Gaming Equipment, Vehicles and Other Equipment

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Gaming Equipment, Vehicles and Other Equipment

GAMING EQUIPMENT, VEHICLES AND OTHER EQUIPMENT

Gaming equipment, vehicles and other equipment consist of the following (in thousands):

	March 31, 2015			December 31, 2014
Gaming equipment	$	52,941		$	50,516
Vehicles and other equipment	7,830			6,681
Less: Accumulated depreciation	(19,685		)	(16,428		)
Total gaming equipment, vehicles and other equipment, net	$	41,086		$	40,769

Gaming equipment, vehicles and other equipment are depreciated over the respective useful lives of the assets ranging from three to six years. Depreciation expense was $3.9 million and $4.3 million for the three months ended March 31, 2015 and 2014, respectively.

Immaterial Error Correction

The Company determined that costs to install and deliver leased gaming machines were being capitalized and incorrectly depreciated over the useful life of the machine rather than capitalized as initial direct costs and amortized over the term of the lease in accordance with ASC 840-20-35-2. Additionally, the Company determined the gaming machines associated with our gaming equipment leases in Illinois should have been depreciated over 6 years as compared to 5 years given this period represents the estimated term of leases in Illinois and the fact that this represents the useful life in this jurisdiction. In the second quarter of 2014, the Company recorded the cumulative effect of the analysis performed which resulted in a decrease of $2.0 million to gaming equipment with a corresponding increase to goodwill, an increase of $0.2 million and $0.4 million to deposits and other and other assets, respectively, and a reduction of $0.3 million in depreciation expense related to the period from the Acquisition date to the second quarter of 2014. In the first quarter of 2015, the Company further refined its analysis and as a result increased gaming equipment by $0.8 million, decreased goodwill by $0.4 million, decreased deposits and other and other assets by $0.4 million and $0.1 million, respectively, increased depreciation expense by $0.3 million and decreased gaming operating expenses by $0.2 million. We have performed an evaluation to determine if the financial statement impact resulting from these errors in accounting was material, considering both quantitative and qualitative factors. Based on this materiality analysis, we concluded that correcting the cumulative error would be immaterial to the current year financial statements and a correction of the errors, individually and in the aggregate, would not have a material impact to any individual prior period financial statements.