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iowa gambling annual report Employer Identification Number 3440 West Russell Road, Las Simply bingo gambling licence remarkable, NV Address of principal executive offices 89118 Zip Code 702 889-7600 Registrant's telephone number, including area code Securities Registered Pursuant To Section 12 b of the Act: None Securities Registered Pursuant To Section 12 g of the Act: Common Units Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No ý Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 d of the Act.
Yes o No ý Indicate by check mark whether the Registrant 1 has filed all reports required to be filed by Section 13 or 15 d of the Securities and Exchange Act of 1934 during the preceding 12 months or for such shorter period that the Registrant was required to file such reportsand 2 has been subject to such filing requirements for the past 90 days.
Yes ý No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T § 232.
Yes o No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K §229.
See definition of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer ý Do not check if a smaller reporting company Smaller reporting company o Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Act.
There currently is no established public trading market for our membership interests.
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15 d of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ý No o The number of the Registrant's common units outstanding was 20,226,833 as of March 30, 2012.
Page CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects", "projects," "may," "will" or "should" or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties, and similar references to future periods.
Examples of forward-looking statements include, but are not limited to, statements we make regarding i the adequacy of cash flows from operations and available cash and ii the effects to our business as a result of our Predecessor's reorganization proceedings under title 11 of the United States Code the "Bankruptcy Code"11 U.
§§ 101, et seq.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.
Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.
Our actual results may differ materially from those contemplated by the forward-looking statements.
We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.
These risks and uncertainties include, but are not limited to, statements we make regarding: i the potential adverse impact of the Chapter 11 filing on our operations, management and employees; ii customer response to the Chapter 11 filing; iii the adequacy of cash flows from operations, available cash and available amounts under our credit facility to meet future liquidity needs; iv expectations regarding the operation of slot machines at our casino properties; v our continued viability, our operations and results of operations; or vi expectations related to integration of newly acquired casino properties.
Additional important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, as well as the following: • flooding and other natural disasters may adversely affect our business; • the recession, and in particular the economic downturn in Nevada and California, may continue to adversely affect our business; • our debt service requirements may adversely affect our operations and ability to compete; • our ability to generate cash to service our substantial indebtedness depends on many factors that are beyond our control; • rising gasoline prices could have a material adverse effect on our revenues as our casinos primarily rely on drive in traffic for visitation; • we may experience a loss of revenue or market share due to intense competition; • we face extensive regulation from gaming and other government authorities; • changes to applicable gaming and tax laws could have a material adverse effect on our financial condition; and • other factors that are described in "Risk Factors.
Factors or events that could cause continue reading actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
Overview Affinity Gaming, LLC and together with its subsidiaries, the "Company," "Successor," "we" or "us" was organized in the State of Nevada on March 29, 2010 as Herbst Gaming, LLC.
The Company changed its name to Affinity Gaming, LLC, effective May 20, 2011, to reflect its new beginning, new Board of Directors and new management team.
We can i block all gambling sites a Nevada limited liability company that was formed to acquire substantially all of the assets of Herbst Gaming, Inc.
Predecessor's bankruptcies were jointly administered under the lead case In re: Zante, Inc.
BK-N-09-50746-GWZ in the United States Bankruptcy Court for the District of Nevada, Iowa gambling annual report Division the "Bankruptcy Court".
The reorganization of Predecessor was substantially consummated on December 31, 2010 the "Emergence Date"wherein we acquired all of Predecessor's assets in consideration for the issuance of our membership interests and senior secured loans.
See Note 2—Fresh Start Accounting for a further description of the reorganization of Predecessor.
We are a diversified, multi-jurisdictional casino operator with wholly-owned casino operations in Nevada, Missouri and Iowa.
In February 2012, we completed the planned sale of certain assets and liabilities related to our slot route operation and our casinos in Pahrump and Searchlight, Nevada.
As of December 31, 2011, we operated 15 wholly-owned casinos, 12 of which are located in Nevada.
As of December 31, 2011, the casinos in Nevada contained an aggregate of approximately 5,940 slot machines and 96 table games.
Our casino operations outside of Nevada consist of St Jo Frontier Casino in St.
Joseph, Missouri "St Jo"Mark Twain Casino in LaGrange, Missouri "Mark Twain" and Lakeside Casino Resort in Osceola, Iowa "Lakeside Iowa".
As of December 31, 2011, these three Casinos contained an aggregate of approximately 2,229 slot machines and 38 table games.
Additionally, on February 29, 2012, 2 we acquired three casinos in Black Hawk, Colorado from Golden Gaming, LLC, the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino.
See Recent Developments below for further detail regarding the acquisition.
Our slot route operations involved the exclusive installation and operation of a limited number of slot machines in certain strategic, high-traffic, non-casino locations, such as grocery stores, drug stores, convenience stores, bars and restaurants.
As of December 31, 2011, we had approximately 6,000 slot machines on our slot route.
The slot route operation was sold in February 2012.
See Recent Developments below for further detail regarding the disposition.
We also provide consulting services to Hotspur Casinos, Https://cetsolarstore.com/gambling/sports-gambling-should-be-illegal.html, Inc.
Marriott Resort in Las Vegas which Hotspur will manage.
Under the terms of the consulting agreement, we receive a fixed monthly fee.
Our principal executive offices are located at 3440 West Russell Road, Las Vegas, Nevada 89118 and our telephone number is 702 889-7600.
Recent Developments On February 27, 2012, the Company sold its casino in Searchlight, Nevada, and the portion of its slot route operations relating solely to the Terrible Herbst convenience stores to JETT Gaming, LLC, a Las Vegas-based slot route operator.
On February 29, 2012, the Company sold the remainder of its slot route operations, as well as its two Pahrump, Nevada casinos, to Golden Gaming, LLC formerly known as Golden Gaming, Inc.
In addition, as part of the transaction with Golden Gaming, the Company acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado the "Black Hawk Casinos" —and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Pending licensure, we receive fixed monthly rental payments under the lease.
The Company focuses on operation of locals-oriented casinos catering to customers in drive-in markets.
Divesting of the slot route operation and smaller Nevada casinos while acquiring the Black Hawk Colorado casinos is consistent with and critical to the Company's long-term strategic vision.
Emergence from Chapter 11 Reorganization On March 22, 2009, Predecessor filed voluntary petitions for relief the "Chapter 11 Cases" under Chapter 11 of the Bankruptcy Code in order to preserve its assets and the value of its estates.
From March 22, 2009 through February 5, 2010, Predecessor operated the business and managed the properties as debtors-in-possession, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.
In exchange for Predecessor agreeing to meet certain timing milestones and to file a plan of reorganization and supporting disclosure statement satisfactory to Consenting Lenders holding at least two-thirds the amount of the HGI Credit Facility claims held by all of the Consenting Lenders, the Consenting Lenders agreed to vote in support of a plan of reorganization with the terms and conditions described therein during the bankruptcy balloting process.
On July 22, 2009, Predecessor filed with the Bankruptcy Court an amended joint plan of reorganization.
On January 22, 2010, the Bankruptcy Court issued an Amended Order Confirming Debtors' First Amended Joint Plan of Reorganization the "Order"confirming the amended joint plan of reorganization, as modified by 3 the Findings of Fact and Conclusions of Law in Support of Order Confirming Debtors' First Amended Joint Plan of Reorganization the "Findings of Fact" entered contemporaneously with the Order the amended joint plan of reorganization as modified by the Findings of Fact, the "Bankruptcy Plan".
The Bankruptcy Plan became effective on February 5, 2010, but was not fully implemented until December 31, 2010, after applicable regulatory approvals were obtained the "Emergence Date".
From and after the transfer of Predecessor's assets to us, all of Predecessor's subsidiaries other than E-T-T Enterprises L.
Fresh Start Accounting As required by accounting principles generally accepted in the United States "GAAP"we adopted fresh start accounting effective December 31, 2010 following the guidance of Financial Accounting Standards Board "FASB" Accounting Standards Codification "ASC" Topic 852, Reorganizations "FASB ASC 852".
The financial statements for the periods ended prior to December 31, 2010 do not include all of the effects of any changes in our capital structure or changes in the fair value of assets and liabilities as a result of fresh start accounting.
See Note 2 to our consolidated financial statements for a detailed explanation of the impact of emerging from Chapter 11 and applying fresh start accounting on our financial position.
Management Changes and Operational Changes Affinity Gaming emerged from bankruptcy with improved liquidity and capital levels.
In accordance with accounting standards for companies that have emerged from bankruptcy, our post emergence balance sheet reflects our assets and liabilities at fair value, and a new equity value was established.
All common stock and preferred stock of Herbst Gaming Inc.
As a result of the reorganization, our business, financial condition and operating strategy changed significantly.
We have an experienced new senior management team, including a new Board of Directors, Chief Executive Officer, Chief Financial Officer and Treasurer, and General Counsel and Secretary.
We have continued to concentrate on EBITDA as defined in the Credit Agreement defined below stability in each of the regions we operate with the new executive team.
In addition to the regions that we currently operate in, the acquisition of the three casinos in Black Hawk, Colorado allows us to further expand our geographic footprint.
On January 7, 2011, we appointed David D.
Ross, 47, as Chief Executive Officer.
Prior to his appointment as our Chief Click here Officer, Go here />Prior to joining Predecessor, Mr.
Ross spent 25 years with Coast Casinos, a division of Boyd Gaming Corp.
Most recently he served as Coast Casinos' Chief Operating Officer from 2004-2008.
On January 7, 2011, we appointed Ferenc Szony, 56, as President.
Szony previously served as President of Predecessor and his employment contract was assumed by us in connection with the Restructuring Transactions.
Prior to joining Predecessor, Mr.
Szony served as President and Chief Executive Officer of the Sands Regency Casino Hotel from 1997 until its acquisition by Predecessor in January 2007.
Effective January 1, 2012, Mr.
Szony was appointed Chief Operating Officer, and no longer holds the title of President.
On February 4, 2011, we appointed Marc H.
Rubinstein, 50, as Senior Vice President, General Counsel and Secretary.
Prior to his appointment as Senior Vice President, General Counsel and Secretary, and since July 2008, Mr.
Rubinstein served as Senior Vice President, Law and Administration, and Secretary for Tropicana Entertainment Inc.
On May 3, 2011, we appointed John Christopher Krabiel, 48, as Chief Financial Officer and Treasurer.
Prior to his appointment as Chief Financial Officer and Treasurer, and from August 2004 until his hiring by the Company in January 2011 as Vice President of Operations, Mr.
Krabiel served in https://cetsolarstore.com/gambling/gambling-winnings-tax-us.html roles at Boyd Gaming Corp.
Credit Facility On December 31, 2010, we entered into a credit agreement with Wilmington Trust Company, as administrative agent, and the lender parties from time to time thereto the "Credit Agreement".
The Senior Secured Loans bear interest at the rate of, at our election, either i the LIBOR plus a margin of 7.
Both LIBOR and the alternative base rate are subject to a fixed floor of 3% and 4%, respectively.
The principal amount of the Senior Secured Loans is payable on the maturity date, which shall be the earlier of December 31, 2015 or the acceleration of the Senior Secured Loans in accordance with the terms of the Credit Agreement.
Description of Business Our business focuses on attracting and fostering repeat business from local gaming see more />Local patrons are typically sophisticated gaming customers who seek the latest slot machines and a pleasant atmosphere in locations convenient to their homes and businesses.
All of our casino properties focus on local customers, with an emphasis on slot machine play.
There are currently 329 hotel rooms with article source amenities.
Terrible's Las Vegas is conveniently located approximately one mile east of the Las Vegas Strip, which we believe appeals to locals who wish to avoid the congestion of the Las Vegas Strip.
Terrible's Las Vegas' favorable location has made it popular with Las Vegas Strip casino employees.
Although not a 6 tourist destination due to the limited number of rooms, the property receives a certain amount of tourist traffic through the casino due to its location near the airport, the Las Vegas Strip and the Las Vegas Convention Center.
Henderson Casino The Henderson Casino is located in Henderson, Nevada, a suburb southeast of Las Vegas.
The property has approximately 5,000 square feet of gaming space with approximately 95 slot machines, a 16-lane bowling alley and a 24-hour café.
Two 18-hole Tom Fazio golf courses with a full-service restaurant and club house, leased and managed by a third-party, are also located adjacent in gambling spanish business our properties in Primm.
Primm Valley Resort and Casino Primm Valley offers approximately 845 slot machines, 25 here games, and a race and sports book operated by a third party.
Additionally Primm Valley has a 625 room hotel and 21,000 square feet of convention space.
Primm Valley has a full service coffee shop operated by a third party, a buffet and the GP Steakhouse.
The resort has a swimming pool, and a full service spa.
Primm Valley is connected to the "Fashion Outlets of Las Vegas," a retail complex owned by a third party that houses over 100 designer outlet stores, including a Neiman Marcus "Last Call," a Williams Sonoma Outlet store, and Coach, Tommy Bahama, Banana Republic and Versace factory outlet stores.
Buffalo Bill's Resort and Casino Buffalo Bill's offers approximately 929 slot machines, 33 table games, and a race and sports book operated by a third party.
In addition to a 1,243 room hotel, Buffalo Bill's has a Denny's operated by a third party, a buffet and a Mexican restaurant.
The western themed property also has extensive entertainment amenities including the 6,800 seat "Star of the Desert" arena that hosts headline entertainers throughout the year.
Buffalo Bill's has a roller coaster as well as water park log rides, a movie theater, and a midway-style arcade.
Additionally Whiskey Pete's has a 779 room hotel, a full service coffee shop operated by a third party, a weekend buffet, a McDonald's restaurant, an 8,000 square feet special events and concert venue with 700 seats, and a swimming pool.
Northern Nevada Casinos Sands Regency Casino Hotel Sands Regency Casino Hotel in Downtown Reno, Nevada https://cetsolarstore.com/gambling/charlie-sloth-hood-heat-volume-1-tracklist.html approximately 26,000 square feet of gaming space, including approximately 548 slot machines and eight table games, bingo, live poker and a sports book operated by an independent third party.
Additionally, the Sands has 833 hotel rooms and a spa.
The property also has a Mel's, the original, diner style restaurant, and an Arby's 7 restaurant, both of which are operated by third parties.
The facility also includes approximately 12,000 square feet of convention and meeting space.
Third parties lease space from the Sands and operate a wedding chapel, a bicycle and ski rental shop and a beauty shop.
Rail City Casino The Rail City Casino in Sparks, Nevada has approximately 24,000 square feet of gaming space housing approximately 885 slots, six table games, including keno, a sports book operated by a third party, a 24-hour family-style restaurant and an ale house and brew pub.
Dayton Depot Casino The Dayton Depot Casino is located in Dayton, Nevada.
The Dayton Casino has approximately 14,000 square feet of casino space, a family-style restaurant, 219 slot machines and a sports book operated by a third party.
Midwest Casinos Missouri St Jo Frontier Casino St Jo, a riverboat casino located in a man-made basin adjacent to the Missouri River in St.
Joseph, Missouri, offers approximately 568 slot machines and 11 table games.
St Jo also offers a bar, a coffee shop style restaurant, a buffet, and over 2,400 total square feet of modular conference and meeting space.
The casino and its amenities have a locally popular western theme that plays off St.
Joseph's heritage as the founding location and headquarters of the Pony Express.
St Jo owns 40 acres of land, 32 acres of which are undeveloped.
Mark Twain Casino Mark Twain, a riverboat casino located in a man-made basin adjacent to the Mississippi River in LaGrange, Missouri, offers approximately 654 slot machines and 13 table games.
The casino has a locally popular theme based on Mark Twain, who grew up in and wrote about nearby Hannibal, Missouri.
Iowa Lakeside Casino Resort Lakeside Iowa, a riverboat casino located on West Lake in Osceola, Iowa, 40 miles west of Des Moines, offers approximately 1,007 slot machines and 14 table games.
Lakeside Iowa also offers a 60-room, all-suite hotel, 10,000 square feet of modular conference and meeting facilities that may also be used for concerts, a fitness center, an outdoor pool and a gift shop.
Lakeside Iowa owns 121 acres of land, 88 8 acres of which are undeveloped.
