expenditures covenant and a total secured leverage ratio covenant.

As a result of these covenants and restrictions, we are limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The restrictions caused by such covenants could also place us at a competitive disadvantage to less leveraged competitors. The terms of any future indebtedness we may incur could include more restrictive covenants. Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross default provisions.  A default, if not cured or waived, would permit lenders to accelerate the maturity of the indebtedness under these agreements, terminate any funding commitments to extend future credit, require us to apply all available cash to repay the borrowings, and/or foreclose upon any collateral securing such indebtedness, including pledges of equity interests of entities owning our casino properties, which could result in the lenders owning, and controlling, the equity of certain of our casino properties. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations. We would, therefore, be required to seek alternative sources of funding, which may not be available on commercially reasonable terms, terms as favorable as our current agreements or at all, or face bankruptcy. If we are unable to refinance our indebtedness or find alternative means of financing our operations, we may be required to curtail our operations or take other actions that are inconsistent with our current business practices or strategy. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Despite our substantial indebtedness, we may still be able to incur significantly more debt, which could intensify the risks described above.

Although the terms of the agreements governing our indebtedness contain restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of important qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. Our 2016 Credit Facility allows us to (i) increase the aggregate amount of term loans and/or revolving loans by additional amounts subject to certain terms and conditions under the 2016 Credit Agreement, (ii) incur capital lease obligations and purchase money indebtedness for fixed or capital assets in an aggregate amount not to exceed the greater of $20 million or 26.66% of consolidated EBITDA (with such indebtedness being secured by the assets leased or acquired), and (iii) incur other indebtedness in an amount not to exceed the greater of $15 million or 20% of consolidated EBITDA.If new debt is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.

The state of the financial markets may impact our ability to obtain sufficient financing and credit in the future.

In addition to earnings and cash flows from operations, we may rely on borrowed money to finance our business, which may be constrained if we are unable to borrow additional capital or refinance existing borrowings on reasonable terms. Over the past several years, financial markets and banking systems experienced disruption which had a dramatic impact on the availability and cost of capital and credit. The United States and other governments have enacted legislation and taken other actions to help alleviate these conditions, although there is no assurance that such steps will have the effect of easing the conditions in credit and capital markets over the long term. Therefore, we have no assurance that such steps will facilitate us being able to obtain financing or access the capital markets for future debt or refinancing opportunities in a timely manner, or on acceptable terms, or at all. If we are unable to borrow funds, we may be unable to make the capital expenditures necessary for us to compete with other casino operators or take advantage of new business opportunities. As a result, the lack of such funding could have a material adverse effect on our business, results of operations and financial condition and our ability to service our indebtedness.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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†

† Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements 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. 

		AFFINITY GAMING
Dated:	August 15, 2016	By:	/s/ Michael Silberling
		Name:	Michael Silberling
		Title:	Chief Executive Officer
Dated:	August 15, 2016	By:	/s/ Walter Bogumil
		Name:	Walter Bogumil
		Title:	Senior Vice President, Chief Financial Officer and Treasurer

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Silberling, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Affinity Gaming;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2016

By:	/s/ Michael Silberling
	Michael Silberling
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter Bogumil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Affinity Gaming;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2016

By	/s/ Walter Bogumil
	Walter Bogumil
	Senior Vice President, Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

We; Michael Silberling, the registrant's principal executive officer, and Walter Bogumil, the registrant's principal financial officer; certify that:

1. the accompanying Quarterly Report on Form 10-Q for the period ended June 30, 2016 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Affinity Gaming at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided to Affinity Gaming, which will retain it and furnish it to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

Date: August 15, 2016

/s/ Michael Silberling

Michael Silberling

Chief Executive Officer

/s/ Walter Bogumil

Walter Bogumil

Senior Vice President, Chief Financial Officer and Treasurer

The foregoing certification is being furnished solely pursuant to the requirements of 18 U.S.C. § 1350 and is not being filed as a part of the Report or as a separate disclosure document.

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Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
DEI [Abstract]
Entity Registrant Name	Affinity Gaming
Entity Central Index Key	0001499268
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		20,462,329

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 74,678	$ 157,779
Restricted cash	95,553	608
Accounts receivable, net of reserve of $117 and $147, respectively	2,603	3,217
Income tax receivable	24	16
Prepaid expense	8,682	10,079
Inventory	2,832	2,798
Total current assets	184,372	174,497
Property and equipment, net	245,153	251,908
Other assets, net	3,971	3,530
Intangibles, net	122,791	124,042
Goodwill	48,287	48,287
Total assets	604,574	602,264
Current liabilities
Accounts payable	9,391	13,220
Accrued interest	2,365	2,327
Accrued expense	22,082	24,158
Current maturities of long-term debt	0	11,383
Other current liabilities	8	23
Total current liabilities	33,846	51,111
Long-term debt, less current portion	374,261	364,204
Other liabilities	1,984	1,932
Deferred income taxes	18,764	14,758
Total liabilities	428,855	432,005
Commitments and contingencies (Note 11)
Owners' equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued or outstanding	0	0
Common stock, $0.001 par value; 200,000,000 shares authorized; 20,462,329 and 20,377,247 shares issued and outstanding for 2016 and 2015, respectively	20	20
Additional paid-in-capital	208,805	208,239
Accumulated deficit	(33,106)	(38,000)
Total owners’ equity	175,719	170,259
Total liabilities and owners’ equity	$ 604,574	$ 602,264

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable reserve	$ 117	$ 147
Common stock, par value (usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	200,000,000	200,000,000
Common stock, shares issued (shares)	20,462,329	20,377,247
Common stock, shares outstanding (shares)	20,462,329	20,377,247
Preferred stock, par value (usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0

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Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
REVENUE
Casino	$ 69,448	$ 75,505	$ 141,331	$ 150,602
Food and beverage	10,384	12,082	21,208	24,043
Lodging	6,031	7,190	12,429	14,222
Fuel and retail	13,390	15,676	25,530	28,252
Other	3,608	3,268	6,922	6,163
Total revenue	102,861	113,721	207,420	223,282
Promotional allowances	(8,203)	(12,210)	(17,012)	(24,793)
Net revenue	94,658	101,511	190,408	198,489
EXPENSE
Casino	26,181	29,956	53,562	59,690
Food and beverage	10,378	11,800	21,170	23,627
Lodging	4,205	4,197	8,553	8,106
Fuel and retail	9,106	11,675	17,403	20,939
Other	1,956	1,838	3,463	3,368
General and administrative	18,850	19,601	37,563	38,318
Depreciation and amortization	7,312	7,205	14,696	14,368
Corporate	4,932	5,358	9,816	9,295
Write downs, reserves and recoveries	(91)	(204)	(39)	(69)
Total expense	82,829	91,426	166,187	177,642
Operating income	11,829	10,085	24,221	20,847
Other expense
Interest expense, net	(7,656)	(7,653)	(15,321)	(15,258)
Total other expense, net	(7,656)	(7,653)	(15,321)	(15,258)
Income before income tax	4,173	2,432	8,900	5,589
Provision for income taxes	(2,390)	(1,635)	(4,006)	(5,032)
Net income (loss)	$ 1,783	$ 797	$ 4,894	$ 557

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 4,894	$ 557
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,696	14,368
Amortization of debt costs and discounts	1,587	1,459
Loss (gain) on sale of property and equipment	9	(1)
Share-based compensation	700	667
Deferred income taxes	4,006	5,001
Changes in operating assets and liabilities:
Accounts receivable, net	614	506
Prepaid expense	1,397	1,484
Inventory	(34)	(75)
Other assets	114	100
Accounts payable	(1,967)	836
Accrued interest	38	(26)
Accrued expense	(2,076)	(511)
Income tax receivable	(8)	116
Other liabilities	(27)	(20)
Net cash provided by operating activities	23,943	24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	18	8
Purchases of property and equipment	(8,601)	(6,718)
Net cash used in investing activities	(8,583)	(6,710)
Cash flows from financing activities:
Restricted cash	(94,945)	0
Payment on capital lease	15	16
Payment on long-term debt	(2,913)	0
Loan origination fees	(515)	0
Repurchases of vested share-based awards	(73)	(47)
Net cash provided by (used in) financing activities	(98,461)	(63)
Net (decrease) increase in cash and cash equivalents	(83,101)	17,688
Cash and cash equivalents:
Beginning of period	157,779	135,175
End of period	74,678	152,863
Supplemental cash flow information:
Cash paid during the period for interest	13,851	13,916
Supplemental schedule of non-cash investing and financing activities:
Purchase of property and equipment financed through accounts payable	706	402
Non-cash loan origination fees	$ 6	$ 0

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Organization, Consolidation and Presentation of Financial Statements

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements

NOTE 1. ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

Organization and Business

Affinity Gaming (together with its subsidiaries, “Affinity” or “we”) is a Nevada corporation, headquartered in Las Vegas, which owns and operates 11 casinos, five of which are located in Nevada, three in Colorado, two in Missouri and one in Iowa. We also provided consulting services to Hotspur Casinos Nevada, Inc. (“Hotspur”), the operator of the Rampart Casino at the JW Marriott Resort in Las Vegas until the expiration of the related consulting agreement on April 1, 2015. Hotspur previously paid us a fixed annual fee in monthly installments.

Consolidation

We include all of our subsidiaries in our consolidated financial statements, eliminating all intercompany balances and transactions during consolidation.

Basis of Presentation

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). While preparing our financial statements, we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expense during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require us to make extensive use of estimates include the fair values of assets and liabilities related to depreciation and amortization, the estimates used when computing share-based compensation expense, the estimated allowance for doubtful accounts receivable and the estimated cash flows we use in assessing the recoverability of long-lived assets, as well as the estimated fair values of certain assets related to write downs and impairments, contingencies and litigation, and claims and assessments.

We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, with the audited Consolidated Balance Sheet amounts as of December 31, 2015 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Statements of Cash Flows in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP, though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading.

Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period.

Management believes our unaudited condensed consolidated interim financial statements include all the normal recurring adjustments necessary to fairly present our unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, our unaudited Condensed Consolidated Statements of Operations and our unaudited Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within our 2015 Form 10-K.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

We have made no material changes to our significant accounting policies as reported in our 2015 Form 10-K.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases, that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. Lessees and lessors are required to apply a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, and early application is permitted. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2014-09 stipulate that an entity should recognize revenue in an amount which reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers, and they provide a five-step process to assist entities with achieving that core principle. The ASU also specifies the accounting for some costs to obtain or fulfill a contract with a customer. With regard to disclosures, ASU 2014-09 states that entities should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, and it requires qualitative and quantitative disclosures concerning contracts with customers, significant judgments and changes therein, and assets recognized from the costs incurred to obtain or fulfill a contract. The amendments in ASU 2014-09, have been deferred for one year and are effective for annual reporting periods beginning after December 15, 2017, including interim periods therein, and they permit either retrospective application to all prior periods or retrospective application with the cumulative effect of application recognized on the initial application date. Early adoption is permitted for annual and interim periods beginning after December 31, 2016. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

We have reviewed all other recently issued accounting pronouncements and, other than those we have disclosed above or in previous filings with the SEC, we do not believe any of such pronouncements will have a material effect on our operations.

Reclassifications

The unaudited condensed consolidated financial statements and related notes reflect certain reclassifications to prior year amounts in order to conform with current year presentation. The reclassifications have no effect on previously reported net income.

In November 2015, the FASB issued an accounting standards update which changes the presentation of deferred taxes in classified balance sheets. The new guidance requires classification of all deferred tax assets and liabilities as well as applicable valuation allowances as non-current. The effective date for this guidance is for financial statements issued for annual and interim periods beginning after December 15, 2016. Early application is permitted. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have applied the guidance in the accompanying condensed consolidated financial statements with retrospective application for the Consolidated Balance Sheet at December 31, 2015. The effect of the accounting change in the prior year resulted in current deferred income taxes of $1.7 million, previously presented separately in current liabilities, to be added to $13.1 million in long-term deferred income taxes, for a revised $14.8 million in long-term deferred income taxes at December 31, 2015.

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Restricted Cash

6 Months Ended

Jun. 30, 2016

Cash and Cash Equivalents [Abstract]

Restricted Cash

NOTE 3. RESTRICTED CASH

Restricted cash balances at June 30, 2016 and December 31, 2015 include cash or certificates of deposit required for gaming activity in certain jurisdictions in which we operate, and for self-insured retention obligations under some of our workers compensation insurance policies. In addition, restricted cash includes $94.9 million held at June 30, 2016 in contemplation of the refinancing of our outstanding debt, which was completed on July 1, 2016.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

NOTE 4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands, except estimated lives):

	Estimated Life (Years)	June 30, 2016			December 31, 2015
Building and improvements	7 - 40	$	187,106		$	185,875
Gaming equipment	3 - 10	78,671			75,527
Furniture, fixtures, and equipment	3 - 10	51,475			49,571
Leasehold improvements	7	196			196
Land	—	39,513			39,513
Barge	30	15,019			15,019
Construction-in-progress		3,027			3,185
Total property and equipment		375,007			368,886
Less accumulated depreciation		(129,854		)	(116,978		)
Total property and equipment, net		$	245,153		$	251,908

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

We determine the fair value of the indefinite-lived intangible assets other than goodwill using the discounted cash flow method, a form of the income approach.  In determining the fair values, we make significant assumptions relating to variables based on past experiences and judgments about future performance.  These variables include, but are not limited to: (1) the forecast earnings growth rate of each market, (2) risk-adjusted discount rate, and (3) expected growth rates in perpetuity to estimated terminal values.

