(Former name, former address and former fiscal year, if changed since last report)

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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s Common Stock, $0.00001 par value per share, outstanding as of November ~~6, 2018~~4, 2019 was ~~77,391,244.~~

	September 30,			December 31,		September 30,				December 31,
	2018			2017		2019				2018
		(unaudited)					(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$		164,086	$	134,596	$		208,831		$	230,752
Restricted cash			1,622		3,267
Restricted cash and investments								22,242			24,892
Marketable securities			17,057		17,631			20,433			16,957
Accounts receivable, net			42,002		45,797			48,150			60,169
Due from affiliates			187		243			2,823			327
Inventories			15,258		16,870			17,684			20,595
Prepaid income taxes			504		4,805
Prepaid expenses and other			29,578		27,823
Income taxes receivable								—			15,731
Prepaid expenses								37,429			48,002
Assets held for sale			155,914		—			605,947			155,771
Total current assets			426,208		251,032			963,539			573,196
Escrow cash			604,100		—
Investment in and advances to unconsolidated affiliates								129,796			1,892
Property and equipment, net			1,488,866		1,502,817			2,635,111			2,882,606
Gaming licenses and other intangibles, net			1,121,573		996,816			1,118,855			1,362,006
Goodwill			788,146		747,106			909,717			1,008,316
Non-operating real property			17,880		18,069
Right-of-use assets								245,344			—
Other assets, net			30,401		30,632			78,879			83,446
Total assets	$		4,477,174	$	3,546,472	$		6,081,241		$	5,911,462
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$		447	$	615	$		238		$	462
Accounts payable			33,307		34,778			50,024			58,524
Due to affiliates			19		—
Accrued property, gaming and other taxes			43,339		43,212			54,628			51,931
Accrued payroll and related			58,567		53,330			72,999			87,332
Accrued interest			37,626		25,607			34,637			42,780
Income taxes payable			268		171			15,425			47,475
Short-term lease obligation								21,963			—
Accrued other liabilities			77,495		66,038			108,999			102,982
Liabilities related to assets held for sale			10,868		—			56,058			10,691
Total current liabilities			261,936		223,751			414,971			402,177
Long-term financing obligation to GLPI								967,982			959,835
Long-term debt, less current portion			2,967,434		2,189,578			2,950,955			3,261,273
Deferred income taxes			194,490		162,967			224,877			200,010
Long-term lease obligation								229,297			—
Other long-term liabilities			17,163		28,579			166,381			59,014
Total liabilities			3,441,023		2,604,875			4,954,463			4,882,309
Commitments and contingencies (Note 11)
Commitments and contingencies (Note 14)
STOCKHOLDERS' EQUITY:
Common stock, 200,000,000 and 100,000,000 shares authorized, 77,391,244 and 76,825,966 issued and outstanding, par value $0.00001 as of September 30, 2018 and December 31, 2017, respectively			1		—
Common stock, 200,000,000 shares authorized, 77,545,678 and 77,215,066 issued and outstanding, net of treasury shares, par value $0.00001 as of September 30, 2019 and December 31, 2018, respectively								1			1
Paid-in capital			745,745		746,547			756,225			748,076
Retained earnings			290,326		194,971			379,682			290,206
Treasury stock at cost, 223,823 shares held at September 30, 2019 and December 31, 2018								(9,131	)		(9,131	)
Accumulated other comprehensive income			79		79			1			1
Total stockholders’ equity			1,036,151		941,597			1,126,778			1,029,153
Total liabilities and stockholders’ equity	$		4,477,174	$	3,546,472	$		6,081,241		$	5,911,462

The accompanying condensed notes are an integral part of these consolidated financial statements.

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2018			2017			2018			2017			2019			2018			2019			2018
REVENUES:
Casino	$	362,877		$	347,537		$	1,046,010		$	764,684
Pari-mutuel commissions		5,292			5,111			14,407			9,859
Casino and pari-mutuel commissions													$	458,000		$	368,169		$	1,385,848		$	1,060,417
Food and beverage		58,153			59,537			164,644			141,667			78,435			58,153			229,072			164,644
Hotel		44,780			45,962			114,447			99,545			94,318			44,780			237,493			114,447
Other		16,151			14,731			44,739			35,142			32,428			16,151			83,712			44,739
Net revenues		487,253			472,878			1,384,247			1,050,897			663,181			487,253			1,936,125			1,384,247
EXPENSES:
Casino		175,333			169,322			506,536			389,010
Pari-mutuel commissions		4,729			4,657			13,022			9,894
Casino and pari-mutuel commissions														202,555			180,062			616,101			519,558
Food and beverage		45,381			51,220			134,927			120,041			60,406			45,381			180,288			134,927
Hotel		13,977			15,513			40,178			36,862			27,315			13,977			76,101			40,178
Other		9,315			9,632			25,030			22,702			12,092			9,315			34,064			25,030
Marketing and promotions		23,122			26,439			66,255			58,099			33,292			23,122			97,673			66,255
General and administrative		75,599			75,650			223,546			168,339			122,767			75,599			360,086			223,546
Corporate		9,217			7,718			33,018			21,734			13,014			9,217			50,819			33,018
Impairment charges		3,787			—			13,602			—			—			3,787			958			13,602
Depreciation and amortization		35,760			29,122			99,204			69,635			52,592			35,760			166,882			99,204
Total operating expenses		396,220			389,273			1,155,318			896,316			524,033			396,220			1,582,972			1,155,318
(Loss) gain on sale or disposal of property and equipment		(110	)		4			(393	)		(51	)		(284	)		(110	)		21,668			(393	)
Proceeds from terminated sale		5,000			—			5,000			—
Proceeds from terminated sales														—			5,000			—			5,000
Transaction expenses		(4,091	)		(2,094	)		(10,043	)		(89,172	)		(12,442	)		(4,091	)		(21,628	)		(10,043	)
Equity in loss of unconsolidated affiliates		(63	)		(23	)		(116	)		(305	)
Loss from unconsolidated affiliates														(1,515	)		(63	)		(2,132	)		(116	)
Operating income		91,769			81,492			223,377			65,053			124,907			91,769			351,061			223,377
OTHER EXPENSE:
Interest expense, net		(34,085	)		(29,183	)		(96,579	)		(69,380	)		(71,897	)		(34,085	)		(217,205	)		(96,579	)
Loss on early retirement of debt, net		—			(10,030	)		(162	)		(37,347	)		(1,204	)		—			(1,204	)		(162	)
Unrealized gain on restricted investments														3,318			—			460			—
Total other expense		(34,085	)		(39,213	)		(96,741	)		(106,727	)		(69,783	)		(34,085	)		(217,949	)		(96,741	)
Net income (loss) before income taxes		57,684			42,279			126,636			(41,674	)
(Provision) benefit for income taxes		(19,980	)		(12,592	)		(31,281	)		26,116
Net income (loss)	$	37,704		$	29,687		$	95,355		$	(15,558	)
Net income (loss) per share of common stock:
Income before income taxes														55,124			57,684			133,112			126,636
Provision for income taxes														(18,069	)		(19,980	)		(38,892	)		(31,281	)
Net income													$	37,055		$	37,704		$	94,220		$	95,355
Net income per share of common stock:
Basic	$	0.49		$	0.39		$	1.23		$	(0.24	)	$	0.48		$	0.49		$	1.21		$	1.23
Diluted	$	0.48		$	0.38		$	1.22		$	(0.24	)	$	0.47		$	0.48		$	1.20		$	1.22
Weighted average basic shares outstanding		77,522,664			76,902,070			77,445,611			63,821,705			77,721,353			77,522,664			77,657,553			77,445,611
Weighted average diluted shares outstanding		78,283,588			77,959,689			78,208,040			63,821,705			78,449,747			78,283,588			78,588,517			78,208,040

The accompanying condensed notes are an integral part of these consolidated financial statements.

	Common Stock													Treasury Stock
	Shares			Amount		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Shares		Amount			Total
Balance, December 31, 2018		77,438,889		$	1	$	748,076		$	290,206		$	1		223,823	$	(9,131	)	$	1,029,153
Cumulative change in accounting principle, net of tax		—			—		—			(4,744	)		—		—		—			(4,744	)
Issuance of restricted stock units		330,641			—		4,948			—			—		—		—			4,948
Net income		—			—		—			38,229			—		—		—			38,229
Shares withheld related to net share settlement of stock awards		(106,542	)		—		(4,322	)		—			—		—		—			(4,322	)
Balance, March 31, 2019		77,662,988		$	1	$	748,702		$	323,691		$	1		223,823	$	(9,131	)	$	1,063,264
Issuance of restricted stock units		169,248			—		6,509			—			—		—		—			6,509
Net income		—			—		—			18,936			—		—		—			18,936
Shares withheld related to net share settlement of stock awards		(65,312	)		—		(3,190	)		—			—		—		—			(3,190	)
Balance, June 30, 2019		77,766,924		$	1	$	752,021		$	342,627		$	1		223,823	$	(9,131	)	$	1,085,519
Issuance of restricted stock units		3,377			—		4,266			—			—		—		—			4,266
Net income		—			—		—			37,055			—		—		—			37,055
Shares withheld related to net share settlement of stock awards		(800	)		—		(62	)		—			—		—		—			(62	)
Balance, September 30, 2019		77,769,501		$	1	$	756,225		$	379,682		$	1		223,823	$	(9,131	)	$	1,126,778

Balance, December 31, 2017		76,825,966		$	—	$	746,547		$	194,971		$	79		—	$	—		$	941,597
Issuance of restricted stock units		645,047			—		3,679			—			—		—		—			3,679
Net income		—			—		—			20,855			—		—		—			20,855
Shares withheld related to net share settlement of stock awards		(229,898	)		—		(7,502	)		—			—		—		—			(7,502	)
Balance, March 31, 2018		77,241,115		$	—	$	742,724		$	215,826		$	79		—	$	—		$	958,629
Issuance of restricted stock units		64,833			1		3,471			—			—		—		—			3,472
Net income		—			—		—			36,796			—		—		—			36,796
Exercise of stock options		50,336			—		—			—			—		—		—			—
Shares withheld related to net share settlement of stock awards		(19,674	)		—		(2,175	)		—			—		—		—			(2,175	)
Balance, June 30, 2018		77,336,610		$	1	$	744,020		$	252,622		$	79		—	$	—		$	996,722
Issuance of restricted stock units		61,535			—		2,495			—			—		—		—			2,495
Net income		—			—		—			37,704			—		—		—			37,704
Exercise of stock options		17,000			—		154			—			—		—		—			154
Shares withheld related to net share settlement of stock awards		(23,901	)		—		(924	)		—			—		—		—			(924	)
Balance, September 30, 2018		77,391,244		$	1	$	745,745		$	290,326		$	79		—	$	—		$	1,036,151

The accompanying condensed notes are an integral part of these consolidated financial statements.

	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	95,355		$	(15,558	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income							$	94,220		$	95,355
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		99,204			69,635			166,882			99,204
Amortization of deferred financing costs, discount and debt premium		3,753			5,041			13,861			3,753
Deferred revenue								(4,966	)		—
Unrealized gain on restricted investment								(460	)		—
Loss on early retirement of debt		162			37,347			1,204			162
Lease amortization								2,367			1,285
Stock compensation expense		9,645			4,454			15,723			9,645
(Gain) loss on sale or disposal of property and equipment								(21,668	)		393
Impairment charges		13,602			—			958			13,602
Provision (benefit) for deferred income taxes		28,345			(25,560	)
Provision for deferred income taxes								26,080			28,345
Loss from unconsolidated affiliates								2,132			116
Other		1,626			789			1,204			1,119
Change in operating assets and liabilities:
Sale of trading securities		573			272
Accounts receivable		(441	)		(6,937	)		10,147			(441	)
Inventory		380			17
Prepaid expenses and other assets		649			2,054			5,489			1,602
Interest payable		(6,563	)		(1,441	)
Income taxes payable		4,398			(1,268	)		(30,318	)		4,398
Accounts payable and accrued liabilities		12,760			2,786
Accounts payable and accrued other liabilities								(22,772	)		4,910
Net cash provided by operating activities		263,448			71,631			260,083			263,448
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net		(89,082	)		(52,930	)		(135,016	)		(89,082	)
Proceeds from sale of property and equipment		920			—
Sale of restricted investments								4,962			—
Proceeds from sale of businesses, property and equipment, net of cash sold								169,361			920
Net cash used in business combinations		(306,274	)		(1,313,052	)		—			(306,274	)
Investment in and loans to unconsolidated affiliate		(698	)		—
Net cash used in investing activities		(395,134	)		(1,365,982	)
Investment in and loans to unconsolidated affiliates								(815	)		(698	)
Net cash provided by (used in) investing activities								38,492			(395,134	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Term Loan		—			1,450,000
Proceeds from issuance of 6% Senior Notes due 2025		—			875,000
Proceeds from issuance of 6% Senior Notes due 2026		600,000			—			—			600,000
Borrowings under Revolving Credit Facility		215,358			207,953
Payments under Term Loan		—			(866,750	)
Payments under Revolving Credit Facility		(35,358	)		(236,953	)
Debt premium proceeds		—			27,500
Payments on Term Loan								(70,000	)		—
Net (payments) borrowings under Revolving Credit Facility								(245,000	)		180,000
Debt issuance costs		(5,401	)		(51,338	)		(458	)		(5,401	)
Taxes paid related to net share settlement of equity awards		(10,601	)		(10,927	)		(7,574	)		(10,601	)
Proceeds from exercise of stock options		154			2,900			—			154
Payments on other long-term payables		(501	)		(370	)		(372	)		(501	)
Net cash provided by financing activities		763,651			1,397,015
Net cash (used in) provided by financing activities								(323,404	)		763,651

Increase in cash, cash equivalents and restricted cash		631,965			102,664
(Decrease) Increase in cash, cash equivalents and restricted cash								(24,829	)		631,965
Cash, cash equivalents and restricted cash, beginning of period		147,749			63,444			246,691			147,749
Cash, cash equivalents and restricted cash, end of period	$	779,714		$	166,108		$	221,862		$	779,714

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	164,086		$	134,903		$	208,831		$	164,086
Restricted cash		1,622			21,308			6,437			1,622
Restricted and escrow cash included in other noncurrent assets		614,006			9,897			6,594			614,006
Total cash, cash equivalents and restricted cash	$	779,714		$	166,108		$	221,862		$	779,714

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	(86,964	)	$	(67,840	)	$	213,719		$	86,964
Income taxes refunded (paid)		3,953			(714	)
Income taxes paid, net								43,053			3,953
NON-CASH FINANCING ACTIVITIES:
Net change in payables for capital expenditures		(5,914	)		2,286
Payables for capital expenditures								11,292			11,190

The accompanying condensed notes are an integral part of these consolidated financial statements.

The accompanying unaudited consolidated financial statements include the accounts of Eldorado Resorts, Inc. (“ERI” or the “Company”), a Nevada corporation formed in September 2013, and its consolidated subsidiaries. The Company acquired Mountaineer, Presque Isle Downs and Scioto Downs in September 2014 pursuant to a merger with MTR Gaming Group, Inc. (“MTR Gaming”) and in November 2015 it acquired Circus Reno and the interests in the Silver Legacy that it did not own prior to such date.

On May 1, 2017, the Company completed its acquisition of Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) pursuant to the Agreement and Plan of Merger dated as of September 19, 2016 (“Isle Merger”) with ~~Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”).~~Isle. As a result of the Isle Merger, Isle became a wholly-owned subsidiary of ERI.

On August 7, 2018, the Company completed its ~~previously announced~~ acquisition of the outstanding partnership interests of Elgin Riverboat Resort – Riverboat Casino d/b/a Grand Victoria Casino, an Illinois partnership (“Elgin”), the owner of Grand Victoria Casino, located in Elgin, Illinois (the “Elgin Acquisition”). On October 1, 2018, the Company completed its acquisition of Tropicana Entertainment, Inc. (“Tropicana”), and added 7 properties to its portfolio (the “Tropicana Acquisition”).

AsOn January 11, 2019 and March 8, 2019, respectively, the Company closed on its sales of ~~September 30, 2018, ERI owned and operated the following properties:~~

~~In addition, Scioto Downs, through its subsidiary RacelineBet, Inc., also operates Racelinebet.com, a national account wagering service that offers online and telephone wagering on horse races~~is reported) as ~~a marketing affiliate of TwinSpires.com, an affiliate of Churchill Downs Incorporated.~~

~~The Company has entered into definitive agreements to sell Presque Isle Downs and Lady Luck Nemacolin.~~

The Elgin Acquisition was made pursuant to a purchase agreement dated as of April 15, 2018, by and among the Company, Elgin Holdings I LLC, a Delaware limited liability company and a direct wholly owned subsidiary of the Company, Elgin Holdings II LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of the Company, MGM Elgin Sub, Inc., a Nevada corporation, Illinois RBG, L.L.C., a Delaware limited liability company and Elgin. As a result of the Elgin Acquisition, Elgin became an indirect wholly-owned subsidiary of the Company. The Company purchased Elgin for $327.5 million and an estimated $1.4 million working capital adjustment subject to finalization within 100 days of the Elgin Acquisition date. The Elgin Acquisition was financed using cash on hand and borrowings under the Company’s revolving credit facility.

Transaction expenses attributed to the Elgin Acquisition are reported on the accompanying statement of operations and totaled $2.1 million and $3.4 million for the three and nine months ended September 30, 2018, respectively. As of September 30, ~~2018, $0.2 million of accrued costs and expenses related to the Elgin Acquisition are included in accrued other liabilities on the accompanying consolidated balance sheet.~~2019:

Certain reclassifications of prior year presentations have been made to conform to the current period presentation.

The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, all of which are normal and recurring, considered necessary for a fair ~~presentation and have been included herein.~~presentation. The results of operations for these interim periods are not necessarily indicative of the operating results for other quarters, for the full year or any future period.

The executive decision maker of our Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of our casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Prior to the Elgin ~~Acquisition,~~and Tropicana acquisitions, the Company’s principal operating activities occurred in ~~four~~4 geographic regions and reportable segments. Following the Elgin ~~Acquisition~~ and ~~in anticipation of the acquisition of~~ Tropicana ~~(see Note 3),~~acquisitions, a fifth segment, Central, ~~has been~~was added. ~~As of and for the three and nine months ended September 30, 2018, the Central segment only contains Elgin.~~ The reportable segments are based on the similar characteristics of the operating segments within the regions in which they operate: West, Midwest, South, East, and ~~Central~~Central. (See ~~Note 13~~the table above for a listing of properties included in each segment).

~~The financial information included for periods prior to our acquisitions of Isle and Elgin are those of ERI and its subsidiaries.~~ The presentation of information herein for periods prior to our acquisitions of ~~Isle~~Elgin and ~~Elgin~~Tropicana and after our ~~acquisitions~~dispositions of Presque Isle Downs and ~~Elgin~~Nemacolin are not fully comparable because the results of operations for ~~Isle~~Elgin and ~~Elgin~~Tropicana are not included for periods prior to ~~our acquisitions~~August 7, 2018 and October 1, 2018, respectively. Additionally, the results of operations for Presque Isle Downs and ~~Elgin.~~Nemacolin are not included for periods after the sales date. The Company closed on its sales of Presque Isle Downs and Nemacolin in January 2019 and March 2019, respectively. (See Note 5).

These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017 and Form 8-K filed on September 5, 2018, which recast the Company’s form 10-K for the year ended December 31, 2017 for adoption of the new revenue recognition standard.~~2018.

Recently Issued Accounting Pronouncements ~~– New Developments and Adoptions of New Accounting Standards~~

In ~~May 2014 (amended January 2017)~~February 2016 (as amended through December 2018), the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” (ASC Topic 606) which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and eliminates existing industry guidance, including revenue recognition guidance specific to the gaming industry. The core principle of the revenue model indicates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

~~The Company adopted this standard effective January 1, 2018, and elected to apply the full retrospective adoption method. The most significant impacts of the adoption are summarized below in Note 2.~~

In November 2016, ASU No. 2016-18 was issued related to the inclusion of restricted cash in the statement of cash flows. This new guidance requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalent. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017. The Company retrospectively adopted this guidance on December 31, 2017. Upon adoption, the Company included a reconciliation of Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total shown in the Consolidated Statements of Cash Flows. Adoptions of this guidance had no other impact on the Consolidated Financial Statements or disclosures.

Certain amounts have been retrospectively reclassified for the three and nine months ended September 30, 2017 to conform to the current period presentation and reflect the change in the Company’s Consolidated Statements of Cash Flows required with the adoption of ASU No. 2016-15.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations – Clarifying the Definition of a Business.” This amendment is intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. Amendments in this update provide a more robust framework to use in determining when a set of assets and activities is a business and to provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The amendments are effective for interim and annual periods beginning after December 15,

2017, with early adoption allowed as follows: (1) transactions for which acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance and (2) transactions in which a subsidiary is deconsolidated or a group of assets is derecognized that occur before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company adopted this accounting standard during the first quarter of 2018, which did not have an impact on our consolidated financial statements, and will result in future acquisitions which do not involve substantive processes being accounted for as asset acquisitions.

~~In February 2016, the FASB issued~~ ASU No. 2016-02 codified as Accounting Standards Codification (“ASC”) 842, Leases, (“ASC 842”) which addresses the recognition and measurement of leases. Under the new guidance, for all leases, ~~(with the exception of short-term leases),~~ at the commencement date, lessees ~~will be~~were required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a ~~lease,~~lease. The liability is measured on a discounted ~~basis, and~~basis. Lessees also recognized a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to ~~use, or~~ control the use of a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Further, the new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and liabilities, which no longer provides a source for off balance sheet financing. The effective date was for ~~this update is for the~~ annual and interim periods beginning after December 15, ~~2018 with early adoption permitted. This ASU requires~~2018. ASC 842 required a transition adoption election using either 1) a modified retrospective approach with periods prior to the adoption date being recast or 2) a prospective ~~adoption~~ approach with a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods ~~not recast.~~ continuing to be reported under prior lease accounting guidance.

The Company ~~anticipates adopting this standard~~adopted ASC 842 on January 1, 2019 using the prospective ~~adoption~~ approach, and ~~electing~~therefore, comparative periods will continue to be reported under prior lease accounting guidance consistent with previously issued financial statements. The Company elected the package of practical expedients ~~allowed~~permitted under the ~~standard.~~ transition guidance within ASC 842, which among other things, allowed us to carry forward the historical lease identification, lease classification and treatment of initial direct costs for leases entered into prior to January 1, 2019. The Company also made an accounting policy election to not record short-term leases with an initial term of 12 months or less on the balance sheet for all classes of underlying assets. The Company has also elected to not adopt the hindsight practical expedient for determining lease terms.

~~Currently, the Company does not have any material capital leases nor any material~~

The Company’s operating leases, ~~where~~in which the Company is the ~~lessor. Our operating leases, primarily relating to certain ground leases and slot machines or VLTs, will be~~lessee, are recorded on the balance sheet as ana ROU asset with a corresponding lease liability. The lease liability ~~which~~ will be ~~amortized using~~remeasured each reporting period with a corresponding change to the ~~effective interest rate method as payments~~ROU asset. The adoption of this guidance did not have an impact on net income; however, upon adoption the Company recorded a cumulative adjustment to our retained earnings of $4.7 million, net of tax, primarily related to the Company’s lease and management agreements at its Bettendorf location. (See Note 2). Adoption of this guidance did not have a material impact on the Company’s other financing leases.

In June 2016 (modified in November 2018), the FASB issued ASU No 2016-13, Financial Instruments – Credit Losses related to timing of recognizing impairment losses on financial assets. The new guidance lowers the threshold on when losses are ~~made.~~incurred, from a determination that a loss is probable to a determination that a loss is expected. The ~~ROU asset~~change in guidance will be ~~depreciated~~applicable to our evaluation of the CRDA investments (see Note 8). The guidance is effective for interim and annual periods beginning after December 15, 2019. Adoption of the guidance requires a modified-retrospective approach and a cumulative adjustment to retained earnings to the first reporting period that the update is effective. The Company will adopt the new guidance on ~~a straight-line basis and recognized as lease expense.~~January 1, 2020. The Company is evaluating the qualitative and quantitative effects of ~~adoption of ASU 2016-02 are still being analyzed, and the Company is in the process of evaluating the full effect, including the total amount of both capital and operating leases,~~ the new guidance ~~will have~~and currently does not expect a cumulative effect on ~~our consolidated financial statements.~~

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”. This amendment modifies the disclosure requirements on fair value measurements and is effective for annual and interim periods beginning after December 15, 2019, with early adoption allowed. The Company is still evaluating the qualitative and quantitative effect of the new guidance will have on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, ~~“Customer’s~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service ~~Contract”. The amendments in this update align~~Contract. This amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This generally means that an intangible asset is recognized for the software license and, to the extent that the payments attributable to the software license are made over time, a liability also is recognized. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. This generally means that the fees associated with the hosting element (service) of the arrangement are expensed as incurred. The amendment is effective for annual and interim periods beginning after December 15, 2019, with early adoption allowed. The Company will adopt the new guidance on January 1, 2020. The Company is ~~still~~evaluating the qualitative and quantitative effects of the new guidance and currently does not believe it will have a significant impact on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No 2018-14, Compensation –Retirement Benefits – Defined Benefit Plans – General. This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020 with early adoption allowed. The Company anticipates adopting this amendment during the first quarter of 2021, and currently does not expect it to have a significant impact on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This amendment modifies the disclosure requirements for fair value measurements and is effective for annual and interim periods beginning after December 15, 2019 with early adoption allowed. The Company will adopt the new guidance on January 1, 2020. The Company is evaluating the qualitative and quantitative effect of the new guidance will have on ~~our consolidated financial statements.~~its Consolidated Financial Statements.

The Company’s management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the ~~Securities~~contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and ~~Exchange Commission issued a final rule “Disclosure Update~~(b) the right to direct the use of the asset.

