Note 11 - Contingency

9 Months Ended

Jan. 31, 2019

Notes to Financial Statements

Legal Matters and Contingencies [Text Block]

11.

Contingency

On

December 29, 2017,

BHCMC, received a ruling from the Kansas Supreme Court in the Matter of the Appeal of BHCMC, LLC d/b/a Boot Hill Casino & Resort, concerning the request for refund for sales/use taxes paid for slot machines owned by the Kansas Lottery. The Kansas Department of Revenue appealed from a Board of Tax Appeals summary decision granting a compensating use tax refund to BHCMC. The Kansas Supreme Court addressed “whether such a tax can be imposed on Boot Hill (BHCMC) for electronic gaming machines it does not—and, under the law and its management agreement with Kansas Lottery, cannot—own”. The Court ruled that “Boot Hill did

not

exercise a right or power incident to ownership of personal property in order to be subject to a compensating use tax for that property.” Because BHCMC has

not

exercised such a power or right, the Court affirmed Board of Tax Appeals' refund decision and the ruling of the Kansas Court of Appeals panel decision. Management makes

no

assurances related to collection of, or the timeliness of, any actions realizing any direct monetary effects, if any, of the ruling. Therefore, the Company’s accounting of these sales/use tax refunds will be recognized as other income when payment is received from the State of Kansas.

For the

nine

months ended

January 31, 2019,

$2.0

million was reported as a refund of sales/use tax, including

$385

in the

three

months ended

January 31, 2019,

in the consolidated statement of operations in connection with the above ruling.