Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company’s effective income tax rate for the three months ended June 30, 2019 was higher than the U.S. federal statutory rate of 21.0% primarily due to state income taxes and certain expenses that are not deductible for the purposes of income taxes. This expense was partially offset by tax benefits resulting from tax deductions from vesting of stock awards in excess of book deductions.

The Company’s effective income tax rate for the six months ended June 30, 2019 was higher than the U.S. federal statutory rate of 21.0% primarily due to state income taxes, as well as $2.2 million of future income tax expenses recognized from the remeasurement of our net deferred tax liabilities based on an increase in income attributable to states with higher tax rates compared to the prior year period, and certain expenses that are not deductible for the purposes of income taxes. This expense was partially offset by tax benefits resulting from tax deductions from vesting of stock awards in excess of book deductions.

During the first quarter of 2019, we recognized a $109.6 million deferred tax liability and a corresponding increase in our investment in unconsolidated affiliates related to an entity we acquired in conjunction with our acquisition of the Clairvest ownership interest in Midwest Gaming. Refer to Note 12, Investments in and Advances to Unconsolidated Affiliates, for further information.

The Company’s effective income tax rate for the three and six months ended June 30, 2018 was higher than the U.S. federal statutory rate of 21.0%, primarily due to state income taxes and certain expenses that are not deductible for income tax purposes, partially offset by tax benefits resulting from tax deductions from vesting of stock awards in excess of book deductions as well as deferred tax benefits from Kentucky House Bill 487, which was enacted on April 27th, 2018 and lowered Kentucky’s corporate tax rate from 6% to 5%, imposed a single-sales factor apportionment effective for the 2018 tax year and beyond, and required a combined Kentucky tax return.