Finance and ~~Simplification”. The final rule~~operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is ~~intended to update existing disclosure requirements that have become redundant, duplicative, overlapping, outdate or superseded and to facilitate the disclosure~~not determinable in most of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. Included in the final rule is a requirement to present changes in stockholders equity in the Company’s ~~10-Q filings. The final rule is effective for annual filings on November 5, 2018 and for interim periods beginning after the effective date, and will be included in~~leases, management uses the Company’s ~~2019 first quarter filing.~~incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expense for operating leases with minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components. For leases in which the Company is the lessee, the Company accounts for the lease components and non-lease components as a single lease component for all classes of underlying assets. Leases, in which the Company is the lessor, are substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately, which is consistent with the Company’s historical accounting. Leases with an expected or initial term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company has operating and finance leases for various real estate and equipment. Certain of the Company’s lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage. The Company’s leases include options to extend the lease term one month to 60 years. Except for the GLPI Master Lease (see Note 10), the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental cash flow information related to leases is as follows (in thousands):

The ~~adoption~~Company recognizes as casino revenue the net win from gaming activities, which is the difference between gaming wins and losses, not the total amount wagered. Progressive jackpots are accrued and charged to revenue at the time the obligation to pay the jackpot is established. Gaming revenues are recognized net of ~~ASC Topic 606~~certain cash and free play incentives. Pari-mutuel commissions consist of commissions earned from thoroughbred and harness racing and importing of simulcast signals from other race tracks and are recognized at the time wagers are made. Such commissions are a designated portion of the wagering handle as determined by state racing commissions and are shown net of the taxes assessed by state and local agencies, as well as purses and other contractual amounts paid to horsemen associations. The Company recognizes revenues from fees earned through the exporting of simulcast signals to other race tracks at the time wagers are made and recorded on ~~January 1, 2018 principally affected~~a gross basis. Such fees are based upon a predetermined percentage of handle as contracted with the ~~presentation of promotional allowances~~other race tracks.

Hotel, food and ~~how~~beverage services have been determined to be separate, stand-alone performance obligations and are recorded as revenue as the good or service is transferred to the customer over the customer’s stay at the hotel or when the delivery is made for the food and beverage. Advance deposits for future hotel occupancy, convention space or food and beverage services contracts are recorded as deferred income until the revenue recognition criteria has been met. The Company ~~measured the liability associated with our customer loyalty programs. The presentation of gross revenues for complimentary~~also provides goods and services ~~provided to guests with~~that may include multiple performance obligations, such as for packages, for which revenues are allocated on a corresponding offsetting amount included in promotional allowances was eliminated. This adjustment in presentation of promotional allowances did not have an impact on the Company’s historically reported net operating revenues. The majority of such amounts previously included in promotional allowances now offset casino revenuespro rata basis based on ~~an allocation of revenues to performance obligations using~~each service's stand-alone selling price. ~~Food, beverage,~~

The Company offers programs at its properties whereby participating customers can accumulate points for wagering that can be redeemed for credits for free play on slot machines, lodging, ~~and other services furnished to our guests on a complimentary basis are measured at the respective estimated standalone selling prices and included as revenues within~~ food and beverage, ~~lodging,~~merchandise and, ~~retail, entertainment and other, which generally resulted~~ in ~~a corresponding decrease in gaming revenues.~~limited situations, cash. The ~~costs of providing such complimentary goods and services are included as expenses within food and beverage, lodging, and retail, entertainment and other.~~

Additionally, as a result of the adoption of the new standard, certain adjustments and other reclassifications to and between revenue categories and to and between expense categories were required; however, the amounts associated with such adjustments did not have a significant impact on the Company’s previously reported operating income or net income.

~~Liabilities associated with our customer loyalty~~incentives earned by customers under these programs are ~~no longer valued at cost; rather a deferred~~based on previous revenue ~~model is used to account for the classification~~transactions and ~~timing of revenue to be recognized related to the redemption of loyalty program liabilities by our customers.~~represent separate performance obligations. Points earned, ~~under the Company’s loyalty programs~~less estimated breakage, are ~~deemed to be separate performance obligations, and~~ recorded as a reduction of casino revenues at the standalone selling price of the points when earned atbased upon the retail value of ~~such~~the benefits, ~~owed to the customer~~historical redemption rates and estimated breakage and recognized as departmental revenue based on where such points are redeemed upon fulfillment of the performance obligation. The player loyalty program liability represents a deferral of revenue until redemption occurs, which is typically less than one year.

The Company ~~elected~~offers discretionary coupons and other discretionary complimentaries to adopt the full retrospective method to apply the new guidance to each prior reporting period presented as if it had been in effect since January 1, 2015, with a pre-tax cumulative effect adjustment to our retained earnings upon adoption of $4.7 million. Net of tax, the cumulative effect adjustment to our retained earnings upon adoption was $3.5 million. This was primarily related to our loyalty program point liability, which increased from an estimated incremental cost model to a deferred revenue model at retail value.

~~Adoption~~customers outside of the ~~new standard did not have~~player loyalty program. The retail value of complimentary food, beverage, hotel rooms and other services provided to customers is recognized as a ~~significant impact on our previously reported net~~reduction to the revenues for the department which issued the complimentary and a credit to the revenue ~~expenses, operating income,~~for the department redeemed. Complimentaries provided by third parties at the discretion and ~~net income. The impact of adoption~~under the control of the ~~new standard to previously reported selected financial statement information was~~Company is recorded as ~~follows (in thousands):~~

Additionally, adoption of the new standard resulted in a basic earnings per share adjustment from the as reported $0.38 per share to $0.39 per share for the three months ended September 30, 2017. There was no adjustment for the diluted earnings per share for the three months ended September 30, 2017. Adoption of the new standard resulted in a net loss per share adjustment from the as reported $0.25 per share to $0.24 per share for the nine months ended September 30 2018 for both basic and diluted earnings per share.

The Company’s consolidated statement of operations presents net revenue disaggregated by type or nature of the good or service (i.e., casino, pari-mutuel, food and beverage, hotel and ~~other)~~other, including revenues associated with the Company’s interests in William Hill and The Stars Group Inc. (“TSG”)). A summary of net revenues disaggregated by type of revenue and reportable segment is presented below (amounts in thousands). Refer to ~~Note 13~~Notes 1 and 16 for ~~a discussion of~~additional information on the Company’s reportable segments.

	Three Months Ended September 30, 2018														Three Months Ended September 30, 2019
	West		Midwest		South		East		Central		Corporate and Other		Total		West		Midwest		South		East		Central		Corporate and Other		Total
Casino	$	60,912	$	86,331	$	84,299	$	109,637	$	21,698	$	—	$	362,877	$	62,081	$	84,249	$	87,331	$	129,244	$	95,095	$	—	$	458,000
Pari-mutuel commissions		—		—		1,854		3,438		—		—		5,292
Food and beverage		27,502		6,867		12,492		9,359		1,933		—		58,153		32,897		5,570		12,049		16,280		11,639		—		78,435
Hotel		31,583		4,720		6,169		2,308		—		—		44,780		41,352		4,240		6,647		33,039		9,040		—		94,318
Other		9,095		1,916		1,755		2,980		266		139		16,151		15,088		1,807		1,990		7,999		3,636		1,908		32,428
Net revenues	$	129,092	$	99,834	$	106,569	$	127,722	$	23,897	$	139	$	487,253	$	151,418	$	95,866	$	108,017	$	186,562	$	119,410	$	1,908	$	663,181

	Three Months Ended September 30, 2017														Three Months Ended September 30, 2018
	West		Midwest		South		East		Central		Corporate and Other		Total		West		Midwest		South		East		Central		Corporate and Other		Total
Casino	$	63,501	$	89,482	$	84,447	$	110,107	$	—	$	—	$	347,537	$	60,912	$	86,331	$	86,153	$	113,075	$	21,698	$	—	$	368,169
Pari-mutuel commissions		—		—		1,766		3,345		—		—		5,111
Food and beverage		30,099		7,572		12,669		9,197		—		—		59,537		27,502		6,867		12,492		9,359		1,933		—		58,153
Hotel		31,737		4,828		7,207		2,190		—		—		45,962		31,583		4,720		6,169		2,308		—		—		44,780
Other		8,987		1,769		1,845		1,957		—		173		14,731		9,095		1,916		1,755		2,980		266		139		16,151
Net revenues	$	134,324	$	103,651	$	107,934	$	126,796	$	—	$	173	$	472,878	$	129,092	$	99,834	$	106,569	$	127,722	$	23,897	$	139	$	487,253

	Nine Months Ended September 30, 2018														Nine Months Ended September 30, 2019
	West		Midwest		South		East		Central		Corporate and Other		Total		West		Midwest		South		East		Central		Corporate and Other		Total
Casino	$	168,342	$	262,138	$	270,802	$	323,030	$	21,698	$	—	$	1,046,010	$	170,980	$	254,641	$	291,552	$	378,246	$	290,429	$	—	$	1,385,848
Pari-mutuel commissions		—		—		7,853		6,554		—		—		14,407
Food and beverage		76,524		20,527		38,936		26,724		1,933		—		164,644		90,084		17,553		39,815		45,960		35,660		—		229,072
Hotel		77,234		12,775		18,462		5,976		—		—		114,447		102,804		11,962		19,822		77,372		25,533		—		237,493
Other		24,450		5,795		5,559		8,292		266		377		44,739		33,373		5,734		6,480		21,671		11,053		5,401		83,712
Net revenues	$	346,550	$	301,235	$	341,612	$	370,576	$	23,897	$	377	$	1,384,247	$	397,241	$	289,890	$	357,669	$	523,249	$	362,675	$	5,401	$	1,936,125

	Nine Months Ended September 30, 2017														Nine Months Ended September 30, 2018
	West		Midwest		South		East		Central		Corporate and Other		Total		West		Midwest		South		East		Central		Corporate and Other		Total
Casino	$	132,563	$	147,469	$	176,616	$	308,036	$	—	$	—	$	764,684	$	168,342	$	262,138	$	278,655	$	329,584	$	21,698	$	—	$	1,060,417
Pari-mutuel commissions		—		—		3,271		6,588		—		—		9,859
Food and beverage		74,593		12,607		29,231		25,236		—		—		141,667		76,524		20,527		38,936		26,724		1,933		—		164,644
Hotel		69,596		8,282		15,706		5,961		—		—		99,545		77,234		12,775		18,462		5,976		—		—		114,447
Other		20,812		2,934		4,130		6,900		—		366		35,142		24,450		5,795		5,559		8,292		266		377		44,739
Net revenues	$	297,564	$	171,292	$	228,954	$	352,721	$	—	$	366	$	1,050,897	$	346,550	$	301,235	$	341,612	$	370,576	$	23,897	$	377	$	1,384,247

The Company records contract or contract-related liabilities related to differences between the timing of cash receipts from the customer and the recognition of revenue. The Company generally has three types of liabilities related to contracts with customers: (1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer, (2) player loyalty program obligations, which represents the deferred allocation of revenue relating to player loyalty program incentives earned, as discussed above, and (3) customer deposits and other deferred revenue, which is primarily funds deposited by customers related to gaming play, advance payments on goods and services yet to be provided (such as advance ticket sales and deposits on rooms and convention space or for unpaid wagers), and deferred revenues associated with the Company’s interests in William Hill and TSG (see Note 7 and Note 8). Except for deferred revenues related to William Hill and TSG, these liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Accrued other liabilities” on the Company’s Consolidated Balance Sheets.

The following table summarizes the activity related to contract and contract-related liabilities (in thousands):

The September 30, 2019 balances exclude liabilities related to assets held for sale recorded in 2019 (see Note 5). The change in customer deposits and other deferred revenue during the nine months ended September 30, 2019 is primarily attributed to the Company’s interests in William Hill, which is recorded in other long-term liabilities on the Consolidated Balance Sheets (see Note 7).

On April 15, 2018, the Company announced that it had entered into a definitive agreement to acquire Tropicana in a cash transaction valued at $1.9 billion. At the closing of the transaction on October 1, 2018, a subsidiary of the Company merged into Tropicana and Tropicana became a wholly-owned subsidiary of the Company. Immediately prior to the merger, Tropicana sold Tropicana Aruba Resort and Casino and Gaming and Leisure Properties, Inc. (“GLPI”) acquired substantially all of Tropicana’s real estate, other than the real estate underlying MontBleu and Lumière, for approximately $964 million. The Company acquired Tropicana’s operations and certain real estate for $927.3 million. Substantially concurrently with the acquisition of the real estate portfolio by GLPI, the Company also entered into a triple net master lease with GLPI (the “Master Lease”) (see Note 10). The Company funded the purchase of the real estate underlying Lumière with the proceeds of a $246 million loan (see Note 11) and funded the remaining consideration payable with cash on hand at the Company and Tropicana, borrowings under the Company’s revolving credit facility and proceeds from the Company’s offering of $600 million in aggregate principal amount of 6% senior notes due 2026.

Transaction expenses related to the Tropicana Acquisition totaled $0.8 million and $2.0 million for the three months ended September 30, 2019 and 2018, respectively, and $3.3 million and $5.5 million for the nine months ended September 30, 2019 and 2018, respectively.

The total purchase consideration for the Tropicana Acquisition was $927.3 million. The purchase consideration in the acquisition was determined with reference to its acquisition date fair value.

~~Note 3. Acquisitions, Preliminary Purchase Price Accounting~~The fair values are based on management’s analysis including work performed by third party valuation specialists. The following table summarizes the final allocation of the purchase consideration to the identifiable assets acquired and ~~Proforma Information~~liabilities assumed of Tropicana, with the excess recorded as goodwill as of September 30, 2019 (dollars in thousands):

During the three months ended September 30, 2019, the Company finalized its valuation procedures and adjusted the Tropicana preliminary purchase price accounting, as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2018, to their final values. The net impact of these changes was a $9.3 million decrease to goodwill. Changes included a $16.3 million increase to other noncurrent assets primarily related to certain long-term receivables offset by $7.0 million of other immaterial changes to liabilities.

Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Tropicana Acquisition make use of Level 3 inputs including discounted cash flows.

Trade receivables and payables, inventories and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the estimated fair value of those items at the Tropicana Acquisition date.

The fair value of land (excluding the real property acquired by GLPI) was determined using the market approach, which arrives at an indication of value by comparing the site being valued to sites that have been recently acquired in arm’s-length transactions. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. Building and site improvements were valued under the cost approach using a direct cost model built on estimates of replacement cost. Personal property assets with an active and identifiable secondary market such as riverboats, gaming equipment, computer equipment and vehicles were valued using the market approach. Other personal property assets such as furniture, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. The income approach incorporates all tangible and intangible property and served as a ceiling for the fair values of the acquired assets of the ongoing business enterprise, while still taking into account the premise of highest and best use. In the instance where the business enterprise value developed via the income approach was exceeded by the initial fair values of the underlying assets, an adjustment to reflect economic obsolescence was made to the tangible assets on a pro rata basis to reflect the contributory value of each individual asset to the enterprise as a whole.

The real estate assets that were sold to GLPI and leased back by the Company were adjusted to fair value concurrently with the acquisition of Tropicana. The fair value of the properties was determined utilizing the direct capitalization method of the income approach. In allocating the fair value to the underlying acquired assets, a fair value for the buildings and improvements was determined using the above mentioned cost approach method. To determine the underlying land value, the extraction method was applied wherein the fair value of the building and improvements was deducted from the fair value of the property as derived from the direct capitalization approach to determine the fair value of the land. The fair value of GLPI’s real estate assets was determined to be $957.3 million.

The fair value of the gaming licenses was determined using the multi period excess earnings or replacement cost methodology, based on whether the license resides in gaming jurisdictions where competition is limited to a specified number of licensed gaming operators. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. Under the respective state’s gaming legislation, the property specific licenses can only be acquired if a theoretical buyer were to acquire each existing facility. The existing licenses could not be acquired and used for a different facility. The properties’ estimated future cash flows were the primary assumption in the respective valuations. Cash flow estimates included net gaming revenue, gaming operating expenses, general and administrative expenses, and tax expense. The replacement cost methodology is a cost approach methodology based on replacement or reproduction cost of the gaming license as an indicator of fair value.

The Company has assigned an indefinite useful life to the gaming licenses, in accordance with its review of the applicable guidance of ASC 350. The Company considered, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. The Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets. Tropicana had licenses in New Jersey, Missouri, Mississippi, Nevada, Indiana, and Louisiana. The renewal of each state’s gaming license depends on a number of factors, including payment of certain fees and taxes, providing certain information to the state’s gaming regulator, and meeting certain inspection requirements. However, the Company’s historical experience has not indicated, nor does the Company expect, any limitations regarding its ability to continue to renew each license. No other competitive, contractual, or economic factor limits the useful lives of these assets. Accordingly, the Company has concluded that the useful lives of these licenses are indefinite.

Trade names were valued using the relief from royalty method, which presumes that without ownership of such trademarks, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the Company’s ownership of the brand name. The primary assumptions in the valuation included revenue, pre-tax royalty rate, and tax expense. The Company has assigned an indefinite useful life to the trade names after considering, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. In that analysis, the Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets.

Player loyalty programs were valued using the cost approach and the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The residual or net cash flows of the two models is ascribable to the intangible asset. The Company has estimated a 3-year useful life on the player loyalty programs.

Goodwill is the result of expected synergies from combining operations of the acquired and acquirer. The goodwill acquired is fully amortizable for tax purposes.

For the period from January 1, 2019 through September 30, 2019, Tropicana generated net revenues of $643.8 million and net income of $14.7 million.

On August 7, 2018, the Company completed its acquisition of one hundred percent of the partnership interests in Elgin. As a result of the Elgin Acquisition, Elgin became an indirect wholly-owned subsidiary of the Company. The Company purchased Elgin for $327.5 million plus a $1.3 million working capital adjustment. The Elgin Acquisition was financed using cash on hand and borrowings under the Company’s revolving credit facility.

Transaction expenses related to the Elgin Acquisition totaled $0.1 million and $2.1 million for the three months ended September 30, 2019 and 2018, respectively and $0.1 million and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively.

The total purchase consideration for the Elgin Acquisition was ~~$328.9~~$328.8 million. The ~~estimated~~ purchase consideration in the acquisition was determined with reference to its acquisition date fair value.

The working capital adjustment is subject to finalization within 100 days of the Elgin Acquisition date pursuant to the terms of the purchase agreement; however, no material adjustments are anticipated.

The fair values are based on management’s analysis including ~~preliminary~~ work performed by third party valuation ~~specialists, which are subject to finalization and review. The purchase price accounting for Elgin is preliminary and is subject to change.~~specialists. No changes were recorded during the nine months ended September 30, 2019. The following table summarizes the ~~preliminary~~ allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of Elgin, with the excess recorded as goodwill as of September 30, ~~2018~~2019 (dollars in thousands):

Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Elgin Acquisition ~~make~~made use of Level 3 inputs including discounted cash flows.

Trade receivables and payables, ~~inventory~~inventories and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the estimated fair value of those items at the Elgin Acquisition date.

The fair value of land was determined using the market approach, which arrives at an indication of value by comparing the site being valued to sites that have been recently acquired in arm’s-length transactions. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. Building and site improvements were valued ~~using~~under the cost approach using a direct cost model built on estimates of replacement cost. ~~With respect to personal property components of the assets, personal~~Personal property assets with an active and identifiable secondary market such as riverboats, gaming equipment, computer equipment and vehicles were valued using the market approach. Other personal property assets such as furniture, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset.

The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. The income approach incorporates all tangible and intangible property and served as a ceiling for the fair values of the acquired assets of the ongoing business enterprise, while still taking into account the premise of highest and best use.

The Company has assigned an indefinite useful life to the gaming licenses, in accordance with its review of the applicable guidance of ASC 350. The fair value of the gaming license was determined using the multi period excess earnings method. The excess earnings methodology, which is an income approach methodology that allocates the projected cash flows of the business to the gaming license intangible assets less charges for the use of other identifiable assets of Elgin including working capital, fixed assets and other intangible assets. This methodology was considered appropriate as the gaming license is the primary asset of Elgin. The property’s estimated future cash flows were the primary assumption in the respective valuations. Cash flow estimates included net gaming revenue, gaming operating expenses, general and administrative expenses, and tax expense. The renewal of the gaming license depends on a number of factors, including payment of certain fees and taxes, providing certain information to the state’s gaming regulator, and meeting certain inspection requirements. However, ~~ERI’s~~the Company’s historical experience has not indicated, nor does ~~ERI~~the Company expect, any limitations regarding its ability to continue to renew the license. No other competitive, contractual, or economic factor limits the useful lives of this asset. Accordingly, ~~ERI~~the Company has concluded that the useful life of this license is indefinite.

~~Player relationships were~~The player loyalty program was valued using the cost approach and the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The residual or net cash flows of the two models is ascribable to the intangible asset. The Company has estimated a 4-year useful life on the player loyalty programs.

The trade name was valued using the relief‑from‑royalty method. The ~~loyalty program was valued using a comparative business~~primary assumptions in the valuation ~~method. Management~~included revenue, pre-tax royalty rate, and tax expense. The Company has assigned the trade name an indefinite useful life after considering, among other things, the expected use of the asset, the expected useful life of other related ~~asset~~assets or asset ~~group,~~groups, any legal, regulatory, or contractual provisions that may limit the useful life, ~~ERI’s~~the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. In that analysis, ~~ERI~~the Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets.

Goodwill is the result of expected synergies from combining operations of the acquired and acquirer. The goodwill acquired is fully amortizable for tax purposes.

For the period from ~~the Elgin acquisition date~~January 1, 2019 through September 30, ~~2018,~~2019, Elgin generated net revenues of ~~$23.9~~$115.7 million and net income of ~~$2.2~~$17.4 million.

On April 15, 2018 the Company announced that it entered into a definitive agreement to acquire Tropicana Entertainment Inc. (“Tropicana”) in a cash transaction valued at $1.85 billion. At the closing of the transaction on October 1, 2018, a subsidiary of the Company merged into Tropicana and Tropicana became a wholly owned subsidiary of the Company. Immediately prior to the merger, Tropicana sold Tropicana Aruba Resort and Casino and Gaming and Leisure Properties (“GLPI”) acquired substantially all of Tropicana’s real estate, other than the real estate underlying MontBleu Casino Resort & Spa and Lumière Place Casino and Hotel (“Lumière Place”), for approximately $964 million and the Company acquired the real estate underlying Lumière Place for $246 million. The Company also entered into a 15-year master lease with GLPI pursuant to which the Company will lease the Tropicana real estate acquired by GLPI. The Company funded the purchase of the real estate underlying Lumière Place with the proceeds of a $246 million loan from GLPI and funded the $640 million of consideration payable by the Company and the repayment of amounts outstanding under the Tropicana credit facility with cash on hand at the Company and Tropicana, borrowings under the Company’s revolving credit facility and proceeds from the Company’s offering of $600 million of 6% senior notes due 2026. In addition, the Company’s borrowing capacity on its revolving credit facility increased from $300 million to $500 million effective October 1, 2018 and the maturity of the revolving credit facility was extended to October 1, 2023.

Transaction expenses related to the Tropicana Acquisition for the three and nine months ended September 30, 2018 totaled $2.0 million and $5.5 million, respectively. As of September 30, 2018, $1.2 million of accrued costs and expenses related to the Tropicana Acquisition are included in accrued other liabilities.

Following the acquisition of the real estate portfolio by GLPI, the Company entered into a triple net master lease for the Tropicana properties acquired by GLPI with an initial term of 15 years, with renewals of up to 20 years at the Company’s option (“Master Lease”). Under the Master Lease, the Company is required to pay the following, among other things: lease payments to the underlying ground lessor for properties that are subject to ground leases, facility maintenance costs, all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties). The initial annual rent under the terms of the lease is expected to be approximately $87.6 million. The Company does not have the ability to terminate the obligations under the Master Lease prior to its expiration without GLPI’s consent.

In connection with the purchase of the real estate related to Lumière Place, GLPI, Tropicana St. Louis RE LLC, a wholly-owned subsidiary of the Company (“Tropicana St. Louis RE”), and the Company entered into a loan agreement, dated as of October 1, 2018 (the “Lumière Loan”), relating to a loan of $246 million by GLPI to Tropicana St. Louis RE to fund the entire purchase price of the real estate underlying Lumière Place and a guaranty by the Company of the amounts owed by Tropicana St. Louis RE. The Lumière Loan bears interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until October 1, 2020, and matures on October 1, 2020. The Lumière Loan is secured by a first priority mortgage on the Lumière Real Property until October 1, 2019. In connection with the issuance of the Lumière Loan, the Company agreed to use its commercially reasonable efforts to transfer one or more of the Grand Victoria Casino, Isle Casino Bettendorf, Isle Casino Hotel Waterloo, Isle of Capri Lula, Lady Luck Casino Vicksburg and Mountaineer Casino, Racetrack and Resort or such other property or properties mutually acceptable to Tropicana St. Louis RE and GLPI, provided that the aggregate value of such property, individually or collectively, is at least $246 million (the “Replacement Property”), to GLPI with a simultaneous leaseback to the Company of such Replacement Property. In connection with such Replacement Property sale, (i) the Company and GLPI will enter into an amendment to the Master Lease to revise the economic terms to include the Replacement Property, (ii) GLPI, or one of its affiliates, will assume the Lumière Loan and Tropicana St. Louis RE’s obligations under the Lumière Loan in consideration of the acquisition of the Replacement Property and the obligations of Tropicana St. Louis RE and the Company under the Lumière Loan will be deemed to have been satisfied, (iii) the Lumière Real Property will be released from the lien placed on it in connection with the Lumière Loan (if such lien has not yet been released in accordance with the terms of the Lumière Loan) and (iv) in the event the value of the Replacement Property is greater than the outstanding obligations of Tropicana St. Louis RE under the Lumière Loan, GLPI will pay Tropicana St. Louis RE the difference between the value of the Replacement Property and the amount of outstanding obligations under the Lumière Loan. If such Replacement Property transaction is not consummated prior to the maturity date of the Lumière Loan, other than as a result of certain failures to perform by GLPI, then the amounts outstanding will be paid in full and the rent under the Master Lease will automatically increase, subject to certain escalations.

