14.COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Litigation – From time to time, the Company is subject to various legal proceedings arising from normal business operations. The Company does not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on its financial position, cash flows or results of operations, except for the proceedings involving the Polish Internal Revenue Service (“Polish IRS”) described below.

Casinos Poland

In March 2011, the Polish IRS began conducting a series of tax audits of CPL to review the calculation and payment of personal income tax by CPL employees. Based on the March 2011 audit, the Polish IRS concluded that CPL should calculate, collect and remit to the Polish IRS personal income tax on tips received by CPL employees from casino customers for the periods from December 1, 2007 to December 31, 2008, January 1, 2009 to December 31, 2009 and January 1, 2011 to January 31, 2011.

After proceedings with the Polish IRS, the Director of the Tax Chamber in Warsaw upheld the decision of the Polish IRS in November 2012 for review of the period from January 1, 2011 to January 31, 2011. CPL paid PLN 0.1 million (less than $0.1 million) to the Polish IRS for taxes and interest owed resulting from the decision. CPL appealed the decision to the Regional Administrative Court in Warsaw in December 2012. In September 2013, the Regional Administrative Court in Warsaw denied CPL’s appeal. CPL appealed the decision to the Supreme Administrative Court and received an oral decision on March 9, 2016. The court found in favor of the Polish IRS. CPL expects to receive the written decision from the court within the next several weeks. As previously disclosed, CPL paid the Polish IRS for the taxes and interest owed from this decision in December 2012.

After further proceedings and appeals between CPL and the Polish IRS, the Director of the Tax Chamber in Warsaw also upheld the decision of the Polish IRS in December 2013 for review of the period from December 1, 2007 to December 31, 2008. CPL paid PLN 3.5 million ($1.2 million) to the Polish IRS for taxes and interest owed resulting from the decision. CPL appealed the decision to the Voivodship Administrative Court. In January 2014, the Voivodship Administrative Court denied CPL’s appeal. CPL appealed the decision to the Supreme Administrative Court on December 19, 2014 and received an oral decision on March 9, 2016. The court found in favor of the Polish IRS. CPL expects to receive the written decision from the court within the next several weeks. As previously disclosed, CPL paid the Polish IRS for the taxes and interest owed from this decision in December 2013.

After further proceedings and appeals with the Polish IRS, the Director of the Tax Chamber in Warsaw also upheld the decision of the Polish IRS in December 2014 for review of the period from January 1, 2009 to December 31, 2009. CPL paid PLN 2.8 million ($0.9 million) to the Polish IRS for taxes and interest owed resulting from the decision. CPL appealed the decision to the Voivodship Administrative Court in January 2015 and received an oral decision in October 2015. The court found in favor of CPL on the procedural grounds that the prior tax proceedings were not conducted by the appropriate tax authority. However, the court also found that CPL’s tax records for 2009 remain open for audit by a different tax authority. CPL appealed the decision to the Supreme Administrative Court in December 2015 and expects a decision in 2018.

The statute of limitations for the Polish IRS to begin a tax audit is five years. The statute of limitations for the period from January 1, 2010 to December 31, 2010 ended on December 31, 2015 and as a result the Company has adjusted the liability to remove the estimated taxes accrued for the 2010 tax year. The adjustment reduced the contingent liability by PLN 3.4 million ($0.9 million). The adjustment was recorded as gain on foreign currency transactions and other on the Company’s consolidated statement of earnings (loss) for the year ended December 31, 2015. The balance of the potential liability on the Company’s consolidated balance sheet for all open periods as of December 31, 2015 is estimated at PLN 8.6 million ($2.2 million based on the exchange rate in effect on December 31, 2015).

Management is assessing the impact of the outcome of the decisions relating to the Polish IRS tax audits for December 1, 2007 to December 31, 2008 and January 1, 2011 to January 31, 2011 as it relates to future tax years that have not been audited. The impact may be material to the Company’s consolidated financial statements.

Employee Benefit Plans – The Company provides its employees in Colorado with a 401(k) Savings and Retirement Plan (the “401K Plan”). The 401K Plan allows eligible employees to make tax-deferred cash contributions that are matched on a discretionary basis by the Company up to a specified level. Participants become fully vested in employer contributions over a six-year period. Effective January 1, 2012, the Company reinstated matching contributions that were suspended on December 1, 2008. For each of the years ended December 31, 2015, 2014 and 2013, the Company contributed less than $0.1 million to the 401K Plan.

The Company provides its employees in Canada with two registered retirement plans: the Registered Savings Plan and Registered Pension Plan (“RSP and RPP Plans”). The RSP and RPP Plans allow eligible employee to make tax-deferred cash contributions that are matched on a discretionary basis by the Company up to a specified level. Participants of the RPP Plan become fully vested in employer contributions over a two-year period and participants of the RSP Plan become fully vested in employer contributions immediately. The Company contributed $0.1 million to the RSP and RPP Plans during each of the years ended December 31, 2015, 2014 and 2013.

Casinos Poland is required to contribute 20% of its employees’ salaries to Zaklad Ubezpieczen Spoleczynch (“ZUS”). ZUS is responsible for collecting and distributing social insurance in Poland. Casinos Poland contributed $1.2 million, $1.5 million and $1.0 million to ZUS during the years ended December 31, 2015, 2014 and 2013, respectively.

Operating Lease Commitments– The Company has entered into certain noncancelable operating leases for real property and equipment. Rental expenses, including month-to-month rentals, were $0.9 million, $0.8 million, and $0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Following is a summary of operating lease commitments over the next five years:


Amounts in thousands
2016	$	217
2017		188
2018		144
2019		125
2020		111
Total	$	785