Lakeside's amenities will soon include an additional 90-room all-suite hotel expansion, which is currently under construction and expected to open mid 2012.
Black Hawk Casinos On February 29, 2012, the Company acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado—and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
The Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino are located in close proximity to one another along a half-mile strip of casino and casino hotel properties in Black Hawk.
The properties occupy 1.
They also collectively feature 26,356 square feet of gaming space, 1,066 slot machines, 43 table games including 16 live poker gamesfour restaurants, three bars and a parking garage with 750 spaces.
Discontinued Operations Slot Route Operations Our slot route operations involved the exclusive installation and operation of slot machines in chain store and street account locations.
At December 31, 2011, we operated approximately 6,000 slot machines throughout Nevada.
We define chain stores as grocery stores, drug stores, merchandise stores and convenience stores, each with more than five locations.
Our chain store contracts were primarily with large, national retailers such as Albertsons, Vons, Safeway, CVS and Smith's, as well as Terrible Herbst gas stations and convenience stores.
Street accounts include local bars, restaurants and non-chain convenience stores.
Nevada law limits slot route operations to certain types of non-casino locations including bars, taverns, convenience stores, grocery stores and drug stores.
Most locations are limited to offering no more than 15 slot machines.
We generally entered into two types of slot route contracts: space lease arrangements and revenue-sharing arrangements.
Under space lease arrangements, which we principally entered into with chain stores, we paid a fixed monthly fee for each location in which we placed slot machines and we kept the revenues generated by the slot machines.
Under revenue-sharing arrangements, which we typically entered into with street accounts, we paid the location owner a percentage of the revenues generated by our slot machines located at that particular street account.
In order to enter into a revenue-sharing arrangement, the location owner had to hold a gaming license.
Both space lease and revenue-sharing arrangements typically involved long-term contracts that provided us with the exclusive right to install our slot machines at particular locations.
In the case of chain stores, our contracts also gave us the exclusive right to install slot machines at stores opened in the future.
Terrible's Town Casino Terrible's Town Casino in Pahrump, Nevada, which is approximately 60 miles from Las Vegas, has approximately 14,000 square feet of gaming space with approximately 343 slot machines, six table games, a race and sports book, a 120-seat bingo facility and a restaurant with a buffet.
Sales and Marketing Nevada Market Because we believe that a vast majority of our patrons at our casinos in Southern Nevada are local residents, our marketing efforts are primarily focused on the local populations of Clark County and Nye County, Nevada.
Our marketing efforts seek to capitalize on repeat visitation from loyalty programs.
We have a state-of-the-art player's club loyalty program, "the one card," that combines the loyalty programs at all of our Nevada casinos.
Under the one card program, club customers are rewarded with points for playing at all of our casino locations in Nevada; club reward points may be redeemed for free play or cash as well as free or discounted rooms, food or other goods or services provided at any such location.
These marketing efforts seek to capitalize on the strong recognition and high level of quality and value associated with our properties.
We believe that the majority of our properties operate under strongly recognized local trade names, although the Terrible Herbst brand is still used in some casino operations.
We have licensed the Terrible Herbst trade name from Terrible Herbst, Inc.
Subject to mutual consent as to the amount of the license fee and continued use, we may extend the term of the license agreement.
However, there can be no assurance as to whether or when we will be able to renew the license agreement.
The customer base of the Northern Nevada casinos ranges from locals living in Northern Nevada, in the case of Rail City, to customers from Western Canada, the Pacific Northwest and Northern California, in the case of the Sands.
The marketing efforts of the Northern Nevada casinos are primarily focused on attracting locals and value-minded out-of-market visitors through aggressive promotions and customer loyalty programs.
A substantial portion of the Sands' business, particularly its hotel customer base, is arranged through travel groups, both air and motor coach wholesalers, which offer economy rates, and are primarily from Western Canada, the Pacific Northwest and Northern California.
Gold Ranch's guests include both tourists and local residents.
Gold Ranch attempts to attract local residents through mid-week promotions geared toward enhancing local play mainly through lottery, casino, and restaurant programs.
Tourist programs emphasize the RV Park, casino and restaurant cross-promotions.
The customer base of the Primm Casinos consists of value-oriented events gambling compliance from Southern California primarily from San Bernardino, Victorville and Barstow.
The marketing efforts of the Primm Casinos are primarily focused on attracting value-minded, out-of-market visitors through aggressive promotions and special events.
While continuing our focus on out-of-market visitors, we have been expanding the marketing programs of the Primm casinos to include the Southern Nevada locals market.
Our promotional efforts leverage the amenities that the Primm Casinos offer including the golf course, adjacent outlet mall and entertainment events to attract visitors from the Las Vegas locals market and tourists from Southern California.
Midwest Market Each of Lakeside Iowa, Mark Twain and St Jo has a highly recognizable brand name within its respective community.
In addition, each of Lakeside Iowa, Mark Twain and St Jo operates a slot 10 player's club loyalty program that rewards customers with points for every wager.
Points are redeemable for free play or cash in the Missouri casinosas well as food, valet or retail items.
Each of the three casinos also hosts blackjack and slot tournaments as well as other special events on the casino premises that seek to recognize and cultivate repeat visits by local casino patrons.
Business Strategy Our business strategy for casino operations focus on the value-oriented, high repeat visitation from both local and drive-in tourist gaming markets.
With respect to local gaming markets, these consumers represent high potential repeat business, and generating customer satisfaction and loyalty is a critical component of our strategy.
Local patrons are typically sophisticated gaming customers who seek convenient locations, a variety of slot machines and a pleasant atmosphere.
On February 27, 2012, we sold our casino in Searchlight, Nevada, and the portion of our slot route operations relating solely to the Terrible Herbst convenience stores to JETT Gaming, LLC, a Las Vegas-based slot route operator.
On February 29, 2012, the we sold the remainder of our slot route operations, as well as its two Pahrump, Nevada casinos, to Golden Gaming, Inc.
In addition, as part of the transaction with Golden Gaming, we acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado—and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
The Company focuses on operation of locals oriented casinos catering to customers in drive-in markets.
Divesting of the slot route operation and smaller Nevada casinos while acquiring the Black Hawk Colorado casinos are consistent with and critical to the Company's long-term strategic vision.
We anticipate that our growth will come from diversification and expansion of our existing properties and through strategic acquisitions.
In addition to evaluating strategic acquisition opportunities, we continuously review the operating performance of each of our existing properties and the feasibility of enhancing their performance through targeted capital expenditure and expense savings programs.
In doing so, we assess the anticipated relative costs and benefits of the projects under consideration, the availability of cash flows and debt financing to fund capital expenditures, and competitive and other relevant factors.
Our operating strategy is to offer high quality gaming, hotel and dining experiences at affordable prices.
Our primary target market consists of value-oriented, local, middle-market gaming patrons who gamble frequently.
We believe that we attract our targeted customers and that they return to our casinos because of our high value orientation, as well as convenient locations, great food, ample parking and the latest slot machines.
Because locals demand variety and quality in their slot and video poker machine play, our casino properties offer the latest in slot and video poker technology.
Although perceived value initially attracts a customer to our casino properties, actual value generates customer satisfaction and loyalty.
Most of our business is generated from drive-in tourists.
As part of our commitment to providing a quality entertainment experience for our patrons, we are dedicated to ensuring a high level of customer satisfaction and loyalty by providing attentive customer service in a friendly, casual atmosphere.
We recognize that consistent quality and a comfortable atmosphere stem from the collective care and friendliness of our employees.
Intellectual Property The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success.
While our business as a whole is not substantially dependent on any one patent or combination of our patents or other intellectual property, we seek to establish and maintain our proprietary rights in our business operations and 11 technology through the use of patents, copyrights, trademarks and trade secret laws.
We file applications for and obtain patents, copyrights and trademarks in the United States.
We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate confidentiality agreements.
On December 31, 2010, in connection with the Restructuring Transactions, we acquired all of the trademark rights owned by Predecessor.
This included trademarks licensed to Predecessor pursuant to a Trademark License Agreement the "Trademark License" between Predecessor and Terrible Herbst, Inc.
We have licensed the Terrible Herbst trade name from Terrible Herbst, Inc.
Subject to mutual consent as to the amount of the license fee and continued use, we may extend the term of the license agreement.
However, there can be no assurance as to whether or when we will be able to renew the license agreement.
We consider all of these marks, and the associated name recognition, to be valuable to our business, and we are not aware of any third party claims against the use or registration of our trademarks at this time.
These inventions are referred to as the "Secure Safe System" and "Safe Patents.
Competition Nevada Market With respect to our casino operations in Las Vegas, Terrible's Las Vegas competes for local gaming customers with other locals-oriented casino-hotels in Las Vegas.
We do not believe that we are in direct competition with many of the resort-casino properties on the Las Vegas Strip, which focus primarily on attracting tourist players.
Instead, we believe that our principal competitors in our casino operations are other local casinos located near our properties.
We compete with other local casinos on the basis of the desirability of location, payout rates, personalized approach, casino promotions, comfort and value of restaurants and hotel rooms and the variety and value of entertainment.
The construction of new casinos or the expansion of existing casinos near our casinos could have a negative impact on our casino operations.
The expansion and maturation of Native American gaming in Northern California, the Pacific Northwest, and British Columbia has had an adverse impact on total gaming revenues of the greater Reno area.
Native American casinos in Northern California offer most of the amenities that casinos in Reno offer, including big name entertainment and hotel rooms.
In addition, Thunder Valley, on the Interstate-80 corridor in California, has grown to be one of the country's busiest and most profitable casinos, and recently expanded its hotel and casino.
More Native American casinos and expansions to other existing casinos are planned in Northern California 12 and many are partnering with existing gaming companies that have financial resources to promote their facilities.
In addition, many of our direct competitors in the Reno market have greater financial and other resources than we do.
The Primm Casinos face intense competition from Native American gaming in Southern California, other casinos outside of Las Vegas, such as casinos located in Jean, Laughlin and Mesquite, Nevada, as well as value oriented casinos located in the Las Vegas market.
Midwest Market Each of Lakeside Iowa, Mark Twain and St Jo competes for local gaming customers with other casinos in their respective markets.
Lakeside Iowa is located along Interstate 35, approximately 40 miles southwest of Des Moines, Iowa.
The primary competitors of Lakeside Iowa are the Prairie Meadows Casino, the Riverside Casino and Golf Resort and the Meskwaki Bingo Casino Hotel.
The Prairie Meadows Casino is located approximately 60 miles from Lakeside Iowa, east of Des Moines.
Riverside Casino and Golf Resort is located in Riverside, Iowa, approximately 175 miles from Osceola.
The Meskwaki Bingo Casino Hotel is located in Tama, Iowa and is approximately 110 miles from Lakeside Iowa.
Mark Twain is the only casino in northeast Missouri and is approximately 15 miles from Quincy, Illinois and approximately 25 miles from Hannibal, Missouri.
The closest casino to Mark Twain is the Catfish Bend Casino, located in Burlington, Iowa, which is approximately 75 miles from LaGrange.
St Jo is approximately 50 miles north of Kansas City, Missouri.
St 4 dead engine 6 den frontier gambling cheat primarily targets residents of St.
Joseph, Missouri and is the only casino in St.
However, St Jo competes indirectly with four riverboats in Kansas City, Missouri and to a lesser extent with several Native American casinos, the closest of which is approximately 45 miles from St.
Certain states have recently legalized, and other states are considering legalizing, casino gaming in certain areas.
In addition, states such as Illinois and Kansas have awarded additional gaming licenses or are expanding permitted gaming.
In addition, Iowa was considering awarding additional gaming licenses in the State.
The award of one or more additional licenses in Iowa or in other locations close to Lakeside Iowa, Mark Twain or St Jo would be expected to adversely affect our results of operations and financial condition.
Colorado Market The Black Hawk Casinos compete with approximately 23 other gaming operations located in the Black Hawk and Central City gaming market in Colorado.
The Black Hawk and Central City markets are approximately 1.
The Black Hawk Casinos are situated directly across the street from one of the largest casinos in the market and collectively have over 1,066 slot machines, representing approximately 10% of slots in the market.
The Black Hawk Casinos collectively also have 43 table games, including 16 live poker tables, representing approximately 30% of total tables in the market.
Additionally, the casinos have one of the only parking garages in the market with approximately 750 parking spaces.
Our properties in Black Hawk compete directly with the other casinos encountered when entering Black Hawk from Denver via State Route 119.
The Black Hawk and Central City gaming market is insulated from other casino gaming markets, with no casinos within 50 miles.
There have been proposals for the development of Native American, racetrack and video lottery terminal casinos throughout the state over the years.
None of the proposals has been adopted by the state's electorate or by the legislature.
Should any form of additional gaming be authorized in the Denver metropolitan area, the Black Hawk and Central City market would be adversely affected.
However, our casinos in the Midwest and in Northern Nevada do experience some business interruption during the winter months.
We also expect that our casinos in Black Hawk Colorado will experience similar business disruption during the winter months.
Environmental Laws Compliance with federal, state and local laws enacted for the protection of the environment to date had no material effect upon our capital expenditures, earnings or competitive position.
We are currently building a new truck stop in Primm, Nevada and in connection with the construction, have encountered contaminated soil from a gas station operated more than 30 years ago, requiring continue reading />We cannot provide assurance that we have accurately estimated or identified the scope of the issue or the impact that this remediation will have on our capital expenditures, earnings or competitive position as we complete the project.
Although we maintain insurance coverage, and have submitted an insurance claim for the cost of remediation, the potential liability related thereto may exceed the amount of our insurance coverage or may be excluded under the terms of the policy, which could have a material adverse effect on our business, financial condition and results of operations.
Additionally, we may be required to make additional expenditures to remain in, or to achieve, compliance with environmental laws go here the future and such expenditures may be material.
Governmental Regulation The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations.
Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located.
These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interests in the gaming operations.
Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions.
Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations.
These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising.
Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted.
Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.
Nevada The ownership and operation of casino gaming facilities and slot routes in Nevada are subject to the Nevada Gaming Control Act and the regulations promulgated thereunder, click here the Nevada Act, and various local regulations.
Our gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Clark County Liquor and Gaming Licensing Board, and the Cities of Reno, Henderson and other local regulatory authorities collectively, the "Nevada Gaming Authorities".
Changes in these laws, regulations and procedures could have an adverse effect on our gaming operations.
Limited liability companies and other entities that operate casinos in Nevada are required to be licensed by the Nevada Gaming Authorities.
A gaming license for such activities requires the periodic payment of fees and taxes and is not transferable.
Affinity Gaming is registered by the Nevada Gaming Commission as a publicly traded just click for source a "registered corporation".
As a registered corporation, we are required periodically to submit detailed financial and operating reports to the Nevada Gaming Commission and furnish any other information that the Nevada Gaming Commission may require.
Affinity Gaming has been found suitable by the Nevada Gaming Commission to own the membership interests of various licensed limited liability companies that own and operate casinos licensed by the Nevada Gaming Commission all of which are collectively referred to as the "Gaming Subsidiaries".
No person may become a member of, or receive any percentage of the profits from any of the Gaming Subsidiaries without first obtaining licenses and approvals from the Nevada Gaming Authorities.
Affinity Gaming and all of its Gaming Subsidiaries have obtained from the Nevada Gaming Authorities the various registrations, approvals, permits and licenses required in order to engage in the various gaming businesses that each respectively operates in Nevada.
The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, Affinity Gaming or any of the Gaming Subsidiaries in order to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee.
Officers, directors, managers and certain key employees of Affinity Gaming or any of the Gaming Subsidiaries must file applications with the Nevada Gaming Ohio gambling helpline and are required to be licensed by the Nevada Gaming Authorities.
The Nevada Gaming Authorities may deny an application for licensing for any cause that they deem reasonable.
A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation.
Changes in licensed positions must be reported to the Nevada Gaming Authorities and, in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove any change in corporate position.
If the Nevada Gaming Authorities were to find an problem number, director, manager or key employee unsuitable for licensing or unsuitable to continue having a relationship with us, we would have to sever all relationships with that person.
In addition, the Nevada Gaming Commission may require us to terminate the employment of any person who refuses to file appropriate applications.
Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.
Affinity Gaming and the Gaming Subsidiaries are required to submit detailed financial and operating reports to the Nevada Gaming Commission.