~~Due to the closing of the transaction in October, preliminary purchase accounting has not been reflected herein.~~

The following unaudited pro forma information presents the results of operations of the Company for the nine months ended September 30, ~~2017,~~2018, as if only the ~~Isle~~Tropicana Acquisition had occurred on January 1, ~~2016~~2017 (in thousands).

These pro forma results do not necessarily represent the results of operations that would have been achieved if the acquisition had taken place on January 1, ~~2016,~~2017, nor are they indicative of the results of operations for future periods. The pro forma amounts include the historical operating results of the Company and ~~Isle~~Tropicana prior to the ~~Isle~~Tropicana Acquisition with adjustments directly attributable to the ~~Isle~~Tropicana Acquisition.

The following unaudited pro forma information presents the results of operations of the Company for the nine months ended September 30, 2018, ~~and 2017,~~ as if only the Elgin Acquisition had occurred on January 1, 2017 (in thousands).

These pro forma results do not necessarily represent the results of operations that would have been achieved if the acquisition had taken place on January 1, 2017, nor are they indicative of the results of operations for future periods. The pro forma amounts include the historical operating results of the Company and Elgin prior to the Elgin Acquisition with adjustments directly attributable to the Elgin Acquisition.

On July 10, 2019, the Company entered into a definitive agreement to sell the equity interests of Rainbow Casino Vicksburg Partnership, L.P. and IOC-Kansas City, L.L.C., the entities that hold Lady Luck Casino Vicksburg and Isle of Capri Casino Kansas City, to Twin River Worldwide Holdings, Inc. for approximately $230 million, subject to a working capital adjustment.

On June 17, 2019, the Company entered into definitive agreements to sell the real property relating to Mountaineer, Cape Girardeau, and Caruthersville to VICI Properties, Inc. (“VICI”) for approximately $278 million and, immediately following the consummation of the sale such real property, sell all of the outstanding equity interests of Mountaineer Park, Inc., IOC-Caruthersville, LLC and IOC-Cape Girardeau, LLC to Century Casinos, Inc. for approximately $107 million, subject to a customary working capital adjustment.

The sales ofMountaineer, Cape Girardeau, Caruthersville, Kansas City and Vicksburg met the requirements for presentation as assets held for sale under generally accepted accounting principles as of September 30, 2019. However, they did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations.

The divestitures are subject to receipt of required regulatory approvals and other customary closing conditions. The divestitures are expected to close in early 2020 subject to satisfaction of closing conditions.

The assets and liabilities held for sale, accounted for at carrying value as it was lower than fair value, were as follows as of September 30, 2019 (in thousands):

	September 30, 2019
	Mountaineer		Cape Girardeau		Caruthersville		Kansas City		Vicksburg		Total
Assets:
Accounts receivable, net	$	3,122	$	327	$	159	$	240	$	72	$	3,920
Due from affiliates		106		—		—		—		—		106
Inventories		1,058		716		233		46		131		2,184
Right-of-use assets		341		148		7		41,389		—		41,885
Prepaid expenses and other		14,583		294		148		273		4,210		19,508
Property and equipment, net		66,284		77,007		15,323		38,724		31,287		228,625
Goodwill		3,854		18,790		18,276		39,623		8,806		89,349
Other intangibles, net		44,400		27,788		55,145		90,329		2,708		220,370
Assets held for sale	$	133,748	$	125,070	$	89,291	$	210,624	$	47,214	$	605,947

Liabilities:
Accounts payable	$	409	$	495	$	252	$	206	$	169	$	1,531
Accrued payroll and related		1,131		531		250		435		234		2,581
Accrued property and other taxes		1,137		952		299		484		753		3,625
Short-term lease obligation		171		54		6		3,057		—		3,288
Long-term lease obligation		170		94		1		38,332		—		38,597
Accrued other liabilities		2,917		1,269		567		1,392		291		6,436
Liabilities related to assets held for sale	$	5,935	$	3,395	$	1,375	$	43,906	$	1,447	$	56,058

The following information presents the net operating revenues and net income for the Company’s properties that are held for sale (in thousands):

On February 28, 2018, the Company entered into definitive agreements to sell substantially all of the assets and liabilities of Presque Isle Downs and Vicksburg to Churchill Downs Incorporated (“CDI”). Under the terms of the agreements, CDI agreed to purchase Presque Isle Downs for ~~cash consideration of~~ approximately $178.9 million and Vicksburg for ~~cash consideration of~~ approximately $50.6 million, in each case subject to a customary working capital adjustment. In conjunction with the classification of Vicksburg’s operations as assets held for sale at ~~March 31,~~June 30, 2018 as a result of the announced sale to CDI, an impairment charge totaling $9.8 million was recorded due to the carrying value exceeding the estimated net sales proceeds.

The definitive agreements provided that the ~~dispositions~~divestitures were subject to receipt of required regulatory approvals, termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and other customary closing conditions, including, in the case of Presque Isle Downs, the prior closing of the sale of Vicksburg or the entry into an agreement to acquire another asset of the Company. On May 7, 2018, the Company and CDI each received a Request for Additional Information and Documentary Materials, often referred to as a “Second Request,” from the Federal Trade Commission in connection with its review of the Vicksburg acquisition.

On July 6, 2018, in consideration of the time and expense needed to reply to the Second Request, the Company and CDI entered into a termination agreement and release pursuant to which the parties agreed to terminate the asset purchase agreement with respect to Vicksburg and to enter into an asset purchase agreement pursuant to which CDI would acquire and assume the rights and obligations to operate Nemacolin (the “Vicksburg Termination Agreement”). The Vicksburg Termination Agreement also provided that CDI would pay the Company a $5.0 million termination fee upon execution of a definitive agreement with respect to the Nemacolin ~~transaction.~~transaction, which was recorded as proceeds from terminated sale on the Consolidated Statements of Income. On August 10, 2018, the Company entered into a definitive agreement to sell substantially all of the assets and liabilities of Nemacolin to CDI. Under the terms of the agreement, CDI agreed to purchase Nemacolin for cash consideration of approximately $0.1 million, subject to a customary working capital adjustment.

As a result of the agreement to sell Nemacolin, an impairment charge of $3.8 million ~~for~~was recorded in the ~~three and nine months ended September 30,~~third quarter of 2018 ~~was recorded~~ due to the carrying value of the net property and equipment being sold exceeding the estimated net sales proceeds.

~~Both transactions are expected~~The sale of Presque Isle Downs closed on January 11, 2019 resulting in a gain on sale of $22.1 million, net of final working capital adjustments, for the nine months ended September 30, 2019. The sale of Nemacolin closed on March 8, 2019 resulting in a gain on sale of $0.1 million, net of final working capital adjustments, for the nine months ended September 30, 2019.

Prior to ~~close in~~ the ~~fourth quarter of 2018 or first quarter of 2019, subject to satisfaction of~~respective closing ~~conditions, including receipt of Pennsylvania regulatory approvals.~~

~~The dispositions~~dates, the divestitures of Nemacolin and Presque Isle Downs, both of which ~~are~~were reported in the East segment, met the requirements for presentation as assets held for sale under generally accepted accounting ~~principles~~principles. However, they did not meet the requirements for presentation as ~~of September 30, 2018.~~ discontinued operations. Due to the termination of the Vicksburg sale, Vicksburg iswas no longer presented as an asset held for sale as of ~~September 30,~~December 31, 2018.

The assets and liabilities held for sale, accounted for at carrying value as it was lower than fair value, were as follows as of December 31, 2018 (in thousands):

	September 30, 2018						December 31, 2018
	Nemacolin		Presque Isle Downs		Total		Nemacolin		Presque Isle Downs		Total
Assets:
Accounts receivable, net	$	269	$	3,261	$	3,530	$	272	$	2,208	$	2,480
Inventories		75		1,534		1,609		79		1,607		1,686
Prepaid expenses and other		420		834		1,254		370		773		1,143
Property and equipment, net		1,195		69,782		70,977		1,784		70,134		71,918
Goodwill		—		3,122		3,122		—		3,122		3,122
Other intangibles, net		—		75,422		75,422		—		75,422		75,422
Assets held for sale	$	1,959	$	153,955	$	155,914	$	2,505	$	153,266	$	155,771

Liabilities:
Accounts payable	$	219	$	1,295	$	1,514	$	147	$	683	$	830
Accrued payroll and related		715		691		1,406		838		596		1,434
Accrued property and other taxes		325		77		402		552		71		623
Accrued other liabilities		1,076		3,934		5,010		1,628		3,659		5,287
Other long term liabilities		120		—		120
Long term obligation		2,416		—		2,416
Other long-term liabilities								105		—		105
Long-term obligation								2,412		—		2,412
Liabilities related to assets held for sale	$	4,871	$	5,997	$	10,868	$	5,682	$	5,009	$	10,691

The following information presents the net operating revenues and net income (loss) of Presque Isle Downs and Nemacolin prior to the respective divestitures (in thousands):

	Three Months ended September 30, 2018					Nine Months ended September 30, 2018					Three Months ended September 30, 2018							Nine Months ended September 30, 2018
	Presque Isle Downs		Nemacolin			Presque Isle Downs		Nemacolin			Presque Isle Downs			Nemacolin			Presque Isle Downs			Nemacolin
Net operating revenues	$	37,685	$	8,866		$	107,738	$	25,799		$	37,685		$	8,866		$		107,738	$	25,799
Net income (loss)		5,713		(2,745	)		11,909		(3,213	)		5,713			(2,745	)			11,909		(3,213	)

											Nine Months ended September 30, 2019
											Presque Isle Downs			Nemacolin
Net operating revenues											$	3,235		$	4,836
Net loss												(42	)		(754	)

These amounts include historical operating results, adjusted to eliminate the internal allocation of interest expense that ~~will~~was not be assumed by the buyer. .

~~The Company has authorized common stock of 200,000,000 shares, par value $0.00001 per share.~~ In ~~June~~November 2018, the ~~Company amended its certificate of incorporation to increase the total number of authorized shares of common stock from 100,000,000 shares to 200,000,000 shares~~.

~~On November 8, 2018, the Company issued a press release announcing that its~~Company’s Board of Directors ~~has~~ authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which the Company may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that the Company is required to repurchase under the Share Repurchase Program.

The Company acquired 223,823 shares of common stock at an aggregate value of $9.1 million and an average of $40.80 per share during the year ended December 31, 2018. NaN shares were repurchased during the nine months ended September 30, 2019.

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Total stock-based compensation expense in the accompanying ~~consolidated statements~~Consolidated Statements of ~~operations~~Income totaled ~~$2.5~~$4.3 million and ~~$1.4~~$2.5 million during the three months ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, and ~~$9.6~~$15.7 million and ~~$4.5~~$9.6 million during the nine months ended September 30, 2019 and 2018, respectively. These amounts are included in corporate expenses and, ~~2017, respectively.~~in the case of certain property positions, general and administrative expenses in the Company’s Consolidated Statements of Income. We recognized an increase in income tax expense of $21 thousand for the three months ended September 30, 2019, related to stock-based compensation. We recognized a reduction in income tax expense of $0.4 million for the three months ended September 30, 2018, for excess tax benefits related to stock-based compensation. We recognized a reduction in income tax expense of $1.3 million and $4.9 million during the nine months ended September 30, 2019 and 2018, respectively, for excess tax benefits related to stock-based compensation.

A summary of the ~~RSU and RSA~~restricted stock unit (RSU) activity for the nine months ended September 30, ~~2018~~2019 is presented in the following table:

~~A summary~~As of September 30, 2019 and 2018, the Company had $22.6 million and $11.8 million, respectively, of unrecognized compensation expense. The RSUs are expected to be recognized over a weighted-average period of 1.48 years and 1.15 years, respectively.

There was no ERI ~~Stock Option~~stock option activity for the nine months ended September 30, ~~2018 is presented in the following table:~~

~~As of September 30, 2018, 119,505~~2019. Outstanding options ~~were exercisable.~~

~~Other and intangible assets, net, include the following amounts (in thousands):~~

Goodwill represents the excess of the purchase prices of acquiring MTR Gaming, Isle and Elgin over the fair market value of the net assets acquired. In conjunction with the classification of Vicksburg’s operations as assets held for sale at March 31, 2018 (see Note 4) as a result of the announced sale to CDI, an impairment charge totaling $9.8 million was recorded due to the carrying value exceeding the estimated net sales proceeds. The impairment reduced the value of goodwill in the South segment.

~~The following table presents changes to goodwill for the nine months ended September 30, 2018 (in thousands):~~

Gaming licenses represent intangible assets acquired from the purchase of a gaming entity located in a gaming jurisdiction where competition is limited, such as when only a limited number of gaming operators are allowed to operate in the jurisdiction. These gaming license rights are not subject to amortization as the Company has determined that they have an indefinite useful lives.

Amortization expense related to trade names and loyalty programs for the three months ended September 30, 2018 and 2017 totaled $2.4 million and $1.7 million, respectively, and $5.1 million and $3.3 million for the nine months ended September 30, 2018 and 2017, respectively, which is included in depreciation and amortization expense in the consolidated statements of operations. Such amortization expense is expected to be $3.0 million for the remainder of 2018 and $11.9 million, $8.8 million, $7.2 million and $4.2 million for the years ended December 31, 2019, 2020, 2021 and 2022, respectively.

The SEC staff issued Staff Accounting Bulletin (“SAB”) 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

Through the quarter ended September 30, 2018, the Company recognized no adjustments to the provisional amounts recorded at December 31, 2017. Additionally, the Company has not completed its accounting for all of the tax effects of the Tax Act that became effective January 1, 2018, but has recognized provisional amounts in its income tax provision. The Company is awaiting further guidance from U.S. federal and state regulatory bodies with regards to the final accounting and reporting of these items in the several jurisdictions where the Company files tax returns. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. Its estimates may also be affected as the Company gains a more thorough understanding of the tax law.

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense. Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

~~For the three and nine months ended September 30, 2018, the Company’s tax expense was~~ ~~$20.0 million and $31.3 million,~~ respectively. For the three months ended September 30, 2017, the Company’s tax expense was $12.6 million and for the nine months ended September 30, 2017, the Company’s tax benefit was $26.1 million. For the three and nine months ended September 30, 2018, the difference between the effective rate and the statutory rate is attributed primarily to non-deductible expenses and state and local income taxes. For the three and nine months ended September 30, 2017, the difference between the effective rate and the statutory rate is attributed primarily to non-deductible transaction costs incurred and changes in the effective state tax rate associated with the Isle acquisition, state and local income taxes and the release of the valuation allowance against certain Pennsylvania deferred tax assets. As of September 30, 2018 and 2017, there were no ~~unrecognized tax benefits and the Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits within the next twelve months.~~

The Company and its subsidiaries file US federal income tax returns and various state and local income tax returns. The Company does not have tax sharing agreements with the other members within the consolidated ERI group. With few exceptions, the Company is no longer subject to US federal or state and local tax examinations by tax authorities for years before 2012.

The Company was notified by the Internal Revenue Service in October of 2016 that its federal tax return for the year ended December 31, 2014 had been selected for examination. In September 2017, the IRS informed the Company that they completed the examination of the tax return and made no changes.

Amortization of the debt issuance costs and the discount and premium associated with our indebtedness totaled $1.2 million and $3.8 million for the three and nine months ended September 30, 2018, respectively. Amortization of the debt issuance costs and the discount and premium associated with our indebtedness totaled $2.0 million and $5.0 million for the three and nine months ended September 30, 2017, respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense.

~~Scheduled maturities of long‑term debt are $375.0 million in 2023, $956.8 million in 2024, $875.0 million in 2025 and $600.0 million in 2026.~~

~~In April~~ ~~2017,~~ ~~the Company~~ entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (the “Credit Facility”), consisting of a $1.45 billion term loan facility (the “Term Loan Facility” or “Term Loan”) and a $300.0 million revolving credit facility (the “Revolving Credit Facility”). The Company’s obligations under the Revolving Credit Facility will mature on April 17, 2022. The Company’s obligations under the Term Loan Facility will mature on April 17, 2024. The Company was required to make quarterly principal payments of $3.6 million on the Term Loan Facility on the last day of each fiscal quarter beginning on June 30, 2017 but satisfied this requirement as a result of the principal prepayment of $444.5 million on September 13, 2017 in conjunction with the issuance of the additional 6% Senior Notes. In addition, the Company is required to make mandatory payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, and asset sales and, depending on its consolidated total leverage ratio, the Company may be required to apply a portion of its excess cash flow to repay amounts outstanding under the Credit Facility.

As of September 30, 2018, the Company had $956.8 million outstanding on the Term Loan and $180.0 million outstanding under the Revolving Credit Facility. The Company had $110.9 million of available borrowing capacity, after consideration of $9.1 million in outstanding letters of credit under its Revolving Credit Facility as of September 30, ~~2018.~~

The interest rate per annum applicable to loans under the Revolving Credit Facility are, at our option, either LIBOR plus a margin ranging from 1.75% to 2.50% or a base rate plus a margin from 0.75% to 1.50%, the margin is based on our total leverage ratio. The interest rate per annum applicable to the loans under the Term Loan Facility is, at our option, either LIBOR plus 2.25%, or a base rate plus 1.25%; provided, however, that in no event will LIBOR be less than zero or the base rate be less than 1.00%. Additionally, the Company pays a commitment fee on the unused portion2019 totaled 135,956, of ~~the Revolving Credit Facility of 0.50% per annum. At September 30, 2018, the weighted average interest rates on the Term Loan and Revolving Credit Facility~~which 125,331 options were ~~4.17% and 4.54%.~~exercisable.

On June 6, 2018, the Company executed an amendment that modified certain covenants in the Credit Facility to allow for considerations related to the acquisition of Tropicana. The borrowing capacity of the Revolving Credit Facility increased from $300 million to $500 million effective substantially concurrently with the consummation of the Tropicana Acquisition on October 1, 2018 and the maturity date of the Revolving Credit Facility extended to October 1, 2023.

~~As of September 30, 2018 we were in compliance with all covenants under the Credit Facility.~~

On September 20, 2018, Delta Merger Sub, Inc. (“Escrow Issuer”), a Delaware corporation and a wholly-owned subsidiary of the Company, issued $600 million aggregate principal amount of 6.0% senior notes due 2026 (the “6% Senior Notes due 2026”) pursuant to an indenture, dated as of September 20, 2018 (the “2026 Indenture”), between Escrow Issuer and U.S. Bank, National Association, as Trustee. Interest on the 6% Senior Notes due 2026 will be paid semi-annually in arrears on March 15 and September 15, commencing March 15, 2019.

The 6% Senior Notes due 2026 were general unsecured obligations of Escrow Issuer’s upon issuance and, upon the assumption of such obligations by the Company and the subsidiary guarantors (the “Guarantors”) upon consummation of the Tropicana Acquisition, became general unsecured obligations of the Company and the Guarantors, ranking senior in right of payment to all of the Company’s existing and future debt that is expressly subordinated in right of payment to the 6% Senior Notes due 2026 and the guarantees, ranking equally in right of payment with all of the applicable obligor’s existing and future senior liabilities, including the obligations under the Company’s existing 7% Senior Notes due 2023 and 6% Senior Notes due 2025, and are effectively subordinated to all of the applicable obligor’s existing and future secured debt, including indebtedness under the Company’s existing senior secured credit facility and the Lumière Note (as defined in the 2026 Indenture), in each case, to the extent of the value of the collateral securing such debt. In addition, the 6% Senior Notes due 2026 and the related guarantees are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries and other entities in which the Company has an equity interest that do not guarantee the 6% Senior Notes due 2026 (other than indebtedness and liabilities owed to the Company or the Guarantors).

On or after September 15, 2021, the Company may redeem all or a portion of the 6% Senior Notes due 2026 upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest, if any, on the 6% Senior Notes due 2026 redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on September 15 of the years indicated below:

Upon the occurrence of a Change of Control (if the 6% Senior Notes due 2026 do not have investment grade status) or a Change of Control Triggering Event (each as defined in the 2026 Indenture), the Company must offer to repurchase the 6% Senior Notes due 2026 at 101% of their principal amount, plus accrued and unpaid interest to the applicable repurchase date.

If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company must apply the net proceeds of such sale to make an offer to repurchase the 6% Senior Notes due 2026 at 100% of their principal amount, plus accrued and unpaid interest to the applicable repurchase date.

~~The 6% Senior Notes due 2026 are subject to redemption imposed by gaming laws and regulations of applicable gaming regulatory authorities.~~

~~The 2026 Indenture contains certain covenants limiting, among other things, the Company’s ability to:~~

These covenants are subject to a number of exceptions and qualifications as set forth in the 2026 Indenture. The 2026 Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 6% Senior Notes due 2026 to be declared due and payable.

The Company applied the net proceeds of the sale of the 6% Senior Notes due 2026, together with borrowings under its existing revolving credit, cash on hand and Tropicana’s cash on hand, to pay the consideration payable by the Company pursuant to the merger agreement, repay all of the debt outstanding under Tropicana’s existing credit facility and pay fees and costs associated with the Tropicana Acquisition that closed on October 1, 2018.

On March 29, 2017, Eagle II, a wholly owned subsidiary of the Company, issued at par $375.0 million aggregate principal amount of 6.0% senior notes due 2025 (the “6% Senior Notes due 2025”) pursuant to an indenture, dated as of March 29, 2017 (the “2025 Indenture”), between Eagle II and U.S. Bank, National Association, as Trustee. The 6% Senior Notes due 2025 will mature on April 1, 2025, with interest payable semi-annually in arrears on April 1 and October 1. In connection with the consummation of the Isle Acquisition on May 1, 2017, the Company assumed Eagle II’s obligations under the 6% Senior Notes due 2025 and the 2025 Indenture and certain of the Company’s subsidiaries (including Isle and certain of its subsidiaries) executed guarantees of the Company’s obligations under the 6% Senior Notes due 2025.

On September 13, 2017, the Company issued an additional $500.0 million principal amount of its 6% Senior Notes due 2025 at an issue price equal to 105.5% of the principal amount of the 6% Senior Notes due 2025. The additional notes were issued pursuant to the 2025 Indenture that governs the 6% Senior Notes due 2025. The Company used the proceeds of the offering to repay $78.0 million of outstanding borrowings under the previous revolving credit facility and used the remainder to repay $444.5 million outstanding borrowings under the previous term loan facility and related accrued interest.

On July 23, 2015, the Company issued at par $375.0 million in aggregate principal amount of 7.0% senior notes due 2023 (“7% Senior Notes due 2023”) pursuant to an indenture, dated as of July 23, 2015 (the “2023 Indenture”), between the Company and U.S. Bank, National Association, as Trustee. The 7% Senior Notes due 2023 will mature on August 1, 2023, with interest payable semi-annually in arrears on February 1 and August 1 of each year.

~~As of September 30, 2018 we were in compliance with all covenants under the 6% Senior Notes due 2025, 6% Senior Notes due 2026 and 7% Senior Notes due 2023.~~

In conjunction with the Isle Acquisition, the Company acquired the existing lease and management agreements at its Nemacolin location. Under the terms of the agreements, Nemacolin Woodland Resort (“Resort”) provided land, land improvements and a building for the casino property. The Company was deemed, for accounting purposes only, to be the owner of these assets provided by the Resort during the construction and casino operating periods due to the Company’s continuing involvement. Therefore, the transaction was accounted for using the direct financing method. As of September 30, 2018 and December 31, 2017, the Company recorded property and equipment, net of accumulated depreciation, of $1.2 million and $4.2 million, respectively, and a liability of $2.4 million and $4.5 million, respectively. The decreases in the assets and liability were primarily due to the impairment charges (see Note 4) and the Company finalizing its purchase price accounting related to the Isle Acquisition. These assets and liabilities are reported as held for sale at September 30, 2018.

In conjunction with the Isle Acquisition, the Company acquired the existing lease and management agreements at its Bettendorf location. Under the terms of the agreements with the City of Bettendorf, Iowa, the Company leases, manages, and provides financial and operating support for the convention center (Quad-Cities Waterfront Convention Center). The Company was deemed, for accounting purposes only, to be the owner of the convention center due to the Company’s continuing involvement. Therefore, the transaction was accounted for using the direct financing method. As of September 30, 2018 and December 31, 2017, the Company recorded property and equipment, net of accumulated depreciation, of $11.9 million and a liability of $5.7 million and $12.5 million, respectively, in other long-term liabilities related to the agreement. The changes in property and equipment and in the liability were primarily due to the Company finalizing its purchase price accounting related to the Isle Acquisition.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accordingly, fair value is a market based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there is a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows:

~~Items Measured at Fair Value on a Recurring Basis~~: The following table sets forth the assets measured at fair value on a recurring basis, by input level, in the consolidated balance sheets at September 30, 2018 and December 31, 2017 (amounts in thousands):

~~The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practical to estimate fair value:~~

~~Cash and Cash Equivalents~~: Cash equivalents include investments in money market funds. Investments in this category can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short‑term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. Cash and cash equivalents also includes cash maintained for gaming operations. The carrying amounts approximate the fair value because of the short maturity of those instruments (Level 1).

~~Restricted Cash~~: Restricted cash includes cash reserved for unredeemed winning tickets from the Company’s racing operations, funds related to horsemen’s fines and certain simulcasting funds that are restricted to payments for improving horsemen’s facilities and racing purses, cash deposits that serve as collateral for letters of credit, surety bonds and short-term certificates of deposit that serve as collateral for certain bonding requirements. The estimated fair values of our restricted cash and investments are based upon quoted prices available in active markets (Level 1), or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold our restricted cash and investments. ~~Restricted investments, included in Other Assets, net, relate to trading securities pledged as collateral by our captive insurance company.~~

~~Escrow Cash~~: Escrow cash represents the 6% Senior Notes due 2026 issued totaling $600 million plus approximately a month and a half of interest totaling $4.1 million placed into escrow pending satisfaction of certain conditions, including consummation of the Tropicana Acquisition. Escrow cash is classified as Level 1 as its carrying value approximates market prices.

~~Marketable Securities:~~ Marketable securities consist primarily of trading securities held the Company’s captive insurance subsidiary. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold these marketable securities.

