Other Intangible Assets and Capital Leases

9 Months Ended

Jan. 31, 2012

Other Intangible Assets and Capital Leases Disclosure [Abstract]

Other Intangible Assets and Capital Leases

5.  Other Intangible Assets and Capital Leases:  In January 2012, a subsidiary, BHCMC, LLC began a five-year series of monthly lease payments to a non-controlling Member, BHC Investment LC (“BHCI”), of BHCMC, LLC for intangible items paid for with funds from BHCI.  These items include the Kansas Expanded Lottery Act Management Contract privilege fee and intangible casino gaming support equipment and software systems.  The intangible gaming support equipment and systems include the slot and table game management systems, casino marketing systems, surveillance network systems and equipment, security system and equipment related to casino gaming and the system backup and recovery software and equipment.  The five-year total of the intangible lease payments to BHCI is $10,595,791 (other intangible assets of $7,423,162 plus imputed interest $3,172,629) plus $260,000 advance lease payments made in July 2010.  The advance lease payment made in July 2010 was carried as a prepaid on BHCMC, LLC balance sheet.  The payment total is recorded as intangible assets with related long-term and current liabilities.  BHCMC, LLC will own the intangible right to all personalty items upon full payment of the lease payments.

BHCMC, LLC expects the intangible assets for the Kansas Expanded Lottery Act contract privilege fee of $5,500,000 to have value over the remaining life of the Management Contract with the State of Kansas which will end in December 2024 (approximately 13 years).  There is no assurance of Management Contract renewal.  The privilege fee will be fully amortized by the projected end of the Management Contract.

BHCMC, LLC expects these intangible gaming support items to have a useful life ranging from two to five years.  These intangible items are valued at cost of $2,183,162 and are being fully amortized over the five-year period of lease payments.  A portion of these items are expected to be repaired, overhauled and replaced for technical obsolescence on an on-going basis.  BHCMC, LLC accounting policy is to expense these repairs, overhauls and obsolescence replacements as completed.