If it were determined that Affinity Gaming or any of its Gaming Subsidiaries violated the Nevada gaming laws, our gaming licenses and registrations with the Nevada Gaming Commission could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures.
In addition, Affinity Gaming, the Gaming Subsidiaries and the persons involved could be subject to substantial fines for each separate violation of the Nevada laws at the discretion of the Nevada Gaming Commission.
Further, the Nevada Gaming Commission could appoint a supervisor to operate our gaming properties and, under certain circumstances, earnings generated during the supervisor's appointment except for the reasonable rental value of our gaming properties could be forfeited to the State of Nevada.
Limitation, conditioning or suspension of any gaming license or the appointment of a supervisor could and revocation of any gaming license would materially adversely affect our operations.
Any beneficial holder of Affinity Gaming's voting or non-voting securities, regardless of the number of shares owned, may be required to file an application, be investigated and have his or her suitability as a beneficial holder of Affinity Gaming's voting or non-voting securities determined if the Nevada Gaming Commission has reason to believe that such ownership would be inconsistent with the declared policies of the State of Nevada.
If such beneficial holder who must be found suitable is a corporation, limited liability company, partnership or trust, it must submit detailed business and financial information including a list of its beneficial owners.
The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in connection with conducting such investigation.
The Nevada Act requires any person who acquires more than 5% of a registered corporation's voting securities to report the acquisition to the Nevada Gaming Commission.
The Nevada Act requires beneficial owners of more than 10% of a registered corporation's voting securities apply to the Nevada Gaming Commission for a finding of suitability within 30 days after the Chairman of the Nevada State Gaming Control Board mails the written notice requiring such filing.
However, an "institutional investor," as defined in the Nevada Act, that beneficially owns more than 10%, but not more than 11%, of a registered corporation's voting securities as a result of a stock repurchase by the registered corporation may not be required to file such an application.
Further, an institutional investor that acquires more than 10%, but not more than 25%, of a registered corporation's voting securities may apply to the Nevada Gaming Commission for a waiver of a finding of suitability if that institutional investor holds gambling regulatory authority act voting securities for investment purposes only.
An institutional investor that has obtained a waiver may hold more than 25%, but not more than 29%, of a registered corporation's voting securities and maintain its waiver if the additional ownership results from a stock repurchase by the registered corporation.
An institutional investor will not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of the registered corporation, any change in the corporate charter, bylaws, management, policies or operations of the registered corporation, or any of its gaming affiliates or any other action which the Nevada Gaming Commission finds to be inconsistent with holding the registered corporation's voting securities for investment purposes only.
Activities which are not deemed to be inconsistent with holding voting securities for investment purposes only include: • the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; • the establishment and maintenance of responsible accounting practices and procedures; 16 • the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; • the prevention of cheating and fraudulent practices; • providing a source of state and local revenues through taxation and licensing fees; • voting on all matters voted on by stockholders; • making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and • other activities as the Nevada Gaming Commission may determine to be consistent with such investment intent.
Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Nevada Gaming Commission or by the Chairman of the Nevada State Gaming Control Board, may be found unsuitable.
The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner.
Any stockholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common stock of a registered corporation beyond the period of time as may be prescribed by the Nevada Gaming Commission may be guilty of a criminal offense.
Affinity Gaming and the Gaming Subsidiaries may become subject to disciplinary action if, after receipt of notice that a person is unsuitable to be a stockholder or to have any other relationship with Affinity Gaming or the Gaming Subsidiaries, Affinity Gaming: • pays that person any dividend or interest upon voting securities; • allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; • pays remuneration in any form to that person for services rendered or otherwise; or • fails to pursue all lawful efforts to require the unsuitable person to relinquish his voting securities for cash at fair market value.
Additionally, the Clark County Liquor and Gaming Licensing Board has taken the position that it has the authority to approve all persons owning or controlling the stock of any entity controlling a gaming license.
Affinity Gaming may be required to disclose to the Nevada State Gaming Control Board and the Nevada Gaming Commission the identities of all holders of its debt securities.
The Nevada Gaming Commission may, in its discretion, require the holder of any debt or similar security of a registered corporation to file applications, be investigated and be found suitable to own the debt or other security of a registered corporation.
If the Nevada Gaming Commission determines that a person is unsuitable to own the security, then pursuant to Nevada law, the registered corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Gaming Commission, it: • pays to the unsuitable person any dividend, interest, or any distribution whatsoever; • recognizes any voting right by the unsuitable person in connection with debt securities; • pays the unsuitable person remuneration in any form; or • makes any payment to the unsuitable person by way of principal, redemption, conversion, this web page, liquidation or similar here />If any securities are held in trust by an agent or click here a nominee, the record holder may be required to disclose the identity of the beneficial holder to the Nevada Gaming Authorities.
A failure to make such disclosure may be grounds for finding the record holder unsuitable.
We are also required to render maximum assistance in determining the identity of the beneficial owner.
The Nevada Gambling washington dc airports map Commission has the power to require our securities to bear a legend indicating that the securities are subject to the Nevada Act.
Affinity Gaming may not make a public offering of securities without the prior approval of the Nevada Gaming Commission if the proceeds from the offering are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for those purposes or similar transactions.
Furthermore, any such approval, if granted, does not constitute a finding, recommendation or approval by the Nevada Gaming Commission or the Nevada State Gaming Control Board as to the accuracy or adequacy of the prospectus or the investment visit web page of the securities offered.
Any representation to the contrary is unlawful.
Changes in the control of Affinity Gaming through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby that person obtains control including foreclosure on the pledged sharesmay not occur without the prior approval of the Nevada Gaming Commission.
Entities seeking to acquire control or ownership of a registered corporation must satisfy the Nevada State Gaming Control Board and Nevada Gaming Commission in a variety of stringent standards prior to assuming control of such registered corporation.
The Nevada Gaming Commission may also require the stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.
The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defensive tactics affecting Nevada corporate gaming licensees and registered corporations that are affiliated with those operations may be injurious to stable and productive corporate gaming.
The Nevada Commission has established regulations to ameliorate the potentially adverse effects of these business practices upon Nevada's gaming industry and to further Nevada's policy to: 1 assure the financial stability of corporate gaming licensees and their affiliates; 2 preserve the beneficial aspects of conducting business in the corporate form; and 3 promote a neutral environment for the orderly governance of corporate affairs.
Approvals are, in certain circumstances, required from the Nevada Commission before the registered corporation can make exceptional repurchases of voting securities above the current market price and before a corporate acquisition opposed by management can be consummated.
The Nevada Act also requires prior approval of a plan of recapitalization proposed by the registered corporation's board of directors in response to a tender offer made directly to link registered corporation's stockholders for the purposes of acquiring control of the registered corporation.
License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to the counties and cities in which the Nevada licensee's respective operations are conducted.
Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: • a percentage of the gross revenues received; • the number of gaming devices operated; or • the number of table games operated.
A live entertainment tax is also paid by gaming operations where entertainment is furnished in connection with admission fees, the selling of food or refreshments or the selling of merchandise.
The revolving fund is subject to increase or decrease in the gambling quotes about life of the Nevada Gaming Commission.
Thereafter, Licensees are also required to comply with certain reporting requirements imposed by the Nevada gaming laws.
Licensees are also subject to disciplinary action by the Nevada Gaming Commission if they knowingly violate any laws of the foreign jurisdiction pertaining to a foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in activities or enter into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees, or employ, contract with or associate with a person in the foreign operation who has been denied a license or a finding of suitability in Nevada on the ground of personal unsuitability.
The sale of alcoholic beverages in gaming establishments is subject to strict licensing, control and regulation by local regulatory authorities.
Local regulatory authorities have full power to limit, condition, suspend or revoke any such licenses.
Missouri On November 3, 1992, a statewide referendum authorized gaming in the State of Missouri on the Missouri and the Mississippi Rivers.
On April 29, 1993, Missouri enacted revised legislation as amended, the "Missouri Gaming Law" which amended the existing legislation.
In a decision handed down on January 25, 1994, the Missouri Supreme Court held that games of chance were prohibited under the Missouri constitution.
In a statewide election held on November 8, 1994, Missouri voters approved the adoption of an amendment to the Missouri Constitution which permits the legislature to allow games of chance to be conducted on excursion boats and floating facilities on the Mississippi River and the Missouri River.
As a result of the amendment, games of chance are also permitted, subject to Missouri Gaming Law.
Pursuant to the Missouri Gaming Law, there are thirteen operating riverboat gaming facility sites in Missouri: one in Caruthersville; one in Boonville; four in the St.
Louis area; four in the Kansas City area; one in LaGrange; one in St.
Joseph and one in Cape Girardeau.
Opponents of gaming in Missouri have brought several legal challenges to gaming in the past and may possibly bring similar challenges in the future.
On November 25, 1997, the Missouri Supreme Court overturned a state lower court and held that a portion of the Missouri Gaming Law that authorized excursion gaming facilities in "artificial basins" up to 1,000 feet from the Mississippi or Missouri rivers was unconstitutional.
This ruling created uncertainty as to the legal status of several excursion gaming riverboat facilities in the state.
On November 3, 1998, a statewide referendum was held, whereby the voters amended the constitution to allow "artificial basins" for existing facilities, effectively overturning the above Missouri Supreme Court decision.
There can be no assurances that any future challenges, if brought, would not further interfere with gaming operations in Missouri, including the operations of St Jo and Mark Twain.
Under the Missouri Gaming Law, the ownership and operation of riverboat gaming facilities in Missouri are subject to extensive state and local regulation.
Affinity Gaming, HGI-St Jo, LLC, the subsidiary of Affinity Gaming that owns St Jo and the current licensee and HGI-Mark Twain, LLC, the subsidiary of Affinity Gaming that owns Mark Twain and the current licensee, any subsidiaries, and some of their officers and employees are and will be subject to specific regulations, including ongoing licensing requirements.
As part of the application and licensing process for a gaming license, the applicant must submit detailed financial, operating and other reports to the Missouri Gaming Commission.
Each applicant has an ongoing duty to update the information provided to the Missouri Gaming Commission in the application, usually within seven days of a material change in the 19 information on file with the Missouri Gaming Commission.
Each of St Jo and Mark Twain has frequently updated its application materials since it was initially licensed.
In addition to the information required of the applicant, directors, officers, affiliated business entities and other defined "key persons" which include individuals and companies designated by the Missouri Gaming Commission must submit Personal Disclosure Forms, which include detailed financial information, and are subject to thorough investigations.
In addition, some officers and directors of Affinity Gaming, as well as Affinity Gaming itself, have submitted Personal Disclosure Forms and applications to the Missouri Gaming Commission.
All gaming employees must obtain an occupational license issued by the Missouri Gaming Commission.
Suppliers are also subject to licensing requirements of the Missouri Gaming Commission.
An institutional investor holding an interest of 20% or less in Affinity Gaming for only passive investment purposes, may be exempted from these licensure requirements by the Missouri Gaming Commission.
Effective May 30, 2008, certain amendments were made to Missouri's gaming regulations that provide for the division of Missouri gaming licenses into Class A and Class B Licenses.
Affinity Gaming now holds a Class A License which allows Affinity Gaming to operate the HGI-St Jo and HGI-Mark Twain business entities.
HGI-St Jo and HGI-Mark Twain now hold Class B Licenses allowing them to operate St Jo Frontier Casino and HGI-Mark Higher stakes, respectively.
In January 2012, the Class A and Class B licenses for Affinity Gaming, HGI-St Jo and HGI-Mark Twain were renewed for a two-year term by the Missouri Gaming Commission, which continues to require, among other things: • suitability investigations into an applicant's character, financial responsibility, experience and qualifications; • suitability investigations into each designated key person or affiliated business entity's character, financial responsibility, experience and qualifications; • disclosure of required financial see above and other personal information on each key person or designated affiliated business entity; • disclosure of detailed information about the applicant's history, business, affiliations, officers, directors and owners; • an affirmative action plan for the hiring and training of minorities and women; and • an economic development or impact report.
Each of Affinity Gaming, HGI-St Jo and HGI-Mark Twain has undergone a full licensing investigation and hearing in connection with its licensing.
The Missouri Gaming Law and implementing regulations impose restrictions on the use of and do not permit the transfer of the gaming licenses as well as limitations on transactions engaged in by licensees.
The licenses issued by the Missouri Gaming Commission may not be transferred nor pledged as collateral.
The restrictions on transfer of ownership apply to Affinity Gaming as well as the direct licensees, HGI—St Jo and HGI—Mark Twain.
Gaming equipment may not be pledged.
Corporate stock of some licensees may not be pledged except in narrow circumstances and subject to regulatory conditions.
Missouri statutes and administrative rules contain detailed requirements and conditions concerning the operation of a licensed excursion gambling boat facility, including but not limited to the following: • a charge of two dollars per https://cetsolarstore.com/gambling/choctaw-casino-minimum-gambling-age.html customer per excursion that licensees must either collect from each customer or pay itself to the Missouri Gaming Commission; • minimum payouts; • the payment of shall gambling problem quotes consider 21% tax on adjusted gross receipts; • prohibitions against providing credit to gaming customers; • the use of credit cards and cashing of checks by customers; • providing security on the excursion gambling boat, including a requirement that each licensee reimburse the Missouri Gaming Commission for all costs of any Missouri Gaming Commission staff, including Missouri Highway Patrol Officers, necessary to protect the public on the licensee's riverboat; • the receipt of liquor licenses from the Missouri Gaming Commission and local jurisdictions; and • the adoption of minimum control standards for the conduct of gaming and the operation of the facility approved by the Missouri Gaming Commission.
The Missouri Gaming Commission has the power, as well as broad discretion in exercising this power, to revoke or suspend gaming or occupational licenses and impose other penalties for violations of the Missouri Gaming Law and the rules and regulations promulgated thereunder, including without limitation, forfeiture of all gaming equipment used for improper gaming and fines of up to three times a licensee's highest daily gross receipts during the preceding twelve months.
Although the Missouri Gaming Law provides no limit on the amount of riverboat space that may be used for gaming, the Missouri Gaming Commission is empowered to impose space limitations through the adoption of rules and regulations.
However, by vote of Missouri registered voters on November 8, 2008, the Missouri Gaming Law was amended to provide that the Missouri Gaming Commission shall not establish any regulations or policies that limit the amount of wagers, losses or buy-in amounts.
In addition, the Missouri Gaming Commission is empowered to determine on a city and county-specific basis where "dockside" or permanently-docked gaming is appropriate and may be permitted.
The Missouri Gaming Commission has authorized all thirteen licensed sites to operate all or a portion of their facilities on a continuously docked basis.
The sale of alcoholic beverages in gaming establishments is subject to strict licensing, control and regulation by the Missouri Gaming Commission.
The Missouri Gaming Commission https://cetsolarstore.com/gambling/costa-rica-gambling-buster.html full power to limit, condition, suspend or revoke any such Commission license.
The Commission has also issued strict 21 regulations concerning the sale and use of alcoholic beverages upon an excursion gambling boat or facility immediately adjacent to an excursion gambling boat.
Iowa In 1989, the State of Iowa legalized riverboat gaming on the Mississippi River and other waterways located in Iowa.
Under Iowa gaming law "Iowa Gaming Law"a license to conduct gaming may be issued in a county only if the county electorate has approved gaming.
The electorate of Clarke County, Iowa, where Osceola is located, approved gaming on February 28, 1995 by referendum.
Gaming conducted by the Lakeside Casino Resort was approved by referendum on November 18, 1997.
In addition, a referendum must be held every eight years in each of the counties where gambling games are conducted and the proposition to continue to allow gambling games in such counties must be approved by a majority of the county electorate voting on the proposition.
Such referenda took place on November 5, 2002 and November 2, 2010 with the majority of the electorate voting each time in favor of continued gaming gambling in cozumel Clarke County.
The next referendum is scheduled for 2018.
If any reauthorization referendum is defeated, Iowa Gaming Law provides that any previously issued gaming license will remain valid and subject to renewal for a total of nine years from the date of original issuance of the license, subject to earlier non-renewal or revocation under Iowa Gaming Law and regulations applicable to all licenses.
