Leases

6 Months Ended

Jun. 30, 2022

12.LEASES

The Company determines if an arrangement is a lease at inception. The right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate in each of the jurisdictions in which its subsidiaries operate to calculate the present value of lease payments. Lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise those options. Operating lease expense is recorded on a straight-line basis over the lease term.

The Company accounts for lease agreements with lease and non-lease components as a single lease component for all asset classes. The Company does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

The Company’s operating and finance leases include land, casino space, corporate offices, and gaming and other equipment. The leases have remaining lease terms of one month to 15 years.

The components of lease expense were as follows:


	For the three months ended				For the six months ended
	June 30,				June 30,
Amounts in thousands	2022		2021		2022		2021
Operating lease expense	$	1,349	$	1,519	$	2,723	$	2,982

Finance lease expense:
Amortization of right-of-use assets	$	42	$	31	$	84	$	67
Interest on lease liabilities		4		2		9		4
Total finance lease expense	$	46	$	33	$	93	$	71

Variable lease expense	$	373	$	211	$	797	$	388

Variable lease expense relates primarily to rates based on changes in indexes that are excluded from the lease liability and fluctuations in foreign currency related to leases in Poland.

Supplemental cash flow information related to leases was as follows:


	For the six months ended
	June 30,
Amounts in thousands	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	8	$	4
Operating cash flows from operating leases		2,551		2,862
Financing cash flows from finance leases		79		64

Right-of-use assets obtained in exchange for operating lease liabilities	$	140	$	341

Supplemental balance sheet information related to leases was as follows:


	As of		As of
Amounts in thousands	June 30, 2022		December 31, 2021
Operating leases
Leased right-of-use assets, net	$	26,180	$	28,383

Current portion of operating lease liabilities		3,467		3,915
Operating lease liabilities, net of current portion		25,510		27,229
Total operating lease liabilities		28,977		31,144

Finance leases
Finance lease right-of-use assets, gross		562		424
Accumulated depreciation		(188)		(342)
Property and equipment, net		374		82

Current portion of finance lease liabilities		151		38
Finance lease liabilities, net of current portion		224		43
Total finance lease liabilities		375		81

Weighted-average remaining lease term
Operating leases		11.2 years		11.2 years
Finance leases		2.4 years		2.2 years

Weighted-average discount rate
Operating leases		4.8%		4.7%
Finance leases		4.5%		4.0%

Maturities of lease liabilities as of June 30, 2022 were as follows:


Amounts in thousands		Operating Leases	Finance Leases
2022	$	2,406	$	87
2023		4,452		158
2024		3,821		152
2025		2,805		—
2026		2,527		—
Thereafter		23,222		—
Total lease payments		39,233		397
Less imputed interest		(10,256)		(22)
Total	$	28,977	$	375