The following table summarizes intangible assets by category (in thousands):

	June 30, 2016							December 31, 2015
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Finite-lived intangible assets
Customer loyalty programs	$	12,164	$	(9,583	)	$	2,581	$	12,164	$	(8,583	)	$	3,581
Trademarks	2,982		(2,649		)	333		2,982		(2,398		)	584
	15,146		$	(12,232	)	2,914		15,146		$	(10,981	)	4,165
Indefinite-lived intangible assets
Gaming license rights	110,646					110,646		110,646					110,646
Local tradenames	9,231					9,231		9,231					9,231
	119,877					119,877		119,877					119,877
Total intangible assets	$	135,023				$	122,791	$	135,023				$	124,042

The following table summarizes the changes in goodwill by reportable segment during the six months endedJune 30, 2016:

	Nevada		Midwest		Total
Balance at December 31, 2015	$	33,665	$	14,622	$	48,287
Impairment of goodwill	—		—		—
Balance at June 30, 2016	$	33,665	$	14,622	$	48,287

We amortize definite-lived intangible assets ratably over their expected lives which, for customer loyalty programs, approximate seven years and, for trademarks, approximate 3.75 years. Overall, we are amortizing definite-lived intangible assets over a weighted-average expected life of approximately 6.5 years.

We obtain gaming license rights when we acquire gaming entities that operate in gaming jurisdictions where competition is limited, such as states where the law only allows a certain number of operators.  We do not currently amortize gaming license rights and local tradenames because we have determined they have an indefinite useful life.

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Other Assets

6 Months Ended

Jun. 30, 2016

Other Assets [Abstract]

Other Assets

NOTE 6. OTHER ASSETS, NET

Other assets, net consist of the following (in thousands):

	June 30, 2016		December 31, 2015
Long-term deposits	$	2,924	$	2,919
Other assets	1,047		611
Total	$	3,971	$	3,530

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Accrued Expense

6 Months Ended

Jun. 30, 2016

Accrued Liabilities, Current [Abstract]

Accrued Expense

NOTE 7. ACCRUED EXPENSE

Accrued expense consists of the following (in thousands):

	June 30, 2016		December 31, 2015
Progressive jackpot liabilities	$	3,093	$	2,984
Accrued payroll and related	7,198		7,441
Slot club point liability	2,993		3,213
Litigation reserve	3,100		3,100
Other accrued expense	5,698		7,420
Total	$	22,082	$	24,158

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Long-Term Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 8. LONG-TERM DEBT

The following table presents long-term debt balances (in thousands):

	June 30, 2016			December 31, 2015
9% Senior Unsecured Notes due 2018	$	200,000		$	200,000
Unamortized debt issuance cost, net	(2,448		)	(3,028		)
Unamortized discount	(684		)	(847		)
9% Senior Unsecured Notes due 2018, net	196,868			196,125
Term loan due 2017	179,832			182,745
Unamortized debt issuance cost, net	(2,439		)	(3,283		)
Term loan due 2017, net	177,393			179,462
Total debt, including current maturities	374,261			375,587
Less: current maturities of long-term debt	—			(11,383		)
Total long-term debt	$	374,261		$	364,204

The current maturities of long-term debt at December 31, 2015, includes the mandatory excess cash flow payment as calculated for the year ended December 31, 2015 on the 2012 Term Loan (defined below). The actual payment required by the lenders was $2.9 million, which was paid in April 2016.

On May 9, 2012, we issued $200.0 million of 9.00% senior unsecured notes due 2018 (the “2018 Notes”), and entered into a Credit Agreement, dated May 9, 2012 (the “2012 Credit Agreement”), which provided for a $200.0 million term loan (the “2012 Term Loan”) due in 2017, the entirety of which the lenders disbursed to us on the closing date of the 2012 Credit Agreement, and a $35.0 million revolving credit facility (the “2012 Revolving Credit Facility” and, together with the 2012 Term Loan, the “2012 Credit Facility”) which remained undrawn as of June 30, 2016. Proceeds from the 2012 Term Loan and the 2018 Notes were used to repay debt then outstanding.

On July 22, 2014, we completed the second amendment to the 2012 Credit Agreement (the “Second Amended Credit Agreement”) governing our 2012 Credit Facility. We incur and pay interest on the 2012 Term Loan under the Second Amended Credit Agreement at an uncommitted floating rate of LIBOR plus 4.00%, subject to a LIBOR floor of 1.25%. The Second Amended Credit Agreement also requires us to pay commitment fees related to the Revolving Credit Facility equal to an annualized rate of 0.50% on undrawn amounts when the Total Net Leverage Ratio is greater than 3.50 to 1.00, or equal to an annualized rate of 0.375% on undrawn amounts when the Total Net Leverage Ratio is less than or equal to 3.50 to 1.00. The 2012 Credit Facility provides an accordion feature which allows us to seek additional borrowings of up to $80.0 million subject to certain customary terms and conditions, including pro forma compliance with a maximum leverage ratio, as defined in the Second Amended Credit Agreement.

Unamortized debt issuance cost, which we are amortizing over the life of the 2018 Notes and the 2012 Term Loan, totaled $4.9 million at June 30, 2016. In April 2015, the FASB issued guidance that debt issuance costs should be presented in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Under the new guidance, effective for annual and interim periods beginning after December 15, 2015, we have reclassified $1.5 million in unamortized debt issuance costs previously presented in other assets to be deducted from the long-term debt balances at December 31, 2015.

The Second Amended Credit Agreement contains customary covenants including, but not limited to, a maximum total net leverage ratio, a maximum secured leverage ratio, a minimum interest coverage ratio and maximum total annual capital expenditures. Additionally, the 2012 Term Loan is subject to mandatory annual prepayments based on generation of excess cash flow (as defined), equal to 50% of excess cash flow when the Total Net Leverage Ratio is greater than 4.00 to 1.00, equal to 25% of excess cash flow when the Total Net Leverage Ratio is greater than 3.00 to 1.00, but less than or equal to 4.00 to 1.00, and equal to zero when the Total Net Leverage Ratio is less than or equal to 3.00 to 1.00. At June 30, 2016, the First Lien Senior Secured Net Leverage Ratio was 1.95 to 1.00, and the Interest Expense Coverage Ratio was 2.57 to 1.00. As of June 30, 2016, we remained in compliance with all debt covenants.

We issued the 2018 Notes pursuant to an indenture dated May 9, 2012 (“2018 Notes Indenture”). Under the 2018 Notes Indenture, the Issuers are entitled to redeem all or a portion of the 2018 Notes upon providing not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth in the table below.

Year	Percentage
2015	104.50	%
2016	102.25	%
2017 and thereafter	100.00	%

We based the estimated fair value of the 2018 Notes and the 2012 Credit Facility on Level 2 inputs using quoted prices in inactive markets and observable market data for similar, but not identical, instruments. The following table presents the carrying values and estimated fair values of our long-term debt at June 30, 2016 (in thousands):

	Carrying Value		Estimated Fair Value
9% Senior Unsecured Notes due 2018	$	196,868	$	201,298
Term loan due 2017	177,393		177,180
Total	$	374,261	$	378,478

Subsequent to the quarter end, on July 1, 2016, we entered into a Credit Agreement (the “2016 Credit Agreement”) which provides for a $300.0 million term loan facility (the “2016 Term Loan”) and a $75 million revolving credit facility (the “2016 Revolving Credit Facility” and, together with the 2016 Term Loan, the “2016 Credit Facility”), which remained undrawn on the closing date of the 2016 Credit Agreement. The 2016 Term Loan will be payable in quarterly installments, commencing on September 30, 2016, in an amount equal to 0.25% of the 2016 Term Loan until the maturity date, July 1, 2023, upon which date the remaining balance will come due. Amounts outstanding under the 2016 Revolving Credit Facility will be due and payable on July 1, 2021. The interest rate under the 2016 Term Loan is at a floating rate not less than 5.0%. We used the proceeds of the 2016 Term Loan together with $94.9 million in cash from our balance sheet to repay all amounts outstanding under the 2012 Term Loan and redeem the 2018 Notes. The Company is currently determining the impact of this third quarter refinancing on its results of operations.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 9. INCOME TAXES

We continually evaluate our deferred tax assets to determine if any portion of those assets would not be realized in a future period. Based on our analysis of all available evidence, which included consideration of our cumulative consolidated pre-tax losses as well as other data, we concluded that it is more likely than not that we will be unable to realize all of our net deferred tax assets and, as a result, we recorded a full valuation allowance against its net deferred tax assets in 2014. For the quarters ended June 30, 2016 and 2015, our effective income tax rates varied from the federal statutory rate primarily due to the amortization of indefinite-lived intangibles. We recorded a provision for income taxes of $2.4 million and $1.6 million for the quarters ended June 30, 2016 and 2015, respectively. For the six months endedJune 30, 2016 and 2015, our effective income tax rates varied from the federal statutory rate primarily due to the amortization of indefinite-lived intangibles. We recorded a provision for income taxes of $4.0 million and $5.0 million for the six months endedJune 30, 2016 and 2015, respectively.

We have analyzed our filing positions in each jurisdiction where we are required to file income tax returns. We believe our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments which will result in a material change to our financial position.

We filed income tax returns in the United States federal jurisdiction and in several state jurisdictions. Our 2014 United States federal return is currently under examination. No adjustments have been proposed as of June 30, 2016.

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Share-based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based compensation

NOTE 10. SHARE-BASED COMPENSATION

We designed our share-based compensation arrangements to advance our long-term interests; for example, by allowing us to attract and retain employees and directors by aligning their interests with those of our stockholders. The amount, frequency, and terms of share-based awards may vary based on competitive practices, our operating results, government regulations and availability under our equity incentive plans. Depending upon the form of the share-based award, new shares of our common stock may be issued upon grant, option exercise or vesting of the award.

The Affinity Gaming Amended and Restated 2011 Long-Term Incentive Plan (“LTIP”), which the Compensation Committee of our Board of Directors approved, allows us to issue up to 2,000,000 shares of common stock, subject to stock options, or as restricted stock, to employees, officers, directors and consultants. Awards vest upon the passage of time, the attainment of performance criteria, or both. Stock options awarded under the LTIP expire five years from the grant date. Awards granted to management generally vest ratably over three years from the date of the grant and those granted to directors generally vest in two equal tranches, the first upon issuance and the second during January of the calendar year following the year of grant. Holders of restricted stock may vote their shares and receive their proportionate share of any dividends. Restricted stock remains subject to the terms and conditions contained in the applicable award agreement and our LTIP until the recipient vests in the award.

The following table summarizes the activity related to our outstanding stock options and non-vested restricted stock for the period ended June 30, 2016:

	Stock Options				Restricted Stock
	Outstanding				Non-Vested
	Shares		Weighted Average Exercise Price Per Share		Shares		Weighted Average Fair Value Per Share
December 31, 2015	330,605		$	10.24	82,290		$	10.54
Granted	272,500		12.00		85,082		12.00
Vested	—		—		(81,660	)	10.96
Forfeited	(36,364	)	10.00		—		—
June 30, 2016	566,741		$	11.10	85,712		$	11.59

As of June 30, 2016, awards representing 1,029,070 shares or potential shares of our common stock remained outstanding; therefore, awards representing 970,930 shares or potential shares of our common stock remained available for issuance under our Amended 2011 Long-Term Incentive Plan.

We account for stock option awards as liabilities as a result of our past practice of settling stock options for cash. As of June 30, 2016 and December 31, 2015, we have reported $1.3 million and $1.2 million, respectively, of share-based compensation liability in Other liabilities on the condensed consolidated balance sheet.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 11. COMMITMENTS AND CONTINGENCIES

Data Security Events

In October 2013, Affinity was contacted by law enforcement regarding fraudulent credit and debit card charges which may have been linked to a data security breach in Affinity’s information technology system. We immediately initiated a thorough investigation, supported by an independent professional forensic investigation firm, to determine the nature and scope of the compromise. In December 2013, we issued a press release advising that our payment processing system had become infected by malware, which resulted in a compromise of credit card and debit card information belonging to individuals who used their cards at restaurants, hotels and gift shops at our facilities between March 14 and October 16, 2013. As of November 14, 2013, our forensics expert advised us that our credit card processing systems were free of functioning malware. We encouraged our patrons to protect against possible identity theft or other financial loss by reviewing account statements for potential fraudulent activity during the period of exposure. In April 2014, we again learned that an unauthorized intrusion and installation of malware compromising the credit card processing environment had occurred. We then hired a different professional forensics investigation firm to conduct a thorough investigation of the more recently discovered event, and the security of our information technology environment as it related to both incidents. As a result of the second investigation, we have reason to believe credit card and debit card information from individuals who used their cards at restaurants, hotels and gift shops at our properties between December 7, 2013 and April 28, 2014, also may have been compromised. In May 2014, we issued another press release and encouraged our patrons to protect against possible identity theft or other financial loss by reviewing account statements for potential fraudulent activity during the period of exposure.