In addition, Iowa Gaming Law authorizes the granting of licenses to non-profit corporations that, in turn, are permitted to enter into operating agreements with qualified persons who also actually conduct riverboat gaming operations.
Such operators must likewise be approved and licensed by the Iowa Racing and Gaming Commission the "Iowa Gaming Commission".
In July 1997, Clarke County Development Corporation "CCDC"a non-profit corporation organized for the purpose of facilitating riverboat gaming in Osceola, Iowa, entered into an operator's contract, since amended, for Lakeside Iowa for a term of up to 50 years.
Under the operator's contract, as amended, CCDC is to be paid a monthly fee equal to 1.
Further, pursuant to a dock site agreement executed in August 1997 which also has a term of up to 50 yearsLakeside Iowa is required to pay a monthly fee to the City of Osceola and the Water Works Board of Trustees equal to 1.
Beginning eight years from the date of such payment and continuing for so long as the operator's contract, as amended, remains in effect, we will pay into the escrow fund controlled by the City of Osceola an additional 1% of annual adjusted gross receipts from Lakeside Iowa.
We may, however, offset up to 50% of this 1% annual payment with any expenditures we have made for capital improvements excluding gaming devices and improvements to the gaming facility, casino floor, development of a truck stop and general repairs and maintenance.
In March 2012, CCDC initiated legal proceedings against both us and the Iowa Racing Commission.
CCDC has sought a declaratory judgment ruling that the operator's contract is non-assignable.
We intend to contest CCDC's position even though there are no present plans to seek to assign the agreement.
CCDC has also named both the Https://cetsolarstore.com/gambling/gambling-destinations-in-united-states.html Racing Commission and us in a suit seeking judicial review of the Commission's initial approval of our license and the subsequent renewals.
We intend to defend this action as well.
Were CCDC to prevail, the amount of our contribution under the operator's contract would increase to 3%.
Dockside casino gaming is authorized by the Iowa Gaming Commission and the Iowa Legislature, subject to certain limitations not applicable to Lakeside Iowa, eliminated the requirement that gaming licensees cruise, effective Https://cetsolarstore.com/gambling/antigua-and-barbuda-gambling-licence.html 6, 2004.
The legal age for gaming is 21.
Lakeside Iowa's excursion gambling boat license was approved for renewal at a March 8, 2012 meeting of the Iowa Gaming Commission.
This license is not transferable and will https://cetsolarstore.com/gambling/tricks-to-gambling-in-vegas.html to be renewed annually and prior to the commencement of each subsequent annual renewal period.
Both requirements have been met.
The ownership and operation of gaming facilities in Iowa are subject to extensive state laws, regulations of the Iowa Gaming Commission and various county and municipal ordinances, concerning the responsibility, financial stability and character of gaming operators and persons financially interested or involved in gaming operations.
Iowa Gaming Law seeks to: 1 prevent unsavory or unsuitable persons from having direct or indirect involvement with gaming at any time or in any capacity; 2 establish and maintain responsible accounting practices and procedures; 3 maintain effective control over the financial practices of licensees including the establishment of minimum procedures for internal fiscal affairs, the safeguarding of assets and revenues, the provision of reliable record keeping and the filing of periodic reports with the Iowa Gaming Commission ; 4 prevent cheating and fraudulent practices; and 5 provide a source of state and local revenues through taxation and licensing fees.
Changes in Iowa Gaming Law could have a material adverse effect on the Iowa gaming operations.
Gaming licenses granted to individuals must be renewed every year, and licensing authorities have broad discretion with regard to such renewals.
Licenses are not transferable.
The Iowa gaming operations must submit detailed financial and operating reports to the Iowa Gaming Commission.
Officers, directors, managers and employees of the Iowa gaming operations are required to be licensed by the Iowa Gaming Commission.
Employees associated with gaming must obtain a license and these licenses are subject to immediate suspension under specific circumstances.
In addition, anyone having a material relationship or involvement with the Iowa gaming operations may be required to be found suitable or to be licensed, in which case those persons would be required to pay the costs and https://cetsolarstore.com/gambling/gambling-comeback-stories.html of the Iowa Gaming Commission in connection with the investigation.
The Iowa Gaming Commission may deny an application for a license for any cause deemed reasonable.
In addition to its authority to deny an application for license, the Iowa Gaming Commission has jurisdiction to disapprove a change in position by officers or key employees and the power to require the Iowa gaming operations to suspend or dismiss officers, directors or other key employees or sever relationships with other persons who refuse to file appropriate applications or whom the Iowa Gaming Commission finds unsuitable to act in such capacities.
The Iowa Gaming Commission may revoke a gaming license if the licensee: • has been suspended from operating a gaming operation in another jurisdiction by a board or commission of that jurisdiction; • has failed to demonstrate financial responsibility sufficient to meet adequately the requirements of the gaming enterprise; • is not the true owner of the enterprise; 23 • has failed to disclose ownership of other persons in the enterprise; • is a corporation 10% of the stock of which is subject to a contract or option to purchase at any time during the period for which the license was issued, unless the contract or option was disclosed to the Iowa Gaming Commission and the Iowa Gaming Commission approved the sale or transfer during the period of the license; • knowingly makes a false statement of a material fact to the Iowa Gaming Commission; • fails to meet a monetary obligation in connection with an excursion gaming boat; • pleads guilty to, or is convicted of, a felony; • loans to any person, money or other thing of value for the purpose of permitting that person to wager on any game of chance; • is delinquent in the payment of property taxes or other taxes or fees or a payment of any other contractual obligation or debt due or owed to a city or county; or • assigns, grants or turns over to another person the operation of a licensed excursion boat this provision does not prohibit assignment of a management contract approved by the Iowa Gaming Commission or permits another person to have a share of the money received for admission to the excursion boat.
If it were determined that an Iowa Gaming Law was violated by a licensee, the gaming licenses held by a licensee could be limited, made conditional, suspended or revoked.
In addition, the licensee and the persons involved could be subject to substantial fines for each separate violation of an Iowa Gaming Law in the discretion of the Iowa Gaming Commission.
Limitations, conditioning or suspension of any gaming license could and revocation of any gaming license would have a material adverse effect on operations.
The Iowa Gaming Commission may also require any individual who has a material relationship with the Iowa gaming operations to be investigated and licensed or found suitable.
The Iowa Gaming Commission, prior to the acquisition, must approve any person who acquires 5% or more of a licensee's equity securities in the event that approval by the Iowa Gaming Commission is not otherwise contemplated by the operative acquisition document.
The applicant stockholder is required to pay all costs of this investigation.
In addition, there was a prepaid assessment learn more here on June 1, 2005 and another prepaid assessment paid on June 1, 2006, in an aggregate amount equal to 2.
These assessments will be offset by future state gaming taxes paid by each licensee with a credit for 20% of the assessments paid allowed each year beginning July 1, 2010 for five consecutive years.
The state of Iowa is also reimbursed by the licensees for all costs associated with monitoring and enforcement by the Iowa Gaming Commission and the Iowa Department of Criminal Investigation.
The sale of alcoholic beverages in gaming establishments is subject to strict licensing, control and regulation by the State.
The State has full power to limit, condition, suspend or revoke any such licenses.
Colorado As prescribed by the Colorado Limited Gaming Act of 1991 the "Colorado Act"the ownership and operation of limited stakes gaming facilities in Colorado are subject to the Colorado Gaming Regulations the "Colorado Regulations" and final authority of the Colorado Limited Gaming Control Commission the "Colorado Commission".
The Colorado Act also created the Colorado Division of 24 Gaming within the Colorado Department of Revenue to license, supervise and enforce the conduct of limited stakes gaming in Colorado.
Affinity Gaming expects the initial licensing process to be complete in the second half of 2012.
The Colorado Act declares public policy on limited stakes gaming to be that: 1 the success of limited stakes gaming is dependent upon public confidence and trust that licensed limited stakes gaming is conducted honestly and competitively, the rights of the creditors of licensees are protected and gaming is free from criminal and corruptive elements; 2 public confidence and trust can be maintained only by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments and the manufacture or distribution of gaming devices and equipment; 3 all establishments where limited gaming is conducted and where gambling devices are operated, and all manufacturers, sellers and distributors of certain gambling devices and equipment, must therefore be licensed, controlled and assisted to protect the public health, safety, good order and the general welfare of the inhabitants of the state to foster the stability and success of limited stakes gaming and to preserve the economy, policies and free competition in Colorado; and 4 no applicant for a license or other affirmative Colorado Commission approval has any right to a license or to the granting of the approval sought.
Any license issued or other Colorado Commission approval granted pursuant to the Colorado Act is a revocable privilege, and no holder acquires any vested rights therein.
Pursuant to an amendment to the Colorado Constitution the "Colorado Amendment"limited stakes gaming became lawful in the cities of Central City, Black Hawk and Cripple Creek on October 1, 1991.
Gaming is permitted to be conducted 24 hours each day.
Limited stakes gaming is confined to the commercial districts of these cities as defined by Central City on October 7, 1981, by Black Hawk gambling craps table May 4, 1978, and by Cripple Creek on December 3, 1973.
In addition, the Colorado Amendment restricts limited stakes gaming to structures that conform just click for source the architectural styles and designs that were common to the areas prior to World War I and that conform to the requirements of applicable city ordinances regardless of the age of the structures.
Under the Colorado Amendment, no more than 35% of the square footage of any building and no more than 50% of any one floor of any building may be used for limited stakes gaming.
Persons under the age of 21 cannot participate in limited stakes this web page />Having the authority to impose fines, the Colorado Commission has broad discretion to issue, condition, suspend for up to six months, revoke, limit or restrict at any time the following licenses: slot machine manufacturer or distributor, operator, retail gaming, support and key employee gaming licenses.
With limited exceptions applicable to licensees that are publicly traded entities, no person may sell, lease, purchase, convey or acquire any interest in a retail gaming or operator license or business without the prior approval of the Colorado Commission.
The Colorado Constitution provides for a tax on the total amount wagered less all payouts to players.
The gaming tax rates in effect as of July 1, 2008 can only be increased by amendment to the Colorado Constitution by voters in a statewide election.
With respect to games of poker, the tax is calculated based on the sums wagered that are retained by the licensee as compensation, which must be consistent with the minimum and maximum amounts established by the Colorado Commission.
In May 25 2011, the Commission granted the casino industry a 5% across the board reduction in the gaming tax rates as follows: • 0.
The City of Black Hawk also assesses two monthly device fees that are based on the number of gaming devices operated.
The Colorado Commission has enacted Rule 4.
The term "publicly traded corporation" includes corporations, firms, limited liability companies, trusts, partnerships and other forms of business organizations.
Such requirements automatically apply to any ownership interest held by a publicly traded corporation, holding company or intermediary company thereof, where the ownership interest directly or indirectly is, or will be upon approval of the Colorado Commission, 5% or more of the entire licensee.
In any event, if the Colorado Commission determines that a publicly traded corporation or a subsidiary, intermediary company or holding company has the actual ability to exercise influence over a licensee, regardless of the percentage of ownership possessed by such entity, the Colorado Commission may require the statute california gambling to comply with the disclosure regulations iowa gambling annual report in Rule 4.
Licensed publicly traded corporations are also required to send proxy statements to the Division of Gaming within five days after their distribution.
Licensees to whom Rule 4.
Alternatively, the holders may, within 60 days after the finding of unsuitability, transfer the voting interests or securities to a suitable person, as determined by the Colorado Commission.
Until the voting interests or securities are held by suitable persons, the issuer may not pay dividends or interest, the securities may not be voted and may not be included in the voting or securities of the issuer, and the issuer may not pay any remuneration in any form to the holders of the securities.
Pursuant to Rule 4.
Licensees also must notify any qualifying persons of these requirements.
A qualifying person other than an institutional investor whose interest equals 10% or more must apply to the Colorado Commission for a finding of suitability within 45 days after acquiring such securities.
Licensees must also notify any qualifying persons of these requirements.
Whether or not notified, qualifying persons are responsible for complying with these requirements.
A qualifying person who is an institutional investor under Rule 4.
The Colorado Regulations provide for exemption from the requirements for a finding of suitability when the Colorado Commission finds such action to be consistent with the purposes of the Colorado Act.
Pursuant to Rule 4.
Such unsuitable persons also are prohibited from any beneficial ownership of the voting securities of any such entities.
Licensees, or affiliated entities of licensees, are subject to sanctions for paying dividends or distributions to persons found unsuitable by the Colorado Commission, or for recognizing voting rights of, or paying a salary or any remuneration for services to, unsuitable persons.
Licensees or their affiliated entities also may be sanctioned for failing to pursue efforts to require unsuitable persons to relinquish their interest.
The Colorado Commission may determine that anyone with a material relationship to, or material involvement with, a are there in ireland or an affiliated company must apply for a finding of suitability or must apply for a key employee license.
The Colorado Regulations require that every officer, director and stockholder of private corporations or equivalent office or ownership holders for non-corporate applicants, and every officer, director or stockholder holding either a 5% or greater interest or controlling interest of a publicly traded corporation or owners of an applicant or licensee, shall be a person of good moral character and submit to a full background investigation conducted by the Division of Gaming and the Colorado Commission.
The Colorado Commission may require any person having an interest in a license to undergo a full background investigation and pay the cost of investigation in the same manner as an applicant.
The sale of alcoholic beverages in gaming establishments is subject to strict licensing, control and regulation by State and local authorities.
Alcoholic beverage licenses are revocable and nontransferable.
State and local licensing authorities have full power to limit, condition, suspend for as long as six months or revoke any such licenses.
There are various classes of retail liquor licenses which may be issued under the Colorado Liquor Code.
A gaming licensee may sell malt, vinous or spirituous liquors only by the individual drink for consumption on the premises.
An application for an alcoholic beverage license in Colorado requires notice, posting and a public hearing before the local liquor licensing authority prior to approval.
The Colorado Department of Go here Liquor Enforcement Division must also approve the application.
Employees As of December 31, 2011, we employed 4,046 full-time employees and 703 part-time employees.
There were 1,081 full-time and 67 part-time employees of the entities that were held for sale as of December 31, 2011.
Those employees were hired by Golden Gaming or JETT as outlined in the underlying purchase and sale agreements.
None of our current employees are covered by a collective bargaining agreement.
We believe that our relationship with our what pa gambling commercial recommend is good.
As of 27 December 31, 2011, the Black Hawk Casinos employed 370 full-time and 58 part-time employees, none of which are covered by a collective bargaining agreement.
Available Information A copy of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports, are available, without charge, through our website at iowa gambling annual report />These reports, and any amendments to these reports, are made available on our website as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the Securities and Exchange Commission the "SEC".
An overview of our investor relations department, our primary contact information and a list of our management team are each available free of charge through our website at www.
References to our website in this Annual Report on Form 10-K are provided as a convenience and do not constitute an incorporation by reference of the information contained on, or accessible through, the website.
Therefore, such information should not be considered part of this Annual Report on Form 10-K.
The following risk factors, among others, could cause our financial performance to differ significantly from the goals, plans, objectives, intentions and expectations expressed in this Annual Report on Form 10-K.
If any of the following risks and uncertainties or other risks and uncertainties not currently known to us or not currently considered to be material actually occurs, our business, financial condition or operating results could be harmed substantially.
Adverse weather conditions or natural disasters in the areas in which we operate, or gambling license casino conditions that restrict access to our properties, could have an adverse effect on our results of operations and financial condition.
Adverse weather conditions, particularly flooding, heavy snowfall and other extreme conditions, as well as natural disasters, can deter our guests from traveling or make it difficult for them to visit our properties.
If any of our properties were to experience prolonged adverse weather conditions, or if multiple properties were to simultaneously experience adverse weather conditions, our results of operations and financial condition would be adversely affected.
Our business may also be adversely affected by other events or conditions that restrict access to our properties, such as road closures.
In June of 2011, our property in St.
Joseph, Missouri was closed due to flooding of the Missouri River.
The property reopened in September 2011.
Although our insurance coverage was sufficient and covered the damage to the property as well as lost profits during the period the property was closed, there can be no assurance that our insurance coverage will be sufficient for natural disasters that may occur in the future.
Our future financial results will be affected by the adoption of fresh start reporting and may not reflect historical trends.
