Restatement

On October 24, 2011, management, with concurrence of the Audit Committee, concluded that our previously issued financial statements for the three and six months ended June 30, 2011, respectively, incorrectly accounted for customer loyalty awards associated with our mychoice customer loyalty program. As part of our mychoice program, customers are able to earn a tier status based on their level of play, and each tier status is associated with certain benefits which the customer may receive. During the re-launch of our mychoice program in the second quarter of 2011, we originally expensed costs associated with these tier awards as incurred, or capitalized and amortized these costs as benefits were enjoyed by certain customers. Upon further review of the applicable accounting guidance, we determined that tier award benefits offered to certain customers under the re-launched mychoice program were discretionary in nature and should have been expensed when the benefits were offered, or during the second quarter of 2011. These expense adjustments related to benefits to be enjoyed by customers during 2011, as well as 2012 and in some instances part of 2013. In addition, we are now accruing for the costs associated with benefits customers are expected to receive next year based on this year's expected accumulated points and status level. These tier award benefits are considered non-discretionary in nature moving forward. These changes increased our net loss by $10.2 million, excluding the effect of income taxes, and had no effect on our net cash provided by operating activities as previously reported.

As a result of these adjustments, we are restating our financial statements for the three and six months ended June 30, 2011, respectively. The net effect of the adjustments to the balance sheet as of June 30, 2011 and statements of operations for the three and six-months ended June 30, 2011, respectively, were as follows:



	June 30, 2011
	As Previously Reported		As Restated
	(in thousands)
Condensed Consolidated Balance Sheet:
Prepaid expenses and other assets	$	28,444	$	21,883
Total current assets	240,100		233,539
Total assets	1,884,272		1,877,711
Other accrued liabilities	47,633		52,193
Total current liabilities	169,353		173,913
Total liabilities and stockholders' equity	1,884,272		1,877,711



	For the three months ended June 30, 2011						For the six months ended June 30, 2011
	As Previously Reported			As Restated			As Previously Reported			As Restated
	(in thousands)
Condensed Consolidated Statements of Operations:
Gaming expenses	$	138,534		$	148,730		$	281,959		$	292,155
Total expenses and other costs	267,340			277,536			524,308			534,504
Operating income (loss)	31,745			21,549			62,511			52,315
Income (loss) from continuing operations before income taxes	6,166			(4,030		)	10,834			638
Income tax (expense) benefit	(632		)	(1,557		)	(700		)	(1,625		)
Income (loss) from continuing operations	5,534			(5,587		)	10,134			(987		)
Net loss	(17,956		)	(29,077		)	(15,595		)	(26,716		)
Net loss per common shares-basic and diluted	(0.29		)	(0.47		)	(0.26		)	(0.44		)



	For the six months ended June 30, 2011
	As Previously Reported		As Restated
	(in thousands)
Condensed Consolidated Statement of Cash Flows:
Net loss	(15,595	)	(26,716	)
Changes in prepaid expenses and other	(10,446	)	(3,885	)
Changes in other accrued liabilities	(486	)	4,074

In connection with the restatement of our financial statements for the three and six months ended June 30, 2011, respectively, we notified the lenders under our Credit Facility that there was a default because our second quarter financial statements delivered to the lenders were not in accordance with U.S. generally accepted accounting principles. On November 1, 2011, we received a waiver of this default from our lenders under our Credit Facility. There were no defaults under our bond indentures.

We have revised our income tax expense to reflect the impact of the adjustments described above. Prior to the restatement of our financial statements for the three and six months ended June 30, 2011, our income tax expense was based on our estimated annual tax rate. As a result of the additional expense recognized with respect to the mychoice program, we are now using the actual year-to-date tax rate for the six months ended June 30, 2011 to record our income tax expense for the interim periods. We believe applying the actual year-to-date effective tax rate for the six months ended June 30, 2011 is now the best estimate of our annual effective tax rate.