2.4.0.82105100 - Disclosure - Development and Placement Fee Agreementstruefalsefalse1falsefalsefalseD2013Q3YTDhttp://www.sec.gov/CIK0000896400duration2012-10-01T00:00:002013-06-30T00:00:001true1mgam_DevelopmentAndPlacementFeeAgreementsAbstractmgam_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2mgam_DevelopmentAgmtTextBlockmgam_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">DEVELOPMENT AND PLACEMENT FEE AGREEMENTS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company enters into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to the Company, while funding under placement fee agreements is not reimbursed. In return for either development or placement fees, the facility dedicates a percentage of its floor space to placement of the Company's player terminals, and the Company receives a fixed percentage of those player terminals' hold per day over the term of the agreement which is generally for </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">12</font><font style="font-family:inherit;font-size:10pt;"> to </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">83</font><font style="font-family:inherit;font-size:10pt;"> months. Certain of the agreements contain player terminal performance standards that could allow the facility to reduce a portion of the Company's guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The agreements typically provide for a portion of the amounts retained by the gaming facility for their share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the gaming facility. In the past the Company has, and in the future, the Company may, by mutual agreement, amend these contracts to reduce its floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset recovered for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 18, 2012, the Company announced that it had extended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">1,709</font><font style="font-family:inherit;font-size:10pt;"> unit placements, or </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">85%</font><font style="font-family:inherit;font-size:10pt;"> of the </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">2,009</font><font style="font-family:inherit;font-size:10pt;"> units then- installed on a revenue sharing basis, at the WinStar World Casino and Riverwind Casino operated by the Chickasaw Nation in Oklahoma, for an additional </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">3.5</font><font style="font-family:inherit;font-size:10pt;"> years beyond the original scheduled termination of the original unit placement agreements, which was to occur during the second half of fiscal 2013.  In consideration of the unit placement extensions, the Company paid unit placement fees of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$13.2 million</font><font style="font-family:inherit;font-size:10pt;"> to the Chickasaw Nation.  The Company also agreed to reduce its revenue share percentage on approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">1,000</font><font style="font-family:inherit;font-size:10pt;"> units at the WinStar World Casino with two pricing adjustments on July 16, 2013 and August 1, 2014, bringing the revenue share percentage on these units in line with the Company's other units deployed within the Chickasaw Nation's gaming facilities.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On November 19, 2012, the Company entered into a new development agreement with the Chickasaw Nation to assist with the expansion of the Winstar Casino. As part of this agreement, the Company received the right to </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">150</font><font style="font-family:inherit;font-size:10pt;"> unit placements for a period of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">68</font><font style="font-family:inherit;font-size:10pt;"> months in exchange for a refundable payment of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$6.5 million</font><font style="font-family:inherit;font-size:10pt;">. The payment was made in two equal installments in November 2012 and January 2013.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On March 7, 2013, the Company paid an approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$2.0 million</font><font style="font-family:inherit;font-size:10pt;"> placement fee to the Chickasaw Nation to extend the placement of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">201</font><font style="font-family:inherit;font-size:10pt;"> units in </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">six</font><font style="font-family:inherit;font-size:10pt;"> casino locations across Oklahoma for an additional term of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">50</font><font style="font-family:inherit;font-size:10pt;"> months.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Management reviews intangible assets related to development and placement fee agreements for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no events or changes in circumstances in the </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">three</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">nine</font><font style="font-family:inherit;font-size:10pt;"> month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June 30, 2013</font><font style="font-family:inherit;font-size:10pt;">, which required an impairment charge to the carrying value of intangible assets recorded in connection with development and placement fee agreements.  </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following net amounts related to advances made under development and placement fee agreements and were recorded in the following balance sheet captions:</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:98.4375%;border-collapse:collapse;text-align:left;"><tr><td colspan="7" rowspan="1"></td></tr><tr><td width="72%" rowspan="1" colspan="1"></td><td width="1%" rowspan="1" colspan="1"></td><td width="12%" rowspan="1" colspan="1"></td><td width="1%" rowspan="1" colspan="1"></td><td width="1%" rowspan="1" colspan="1"></td><td width="12%" rowspan="1" colspan="1"></td><td width="1%" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">June 30, <br clear="none"/>2013</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">September 30, <br clear="none"/>2012</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Included in:</font></div></td><td colspan="6" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(In thousands)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#c0ffff;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Notes receivable, net</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#c0ffff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#c0ffff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">6,986</font></div></td><td style="vertical-align:bottom;background-color:#c0ffff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#c0ffff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#c0ffff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">8,156</font></div></td><td style="vertical-align:bottom;background-color:#c0ffff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Intangible assets – contract rights, net of accumulated amortization</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">26,854</font></div></td><td style="vertical-align:bottom;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">30,551</font></div></td><td style="vertical-align:bottom;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr></table></div></div></div>falsefalsefalsenonnum:textBlockItemTypenaAdvances paid to purchases of acquisition of floor space. Certain of the agreements contain player terminal performance standards that could allow the facility to reduce a portion of the company’s guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The agreements typically provide for a portion of the amounts retained by the gaming facility for their share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable.No definition available.false0falseDevelopment and Placement Fee AgreementsUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.multimediagames.com/role/DevelopmentAndPlacementFeeAgreements12