Leases

9 Months Ended

Sep. 30, 2023

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 48 years.

The components of lease expense were as follows:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Amounts in thousands	2023		2022		2023		2022
Operating lease expense	$	1,478	$	1,305	$	4,194	$	3,988

Finance lease expense:
Amortization of right-of-use assets	$	23	$	26	$	70	$	110
Interest on lease liabilities		8		10		26		19
Total finance lease expense	$	31	$	36	$	96	$	129

Variable lease expense	$	335	$	415	$	944	$	1,139

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 nine months ended
	September 30,
Amounts in thousands	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	26	$	15
Operating cash flows from operating leases		3,844		3,579
Financing cash flows from finance leases		113		115

Right-of-use assets obtained in exchange for operating lease liabilities	$	3,489	$	1,050

‎

Supplemental balance sheet information related to leases was as follows:


	As of		As of
Amounts in thousands	September 30, 2023		December 31, 2022
Operating leases
Leased right-of-use assets, net	$	26,018	$	27,190

Current portion of operating lease liabilities		3,580		3,947
Operating lease liabilities, net of current portion		25,490		26,016
Total operating lease liabilities		29,070		29,963

Finance leases
Finance lease right-of-use assets, gross		768		764
Accumulated depreciation		(246)		(175)
Property and equipment, net		522		589

Current portion of finance lease liabilities		158		150
Finance lease liabilities, net of current portion		281		399
Total finance lease liabilities		439		549

Weighted-average remaining lease term
Operating leases		14.6 years		10.5 years
Finance leases		2.9 years		3.6 years

Weighted-average discount rate
Operating leases		8.7%		4.9%
Finance leases		7.0%		7.0%

Maturities of lease liabilities as of September 30, 2023 were as follows:


Amounts in thousands		Operating Leases	Finance Leases
2023	$	1,282	$	46
2024		4,989		179
2025		3,953		161
2026		3,674		85
2027		3,616		15
Thereafter		39,625		—
Total lease payments		57,139		486
Less imputed interest		(28,069)		(47)
Total	$	29,070	$	439