We carry insurance coverage of $5.0 million for liability resulting from network security events. As of June 30, 2016, we have incurred $1.2 million in expense, including deductibles, for the security breaches. We do not expect to incur additional material expenses that are not covered by insurance. However, we cannot estimate the total amount which we will ultimately incur and be reimbursed by insurance carriers because, although the independent forensic investigation has concluded, we have not received all of the monetary assessments and evaluations from the credit card processors and issuing banks seeking to recover the cost of replacement cards and a portion of fraudulent charges, nor have we received any third-party claims as of this date. In addition, several state attorneys general are investigating the data breach events, including how they occurred, their consequences and our responses. We are cooperating in the governmental investigation, and could be subject to fines or other obligations. We have not concluded that a loss from the governmental investigation is probable, however, and therefore have not recorded an accrual for governmental investigation or regulatory action. We will continue to evaluate information as it becomes known and will record an estimate for loss at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. We have commenced a lawsuit in federal court in Nevada against the firm that conducted the initial forensic investigation for recovery of the costs and assessments we incurred as a result of the April 2014 data breach discovery.

Litigation

In March 2012, the Clarke County Development Corp. (“CCDC”), the local non-profit Iowa licensee for which we manage the Lakeside Hotel & Casino (“Lakeside”) in Osceola, Iowa, filed an action in Iowa state court against Affinity and Lakeside, seeking a declaratory judgment that the management contract between CCDC and Lakeside is non-assignable. We removed the case to federal court and contested CCDC's position even though we had no plans to assign the agreement. CCDC also named Lakeside, Affinity and the Iowa Racing & Gaming Commission (“IRGC”) in a separate petition in Iowa state court seeking judicial review of the IRGC's ruling, in November 2010, which approved our predecessor's creditors to become the owners of Affinity Gaming, LLC, and thereby the indirect owners of Lakeside, prior to our emergence from bankruptcy and notwithstanding CCDC’s objection that an assignment of the management agreement had occurred which required its consent. On July 29, 2013, just two weeks before the hearing on judicial review, CCDC filed a voluntary dismissal without prejudice of the petition for judicial review.  On July 30, 2013, CCDC filed a motion to dismiss the federal court action without prejudice, which was granted.  CCDC’s dismissal of the state court petition and the federal court action was based upon its filing in Iowa state court on August 5, 2013 of a third lawsuit, since removed to federal court in Iowa, in which it seeks to enforce a settlement agreement it alleges was reached with us during a non-binding mediation held in June 2013.  On April 21, 2015, following discovery in the new lawsuit, the District Court for the Southern District of Iowa granted summary judgment in favor of the Company and against CCDC. CCDC appealed the grant of summary judgment to the 8^th Circuit U.S. Court of Appeals, and on June 24, 2016, the Court of Appeals reversed the District Court’s decision and remanded the case for trial. A trial date has not yet been set.

In November 2013, Chartwell Advisory Group, Ltd. (“Chartwell”), a professional services firm that facilitated filing refund requests with the Nevada Tax Commission for sales and use tax paid by certain casinos on the cost of complimentary meals for periods beginning in 2004, filed a lawsuit against numerous Nevada casino operators, including one of our subsidiaries, alleging that it is owed a percentage of the tax casinos did not have to pay as a result of a 2012 state tax regulation and related settlement agreement. Our subsidiary had entered into an agreement with this firm prior to the bankruptcy whereby Chartwell would receive a percentage of any refund we received from the state of sales tax previously paid by our subsidiary. We settled this matter in May 2016 for $0.2 million.

We are party to certain other claims, legal actions and complaints arising in the ordinary course of business or asserted by way of defense or counterclaim in actions we filed. We believe that our defenses are substantial in each of these matters and that we can successfully defend our legal position without material adverse effect on our consolidated financial statements.

Environmental Remediation

In 2011, during excavation at the site of our travel center at Whiskey Pete’s Hotel and Casino (“Whiskey Pete’s”) in Primm, Nevada, we encountered several contaminated underground sites which required soil remediation and groundwater testing. Much of the contamination resulted from underground fuel storage tanks related to a gas station operated more than 35 years ago, as well as from abandoned underground fuel lines. We also began testing at the direction of the Nevada Division of Environmental Protection (the “NDEP”) to determine the extent to which the contamination has affected the groundwater, and we have agreed to continue monitoring the groundwater for a period of at least two more years.

For the six months ended June 30, 2016 and 2015, we incurred $43 thousand and $0.1 million, respectively, in costs on remediation work at the Whiskey Pete’s site. We have an insurance policy which provides coverage for environmental remediation costs of up to $5.0 million. From the beginning of construction through June 30, 2016, we have incurred $4.0 million in costs on remediation work and received $2.0 million from our insurer. Insurance proceeds were received in 2015 and prior years.

Although we believe that incurring additional cost related to the testing and ongoing monitoring of groundwater for contamination is probable, we cannot reasonably estimate an amount to accrue at this time because the NDEP has not told us what additional work, if any, it will require us to perform. Additionally, we believe some or all of the ongoing monitoring costs will be reimbursed by insurance as part of our initial claim. We also filed suit in Nevada state district court for partial recovery against the environmental consultant that managed the initial remediation. The ultimate cost to us will depend on the extent of contamination found, if any, as a result of our ongoing testing, the amount of remediation we are required to perform, and the amount we are reimbursed. The litigation against the environmental consultant is in the discovery phase. As we complete our ongoing monitoring obligation, we intend to analyze any cost incurred, and we will expense or capitalize it as necessary.

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

NOTE 12. SEGMENT INFORMATION

The following table presents the components of net revenue by segment (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Gross revenue
Nevada	$	61,119		$	68,704		$	122,900		$	133,754
Midwest	32,189			34,473			65,310			67,738
Colorado	9,553			10,544			19,210			21,790
Total gross revenue	102,861			113,721			207,420			223,282
Promotional allowances
Nevada	(5,786		)	(8,378		)	(11,682		)	(17,166		)
Midwest	(1,744		)	(2,629		)	(3,758		)	(5,167		)
Colorado	(673		)	(1,203		)	(1,572		)	(2,460		)
Total promotional allowances	(8,203		)	(12,210		)	(17,012		)	(24,793		)
Net revenue
Nevada	55,333			60,326			111,218			116,588
Midwest	30,445			31,844			61,552			62,571
Colorado	8,880			9,341			17,638			19,330
Total net revenue	$	94,658		$	101,511		$	190,408		$	198,489

We use earnings before interest expense, net; income tax; depreciation and amortization; share-based compensation; pre-opening costs; write offs, reserves and recoveries; loss on extinguishment or modification of debt; loss on impairment of assets; gains or losses on the disposition of assets; and restructuring and reorganization costs (“Adjusted EBITDA”) as a measure of profit and loss to manage the operational performance of our segments.

Adjusted EBITDA is a measure which does not conform to generally accepted accounting principles in the United States (“GAAP”). You should not consider this information as an alternative to any measure of performance as promulgated under GAAP, such as operating income and net income. Our calculation of Adjusted EBITDA may be different from the calculations used by other companies; therefore, comparability may be limited. We have included a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, which in our case is operating income.

The following table presents Adjusted EBITDA by segment and by corporate and other (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Adjusted EBITDA
Nevada	$	12,120		$	10,915		$	25,014		$	21,437
Midwest	10,388			10,560			21,062			20,129
Colorado	1,474			969			2,618			2,875
Corporate and other	(4,606		)	(4,853		)	(9,116		)	(8,628		)
Total Adjusted EBITDA	$	19,376		$	17,591		$	39,578		$	35,813

The following tables reconcile Adjusted EBITDA to operating income (in thousands):

	Quarter Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	12,120		$	(3,649	)	$	—		$	105		$	8,576
Midwest	10,388			(2,012		)	—			(14		)	8,362
Colorado	1,474			(1,421		)	—			—			53
Corporate and other	(4,606		)	(230		)	(326		)				(5,162		)
Total operations	$	19,376		$	(7,312	)	$	(326	)	$	91		$	11,829

	Quarter Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries		Operating Income
Nevada	$	10,915		$	(3,698	)	$	—		$	197	$	7,414
Midwest	10,560			(1,898		)	—			—		8,662
Colorado	969			(1,297		)	—			—		(328		)
Corporate and other	(4,853		)	(312		)	(505		)	7		(5,663		)
Total operations	$	17,591		$	(7,205	)	$	(505	)	$	204	$	10,085

	Six Months Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	25,014		$	(7,300	)	$	—		$	70		$	17,784
Midwest	21,062			(4,042		)	—			(7		)	17,013
Colorado	2,618			(2,879		)	—			—			(261		)
Corporate and other	(9,116		)	(475		)	(700		)	(24		)	(10,315		)
Total operations	$	39,578		$	(14,696	)	$	(700	)	$	39		$	24,221

	Six Months Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	21,437		$	(7,386	)	$	—		$	120		$	14,171
Midwest	20,129			(3,793		)	—			—			16,336
Colorado	2,875			(2,566		)	—			(58		)	251
Corporate and other	(8,628		)	(623		)	(667		)	7			(9,911		)
Total operations	$	35,813		$	(14,368	)	$	(667	)	$	69		$	20,847

The following table presents total assets by reportable segment (in thousands):

	June 30, 2016		December 31, 2015
Total assets by reportable segment
Nevada	$	218,749	$	224,731
Midwest	203,691		207,414
Colorado	55,812		57,242
Reportable segment total assets	478,252		489,387
Corporate and other	126,322		112,877
Total assets	$	604,574	$	602,264

Total assets in Corporate and other consist primarily of cash at the corporate entity.

The following table presents additions to property and equipment by reportable segment (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cash paid for capital expenditures by reportable segment
Nevada	$	2,748	$	854	$	5,223	$	2,999
Midwest	1,178		1,385		1,932		1,829
Colorado	178		1,043		585		1,291
Reportable segment additions	4,104		3,282		7,740		6,119
Corporate	15		311		861		599
Total cash paid for capital expenditures	$	4,119	$	3,593	$	8,601	$	6,718

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Condensed Consolidated Guarantor Data

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidated Guarantor Data

NOTE 13. CONDENSED CONSOLIDATED GUARANTOR DATA

All of our current and future domestic subsidiaries which guarantee the 2012 Credit Facility also fully and unconditionally guarantee our payment obligations under the 2018 Notes on a senior unsecured basis (see Note 8 for more information regarding our debt). All of the guarantees are joint and several, and all of the guarantor subsidiaries are wholly-owned by us.

We prepared and are presenting the condensed consolidating financial statements in this footnote using the same accounting policies which we used to prepare the financial information located elsewhere in our unaudited condensed consolidated interim financial statements and related footnotes. Although Affinity Gaming Finance Corp. (“AG Finance”), a wholly-owned subsidiary of the Company, is a co-issuer of the 2018 Notes, we present our indebtedness as an obligation of Affinity Gaming only. AG Finance reflects no activity during any period presented, and we did not have any non-guarantor subsidiaries during any period presented.

Affinity Gaming

Unaudited Condensed Consolidating Balance Sheet

June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	25,906	$	—	$	48,772	$	—		$	74,678
Restricted cash	95,414		—		139		—			95,553
Accounts receivable, net	206		—		2,397		—			2,603
Income tax receivable	24		—		—		—			24
Prepaid expense	1,012		—		7,670		—			8,682
Inventory	—		—		2,832		—			2,832
Total current assets	122,562		—		61,810		—			184,372
Property and equipment, net	1,262		—		243,891		—			245,153
Intercompany receivables	—		—		133,862		(133,862		)	—
Investment in subsidiaries	564,158		—		—		(564,158		)	—
Other assets, net	2,498		—		1,473		—			3,971
Intangibles, net	—		—		122,791		—			122,791
Goodwill	—		—		48,287		—			48,287
Total assets	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	1,162	$	—	$	8,229	$	—		$	9,391
Intercompany payables	133,862		—		—		(133,862		)	—
Accrued interest	2,365		—		—		—			2,365
Accrued expense	1,253		—		20,829		—			22,082
Other current liabilities	—		—		8		—			8
Total current liabilities	138,642		—		29,066		(133,862		)	33,846
Long-term debt, less current portion	374,261		—		—		—			374,261
Other liabilities	1,431		—		553		—			1,984
Deferred income taxes	427		—		18,337		—			18,764
Total liabilities	514,761		—		47,956		(133,862		)	428,855
Common stock	20		—		—		—			20
Other equity	175,699		—		564,158		(564,158		)	175,699
Total owners’ equity	175,719		—		564,158		(564,158		)	175,719
Total liabilities and owners’ equity	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574