~~Long‑term Debt:~~ The fair value of our long-term debt or other long-term obligations is estimated based on the quoted market price of the underlying debt issue (Level 1) or, when a quoted market price is not available, the discounted cash flow of future payments utilizing current rates available to us for the debt of similar remaining maturities (Level 2). Debt obligations with a short remaining maturity have a carrying amount that approximates fair value.

~~The estimated fair values of the Company’s financial instruments are as follows (amounts in thousands):~~

~~The following table illustrates the reconciliation of the numerators~~7. Investments in and ~~denominators of the basic and diluted net income per share computations for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands, except per share amounts):~~

~~Litigation.~~ ~~The Company is a party~~Advances to various lawsuits, which have arisen in the normal course of business. Estimated losses are accrued for these lawsuits and claims when the loss is probable and can be estimated. The current liability for the estimated losses associated with those lawsuits is not material to the consolidated financial condition and those estimated losses are not expected to have a material impact on the results of operations.Unconsolidated Affiliates

~~Agreements with Horsemen and Pari-mutuel Clerks~~. The Federal Interstate Horse Racing Act and the state racing laws in West Virginia, Ohio and Pennsylvania require that, in order to simulcast races, we have written agreements with the horse owners and trainers at those racetracks. In addition, in order to operate slot machines in West Virginia, we are required to enter into written agreements regarding the proceeds of the slot machines (a “proceeds agreement”) with a representative of a majority of the horse owners and trainers and with a representative of a majority of the pari‑mutuel clerks. In Pennsylvania and Ohio, we must have an agreement with the representative of the horse owners. We have the requisite agreements in place with the horsemen at Mountaineer until December 31, 2018. With respect to the Mountaineer pari‑mutuel clerks, we have a labor agreement in force until November 30, 2018, which will automatically renew for an additional one-year period, and a proceeds agreement until April 14, 2019. We are required to have a proceeds agreement in effect on July 1 of each year with the horsemen and the pari‑mutuel clerks as a condition to renewal of our video lottery license for such year. If the requisite proceeds agreement is not in place as of July 1 of a particular year, Mountaineer’s application for renewal of its video lottery license could be denied, in which case Mountaineer would not be permitted to operate either its slot machines or table games. Scioto Downs has the requisite agreement in place with the OHHA until December 31, 2023, with automatic two-year renewals unless either party requests re‑negotiation pursuant to its terms. Presque Isle Downs has the requisite agreement in place with the Pennsylvania Horsemen’s Benevolent and Protective Association until May 1, 2021. With the exception of the respective Mountaineer, Presque Isle Downs and Scioto Downs horsemen’s agreements and the agreement between Mountaineer and the pari‑mutuel clerks’ union described above, each of the agreements referred to in this paragraph may be terminated upon written notice by either party.

The Company has a lease agreement with C.S. &Y. Associates (“CS&Y”) which is an entity partially owned by Recreational Enterprises, Inc. (“REI”), which is owned by members of the Carano family, including Gary L. Carano, and various trusts of which members of the Carano family are beneficiaries. In addition, each of Gary L. Carano and Thomas R. Reeg serve as members of the board of directors of REI. The Company owns the entire parcel on which Eldorado Reno is located, except for approximately 30,000 square feet which is leased from CS&Y. For the three and nine months ended September 30, 2018, the Company made lease payments to CS&Y totaling $150,000 and $450,000, respectively. For the three and nine months ended September 30, 2017, the Company made lease payments to CS&Y totaling $150,000 and $392,000, respectively. No amounts were due to or due from CS&Y as of September 30, 2018 and December 31, 2017.

The Company holds a 42.1% variable interest in a partnership with other investors that developed a 118-room Hampton Inn & Suites hotel at Scioto Downs that opened in March 2017. Pursuant to the terms of the partnership agreement, the Company contributed $1.0 million of cash and 2.4 acres of a leasehold immediately adjacent to ~~The Brew Brothers~~ microbrewery and restaurant at Scioto Downs. The partnership constructed the hotel at a cost of $16.0 million and other investors operate the hotel. As of September 30, 2018, the Company’s receivable from the partnership totaled $187,000 and the Company’s payable to the partnership totaled $19,000. These amounts are reflected on the accompanying balance sheet under “due from affiliates” and “due to affiliates.”

~~The~~In April 2018, the Company ~~formed~~entered into a joint venture ~~in April 2018~~ with Cordish Companies (“Cordish”) to master plan and develop a ~~mixed use~~mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino and racetrack at ~~our~~the Company’s Pompano property. ~~No amounts were due to or due from Cordish as of September 30, 2018.~~

As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with the Company’s input ~~from the Company~~ and will submit it for the Company’s review and ~~approval from the Company.~~approval. The Company and Cordish have made ~~initial~~ cash contributions of ~~$250,000~~$500,000 each and could be required to make additional contributions to a maximum of $2.0 million ($1.0 million per member) at the request of the managing member. The Company has agreed to ~~donate~~contribute approximately 130 to 200 acres of land to the joint venture for the project. While the Company holds a 50% variable interest in the joint venture, it is not the primary beneficiary; as such the investment in the joint venture is accounted for using the equity method. The Company ~~will participate~~participates evenly with Cordish in the profits and losses of the joint ~~venture.~~venture, which is included in income (loss) from unconsolidated affiliates on the Consolidated Statements of Income. At September 30, 2019 and December 31, 2018, the Company’s investment in the joint venture including contributions and capitalized professional costs totaled $1.1 million and $0.6 million, respectively, recorded in investment in and advances to unconsolidated affiliates on the Consolidated Balance Sheets.

OnIn September 5, 2018, the Company ~~announced that it had~~ entered into a ~~definitive~~25-year agreement, which became effective January 29, 2019, with William Hill PLC and William Hill US, its U.S. subsidiary (together, “William Hill”) pursuant to which ~~subject~~the Company (i) granted to ~~receipt of all necessary regulatory approvals,~~ William Hill ~~US will become~~the right to conduct betting activities in retail channels and under the Company’s ~~exclusive sports betting operator~~first skin and third skin for ~~a period of 25 years at its~~online channels with respect to the Company’s current and future properties ~~in jurisdictions where sports betting is legal. The Company will also work with William Hill US to leverage its licenses to operate mobile and online sports wagering operations~~located in the United ~~States. At~~States and the ~~closing~~territories and possessions of the ~~transactions contemplated by~~United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online gaming activities utilizing the Company’s second skin available with respect to properties in such territories. Pursuant to the terms of the agreement, in January 2019 the Company ~~will receive~~received a 20% ~~equity stake~~ownership interest in William Hill US as well as 13.4 million ordinary shares of William Hill PLC, which carry certain time restrictions on when they can be sold. Additionally, the Company receives a profit share from the operations of betting and other gaming activities associated with athe Company’s properties. “Skin” in the context of this agreement refers to Eldorado’s ability to grant to William Hill an online channel that allows William Hill to operate online casino and sports gaming activities in reliance on, and utilizing the benefit of, any licenses granted to Eldorado or its subsidiaries. As of September 30, 2019, based on the Company’s existing sportsbook operations with William Hill, the Company’s receivable from William Hill totaled $2.7 million including $0.1 million in assets held for sale, the remaining balance is reflected in due from affiliates on the Consolidated Balance Sheets.

The Company is accounting for its investment in William Hill US under the equity method. The fair value of ~~$50.0~~the Company’s initial investment in William Hill US of $128.9 million ~~(based~~at January 29, 2019 was determined using Level 3 inputs. As of September 30, 2019, the carrying value of the Company’s interest in William Hill US was $127.5 million recorded in investment in and advances to unconsolidated affiliates on the ~~60 day volume-weighted average trading price~~Consolidated Balance Sheets.

As of September 30, 2019, the fair value of the William Hill PLC shares totaled $27.1 million, net of an unrealized loss of $0.2 million, and included in other assets, net on the Consolidated Balance Sheets. The Company also recorded deferred revenue associated with the William Hill US and William Hill PLC shares and is recognizing revenue on a straight-line basis over the 25-year agreement term. The Company recognized revenue of $1.5 million and $3.9 million during the three and nine months ended September 30, 2019, respectively. As of September 30, 2019, the balance of the William Hill deferred revenue totaled $143.6 million and is recorded in other long-term liabilities on the Consolidated Balance Sheets.

Amortization expense with respect to player loyalty programs for the three months ended September 30, 2019 and 2018 totaled $7.6 million and $2.4 million, respectively, and $22.8 million and $5.1 million for the nine months ended September 30, 2019 and 2018, respectively, which is included in depreciation and amortization in the Consolidated Statements of Income. Such amortization expense is expected to be $7.7 million for the remainder of 2019 and $27.4 million, $21.2 million and $4.2 million for the years ended December 31, 2020, 2021 and 2022, respectively.

Goodwill represents the excess of the purchase prices of acquiring MTR Gaming, Isle, Elgin and Tropicana over the fair market value of the net assets acquired. In conjunction with the classification of Vicksburg’s operations as assets held for sale at June 30, 2018 (see Note 5) as a result of the announced sale to CDI, an impairment charge totaling $9.8 million was recorded due to the carrying value exceeding the estimated net sales proceeds. The impairment reduced the value of goodwill in the South segment in 2018.

The September 30, 2019 balances exclude assets held for sale recorded in 2019 (see Note 5), as well as the assets associated with the Presque Isle Downs and Nemacolin divestitures, which accounts for the changes in goodwill and indefinite-lived intangible assets.

The Casino Reinvestment Development Authority (“CRDA”) bonds have various contractual maturities that range up to 40 years. Actual maturities may differ from contractual maturities because of prepayment rights. The Company treats CRDA bonds as held-to-maturity since the Company has the ability and the intent to hold these bonds to maturity and under the CRDA, the Company is not permitted to do otherwise. The Company analyzes the CRDA bonds for recoverability on a quarterly basis based on management's historical collection experience and other information received from the CRDA. If indications exist that the CRDA bond is impaired, additional valuation allowances are recorded.

Non-operating real property consists principally of land and undeveloped properties for which the Company has designated as non-operating and has declared its intent to sell such assets. As a result of a pending sale offer for certain non-operating real property located in Pennsylvania, the Company recognized an impairment charge of $1.0 million for the nine months ended September 30, 2019. Non-operating land totaling $9.8 million associated with Mountaineer is included in assets held for sale as of September 30, 2019.

Approximately ten acres of the approximately 20 acres on which Tropicana Evansville is situated is subject to a lease with the City of Evansville, Indiana. Under the terms of the agreement, a pre-payment of lease rent of $25 million was due at the commencement of the construction project. The prepayments will be applied against future rent in equal monthly amounts over a period of 120 months which commenced upon the opening of the property in January 2018. The current term of the lease expires November 30, 2027. As of December 31, 2018, this prepaid rent was included in long-term prepaid rent. However, upon adoption of the new lease accounting guidance the prepaid rent is now included with the Company’s ROU assets.

In September 2018, we entered into a 25-year agreement, which became effective January 2019, with William Hill pursuant to which we received 13.4 million ordinary shares of William Hill PLC which carry certain time restrictions on when they can be sold. As of September 30, 2019, the fair value of the William Hill PLC shares ~~ending~~totaled $27.1 million, net of an unrealized loss of $0.2 million, and is included in other assets, net on the Consolidated Balance Sheets.

For the three and nine months ended September 30, 2019, the Company’s tax expense was $18.1 million and $38.9 million, respectively, and for the three and nine months ended September 30, 2018, the Company’s tax expense was $20.0 million and $31.3 million, respectively. For the three and nine months ended September 30, 2019, the difference between the effective rate and the statutory rate is attributed primarily to excess tax benefits associated with stock compensation, state and local income taxes and changes in the valuation allowance. For the three and nine months ended September 30, 2018, the difference between the effective rate and the statutory rate is attributed primarily to non-deductible expenses and state and local income taxes.

As of September 30, 2019, there were 0 unrecognized tax benefits and the Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits within the next twelve months. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

As of December 31, 2018, under the prior lease accounting standard the Company’s Master Lease with GLPI was accounted for as a failed sale-leaseback financing obligation equal to the fair value of the leased real estate assets and liabilities acquired in purchase accounting. Upon adoption of ASC 842 (see Note 2), the Company re-evaluated the Master Lease and determined this existing failed sale-leaseback transaction will continue to be accounted for as a financing obligation.

The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated future lease payments over the lease term of 35 years, including renewal options, using an imputed discount rate of approximately 10.2%. The value of the failed sale-leaseback financing obligations is dependent upon assumptions regarding the amount of the lease payments and the estimated discount rate of the lease payments required by a market participant.

The Master Lease provides for the lease of land, buildings, structures and other improvements on the land (including barges and riverboats), easements and similar appurtenances to the land and improvements relating to the operation of the leased properties. The Master Lease provides for an initial term of fifteen years with no purchase option. At the Company’s option, the Master Lease may be extended for up to four five-year renewal terms beyond the initial 15-year term. If we elect to renew the term of the Master Lease, the renewal will be effective as to all, but not less than all, of the leased property then subject to the Master Lease. The Company does not have the ability to terminate its obligations under the Master Lease prior to its expiration without GLPI’s consent.

The rent payable under the Master Lease is comprised of “Base Rent” and “Percentage Rent.” Base rent is the sum of:

The percentage rent payable under the Master Lease is adjusted every two years based on the actual net revenues of the leased properties during the two-year period then ended. The initial variable rent, which is fixed for the first two years, is $13.4 million per year. The actual percentage increase is based on actual performance and is subject to change.

The initial annual rent under the terms of the lease is approximately $87.6 million.

Under the Master Lease, the Company is required to pay the following, among other things: lease payments to the underlying ground lessor for properties that are subject to ground leases, facility maintenance costs, all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties).

The estimated future lease payments include the minimum lease payments and were adjusted to reflect estimated lease payments as described in the agreements, including an annual escalator of up to 2%.

The future minimum payments related to the Master Lease financing obligation with GLPI at September 30, 2019 were as follows (in thousands):

Total payments and interest expense related to the Master Lease were $21.9 million and $24.6 million, respectively, for the three months ended September 30, 2019, and $65.7 million and $73.8 million, respectively, for the nine months ended September 30, 2019. For the initial periods of the Master Lease, cash payments are less than the interest expense recognized, which causes the failed sale-leaseback obligation to increase during the initial years of the lease term.

The Master Lease contains certain covenants, including minimum capital improvement expenditures. As of September 30, 2019, we were in compliance with all of the covenants under the Master Lease.

Amortization of the debt issuance costs and the discount and/or premium associated with our indebtedness totaled $1.9 million and $1.2 million for the three months ended September 30, 2019 and 2018, respectively, and $5.7 million and $3.8 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense.

Scheduled maturities of long‑term debt are $0.1 million for the remainder of 2019, $246.2 million in 2020, $0.2 million in 2021, $0.2 million in 2022, $375.1 million in 2023, and $2.4 billion thereafter.

The Company is party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (as amended the “Credit Facility”), consisting of a $1.45 billion term loan facility (the “Term Loan Facility” or “Term Loan”) and a $500.0 million revolving credit facility (the “Revolving Credit Facility”). The Company’s obligations under the Revolving Credit Facility will mature on October 1, 2023. The Company’s obligations under the Term Loan Facility will mature on April 17, 2024. The Company was required to make quarterly principal payments of $3.6 million on the Term Loan Facility on the last day of each fiscal quarter beginning on June 30, 2017 but satisfied this requirement as a result of the principal prepayment of $444.5 million on September ~~4, 2018).~~13, 2017 in conjunction with the issuance of the additional 6% Senior Notes due 2025. In addition, the Company is required to make mandatory payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, and asset sales and, depending on its consolidated total leverage ratio, the Company may be required to apply a portion of its excess cash flow to repay amounts outstanding under the Credit Facility.

As of September 30, 2019, the Company had $886.8 million outstanding on the Term Loan and 0 outstanding balance under the Revolving Credit Facility. The Company had $483.7 million of available borrowing capacity, after consideration of $16.3 million in outstanding letters of credit under its Revolving Credit Facility as of September 30, 2019. The Company applied approximately $150.0 million of proceeds from the sale of Presque Isle Downs to repay amounts outstanding under the Revolving Credit Facility. Pursuant to the terms of the indentures governing the Company’s senior notes, the Company will be required to make an offer to purchase a portion of its outstanding senior notes with the excess proceeds from such sale unless it applies the net proceeds of such sale to either permanently repay outstanding indebtedness or make specified acquisitions or capital expenditures within 365 days of the sale of Presque Isle Downs. The Company anticipates applying the proceeds of the Presque Isle Downs sale to permanently repay indebtedness and make qualifying capital expenditures prior to the anniversary of the sale.

The interest rate per annum applicable to loans under the Revolving Credit Facility are, at our option, either LIBOR plus a margin ranging from 1.75% to 2.50% or a base rate plus a margin from 0.75% to 1.50%, the margin is based on our total leverage ratio. The interest rate per annum applicable to the loans under the Term Loan Facility is, at our option, either LIBOR plus 2.25%, or a base rate plus 1.25%; provided, however, that in no event will LIBOR be less than zero or the base rate be less than 1.00%. Additionally, the Company pays a commitment fee on the unused portion of the Revolving Credit Facility of 0.50% per annum. As of September 30, 2019, the weighted average interest rate on the Term Loan was 4.31%.

On September 20, 2018, Delta Merger Sub, Inc. (“Escrow Issuer”), a Delaware corporation and a wholly-owned subsidiary of the Company, issued $600 million aggregate principal amount of 6.0% senior notes due 2026 (the “6% Senior Notes due 2026”) pursuant to an indenture, dated as of September 20, 2018 (the “2026 Indenture”), between Escrow Issuer and U.S. Bank, National Association, as Trustee. Interest on the 6% Senior Notes due 2026 will be paid every semi-annually in arrears on March 15 and September 15.

The 6% Senior Notes due 2026 were general unsecured obligations of Escrow Issuer’s upon issuance and, upon the assumption of such obligations by the Company and the subsidiary guarantors (the “Guarantors”) upon consummation of the Tropicana Acquisition, became general unsecured obligations of the Company and the Guarantors, ranking senior in right of payment to all of the Company’s existing and future debt that is expressly subordinated in right of payment to the 6% Senior Notes due 2026 and the guarantees, ranking equally in right of payment with all of the applicable obligor’s existing and future senior liabilities, including the obligations under the Company’s existing 7% Senior Notes due 2023 and 6% Senior Notes due 2025, and are effectively subordinated to all of the applicable obligor’s existing and future secured debt, including indebtedness under the Company’s Term Loan and Revolving Credit Facility and the Lumière Note (as defined in the 2026 Indenture), in each case, to the extent of the value of the collateral securing such debt. In addition, the 6% Senior Notes due 2026 and the related guarantees are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries and other entities in which the Company has an equity interest that do not guarantee the 6% Senior Notes due 2026 (other than indebtedness and liabilities owed to the Company or the Guarantors).

On March 29, 2017, the Company issued at par $375.0 million aggregate principal amount of 6.0% senior notes due 2025 (the “6% Senior Notes due 2025”) pursuant to an indenture, dated as of March 29, 2017 (the “2025 Indenture”), between Eagle II and U.S. Bank, National Association, as Trustee. The 6% Senior Notes due 2025 will mature on April 1, 2025, with interest payable semi-annually in arrears on April 1 and October 1. In connection with the consummation of the Isle Acquisition on May 1, 2017, the Company assumed Eagle II’s obligations under the 6% Senior Notes due 2025 and the 2025 Indenture and certain of the Company’s subsidiaries (including Isle and certain of its subsidiaries) executed guarantees of the Company’s obligations under the 6% Senior Notes due 2025.

We borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière. The Lumière Loan bears interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until October 1, 2020, and matures on October 1, 2020. The Lumière Loan was secured by a first priority mortgage on the Lumière real property that was released pursuant to its terms on October 1, 2019. In connection with the issuance of the Lumière Loan, we agreed to use our commercially reasonable efforts to transfer one or more of the Grand Victoria Casino, Isle Casino Bettendorf, Isle Casino Hotel Waterloo, Isle of Capri Lula, Lady Luck Casino Vicksburg and Mountaineer Casino, Racetrack and Resort or such other property or properties mutually acceptable to us and GLPI, provided that the aggregate value of such property, individually or collectively, is at least $246 million (the “Replacement Property”), to GLPI with a simultaneous leaseback to us of such Replacement Property. In connection with such Replacement Property sale, (i) we and GLPI will enter into an amendment to the Master Lease to revise the economic terms to include the Replacement Property, (ii) GLPI, or one of its affiliates, will assume the Lumière Loan and Tropicana St. Louis RE’s obligations under the Lumière Loan in consideration of the acquisition of the Replacement Property and our obligations under the Lumière Loan will be deemed to have been satisfied, and (iii) in the event the value of the Replacement Property is greater than the our outstanding obligations under the Lumière Loan, GLPI will pay us the difference between the value of the Replacement Property and the amount of outstanding obligations under the Lumière Loan. If such Replacement Property transaction is not consummated prior to the maturity date of the Lumière Loan, other than as a result of certain failures to perform by GLPI, then the amounts outstanding will be paid in full and the rent under the Master Lease will automatically increase, subject to certain escalations.

As of September 30, 2019, we were in compliance with all of the covenants under the 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026, the Credit Facility and the Lumière Loan.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practical to estimate fair value:

Cash and Cash Equivalents: Cash equivalents include cash held in money market funds and investments that can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short‑term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. Cash and cash equivalents also include cash maintained for gaming operations. The carrying amounts approximate the fair value because of the short maturity of those instruments (Level 1).

Restricted Cash and Investments and Other Liabilities related to Restricted Investments: The estimated fair values of our restricted cash and investments are based upon quoted prices available in active markets (Level 1), or quoted prices for similar assets in active and inactive markets (Level 2), or quoted prices available in active markets adjusted for time restrictions related to the sale of the investment (Level 3) and represent the amounts we would expect to receive if we sold our restricted cash and investments.

Marketable Securities: Marketable securities consist primarily of trading securities held the Company’s captive insurance subsidiary. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold these marketable securities.

Long‑term Debt: The fair value of our long-term debt or other long-term obligations is estimated based on the quoted market price of the underlying debt issue (Level 1) or, when a quoted market price is not available, the discounted cash flow of future payments utilizing current rates available to us for the debt of similar remaining maturities (Level 2). Debt obligations with a short remaining maturity have a carrying amount that approximates fair value.

Acquisition‑Related Contingent Considerations: Contingent consideration related to the July 2003 acquisition of Scioto Downs represents the estimate of amounts to be paid to former stockholders of Scioto Downs under certain earn-out provisions. Acquisition related contingent consideration of $0.4 million and $0.5 million is included in accrued other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, respectively.

Items Measured at Fair Value on a Recurring Basis: The following table sets forth the assets measured at fair value on a recurring basis, by input level, in the Consolidated Balance Sheets at September 30, 2019 and December 31, 2018 (amounts in thousands):

The change in restricted cash and investments valued using Level 3 inputs for the nine months ended September 30, 2019 is as follows:

In November 2018, we entered into a 20-year agreement with TSG pursuant to which we agreed to provide TSG with options to obtain access to our second skin for online sports wagering and third skin for real money online gaming and poker, in each case with respect to our properties in the United States. Under the terms of the agreement, we will receive a revenue share from the operation of the applicable verticals by TSG under our licenses. Pursuant to the terms of the TSG agreement, we received 1.1 million TSG common shares, and an additional $5.0 million in TSG common shares became payable to us upon TSG’s exercise of its first option, which shares we expect to receive in the fourth quarter of 2019. We may also receive additional TSG common shares in the future based on TSG net gaming revenue generated in our markets. The initial 1.1 million TSG common shares are subject to a restriction on transfer and may not be sold until November 2019, and the TSG common shares that are payable to us in connection with TSG’s exercise of its first option may not be sold for a period of one year from the date such shares are issued.

At September 30, 2019, the fair value of the Company’s shares of TSG totaled $15.8 million and is included in restricted cash and investments on the Consolidated Balance Sheets. Upon entry into the TSG agreement, the Company ~~will have~~also recorded deferred revenue associated with the ~~opportunity~~shares received and recognized revenue of $0.3 million and $1.0 million during the three and nine months ended September 30, 2019, respectively. As of September 30, 2019, the balance of the TSG deferred revenue totaled $17.7 million and is recorded in other long-term liabilities on the Consolidated Balance Sheets. As part of the agreement with William Hill (see Note 7), the Company is obligated to ~~sell its equity in~~pay William Hill US ~~following a public offering of William Hill US or through a conversion~~50% of the ~~20% equity stake to William Hill PLC shares or cash at William Hill’s discretion after five years.~~ proceeds received from selling the TSG shares. At September 30, 2019, the estimated obligation was $7.9 million and is included in accrued other liabilities on the Consolidated Balance Sheets.

The ~~transaction is expected to close~~estimated fair values of the Company’s financial instruments are as follows (amounts in ~~the first quarter of 2019.~~thousands):

The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the three and nine months ended September 30, 2019 and 2018 (dollars in thousands, except per share amounts):

Litigation. The Company is a party to various legal and administrative proceedings, which have arisen in the normal course of its business. Estimated losses are accrued for these proceedings when the loss is probable and can be estimated. The current liability for the estimated losses associated with these proceedings is not material to the Company’s consolidated financial condition and those estimated losses are not expected to have a material impact on its results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings may not materially impact the Company’s consolidated financial condition or results of operations. Further, no assurance can be given that the Company’s existing insurance coverage will be sufficient to cover losses, if any, arising from such proceedings.

