Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes | 7.INCOME TAXES
Income tax expense or benefits are recorded relative to the jurisdictions that recognize book earnings. For the three months ended March 31, 2026, the Company recognized income tax expense of $0.9 million on pre-tax loss of ($13.9) million, representing an effective income tax rate of (6.6%) compared to income tax expense of $0.5 million on pre-tax loss of ($18.4) million, representing an effective income tax rate of (2.6%) for the same period in 2025.
For the three months ended March 31, 2026, the Company computed an annual effective tax rate using forecasted information. Based on current forecasts, the Company’s effective tax rate is expected to be highly sensitive to changes in earnings. The Company concluded that computing its effective tax rate using forecasted information would be appropriate in estimating tax expense for the three months ended March 31, 2026.
A number of items caused the effective income tax rate for the three months ended March 31, 2026 to differ from the US federal statutory income tax rate of 21%, including certain nondeductible business expenses in Poland, various exchange rate benefits, and income attributable to the non-controlling interest holder of Smooth Bourbon, which is taxed as a partnership for US federal income tax purposes. Further, the Company expects to incur withholding tax on future repatriation of current earnings in certain non-US subsidiaries.
During the quarter, the Company established a valuation allowance against the net deferred tax assets of CPL, due to recent cumulative losses. This resulted in an increase in income tax expense of $0.3 million for the three months ended March 31, 2026. The Company continues to maintain a full valuation allowance on deferred tax assets for CMR, CRM and Century Resorts International Ltd. Additionally, the Company maintains a full valuation allowance on certain net deferred tax assets in the United States, which was initially recorded in the second quarter of 2024.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA extends and makes permanent several key provisions of the Tax Cuts and Jobs Act of 2017 previously set to expire at the end of 2025. This new legislation also introduces modifications to international taxation. The Company does not anticipate material US cash taxes in 2025, and this legislation confirms the Company’s ability to maintain minimal US cash taxes for 2026. The Company does not anticipate the OBBBA will have a material impact on its income tax expense for 2026.
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