Affinity Gaming

Condensed Consolidating Balance Sheet

December 31, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	106,384	$	—	$	51,395	$	—		$	157,779
Restricted cash	469		—		139		—			608
Accounts receivable, net	220		—		2,997		—			3,217
Income tax receivable	16		—		—		—			16
Prepaid expense	1,813		—		8,266		—			10,079
Inventory	—		—		2,798		—			2,798
Total current assets	108,902		—		65,595		—			174,497
Property and equipment, net	2,002		—		249,906		—			251,908
Intercompany receivables	—		—		110,150		(110,150		)	—
Investment in subsidiaries	551,953		—		—		(551,953		)	—
Other assets, net	1,974		—		1,556		—			3,530
Intangibles, net	—		—		124,042		—			124,042
Goodwill	—		—		48,287		—			48,287
Total assets	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	3,483	$	—	$	9,737	$	—		$	13,220
Intercompany payables	110,150		—		—		(110,150		)	—
Accrued interest	2,327		—		—		—			2,327
Accrued expense	1,455		—		22,703		—			24,158
Current maturities of long-term debt	11,383		—		—		—			11,383
Other current liabilities	—		—		23		—			23
Total current liabilities	128,798		—		32,463		(110,150		)	51,111
Long-term debt, less current portion	364,204		—		—		—			364,204
Other liabilities	1,397		—		535		—			1,932
Deferred income taxes	173		—		14,585		—			14,758
Total liabilities	494,572		—		47,583		(110,150		)	432,005
Common stock	20		—		—		—			20
Other equity	170,239		—		551,953		(551,953		)	170,239
Total owners’ equity	170,259		—		551,953		(551,953		)	170,259
Total liabilities and owners’ equity	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	69,448		$	—		$	69,448
Food and beverage	—			—		10,384			—			10,384
Lodging	—			—		6,031			—			6,031
Fuel and retail	—			—		13,390			—			13,390
Other	—			—		3,608			—			3,608
Total revenue	—			—		102,861			—			102,861
Promotional allowances	—			—		(8,203		)	—			(8,203		)
Net revenue	—			—		94,658			—			94,658
EXPENSE
Casino	—			—		26,181			—			26,181
Food and beverage	—			—		10,378			—			10,378
Lodging	—			—		4,205			—			4,205
Fuel and retail	—			—		9,106			—			9,106
Other	—			—		1,956			—			1,956
General and administrative	—			—		18,850			—			18,850
Depreciation and amortization	230			—		7,082			—			7,312
Corporate	4,932			—		—			—			4,932
Write downs, reserves and recoveries	—			—		(91		)	—			(91		)
Total expense	5,162			—		77,667			—			82,829
Operating income (loss)	(5,162		)	—		16,991			—			11,829
Other income (expense)
Interest expense, net	(7,656		)	—		—			—			(7,656		)
Intercompany interest income	7,727			—		—			(7,727		)	—
Intercompany interest expense	—			—		(7,727		)	7,727			—
Income from equity investments in subsidiaries	5,929			—		—			(5,929		)	—
Total other income (expense), net	6,000			—		(7,727		)	(5,929		)	(7,656		)
Income (loss) before income tax	838			—		9,264			(5,929		)	4,173
Benefit (provision) for income taxes	945			—		(3,335		)	—			(2,390		)
Net income (loss)	$	1,783		$	—	$	5,929		$	(5,929	)	$	1,783

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	75,505		$	—		$	75,505
Food and beverage	—			—		12,082			—			12,082
Lodging	—			—		7,190			—			7,190
Fuel and retail	—			—		15,676			—			15,676
Other	—			—		3,268			—			3,268
Total revenue	—			—		113,721			—			113,721
Promotional allowances	—			—		(12,210		)	—			(12,210		)
Net revenue	—			—		101,511			—			101,511
EXPENSE
Casino	—			—		29,956			—			29,956
Food and beverage	—			—		11,800			—			11,800
Lodging	—			—		4,197			—			4,197
Fuel and retail	—			—		11,675			—			11,675
Other	—			—		1,838			—			1,838
General and administrative	—			—		19,601			—			19,601
Depreciation and amortization	312			—		6,893			—			7,205
Corporate	5,358			—		—			—			5,358
Write downs, reserves and recoveries	(7		)	—		(197		)	—			(204		)
Total expense	5,663			—		85,763			—			91,426
Operating income (loss)	(5,663		)	—		15,748			—			10,085
Other income (expense)
Interest expense, net	(7,653		)	—		—			—			(7,653		)
Intercompany interest income	7,693			—		—			(7,693		)	—
Intercompany interest expense	—			—		(7,693		)	7,693			—
Income from equity investments in subsidiaries	2,096			—		—			(2,096		)	—
Total other income (expense), net	2,136			—		(7,693		)	(2,096		)	(7,653		)
Income (loss) before income tax	(3,527		)	—		8,055			(2,096		)	2,432
Benefit (provision) for income taxes	4,324			—		(5,959		)	—			(1,635		)
Net income (loss)	$	797		$	—	$	2,096		$	(2,096	)	$	797

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2016 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	141,331		$	—		$	141,331
Food and beverage	—			—		21,208			—			21,208
Lodging	—			—		12,429			—			12,429
Fuel and retail	—			—		25,530			—			25,530
Other	—			—		6,922			—			6,922
Total revenue	—			—		207,420			—			207,420
Promotional allowances	—			—		(17,012		)	—			(17,012		)
Net revenue	—			—		190,408			—			190,408
EXPENSE
Casino	—			—		53,562			—			53,562
Food and beverage	—			—		21,170			—			21,170
Lodging	—			—		8,553			—			8,553
Fuel and retail	—			—		17,403			—			17,403
Other	—			—		3,463			—			3,463
General and administrative	—			—		37,563			—			37,563
Depreciation and amortization	475			—		14,221			—			14,696
Corporate	9,816			—		—			—			9,816
Write downs, reserves and recoveries	24			—		(63		)	—			(39		)
Total expense	10,315			—		155,872			—			166,187
Operating income (loss)	(10,315		)	—		34,536			—			24,221
Other income (expense)
Interest expense, net	(15,321		)	—		—			—			(15,321		)
Intercompany interest income	15,465			—		—			(15,465		)	—
Intercompany interest expense	—			—		(15,465		)	15,465			—
Income from equity investments in subsidiaries	12,205			—		—			(12,205		)	—
Total other income (expense), net	12,349			—		(15,465		)	(12,205		)	(15,321		)
Income (loss) before income tax	2,034			—		19,071			(12,205		)	8,900
Benefit (provision) for income taxes	2,860			—		(6,866		)	—			(4,006		)
Net income (loss)	$	4,894		$	—	$	12,205		$	(12,205	)	$	4,894

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2015 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	150,602		$	—		$	150,602
Food and beverage	—			—		24,043			—			24,043
Lodging	—			—		14,222			—			14,222
Fuel and retail	—			—		28,252			—			28,252
Other	—			—		6,163			—			6,163
Total revenue	—			—		223,282			—			223,282
Promotional allowances	—			—		(24,793		)	—			(24,793		)
Net revenue	—			—		198,489			—			198,489
EXPENSE
Casino	—			—		59,690			—			59,690
Food and beverage	—			—		23,627			—			23,627
Lodging	—			—		8,106			—			8,106
Fuel and retail	—			—		20,939			—			20,939
Other	—			—		3,368			—			3,368
General and administrative	—			—		38,318			—			38,318
Depreciation and amortization	623			—		13,745			—			14,368
Corporate	9,295			—		—			—			9,295
Write downs, reserves and recoveries	(7		)	—		(62		)	—			(69		)
Total expense	9,911			—		167,731			—			177,642
Operating income (loss)	(9,911		)	—		30,758			—			20,847
Other income (expense)
Interest expense, net	(15,258		)	—		—			—			(15,258		)
Intercompany interest income	15,341			—		—			(15,341		)	—
Intercompany interest expense	—			—		(15,341		)	15,341			—
Income from equity investments in subsidiaries	1,536			—		—			(1,536		)	—
Total other income (expense), net	1,619			—		(15,341		)	(1,536		)	(15,258		)
Income (loss) before income tax	(8,292		)	—		15,417			(1,536		)	5,589
Benefit (provision) for income taxes	8,849			—		(13,881		)	—			(5,032		)
Net income (loss)	$	557		$	—	$	1,536		$	(1,536	)	$	557

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(20,603	)	$	—	$	44,546		$	23,943
Cash flows from investing activities:
Proceeds from sale of property and equipment	—			—		18			18
Purchases of property and equipment	(861		)	—		(7,740		)	(8,601		)
Net cash used in investing activities	$	(861	)	$	—	$	(7,722	)	$	(8,583	)
Cash flows from financing activities:
Restricted cash	(94,945		)	—		—			(94,945		)
Change in intercompany accounts	39,432			—		(39,432		)	—
Payments on capital lease	—			—		(15		)	(15		)
Payments on long-term debt	(2,913		)	—		—			(2,913		)
Loan origination fees	(515		)	—		—			(515		)
Repurchases of vested share-based awards	(73		)	—		—			(73		)
Net cash provided by (used in) financing activities	$	(59,014	)	$	—	$	(39,447	)	$	(98,461	)
Net decrease in cash and cash equivalents	(80,478		)	—		(2,623		)	(83,101		)
Cash and cash equivalents
Beginning of year	106,384			—		51,395			157,779
End of period	$	25,906		$	—	$	48,772		$	74,678

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(12,095	)	$	—	$	36,556		$	24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	3			—		5			8
Purchases of property and equipment	(599		)	—		(6,119		)	(6,718		)
Net cash used in investing activities	$	(596	)	$	—	$	(6,114	)	$	(6,710	)
Cash flows from financing activities:
Change in intercompany accounts	25,248			—		(25,248		)	—
Payments on capital lease	—			—		(16		)	(16		)
Repurchases of vested share-based awards	(47		)	—		—			(47		)
Net cash provided by (used in) financing activities	$	25,201		$	—	$	(25,264	)	$	(63	)
Net increase in cash and cash equivalents	12,510			—		5,178			17,688
Cash and cash equivalents
Beginning of year	88,737			—		46,438			135,175
End of period	$	101,247		$	—	$	51,616		$	152,863

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Subsequent Events

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

NOTE 14. SUBSEQUENT EVENTS

On July 29, 2016 the Board of Directors received a non-binding proposal from Z Capital Partners, L.L.C., on behalf of its affiliated investment funds and/or designees (“Z Capital”), in which, among other things, Z Capital proposed to acquire all of the outstanding common shares of the Company that are not already owned by Z Capital at a purchase price of $15.00 per share in cash. On August 9, 2016, Z Capital increased its offer to $17.35 per share in cash. In connection with Z Capital’s non-binding proposal, the Board appointed a Special Committee of independent directors authorized to, among other things, review Z Capital’s proposal as well as other proposals or strategic alternatives that may be available to the Company. The Company entered into a 15-day exclusivity agreement with Z Capital commencing on August 9, 2016.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Consolidation

Consolidation

We include all of our subsidiaries in our consolidated financial statements, eliminating all intercompany balances and transactions during consolidation.

Basis of Presentation

Basis of Presentation

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). While preparing our financial statements, we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expense during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require us to make extensive use of estimates include the fair values of assets and liabilities related to depreciation and amortization, the estimates used when computing share-based compensation expense, the estimated allowance for doubtful accounts receivable and the estimated cash flows we use in assessing the recoverability of long-lived assets, as well as the estimated fair values of certain assets related to write downs and impairments, contingencies and litigation, and claims and assessments.

We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, with the audited Consolidated Balance Sheet amounts as of December 31, 2015 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Statements of Cash Flows in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP, though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading.

Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period.

Management believes our unaudited condensed consolidated interim financial statements include all the normal recurring adjustments necessary to fairly present our unaudited Condensed Consolidated Balance Sheet as of June 30, 2016, our unaudited Condensed Consolidated Statements of Operations and our unaudited Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within our 2015 Form 10-K.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases, that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. Lessees and lessors are required to apply a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, and early application is permitted. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2014-09 stipulate that an entity should recognize revenue in an amount which reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers, and they provide a five-step process to assist entities with achieving that core principle. The ASU also specifies the accounting for some costs to obtain or fulfill a contract with a customer. With regard to disclosures, ASU 2014-09 states that entities should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, and it requires qualitative and quantitative disclosures concerning contracts with customers, significant judgments and changes therein, and assets recognized from the costs incurred to obtain or fulfill a contract. The amendments in ASU 2014-09, have been deferred for one year and are effective for annual reporting periods beginning after December 15, 2017, including interim periods therein, and they permit either retrospective application to all prior periods or retrospective application with the cumulative effect of application recognized on the initial application date. Early adoption is permitted for annual and interim periods beginning after December 31, 2016. We are currently evaluating the impact this guidance will have on its financial condition, results of operations, cash flows or the reporting thereof.

We have reviewed all other recently issued accounting pronouncements and, other than those we have disclosed above or in previous filings with the SEC, we do not believe any of such pronouncements will have a material effect on our operations.

Reclassifications

The unaudited condensed consolidated financial statements and related notes reflect certain reclassifications to prior year amounts in order to conform with current year presentation. The reclassifications have no effect on previously reported net income.

In November 2015, the FASB issued an accounting standards update which changes the presentation of deferred taxes in classified balance sheets. The new guidance requires classification of all deferred tax assets and liabilities as well as applicable valuation allowances as non-current. The effective date for this guidance is for financial statements issued for annual and interim periods beginning after December 15, 2016. Early application is permitted. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have applied the guidance in the accompanying condensed consolidated financial statements with retrospective application for the Consolidated Balance Sheet at December 31, 2015. The effect of the accounting change in the prior year resulted in current deferred income taxes of $1.7 million, previously presented separately in current liabilities, to be added to $13.1 million in long-term deferred income taxes, for a revised $14.8 million in long-term deferred income taxes at December 31, 2015.