As of November 6, 2019, 8 putative class action lawsuits have been filed in connection with the Merger. The Company has been named as a party in three of such actions: Stein v. Caesars Entertainment Corp., et al, Civil Action No. 1:19-cv-01656, United States District Court for the District of Delaware (9/5/2019), Romaniuk v. Caesars Entertainment Corp., et al, Civil Action No 1:19-cv-17871, United States District Court for the District of New Jersey (9/11/2019), and Biasi v. Caesars Entertainment Corp., et al, Civil Action No. 1:19-cv-08547, United States District Court for the Southern District of New York (9/13/2019). In general, the complaints assert claims under sections 14(a), 20(a) and Rule 14a-9 of the Securities Exchange Act of 1934 challenging the adequacy of certain disclosures in the joint proxy statement/prospectus filed in connection with the Merger. In addition, one of the complaints, in which the Company has not been named a party, alleges state law breach of fiduciary duty claims against the Caesars directors. The complaints seek, among other relief, an injunction preventing consummation of the Merger, damages in the event that the Merger is consummated and attorneys’ fees. The Company intends to vigorously defend itself against these claims.

On September 23, 2019, the Company and certain of its officers were named as defendants in a putative class action complaint filed in the United States District Court for the District of New Jersey and captioned as Elberts v. Eldorado Resorts, Inc., Case No. 2:19-cv-18230-SRC-CLW. The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated under the Securities Exchange Act of 1934. The complaint alleges that the Company made material misstatements and/or omissions during the period from March 1, 2019 through September 2, 2019. The allegations relate to the subpoenas that certain of the Company’s directors and officers received from the SEC, which have been previously disclosed in the proxy statement/prospectus filed by the Company relating to the pending transaction with Caesars. The complaint seeks unspecified damages on behalf of all persons and entities who purchased the Company’s securities during the period from March 1, 2019 through September 2, 2019. The Company intends to vigorously defend itself against these claims.

Agreements with Horsemen and Pari-mutuel Clerks. The Federal Interstate Horse Racing Act and the state racing laws in West Virginia and Ohio require that, in order to simulcast races, we have written agreements with the horse owners and trainers at those racetracks. In addition, in order to operate slot machines in West Virginia, we are required to enter into written agreements regarding the proceeds of the slot machines (a “proceeds agreement”) with a representative of a majority of the horse owners and trainers and with a representative of a majority of the pari‑mutuel clerks. We are required to have a proceeds agreement in effect on July 1 of each year with the horsemen and the pari‑mutuel clerks as a condition to renewal of our video lottery license for such year. If the requisite proceeds agreement is not in place as of July 1 of a particular year, Mountaineer’s application for renewal of its video lottery license could be denied, in which case Mountaineer would not be permitted to operate either its slot machines or table games. In Ohio, we must have an agreement with the representative of the horse owners. We currently have all the requisite agreements in place referenced in this sub section at Mountaineer and Scioto Downs. Certain agreements referenced above may be terminated upon written notice by either party.

As of September 30, 2019, Recreational Enterprises, Inc. (“REI”) owned approximately 14.4% of outstanding common stock of the Company. The directors of REI are the Company’s Executive Chairman of the Board, Gary L. Carano, its Chief Executive Officer and Board member, Thomas R. Reeg, and its former Senior Vice President of Regional Operations, Gene Carano. In addition, Gary L. Carano also serves as the Vice President of REI and Gene Carano also serves as the Secretary and Treasurer of REI. Members of the Carano family, including Gary L. Carano and Gene Carano, own the equity interests in REI. As such, the Carano family has the ability to significantly influence the affairs of the Company. During the three and nine months ended September 30, 2019 and 2018, there were 0 related party transactions between the Company and the Carano family other than compensation, including salary and equity incentives, and the CSY Lease listed below.

The Company owns the entire parcel on which Eldorado Reno is located, except for approximately 30,000 square feet which is leased from C. S. & Y. Associates which is an entity partially owned by REI (the “CSY Lease”). The CSY Lease expires on June 30, 2057. Rent pursuant to the CSY Lease is $0.6 million annually and paid quarterly during the year. As of September 30, 2019 and December 31, 2018, there were 0 amounts due to or from C.S. & Y. Associates.

The executive decision maker of our Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of our casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. ~~As of June 30, 2018,~~Prior to the Elgin and Tropicana acquisitions, the Company’s principal operating activities occurred in ~~four~~4 geographic regions and reportable segments. As referenced in Note 1, following the Elgin and Tropicana acquisitions a fifth segment, Central, ~~has been~~was added in the third quarter of 2018. The reportable segments are based on the similar characteristics of the operating segments within the regions in which they operate. ~~These segments as~~See Note 1 for a summary of ~~September 30, 2018 are summarized as follows:~~these segments.

The following table sets forth, for the periods indicated, certain operating data for our ~~five~~5 reportable segments.

Three Months Ended

Nine months ended

Ended September 30,

Ended September 30,

2018

2017

2018

2017

(in thousands)

Revenues and expenses

West:

Net operating revenues

$

129,092

$

134,324

$

346,550

$

297,564

Operating income

31,894

32,657

63,898

50,590

Midwest:

Net operating revenues

99,834

103,651

301,235

171,292

Operating income

26,637

24,264

80,725

39,676

South:

Net operating revenues

106,569

107,934

341,612

228,954

Operating income

16,176

13,682

50,099

32,210

East:

Net operating revenues

127,722

126,796

370,576

352,721

Operating income

23,637

21,215

67,164

54,411

Central:

Net operating revenues

23,897

—

23,897

—

Operating income

2,868

—

2,868

—

Corporate:

Net operating revenues

139

173

377

366

Operating loss

(9,443
)

(10,326
)

(41,377
)

(111,834
)
Total Reportable Segments

Net operating revenues

$

487,253

$

472,878

$

1,384,247

$

1,050,897

Operating income

$

91,769

$

81,492

$

223,377

$

65,053

Reconciliations to consolidated net income
(loss):

��

Operating income

$

91,769

$

81,492

$

223,377

$

65,053

Unallocated income and expenses:

Interest expense, net

(34,085
)

(29,183
)

(96,579
)

(69,380
)
Loss on early retirement of debt, net

—

(10,030
)

(162
)

(37,347
)
(Provision) benefit for income taxes

(19,980
)

(12,592
)

(31,281
)

26,116

Net income (loss)

$

37,704

$

29,687

$

95,355

$

(15,558
)

Nine Months Ended September 30,

2018

2017

(in thousands)

Capital Expenditures, Net

West

$

49,060

$

30,498

Midwest

14,516

6,545

South

12,307

4,003

East

8,953

6,540

Central

237

—

Corporate

4,009

5,344

Total

$

89,082

$

52,930

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	(in thousands)
Revenues and expenses
West:
Net operating revenues	$	151,418		$	129,092		$	397,241		$	346,550
Depreciation and amortization		13,935			9,476			40,585			27,045
Operating income		35,358			31,894			66,772			63,898
Midwest:
Net operating revenues		95,866			99,834			289,890			301,235
Depreciation and amortization		4,515			8,605			20,650			24,654
Operating income		30,221			26,637			87,066			80,725
South:
Net operating revenues		108,017			106,569			357,669			341,612
Depreciation and amortization		9,000			9,703			29,865			26,343
Operating income		15,185			16,176			61,723			50,099
East:
Net operating revenues		186,562			127,722			523,249			370,576
Depreciation and amortization		11,630			4,486			36,019			15,253
Operating income		45,341			23,637			107,715			67,164
Central:
Net operating revenues		119,410			23,897			362,675			23,897
Depreciation and amortization		11,626			2,215			34,317			2,215
Operating income		25,793			2,868			80,896			2,868
Corporate:
Net operating revenues		1,908			139			5,401			377
Depreciation and amortization		1,886			1,275			5,446			3,694
Operating expense		(26,991	)		(9,443	)		(53,111	)		(41,377	)
Total Reportable Segments
Net operating revenues	$	663,181		$	487,253		$	1,936,125		$	1,384,247
Depreciation and amortization	$	52,592		$	35,760		$	166,882		$	99,204
Operating income	$	124,907		$	91,769		$	351,061		$	223,377
Reconciliations to consolidated net income:
Operating income	$	124,907		$	91,769		$	351,061		$	223,377
Unallocated income and expenses:
Interest expense, net		(71,897	)		(34,085	)		(217,205	)		(96,579	)
Loss on early retirement of debt, net		(1,204	)		—			(1,204	)		(162	)
Unrealized gain on restricted investments		3,318			—			460			—
Provision for income taxes		(18,069	)		(19,980	)		(38,892	)		(31,281	)
Net income	$	37,055		$	37,704		$	94,220		$	95,355

Certain of our wholly-owned subsidiaries have fully and unconditionally guaranteed on a joint and several basis, the payment of all obligations under our 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026 and Credit Facility.

As of September 30, ~~2018, the~~2019, following wholly-owned subsidiaries of the Company ~~were~~are guarantors, on a joint and several basis, under the 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026 and Credit Facility: Isle of Capri Casinos LLC; Eldorado Holdco LLC; Eldorado Resorts LLC; Eldorado Shreveport 1#1, LLC; Eldorado Shreveport 2#2, LLC; Eldorado Casino Shreveport Joint Venture; MTR Gaming Group, Inc.; Mountaineer Park, Inc.; Old PID, Inc. (f/k/a Presque Isle Downs, Inc.); Scioto Downs, Inc.; Eldorado Limited Liability Company; Circus and Eldorado Joint Venture, LLC; ~~CC Reno~~CC-Reno, LLC; CCR Newco, LLC; Black Hawk Holdings, L.L.C.; IC Holdings Colorado, Inc.; CCSC/Blackhawk, Inc.; Isle of Capri Black Hawk, L.L.C.; IOC-Black Hawk Distribution Company, LLC; IOC-Black Hawk County, Inc.; Isle of Capri Bettendorf, L.C.; PPI, Inc.; Pompano Park ~~Holdings LLC; Pompano Park JV~~ Holdings, L.L.C.; IOC-Lula, Inc.; IOC-Kansas City, Inc.; IOC-Boonville, Inc.; IOC-Caruthersville, LLC; IOC Cape Girardeau, LLC; IOC-Vicksburg, Inc.; IOC-Vicksburg, L.L.C.; Rainbow Casino-Vicksburg Partnership, L.P.; IOC Holdings L.L.C.; St. Charles Gaming Company, ~~L.L.C.;~~L.L.C; Elgin Riverboat ~~Resort-Riverboat~~Resort–Riverboat Casino; Elgin Holdings I LLC; Elgin Holdings II LLC, PPI Development Holdings LLC; ~~and~~ PPI Development LLC; Tropicana Entertainment, Inc.; New Tropicana Holdings, Inc.; New Tropicana OpCo, Inc.; TLH LLC; TropWorld Games LLC; TEI R7 Investment LLC; TEI Management Services LLC; Tropicana St. Louis LLC; TEI (ST. LOUIS RE), LLC; TEI (STLH), LLC; TEI (ES), LLC; Aztar Riverboat Holding Company, LLC; Aztar Indiana Gaming Company, LLC ; New Jazz Enterprises, LLC; Catfish Queen Partnership in Commendam; Centroplex Centre Convention Hotel, L.L.C.; Columbia Properties Tahoe, LLC; MB Development, LLC; Lighthouse Point, LLC; Tropicana Atlantic City Corp.; Tropicana St. Louis RE LLC, Tropicana Laughlin, LLC, ELDO FIT, LLC and CRS ANNEX, LLC. Each of the subsidiaries’ guarantees is joint and several with the guarantees of the other subsidiaries.

The consolidating condensed balance sheet as of September 30, ~~2018~~2019 is as follows:

Balance Sheet	Eldorado Resorts, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated		Eldorado Resorts, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated
	(in thousands)											(in thousands)
Current assets	$	48,687	$	350,653	$	26,868	$	—		$	426,208	$	78,612	$	864,016	$	20,911	$	—		$	963,539
Intercompany receivables		65,375		—		23,067		(88,442	)		—		—		438,466		32,402		(470,868	)		—
Investment in and advances to unconsolidated affiliates													127,480		2,316		—		—			129,796
Investments in subsidiaries		2,931,271		—		—		(2,931,271	)		—		3,847,795		—		—		(3,847,795	)		—
Escrow cash		—		—		604,100		—			604,100
Property and equipment, net		13,077		1,472,777		3,012		—			1,488,866		17,544		2,616,883		684		—			2,635,111
Other assets		28,421		1,929,196		27,032		(26,649	)		1,958,000		72,945		2,299,720		15,868		(35,738	)		2,352,795
Total assets	$	3,086,831	$	3,752,626	$	684,079	$	(3,046,362	)	$	4,477,174	$	4,144,376	$	6,221,401	$	69,865	$	(4,354,401	)	$	6,081,241

Current liabilities	$	54,422	$	178,758	$	28,756	$	—		$	261,936	$	75,851	$	321,286	$	17,834	$	—		$	414,971
Intercompany payables		—		63,442		25,000		(88,442	)		—		445,868		—		25,000		(470,868	)		—
Long-term financing obligation to GLPI													—		967,982		—		—			967,982
Long-term debt, less current maturities		1,992,301		375,000		600,133		—			2,967,434		2,329,800		621,155		—		—			2,950,955
Deferred income tax liabilities		—		221,139		—		(26,649	)		194,490		—		260,449		166		(35,738	)		224,877
Other accrued liabilities		4,036		13,127		—		—			17,163
Other liabilities													166,080		229,598		—		—			395,678
Stockholders’ equity		1,036,072		2,901,160		30,190		(2,931,271	)		1,036,151		1,126,777		3,820,931		26,865		(3,847,795	)		1,126,778
Total liabilities and stockholders’ equity	$	3,086,831	$	3,752,626	$	684,079	$	(3,046,362	)	$	4,477,174	$	4,144,376	$	6,221,401	$	69,865	$	(4,354,401	)	$	6,081,241

The consolidating condensed balance sheet as of December 31, ~~2017~~2018 is as follows:

Balance Sheet	Eldorado Resorts, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated		Eldorado Resorts, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated
	(in thousands)											(in thousands)
Current assets	$	27,572	$	201,321	$	22,139	$	—		$	251,032	$	48,268	$	497,309	$	27,619	$	—		$	573,196
Intercompany receivables		274,148		—		34,492		(308,640	)		—		—		7,831		28,042		(35,873	)		—
Investment in and advances to unconsolidated affiliates													—		1,892		—		—			1,892
Investments in subsidiaries		2,437,287		—		—		(2,437,287	)		—		3,648,961		—		—		(3,648,961	)		—
Property and equipment, net		12,042		1,483,473		7,302		—			1,502,817		18,555		2,863,311		740		—			2,882,606
Other assets		37,458		1,764,291		27,283		(36,409	)		1,792,623		35,072		2,423,807		26,674		(31,785	)		2,453,768
Total assets	$	2,788,507	$	3,449,085	$	91,216	$	(2,782,336	)	$	3,546,472	$	3,750,856	$	5,794,150	$	83,075	$	(3,716,619	)	$	5,911,462

Current liabilities	$	28,677	$	169,348	$	25,726	$	—		$	223,751	$	48,579	$	328,319	$	25,279	$	—		$	402,177
Intercompany payables		—		283,640		25,000		(308,640	)		—		10,873		—		25,000		(35,873	)		—
Long-term financing obligation to GLPI													—		959,835		—		—			959,835
Long-term debt, less current maturities		1,814,185		375,000		393		—			2,189,578		2,640,046		621,193		34		—			3,261,273
Deferred income tax liabilities		—		199,376		—		(36,409	)		162,967		—		231,795		—		(31,785	)		200,010
Other accrued liabilities		4,127		19,624		4,828		—			28,579
Other liabilities													22,206		36,808		—		—			59,014
Stockholders’ equity		941,518		2,402,097		35,269		(2,437,287	)		941,597		1,029,152		3,616,200		32,762		(3,648,961	)		1,029,153
Total liabilities and stockholders’ equity	$	2,788,507	$	3,449,085	$	91,216	$	(2,782,336	)	$	3,546,472	$	3,750,856	$	5,794,150	$	83,075	$	(3,716,619	)	$	5,911,462

The consolidating condensed statement of operations for the three months ended September 30, 2019 is as follows:

	Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated
	(in thousands)
Revenues:
Gaming and pari-mutuel commissions	$	—			457,852		$	148		$	—		$	458,000
Non-gaming		1,785			202,018			1,378			—			205,181
Net revenues		1,785			659,870			1,526			—			663,181

Operating expenses:
Gaming and pari-mutuel commissions		—			202,555			—			—			202,555
Non-gaming		—			99,813			—			—			99,813
Marketing and promotions		—			33,291			1			—			33,292
General and administrative		—			122,802			(35	)		—			122,767
Corporate		13,490			(541	)		65			—			13,014
Management fee		(6,401	)		6,401			—			—			—
Depreciation and amortization		1,311			51,225			56			—			52,592
Total operating expenses		8,400			515,546			87			—			524,033

Loss on sale or disposal of property and equipment		—			(284	)		—			—			(284	)
Transaction expenses		(12,442	)		—			—			—			(12,442	)
(Loss) income from unconsolidated affiliates		(1,552	)		37			—			—			(1,515	)
Operating (loss) income		(20,609	)		144,077			1,439			—			124,907
Other Expense:
Interest expense, net		(35,600	)		(35,948	)		(349	)		—			(71,897	)
Loss on early retirement of debt, net		(1,204	)		—			—			—			(1,204	)
Unrealized gain on restricted investments		3,318			—			—			—			3,318
Subsidiary income (loss)		71,256			—			—			(71,256	)		—
Income (loss) before income taxes		17,161			108,129			1,090			(71,256	)		55,124
Income tax benefit (provision)		19,894			(37,633	)		(330	)		—			(18,069	)
Net income (loss)	$	37,055		$	70,496		$	760		$	(71,256	)	$	37,055

The consolidating condensed statement of operations for the three months ended September 30, 2018 is as follows:

	Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated			Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated
	(in thousands)															(in thousands)
Revenues:
Gaming and pari-mutuel commissions	$	—		$	359,897		$	8,272		$	—		$	368,169		$	—		$	359,897		$	8,272		$	—		$	368,169
Non-gaming		10			116,639			2,435			—			119,084			10			116,639			2,435			—			119,084
Net revenues		10			476,536			10,707			—			487,253			10			476,536			10,707			—			487,253

Operating expenses:
Gaming and pari-mutuel commissions		—			174,602			5,460			—			180,062			—			174,602			5,460			—			180,062
Non-gaming		—			68,046			627			—			68,673			—			68,046			627			—			68,673
Marketing and promotions		—			22,687			435			—			23,122			—			22,687			435			—			23,122
General and administrative		—			73,755			1,844			—			75,599			—			73,755			1,844			—			75,599
Corporate		8,596			94			527			—			9,217			8,596			94			527			—			9,217
Impairment charges		—			—			3,787			—			3,787			—			—			3,787			—			3,787
Management fee		(7,067	)	��	7,067			—			—			—			(7,067	)		7,067			—			—			—
Depreciation and amortization		923			34,782			55			—			35,760			923			34,782			55			—			35,760
Total operating expenses		2,452			381,033			12,735			—			396,220			2,452			381,033			12,735			—			396,220

Loss on sale of asset or disposal of property and equipment		—			(101	)		(9	)		—			(110	)		—			(101	)		(9	)		—			(110	)
Proceeds from terminated sale		5,000			—			—						5,000			5,000			—			—			—			5,000
Transaction expenses		(4,090	)		(1	)		—			—			(4,091	)		(4,090	)		(1	)		—			—			(4,091	)
Equity in loss of unconsolidated affiliate		—			(63	)		—			—			(63	)		—			(63	)		—			—			(63	)
Operating (loss) income		(1,532	)		95,338			(2,037	)		—			91,769			(1,532	)		95,338			(2,037	)		—			91,769

Other Expense:
Interest expense, net		(26,482	)		(6,088	)		(1,515	)		—			(34,085	)		(27,582	)		(6,088	)		(415	)		—			(34,085	)
Subsidiary income (loss)		60,864			—			—			(60,864	)		—			61,964			—			—			(61,964	)		—
Income (loss) before income taxes		32,850			89,250			(3,552	)		(60,864	)		57,684			32,850			89,250			(2,452	)		(61,964	)		57,684
Income tax benefit (provision)		4,854			(25,778	)		944			—			(19,980	)		4,854			(25,778	)		944			—			(19,980	)
Net income (loss)	$	37,704		$	63,472		$	(2,608	)	$	(60,864	)	$	37,704		$	37,704		$	63,472		$	(1,508	)	$	(61,964	)	$	37,704

The consolidating condensed statement of operations for the ~~three~~nine months ended September 30, ~~2017~~2019 is as follows:

	Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated			Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries				Eldorado Resorts, Inc. Consolidated
	(in thousands)															(in thousands)
Revenues:
Gaming and pari-mutuel commissions	$	—		$	343,825		$	8,823		$	—		$	352,648		$	—		$	1,381,231		$	4,617		$		—		$	1,385,848
Non-gaming		—			117,347			2,883			—			120,230			4,966			540,394			4,917				—			550,277
Net revenues		—			461,172			11,706			—			472,878			4,966			1,921,625			9,534				—			1,936,125

Operating expenses:
Gaming and pari-mutuel commissions		—			168,102			5,877			—			173,979			—			612,937			3,164				—			616,101
Non-gaming		—			75,445			920			—			76,365			—			290,053			400				—			290,453
Marketing and promotions		—			25,623			816			—			26,439			—			97,422			251				—			97,673
General and administrative		—			73,840			1,810			—			75,650			—			358,884			1,202				—			360,086
Corporate		7,865			(1,464	)		1,317			—			7,718			50,352			166			301				—			50,819
Impairment charges																	—			958			—				—			958
Management fee		(7,666	)		7,366			300			—			—			(16,956	)		16,956			—				—			—
Depreciation and amortization		303			28,675			144			—			29,122			3,701			163,125			56				—			166,882
Total operating expenses		502			377,587			11,184			—			389,273			37,097			1,540,501			5,374				—			1,582,972

Gain on sale of asset or disposal of property and equipment		—			4			—			—			4
Gain on sale or disposal of property and equipment																	409			21,193			66				—			21,668
Transaction expenses		(455	)		(1,639	)		—			—			(2,094	)		(20,470	)		(913	)		(245	)			—			(21,628	)
Equity in loss of unconsolidated affiliate		—			(23	)		—			—			(23	)
(Loss) income from unconsolidated affiliates																	(2,281	)		149			—				—			(2,132	)
Operating (loss) income		(957	)		81,927			522			—			81,492			(54,473	)		401,553			3,981				—			351,061

Other Expense:																										��
Interest expense, net		(22,583	)		(6,184	)		(416	)		—			(29,183	)		(108,617	)		(107,507	)		(1,081	)			—			(217,205	)
Loss on early retirement of debt, net		(10,030	)		—			—			—			(10,030	)		(1,204	)		—			—				—			(1,204	)
Unrealized gain on restricted investments																	460			—			—				—			460
Subsidiary income (loss)		51,738			—			—			(51,738	)		—			203,531			—			—				(203,531	)		—
(Loss) income before income taxes		18,168			75,743			106			(51,738	)		42,279
Income (loss) before income taxes																	39,697			294,046			2,900				(203,531	)		133,112
Income tax benefit (provision)		11,519			(24,085	)		(26	)		—			(12,592	)		54,523			(92,515	)		(900	)			—			(38,892	)
Net (loss) income	$	29,687		$	51,658		$	80		$	(51,738	)	$	29,687
Net income (loss)																$	94,220		$	201,531		$	2,000		$		(203,531	)	$	94,220

The consolidating condensed statement of operations for the nine months ended September 30, 2018 is as follows:

	Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated			Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries			Eldorado Resorts, Inc. Consolidated
	(in thousands)															(in thousands)
Revenues:
Gaming and pari-mutuel commissions	$	—		$	1,036,650		$	23,767		$	—		$	1,060,417		$	—		$	1,036,650		$	23,767		$	—		$	1,060,417
Non-gaming		10			316,216			7,604			—			323,830			10			316,216			7,604			—			323,830
Net revenues		10			1,352,866			31,371			—			1,384,247			10			1,352,866			31,371			—			1,384,247

Operating expenses:
Gaming and pari-mutuel commissions		—			503,741			15,817			—			519,558			—			503,741			15,817			—			519,558
Non-gaming		—			198,113			2,022			—			200,135			—			198,113			2,022			—			200,135
Marketing and promotions		—			64,943			1,312			—			66,255			—			64,943			1,312			—			66,255
General and administrative		—			218,054			5,492			—			223,546			—			218,054			5,492			—			223,546
Corporate		30,148			751			2,119			—			33,018			30,148			751			2,119			—			33,018
Impairment charges		—			9,815			3,787			—			13,602			—			9,815			3,787			—			13,602
Management fee		(19,234	)		19,234			—			—			—			(19,234	)		19,234			—			—			—
Depreciation and amortization		2,646			96,180			378			—			99,204			2,646			96,180			378			—			99,204
Total operating expenses		13,560			1,110,831			30,927			—			1,155,318			13,560			1,110,831			30,927			—			1,155,318

Loss on sale of asset or disposal of property and equipment		—			(386	)		(7	)		—			(393	)		—			(386	)		(7	)		—			(393	)
Proceeds from terminated sale		5,000			—									5,000			5,000			—			—			—			5,000
Transaction expenses		(9,543	)		(500	)		—			—			(10,043	)		(9,543	)		(500	)		—			—			(10,043	)
Equity in loss of unconsolidated affiliate		—			(116	)		—			—			(116	)		—			(116	)		—			—			(116	)
Operating (loss) income		(18,093	)		241,033			437			—			223,377			(18,093	)		241,033			437			—			223,377

Other Expense:
Interest expense, net		(75,827	)		(18,293	)		(2,459	)		—			(96,579	)		(76,927	)		(18,293	)		(1,359	)		—			(96,579	)
Loss on early retirement of debt, net		(162	)		—			—			—			(162	)		(162	)		—			—			—			(162	)
Subsidiary income (loss)		164,940			—			—			(164,940	)		—			166,040			—			—			(166,040	)		—
Income (loss) before income taxes		70,858			222,740			(2,022	)		(164,940	)		126,636			70,858			222,740			(922	)		(166,040	)		126,636
Income tax benefit (provision)		24,497			(56,519	)		741			—			(31,281	)		24,497			(56,519	)		741			—			(31,281	)
Net income (loss)	$	95,355		$	166,221		$	(1,281	)	$	(164,940	)	$	95,355		$	95,355		$	166,221		$	(181	)	$	(166,040	)	$	95,355