We were formed pursuant to the Bankruptcy Plan to acquire substantially all of the assets of Predecessor.
The Restructuring Transactions resulted in us becoming a new reporting entity and adopting fresh start reporting in accordance with Accounting Standards Codification " ASC " 852-10-15.
As required by fresh start reporting, the Company caused Predecessor's assets and liabilities to be adjusted to measured value, and certain assets and liabilities not previously recognized in Predecessor's financial statements have been recognized under fresh start reporting.
Because the Restructuring Transactions were consummated on December 31, 2010, fresh start reporting was adopted 28 and the consolidated financial statements included in this Annual Report on Form 10-K give effect to adjustments in the carrying values of assets or liabilities that were recorded under fresh start reporting rules.
Accordingly, our financial condition and results of operations from and after January 1, 2011 may not be comparable to the financial condition and results of operations reflected in Predecessor's historical consolidated financial statements including those included herein.
The bankruptcy filing has had a negative impact on Predecessor's image which may negatively impact our business going forward.
As a result of the Chapter 11 cases, Predecessor has been the subject of negative publicity which has had an impact on its image and the images of the casino and slot route operations we acquired.
This negative publicity may have an effect on the terms under which some customers and suppliers are willing to continue to do business with us and could materially adversely affect our business, financial condition and results of operations.
Our operations, and the gaming industry as a whole, have been adversely affected by the recession.
Our gaming operations and casinos may be further adversely impacted if general economic conditions do not improve, which could lead to an adverse impact on our operations.
The results of operations of Predecessor's slot route and casino businesses were negatively impacted by the global financial recession, subprime mortgage crisis, volatile gasoline and energy prices, high unemployment and the general economic article source, including a decrease in consumer confidence levels.
The gaming industry as a whole is currently experiencing reduced demand.
The demand for gaming is highly sensitive to consumers' disposable incomes, and a general decline in economic conditions, including businesses downsizing their workforces, may lead to our potential customers having less discretionary income with which to wager.
Many of our customers have also experienced significant reductions in their savings as a result of recent investment losses.
The State of Nevada, one of our primary markets, has experienced a significant economic downturn.
According to the U.
Bureau of Labor Statistics, Nevada had the highest unemployment rate in the country in 2011 at 13.
In addition, according to a report published by Realtytrac, Nevada ranked at number one in foreclosure rates in the country for 2011.
These developments have led, and are likely to continue to lead, to a reduction in the revenues and have materially adversely affected the operating results of Predecessor and our company.
Gaming industry revenues are sensitive to general economic conditions and are influenced by consumer confidence in the economy and other factors.
An extended period of reduced discretionary spending could significantly harm our operations and we may not be able to lower our costs rapidly enough, or at all, to offset a decrease in revenues.
We may be unable to generate sufficient cash flows to meet our debt obligations and finance all operating expenses, working capital needs and capital expenditures.
We have no revolving credit facility and generate all of our cash from operations.
We may be unable to generate sufficient revenues and cash flows to service our debt obligations as they come due, finance capital expenditures, or meet our operational needs.
Any one of these failures may preclude us from, among other things: • maintaining or enhancing our current customer offerings; • taking advantage of future opportunities; • growing our businesses; or • responding to competitive pressures.
We may not be able to obtain such working capital when it is required.
Further, even if we were able to obtain additional working capital, it may only be available on unfavorable terms.
For example, we may be required to take on additional debt, the interest costs of which could adversely affect our results of operations and financial condition.
If any such required capital is obtained in the form of equity, the equity interests of the holders of the then-outstanding Common Units could be diluted.
Limited liquidity and working capital may also restrict our ability to maintain and update our facilities, which could put us at a competitive disadvantage to casinos offering more modern and better maintained facilities.
A write-off of all or a part of our identifiable intangible assets or goodwill would hurt our operating results and reduce our net worth.
Under generally accepted accounting principles, we review our identifiable intangible assets, including goodwill, for impairment at least annually or when events or changes in circumstances indicate the carrying value may not be recoverable.
Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill or other identifiable intangible assets may not be recoverable, include a sustained decline in the value of our Common Units, reduced future cash flow estimates and slower growth rates in our industry.
We may be required to record a significant non-cash impairment charge in our financial statements during the period in which any impairment of our goodwill or other identifiable intangible assets is determined, negatively impacting our results of operations and stockholders' equity.
Intangible assets such as customer loyalty programs and the Terrible's Trade name that have a definite life are amortized based on estimated useful lives.
Identifiable intangible assets that have an indefinite useful life including gaming license rights in jurisdictions where a limited number of licenses are issued and just click for source trade names are not amortized.
Goodwill and indefinite lived intangible assets are tested annually and between annual tests if events occur or circumstances change that would, more likely than not, reduce the fair value of the amount reflected on the balance sheet.
Because valuation methodologies include forecasted information and assumptions about future performance, the likelihood and severity of an impairment charge increases during periods of market volatility, such as the one that recently occurred as a result of the general weakening of the global economy.
Annual testing of our intangible assets and goodwill did not result in any impairment charges during 2011.
The Primm Casino trade name and Sands Regency Casino trade name impairments were primarily due to reduced revenue and cash flow projections while the impairment at the Lakeside Casino was primarily due to higher capital expenditure assumptions, lower free cash flow amounts and changes in the weighted average cost of capital, which reduced the fair value of the gaming license.
If we are unable to retain our existing customers, or if average customer spending or customer traffic decreases, we may incur future impairment charges.
In the event an impairment of indefinite lived intangible assets or goodwill is identified, a charge to earnings would be recorded.
Although it does not affect our cash flow, a write-off in future periods of all or a part of these assets would adversely affect our business, financial condition and results of operations.
The gaming industry is highly competitive.
We compete for local gaming customers with other locals-oriented casino-hotels and other casinos located in the vicinity of these properties.
Our casino operations in the Midwest face competitors that include land-based casinos, dockside casinos, riverboat casinos, casinos located on Native American reservations, and racing and pari-mutuel operations.
The largest sources of customers for the Sands Regency Casinos are California and the Pacific Northwest, including a large number of customers who drive to Reno from the San Francisco and Sacramento metropolitan areas, and the largest source of customers for the Primm Casinos are from Southern California, including a large number of customers who drive to Las Vegas from the San Bernardino and Barstow metropolitan areas.
The expansion of Native American casinos in California, Oregon and Washington continues to have an impact on casino revenues in Nevada in general, and such impact may be significant on the markets in which the Sands Regency Casinos and the Primm Casinos operate.
If our competitors operate just click for source successfully, if their existing slot route operations or properties are enhanced or expanded, or if additional competitors are established in and around the locations in which we conduct business, we may lose market share.
In particular, the expansion of slot route operations or casino gaming in or near any geographic area from which we attract or expect to attract a significant number of our customers could have a material adverse effect on our business, financial condition and results of operations.
Some Native American casinos have a lower minimum age requirement for gambling, which may increase their market share at the expense of this web page market share.
Some Native American casinos in Southern California and Iowa allow customers at least 18 years old to gamble, whereas our gambling establishments require our customers to be at least 21 years old.
This could lead to a reduced market for us as those Native American casinos would have an earlier opportunity to create loyal customers.
If our competitors are able to retain these customers after they turn 21, thereby causing them to continue gambling at those establishments rather than try our establishments, we may experience reduced market share.
We depend upon our key employees and certain members of our management.
Our success is substantially dependent upon the efforts and skills of David D.
Ross, our Chief Executive Officer, Ferenc Szony, our Chief Operating Officer, John Christopher Krabiel, our Chief Financial Officer and Treasurer and Marc.
Rubinstein, our Senior Vice President, General Counsel and Secretary.
We have entered into employment agreements with Mr.
Ross through December 2013, Mr.
Krabiel through December 2012 and Mr.
Rubinstein through February 2013.
The employment agreements with Messrs.
Ross, Krabiel and Rubinstein automatically renew for successive one-year periods unless sooner terminated or unless either party to the respective agreements notifies the other in writing at least 60 days prior to the date the respective agreement is scheduled to expire.
If we were to lose the services rendered by these executives, our operations could be adversely affected.
In addition, we compete with other potential employers for employees, and we may not succeed in hiring and retaining the executives and other employees that we need.
An inability to hire quality employees could have a material adverse effect on our business, financial condition and results of operations.
In connection with credit card sales, we transmit confidential credit card information securely over public networks and store it in our data warehouse.
Third parties may have the technology or know-how to breach the security of this customer information, and our security measures may not effectively prohibit others from obtaining improper access to this information.
If a person is able to circumvent our security measures, he or she could destroy or steal valuable information or disrupt our operations.
Any security breach could expose us to risks of data loss, litigation and liability and could seriously disrupt our operations, and any resulting negative publicity could significantly harm our reputation.
Recent changes to our senior management and Board of Directors may cause uncertainty in, or be disruptive to, our business.
We have recently experienced significant changes in our senior management and our Board of Directors.
On January 7, 2011, we appointed David D.
Ross as Chief Executive Officer.
Prior to his appointment as our Chief Executive Officer, Mr.
On May 3, 2011, we also appointed John Christopher Krabiel as Chief Financial Officer and Treasurer.
On January 7, 2011, we appointed Ferenc Szony as President.
Szony previously served as President of Predecessor and his employment contract was assumed by us in connection with the Restructuring Transactions.
On January 1, 2012, Mr.
Szony was appointed Chief Operating Officer pursuant to an amended employment agreement with a one year term.
On February 4, 2011, we appointed Marc H.
Rubinstein as Senior Vice President, General Counsel and Secretary.
We have made strategic changes in addition to personnel changes, which are based on greater cost constraint and yield management, and plan to continue our cost containment strategy.
These changes in our senior management, Board of Directors and operations may be disruptive to our business and, during the transition period, there may be uncertainty among investors, employees and others concerning our future direction and performance.
Any such disruption or uncertainty could have a material adverse impact on our results of operations and financial condition.
In addition, we may not be able to achieve or fully implement our planned additional cost reduction measures without adversely impacting revenues or guest service.
We face extensive regulation from gaming and other government authorities.
As owners and operators of gaming facilities, we are subject go here extensive state and local regulations in Nevada, Iowa and Missouri.
Certain approvals from gaming authorities must be obtained before we can take certain actions with respect to our properties in these jurisdictions.
In addition the Nevada Gaming Commission, the Iowa Gaming and Commission and the Missouri Gaming Commission require us and our subsidiaries to obtain gaming licenses and require our officers, key employees and business entity affiliates to demonstrate suitability to hold gaming licenses.
Such state and local government authorities may limit, condition, suspend or revoke a license for any cause deemed reasonable by the respective licensing agency.
They may also levy substantial fines against us or our subsidiaries or the individuals involved in violating any gaming laws or regulations.
The violation of any such state and local regulations could have a material adverse effect on our business, financial condition and results of operations.
In Nevada, the Nevada Gaming Commission could request that a state court appoint a supervisor to operate any non-restricted gaming establishment operated by us if the licenses held by us are revoked, suspended or otherwise lapse.
In such extraordinary circumstances, earnings generated by gaming operations during a supervisor's appointment except for reasonable rental value could be 32 forfeited to the State of Nevada.
The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.
On February 28, 1995, the electorate of Clarke County, Iowa the county in which the Lakeside Iowa Casino is located approved an excursion boat gambling referendum permitting such gaming operations in Clarke County.
Every eight years a majority of the Clarke County electorate must reauthorize the excursion boat gambling referendum to allow gambling games to continue in Clarke County.
Such a referendum took place on November 2, 2010, with the electorate voting on the proposition favoring continued gaming on riverboats in Clarke County.
The next referendum is scheduled for November 2018.
If the reauthorization referendum is defeated it would have a material adverse effect on our operations and financial condition.
In addition, Lakeside Iowa's excursion gambling boat license was approved apologise, are gambling winnings considered income will renewal at a March 8, 2012 meeting of the Iowa Gaming Commission.
This license is not transferable and will need to be renewed annually and prior to the commencement of each subsequent annual renewal period.
CCDC is currently challenging the Iowa Racing Commission's decision to approve our license as well as seeking a declaratory ruling that our operator's agreement is not assignable.
The Class A and Class B licenses in Missouri were renewed for a two-year term in January 2012.
Any future public offering of debt or equity securities by us will require review of and prior approval by the Nevada Gaming Commission, the Iowa Gaming Commission and the Missouri Gaming Commission.
Failure to obtain gaming licenses in Colorado could affect our results of operations and financial position.
In connection with our acquisition of the land and buildings of the three Black Hawk Casinos, we simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Pending licensure, Golden Gaming continues running the operations of the Black Hawk Casinos and we receive fixed monthly rental payments under the lease.
If we are unable to obtain gaming licenses in Colorado, we will not be permitted to operate the Black Hawk Casinos.
If we are not permitted to operate the Black Hawk Casinos, we may be unable to find alternative operators of the Black Hawk properties on terms agreeable to us, if at all, following the expiration of the Golden Gaming lease.
Any such discontinuance of operations could negatively affect our ability to maintain relationships with customers, distributors and employees.
Our operations are subject to numerous laws and regulations resulting from our diverse operating activities We are subject to a variety of other rules and regulations, including zoning, environmental, construction and land-use laws, regulations and permits that govern the serving of alcoholic beverages.
Any changes to these laws could have a material adverse effect on our business, financial condition and results of operations.
Potential changes in legislation and regulation could negatively impact our gaming operations.
From time to time, legislators and special interest groups have proposed legislation that would expand, restrict or prevent gaming operations in the jurisdictions in which we operate.
Any such change to the regulatory environment or the adoption of new federal, state riverboat gambling history iowa local government legislation could have a material adverse effect gambling profit taxable is our business.
Many jurisdictions require any person who acquires beneficial ownership of debt or equity securities of a casino gaming company to apply for qualification or a finding of suitability.
Generally, any person who fails or refuses to apply for a iowa gambling annual report of suitability or a license within the prescribed period after being advised by gaming authorities that it is required to do so may be denied a license or found unsuitable or unqualified, as applicable.
Any holder of securities that is found unsuitable or unqualified or denied a license, and who holds, directly or indirectly, any beneficial ownership of a gaming entity's securities beyond such period of time as may be prescribed by the applicable gaming authorities may be guilty of a criminal offense.
Furthermore, a gaming entity may be subject to disciplinary action if such gaming entity, after receiving notice that a person is unsuitable to be a holder of securities or to have any other relationship with such gaming entity or any of its subsidiaries: • pays that person any dividend or interest upon the securities; • allows that person to exercise, directly or indirectly, any voting ownership right conferred through securities held by that person; • pays remuneration in any form to that person for services rendered or otherwise; or • fails to pursue all lawful efforts to require such unsuitable person to relinquish the securities including, if necessary, the immediate purchase of such securities for the lesser of fair value at the time of repurchase or fair value at the time of acquisition by the unsuitable holder.
In the event that disqualified holders fail to divest themselves of such securities, gaming authorities have the power to revoke or suspend the casino license or licenses related to the regulated entity that issued the securities.
In addition, the Operating Agreement of Affinity Gaming, LLC, dated as of December 31, 2010 the "Operating Agreement"by and among the Members identified on Schedule A attached thereto, provides that we may redeem our membership interests from an Unsuitable Member as such term is defined in the Operating Agreement.
The prior approval of the Nevada Gaming Commission, Iowa Gaming and Racing Commission, Missouri Gaming Commission and Colorado Limited Gaming Control Commission is required for change of control transactions and certain acquisitions of equity interests in the Company.
Changes in the control of the Company through confirm. www gambling com py bingo plus seems, consolidation, equity or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby that person obtains control, may not occur without the prior approval of the Nevada Gaming Commission, the Iowa Racing and Gaming Commission, the Missouri Gaming Commission and the Colorado Limited Gaming Control Commission.
The Nevada Gaming Commission, the Iowa Racing and Gaming Commission, the Missouri Gaming Commission and the Colorado Limited Gaming Control Commission may also require the equity holders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.
Under Nevada law, any person who acquires more than 5% of our voting securities will be required to report such acquisition to the Nevada Gaming Commission.
Any beneficial owner of more than 10% of our https://cetsolarstore.com/gambling/when-did-gambling-become-legal-in-florida.html securities will be required to apply to the Nevada Gaming Commission for a finding of suitability.