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment, net consist of the following (in thousands, except estimated lives):

	Estimated Life (Years)	June 30, 2016			December 31, 2015
Building and improvements	7 - 40	$	187,106		$	185,875
Gaming equipment	3 - 10	78,671			75,527
Furniture, fixtures, and equipment	3 - 10	51,475			49,571
Leasehold improvements	7	196			196
Land	—	39,513			39,513
Barge	30	15,019			15,019
Construction-in-progress		3,027			3,185
Total property and equipment		375,007			368,886
Less accumulated depreciation		(129,854		)	(116,978		)
Total property and equipment, net		$	245,153		$	251,908

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

The following table summarizes intangible assets by category (in thousands):

	June 30, 2016							December 31, 2015
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Finite-lived intangible assets
Customer loyalty programs	$	12,164	$	(9,583	)	$	2,581	$	12,164	$	(8,583	)	$	3,581
Trademarks	2,982		(2,649		)	333		2,982		(2,398		)	584
	15,146		$	(12,232	)	2,914		15,146		$	(10,981	)	4,165
Indefinite-lived intangible assets
Gaming license rights	110,646					110,646		110,646					110,646
Local tradenames	9,231					9,231		9,231					9,231
	119,877					119,877		119,877					119,877
Total intangible assets	$	135,023				$	122,791	$	135,023				$	124,042

Schedule of goodwill by segment

The following table summarizes the changes in goodwill by reportable segment during the six months endedJune 30, 2016:

	Nevada		Midwest		Total
Balance at December 31, 2015	$	33,665	$	14,622	$	48,287
Impairment of goodwill	—		—		—
Balance at June 30, 2016	$	33,665	$	14,622	$	48,287

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2016

Other Assets [Abstract]

Other assets disclosure

Other assets, net consist of the following (in thousands):

	June 30, 2016		December 31, 2015
Long-term deposits	$	2,924	$	2,919
Other assets	1,047		611
Total	$	3,971	$	3,530

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Accrued Expense (Tables)

6 Months Ended

Jun. 30, 2016

Accrued Liabilities, Current [Abstract]

Schedule of accrued expense

Accrued expense consists of the following (in thousands):

	June 30, 2016		December 31, 2015
Progressive jackpot liabilities	$	3,093	$	2,984
Accrued payroll and related	7,198		7,441
Slot club point liability	2,993		3,213
Litigation reserve	3,100		3,100
Other accrued expense	5,698		7,420
Total	$	22,082	$	24,158

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of long-term debt balances

The following table presents long-term debt balances (in thousands):

	June 30, 2016			December 31, 2015
9% Senior Unsecured Notes due 2018	$	200,000		$	200,000
Unamortized debt issuance cost, net	(2,448		)	(3,028		)
Unamortized discount	(684		)	(847		)
9% Senior Unsecured Notes due 2018, net	196,868			196,125
Term loan due 2017	179,832			182,745
Unamortized debt issuance cost, net	(2,439		)	(3,283		)
Term loan due 2017, net	177,393			179,462
Total debt, including current maturities	374,261			375,587
Less: current maturities of long-term debt	—			(11,383		)
Total long-term debt	$	374,261		$	364,204

Schedule of redemption price percentage for notes

We issued the 2018 Notes pursuant to an indenture dated May 9, 2012 (“2018 Notes Indenture”). Under the 2018 Notes Indenture, the Issuers are entitled to redeem all or a portion of the 2018 Notes upon providing not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth in the table below.

Year	Percentage
2015	104.50	%
2016	102.25	%
2017 and thereafter	100.00	%

Schedule of carrying values and estimated fair values of debt instruments

The following table presents the carrying values and estimated fair values of our long-term debt at June 30, 2016 (in thousands):

	Carrying Value		Estimated Fair Value
9% Senior Unsecured Notes due 2018	$	196,868	$	201,298
Term loan due 2017	177,393		177,180
Total	$	374,261	$	378,478

Subsequent to the quarter end, on July 1, 2016, we entered into a Credit Agreement (the “2016 Credit Agreement”) which provides for a $300.0 million term loan facility (the “2016 Term Loan”) and a $75 million revolving credit facility (the “2016 Revolving Credit Facility” and, together with the 2016 Term Loan, the “2016 Credit Facility”), which remained undrawn on the closing date of the 2016 Credit Agreement. The 2016 Term Loan will be payable in quarterly installments, commencing on September 30, 2016, in an amount equal to 0.25% of the 2016 Term Loan until the maturity date, July 1, 2023, upon which date the remaining balance will come due. Amounts outstanding under the 2016 Revolving Credit Facility will be due and payable on July 1, 2021. The interest rate under the 2016 Term Loan is at a floating rate not less than 5.0%. We used the proceeds of the 2016 Term Loan together with $94.9 million in cash from our balance sheet to repay all amounts outstanding under the 2012 Term Loan and redeem the 2018 Notes. The Company is currently determining the impact of this third quarter refinancing on its results of operations.

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Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of outstanding and non-vested options activity

The following table summarizes the activity related to our outstanding stock options and non-vested restricted stock for the period ended June 30, 2016:

	Stock Options				Restricted Stock
	Outstanding				Non-Vested
	Shares		Weighted Average Exercise Price Per Share		Shares		Weighted Average Fair Value Per Share
December 31, 2015	330,605		$	10.24	82,290		$	10.54
Granted	272,500		12.00		85,082		12.00
Vested	—		—		(81,660	)	10.96
Forfeited	(36,364	)	10.00		—		—
June 30, 2016	566,741		$	11.10	85,712		$	11.59

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of segment classification of properties

The following table presents Adjusted EBITDA by segment and by corporate and other (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Adjusted EBITDA
Nevada	$	12,120		$	10,915		$	25,014		$	21,437
Midwest	10,388			10,560			21,062			20,129
Colorado	1,474			969			2,618			2,875
Corporate and other	(4,606		)	(4,853		)	(9,116		)	(8,628		)
Total Adjusted EBITDA	$	19,376		$	17,591		$	39,578		$	35,813

The following table presents the components of net revenue by segment (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Gross revenue
Nevada	$	61,119		$	68,704		$	122,900		$	133,754
Midwest	32,189			34,473			65,310			67,738
Colorado	9,553			10,544			19,210			21,790
Total gross revenue	102,861			113,721			207,420			223,282
Promotional allowances
Nevada	(5,786		)	(8,378		)	(11,682		)	(17,166		)
Midwest	(1,744		)	(2,629		)	(3,758		)	(5,167		)
Colorado	(673		)	(1,203		)	(1,572		)	(2,460		)
Total promotional allowances	(8,203		)	(12,210		)	(17,012		)	(24,793		)
Net revenue
Nevada	55,333			60,326			111,218			116,588
Midwest	30,445			31,844			61,552			62,571
Colorado	8,880			9,341			17,638			19,330
Total net revenue	$	94,658		$	101,511		$	190,408		$	198,489

Schedule of reconciliation of Adjusted EBITDA to operating income

The following tables reconcile Adjusted EBITDA to operating income (in thousands):

	Quarter Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	12,120		$	(3,649	)	$	—		$	105		$	8,576
Midwest	10,388			(2,012		)	—			(14		)	8,362
Colorado	1,474			(1,421		)	—			—			53
Corporate and other	(4,606		)	(230		)	(326		)				(5,162		)
Total operations	$	19,376		$	(7,312	)	$	(326	)	$	91		$	11,829

	Quarter Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries		Operating Income
Nevada	$	10,915		$	(3,698	)	$	—		$	197	$	7,414
Midwest	10,560			(1,898		)	—			—		8,662
Colorado	969			(1,297		)	—			—		(328		)
Corporate and other	(4,853		)	(312		)	(505		)	7		(5,663		)
Total operations	$	17,591		$	(7,205	)	$	(505	)	$	204	$	10,085

	Six Months Ended June 30, 2016
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	25,014		$	(7,300	)	$	—		$	70		$	17,784
Midwest	21,062			(4,042		)	—			(7		)	17,013
Colorado	2,618			(2,879		)	—			—			(261		)
Corporate and other	(9,116		)	(475		)	(700		)	(24		)	(10,315		)
Total operations	$	39,578		$	(14,696	)	$	(700	)	$	39		$	24,221

	Six Months Ended June 30, 2015
	Adjusted EBITDA			Depreciation and Amortization			Share-Based Compensation			Write Downs, Reserves and Recoveries			Operating Income
Nevada	$	21,437		$	(7,386	)	$	—		$	120		$	14,171
Midwest	20,129			(3,793		)	—			—			16,336
Colorado	2,875			(2,566		)	—			(58		)	251
Corporate and other	(8,628		)	(623		)	(667		)	7			(9,911		)
Total operations	$	35,813		$	(14,368	)	$	(667	)	$	69		$	20,847

Reconciliation of assets by reportable segment to consolidated

The following table presents total assets by reportable segment (in thousands):

	June 30, 2016		December 31, 2015
Total assets by reportable segment
Nevada	$	218,749	$	224,731
Midwest	203,691		207,414
Colorado	55,812		57,242
Reportable segment total assets	478,252		489,387
Corporate and other	126,322		112,877
Total assets	$	604,574	$	602,264

Reconciliation of capital expenditures by reportable segments to consolidated

The following table presents additions to property and equipment by reportable segment (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cash paid for capital expenditures by reportable segment
Nevada	$	2,748	$	854	$	5,223	$	2,999
Midwest	1,178		1,385		1,932		1,829
Colorado	178		1,043		585		1,291
Reportable segment additions	4,104		3,282		7,740		6,119
Corporate	15		311		861		599
Total cash paid for capital expenditures	$	4,119	$	3,593	$	8,601	$	6,718

XML

Condensed Consolidated Guarantor Data (Tables)

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

Affinity Gaming

Unaudited Condensed Consolidating Balance Sheet

June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	25,906	$	—	$	48,772	$	—		$	74,678
Restricted cash	95,414		—		139		—			95,553
Accounts receivable, net	206		—		2,397		—			2,603
Income tax receivable	24		—		—		—			24
Prepaid expense	1,012		—		7,670		—			8,682
Inventory	—		—		2,832		—			2,832
Total current assets	122,562		—		61,810		—			184,372
Property and equipment, net	1,262		—		243,891		—			245,153
Intercompany receivables	—		—		133,862		(133,862		)	—
Investment in subsidiaries	564,158		—		—		(564,158		)	—
Other assets, net	2,498		—		1,473		—			3,971
Intangibles, net	—		—		122,791		—			122,791
Goodwill	—		—		48,287		—			48,287
Total assets	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	1,162	$	—	$	8,229	$	—		$	9,391
Intercompany payables	133,862		—		—		(133,862		)	—
Accrued interest	2,365		—		—		—			2,365
Accrued expense	1,253		—		20,829		—			22,082
Other current liabilities	—		—		8		—			8
Total current liabilities	138,642		—		29,066		(133,862		)	33,846
Long-term debt, less current portion	374,261		—		—		—			374,261
Other liabilities	1,431		—		553		—			1,984
Deferred income taxes	427		—		18,337		—			18,764
Total liabilities	514,761		—		47,956		(133,862		)	428,855
Common stock	20		—		—		—			20
Other equity	175,699		—		564,158		(564,158		)	175,699
Total owners’ equity	175,719		—		564,158		(564,158		)	175,719
Total liabilities and owners’ equity	$	690,480	$	—	$	612,114	$	(698,020	)	$	604,574

Affinity Gaming

Condensed Consolidating Balance Sheet

December 31, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)		AG Finance (Co-Issuer)		Guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Cash and cash equivalents	$	106,384	$	—	$	51,395	$	—		$	157,779
Restricted cash	469		—		139		—			608
Accounts receivable, net	220		—		2,997		—			3,217
Income tax receivable	16		—		—		—			16
Prepaid expense	1,813		—		8,266		—			10,079
Inventory	—		—		2,798		—			2,798
Total current assets	108,902		—		65,595		—			174,497
Property and equipment, net	2,002		—		249,906		—			251,908
Intercompany receivables	—		—		110,150		(110,150		)	—
Investment in subsidiaries	551,953		—		—		(551,953		)	—
Other assets, net	1,974		—		1,556		—			3,530
Intangibles, net	—		—		124,042		—			124,042
Goodwill	—		—		48,287		—			48,287
Total assets	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	$	3,483	$	—	$	9,737	$	—		$	13,220
Intercompany payables	110,150		—		—		(110,150		)	—
Accrued interest	2,327		—		—		—			2,327
Accrued expense	1,455		—		22,703		—			24,158
Current maturities of long-term debt	11,383		—		—		—			11,383
Other current liabilities	—		—		23		—			23
Total current liabilities	128,798		—		32,463		(110,150		)	51,111
Long-term debt, less current portion	364,204		—		—		—			364,204
Other liabilities	1,397		—		535		—			1,932
Deferred income taxes	173		—		14,585		—			14,758
Total liabilities	494,572		—		47,583		(110,150		)	432,005
Common stock	20		—		—		—			20
Other equity	170,239		—		551,953		(551,953		)	170,239
Total owners’ equity	170,259		—		551,953		(551,953		)	170,259
Total liabilities and owners’ equity	$	664,831	$	—	$	599,536	$	(662,103	)	$	602,264