The consolidating condensed statement of ~~operations~~cash flows for the nine months ended September 30, ~~2017~~2019 is as follows:

Eldorado
Resorts, Inc.
(Parent Obligor)

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Consolidating
and Eliminating
Entries

Eldorado
Resorts, Inc.
Consolidated

(in thousands)

Revenues:

Gaming and pari-mutuel
   commissions

$

—

$

760,033

$

14,510

$

—

$

774,543

Non-gaming

—

271,515

4,839

—

276,354

Net revenues

—

1,031,548

19,349

—

1,050,897

Operating expenses:

Gaming and pari-mutuel
   commissions

—

389,182

9,722

—

398,904

Non-gaming

—

178,036

1,569

—

179,605

Marketing and promotions

—

56,641

1,458

—

58,099

General and administrative

—

165,279

3,060

—

168,339

Corporate

21,413

(1,791
)

2,112

—

21,734

Management fee

(21,214
)

20,714

500

—

—

Depreciation and amortization

635

68,767

233

—

69,635

Total operating expenses

834

876,828

18,654

—

896,316

Loss on sale of asset or disposal of
   property and equipment

(21
)

(30
)

—

—

(51
)
Transaction expenses

(69,628
)

(19,544
)

—

—

(89,172
)
Equity in loss of unconsolidated
   affiliate

—

(305
)

—

—

(305
)
Operating (loss) income

(70,483
)

134,841

695

—

65,053

Interest expense, net

(49,576
)

(19,110
)

(694
)

—

(69,380
)
Loss on early retirement of debt, net

(37,347
)

—

—

—

(37,347
)
Subsidiary income (loss)

77,393

—

—

(77,393
)

—

(Loss) income  before income
   taxes

(80,013
)

115,731

1

(77,393
)

(41,674
)
Income tax benefit (provision)

64,455

(38,405
)

66

—

26,116

Net (loss) income

$

(15,558
)

$

77,326

$

67

$

(77,393
)

$

(15,558
)

	Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries		Eldorado Resorts, Inc. Consolidated
	(in thousands)
Net cash (used in) provided by operating activities	$	(83,572	)	$	342,979		$	676		$	—	$	260,083
INVESTING ACTIVITIES:
Purchase of property and equipment, net		(3,510	)		(131,506	)		—			—		(135,016	)
Sale of restricted investments		—			—			4,962			—		4,962
Proceeds from sale of property and equipment, net of cash sold		33			171,398			(2,070	)		—		169,361
Investments in and loans to unconsolidated affiliates		(815	)		—			—			—		(815	)
Net cash (used in) provided by investing activities		(4,292	)		39,892			2,892			—		38,492
FINANCING ACTIVITIES:
Net proceeds from (payments to) related parties		434,993			(430,633	)		(4,360	)		—		—
Payments on Term Loan		(70,000	)		—			—			—		(70,000	)
Net payments under Revolving Credit Facility		(245,000	)		—			—			—		(245,000	)
Debt issuance costs		(458	)		—			—			—		(458	)
Taxes paid related to net share settlement of equity awards		(7,574	)		—			—			—		(7,574	)
Dividends received (paid)		—			7,900			(7,900	)		—		—
Payments on other long-term payables		(72	)		(36	)		(264	)				(372	)
Net cash provided by (used in) financing activities		111,889			(422,769	)		(12,524	)		—		(323,404	)
Increase (decrease) in cash, cash equivalents and restricted cash		24,025			(39,898	)		(8,956	)		—		(24,829	)
Cash, cash equivalents and restricted cash, beginning of period		12,844			222,672			11,175			—		246,691
Cash, cash equivalents and restricted cash, end of period	$	36,869		$	182,774		$	2,219		$	—	$	221,862

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	36,869			169,819			2,143		$	—	$	208,831
Restricted cash		—			6,361			76			—		6,437
Restricted and escrow cash included in other noncurrent assets		—			6,594			—			—		6,594
Total cash, cash equivalents and restricted cash	$	36,869		$	182,774		$	2,219		$	—	$	221,862

The consolidating condensed statement of cash flows for the nine months ended September 30, 2018 is as follows:

		Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries		Eldorado Resorts, Inc. Consolidated				Eldorado Resorts, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Entries		Eldorado Resorts, Inc. Consolidated
		(in thousands)															(in thousands)
Net cash (used in) provided by operating activities		$	(22,743	)	$	283,414		$	2,777		$	—	$	263,448			$	(22,743	)	$	283,410		$	2,781		$	—	$	263,448
INVESTING ACTIVITIES:
Purchase of property and equipment, net			(2,620	)		(85,384	)		(1,078	)		—		(89,082	)			(2,620	)		(86,405	)		(57	)		—		(89,082	)
Proceeds from sale of property and equipment			—			920			—			—		920				—			920			—			—		920
Cash (used in) provided by business combinations			(328,925	)		22,651			—			—		(306,274	)
Investment in and loans to unconsolidated affiliate			—			(698	)		—			—		(698	)
Net cash (used in) provided by business combinations																		(328,925	)		22,651			—			—		(306,274	)
Investment in and loans to unconsolidated affiliates																		—			(698	)		—			—		(698	)
Net cash used in investing activities			(331,545	)		(62,511	)		(1,078	)		—		(395,134	)			(331,545	)		(63,532	)		(57	)		—		(395,134	)
FINANCING ACTIVITIES:
Net proceeds from (payments to) related parties																		208,772			(214,023	)		5,251			—		—
Proceeds from issuance of New Term Loan																		—			—			—			—		—
Proceeds from issuance of 6% Senior Notes due 2026			—			—			600,000			—		600,000				—			—			600,000			—		600,000
Borrowings under Revolving Credit Facility			215,358			—			—			—		215,358
Payments under Revolving Credit Facility			(35,358	)		—			—			—		(35,358	)
Net proceeds from (payments to) related parties			208,772			(215,048	)		6,276			—		—
Payments on other long-term payables			(67	)		(217	)		(217	)		—		(501	)
Net borrowings under Revolving Credit Facility																		180,000			—			—			—		180,000
Debt issuance costs			(5,401	)		—			—			—		(5,401	)			(5,401	)		—			—			—		(5,401	)
Taxes paid related to net share settlement of equity awards			(10,601	)		—			—			—		(10,601	)			(10,601	)		—			—			—		(10,601	)
Proceeds from exercise of stock options			154			—			—			—		154				154			—			—			—		154
Payments on other long-term payables																		(67	)		(217	)		(217	)		—		(501	)
Net cash provided by (used in) financing activities			372,857			(215,265	)		606,059			—		763,651				372,857			(214,240	)		605,034			—		763,651
Increase in cash, cash equivalents and restricted cash			18,569			5,638			607,758			—		631,965				18,569			5,638			607,758			—		631,965
Cash, cash equivalents and restricted cash, beginning of period			13,837			118,483			15,429			—		147,749				13,837			118,483			15,429			—		147,749
Cash, cash equivalents and restricted cash, end of period		$	32,406		$	124,121		$	623,187		$	—	$	779,714			$	32,406		$	124,121		$	623,187		$	—	$	779,714

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS:	RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS:															RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents		$	31,688		$	122,451			9,947		$	—	$	164,086			$	31,688		$	122,451		$	9,947		$	—	$	164,086
Restricted cash			718			670			234			—		1,622				718			670			234			—		1,622
Restricted and escrow cash included in other noncurrent assets			—			1,000			613,006			—		614,006				—			1,000			613,006			—		614,006
Total cash, cash equivalents and restricted cash		$	32,406		$	124,121		$	623,187		$	—	$	779,714			$	32,406		$	124,121		$	623,187		$	—	$	779,714

On June 24, 2019, the Company entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of August 15, 2019, and as it may be further amended from time to time, the “Merger Agreement”) with Caesars Entertainment Corporation (“Caesars”) pursuant to which a wholly-owned subsidiary of the Company will merge with and into Caesars, with Caesars surviving as a wholly-owned subsidiary of the Company (the “Merger”). Based on the terms and subject to the conditions set forth in the Merger Agreement, the aggregate consideration payable by the Company in respect of outstanding shares of common stock of Caesars will be (a) an amount of cash equal to (i) the sum of (A) $8.40 plus (B) if applicable closing conditions set forth in the Merger Agreement are not satisfied by March 25, 2020, an amount equal to $0.003333 for each day (provided that such amount will not be payable if the waiting period under the HSR Act has expired or been terminated but (to the extent required) the consents of the holders of Caesars’ 5.00% convertible senior notes due 2024 have not been obtained) from March 25, 2020 until the closing date of the Merger, multiplied by (ii) a number of shares of Caesars common stock equal to (A) 682,161,838 (which includes 8,271,660 shares being held in escrow trust to satisfy unsecured claims pursuant to the Third Amended Joint Plan of Reorganization, filed with the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago on January 13, 2017, at Docket No. 6318, which

~~The consolidating condensed statement~~shares are not entitled to vote) plus (B) the number of shares of Caesars common stock (the “Aggregate Caesars Share Amount”) issued after June 24, 2019 and prior to the effective time of the Merger pursuant to the exercise of certain equity awards issued under Caesars stock plans or conversion of Caesars’ outstanding convertible notes and (b) a number of shares of common stock of Eldorado equal to 0.0899 multiplied by the Aggregate Caesars Share Amount (such amount per share of Caesars common stock, the “Merger Consideration”). Following the consummation of the Merger (assuming that all Caesars convertible notes are converted immediately following consummation of the Merger into $8.40 in cash ~~flows~~and 0.0899 shares of common stock of Eldorado for each share of Caesars common stock into which such Caesars convertible notes were convertible immediately prior to the ~~nine months ended September 30, 2017 is as follows:~~Merger), Eldorado and former Caesars stockholders will hold approximately 51% and 49%, respectively, of the combined company's outstanding shares of common stock.

The Merger Agreement contains customary representations and warranties by each of Caesars and Eldorado, and each party has agreed to customary covenants.

The Merger Agreement also contains termination rights for each of Caesars and Eldorado under certain circumstances. If the Merger Agreement is terminated in certain circumstances relating to changes in the recommendation of the board of directors of Caesars in favor of the Merger, entry by Caesars into an alternative transaction or in certain circumstances following the failure of Caesars stockholders to approve the Merger, Caesars will be required to pay Eldorado a termination fee of approximately $418.4 million. If the Merger Agreement is terminated in certain circumstances relating to changes in the recommendation of the board of directors of Eldorado in favor of the issuance of shares of Eldorado common stock in the Merger or in certain circumstances following the failure of Eldorado stockholders to approve such issuance, then Eldorado will be required to pay Caesars a termination fee of approximately $154.9 million. In addition, each party will be obligated to reimburse the other party’s expenses for an amount not to exceed $50.0 million if the Merger Agreement is terminated because of the failure to obtain the required approval of such party’s stockholders (creditable against any termination fee that may subsequently be paid by such party). The Merger Agreement also provides that Eldorado will be obligated to pay a termination fee of approximately $836.8 million to Caesars if the Merger Agreement is terminated (i) due to a law or order relating to gaming or antitrust laws that prohibits or permanently enjoins the consummation of the transactions, (ii) because the required regulatory approvals were not obtained prior to June 24, 2020 (subject to extension to a date no later than December 24, 2020 pursuant to the Merger Agreement) or (iii) due to Eldorado willfully and materially breaching certain obligations with respect to the actions required to be taken by Eldorado to obtain required antitrust approvals.

Consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including, among others, (1) the expiration or termination of any applicable waiting period under the HSR Act, and receipt of required gaming approvals, (2) the absence of any governmental order or law prohibiting the consummation of the Merger, (3) adoption of the Merger Agreement by holders of a majority of the outstanding shares of Caesars common stock, (4) the approval of the issuance of shares of Eldorado common stock in the Merger, (5) the effectiveness of the registration statement for Eldorado common stock to be issued in the Merger and the authorization for listing of those shares on the Nasdaq Stock Market, (6) absence of a material adverse effect on the other party, (7) the accuracy of the other party’s representations and warranties, subject to customary materiality standards, (8) compliance of the other party with its respective covenants under the Merger Agreement in all material respects and (9) conversion or certain amendments of, or another mutually agreed arrangement with respect to, Caesars’ 5.00% convertible senior notes due 2024.

In connection with the execution of the Merger Agreement, on June 24, 2019, the Company entered into a debt financing commitment letter and related fee letters with JPMorgan Chase Bank, N.A., Credit Suisse AG, Cayman Islands Branch, Credit Suisse Loan Funding LLC, Macquarie Capital (USA) Inc. and Macquarie Capital Funding LLC (the “Initial Commitment Parties”). On July 19, 2019, the Company entered into an amended and restated commitment letter (the “A&R Commitment Letter”) and related fee letters, which amended and restated the Commitment Letter in its entirety to, among other things, add additional arrangers and lenders, including Bank of America, N.A., BofA Securities, Inc., Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Goldman Sachs Bank USA, SunTrust Bank, SunTrust Robinson Humphrey, Inc., U.S. Bank National Association, KeyBank National Association, KeyBanc Capital Markets Inc., Fifth Third Bank, and Citizens Bank, National Association (together with the Initial Commitment Parties, collectively, the “Commitment Parties”). Pursuant to the A&R Commitment Letter, the Commitment Parties committed to arrange and provide (i) the Company with: (w) a $1,000.0 million senior secured revolving credit facility, (x) a $3,000.0 million senior secured term loan B facility, (y) a $3,600.0 million senior secured 364-day bridge facility and (z) a $1,800.0 million senior unsecured bridge loan facility and (ii) a subsidiary of Caesars with a $2,400.0 million senior secured incremental term loan B facility (collectively, the “Debt Financing”). The proceeds of the Debt Financing will be used (a) to pay all or a portion of the cash consideration payable in the Merger, (b) to refinance all of the Company’s existing syndicated bank credit facilities and outstanding senior notes, (c) to refinance certain of Caesars’ and its subsidiaries’ existing debt, (d) to pay transaction fees and expenses related to the Merger and related transactions and (e) for working capital and general corporate purposes. The availability of the borrowings under the Debt Financing is subject to the satisfaction of certain customary conditions including the substantially concurrent closing of the Merger.

Eldorado
Resorts, Inc.
(Parent Obligor)

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Consolidating
and Eliminating
Entries

Eldorado
Resorts, Inc.
Consolidated

(in thousands)

Net cash (used in) provided by
   operating activities

$

(64,274
)

$

131,253

$

4,652

$

—

$

71,631

INVESTING ACTIVITIES:

Purchase of property and equipment, net

(4,128
)

(48,439
)

(363
)

—

(52,930
)
Cash (used in) provided by business
   combinations

(1,355,371
)

37,103

5,216

—

(1,313,052
)
Net cash used in investing activities

(1,359,499
)

(11,336
)

4,853

—

(1,365,982
)
FINANCING ACTIVITIES:

Proceeds from issuance of Term Loan

1,450,000

—

—

—

1,450,000

Proceeds from issuance of 6% Senior Notes
   Due 2025

875,000

—

—

—

875,000

Borrowings under Revolving Credit
   Facility

207,953

—

—

—

207,953

Payments under Term Loan

(866,750
)

—

—

—

(866,750
)
Payments under Revolving Credit Facility

(236,953
)

—

—

—

(236,953
)
Net (payments to) proceeds from related
   parties

41,526

(46,694
)

5,168

—

—

Debt premium proceeds

27,500

27,500

Payments on other long-term payables

(23
)

(242
)

(105
)

—

(370
)
Debt issuance costs

(51,338
)

—

—

—

(51,338
)
Taxes paid related to net share settlement of
   equity awards

(10,927
)

—

—

—

(10,927
)
Proceeds from exercise of stock options

2,900

—

—

—

2,900

Net cash provided by (used in)
   financing activities

1,438,888

(46,936
)

5,063

—

1,397,015

Increase in cash, cash equivalents and
   restricted cash

15,115

72,981

14,568

—

102,664

Cash, cash equivalents and restricted
   cash, beginning of period

1,410

61,702

332

—

63,444

Cash, cash equivalents and restricted
   cash, end of period

$

16,525

$

134,683

$

14,900

$

—

$

166,108

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONDENSED
   CONSOLIDATED BALANCE SHEETS:

Cash and cash equivalents

$

15,775

$

113,302

$

5,826

$

—

$

134,903

Restricted cash

750

20,381

177

—

21,308

Restricted cash included in other noncurrent
   assets

—

1,000

8,897

—

9,897

Total cash, cash equivalents and restricted
   cash

$

16,525

$

134,683

$

14,900

$

—

$

166,108

On July 19, 2019, the Company entered into a commitment and engagement letter (as amended, the “Increase Commitment Letter”) and related fee letters to, if elected by the Company, increase the total size of the Debt Financing, including an increase to the senior secured term loan B facility to be arranged on a commercially reasonable efforts basis by the Commitment Parties in an amount to be agreed upon by the parties and an increase to the revolving credit facility by $830.0 million, the proceeds of which, if the Company elects to incur such financing, may be used to refinance certain existing indebtedness of Caesars Resort Collection, LLC and its subsidiaries and for working capital and general corporate purposes upon consummation of the Merger. The Increase Commitment Letter and a related engagement letter also contemplate the possibility of new senior secured and/or senior unsecured notes to be issued by the Company.

In connection with the execution of the Merger Agreement, on June 24, 2019, the Company entered into a Master Transaction Agreement (the “MTA”) with VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to which, among other things, the Company has agreed, subject to the consummation of the Merger and the other applicable conditions set forth therein and in any related documents, (i) through one or more of its subsidiaries (after giving effect to the Merger) to consummate one or more sale and leaseback transactions with VICI and/or its affiliates with respect to certain property described in the MTA, including Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City (or, under certain circumstances, if necessary, certain replacement properties specified in the MTA), (ii) through one or more of its subsidiaries (after giving effect to the Merger) to amend the CPLV Lease, the Non-CPLV Lease and the Joliet Lease (each as defined in the MTA) in accordance with the terms of the MTA and receive certain consideration from VICI or its affiliates in respect thereof, (iii) to provide a guaranty in respect of each of the CPLV Lease, the Non-CPLV Lease and the Joliet Lease in accordance with the terms of the MTA, (iv) to enter into (or cause its applicable subsidiaries (after giving effect to the Merger) to enter into) certain right of first refusal agreements and a put-call right agreement in accordance with the terms of the MTA and (v) to undertake certain related transactions in connection with or related to the foregoing. The Company expects to apply the proceeds of the VICI transactions to pay a portion of the cash consideration payable in the Merger and transaction expenses associated with the Merger and related transactions.

On September 26, 2019, the Company and VICI entered into definitive Purchase and Sale Agreements to effect the purchase and sale of Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City in connection with the transactions described in clause (i) of the preceding paragraph.

The Company expects that the Merger and related transactions will be consummated in the first half of 2020.

You should read the following discussion together with the financial statements, including the related notes and the other financial information, contained in this Quarterly Report on Form 10-Q.

Eldorado Resorts, Inc., a Nevada corporation, is referred to as the “Company,” “ERI,” or the “Registrant,” and together with its subsidiaries may also be referred to as “we,” “us” or “our.”

We are a geographically diversified gaming and hospitality company ~~that owned and operated 21~~with 26 gaming facilities in 1112 states as of September 30, ~~2018.~~2019. Our properties, which are located in Ohio, Louisiana, Nevada, ~~Pennsylvania,~~New Jersey, West Virginia, Colorado, Florida, Iowa, Mississippi, Illinois, ~~Mississippi~~Indiana and Missouri, feature approximately ~~21,000~~26,600 slot machines, ~~and~~ video lottery terminals (“VLTs”) and e-tables, approximately ~~600~~750 table games and ~~over 7,000~~approximately 11,800 hotel ~~rooms as of September 30, 2018.~~rooms. Our primary source of revenue is generated by gaming operations, and we utilize our hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to our properties.

We were founded in 1973 by the Carano ~~Family~~family with the opening of the Eldorado Hotel Casino in Reno, Nevada. In 1993, we partnered with MGM Resorts International ~~on the~~to build Silver Legacy Resort Casino, the first mega-themed resort in Reno. In 2005, we acquired our first property outside of Reno when we ~~acquired~~purchased a casino in Shreveport, Louisiana, now known as Eldorado Shreveport. In September 2014, we merged with MTR Gaming Group, Inc. and acquired its three gaming and racing facilities in Ohio, Pennsylvania and West Virginia. The following year, in November 2015, we acquired Circus ~~Circus~~ Reno and the 50% membership interest in the Silver Legacy that was owned by MGM Resorts International. On May 1, 2017, we completed our ~~largest~~ acquisition ~~to date when we acquired~~of Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”), adding ~~another~~ 13 gaming properties to our ~~portfolio.~~

portfolio. On August 7, 2018, we acquired the ~~Company completed its previously announced acquisition of the outstanding partnership interests of~~ Elgin Riverboat Resort – Riverboat Casino d/b/a Grand Victoria Casino ~~an Illinois partnership~~ (“Elgin”)~~, the owner of Grand Victoria Casino, located in Elgin, Illinois~~ (the “Elgin Acquisition”).

As On October 1, 2018, we completed our acquisition of ~~September 30, 2018, ERI owned~~Tropicana Entertainment, Inc. (“Tropicana”), and ~~operated the following properties:~~

In addition, Scioto Downs, through its subsidiary RacelineBet, Inc., also operates Racelinebet.com, a national account wagering service that offers online and telephone wagering on horse races as a marketing affiliate of TwinSpires.com, an affiliate of Churchill Downs Incorporated.

~~The Company has~~VICI entered into definitive ~~agreements~~Purchase and Sale Agreements to ~~sell Presque Isle Downs~~effect the purchase and ~~Lady Luck Nemacolin.~~sale of Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City in connection with the transactions described in clause (i) of the preceding paragraph.

We expect that the Merger and ~~Mergers~~related transactions will be consummated in the first half of 2020.

~~On August 7,~~In September 2018, we ~~completed~~entered into a 25-year agreement, which became effective January 2019, with William Hill PLC and William Hill US, its U.S. subsidiary (together, “William Hill”) pursuant to which we (i) granted to William Hill the right to conduct betting activities in retail channels and under our ~~previously announced acquisition~~first skin and third skin for online channels with respect to our current and future properties located in the United States and the territories and possessions of the ~~Grand Victoria Casino~~United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online gaming activities utilizing our second skin available with respect to properties in ~~Elgin, Illinois. We purchased Elgin~~such territory. Pursuant to the terms of the agreement, we received a 20% ownership interest in William Hill US valued at approximately $128.9 million as well as 13.4 million ordinary shares of William Hill PLC valued at approximately $27.3 million upon closing of the transaction in January 2019. The Company’s initial equity and the profit and losses attributable to William Hill US are in included in income (loss) from unconsolidated affiliates on the Consolidated Statements of Income. The amortization of deferred revenues associated with the Company’s equity interests totaled $1.3 million and $3.9 million for ~~$327.5~~the three and nine months ended September 30, 2019, respectively, and is included in corporate and other revenues and operating income. Additionally, we receive a profit share from the operations of betting and other gaming activities associated with the Company’s properties, which is included in other property revenues and operating income.

In November 2018, we entered into a 20-year agreement with The Stars Group Inc. (“TSG”) pursuant to which we agreed to provide TSG with options to obtain access to our second skin for online sports wagering and third skin for real money online gaming and poker, in each case with respect to our properties in the United States. Under the terms of the agreement, we will receive a revenue share from the operation of the applicable verticals by TSG under our licenses. Pursuant to the terms of the TSG agreement, we received 1.1 million TSG common shares valued at approximately $18.6 million and an ~~estimated $1.4 working capital adjustment subject~~additional $5.0 million in TSG common shares became payable to ~~finalization within 100 days~~us upon TSG’s exercise of its first option, which shares we expect to receive in the ~~Elgin Acquisition date.~~fourth quarter of 2019. We may also receive additional TSG common shares in the future based on TSG net gaming revenue generated in our markets. Upon the entry into the TSG agreement, the Company also recorded deferred revenue associated with the shares received and recognized revenue of $0.3 million and $0.9 million during the three and nine months ended September 30, 2019, respectively, which is included in corporate and other revenues and operating income.

On ~~April 15,~~October 1, 2018, ~~the Company announced that it entered into a definitive agreement to acquire~~we acquired Tropicana ~~Entertainment Inc. (“Tropicana”)~~ in a cash transaction valued at ~~$1.85~~$1.9 billion. At the closing of the transaction ~~on October 1, 2018, a subsidiary of the Company merged into Tropicana and~~ Tropicana became a ~~wholly owned~~wholly-owned subsidiary of ~~the Company.~~ours. Immediately prior to ~~the merger,~~our acquisition, Tropicana sold Tropicana Aruba Resort and ~~Casino and~~GLP Capital, L.P., a wholly-owned subsidiary of Gaming and Leisure Properties, Inc. (“GLPI”), acquired substantially all of Tropicana’s real estate, other than the real estate underlying MontBleu ~~Casino Resort & Spa~~ and Lumière, ~~Place Casino and Hotel (“Lumière Place”),~~ for approximately $964 ~~million and the Company~~million. We acquired the real estate underlying Lumière ~~Place~~ for $246 million. The Company also entered into a 15-year master lease with GLPI pursuant to which the Company will lease the Tropicana real estate acquired by GLPI. The Company funded the purchase of the real estate underlying Lumière Placemillion with the proceeds of a $246 million loan from ~~GLPI and~~GLPI. We funded the ~~$640 million of~~remaining consideration payable ~~by the Company~~with our cash on hand and ~~the repayment of amounts outstanding under the Tropicana credit facility with~~ cash on hand at ~~the Company and~~ Tropicana, borrowings under ~~the Company’s~~our revolving credit facility and proceeds from ~~the Company’s~~our offering of $600 million of 6%6.0% senior notes due 2026. In addition, ~~the Company’s~~our borrowing capacity on ~~its~~our revolving credit facility increased from $300 million to $500 million effective October 1, 2018, and the maturity of the revolving credit facility was extended to October 1, 2023.

