Welcome to the Century Casinos Q2 2020 Earnings Conference call. This call will be recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to introduce our host for today's call, Mr. Peter Hoetzinger. Mr. Hoetzinger, you may begin.

Good morning, everyone and thank you for joining our earnings call. With me on the call are my Co-CEO and the Chairman of Century Casinos, Erwin Haitzmann, as well as, our Chief Financial Officer, Margaret Stapleton. As always, before we begin, we would like to remind you that we will be discussing forward-looking information which involves a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings and encourage you to review these filings. In addition, throughout our call, we'll refer to several non-GAAP financial measures including, but not limited to, adjusted EBITDA. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our earnings release and SEC filings available in the Investors section of our website at cnty.com. I will now provide an overview of the company's status quo and the review the financial results for the second quarter 2020. After that, there will be a question-and-answer session. Following the temporary closure of properties in mid-March, we took immediate steps to reduce operating costs and to ensure that our company preserved its financial flexibility to manage through the shutdown. We reduced expenses throughout the company, temporarily laid off and furloughed approximately 90% of our team members, except for Poland where all employees continued to be paid reduced salaries based on local employment laws. We continued to pay benefits to our US and Canadian employees, including part time employees, and senior executive management agreed to voluntary pay cuts. When the first reopening scenarios emerged, of focus from day one…

[Operator Instructions] Our first question is from Chad Beynon with Macquarie. Your line is open.

Thanks. Good morning. This is Jordan Bender on for Chad. Hope all is well. What is you seeing with retail sports betting? And how should we think about your opportunity with iGaming and sports betting in your markets with the legalized product?

Jordan, we have sports betting licenses for our Colorado properties. We have entered into two agreements, one with Circa Sports, which we just launched their app recently and another agreement Bet 365 they will launch later. And with one more license available and have interest from a handful of providers and we're negotiating that deal as we speak. In the other markets in West Virginia, we have sports betting and iGaming already legalized. We are partnering with William Hill, and they've told us that before the end of this year, we go live with both sports betting and iGaming. And in Missouri, it has not been legalized yet. But we have - I think there's a strong indication that it will get legalized soon, and we look forward also to working with William Hill in Missouri.

Okay. And then you obviously added a few solid assets between - at the end of 2019, and you announced this move up in Canada earlier in the week, last week. Do you think you've rightsized your portfolio at this time? Are you still have more to go on getting rid of some of your non-core assets?

No, I think we are happy with our portfolio there. We have two very strong performing racinos up there, one in Edmonton, one in Calgary, and the other casinos are in very good locations in strong spots. And I don't see any significant change as of today.

Okay. And if I can get one more here. Can you update us on the Colorado Max bet limit that's coming up on the ballot here November? I mean, do you guys have any thoughts around what that could possibly do for the business? Obviously, if that were the past, that would be something positive for the company here.

Yeah, but no, we've - it's tough to say, it's too early to say and we don't have any, like official guidance that we are able to give out with regard to that. Erwin, would you like to comment further?

No, I think it's exactly what you said.

Okay. Thank you, guys. I will pass it off.

Thanks, Jordan.

[Operator Instructions] Your next question is from Brad Boyer with Stifel. Your line is open.

Hey. Good morning, guys. Thanks for all the additional color on the quarter, very helpful. My first question is just around the preliminary July metrics that you guys presented. How are you thinking about those numbers in the context of sort of a go forward basis? Obviously, you know, there's a lot of moving parts right now. You know, you're obviously getting the benefit of some favorable revenue mix and some operating efficiencies, but - and then at the same time, on the flip side, you're operating with limited capacity. So, you know, how are you thinking about, you know, what those numbers might look like a couple months down the road. Do you think that sort of some of the margin performance that you're producing today is sustainable, do you expect margins to compress a little as more of the business comes back online? Just any color you can provide around that?

Yeah. I think for the short term, like next one or two months, we don't see any significant change as assuming the situation with regard to COVID gets better then our competitors and also us will most likely open some of the other amenities. And that will most likely mean that overall and absolute revenue will grow. But as these other amenities have lower operating margins, you will see higher revenue on the one side, but the operating margins will probably not be as high as they currently are. And with regard to the promotional environment, I think everybody is watching each other to see if everybody stays conservative and relatively quiet or if somebody jumps out and starts some aggressive campaigning, which we don't see at the moment. That's my first take on it. Erwin, would you like to add to that?

Yeah, I agree with what you said and I would like to add. We have a little bit of runway with regard to measures that we can take on the floor. To give you one example, we have received approval in West Virginia to make part of our floor smoking again. So as of today, we will have 118 slot machines in a smoking area. And that is something that will help. At the same time, we still are working on getting more slot machines, in total open all across Canada. So hopefully get from 50% to a higher percentage of slots actually being in operation. So on the revenue side, we think there is still some room to grow also in the shorter term.

Okay, that's all very helpful. And then, you know, I guess, obviously, just, you know, would you guys being a little bit closer to Poland and I know, you know, over the last couple months Peter you provided some good perspective on that market. Could you just give us an update sort of you know, where things stand with respect to business getting back to kind of “normal” in Poland. I know sort of the pacing of COVID recovery and what have you may be a little bit different in Europe. Just any color around that and sort of how that plays into maybe, you know, Warsaw, sort of you know, getting back on track here?

Most of the travel restrictions are gone now, and tourism has started to come back. But obviously as we go - as we are in the summer months, July, August, to mid September was always a slower period of time in Poland because many ports go away for some of vacation and business tourism isn't in full swing yet. But it is getting better, hotels are getting high occupancy like week-by-week now. And that helps us.

Okay. And then last one, just, you know, could you give us a little bit of an update as to where your appetite stands for, you know, growing the portfolio at this point. I mean, obviously, you know, there are some US based assets that, you know, are being sort of publicly shopped at the moment. Just any thoughts around your desire to kind of, you know, continue to grow the portfolio at this point?

Yes, we are watching that very closely and try to position ourselves right to possibly look at it very, very seriously, towards the end of this year and next. And as you've seen, we are trying to look at our liquidity position and see where we can get into the right position to make a move if an opportunity is good for us. So that's certainly something that we are looking at.

Perfect. Thanks, Peter.

We have no further questions. I turn the call back to moderator for concluding remarks.

Thank you for interest in Century Casinos and your participation in the call. For a recording of the call, please visit the financial results section of our website at cnty.com. You have our best wishes for good health. Thanks again, and goodbye.

This concludes today's conference call. Thank you for attending.