Condensed Consolidating Statement of Operations

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	69,448		$	—		$	69,448
Food and beverage	—			—		10,384			—			10,384
Lodging	—			—		6,031			—			6,031
Fuel and retail	—			—		13,390			—			13,390
Other	—			—		3,608			—			3,608
Total revenue	—			—		102,861			—			102,861
Promotional allowances	—			—		(8,203		)	—			(8,203		)
Net revenue	—			—		94,658			—			94,658
EXPENSE
Casino	—			—		26,181			—			26,181
Food and beverage	—			—		10,378			—			10,378
Lodging	—			—		4,205			—			4,205
Fuel and retail	—			—		9,106			—			9,106
Other	—			—		1,956			—			1,956
General and administrative	—			—		18,850			—			18,850
Depreciation and amortization	230			—		7,082			—			7,312
Corporate	4,932			—		—			—			4,932
Write downs, reserves and recoveries	—			—		(91		)	—			(91		)
Total expense	5,162			—		77,667			—			82,829
Operating income (loss)	(5,162		)	—		16,991			—			11,829
Other income (expense)
Interest expense, net	(7,656		)	—		—			—			(7,656		)
Intercompany interest income	7,727			—		—			(7,727		)	—
Intercompany interest expense	—			—		(7,727		)	7,727			—
Income from equity investments in subsidiaries	5,929			—		—			(5,929		)	—
Total other income (expense), net	6,000			—		(7,727		)	(5,929		)	(7,656		)
Income (loss) before income tax	838			—		9,264			(5,929		)	4,173
Benefit (provision) for income taxes	945			—		(3,335		)	—			(2,390		)
Net income (loss)	$	1,783		$	—	$	5,929		$	(5,929	)	$	1,783

Affinity Gaming

Unaudited Condensed Consolidating Statement of Operations

Quarter ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	75,505		$	—		$	75,505
Food and beverage	—			—		12,082			—			12,082
Lodging	—			—		7,190			—			7,190
Fuel and retail	—			—		15,676			—			15,676
Other	—			—		3,268			—			3,268
Total revenue	—			—		113,721			—			113,721
Promotional allowances	—			—		(12,210		)	—			(12,210		)
Net revenue	—			—		101,511			—			101,511
EXPENSE
Casino	—			—		29,956			—			29,956
Food and beverage	—			—		11,800			—			11,800
Lodging	—			—		4,197			—			4,197
Fuel and retail	—			—		11,675			—			11,675
Other	—			—		1,838			—			1,838
General and administrative	—			—		19,601			—			19,601
Depreciation and amortization	312			—		6,893			—			7,205
Corporate	5,358			—		—			—			5,358
Write downs, reserves and recoveries	(7		)	—		(197		)	—			(204		)
Total expense	5,663			—		85,763			—			91,426
Operating income (loss)	(5,663		)	—		15,748			—			10,085
Other income (expense)
Interest expense, net	(7,653		)	—		—			—			(7,653		)
Intercompany interest income	7,693			—		—			(7,693		)	—
Intercompany interest expense	—			—		(7,693		)	7,693			—
Income from equity investments in subsidiaries	2,096			—		—			(2,096		)	—
Total other income (expense), net	2,136			—		(7,693		)	(2,096		)	(7,653		)
Income (loss) before income tax	(3,527		)	—		8,055			(2,096		)	2,432
Benefit (provision) for income taxes	4,324			—		(5,959		)	—			(1,635		)
Net income (loss)	$	797		$	—	$	2,096		$	(2,096	)	$	797

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2016 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	141,331		$	—		$	141,331
Food and beverage	—			—		21,208			—			21,208
Lodging	—			—		12,429			—			12,429
Fuel and retail	—			—		25,530			—			25,530
Other	—			—		6,922			—			6,922
Total revenue	—			—		207,420			—			207,420
Promotional allowances	—			—		(17,012		)	—			(17,012		)
Net revenue	—			—		190,408			—			190,408
EXPENSE
Casino	—			—		53,562			—			53,562
Food and beverage	—			—		21,170			—			21,170
Lodging	—			—		8,553			—			8,553
Fuel and retail	—			—		17,403			—			17,403
Other	—			—		3,463			—			3,463
General and administrative	—			—		37,563			—			37,563
Depreciation and amortization	475			—		14,221			—			14,696
Corporate	9,816			—		—			—			9,816
Write downs, reserves and recoveries	24			—		(63		)	—			(39		)
Total expense	10,315			—		155,872			—			166,187
Operating income (loss)	(10,315		)	—		34,536			—			24,221
Other income (expense)
Interest expense, net	(15,321		)	—		—			—			(15,321		)
Intercompany interest income	15,465			—		—			(15,465		)	—
Intercompany interest expense	—			—		(15,465		)	15,465			—
Income from equity investments in subsidiaries	12,205			—		—			(12,205		)	—
Total other income (expense), net	12,349			—		(15,465		)	(12,205		)	(15,321		)
Income (loss) before income tax	2,034			—		19,071			(12,205		)	8,900
Benefit (provision) for income taxes	2,860			—		(6,866		)	—			(4,006		)
Net income (loss)	$	4,894		$	—	$	12,205		$	(12,205	)	$	4,894

Affinity Gaming Unaudited Condensed Consolidating Statement of Operations Six Months Ended June 30, 2015 (in thousands)
	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Eliminating Entries			Total
REVENUE
Casino	$	—		$	—	$	150,602		$	—		$	150,602
Food and beverage	—			—		24,043			—			24,043
Lodging	—			—		14,222			—			14,222
Fuel and retail	—			—		28,252			—			28,252
Other	—			—		6,163			—			6,163
Total revenue	—			—		223,282			—			223,282
Promotional allowances	—			—		(24,793		)	—			(24,793		)
Net revenue	—			—		198,489			—			198,489
EXPENSE
Casino	—			—		59,690			—			59,690
Food and beverage	—			—		23,627			—			23,627
Lodging	—			—		8,106			—			8,106
Fuel and retail	—			—		20,939			—			20,939
Other	—			—		3,368			—			3,368
General and administrative	—			—		38,318			—			38,318
Depreciation and amortization	623			—		13,745			—			14,368
Corporate	9,295			—		—			—			9,295
Write downs, reserves and recoveries	(7		)	—		(62		)	—			(69		)
Total expense	9,911			—		167,731			—			177,642
Operating income (loss)	(9,911		)	—		30,758			—			20,847
Other income (expense)
Interest expense, net	(15,258		)	—		—			—			(15,258		)
Intercompany interest income	15,341			—		—			(15,341		)	—
Intercompany interest expense	—			—		(15,341		)	15,341			—
Income from equity investments in subsidiaries	1,536			—		—			(1,536		)	—
Total other income (expense), net	1,619			—		(15,341		)	(1,536		)	(15,258		)
Income (loss) before income tax	(8,292		)	—		15,417			(1,536		)	5,589
Benefit (provision) for income taxes	8,849			—		(13,881		)	—			(5,032		)
Net income (loss)	$	557		$	—	$	1,536		$	(1,536	)	$	557

Condensed Consolidating Statement of Cash Flows

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2016

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(20,603	)	$	—	$	44,546		$	23,943
Cash flows from investing activities:
Proceeds from sale of property and equipment	—			—		18			18
Purchases of property and equipment	(861		)	—		(7,740		)	(8,601		)
Net cash used in investing activities	$	(861	)	$	—	$	(7,722	)	$	(8,583	)
Cash flows from financing activities:
Restricted cash	(94,945		)	—		—			(94,945		)
Change in intercompany accounts	39,432			—		(39,432		)	—
Payments on capital lease	—			—		(15		)	(15		)
Payments on long-term debt	(2,913		)	—		—			(2,913		)
Loan origination fees	(515		)	—		—			(515		)
Repurchases of vested share-based awards	(73		)	—		—			(73		)
Net cash provided by (used in) financing activities	$	(59,014	)	$	—	$	(39,447	)	$	(98,461	)
Net decrease in cash and cash equivalents	(80,478		)	—		(2,623		)	(83,101		)
Cash and cash equivalents
Beginning of year	106,384			—		51,395			157,779
End of period	$	25,906		$	—	$	48,772		$	74,678

Affinity Gaming

Unaudited Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2015

(in thousands)

	Affinity Gaming (Co-Issuer)			AG Finance (Co-Issuer)		Guarantor Subsidiaries			Total
Net cash (used in) provided by operating activities	$	(12,095	)	$	—	$	36,556		$	24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	3			—		5			8
Purchases of property and equipment	(599		)	—		(6,119		)	(6,718		)
Net cash used in investing activities	$	(596	)	$	—	$	(6,114	)	$	(6,710	)
Cash flows from financing activities:
Change in intercompany accounts	25,248			—		(25,248		)	—
Payments on capital lease	—			—		(16		)	(16		)
Repurchases of vested share-based awards	(47		)	—		—			(47		)
Net cash provided by (used in) financing activities	$	25,201		$	—	$	(25,264	)	$	(63	)
Net increase in cash and cash equivalents	12,510			—		5,178			17,688
Cash and cash equivalents
Beginning of year	88,737			—		46,438			135,175
End of period	$	101,247		$	—	$	51,616		$	152,863

XML

Organization, Consolidation and Presentation of Financial Statements (Details)	6 Months Ended
	Jun. 30, 2016 casino
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of casinos (casinos)	11
Nevada
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of casinos (casinos)	5
Colorado
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of casinos (casinos)	3
Missouri
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of casinos (casinos)	2
Iowa
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of casinos (casinos)	1

XML

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term deferred income taxes	$ 18,764	$ 14,758
Adjustments for New Accounting Principle, Early Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Current deferred income taxes		1,700
Long-term deferred income taxes		$ 13,100

XML

Restricted Cash (Details) $ in Millions	Jun. 30, 2016 USD ($)
Cash and Cash Equivalents [Abstract]
Restricted cash	$ 94.9

XML

Property and Equipment, Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Property and equipment
Gross	$ 375,007	$ 368,886
Less accumulated depreciation	(129,854)	(116,978)
Total property and equipment, net	245,153	251,908
Building and improvements
Property and equipment
Gross	$ 187,106	185,875
Building and improvements | Minimum
Property and equipment
Estimated Life (Years)	7 years
Building and improvements | Maximum
Property and equipment
Estimated Life (Years)	40 years
Gaming equipment
Property and equipment
Gross	$ 78,671	75,527
Gaming equipment | Minimum
Property and equipment
Estimated Life (Years)	3 years
Gaming equipment | Maximum
Property and equipment
Estimated Life (Years)	10 years
Furniture, fixtures, and equipment
Property and equipment
Gross	$ 51,475	49,571
Furniture, fixtures, and equipment | Minimum
Property and equipment
Estimated Life (Years)	3 years
Furniture, fixtures, and equipment | Maximum
Property and equipment
Estimated Life (Years)	10 years
Leasehold improvements
Property and equipment
Estimated Life (Years)	7 years
Gross	$ 196	196
Land
Property and equipment
Gross	$ 39,513	39,513
Barge
Property and equipment
Estimated Life (Years)	30 years
Gross	$ 15,019	15,019
Construction-in-progress
Property and equipment
Gross	$ 3,027	$ 3,185

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Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Acquired Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross carrying amount	$ 15,146	$ 15,146
Accumulated Amortization	(12,232)	(10,981)
Finite-Lived Intangible Assets, Net	2,914	4,165
Indefinite-lived intangible assets	119,877	119,877
Intangibles, Gross Carrying Amount	135,023	135,023
Intangibles, net	122,791	124,042
Gaming license rights
Acquired Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Indefinite-lived intangible assets	110,646	110,646
Local tradenames
Acquired Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Indefinite-lived intangible assets	9,231	9,231
Customer loyalty programs
Acquired Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross carrying amount	12,164	12,164
Accumulated Amortization	(9,583)	(8,583)
Finite-Lived Intangible Assets, Net	2,581	3,581
Trademarks
Acquired Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross carrying amount	2,982	2,982
Accumulated Amortization	(2,649)	(2,398)
Finite-Lived Intangible Assets, Net	$ 333	$ 584

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Goodwill and Other Intangible Assets - Summary of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 48,287
Impairment of goodwill	0
Goodwill, ending balance	48,287
Nevada
Goodwill [Roll Forward]
Goodwill, beginning balance	33,665
Impairment of goodwill	0
Goodwill, ending balance	33,665
Midwest
Goodwill [Roll Forward]
Goodwill, beginning balance	14,622
Impairment of goodwill	0
Goodwill, ending balance	$ 14,622

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Goodwill and Other Intangible Assets - Narrative (Details)	6 Months Ended
	Jun. 30, 2016
Weighted Average
Finite-Lived Intangible Assets [Line Items]
Intangible assets useful life	6 years 6 months
Customer loyalty programs
Finite-Lived Intangible Assets [Line Items]
Intangible assets useful life	7 years
Trademarks
Finite-Lived Intangible Assets [Line Items]
Intangible assets useful life	3 years 9 months

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Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other Assets [Abstract]
Long-term deposits	$ 2,924	$ 2,919
Other assets	1,047	611
Total	$ 3,971	$ 3,530

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Accrued Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accrued Liabilities, Current [Abstract]
Progressive jackpot liabilities	$ 3,093	$ 2,984
Accrued payroll and related	7,198	7,441
Slot club point liability	2,993	3,213
Litigation reserve	3,100	3,100
Other accrued expense	5,698	7,420
Total	$ 22,082	$ 24,158