~~Following~~Substantially concurrently with the acquisition of the real estate portfolio by GLPI, ~~the Company~~we entered into a triple net master lease for the Tropicana properties acquired by GLPI with an initial term of 15 years, with renewals of up to 20 years at ~~the Company’s~~our option (“Master Lease”). Under the Master Lease, ~~the Company is~~we are required to pay the following, among other things: lease payments to the underlying ground lessor for properties that are subject to ground leases, facility maintenance costs, all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties). The initial annual rent under the terms of the lease ~~is expected to be~~was approximately $87.6 ~~million. The Company does~~million and is subject to annual escalation. We do not have the ability to terminate the obligations under the Master Lease prior to its expiration without GLPI’s consent.

In connection with the purchase of the real estate related to Lumière, ~~Place,~~ GLPI, Tropicana St. Louis RE LLC, a wholly-owned subsidiary of ~~the Company~~ours (“Tropicana St. Louis RE”), and ~~the Company~~GLPI entered into a loan agreement, dated as of October 1, 2018 (the “Lumière Loan”), relating to a loan of $246 million by GLPI to Tropicana St. Louis RE to fund the ~~entire~~ purchase price of the real estate underlying Lumiè~~re Place and a guaranty by the Company of the amounts owed by Tropicana St. Louis RE.~~re. The Lumière Loan is guaranteed by us, bears interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% ~~until October 1, 2020,~~thereafter and matures on October 1, 2020. The Lumière Loan iswas secured by a first priority mortgage on the Lumière ~~Real Property until~~real estate that was released pursuant to its terms on October 1, 2019. In connection with the issuance of the Lumière Loan, ~~the Company~~we agreed to use ~~its~~our commercially reasonable efforts to transfer one or more of ~~the Grand Victoria Casino, Isle Casino~~Elgin, Bettendorf, ~~Isle Casino Hotel~~ Waterloo, ~~Isle of Capri~~ Lula, ~~Lady Luck Casino~~ Vicksburg and Mountaineer ~~Casino, Racetrack and Resort~~ or such other property or properties mutually acceptable to Tropicana St. Louis RE and GLPI, provided that the aggregate value of such property, individually or collectively, is at least $246 million (the “Replacement Property”), to GLPI with a simultaneous leaseback to ~~the Company~~us of such Replacement Property. In connection with such Replacement Property sale, (i) ~~the Company~~we and GLPI will enter into an amendment to the Master Lease to revise the economic terms to include the Replacement Property, (ii) GLPI, or one of its affiliates, will assume the Lumière Loan and Tropicana St. Louis RE’s obligations under the Lumière Loan in consideration of the acquisition of the Replacement Property and ~~the obligations of~~our Tropicana St. Louis ~~RE and the Company~~RE’s obligations under the Lumière Loan will be deemed to have been satisfied (iii) the Lumière Real Property will be released from the lien placed on it in connection with the Lumière Loan (if such lien has not yet been released in accordance with the terms of the Lumière Loan) and ~~(iv)~~(iii) in the event the value of the Replacement Property is greater than the outstanding obligations of Tropicana St. Louis RE under the Lumière Loan, GLPI will pay Tropicana St. Louis RE the difference between the value of the Replacement Property and the amount of outstanding obligations under the Lumière Loan. If such Replacement Property transaction is not consummated prior to the maturity date of the Lumière Loan, other than as a result of certain failures to perform by GLPI, then the amounts outstanding will be paid in full and the rent under the Master Lease will automatically increase, subject to certain escalations.

On ~~September 5,~~August 7, 2018, we completed the ~~Company announced that~~acquisition of the Grand Victoria Casino in Elgin, Illinois. We purchased Elgin for $328.8 million, including a working capital adjustment totaling $1.3 million. The Elgin Acquisition was financed using cash on hand and borrowings under the Company’s revolving credit facility.

In April 2018, we entered into a joint venture with Cordish Companies (“Cordish”) to master plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino and racetrack at our Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with our input and will submit it ~~had~~for our review and approval. We and Cordish have made cash contributions of $500,000 each and could be required to make additional contributions to a maximum of $2.0 million ($1.0 million per member) at the request of the managing member. We have agreed to contribute approximately 130 to 200 acres of land to the joint venture for the project. While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary; as such the investment in the joint venture is accounted for using the equity method. We participate evenly with Cordish in the profits and losses of the joint venture, which is included in income (loss) from unconsolidated affiliates on the Consolidated Statements of Income.

On July 10, 2019, we entered into a definitive agreement ~~pursuant~~ to ~~which,~~sell the equity interests of Rainbow Casino Vicksburg Partnership, L.P. and IOC-Kansas City, L.L.C., the entities that hold Lady Luck Casino Vicksburg and Isle of Capri Casino Kansas City, to Twin River Worldwide Holdings, Inc. for cash consideration of approximately $230 million, subject to a working capital adjustment.

The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of ~~all necessary~~required regulatory approvals, William Hill US will become the Company’s exclusive sports betting operator for a period of 25 years at its properties in jurisdictions where sports betting is legal. The Company will also work with William Hill US to leverage its licenses to operate mobile and online sports wagering operations in the United States. At the closing of the transactions contemplated by the agreement, the Company will receive a 20% equity stake in William Hill US as well as ordinary shares of William Hill PLC (LON: WMH) with a value of $50.0 million (based on the 60 day volume-weighted average trading price of William Hill PLC shares ending on September 4, 2018). Pursuant to the terms of the agreement, the Company will have the opportunity to sell its equity in William Hill US following a public offering of William Hill US or through a conversion of the 20% equity stake to William Hill PLC shares or cash at William Hill’s discretion after five years.approvals. The transaction is expected to close in early 2020.

On June 17, 2019, we entered into definitive agreements to sell the ~~first quarter~~real property relating to Mountaineer, Cape Girardeau, and Caruthersville to VICI Properties Inc. (“VICI) for approximately $278 million and, immediately following the consummation of ~~2019.~~the sale such real property, sell all of the outstanding equity interests of Mountaineer Park, Inc., IOC-Caruthersville, LLC and IOC- Cape Girardeau, LLC to Century Casinos, Inc. for approximately $107 million, subject to a customary working capital adjustment.

~~Dispositions~~The definitive agreements provide that the consummation of the sales is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. The transaction is expected to close in early 2020.

On February 28, 2018, ~~the Company~~we entered into definitive agreements to sell substantially all of the assets and liabilities of Presque Isle Downs and Vicksburg to Churchill Downs Incorporated (“CDI”). Under the terms of the agreements, CDI agreed to purchase Presque Isle Downs for cash consideration of approximately $178.9 million and Vicksburg for cash consideration of approximately $50.6 million, in each case subject to a customary working capital adjustment. In conjunction with the classification of Vicksburg’s operations as assets held for sale at ~~March 31,~~June 30, 2018 as a result of the announced sale to CDI, an impairment charge totaling $9.8 million was recorded due to the carrying value exceeding the estimated net sales proceeds.

The definitive agreements provided that the ~~dispositions~~divestitures were subject to receipt of required regulatory approvals, termination of the waiting period under the ~~Hart-Scott-Rodino~~HSR Act and other customary closing conditions, including, in the case of Presque Isle Downs, the prior closing of the sale of Vicksburg or the entry into an agreement to acquire another asset of ~~the Company.~~ours. On May 7, 2018, ~~the Company~~we and CDI each received a Request for Additional Information and Documentary Materials, often referred to as a “Second Request,” from the Federal Trade Commission in connection with its review of the Vicksburg acquisition.

On July 6, 2018, in consideration of the time and expense needed to reply to the Second Request, the Company and CDI entered into a termination agreement and release pursuant to which the parties agreed to terminate the asset purchase agreement with respect to Vicksburg and to enter into an asset purchase agreement pursuant to which CDI would acquire and assume the rights and obligations to operate Nemacolin (the “Vicksburg Termination Agreement”). The Vicksburg Termination Agreement also provided that CDI would pay ~~the Company~~us a $5.0 million termination fee upon execution of a definitive agreement with respect to the Nemacolin transaction. On August 10, 2018, ~~the Company~~we entered into a definitive agreement to sell substantially all of the assets and liabilities of Nemacolin to CDI. Under the terms of the agreement, CDI agreed to purchase Nemacolin for cash consideration of approximately $0.1 million, subject to a customary working capital adjustment.

~~Both transactions are expected to close in~~We closed on the ~~fourth quarter~~sale of ~~2018 or first quarter~~Presque Isle Downs on January 11, 2019 and the sale of ~~2019, subject to satisfaction of closing conditions, including receipt of Pennsylvania regulatory approvals.~~Nemacolin on March 8, 2019.

The executive decision maker of our ~~Company~~company reviews operating results, assesses performance and makes decisions on a “significant market” basis. ~~Management~~Our management views each of our ~~casinos~~properties as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate, and their management and reporting structure. AsPrior to our acquisition of ~~June 30, 2018,~~Isle, our principal operating activities occurred in three geographic regions: Nevada, Louisiana and parts of the eastern United States. Following the Isle Acquisition, the Company’s principal operating activities occurred in four geographic regions and reportable ~~segments. Due to~~segments: West, Midwest, South and East. Following the Tropicana Acquisition and Elgin Acquisition, ~~and Tropicana Acquisition, a fifth~~an additional segment, Central, ~~has been~~was added ~~in the third quarter of 2018. The~~increasing our reportable segments ~~are based on the similar characteristics~~to five. See Notes 1 and 16 for a summary of ~~the operating segments within the regions in which they operate. These segments as of September 30, 2018 are summarized as follows:~~these segments.

~~The financial information included in this Item 2 for periods prior to our acquisitions of Isle and Elgin are those of ERI and its subsidiaries.~~ The presentation of information herein for periods prior to our acquisitions of ~~Isle~~Elgin and ~~Elgin~~Tropicana and after our acquisitions of ~~Isle~~Elgin and ~~Elgin~~Tropicana are not fully comparable because the results of operations for ~~Isle~~Elgin and ~~Elgin~~Tropicana are not included for periods prior to August 7, 2018 and October 1, 2018, respectively. Additionally, the Company closed on its sales of Presque Isle Downs and Nemacolin on January 11, 2019 and March 8, 2019, respectively.

Summary financial results of Tropicana for the three and nine months ended September 30, 2018 is included in Tropicana’s Quarterly Report on Form 10-Q as filed with the SEC. In conjunction with our ~~acquisitions~~acquisition of ~~Isle~~Tropicana, Tropicana was no longer required to file quarterly and ~~Elgin.~~annual reports with the SEC and terminated its registration on October 1, 2018.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of these factors and the changing competitive landscape in each of our markets, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited consolidated financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q.

Our primary source of revenue is generated by our gaming operations, but we use our hotels, restaurants, bars, entertainment, retail shops, racing, sportsbook offerings and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers visiting and staying at our properties. Key performance metrics include volume indicators such as table games drop and slot handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room designated by average daily rate (“ADR”) are key indicators for our hotel business. Our calculation of ADR consists of the average price of occupied rooms per day including the impact of resort fees and complimentary rooms. Complimentary room rates are determined based on an analysis of retail or cash rates for each customer segment and each type of room product to estimate complimentary rates which are consistent with retail rates. Complimentary rates are reviewed at least annually and on an interim basis if there are significant changes in market conditions. Complimentary rooms are treated as occupied rooms in our calculation of hotel occupancy.

The following summary highlights the significant factors impacting our financial results for the three and nine months ended September 30, ~~2018~~2019 and ~~2017.~~2018.

In previous periods, the operations of Lake Charles were classified as discontinued operations and as an asset held for sale. As a result of the termination of the sale, Lake Charles is no longer classified as an asset held for sale and as discontinued operations, and is included in our results of operations for the three and nine months ended September 30, 2018 and 2017.

In conjunction with the classification of Vicksburg’s operations as assets held for sale at ~~March 31,~~June 30, 2018 as a result of the announced sale to CDI, an impairment charge totaling $9.8 million was recorded due to the carrying value exceeding the estimated net sales proceeds. Effective July 6, 2018, the sale of Vicksburg was terminated, and Vicksburg was no longer presented as an asset held for sale as of ~~September 30,~~July 31, 2018. In connection with this termination, CDI paid us a $5.0 million termination ~~fee, which is~~fee.

On August 10, 2018, we entered into an agreement to sell our rights and obligations to operate Nemacolin. Due to the carrying value of the property and equipment being sold exceeding the estimated net sales proceeds, we also recorded an impairment charge for three and nine months ended September 30, 2018 totaling $3.8 million related to Nemacolin.from continuing operations.

~~Additionally, our operations were impacted system wide by challenging weather in January and February of 2018 as well as our Reno operations in March of 2018.~~

~~A 118-room Hampton Inn Hotel at Scioto Downs developed by a third party~~ At Tropicana Atlantic City, we opened an expansive, new sportsbook in ~~March 2017 and since opening has driven visitation and spend at~~ the ~~property.~~ fourth quarter of 2018.

The following table highlights the results of our operations (dollars in thousands):

	Three Months Ended							Nine Months Ended								Three Months Ended								Nine Months Ended
	September 30,							September 30,								September 30,								September 30,
	2018		2017		Change			2018		2017			Change			2019		2018		Change				2019		2018		Change
Net revenues	$	487,253	$	472,878		3.0	%	$	1,384,247	$	1,050,897			31.7	%	$	663,181	$	487,253		36.1		%	$	1,936,125	$	1,384,247		39.9		%
Operating income		91,769		81,492		12.6	%		223,377		65,053			243.4	%		124,907		91,769		36.1		%		351,061		223,377		57.2		%
Net income (loss)		37,704		29,687		27.0	%		95,355		(15,558	)		712.9	%
Net income																	37,055		37,704		(1.7	)	%		94,220		95,355		(1.2	)	%

Operating Results. Including incremental net revenues totaling $264.7 million generated by Elgin and the Tropicana properties, net revenues rose 36.1% for the three months ended September 30, 2019 compared to the same prior year period. For the ~~three and~~ nine months ended September 30, ~~2018~~2019 compared to the same prior year period, Elgin and Tropicana contributed incremental net revenues totaling ~~$23.9 million. For~~$759.5 million resulting in a 39.9% increase in net revenues for the nine months ended September 30, ~~2018~~2019 compared to the same prior year ~~period,~~period. Excluding the impact of our acquisitions and the divestitures of Presque Isle ~~contributed $307.7 million of incremental~~Downs and Nemacolin, net revenues ~~from January 1, 2018 through April 30, 2018 (the comparative period preceding our acquisition of Isle on May 1, 2017). Including incremental Elgin~~decreased 9.6% and ~~Isle net revenues, net revenues increased 3.0% and 31.7%~~6.6%, respectively, for the three and nine months ended September 30, ~~2018~~2019 compared to the same prior year periods mainly due to the significant factors described above. These decreases were offset by incremental net revenues recognized in conjunction with our William Hill and TSG sports betting partnerships for the three and nine months ended September 30, 2019 compared to the same prior year periods. ~~Incremental~~

Operating income increased $33.1 million and $127.7 million, or 36.1% and 57.2%, for the three and nine months ended September 30, 2019, respectively, compared to the same prior year periods mainly due to incremental operating income contributed by the acquired Elgin and Tropicana properties. Excluding the impact of our acquisitions and the divestitures of Presque Isle Downs and Nemacolin, operating income decreased 18.4% for the three months ended September 30, 2019 due to higher depreciation expense associated with asset additions and transaction costs associated with the acquisitions of Tropicana and Caesars. For the nine months ended September 30, 2019, we recorded a $22.2 million net ~~revenues~~gain on the sale of assets associated with the sales of Presque Isle Downs and Nemacolin resulting in ~~both periods consisted primarily~~an increase in operating income of ~~gaming revenues. Excluding incremental Elgin~~1.3% excluding the impact of our acquisitions and ~~Isle net revenues, net revenues~~divestitures.

Net income decreased ~~2.0%~~$0.6 million and ~~remained flat,~~$1.1 million, respectively, for the three and nine months ended September 30, ~~2018~~2019, compared to the same prior year ~~periods.~~

~~Operating income increased $10.3 million and $158.3, respectively,~~periods principally due to the same factors impacting operating income. Additionally, higher interest expense for the three and nine months ended September 30, ~~2018~~2019 compared to the same prior year ~~periods. In addition~~periods resulting from increased debt associated with the Tropicana Acquisition and amortization of the direct financing obligation associated with the Master Lease also contributed to the ~~incremental operating~~declines. Net income ~~contributed by~~for the ~~acquired Isle properties and Elgin, these increases over prior year were mainly due to the significant amount of Isle transaction expenses incurred during the~~ three ~~and nine~~ months ended September 30, ~~2017.~~

~~Net income increased $8.0 million and $110.9 million for the three and nine months ended September 30, 2018, respectively,~~2019 compared to the same prior year ~~periods. These increases were due to the same factors impacting operating income combined with the~~period was also impacted by a $1.2 million loss on the early retirement of debt due to repayments on our Term Loan offset by a $3.3 million gain associated with our investments. Net income for the three ~~and~~months ended September 30, 2018 was favorably impacted by a $5.0 million fee related to the termination of the agreement to purchase our Vicksburg property. Net income for the nine months ended September 30, ~~2017 associated with our refinancing completed in May of 2017. These increases were partially offset~~2019 compared to the same prior year period was also impacted by a higher ~~interest expense during the 2018 periods resulting from increased debt following our acquisition of Isle along with increases~~income tax provision due to an increase in our effective tax ~~provision.~~rate from an increase in disallowed officers’ compensation and changes in valuation allowance.

The following tables highlight our net revenues and operating income (loss) by reportable segment (dollars in thousands):

	Net Revenues for the Three Months Ended September 30,				Operating Income (Loss) for the Three Months Ended September 30,						Net Revenues for the Three Months Ended September 30,				Operating Income (Loss) for the Three Months Ended September 30,
	2018		2017		2018			2017			2019		2018		2019			2018
West	$	129,092	$	134,324	$	31,894		$	32,657		$	151,418	$	129,092	$	35,358		$	31,894
Midwest		99,834		103,651		26,637			24,264			95,866		99,834		30,221			26,637
South		106,569		107,934		16,176			13,682			108,017		106,569		15,185			16,176
East		127,722		126,796		23,637			21,215			186,562		127,722		45,341			23,637
Central		23,897		—		2,868			—			119,410		23,897		25,793			2,868
Corporate		139		173		(9,443	)		(10,326	)		1,908		139		(26,991	)		(9,443	)
Total	$	487,253	$	472,878	$	91,769		$	81,492		$	663,181	$	487,253	$	124,907		$	91,769

	Net Revenues for the Nine Months Ended September 30,				Operating Income (Loss) for the Nine Months Ended September 30,						Net Revenues for the Nine Months Ended September 30,				Operating Income (Loss) for the Nine Months Ended September 30,
	2018		2017		2018			2017			2019		2018		2019			2018
West	$	346,550	$	297,564	$	63,898		$	50,590		$	397,241	$	346,550	$	66,772		$	63,898
Midwest		301,235		171,292		80,725			39,676			289,890		301,235		87,066			80,725
South		341,612		228,954		50,099			32,210			357,669		341,612		61,723			50,099
East		370,576		352,721		67,164			54,411			523,249		370,576		107,715			67,164
Central		23,897		—		2,868			—			362,675		23,897		80,896			2,868
Corporate		377		366		(41,377	)		(111,834	)		5,401		377		(53,111	)		(41,377	)
Total	$	1,384,247	$	1,050,897	$	223,377		$	65,053		$	1,936,125	$	1,384,247	$	351,061		$	223,377

Three Months Ended September 30, ~~2018~~2019 Compared to the Three Months Ended September 30, ~~2017~~2018

	Three Months Ended											Three Months Ended
	September 30,							Percent				September 30,							Percent
	2018		2017		Variance			Change				2019		2018		Variance			Change
Revenues:
Gaming and Pari-Mutuel Commissions:
West	$	60,912	$	63,501	$	(2,589	)		(4.1	)	%	$	62,081	$	60,912	$	1,169			1.9		%
Midwest		86,331		89,482		(3,151	)		(3.5	)	%		84,249		86,331		(2,082	)		(2.4	)	%
South		86,153		86,213		(60	)		(0.1	)	%		87,331		86,153		1,178			1.4		%
East		113,075		113,452		(377	)		(0.3	)	%		129,244		113,075		16,169			14.3		%
Central		21,698		—		21,698			100.0		%		95,095		21,698		73,397			338.3		%
Total Gaming and Pari-Mutuel Commissions		368,169		352,648		15,521			4.4		%		458,000		368,169		89,831			24.4	��	%
Non-gaming:
West		68,180		70,823		(2,643	)		(3.7	)	%		89,337		68,180		21,157			31.0		%
Midwest		13,503		14,169		(666	)		(4.7	)	%		11,617		13,503		(1,886	)		(14.0	)	%
South		20,416		21,721		(1,305	)		(6.0	)	%		20,686		20,416		270			1.3		%
East		14,647		13,344		1,303			9.8		%		57,318		14,647		42,671			291.3		%
Central		2,199		—		2,199			100.0		%		24,315		2,199		22,116			1,005.7		%
Corporate		139		173		(34	)		(19.7	)	%		1,908		139		1,769			1,273.0		%
Total Non-gaming		119,084		120,230		(1,146	)		(1.0	)	%		205,181		119,084		86,097			72.3		%
Total Net Revenues		487,253		472,878		14,375			3.0		%		663,181		487,253		175,928			36.1		%
Expenses:
Gaming and Pari-Mutuel Commissions:
West		21,605		23,314		(1,709	)		(7.3	)	%		22,326		21,605		721			3.3		%
Midwest		35,687		37,481		(1,794	)		(4.8	)	%		33,881		35,687		(1,806	)		(5.1	)	%
South		41,513		43,234		(1,721	)		(4.0	)	%		42,361		41,513		848			2.0		%
East		70,645		69,950		695			1.0		%		60,972		70,645		(9,673	)		(13.7	)	%
Central		10,612		—		10,612			100.0		%		43,015		10,612		32,403			305.3		%
Total Gaming and Pari-Mutuel Commissions		180,062		173,979		6,083			3.5		%		202,555		180,062		22,493			12.5		%
Non-gaming
West		37,111		41,124		(4,013	)		(9.8	)	%		42,838		37,111		5,727			15.4		%
Midwest		7,572		9,877		(2,305	)		(23.3	)	%		6,021		7,572		(1,551	)		(20.5	)	%
South		13,217		15,552		(2,335	)		(15.0	)	%		12,757		13,217		(460	)		(3.5	)	%
East		8,744		9,812		(1,068	)		(10.9	)	%		25,655		8,744		16,911			193.4		%
Central		2,029		—		2,029			100.0		%		12,542		2,029		10,513			518.1		%
Total Non-gaming		68,673		76,365		(7,692	)		(10.1	)	%		99,813		68,673		31,140			45.3		%

Marketing and promotions		23,122		26,439		(3,317	)		(12.5	)	%		33,292		23,122		10,170			44.0		%
General and administrative		75,599		75,650		(51	)		(0.1	)	%		122,767		75,599		47,168			62.4		%
Corporate		9,217		7,718		1,499			19.4		%		13,014		9,217		3,797			41.2		%
Impairment charges		3,787		—		3,787			100.0		%		—		3,787		(3,787	)		(100.0	)	%
Depreciation and amortization		35,760		29,122		6,638			22.8		%		52,592		35,760		16,832			47.1		%
Total Operating Expenses	$	396,220	$	389,273	$	6,947			1.8		%	$	524,033	$	396,220	$	127,813			32.3		%

Gaming Revenues and Pari-Mutuel Commissions. Elgin and Tropicana contributed ~~$21.7~~$171.2 million of incremental gaming revenues and pari-mutuel commissions for the three months ended September 30, ~~2018 resulting in an increase of 4.4%~~2019 compared to the same prior year period.

~~Excluding incremental Elgin gaming~~ This increase was partially offset by the decline in revenues associated with the divestitures of Presque Isle Downs and ~~pari-mutuel commissions, gaming revenues and pari-mutuel commissions decreased 1.8%~~Nemacolin for the three months ended September 30, ~~2018~~2019 compared to the same prior year period, resulting in a 24.4% increase in gaming revenues and pari-mutuel commissions.

Excluding incremental Elgin and Tropicana gaming revenues and pari-mutuel commissions and the impact of the Presque Isle Downs and Nemacolin divestitures, gaming revenues and pari-mutuel commissions decreased 11.9% for the three months ended September 30, 2019 compared to the same prior year period due to ~~decreased revenues in all segments. This decline was primarily due to~~ reductions in ~~free play~~casino volume associated with ~~unprofitable play.~~declines in promotional offers across all segments and severe weather in our South segment.

Non-gaming Revenues. Elgin and Tropicana contributed ~~$2.2~~$93.5 million of incremental non-gaming revenues for the three months ended September 30, ~~2018. Despite the incremental revenues,~~2019, which was partially offset by declines in non-gaming revenues ~~decreased 1.0%~~attributable to the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 72.3% over the same prior year period.

Excluding incremental Elgin and Tropicana non-gaming revenues and the impact of the Presque Isle Downs and Nemacolin divestitures, non-gaming revenues decreased ~~1.8%~~3.0% for the three months ended September 30, ~~2018~~2019 compared to the same prior year period. ~~Decreased non-gaming~~This decline was primarily driven by changes in promotional activity along with decreased food and beverage revenues associated with reductions in ~~the~~restaurant offerings in our West, Midwest and South ~~resulting from reductions~~segments in ~~promotional offers were partially offset by increased~~an effort to drive more profitable non-gaming ~~revenues in the East.~~departmental margins.

Gaming Expenses and Pari-Mutuel Commissions. Elgin and Tropicana contributed ~~$10.6~~$70.6 million of incremental gaming expenses and pari-mutuel commissions for the three months ended September 30, ~~2018~~2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of ~~3.5%~~12.5% in gaming expenses and pari-mutuel commissions over the same prior year period.

Non-gaming Expenses. Elgin and Tropicana contributed $41.8 million of incremental non-gaming expenses for the three months ended September 30, 2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 45.3% over the same prior year period.

