Century Casinos has reported a ‘mixed quarter’ in Poland for Casinos Poland where slot revenue was up 40 per cent but table games revenue was down by 30 per cent. Casinos Poland operates 505 machines and 81 tables at nine locations throughout the country.
Speaking at the conference call where the operator released its financial figures for the first quarter, Peter Hoetzinger, Co Chief Executive Officer of Century Casinos, said: “Slot revenue showed continued strong growth with coin-in up 50 per cent and revenue up 40 per cent. The increase in slot revenue was broad-based. It’s pretty much all of our locations and it was due to better slot product on the floor, due to the new player loyalty program and also due to the closing of the last league of slot arcades a few months ago.”
“On the gaming tables, there was real growth in money wager. Drop was up over two per cent at a much lower whole percentage compared to last year, resulted in a 30 per cent decline in table game revenue. The overall EBITDA margin increased slightly to 14 per cent,” he added. “We work hard to keep Casinos Poland growing and to keep operating margins close to where they are today, despite of the higher compensation expenses going forward.”
The company said it remains in the dark over how changes to the taxation of tipping will hit its profits.
Mr. Hoetzinger explained: “The Supreme Administration Court of Poland ruled in early March that Casinos Poland, acting as a taxpayer, must calculate, collect and pass on to the Polish Tax Authorities personal income tax on all tips received by employees from casino customers. We have still not received the written ruling from the court, and therefore we have not been in a position to record the proper additional expense related to this ruling. We are evaluating changes to payroll on a go-forward basis, but no changes can be and will be made until after their written verdict is received and analyzed. This is frustrating for us.”
“So far, we believe that the contingent liability we had established is sufficient to cover the open tax periods relating to personal income tax through the end of Q1, if the Polish IRS were to continue with the tax audits. Until a written verdict is received, we cannot estimate the probability of additional employment tax obligations being assessed based on the decision relating to personal income tax.”