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Long-Term Debt - Summary of debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Payments on long-term debt	$ 2,913	$ 0
Total debt, including current maturities	374,261		$ 375,587
Less: current maturities of long-term debt	0		(11,383)
Long-term debt, less current portion	374,261		364,204
9% Senior Unsecured Notes Due 2018 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	200,000		200,000
Unamortized debt issuance cost, net	(2,448)		(3,028)
Unamortized discount	(684)		(847)
Total debt, including current maturities	196,868		196,125
Term Loan Due 2017 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	179,832		182,745
Unamortized debt issuance cost, net	(2,439)		(3,283)
Total debt, including current maturities	$ 177,393		$ 179,462

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Long-Term Debt (Details)			1 Months Ended	6 Months Ended
	Jul. 01, 2016 USD ($)	May 09, 2012 USD ($)	Apr. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Long Term Debt Textuals [Abstract]
Actual payment required by the lenders			$ 2,900,000
Payments on long-term debt				$ 2,913,000	$ 0
Additional borrowing capacity, accordion feature				80,000,000
Debt instrument unamortized loan fees				$ 4,900,000
First lien senior secured net leverage ratio				1.95
Interest coverage ratio				2.57
Carrying Value
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 374,261,000
Estimated Fair Value
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 378,478,000
Senior Notes | Between first and second year after closing
Long Term Debt Textuals [Abstract]
Redemption price as percentage of principal amount				104.50%
Senior Notes | Between second and third year after closing
Long Term Debt Textuals [Abstract]
Redemption price as percentage of principal amount				102.25%
Senior Notes | Twelve months commencing on May 2017 and thereafter
Long Term Debt Textuals [Abstract]
Redemption price as percentage of principal amount				100.00%
Senior Notes | Maximum
Long Term Debt Textuals [Abstract]
Debt instrument redemption as percentage of original principal notice period				60 days
Senior Notes | Minimum
Long Term Debt Textuals [Abstract]
Debt instrument redemption as percentage of original principal notice period				30 days
Senior Notes | 9% Senior Unsecured Notes Due 2018
Long Term Debt Textuals [Abstract]
Proceeds from issuance of debt		$ 200,000,000
Interest rate (percent)		9.00%
Senior Notes | 9% Senior Unsecured Notes Due 2018 | Carrying Value | Level 2
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 196,868,000
Senior Notes | 9% Senior Unsecured Notes Due 2018 | Estimated Fair Value | Level 2
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 201,298,000
Senior Notes | Term Loan Due 2017
Long Term Debt Textuals [Abstract]
Proceeds from issuance of debt		$ 200,000,000
Senior Notes | Term Loan Due 2017 | LIBOR
Long Term Debt Textuals [Abstract]
Interest margin (percent)				4.00%
Senior Notes | Term Loan Due 2017 | Minimum
Long Term Debt Textuals [Abstract]
Interest rate (percent)				1.25%
Senior Notes | Term Loan Due 2017 | Carrying Value
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 177,393,000
Senior Notes | Term Loan Due 2017 | Estimated Fair Value
Long Term Debt Textuals [Abstract]
Long-term debt, fair value				$ 177,180,000
Senior Notes | Term Loan Due 2017 | Total net leverage ratio greater than 4.00 to 1.00
Long Term Debt Textuals [Abstract]
Mandatory prepayments as a percentage of entity's excess cash flow				50.00%
Senior Notes | Term Loan Due 2017 | Total net leverage ratio greater than 4.00 to 1.00 | Minimum
Long Term Debt Textuals [Abstract]
Total net leverage ratio				4.00
Senior Notes | Term Loan Due 2017 | Total net leverage ratio greater than 3.00 to 1.00 but less than or equal to 4.00 to 1.00
Long Term Debt Textuals [Abstract]
Mandatory prepayments as a percentage of entity's excess cash flow				25.00%
Senior Notes | Term Loan Due 2017 | Total net leverage ratio greater than 3.00 to 1.00 but less than or equal to 4.00 to 1.00 | Maximum
Long Term Debt Textuals [Abstract]
Total net leverage ratio				4.00
Senior Notes | Term Loan Due 2017 | Total net leverage ratio greater than 3.00 to 1.00 but less than or equal to 4.00 to 1.00 | Minimum
Long Term Debt Textuals [Abstract]
Total net leverage ratio				3.00
Senior Notes | Term Loan Due 2017 | Total net leverage ratio less than or equal to 3.00 to 1.00
Long Term Debt Textuals [Abstract]
Mandatory prepayments as a percentage of entity's excess cash flow				0.00%
Revolving Credit Facility
Long Term Debt Textuals [Abstract]
Remaining borrowing capacity				$ 35,000,000
Revolving Credit Facility | Total net leverage ratio greater than 3.50 to 1.00
Long Term Debt Textuals [Abstract]
Unused capacity commitment fee percentage				0.50%
Revolving Credit Facility | Total net leverage ratio greater than 3.50 to 1.00 | Maximum
Long Term Debt Textuals [Abstract]
Total net leverage ratio				3.50
Revolving Credit Facility | Total net leverage ratio less than or Equal to 3.50 to 1.00
Long Term Debt Textuals [Abstract]
Unused capacity commitment fee percentage				0.375%
Revolving Credit Facility | Total net leverage ratio less than or Equal to 3.50 to 1.00 | Minimum
Long Term Debt Textuals [Abstract]
Total net leverage ratio				3.50
Subsequent Event
Long Term Debt Textuals [Abstract]
Payments on long-term debt	$ 94,900,000
Subsequent Event | Term Loan Facility | 2016 Credit Facility
Long Term Debt Textuals [Abstract]
Borrowing capacity	$ 300,000,000.0
Quarterly repayment (percent)	0.25%
Subsequent Event | Term Loan Facility | 2016 Credit Facility | Minimum
Long Term Debt Textuals [Abstract]
Minimum floating rate (percent)	5.00%
Adjustments for New Accounting Pronouncement | Other Assets
Long Term Debt Textuals [Abstract]
Deferred Finance Costs, Net						$ 1,500,000
Adjustments for New Accounting Pronouncement | Long-term Debt
Long Term Debt Textuals [Abstract]
Deferred Finance Costs, Net						$ 1,500,000
Revolving Credit Facility | Subsequent Event | 2016 Credit Facility
Long Term Debt Textuals [Abstract]
Borrowing capacity	$ 75,000,000

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Income Taxes-Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Benefit (provision) for income taxes	$ (2,390)	$ (1,635)	$ (4,006)	$ (5,032)

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Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Equity-based compensation
Number of shares available for issuance	2,000,000
Outstanding and Non-Vested, Weighted Average Grant Date Fair Value Per Share (in dollars per share)
Common stock shares or potential shares outstanding	1,029,070
Shares available for future issuance	970,930
Share-based compensation liability	$ 1.3	$ 1.2
Stock Options
Outstanding, Shares
Balance at the beginning of the period (shares)	330,605
Granted (shares)	272,500
Vested (shares)	0
Forfeited (shares)	(36,364)
Balance at the end of the period (shares)	566,741
Outstanding, Weighted Average Exercise Price Per Share (in dollars per share)
Balance at the beginning of the period (usd per share)	$ 10.24
Granted (usd per share)	12.00
Vested (usd per share)	0.00
Forfeited (usd per share)	10.00
Balance at the end of the period (usd per share)	$ 11.10
Restricted Stock
Outstanding and Non-Vested, Shares
Balance at the beginning of the period (shares)	82,290
Granted (shares)	85,082
Vested (shares)	(81,660)
Forfeited (shares)	0
Balance at the end of the period (shares)	85,712
Outstanding and Non-Vested, Weighted Average Grant Date Fair Value Per Share (in dollars per share)
Balance at the beginning of the period (usd per share)	$ 10.54
Granted (usd per share)	12.00
Vested (usd per share)	10.96
Forfeited (usd per share)	0.00
Balance at the end of the period (usd per share)	$ 11.59

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Commitments and Contingencies (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Commitments and contingencies
Network liability coverage	$ 5.0
Expense related to network security breach	1.2
Chartwell Advisory Group, Ltd v Flamingo Gaming LLC
Commitments and contingencies
Estimate of possible loss	$ 0.2

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Commitments and Contingencies Commitments and Contingencies - Environmental Remediation (Details) - USD ($) $ in Thousands	6 Months Ended		58 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Number of years ago that the gas station contaminated the soil	35 years
Environmental remediation expense	$ 43	$ 100	$ 4,000
Insurance recoveries			$ 2,000
Amount of coverage	$ 5,000

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Gross revenue	$ 102,861	$ 113,721	$ 207,420	$ 223,282
Promotional allowances	(8,203)	(12,210)	(17,012)	(24,793)
Net revenue	94,658	101,511	190,408	198,489
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Adjusted EBITDA	19,376	17,591	39,578	35,813
Depreciation and Amortization	(7,312)	(7,205)	(14,696)	(14,368)
Share-Based Compensation	(326)	(505)	(700)	(667)
Write Downs, Reserves and Recoveries	91	204	39	69
Operating income	11,829	10,085	24,221	20,847
Total assets by reportable segment	604,574		604,574		$ 602,264
Cash paid for capital expenditures by reportable segment	4,119	3,593	8,601	6,718
Operating Segments
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total assets by reportable segment	478,252		478,252		489,387
Cash paid for capital expenditures by reportable segment	4,104	3,282	7,740	6,119
Nevada
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Gross revenue	61,119	68,704	122,900	133,754
Promotional allowances	(5,786)	(8,378)	(11,682)	(17,166)
Net revenue	55,333	60,326	111,218	116,588
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Adjusted EBITDA	12,120	10,915	25,014	21,437
Depreciation and Amortization	(3,649)	(3,698)	(7,300)	(7,386)
Share-Based Compensation	0	0	0	0
Write Downs, Reserves and Recoveries	105	197	70	120
Operating income	8,576	7,414	17,784	14,171
Total assets by reportable segment	218,749		218,749		224,731
Cash paid for capital expenditures by reportable segment	2,748	854	5,223	2,999
Midwest
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Gross revenue	32,189	34,473	65,310	67,738
Promotional allowances	(1,744)	(2,629)	(3,758)	(5,167)
Net revenue	30,445	31,844	61,552	62,571
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Adjusted EBITDA	10,388	10,560	21,062	20,129
Depreciation and Amortization	(2,012)	(1,898)	(4,042)	(3,793)
Share-Based Compensation	0	0	0	0
Write Downs, Reserves and Recoveries	(14)	0	(7)	0
Operating income	8,362	8,662	17,013	16,336
Total assets by reportable segment	203,691		203,691		207,414
Cash paid for capital expenditures by reportable segment	1,178	1,385	1,932	1,829
Colorado
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Gross revenue	9,553	10,544	19,210	21,790
Promotional allowances	(673)	(1,203)	(1,572)	(2,460)
Net revenue	8,880	9,341	17,638	19,330
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Adjusted EBITDA	1,474	969	2,618	2,875
Depreciation and Amortization	(1,421)	(1,297)	(2,879)	(2,566)
Share-Based Compensation	0	0	0	0
Write Downs, Reserves and Recoveries	0	0	0	(58)
Operating income	53	(328)	(261)	251
Total assets by reportable segment	55,812		55,812		57,242
Cash paid for capital expenditures by reportable segment	178	1,043	585	1,291
Corporate and other
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Adjusted EBITDA	(4,606)	(4,853)	(9,116)	(8,628)
Depreciation and Amortization	(230)	(312)	(475)	(623)
Share-Based Compensation	(326)	(505)	(700)	(667)
Write Downs, Reserves and Recoveries		7	(24)	7
Operating income	(5,162)	(5,663)	(10,315)	(9,911)
Total assets by reportable segment	126,322		126,322		$ 112,877
Cash paid for capital expenditures by reportable segment	$ 15	$ 311	$ 861	$ 599