Under certain circumstances, an "institutional investor" as defined under the regulations of the Nevada Gaming Commission, which acquires beneficial ownership of more than 10%, but not more than 25%, of our voting securities subject to certain additional holdings as a result of certain debt restructurings or stock repurchase programs under the Nevada Actmay apply to the Nevada Gaming Commission for a waiver of such finding of suitability requirement if the institutional investor holds our voting securities only for investment purposes.
In addition, any beneficial owner of 34 our voting securities, regardless of the number of shares beneficially owned, may be required at the discretion of the Nevada Gaming Commission to file an application for a finding of suitability as such.
In either case, a finding of suitability is comparable to licensing and the applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting the investigation.
Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do click to see more by the Nevada Gaming Commission or by the Chair of the Nevada State Gaming Control Board may be found unsuitable.
Any equity holder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the equity of a registered corporation beyond the period of time as may be prescribed by the Nevada Gaming Commission may be guilty of a criminal offense and the Company and the gaming subsidiaries may become subject to disciplinary action if, after receipt of notice that a person is unsuitable to be an equity holder or to have any other relationship with the Company or the gaming subsidiaries, the Company pays that person any dividend or interest upon voting securities, allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, pays remuneration in any form to that person for services rendered or otherwise; or fails to pursue all lawful efforts to require the unsuitable person to relinquish his voting securities for cash at fair market value.
Under Missouri law, institutional and passive investors that do not take an active role in management and own less than a 20% ownership interest and more than a 5% ownership interest in the Company may either file for a key person license or seek a waiver of licensure.
However, a passive investor owning more than a 5% ownership interest in the Company that desires to take an active role in the management or operations of the Company, or any investor that owns more than a 20% ownership interest in the Company, will be required to file an application for key person licensure.
If the investor is not found suitable, the investor will by required to divest its interest in the Company.
In addition, we will be required to provide the Missouri Gaming Commission with prior notice if we intend to transfer, issue, grant a security interest in, or pledge 5% or more of our equity.
Under Iowa law, any person who intends to acquire 5% or more of the equity securities of a licensed entity must, prior to such acquisition, obtain approval from the Iowa Gaming Commission.
As a matter of policy, the Iowa Gaming Commission has granted institutional investor waivers.
Under Colorado law, persons who acquire direct or indirect beneficial ownership of a 5% or more of any class of voting securities of a publicly traded corporation that is required to include in its articles of incorporation the Rule 4.
Licensees also must notify any qualifying persons of these requirements.
A qualifying person other than an institutional investor whose interest equals 10% or more must apply to the Colorado Commission for a finding of suitability within 45 days after acquiring such securities.
Licensees must also notify any qualifying persons of these requirements.
Whether or not notified, qualifying persons are responsible for complying with these requirements.
A qualifying person who is an institutional investor under Rule 4.
Such requirement to be found suitable to hold our voting securities may discourage or delay change of control transactions.
Gaming laws are generally based upon declarations of public policy which are concerned with, among other things: • the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; • the establishment and maintenance of responsible accounting practices and procedures; • the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record keeping and requiring the filing of periodic reports; • the prevention of cheating and fraudulent practices; and • providing a source of state and local revenues through taxation and licensing fees.
Changes in these laws, regulations and procedures could have an adverse effect on our proposed gaming operations.
Our operations could be adversely affected due to the adoption of certain anti-smoking regulations.
Smoking is currently permitted at casino locations in Nevada, Missouri, and Iowa.
Smoking is not permitted at casino locations in Colorado.
It is not possible to determine the manner, nature or likelihood of changes in the current laws relating to smoking in public places or the effect of regulations regarding secondhand smoke; however, new anti-smoking laws, if adopted, could have a material adverse effect on our business, financial condition and results of operations.
For example, Iowa has a statewide ban on indoor smoking but the law includes an exemption for casino floors and 20% of all hotel rooms.
From time to time, bills have been introduced in the Iowa legislature that would eliminate the casino floor exemption.
Changes to applicable tax laws could have a material adverse effect on our financial condition.
We expect to pay substantial taxes and fees in connection with our operations as a gaming company.
From time to time, federal, state and local legislators and other government officials have proposed and adopted changes in tax laws, or in the administration of those laws affecting the gaming industry.
For example, the Governor of Iowa has introduced legislation to increase the gross gaming revenue tax from 22% to 36%.
It is not possible to determine the likelihood of changes in tax laws or in the administration of those laws.
If adopted, changes to applicable tax laws could have a material adverse effect on our business, financial condition and results of operations.
Due to the continued pressures on the state legislatures to address shortfalls in their budgets associated with the current recession, there may be more support to look to increased taxation that could affect all our gaming properties.
Any increase in taxes would have a material adverse effect on our business, financial condition and results of operation.
Environmental legislations or regulations, if enacted, could lead to an adverse impact on our results of operations and financial condition if such legislations or regulations result in a smaller drive-in tourist market.
Global climate change issues have received an increased focus on the federal and state government levels, which could potentially lead to additional rules and regulations that impact how our drive-in tourist market is able to come to our facilities.
The ultimate impact on our business would be dependent upon the specific rules and regulations adopted and we cannot predict the effects of any such legislation at this time.
However, if such legislations or regulations result in increased costs to 36 motor vehicle drivers, then we may as a result see fewer drive-in tourists, which could adversely impact our operations and financial condition.
The business read article the Primm Casinos may be adversely impacted if their use of water exceeds allowances permitted by federal and local governmental agencies or if such governmental agencies impose additional requirements in connection with such use of water, which in each case could lead to an adverse impact on our operations and financial condition.
The Primm Casinos are not served by a municipal water system.
As a result, the water supply of such casinos is dependent on rights they have been granted to water in various wells located on federal land in the vicinity of the Primm Casinos and permits that allow the delivery of water to the Primm Casinos.
These permits and rights are subject to the jurisdiction and ongoing regulatory authority of the U.
Bureau of Land Management, the States of Nevada and California and local governmental units.
While we believe that adequate water for the Primm Casinos is available, the future water needs of the Primm Casinos may exceed the permitted allowance.
In such an event, future requests for additional water may not be approved or may be approved with terms or conditions that are more onerous.
Any such denial or any such additional terms and conditions may have a material adverse effect on the results of operations of the Primm Casinos, thereby adversely affecting our results of operations and financial condition.
Compliance with environmental law and other government regulations could impose material costs.
We are subject to numerous environmental laws and regulations that impose various environmental controls on our business operations, including, among other things, the discharge of pollutants into the air and water and the investigation and remediation of soil and groundwater affected by hazardous substances.
Such laws and regulations may otherwise relate to various health and safety matters that impose burdens upon our operations.
These laws and regulations govern actions that may have adverse environmental effects and also require compliance with certain practices when handling and disposing of hazardous wastes.
These laws and regulations also impose strict, retroactive and joint and several liability for the costs of, and damages resulting from, cleaning up current sites, past spills, disposals and other releases of hazardous substances.
For example, we are currently building a new truck stop in Primm, Nevada and in connection with the construction, have encountered contaminated soil from a gas station operated more than 30 years ago, requiring mediation.
We cannot provide assurance that we have accurately estimated or identified the scope of the issue or the impact that this remediation will have on our capital expenditures, earnings or competitive position as we complete the project.
Although we maintain insurance coverage, and have submitted an insurance claim for the cost of remediation, the potential liability related thereto may exceed the amount of our insurance coverage or may be excluded under the terms of the policy, which could have a material read article effect on our business, financial condition and results of operations.
We cannot assure you that we have been or will be in compliance with environmental and health and safety laws at all times.
If we violate these laws, we could be fined, criminally charged or otherwise sanctioned by regulators.
We may be required to incur further costs to comply with current or future environmental and safety laws and regulations.
In addition, in the event of accidental contamination or injury from these materials, we could be held liable for any damages that result and any such liability could exceed our resources.
We believe that our expenditures related to environmental matters have not had, and are not currently expected to have, a material adverse effect on our business, financial condition or results of operations.
However, the environmental laws under which we operate are complicated and often increasingly more stringent, and may be applied retroactively.
Accordingly, we may be required to make additional expenditures to remain in, or to achieve, compliance with 37 environmental laws in the future and such additional expenditures may have a material adverse effect on our business, financial condition or results of operations.
Adverse winter weather conditions in Colorado, the Midwest, the Sierra Nevada Mountains and Reno-Lake Tahoe area could have a material adverse effect on the results of operations and financial condition of our casinos, which could lead to an adverse impact on our results of operation and financial condition.
Adverse winter weather conditions, particularly snowfall, can deter customers of the Northern Nevada casinos, Midwest casinos and Colorado casinos from traveling or make it difficult for them to frequent our facilities.
If these locations were to experience prolonged adverse winter weather conditions, the results of operations and financial condition of these casinos could also be materially adversely affected, thereby adversely affecting our overall results of operations and financial condition.
Although our facilities experienced mild weather conditions for most of 2011, the Midwest casinos experienced severe weather conditions in December 2009 and the first quarters of 2010 and 2011, which negatively impacted the results of operations at those facilities.
Riverboats and dockside facilities are subject to risks relating to weather or mechanical failure and must comply with applicable regulations.
We own and operate riverboat and dockside casino facilities, which are subject to risks in addition to those associated with land-based casinos, including loss of service due to casualty, mechanical failure, extended or extraordinary maintenance, flood or other severe weather.
Reduced patronage and the loss of a dockside or riverboat casino from service for any period of time could adversely affect our results of operations.
The riverboats are subject to inspection every year and were inspected in November 2009 in Missouri.
The Company's only vessel is the boat located in Lakeside, Iowa, and this boat had its turbines removed in late 2008, as riverboats in Iowa are no longer required to cruise.
The casino, hotel and resort industry is capital intensive and we may not be able to finance expansion and renovation projects, which could put us at a competitive disadvantage.
The casino properties have an ongoing need for renovations and other capital improvements to remain competitive, including replacement, from time to time, of furniture, fixtures and equipment.
Because of the bankruptcy, Predecessor had deferred renovations and capital improvements.
We may also need to make capital expenditures to comply with applicable laws and regulations.
Renovations and other capital improvements of the casino properties require significant capital expenditures.
In addition, renovations and capital improvements of the casino properties usually generate little or no cash flow until the projects are completed.
We may not be able to fund such projects solely from cash provided from operating activities.
Consequently, we may have to rely upon the availability of debt or equity capital to fund renovations and capital improvements, and our ability to carry them out will be limited if we cannot obtain satisfactory debt or equity financing, which will depend on, among other things, market conditions.
No assurances can be made that we will be able to obtain additional equity or debt financing or that we will be able obtain such financing on favorable terms.
Our failure to renovate our casino properties may put us at a competitive disadvantage.
Our operations may be adversely impacted by increases in energy prices.
The casino properties use significant amounts of electricity, natural gas and other forms of energy.
While no energy shortages have been experienced, the substantial increases in the cost of electricity, natural gas and gasoline in the United States in general, and in Southern and Northern California, Southern and Northern Nevada, South Central Iowa and Northeast and Northwest Missouri in particular, may negatively affect our operating results.
In addition, remarkable, carnival cruise ship gambling was energy price increases in such areas could result in a decline in disposable income of potential customers and a corresponding 38 decrease in visitation and spending at our slot route and casino operations, which could negatively impact revenues.
Any increase in the price of gasoline may have an adverse impact on the results of our operations.
Most customers of the casino properties drive in to the casino properties.
As such, an increase in gasoline prices may have an adverse impact on our operations as it would increase the cost incurred by our customers to drive to our locations.
Though gasoline prices were somewhat more stable during 2010, gasoline prices began to rise during the fourth quarter of 2010 and throughout 2011, and there can be no assurance that prices will not continue to rise, which may adversely affect our customer's discretionary income and, ultimately, our revenue.
The transferability of our membership interests will be very limited and subject to the prior approval of our Board of Directors.
On December 31, 2010, we issued 20,000,001 Common Units to eligible debt holders as part of the Restructuring Transactions.
In connection with the 2011 Long-Term Incentive Plan the "2011 LTIP"we issued 200,000 Restricted Stock Units to our Chief Executive Officer on March 30, 2011.
Also in connection with the 2011 LTIP, we issued an additional 26,832 Restricted Stock Units to our Chief Financial Officer and Treasurer, General Counsel and Secretary and Senior Vice President of Finance.
There is currently no established public trading market for our Common Units, and there are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market for our Common Units.
In addition, although we converted to a c-corporation for federal income tax purposes, transfers of our Common Units still require the approval of our Board of Directors to ensure that new owners agree to the terms of our limited liability company agreement.
Accordingly, we do not expect a public market will develop for our Common Units.
Issuance of Common Units to our executive officers and directors will dilute our equity holders.
On December 31, 2010, 5% of our Common Units, on a fully-diluted basis, were reserved for issuance as grants of equity, restricted equity, options, or similar equity awards in connection with a management and director equity incentive program.
The 2011 LTIP was approved by the Compensation Committee and adopted by the Company on March 30, 2011.
The issuance of the reserved Common Units will dilute the percentage ownership of any holders of our Common Units.
To date, Restricted Stock Units totaling 226,832 have been issued under the 2011 LTIP and a total of 544,226 options to purchase Common Units have been granted under the 2011 LTIP.
We may be subject to litigation resulting from our gaming, resort and dining operations which, if adversely determined, could result in substantial losses.
We will be, from time to time, during the ordinary course of operating our businesses, subject to various litigation claims and legal disputes, including contract, lease, employment and regulatory claims as well as claims made by visitors to our properties.
Certain litigation claims may not be covered entirely or at all by our insurance policies or our insurance carriers may seek to deny coverage.
In addition, litigation claims can be expensive to defend and may divert our attention from the operations of our businesses.
Further, litigation involving visitors to our properties, even if without merit, can attract adverse media attention.
As a result, litigation can have a material adverse effect please click for source our businesses and, because we cannot predict the outcome of any action, it is possible that adverse judgments or settlements could significantly reduce our earnings or result in losses.
As part of our strategy, we may seek to increase growth through strategic acquisitions and any such acquisition may be significant.
Not only is the identification of good acquisition candidates difficult and competitive, but these transactions also involve numerous risks, including the ability to: • successfully integrate acquired companies, properties, systems or personnel into our existing business; • minimize any potential interruption to our ongoing business; • successfully enter markets visit web page which we may have limited or no prior experience; • achieve expected synergies and obtain the desired financial or strategic benefits from acquisitions; • retain key relationships with employees, customers, partners and suppliers of acquired article source and • maintain uniform standards, controls, procedures and policies throughout acquired companies.
Companies, businesses or operations acquired or joint ventures created may not be profitable, may not achieve sales levels and profitability that justify the investments made or carry other risks associated with such transactions.
For example, in connection with our acquisition of the land and buildings of the three Black Hawk Casinos, we simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Pending licensure, Golden Gaming continues running the operations of the Black Hawk Casinos and we receive fixed monthly rental payments under the lease.
Should Golden Gaming decide to discontinue operations of the Black Hawk Casinos during the term of the lease, we may be unable to find alternative operators of the Black Hawk properties on terms agreeable to us, if at all.
Additionally, any such discontinuance of operations could negatively affect our ability to maintain relationships with customers, distributors and employees.
Future acquisitions could also result in the incurrence of indebtedness, the assumption of contingent liabilities, material expenses related to certain intangible assets and increased operating expenses, which could adversely affect our results of operations and financial condition.
In addition, to the extent that the economic benefits associated with any of our acquisitions diminish in the future, we may be required to record additional write downs of goodwill, intangible assets or other assets associated with such acquisitions, which could adversely affect our operating results.
We may also decide to divest certain assets, businesses or brands that do not meet our strategic objectives or growth targets.
With respect to any divestiture, we may encounter difficulty finding potential acquirers or other divestiture options on favorable terms.
Any divestiture could affect our profitability, either as a result of the gains or losses on such sale of a business or brand, the loss of the operating income resulting from such sale or the costs or liabilities that are not assumed by the acquirer that may negatively impact profitability subsequent to any divestiture.
We may also be required to recognize impairment charges as the result of a divesture.
Any potential future acquisitions, new ventures or divestitures may divert the attention of management and may divert resources from matters that are core or critical to the business.