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Condensed Consolidated Guarantor Data - Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 74,678	$ 157,779	$ 152,863	$ 135,175
Restricted cash	95,553	608
Accounts receivable, net	2,603	3,217
Income tax receivable	24	16
Prepaid expense	8,682	10,079
Inventory	2,832	2,798
Total current assets	184,372	174,497
Property and equipment, net	245,153	251,908
Intercompany receivables	0	0
Investment in subsidiaries	0	0
Other assets, net	3,971	3,530
Intangibles, net	122,791	124,042
Goodwill	48,287	48,287
Total assets	604,574	602,264
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	9,391	13,220
Intercompany payables	0	0
Accrued interest	2,365	2,327
Accrued expense	22,082	24,158
Current maturities of long-term debt	0	11,383
Other current liabilities	8	23
Total current liabilities	33,846	51,111
Long-term debt, less current portion	374,261	364,204
Other liabilities	1,984	1,932
Deferred income taxes	18,764	14,758
Total liabilities	428,855	432,005
Owners' equity
Common stock	20	20
Other equity	175,699	170,239
Total owners’ equity	175,719	170,259
Total liabilities and owners’ equity	604,574	602,264
Eliminating Entries
Current assets
Cash and cash equivalents	0	0
Restricted cash	0	0
Accounts receivable, net	0	0
Income tax receivable	0	0
Prepaid expense	0	0
Inventory	0	0
Total current assets	0	0
Property and equipment, net	0	0
Intercompany receivables	(133,862)	(110,150)
Investment in subsidiaries	(564,158)	(551,953)
Other assets, net	0	0
Intangibles, net	0	0
Goodwill	0	0
Total assets	(698,020)	(662,103)
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	0	0
Intercompany payables	(133,862)	(110,150)
Accrued interest	0	0
Accrued expense	0	0
Current maturities of long-term debt		0
Other current liabilities	0	0
Total current liabilities	(133,862)	(110,150)
Long-term debt, less current portion	0	0
Other liabilities	0	0
Deferred income taxes	0	0
Total liabilities	(133,862)	(110,150)
Owners' equity
Common stock	0	0
Other equity	(564,158)	(551,953)
Total owners’ equity	(564,158)	(551,953)
Total liabilities and owners’ equity	(698,020)	(662,103)
Affinity Gaming (Co-Issuer)
Current assets
Cash and cash equivalents	25,906	106,384	101,247	88,737
Restricted cash	95,414	469
Accounts receivable, net	206	220
Income tax receivable	24	16
Prepaid expense	1,012	1,813
Inventory	0	0
Total current assets	122,562	108,902
Property and equipment, net	1,262	2,002
Intercompany receivables	0	0
Investment in subsidiaries	564,158	551,953
Other assets, net	2,498	1,974
Intangibles, net	0	0
Goodwill	0	0
Total assets	690,480	664,831
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	1,162	3,483
Intercompany payables	133,862	110,150
Accrued interest	2,365	2,327
Accrued expense	1,253	1,455
Current maturities of long-term debt		11,383
Other current liabilities	0	0
Total current liabilities	138,642	128,798
Long-term debt, less current portion	374,261	364,204
Other liabilities	1,431	1,397
Deferred income taxes	427	173
Total liabilities	514,761	494,572
Owners' equity
Common stock	20	20
Other equity	175,699	170,239
Total owners’ equity	175,719	170,259
Total liabilities and owners’ equity	690,480	664,831
AG Finance (Co-Issuer)
Current assets
Cash and cash equivalents	0	0	0	0
Restricted cash	0	0
Accounts receivable, net	0	0
Income tax receivable	0	0
Prepaid expense	0	0
Inventory	0	0
Total current assets	0	0
Property and equipment, net	0	0
Intercompany receivables	0	0
Investment in subsidiaries	0	0
Other assets, net	0	0
Intangibles, net	0	0
Goodwill	0	0
Total assets	0	0
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	0	0
Intercompany payables	0	0
Accrued interest	0	0
Accrued expense	0	0
Current maturities of long-term debt		0
Other current liabilities	0	0
Total current liabilities	0	0
Long-term debt, less current portion	0	0
Other liabilities	0	0
Deferred income taxes	0	0
Total liabilities	0	0
Owners' equity
Common stock	0	0
Other equity	0	0
Total owners’ equity	0	0
Total liabilities and owners’ equity	0	0
Guarantor Subsidiaries
Current assets
Cash and cash equivalents	48,772	51,395	$ 51,616	$ 46,438
Restricted cash	139	139
Accounts receivable, net	2,397	2,997
Income tax receivable	0	0
Prepaid expense	7,670	8,266
Inventory	2,832	2,798
Total current assets	61,810	65,595
Property and equipment, net	243,891	249,906
Intercompany receivables	133,862	110,150
Investment in subsidiaries	0	0
Other assets, net	1,473	1,556
Intangibles, net	122,791	124,042
Goodwill	48,287	48,287
Total assets	612,114	599,536
LIABILITIES AND OWNERS’ EQUITY
Accounts payable	8,229	9,737
Intercompany payables	0	0
Accrued interest	0	0
Accrued expense	20,829	22,703
Current maturities of long-term debt		0
Other current liabilities	8	23
Total current liabilities	29,066	32,463
Long-term debt, less current portion	0	0
Other liabilities	553	535
Deferred income taxes	18,337	14,585
Total liabilities	47,956	47,583
Owners' equity
Common stock	0	0
Other equity	564,158	551,953
Total owners’ equity	564,158	551,953
Total liabilities and owners’ equity	$ 612,114	$ 599,536

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Condensed Consolidated Guarantor Data - Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
REVENUE
Casino	$ 69,448	$ 75,505	$ 141,331	$ 150,602
Food and beverage	10,384	12,082	21,208	24,043
Lodging	6,031	7,190	12,429	14,222
Fuel and retail	13,390	15,676	25,530	28,252
Other	3,608	3,268	6,922	6,163
Total revenue	102,861	113,721	207,420	223,282
Promotional allowances	(8,203)	(12,210)	(17,012)	(24,793)
Net revenue	94,658	101,511	190,408	198,489
EXPENSE
Casino	26,181	29,956	53,562	59,690
Food and beverage	10,378	11,800	21,170	23,627
Lodging	4,205	4,197	8,553	8,106
Fuel and retail	9,106	11,675	17,403	20,939
Other	1,956	1,838	3,463	3,368
General and administrative	18,850	19,601	37,563	38,318
Depreciation and amortization	7,312	7,205	14,696	14,368
Corporate	4,932	5,358	9,816	9,295
Write downs, reserves and recoveries	(91)	(204)	(39)	(69)
Total expense	82,829	91,426	166,187	177,642
Operating income	11,829	10,085	24,221	20,847
Other income (expense)
Interest expense, net	(7,656)	(7,653)	(15,321)	(15,258)
Intercompany interest income	0	0	0	0
Intercompany interest expense	0	0	0	0
Income from equity investments in subsidiaries	0	0	0	0
Total other expense, net	(7,656)	(7,653)	(15,321)	(15,258)
Income before income tax	4,173	2,432	8,900	5,589
Benefit (provision) for income taxes	(2,390)	(1,635)	(4,006)	(5,032)
Net income (loss)	1,783	797	4,894	557
Eliminating Entries
REVENUE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
Total revenue	0	0	0	0
Promotional allowances	0	0	0	0
Net revenue	0	0	0	0
EXPENSE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
General and administrative	0	0	0	0
Depreciation and amortization	0	0	0	0
Corporate	0	0	0	0
Write downs, reserves and recoveries	0	0	0	0
Total expense	0	0	0	0
Operating income	0	0	0	0
Other income (expense)
Interest expense, net	0	0	0	0
Intercompany interest income	(7,727)	(7,693)	(15,465)	(15,341)
Intercompany interest expense	7,727	7,693	15,465	15,341
Income from equity investments in subsidiaries	(5,929)	(2,096)	(12,205)	(1,536)
Total other expense, net	(5,929)	(2,096)	(12,205)	(1,536)
Income before income tax	(5,929)	(2,096)	(12,205)	(1,536)
Benefit (provision) for income taxes	0	0	0	0
Net income (loss)	(5,929)	(2,096)	(12,205)	(1,536)
Affinity Gaming (Co-Issuer)
REVENUE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
Total revenue	0	0	0	0
Promotional allowances	0	0	0	0
Net revenue	0	0	0	0
EXPENSE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
General and administrative	0	0	0	0
Depreciation and amortization	230	312	475	623
Corporate	4,932	5,358	9,816	9,295
Write downs, reserves and recoveries	0	(7)	24	(7)
Total expense	5,162	5,663	10,315	9,911
Operating income	(5,162)	(5,663)	(10,315)	(9,911)
Other income (expense)
Interest expense, net	(7,656)	(7,653)	(15,321)	(15,258)
Intercompany interest income	7,727	7,693	15,465	15,341
Intercompany interest expense	0	0	0	0
Income from equity investments in subsidiaries	5,929	2,096	12,205	1,536
Total other expense, net	6,000	2,136	12,349	1,619
Income before income tax	838	(3,527)	2,034	(8,292)
Benefit (provision) for income taxes	945	4,324	2,860	8,849
Net income (loss)	1,783	797	4,894	557
AG Finance (Co-Issuer)
REVENUE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
Total revenue	0	0	0	0
Promotional allowances	0	0	0	0
Net revenue	0	0	0	0
EXPENSE
Casino	0	0	0	0
Food and beverage	0	0	0	0
Lodging	0	0	0	0
Fuel and retail	0	0	0	0
Other	0	0	0	0
General and administrative	0	0	0	0
Depreciation and amortization	0	0	0	0
Corporate	0	0	0	0
Write downs, reserves and recoveries	0	0	0	0
Total expense	0	0	0	0
Operating income	0	0	0	0
Other income (expense)
Interest expense, net	0	0	0	0
Intercompany interest income	0	0	0	0
Intercompany interest expense	0	0	0	0
Income from equity investments in subsidiaries	0	0	0	0
Total other expense, net	0	0	0	0
Income before income tax	0	0	0	0
Benefit (provision) for income taxes	0	0	0	0
Net income (loss)	0	0	0	0
Guarantor Subsidiaries
REVENUE
Casino	69,448	75,505	141,331	150,602
Food and beverage	10,384	12,082	21,208	24,043
Lodging	6,031	7,190	12,429	14,222
Fuel and retail	13,390	15,676	25,530	28,252
Other	3,608	3,268	6,922	6,163
Total revenue	102,861	113,721	207,420	223,282
Promotional allowances	(8,203)	(12,210)	(17,012)	(24,793)
Net revenue	94,658	101,511	190,408	198,489
EXPENSE
Casino	26,181	29,956	53,562	59,690
Food and beverage	10,378	11,800	21,170	23,627
Lodging	4,205	4,197	8,553	8,106
Fuel and retail	9,106	11,675	17,403	20,939
Other	1,956	1,838	3,463	3,368
General and administrative	18,850	19,601	37,563	38,318
Depreciation and amortization	7,082	6,893	14,221	13,745
Corporate	0	0	0	0
Write downs, reserves and recoveries	(91)	(197)	(63)	(62)
Total expense	77,667	85,763	155,872	167,731
Operating income	16,991	15,748	34,536	30,758
Other income (expense)
Interest expense, net	0	0	0	0
Intercompany interest income	0	0	0	0
Intercompany interest expense	(7,727)	(7,693)	(15,465)	(15,341)
Income from equity investments in subsidiaries	0	0	0	0
Total other expense, net	(7,727)	(7,693)	(15,465)	(15,341)
Income before income tax	9,264	8,055	19,071	15,417
Benefit (provision) for income taxes	(3,335)	(5,959)	(6,866)	(13,881)
Net income (loss)	$ 5,929	$ 2,096	$ 12,205	$ 1,536

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Condensed Consolidated Guarantor Data - Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Guarantor Obligations [Line Items]
Net cash (used in) provided by operating activities	$ 23,943	$ 24,461
Cash flows from investing activities:
Proceeds from sale of property and equipment	18	8
Purchases of property and equipment	(8,601)	(6,718)
Net cash used in investing activities	(8,583)	(6,710)
Cash flows from financing activities:
Restricted cash	(94,945)	0
Change in intercompany accounts	0	0
Payments on capital lease	(15)	(16)
Payment on long-term debt	(2,913)	0
Loan origination fees	(515)	0
Repurchases of vested share-based awards	(73)	(47)
Net cash provided by (used in) financing activities	(98,461)	(63)
Net (decrease) increase in cash and cash equivalents	(83,101)	17,688
Beginning of period	157,779	135,175
End of period	74,678	152,863
Affinity Gaming (Co-Issuer)
Guarantor Obligations [Line Items]
Net cash (used in) provided by operating activities	(20,603)	(12,095)
Cash flows from investing activities:
Proceeds from sale of property and equipment	0	3
Purchases of property and equipment	(861)	(599)
Net cash used in investing activities	(861)	(596)
Cash flows from financing activities:
Restricted cash	(94,945)
Change in intercompany accounts	39,432	25,248
Payments on capital lease	0	0
Payment on long-term debt	(2,913)
Loan origination fees	(515)
Repurchases of vested share-based awards	(73)	(47)
Net cash provided by (used in) financing activities	(59,014)	25,201
Net (decrease) increase in cash and cash equivalents	(80,478)	12,510
Beginning of period	106,384	88,737
End of period	25,906	101,247
AG Finance (Co-Issuer)
Guarantor Obligations [Line Items]
Net cash (used in) provided by operating activities	0	0
Cash flows from investing activities:
Proceeds from sale of property and equipment	0	0
Purchases of property and equipment	0	0
Net cash used in investing activities	0	0
Cash flows from financing activities:
Restricted cash	0
Change in intercompany accounts	0	0
Payments on capital lease	0	0
Payment on long-term debt	0
Loan origination fees	0
Repurchases of vested share-based awards	0	0
Net cash provided by (used in) financing activities	0	0
Net (decrease) increase in cash and cash equivalents	0	0
Beginning of period	0	0
End of period	0	0
Guarantor Subsidiaries
Guarantor Obligations [Line Items]
Net cash (used in) provided by operating activities	44,546	36,556
Cash flows from investing activities:
Proceeds from sale of property and equipment	18	5
Purchases of property and equipment	(7,740)	(6,119)
Net cash used in investing activities	(7,722)	(6,114)
Cash flows from financing activities:
Restricted cash	0
Change in intercompany accounts	(39,432)	(25,248)
Payments on capital lease	(15)	(16)
Payment on long-term debt	0
Loan origination fees	0
Repurchases of vested share-based awards	0	0
Net cash provided by (used in) financing activities	(39,447)	(25,264)
Net (decrease) increase in cash and cash equivalents	(2,623)	5,178
Beginning of period	51,395	46,438
End of period	$ 48,772	$ 51,616

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Subsequent Events (Details) - $ / shares	Aug. 09, 2016	Aug. 08, 2016
Z Capital Partners, L.L.C. | Subsequent Event
Subsequent Event [Line Items]
Purchase price per share (usd per share)	$ 17.35	$ 15.00