We may face potential successor liability.
As the successor to Predecessor, we may be subject to certain liabilities of Predecessor not provided for in the Bankruptcy Plan.
Although we have no reason to believe that we will become subject to liabilities of Predecessor that are not provided for in the Bankruptcy Plan, if we should become subject to such liabilities, it could materially adversely affect our business, financial condition and results of operations.
The inability of the applicable parties under our recent acquisition and sale agreements to fulfill their indemnification obligations could affect our results of operations and financial position.
On February 27, 2012, we sold our casino in Searchlight, Nevada, and the portion of our slot route operations relating solely to the Terrible Herbst convenience stores to JETT Gaming, LLC, a Las Vegas-based slot route operator.
On February 29, 2012, we sold the remainder of our slot route operations, as well as our two Pahrump, Nevada casinos, to Golden Gaming, LLC formerly known as Golden Gaming, Inca Las Vegas-based casino, tavern and slot route operator.
In addition, as part of the transaction with Golden Gaming, we acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
In connection with the applicable acquisition and sale agreements, we and Golden Gaming agreed to retain responsibility for and indemnify the purchasing party against damages resulting from certain third-party claims or other liabilities, such as workers' compensation liabilities and certain environmental liabilities.
Our indemnification obligations with respect to breaches of our representations and warranties in the agreement related to the sale of our slot route and Pahrump, Nevada casinos will terminate upon expiration of the applicable indemnification period 18 months for most representations and warranties, 3 years for environmental representations and warranties, and the expiration of the applicable statute of limitations for tax, employee benefits and customary fundamental representations and warrantiesare generally subject to deductible amounts and will not cover damages in excess of applicable coverage limits.
The indemnification obligations of Golden Gaming with respect to breaches of its representations and warranties in the agreement related to the sale of its Black Hawk, Colorado casinos will terminate upon expiration of the applicable indemnification period 18 months for most representations and warranties, 3 years for environmental representations and warranties, and the expiration of the applicable statute of limitations for tax, employee benefits and customary fundamental representations and warranties sports gambling in dubai, are generally subject to deductible amounts and will not cover damages in excess of applicable coverage limits.
The assertion of any third-party claims against us after the expiration of the applicable indemnification period or in excess of the applicable coverage limits, or the failure of Golden Gaming to satisfy its indemnification obligations with respect to breaches of its representations and warranties, could have an adverse effect on our results of operations and financial position.
Our substantial indebtedness could: • make it more difficult to satisfy obligations with respect to the instruments governing our then outstanding indebtedness; • increase vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of cash flow from operations to debt service, thereby reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate purposes; • limit flexibility in planning for, or reacting to, competitive pressures and changes in click the following article business and the industry in which we operate; • place us at a competitive disadvantage compared to our competitors that have less debt; or • limit, along with the financial and other restrictive covenants in the indebtedness, among other things, our ability to borrow additional funds.
If current indebtedness increases, the related risks noted the korean baseball player gambling authoritative that we now face could intensify.
Our Credit So fun is gambling imposes restrictive covenants on us.
Our Credit Agreement has covenants that impose operational and financial restrictions on us.
The restrictions include, among other obligations, limitation on our ability to: • incur additional debt; • make payments on subordinated obligations; • make distributions and repurchase equity; • make investments; • retain cash above certain prescribed limits; • grant liens on our property to secure debt; • enter into certain transactions with affiliates; • sell assets or enter into mergers or consolidations; • sell equity interests in subsidiaries; • source dividend and other payment restrictions affecting subsidiaries; and • change the nature of our lines of business.
In addition, the Senior Secured Loans impose various customary affirmative covenants on us and our subsidiaries, including among others, reporting covenants, covenants to maintain insurance, comply with laws, maintain properties and other covenants customary in senior credit financings of this type.
In addition, the Senior Secured Loans require us to comply with various restrictive financial covenants, including interest coverage and debt to EBITDA ratios, and capital spending limits.
Although the terms of the agreements governing our indebtedness contain restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of important qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial.
The state of the financial markets may impact our ability to obtain sufficient financing and credit on a going forward basis.
In addition to earnings and cash flows from operations, we may rely on borrowed money to finance our business, which may be constrained if we are unable to borrow additional capital or refinance existing borrowings on reasonable terms.
Over the past several years, financial markets and banking systems have experienced disruption that had a dramatic impact on the availability and cost of capital and credit.
The United States and other governments have enacted legislation and taken other actions to help alleviate these conditions, although there is no assurance that such steps will have the effect of easing the conditions in credit and capital markets over the long term.
Therefore, we have no assurance that such steps will facilitate us being able to obtain financing or access the capital markets for future debt or refinance opportunities in a timely manner, or on acceptable terms, or at all.
If we are unable to borrow funds, we may be unable to make capital expenditures that are necessary for us to compete with other casino operators.
As a result, the lack of such funding could have a material adverse effect on our business, results of operations and financial condition and our ability to service our indebtedness.
Our principal properties consist of the following: Nevada Corporate Office We have entered into a lease for corporate office space with an unrelated third party with an effective commencement date of May 1, 2012.
We currently lease space for the Company headquarters and warehouse under leases with learn more here parties of the Predecessor as described below.
Company Headquarters and Warehouse We lease a four-acre site in Las Vegas and, pursuant to that lease, own the 50,000 square foot building where our executive offices and operational headquarters are currently located.
This facility currently houses our executive and administrative offices and is used for sub-assembly and warehouse space for the slot route operations.
The lease between The Herbst Family Limited Partnership II, a Nevada limited partnership and a related party of Predecessor, and us ends on April 30, 2012.
In 43 connection with the sale of the slot route, ownership of the building will revert to JETT Gaming, LLC, a related party of the Predecessor.
Office Space and Convenience Store We lease a three-acre site and a 50,000 square foot building where our employment center and purchasing department are located.
The lease between Herbst Grandchildren's Trust, a trust governed under the laws of the State of Nevada and a related party of Predecessor, and us ends on April 30, 2012.
Town Casino Town Casino in Pahrump, Nevada, which is approximately 60 miles from Las Vegas, comprises an approximately 30,000 square foot building on approximately three acres.
We leased a portion of the land from The Herbst Family Limited Partnership, a Nevada limited partnership and a related party of Predecessor.
In addition to the related party lease, we leased the rest of the land where our business is located from third parties.
The leases have been assigned to Golden Gaming in connection with the sale of the Pahrump casinos.
Ownership of the land has been transferred to Golden Gaming in connection with the sale of when gambling legalized atlantic city Pahrump casinos.
Henderson Casino We lease the land and building on which the Henderson Casino is located in Henderson, Nevada from an unrelated third party.
The lease ends on February 9, 2014, with options to renew the lease for five additional successive terms of ten years each.
We own a 0.
Searchlight Casino We subleased the land and building in which Searchlight is located in Searchlight, Nevada.
The space was subleased from Terrible Herbst, Inc.
The sublease has been assigned to JETT Gaming, a related party of the Predecessor, in connection with its acquisition of this casino and a portion of the slot route operation.
Sands Regency Casino Hotel We own 10.
Rail City Casino We own the land and building on which Rail City is located in Sparks, Nevada.
The Rail City Casino is approximately 7.
The lease ends on January 1, 2022, with an option to renew the lease for four additional successive terms of five years each.
We possess the option to purchase the real property on which the Gold Ranch business assets are located.
Dayton Depot Casino The Dayton Casino is located in Dayton, Nevada.
We own the building that houses the Dayton Casino and the 4.
Buffalo Bill's, Whiskey Pete's and Primm Valley Resort Hotels and Casinos We lease approximately 170 acres of land on which Buffalo Bill's, Whiskey Pete's and Primm Valley are located in Primm, Nevada.
The lease ends on June 30, 2043, with an option to renew the lease for one additional twenty-five year term.
An independent third party leases and manages two 18-hole Tom Fazio golf courses with a full-service restaurant and club house adjacent to our properties.
Midwest St Jo Frontier Casino We own the land and building in St.
Joseph, Missouri on which certain facilities of St Jo are located, and own an additional 72 acres of land adjacent to, or nearby, the casino.
Mark Twain Casino We own the land and building in LaGrange, Missouri on which certain facilities of Mark Twain are located, and own an additional 14 acres of land adjacent to or nearby the casino.
Lakeside Casino Resort We own the land and building in Osceola, Iowa on which certain facilities of Lakeside Iowa are located, including the all-suite hotel, convention facilities, RV park and convenience store and own an additional 121 acres of land adjacent to, or nearby, the casino.
We lease the use of West Lake and certain real estate surrounding West Lake from the City of Osceola, Iowa.
This lease expires on May 19, 2014.
We have an option to extend this lease for seven additional successive terms of five years each.
Black Hawk, Colorado On February 29, 2012, we acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado—and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Pending licensure, we receive fixed monthly rental payments under the lease.
The Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino are located in close proximity to one another and occupy a total of 1.
We also own 1.
The jury verdict was delivered in connection with an action brought by the family of an individual that alleged that E-T-T had negligently retained and negligently supervised a temporary employee who in 2001 stole a truck from E-T-T and, while drunk, hit and killed the individual.
We have fully accrued for this award as of December 31, 2011.
In connection with confirmation of the Bankruptcy Order, we were required to provide a cash reserve for the initial award plus statutory interest.
The restricted cash will be released to us in 2012 in connection with settlement of the case.
We are a party to an arbitration that was filed in 2008 in Las Vegas involving the termination of an employee.
The former employee alleged he was terminated without cause and was therefore due amounts pursuant to his employment agreement.
The arbitration award was appealed to the Clark County District Court.
On April 21, 2010, the District Court issued findings of fact, conclusions of law and an order setting aside the award as arbitrary and capricious, and remanding the matter back to arbitration.
The Company has fully accrued for this amount as of December 31, 2011 and is currently appealing the arbitration.
Predecessor and certain of its subsidiaries filed the Chapter 11 Cases in the Bankruptcy Court.
Predecessor and certain of its subsidiaries filed several emergency motions with the Bankruptcy Court, including a motion to have the Chapter 11 Cases jointly administered.
The information set forth under "Business—Emergence from Chapter 11 Reorganization" beginning on page 3 of this Annual Report on Form 10-K is incorporated by reference into this Item 3.
We are party to other ordinary and routine litigation incidental to our business.
We do not expect the outcome of any pending litigation to have a material adverse effect on our consolidated financial position or results of operations.
MINE SAFETY DISCLOSURES Not applicable 46 PART II ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information Our outstanding Common Units are privately held and there is no established public trading market for our Common Units, and there are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in our Common Units.
Holders of Common Units We had approximately 73 holders of record of our Common Units as of March see more, 2012.
Distributions We have never declared or paid cash distributions on our Common Units.
We currently intend to retain all available funds and any future consolidated earnings to fund our operations and the development and growth of our business and therefore do not anticipate paying any cash distributions.
Restrictions imposed by our debt instruments, including the Senior Secured Loans, significantly restrict us from making dividends or distributions.
Specifically, we are restricted under the Credit Agreement governing the Senior Secured Loans from making certain "restricted payments" as defined in the Credit Agreement.
These restricted payments include the payment of distributions to any direct or indirect holders of our Common Units.
These restricted payments cannot be made unless certain financial and non-financial criteria have been satisfied.
In addition, the terms of our Operating Agreement contains similar restrictions.
Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2011 The information incorporated by reference in Item 12 of this Annual Report from our 2012 proxy statement, which will be filed no later than 120 days after December 31, 2011, is hereby incorporated by reference into this Item 5.
Issuer Purchases of Equity Securities No purchases of equity securities were made during the fourth quarter and there were no shares that may yet be purchased under any repurchase plans or programs.
The following tables set forth our selected historical consolidated financial and operating data as of the dates and for the periods indicated.
The selected historical consolidated balance sheet data as of December 31, 2011 and December 31, 2010 for the Successor is derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The selected historical consolidated data for results of operations for the years ended December 31, 2011 Successor and December 31, 2010 and 2009 Predecessor are derived from the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The selected historical consolidated financial and operating data as of December 31, 2009 and December 31, 2008 and for the years ended December 31, 2009, December 31, 2008, and December 31, 2007 are derived from the audited consolidated financial statements of Predecessor not included in this Annual Report on Form 10-K.
Predecessor consummated the acquisition of the Northern Nevada Casinos in January 2007 and the acquisition of the Primm Casinos in April 2007.
As a result, the period beginning January 1, 2007 may not be comparable to prior years.
On December 31, 2010, we adopted fresh start accounting in accordance with ASC 852-10-15.
As a result, the value of Predecessor's assets, including intangible assets, and liabilities have been adjusted to their fair values with any excess of our enterprise value over our tangible and identifiable intangible assets and liabilities reported as goodwill on our consolidated balance sheet.
Because we conducted no business prior to December 31, 2010, we have presented the results of Predecessor in the select financial data below.
See Note 2 to our consolidated financial statements for a detailed explanation of the impact of emerging from Chapter 11 and applying fresh start accounting on our financial position.
The consolidated balance sheet of Predecessor is presented separately from the consolidated balance sheet of Successor.
The selected historical consolidated data presented below should be read in conjunction with the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and the related notes and other financial data included elsewhere in this Annual Report on Form 10-K.
The historical results set forth below do not indicate results expected for any future periods.
Our future results of operations will be subject to significant business, economic, regulatory and competitive uncertainties and contingencies, some of which are beyond our control.
Segment EBITDA has certain limitations because it does not take into account the impact of certain expenses, including the allocation of overhead.
We have tried to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, financial statements prepared in accordance with generally accepted accounting principles, and 49 descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Executive Overview Affinity Gaming, LLC formerly known as Herbst Gaming, LLC and together with its subsidiaries, the "Company," "Successor," "we" or "us" was organized in the State of Nevada on March 29, 2010.
The Company changed its name to Affinity Gaming, LLC, effective May 20, 2011, to reflect https://cetsolarstore.com/gambling/gambling-casinos-in-savannah-georgia.html new beginning, new Board of Directors and new management team.
We are a Nevada limited liability company that was formed to acquire substantially all of the assets of Herbst Gaming, Inc.
Predecessor's bankruptcies were jointly administered under the lead case In re: Zante, Inc.
BK-N-09-50746-GWZ in the United States Bankruptcy Court for the District of Nevada, Northern Division the "Bankruptcy Court".
The reorganization of Predecessor was substantially consummated on December 31, 2010 the "Emergence Date"wherein we acquired all of Predecessor's assets in consideration for the issuance of our membership interests and senior secured loans.
See Note 2—Fresh Start Accounting for a further description of the reorganization of Predecessor.
On the Emergence Date, we elected to be taxed as a partnership.
Effective April 1, 2011, the Company elected to be treated as a corporation for purposes of federal income tax the "Conversion".
Prior to the Conversion, the Company was treated as a partnership for Federal and state income tax purposes.
As a partnership our taxable read more and losses were attributed to our members, and accordingly, no provision or liability for income taxes was reflected in the accompanying consolidated financial statements for periods prior to the Conversion.
We are a diversified, multi-jurisdictional casino operator with wholly-owned casino operations in Nevada, Missouri and Iowa.
In Iowa gambling annual report 2012, the Company completed the planned sale of certain assets and liabilities related to its slot route operation and its casinos in Pahrump and Searchlight, Nevada.
See Note 3 to our consolidated financial statements for further detail related to discontinued operations.
We have aggregated certain of our operations in order to present three Reportable Segments: i Southern Nevada, ii Northern Nevada, and iii Midwest.
See Note 17 to our consolidated financial statements for a listing of the properties that comprise each reportable segment.
Recent Trends and Initiatives On February 27, 2012, the Company sold its casino in Searchlight, Nevada, and the portion of its slot route operations relating solely to the Terrible Herbst convenience stores to JETT Gaming, LLC, a Las Vegas-based slot route operator.
On February 29, 2012, the Company sold the remainder of its slot route operations, as well as its two Pahrump, Nevada casinos, to Golden Gaming, Inc.
In addition, as part of the transaction with Golden Gaming, the Company acquired the land and buildings of the Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino—all located in Black Hawk, Colorado—and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Pending licensure, we receive fixed monthly rental payments under the lease.
Divesting of the slot route operation and smaller Nevada casinos while acquiring the Black Hawk Colorado casinos are critical to the Company's long-term strategic vision.
The economic downturn that began in 2007 presented challenges to our business as consumer confidence and discretionary spending were adversely impacted across all of our markets.
Declines in average customer spending and customer traffic during the recent recession have had a negative impact on our revenue.
However, despite these macroeconomic challenges, we have performed favorably compared to our competitors as evidenced by our stable operating margins and improved Segment EBITDA.
We took steps to stabilize Segment EBITDA through targeted marketing campaigns and cost savings initiatives at our properties.
We have improved the efficiency of our property operations and reduced costs throughout the Company.
These enhancements have allowed us to maintain or improve our operating margins despite revenue declines.
Outlook While the economy has recently shown signs of improvement, many of our customers are still facing difficulties, and we expect that discretionary spending will have gambling against catholic faith well at reduced levels over the near term.
However, we believe that our strategy of offering value-oriented, convenient locations will support our stabilization strategy.
Although perceived value initially attracts a customer to our casino properties, actual value generates customer satisfaction and loyalty, which are critical to our success.
Should the economic recovery continue, we believe we are well-positioned to capitalize on high repeat patronage from our local and drive-in tourist gaming markets.
Our business strategy focuses on attracting and fostering repeat business from our local gaming patrons.
Local gaming patrons are typically sophisticated gaming customers who seek convenient locations, high payouts and a pleasant atmosphere.
We believe our continued commitment to providing a value-oriented, quality casino entertainment experience for our customers will allow us to gain market share.
Matters Affecting Comparability of Results Several significant factors or events have had a material impact on our results of operations for the periods discussed below and affect the comparability of our results of operations from period to period.
Assets held for sale In February 2012, we completed the planned sale of our slot route, two Pahrump, Nevada casinos and our Searchlight, Nevada casino.
The results of the slot route and three casinos are presented as discontinued operations for all periods presented.
St Jo, Missouri Flood On June 27, 2011, the Company's casino located in St.
Joseph, Missouri was closed due to flooding of the Missouri River.
The casino reopened on September 29, 2011.
Our insurance policies provided coverage for property damages and losses, subject to a deductible.
Our insurance policies also provided coverage for interruption to our business, including lost profits, and reimbursement for other expenses and costs we incurred related to the damages and losses suffered.
The net gain is recorded in the line item write-offs, reserves and recoveries.
Although the net insurance recovery essentially replaces the lost EBITDA for the period the casino was closed, casino revenues and related expenses are not comparable for the periods presented.
See Note 12 to the consolidated financial statements for further information regarding the flood.
On December 31, 2010, we adopted fresh start accounting in accordance with ASC 852-10-15.
As a result, the value of Predecessor's assets, including intangible assets, and liabilities have been adjusted to their fair values with any excess of our enterprise value over our tangible and identifiable intangible assets and liabilities reported as goodwill on our consolidated balance sheet.
We have presented the balance sheet of Predecessor for comparative purposes only.
Because we conducted no business prior to December 31, 2010, we have presented the results of Predecessor for the years ended December 31, 2010 and 2009.
As a result of our adoption of fresh start reporting on December 31, 2010, certain reorganization and fresh start adjustments that are included in Predecessor's operating results for the year ended December 31, 2010 make the results of Predecessor not comparable.
In particular, the assets and liabilities of Predecessor have been adjusted to fair value and certain assets and liabilities not previously recognized in Predecessor's financial statements have been recognized under fresh start reporting.
Debt and Interest Expense On March 22, 2009, Predecessor filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code.
From March 22, 2009 through February 5, 2010, Predecessor operated the business and managed the properties as debtors-in-possession.
During this period, Predecessor did not record or pay interest expense.
Key Performance Indicators In assessing the performance of our business, we consider a variety of performance and financial measures.
The key measures for determining how our business is performing include gross gaming revenue, promotional allowances and marketing expenses and controllable operating costs.
Management measures the performance of each region based on segment EBITDA.
Key volume indicators such as slot win per unit, table games win per unit and promotional allowances as a percentage of gross gaming revenue are analyzed in connection with the casino operations.
Hotel occupancy and average daily rate are used to analyze the performance of our hotel operations.
Fuel and retail operations include revenues from gas stations and convenience stores that we own and operate.
Management measures the performance of fuel operations based on gallons sold and profit margin per gallon.
All of our casino properties focus on local customers with an emphasis on slot machine play.
Our slot route operation depended on the local population in Nevada where we operated.
Generally, we believe that our operating results for the years ended December 31, 2011, 2010 and 2009 have been adversely impacted by the weakened global economy.
Continued high unemployment rates and weak housing prices in the markets in which we operate have also negatively impacted our revenue.
Gaming revenues include revenues from slot machines and table games.
Gaming revenues are generally defined as gaming wins less gaming losses.
Our see more component of revenues is from our slot machines.
Promotional allowances consist primarily of food and beverage, hotel rooms and entertainment furnished gratuitously to customers.
The retail value of such services is included in the respective revenue classifications and is then deducted as promotional allowances.
Promotional allowances were 12% of gross revenues for the years ended December 31, 2011 and 2010 and 13% for the year ended December 31, 2009.
The promotional environment continues to be highly competitive and we continue to manage promotional expenses across our properties.
Gross revenues from fuel and retail operations represent the next most significant source of gross revenue, comprising approximately 19%, 16% and 6% of our gross revenues for the years ended December 31, 2011, 2010 and 2009, respectively.
Our fuel and retail operations include a gas station 55 and convenience store located at the Lakeside property in Osceola, Iowa; a gas station and convenience store at the Gold Ranch property in Verdi, Nevada; and a total of three gas stations and full service retail complex located at the Primm properties.
Food and beverage revenues are derived from food and beverage sales in the restaurants, bars and entertainment outlets.
Food and beverage revenues from outlets that we own and operated at our casino locations https://cetsolarstore.com/gambling/grand-victoria-gambling-boat.html approximately 10% of our gross revenues for the years ended December 31, 2011 and 2010 and approximately 14% of our gross revenues for the year ended December 31, 2009.
Lodging revenues from our hotel operations accounted for approximately 7%, 6% and 12% of our total revenues for the years ended December 31, 2011, 2010 and much minnesota gambling control forms valuable, respectively.
Lodging revenues are derived from rooms rented to guests.
Hotel revenues are recognized at the time the room is provided to the guest.
Other revenues are primarily derived from rental income from third-party leasing arrangements, management consulting fees, entertainment, lottery and ATM revenues at our casino properties and produced approximately 4% of our gross revenues for the years ended December 31, 2011 and 2010 and approximately 6% of our gross revenues for the year ended 2009.
Costs and Expenses Direct costs and expenses, including selling, general and administrative expenses for each of our properties are aggregated and included in Reportable Segment expenses discussed below.
Corporate expenses represent unallocated payroll, professional fees and other expenses that are not directly attributable to our Reportable Segment operations.
Corporate expenses as a percentage of gross revenues were 1.
The bad gambling luck in corporate expenses for the year ended December 31, 2011 when compared to the year ended December 31, 2010 was primarily attributable to write-offs, reserves and recoveries reported in the corporate segment.
Results of Operations by Reportable Segment We review results article source operations based upon Reportable Segments.
Reportable Segment EBITDA represents each property's earnings before interest expense, income taxes, depreciation and amortization, loss on impairment of assets and restructuring and reorganization costs.
In 2011, we terminated the lease under which we operated the two 18-hole Tom Fazio designed golf courses at Primm.
The golf courses, club house and restaurant are now leased to an independent third party by the owner of the land.
Southern Nevada revenue for the years ended December 31, 2009, 2010 and through June 2011, include revenue attributable to the golf courses while we operated them.
Southern Nevada operations accounted for 38%, 37% and 38% of the Company's gross revenues for the years ended December 31, 2011, 2010 and 2009 respectively.
The significant increases in fuel and retail revenue were driven by increases in both volume and retail price of regular and diesel fuel.
Increases in fuel and retail revenues at Primm were offset by reductions in casino revenue, as our feeder markets continue to see record high unemployment and foreclosure rates affecting the discretionary spend of our customer base.
Revenue declines at both Southern Nevada casinos were primarily attributable to casino slot revenue declines which have been adversely affected by an intense promotional environment and cautious consumer spending, resulting in a noticeable decline in the amount spent per visitor.
The Company has implemented and maintained an efficient cost structure to avoid erosion of operating margins while preserving marketing and promotional campaigns to ensure we maintain appropriate returns on player investment in the highly competitive locals gaming market.
During 2010, we closed a coffee shop that we operated at a loss and replaced it with a Denny's which is operated by a third party.
This change in operating strategy, coupled with other targeted expense reductions, allowed us to increase overall food and beverage profitability while adding a desirable amenity for our guests.
Other revenue includes revenues generated from entertainment, the lottery store and golf course.
Northern Nevada Northern Nevada operations include the Sands, Rail City, Gold Ranch and Dayton Casino.
Northern Nevada casino operations accounted for 13% of the Company's gross revenues for the years ended December 31, 2011 and 2010 and 12% of the Company's gross revenues for the year ended December 31, 2009.
The challenging economic environment and more intense competition for a reduced number of visitors, both from Native American gaming and within the Reno market, continue to be negative factors impacting business levels.
Successful targeted marketing campaigns mitigated the macro-economic challenges and allowed us to improve revenue across divisions at the properties where increases were seen.
The Sands revenue decline was primarily attributable to reduced average daily rate and occupancy in hotel operations.
The improvement in Segment EBITDA was driven by the revenue improvement across operating departments coupled with continued effective margin management.
Overall, Segment EBITDA operating margin improved to 16.
Revenues were up in all divisions due to slight increases in volume.
The Company implemented significant cost savings measures in 2010 with the largest savings seen in payroll and selling, general and administrative expenses.
Midwest Midwest operations include the St Jo Frontier Casino in Missouri, the Mark Twain Casino in Missouri and the Lakeside Casino Resort in Osceola, Iowa.
Midwest casino operations accounted for 20%, 21% and 19% of the Company's gross revenues for the years ended December 31, 2011, 2010 and 2009, respectively.
On June 27, 2011, the Company's casino located in St.
Joseph, Missouri was closed due to flooding of the Missouri River.
The casino reopened on September 29, 2011.
Our insurance policies provided coverage for property damage and losses, subject to a deductible.
Our insurance policies also provided coverage for interruption to our business, including lost profits subject to a seven day deductibleand reimbursement for other expenses and costs we incurred related to the damages and losses suffered.
The net gain is recorded in the line item write-offs, reserves and recoveries.
Although the net insurance recovery essentially replaces the lost EBITDA for the period the casino was closed, due to the income statement presentation of the gain, casino revenues and related expenses are not comparable for the periods presented.
See Note 12 to the Consolidated Financial Statements for further information regarding the flood.
The decrease in gross revenue is entirely attributable to the temporary closure of St Jo and the financial statement presentation of proceeds from our insurance carriers for lost profit during the closure period.
Revenue improvements at Mark Twain in 2011 established a new record achieving the highest gross revenues since the property's opening.
Our insurance policies provided coverage for interruption to our business, net of a seven day deductible, as well as property losses related to the flood.
The proceeds for property damage in excess of costs incurred and proceeds for business interruption proceeds have been recorded in the line item write-offs, recoveries and reserves in the accompanying statement of operations for the year ended December 31, 2011.
Management continues to closely monitor promotional and marketing spend per visitor in response to increased competition and an intense promotional market at each of the Midwest properties.
Gross revenue increases at the Missouri negative impact of on were driven by targeted marketing campaigns while gross revenue declines in Iowa were the result of continued weak economic conditions in the market.
Persistently high unemployment and foreclosure rates in Nevada continued to affect our local customer base and revenues derived from the slot route.
Revenue increases in Pahrump were primarily driven by targeted marketing campaigns implemented during the year.
Slot route expenses include fixed space lease payments to our chain store accounts and participation expenses, which represent revenue share arrangements with our street accounts.
High unemployment and continued macro-economic challenges in the Nevada market had an adverse affect link slot revenues in the chain and street locations in which we operate our slot route.
Segment EBITDA declines on the slot route were primarily the result of the fixed nature of space lease payments to our chain store accounts and participation expenses, which represent revenue share arrangements with our street accounts on declining revenue.
Black Hawk, Colorado Pursuant to the Black Hawk Agreement, upon the terms and subject to the conditions learn more here, the Company agreed to purchase the assets and assume certain liabilities of Golden Gaming's Golden Mardi Gras Casino, Golden Gates Casino and Golden Gulch Casino, each located in Black Hawk, Colorado the "Black Hawk Casinos".
The Company acquired the land and buildings of the Black Hawk Casinos and simultaneously leased the casinos back to Golden Gaming until such time that the Company gains approval for gaming licenses in Colorado.
The license approvals are anticipated in the second half of 2012.
Restricted cash consists primarily of cash held in reserve to satisfy Predecessor legal claims and cash held in escrow in accordance with the terms of the Golden Gaming asset purchase agreement.
As discussed in Note 15 to the consolidated financial statements, we expect the restricted cash held in reserve for legal claims against the Predecessor to be released to us in early 2012 in connection with an agreed upon settlement of the litigation.
Further, the restricted cash held in escrow for the Golden Gaming transaction was released to us on March 1, 2012.
Our business relies on cash flows from operations as our primary source of liquidity.
We do not currently have access to additional liquidity, if needed, through borrowings under our Credit Agreement.
Our Credit Agreement does permit us to incur limited indebtedness for trade payables and capital leases in the ordinary course of business.
We cannot provide assurance that, if required, we will be able to obtain necessary approval for additional financing under our Credit Agreement.
Our primary cash needs for the next twelve months of operations include interest payments on our debt and capital expenditures for refurbishment of some of our properties, acquisition of slot machines and other equipment required to maintain our facilities.
Required principal prepayment on our debt is based on excess cash flow as defined in the Credit Agreement and described below calculated at the end of each calendar year.
The most significant components of our working capital are current accounts receivable, accounts payable and other current liabilities.
Our liquidity position benefits from the fact that we generally collect cash from transactions with customers the same day or, in the case of credit or debit card transactions, within a few days of the related transaction.
Our cash flows are affected by a variety of factors, many of which are outside of our control, including regulatory issues, competition, financial markets and other general business conditions.
We believe that we will have sufficient liquidity through available cash, trade credit and cash flow to fund our cash requirements and maintenance capital expenditures for at least the next twelve months.
However, we cannot assure you that we will generate sufficient income and cash flow to meet all of our liquidity requirements.
Operating cash flows decreased in connection with the increases in accounts receivable and accounts payable during the year ended December 31, 2011.
have gambling tax revenue australia not cash provided by operating activities increased in connection with 62 the net income increase offset by reorganization and restructuring expenses paid during the year ended December 31, 2010.
Project capital expenditures were primarily associated with the construction of a new truck stop and completion of room remodels at Primm, Nevada.
Credit Agreement On December 31, 2010, we entered into the Credit Agreement.
The Senior Secured Loans bear interest at the rate of, at the Company's election, either i the LIBOR plus a margin of 7.
Both LIBOR and the alternative base rate are subject to a fixed floor of 3% and 4% respectively.
The principal amount of the Senior Secured Loans is payable on the maturity date, which shall be the earlier of December 31, 2015 or the acceleration of the Senior Secured Loans in accordance with the terms of the Credit Agreement.
The Company is also required to prepay the Credit Agreement with proceeds from sale of assets, certain casualty events subject repair and replacement rightsequity issuances, debt incurrences and certain extraordinary payments received outside of the ordinary course of business.
If prepayment is made, prepayment penalties apply if such prepayment is made i prior to the first anniversary filmcasino fotos the closing, 3%, ii between the first anniversary and the second anniversary of the closing, 2%, and iii between the second anniversary and the third anniversary of the closing, 1%.
The Credit Agreement contains customary covenants restricting certain activities including, but not limited to: the incurrence of additional indebtedness, the incurrence or creation of liens on any of our properties, the ability to acquire or dispose of assets and the ability to make loans or other investments.
In addition, the Company is required by the financial covenants as of December 31, click at this page to maintain a Leverage Ratio, as defined, of not greater than 6.


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