Excluding incremental Elgin and Tropicana non-gaming expenses, and the impact of the Presque Isle Downs and Nemacolin divestitures, non-gaming expenses decreased 11.8% for the three months ended September 30, 2019 compared to the same prior year period. Decreased non-gaming expenses across all segments were associated with lower non-gaming revenues along with continued efforts to reduce variable expenses including labor and cost of sales.

Marketing and Promotions Expenses. Elgin and Tropicana contributed $17.3 million of incremental marketing and promotions expense for the three months ended September 30, 2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 44.0% over the same prior year period.

Excluding incremental Elgin and Tropicana marketing and promotions expenses and the impact of the Presque Isle Downs and Nemacolin divestitures, consolidated marketing and promotions expense decreased 25.7% for the three months ended September 30, 2019 compared to the same prior year period. This decline was primarily due to savings achieved via the termination of certain marketing contracts, reductions in direct mail costs and continued company-wide changes in marketing and promotional activity.

General and Administrative Expenses. Elgin and Tropicana contributed $54.4 million of general and administrative expense for the three months ended September 30, 2019, which was partially offset by the Presque Isle Downs and Nemacolin dispositions, resulting in an increase of 62.4% over the same prior year period.

Excluding incremental Elgin and Tropicana general and administrative expenses, and the impact of the Presque Isle Downs and Nemacolin divestitures, consolidated general and administrative expenses decreased 3.9% for the three months ended September 30, 2019 compared to the same prior year period mainly due to the centralization of certain services provided to our properties and realized savings achieved through consolidated purchasing programs.

Corporate Expenses. For the three months ended September 30, 2019 compared to the same prior year period, corporate expenses increased primarily due to payroll and other expenses associated with additional corporate costs, including stock compensation expense, driven by growth related to the Company’s acquisitions. This increase was partially offset by a decline in corporate bonus expense and captive insurance costs for the three months ended September 30, 2019 compared to the same prior year period.

Depreciation and Amortization Expense. Elgin and Tropicana contributed $26.5 million of depreciation and amortization expense for the three months ended September 30, 2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 47.1% over the same prior year period.

Excluding incremental Elgin and Tropicana depreciation and amortization expense, and the impact of the Presque Isle Downs and Nemacolin divestitures, depreciation and amortization expense decreased 27.0% for the three months ended September 30, 2019 compared to the same prior year period mainly due to ceasing depreciation and amortization expense on assets held for sale.

Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

	Nine Months Ended
	September 30,							Percent
	2019		2018		Variance			Change
Revenues:
Gaming and Pari-Mutuel Commissions:
West	$	170,980	$	168,342	$	2,638			1.6		%
Midwest		254,641		262,138		(7,497	)		(2.9	)	%
South		291,552		278,655		12,897			4.6		%
East		378,246		329,584		48,662			14.8		%
Central		290,429		21,698		268,731			1,238.5		%
Total Gaming and Pari-Mutuel Commissions		1,385,848		1,060,417		325,431			30.7		%
Non-gaming:
West		226,261		178,208		48,053			27.0		%
Midwest		35,249		39,097		(3,848	)		(9.8	)	%
South		66,117		62,957		3,160			5.0		%
East		145,003		40,992		104,011			253.7		%
Central		72,246		2,199		70,047			3,185.4		%
Corporate		5,401		377		5,024			1,332.6		%
Total Non-gaming		550,277		323,830		226,447			69.9		%
Total Net Revenues		1,936,125		1,384,247		551,878			39.9		%
Expenses:
Gaming and Pari-Mutuel Commissions:
West		64,235		63,331		904			1.4		%
Midwest		102,537		107,162		(4,625	)		(4.3	)	%
South		137,679		133,500		4,179			3.1		%
East		181,316		204,953		(23,637	)		(11.5	)	%
Central		130,334		10,612		119,722			1,128.2		%
Total Gaming and Pari-Mutuel Commissions		616,101		519,558		96,543			18.6		%
Non-gaming
West		120,634		107,544		13,090			12.2		%
Midwest		18,849		23,527		(4,678	)		(19.9	)	%
South		40,858		41,260		(402	)		(1.0	)	%
East		72,012		25,775		46,237			179.4		%
Central		38,100		2,029		36,071			1,777.8		%
Total Non-gaming		290,453		200,135		90,318			45.1		%

Marketing and promotions		97,673		66,255		31,418			47.4		%
General and administrative		360,086		223,546		136,540			61.1		%
Corporate		50,819		33,018		17,801			53.9		%
Impairment charges		958		13,602		(12,644	)		(93.0	)	%
Depreciation and amortization		166,882		99,204		67,678			68.2		%
Total Operating Expenses	$	1,582,972	$	1,155,318	$	427,654			37.0		%

Gaming Revenues and Pari-Mutuel Commissions. Elgin and Tropicana contributed $512.4 million of incremental gaming revenues and pari-mutuel commissions for the nine months ended September 30, 2019 compared to the same prior year period. This increase was partially offset by the decline in revenues associated with the divestitures of Presque Isle Downs and Nemacolin for the nine months ended September 30, 2019 compared to the same prior year period resulting in a 30.7% increase in gaming revenues and pari-mutuel commissions.

Excluding incremental Elgin and Tropicana gaming revenues and pari-mutuel commissions and the impact of the Presque Isle Downs and Nemacolin divestitures, gaming revenues and pari-mutuel commissions decreased 7.7% for the nine months ended September 30, 2019 compared to the same prior year period due to reductions in casino volume associated with changes in promotional activity. Additionally, construction disruption affected our West segment and severe weather negatively impacted our visitor volume across all segments contributing to the declines in casino revenues for the nine months ended September 30, 2019 compared to the same prior year period.

Non-gaming Revenues. Elgin and Tropicana contributed $247.1 million of incremental non-gaming revenues for the nine months ended September 30, 2019, which was partially offset by declines in non-gaming revenues attributable to the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 69.9% over the same prior year period.

Excluding incremental Elgin and Tropicana non-gaming revenues and the impact of the Presque Isle Downs and Nemacolin divestitures, non-gaming revenues decreased 3.2% for the nine months ended September 30, 2019 compared to the same prior year period. This decline was primarily driven by the West segment resulting from changes in promotional activity, construction disruption and weather that negatively impacted visitor traffic during the nine months ended September 30, 2019.

Gaming Expenses and Pari-Mutuel Commissions. Elgin and Tropicana contributed $210.1 million of incremental gaming expenses and pari-mutuel commissions for the nine months ended September 30, 2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of 18.6% in gaming expenses and pari-mutuel commissions over the same prior year period.

Excluding incremental Elgin and Tropicana gaming expenses and pari-mutuel commissions, and the impact of the Presque Isle Downs and Nemacolin divestitures, gaming expenses and pari-mutuel commissions decreased 7.9% for the nine months ended September 30, 2019 compared to the same prior year period. Gaming expenses declined in comparison to the same prior year period due to lower volume combined with savings initiatives targeted at reducing variable expenses. Successful efforts to control costs and maximize departmental profit across all segments also drove the improved departmental profit margin ~~during~~for the ~~three~~nine months ended September 30, ~~2018~~2019 compared to the same prior year period.

Non-gaming ~~Expenses~~.Expenses. Elgin and Tropicana contributed ~~$2.0~~$120.7 million of incremental non-gaming expenses for the ~~three~~nine months ended September 30, ~~2018~~2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in ~~a decrease~~an increase of ~~10.1%~~45.1% over the same prior year period.

Excluding incremental Elgin and Tropicana non-gaming expenses, and the impact of the Presque Isle Downs and Nemacolin divestitures, non-gaming expenses decreased ~~12.7%~~11.7% for the ~~three~~nine months ended September 30, ~~2018~~2019 compared to the same prior year period. Decreased non-gaming expenses inacross all segments were associated with ~~decreased~~lower non-gaming revenues along with continued efforts to reduce variable expenses including labor and cost of sales.

Marketing and Promotions Expenses. Elgin and Tropicana contributed ~~$1.3~~$51.1 million of incremental marketing and promotions expense for the ~~three~~nine months ended September 30, ~~2018. Despite~~2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase ~~resulting from incremental costs associated with the addition~~ of ~~Elgin, marketing and promotions expenses decreased 12.5%~~47.4% over the same prior year period.

Excluding incremental Elgin and Tropicana marketing and promotions expenses, and the impact of the Presque Isle Downs and Nemacolin divestitures, consolidated marketing and promotions expense decreased ~~17.3%~~24.7% for the ~~three~~nine months ended September 30, ~~2018~~2019 compared to the same prior year period. This decline was primarily due to ~~synergies~~savings achieved via the termination of certain marketing contracts, reduction in direct mail costs and continued company-wide ~~reductions~~changes in marketing and promotional ~~spend.~~activity.

General and Administrative Expenses. Elgin and Tropicana contributed ~~$4.9~~$160.5 million of general and administrative expense for the ~~three~~nine months ended September 30, ~~2018. Despite~~2019, which was partially offset by the ~~additional general~~Presque Isle Downs and ~~administrative expenses associated with the acquisition~~Nemacolin divestitures, resulting in an increase of ~~Elgin, general and administrative expense remained flat~~61.1% over the same prior year period.

Excluding incremental Elgin and Tropicana general and administrative expenses, and the impact of the Presque Isle Downs and Nemacolin divestitures, consolidated general and administrative expenses decreased ~~6.5%~~4.4% for the ~~three~~nine months ended September 30, ~~2018~~2019 compared to the same prior year period mainly due to the centralization of certain ~~corporate~~ services provided to our properties and realized ~~savings.~~savings achieved through consolidated purchasing programs.

Corporate Expenses. For the ~~three~~nine months ended September 30, ~~2018~~2019 compared to the same prior year period, corporate expenses increased primarily due to payroll and other expenses associated with additional corporate costs ~~including stock comp expense,~~ driven by growth related to the ~~company’s~~Company’s acquisitions.

~~Impairment Charges.~~ ~~Based on the pending disposition, we recorded an impairment charge for the three months ended September 30, 2018 totaling $3.8 million related to our Nemacolin property.~~

~~Depreciation and Amortization Expense. Elgin contributed $2.2 million of depreciation expense for the three months ended September 30, 2018 resulting in~~ Additionally, an increase in severance expense and the associated acceleration of ~~22.8% over the same prior year period.~~

~~Excluding incremental Elgin depreciation and amortization~~stock compensation expense depreciation and amortization expense increased 15.2% for the three months ended September 30, 2018 compared to the same prior year period mainly due asset additions primarily at our three Reno properties.

~~Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017~~

Nine Months Ended

September 30,

Percent

2018

2017

Variance

Change

Revenues:

Gaming and Pari-Mutuel Commissions:

West

$

168,342

$

132,563

$

35,779

27.0

%
Midwest

262,138

147,469

114,669

77.8

%
South

278,655

179,887

98,768

54.9

%
East

329,584

314,624

14,960

4.8

%
Central

21,698

—

21,698

100.0

%
Total Gaming and Pari-Mutuel Commissions

1,060,417

774,543

285,874

36.9

%
Non-gaming:

West

178,208

165,001

13,207

8.0

%
Midwest

39,097

23,823

15,274

64.1

%
South

62,957

49,067

13,890

28.3

%
East

40,992

38,097

2,895

7.6

%
Central

2,199

—

2,199

100.0

%
Corporate

377

366

11

3.0

%
Total Non-gaming

323,830

276,354

47,476

17.2

%
Total Net Revenues

1,384,247

1,050,897

333,350

31.7

%
Expenses:

Gaming and Pari-Mutuel Commissions:

West

63,331

51,754

11,577

22.4

%
Midwest

107,162

61,732

45,430

73.6

%
South

133,500

90,884

42,616

46.9

%
East

204,953

194,534

10,419

5.4

%
Central

10,612

—

10,612

100.0

%
Total Gaming and Pari-Mutuel Commissions

519,558

398,904

120,654

30.2

%
Non-gaming

West

107,544

102,242

5,302

5.2

%
Midwest

23,527

16,655

6,872

41.3

%
South

41,260

34,062

7,198

21.1

%
East

25,775

26,646

(871
)

(3.3
)
%
Central

2,029

—

2,029

100.0

%
Total Non-gaming

200,135

179,605

20,530

11.4

%

Marketing and promotions

66,255

58,099

8,156

14.0

%
General and administrative

223,546

168,339

55,207

32.8

%
Corporate

33,018

21,734

11,284

51.9

%
Impairment charges

13,602

—

13,602

100.0

%
Depreciation and amortization

99,204

69,635

29,569

42.5

%
Total Operating Expenses

$

1,155,318

$

896,316

$

259,002

28.9

%

~~Gaming Revenues and Pari-Mutuel Commissions.~~ Isle contributed $262.8 million and Elgin contributed $21.7 million of incremental gaming revenues and pari-mutuel commissions for the nine months ended September 30, 2018 resulting in an increase 36.9% compared to the same prior year period.

Excluding incremental Isle and Elgin gaming revenues and pari-mutuel commissions, gaming revenues and pari-mutuel commissions remained flat for the nine months ended September 30, 2018 compared to the same prior year period.

~~Non-gaming Revenues~~. Isle contributed $44.9 million and Elgin contributed $2.2 million of incremental non-gaming revenues for the nine months ended September 30, 2018 resulting in an increase of 17.2% in non-gaming revenues compared to the same prior year period.

~~Excluding incremental Isle non-gaming revenues, non-gaming revenues remained flat for the nine months ended September 30, 2018 compared to the same prior year period.~~

~~Gaming Expenses and Pari-Mutuel Commissions~~. Isle contributed $116.1 million and Elgin contributed $10.6 million of incremental gaming expenses and pari-mutuel commissions for the nine months ended September 30, 2018 resulting in an increase of 30.2% in gaming expenses and pari-mutuel commissions over the same prior year period.

Excluding incremental Isle and Elgin gaming expenses and pari-mutuel commissions, gaming expenses and pari-mutuel commissions decreased 1.5% for the nine months ended September 30, 2018 compared to the same prior year period despite gaming revenues remaining flat due to savings initiatives targeted at reducing variable expenses along with continued synergies. Additionally, successful efforts to control costs and maximize departmental profit across all segments also drove the ~~improved departmental profit margin during the three months ended September 30, 2018 compared to the same prior year period.~~

~~Non-gaming Expenses. Isle contributed $30.5 million and Elgin contributed $2.0 million of incremental non-gaming expenses for the nine months ended September 30, 2018 resulting~~increase in ~~an increase of 11.4% compared to the same prior year period.~~

Excluding incremental Isle and Elgin non-gaming expenses, non-gaming expenses decreased 6.7% for the nine months ended September 30, 2018 compared to the same prior year period across all segments. Despite non-gaming revenues remaining flat, decreases in non-gaming expenses were realized due to cost saving initiatives in food and beverage cost of sales, labor and other variable expenses.

~~Marketing and Promotions Expenses. Isle contributed $14.7 million and Elgin contributed $1.3 million of incremental marketing and promotions~~corporate expense for the nine months ended September 30, ~~2018 resulting in an increase of 14.0%~~2019 compared to the same prior year period.

Excluding incremental Isle and Elgin marketing and promotions expenses, consolidated marketing and promotions expense decreased 13.5% for the nine months ended September 30, 2018 compared to the same prior year period due to strategic changes to eliminate unprofitable promotional events and decrease advertising spend.

~~General and Administrative Expenses~~. Isle contributed $55.1 million and Elgin contributed $4.9 of incremental general and administrative expense for the nine months ended September 30, 2018 resulting in an increase of 32.8% compared to the same prior year period.

Excluding incremental Isle and Elgin general and administrative expenses, consolidated general and administrative expenses decreased 2.8% for the nine months ended September 30, 2018 compared to the same prior year period mainly due to the centralization of certain corporate services provided to our properties and realized savings.

~~Corporate Expenses~~. For the nine months ended September 30, 2018 compared to the same prior year period, corporate expenses increased primarily due to payroll and other expenses associated with additional corporate costs, including stock comp expense, driven by growth related to our acquisitions.

Impairment ~~Charges:~~ ~~Based on the pending disposition, we~~Charges. We recorded an impairment charge for the nine months ended September 30, ~~2018~~2019 totaling $1.0 million related to our non-operating real property located in Pennsylvania. We recorded impairment charges of $9.8 million related to the classifications of Vicksburg’s operations as assets held for sale and $3.8 million related to ~~our Nemacolin property. Additionally, we recorded an impairment charge~~the classifications of Nemacolin’s operations as assets held for sale for the nine months ended September 30, 2018 totaling $9.8 million related to the sale of our Vicksburg property due to the carrying value of the net assets being sold exceeding the estimated net sales proceeds. The sale of Vicksburg was terminated effective July 6, 2018..

Depreciation and Amortization Expense. ~~Isle~~Elgin and Tropicana contributed ~~$23.3~~$75.9 million ~~and Elgin contributed $2.2~~ of depreciation and amortization expense for the nine months ended September 30, ~~2018~~2019, which was partially offset by the Presque Isle Downs and Nemacolin divestitures, resulting in an increase of ~~42.5% compared to~~68.2% over the same prior year period.

Excluding incremental ~~Isle~~Elgin and Tropicana depreciation and amortization expense, and the impact of the Presque Isle Downs and Nemacolin divestitures, depreciation and amortization expense ~~increased 5.8%~~decreased 6.8% for the nine months ended September 30, ~~2018~~2019 compared to the same prior year period mainly due ~~asset additions primarily at our three Reno properties.~~to ceasing depreciation and amortization expense on assets held for sale.

Supplemental Unaudited Presentation of Consolidated Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the ~~Presque Isle Downs, Vicksburg, Lake Charles and Nemacolin sales, income related to~~disposition of properties, preopening expenses, costs associated with resolving the ~~termination of the Vicksburg sale,~~historical Tropicana bankruptcy, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss associated with the sales of Presque Isle Downs and Nemacolin and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes the expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our Master Lease and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

The following table summarizes our Adjusted EBITDA for our operating segments for the three and nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, in addition to reconciling Adjusted EBITDA to operating income (loss) in accordance with US GAAP (unaudited, in thousands):

	Three Months Ended September 30, 2018															Three Months Ended September 30, 2019
	Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾			Adjusted EBITDA			Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾				Adjusted EBITDA
Excluding Pre-Acquisition:
West	$	31,894		$	9,475	$	—	$	—	$	65		$	41,434		$	35,358		$	13,934	$	—	$	—	$		191		$	49,483
Midwest		26,637			8,605		15		—		21			35,278			30,221			4,515		4		—			953			35,693
South		16,176			9,704		9		—		126			26,015			15,185			9,000		2		—			512			24,699
East		23,637			4,486		2		—		3,989			32,114			45,341			11,630		—		—			220			57,191
Central		2,868			2,215		—		—		767			5,850			25,793			11,627		—		—			21			37,441
Corporate and Other		(9,443	)		1,275		2,468		4,091		(4,992	)		(6,601	)		(26,991	)		1,886		4,260		12,442			1,684			(6,719	)
Total Excluding Pre-Acquisition	$	91,769		$	35,760	$	2,494	$	4,091	$	(24	)	$	134,090

Pre-Acquisition (1):
Central		3,070			727		—		—		155			3,952
Total Pre-Acquisition	$	3,070		$	727	$	—	$	—	$	155		$	3,952

Including Pre-Acquisition:
West	$	31,894		$	9,475	$	—	$	—	$	65		$	41,434
Midwest		26,637			8,605		15		—		21			35,278
South		16,176			9,704		9		—		126			26,015
East		23,637			4,486		2		—		3,989			32,114
Central		5,938			2,942		—		—		922			9,802
Corporate and Other		(9,443	)		1,275		2,468		4,091		(4,992	)		(6,601	)
Total Including Pre-Acquisition (2)	$	94,839		$	36,487	$	2,494	$	4,091	$	131		$	138,042
Total																$	124,907		$	52,592	$	4,266	$	12,442	$		3,581		$	197,788

	Three Months Ended September 30, 2017 (8)															Three Months Ended September 30, 2018
	Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾			Adjusted EBITDA			Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Transaction Expenses⁽⁶⁾		Other ⁽⁸⁾				Adjusted EBITDA
Excluding Pre-Acquisition:
West	$	32,657		$	7,653	$	67	$	—	$	47		$	40,424		$	31,894		$	9,475	$	—	$	—	$		65		$	41,434
Midwest		24,264			7,995		67		—		139			32,465			26,637			8,605		15		—			21			35,278
South		13,682			6,055		46		—		855			20,638			16,176			9,704		9		—			126			26,015
East		21,215			6,732		5		—		83			28,035			23,637			4,486		2		—			3,989			32,114
Central		—			—		—		—		—			—			2,868			2,215		—		—			767			5,850
Corporate and Other		(10,326	)		687		1,207		2,094		—			(6,338	)		(9,443	)		1,275		2,468		4,091			(4,992	)		(6,601	)
Total Excluding Pre-Acquisition	$	81,492		$	29,122	$	1,392	$	2,094	$	1,124		$	115,224		$	91,769		$	35,760	$	2,494	$	4,091	$		(24	)	$	134,090

Pre-Acquisition (3):
Divestitures:																										��
East																$	4,234		$	55	$	2	$	—	$		4,004		$	8,295
Total Divestitures (1)																$	4,234		$	55	$	2	$	—	$		4,004		$	8,295

Pre-Acquisition:
West																$	4,290		$	3,098	$	—	$	—	$		—		$	7,388
Midwest																	—			—		—		—			—			—
South																	(1,435	)		2,022		—		—			4			591
East																	22,378			8,072		—		—			31			30,481
Central		5,588			1,742		—		—		—			7,330			17,506			6,884		—		—			380			24,770
Total Pre-Acquisition	$	5,588		$	1,742	$	—	$	—	$	—		$	7,330
Corporate and Other																	(38,788	)		448		—		1,529			31,101			(5,710	)
Total Pre-Acquisition (2)																$	3,951		$	20,524	$	—	$	1,529	$		31,516		$	57,520

Including Pre-Acquisition:
West	$	32,657		$	7,653	$	67	$	—	$	47		$	40,424		$	36,184		$	12,573	$	—	$	—	$		65		$	48,822
Midwest		24,264			7,995		67		—		139			32,465			26,637			8,605		15		—			21			35,278
South		13,682			6,055		46		—		855			20,638			14,741			11,726		9		—			130			26,606
East		21,215			6,732		5		—		83			28,035			41,781			12,503		—		—			16			54,300
Central		5,588			1,742		—		—		—			7,330			20,374			9,099		—		—			1,147			30,620
Corporate and Other		(10,326	)		687		1,207		2,094		—			(6,338	)		(48,231	)		1,723		2,468		5,620			26,109			(12,311	)
Total Including Pre-Acquisition (4)	$	87,080		$	30,864	$	1,392	$	2,094	$	1,124		$	122,554
Total Including Pre-Acquisition and Excluding Divestitures (3)																$	91,486		$	56,229	$	2,492	$	5,620	$		27,488		$	183,315

	Nine Months Ended September 30, 2018																Nine Months Ended September 30, 2019
	Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation			Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾			Adjusted EBITDA			Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation			Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾			Adjusted EBITDA
Excluding Pre-Acquisition:
Includes Divestitures:
West	$	63,898		$	27,046	$	(32	)	$	—	$	704		$	91,616		$	66,772		$	40,585	$	—		$	—	$	474		$	107,831
Midwest		80,725			24,654		90			—		248			105,717			87,066			20,650		29			—		1,025			108,770
South		50,099			26,343		50			—		10,142			86,634			61,723			29,865		11			—		880			92,479
East		67,164			15,252		11			—		5,230			87,657			107,715			36,019		7			—		372			144,113
Central		2,868			2,215		—			—		767			5,850			80,896			34,317		—			—		153			115,366
Corporate and Other		(41,377	)		3,694		9,526			10,043		(3,710	)		(21,824	)		(53,111	)		5,446		15,676			21,628		(15,097	)		(25,458	)
Total Excluding Pre-Acquisition	$	223,377		$	99,204	$	9,645		$	10,043	$	13,381		$	355,650
Total																	$	351,061		$	166,882	$	15,723		$	21,628	$	(12,193	)	$	543,101
Divestitures:
East																	$	(91	)	$	—	$	7		$	—	$	46		$	(38	)
Total Divestitures (4)																	$	(91	)	$	—	$	7		$	—	$	46		$	(38	)

Pre-Acquisition (1):
Central		18,448			4,420		—			—		535			23,403
Total Pre-Acquisition	$	18,448		$	4,420	$	—		$	—	$	535		$	23,403

Including Pre-Acquisition:
Excluding Divestitures:
West	$	63,898		$	27,046	$	(32	)	$	—	$	704		$	91,616		$	66,772		$	40,585	$	—		$	—	$	474		$	107,831
Midwest		80,725			24,654		90			—		248			105,717			87,066			20,650		29			—		1,025			108,770
South		50,099			26,343		50			—		10,142			86,634			61,723			29,865		11			—		880			92,479
East		67,164			15,252		11			—		5,230			87,657			107,806			36,019		—			—		326			144,151
Central		21,316			6,635		—			—		1,302			29,253			80,896			34,317		—			—		153			115,366
Corporate and Other		(41,377	)		3,694		9,526			10,043		(3,710	)		(21,824	)		(53,111	)		5,446		15,676			21,628		(15,097	)		(25,458	)
Total Including Pre-Acquisition (2)	$	241,825		$	103,624	$	9,645		$	10,043	$	13,916		$	379,053
Total Excluding Divestitures (5)																	$	351,152		$	166,882	$	15,716		$	21,628	$	(12,239	)	$	543,139

	Nine Months Ended September 30, 2017 (8)																Nine Months Ended September 30, 2018
	Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation			Transaction Expenses⁽⁶⁾		Other ⁽⁷⁾			Adjusted EBITDA			Operating Income (Loss)			Depreciation and Amortization		Stock-Based Compensation			Transaction Expenses⁽⁶⁾		Other ⁽⁸⁾			Adjusted EBITDA
Excluding Pre-Acquisition:
West	$	50,590		$	18,867	$	119		$	—	$	271		$	69,847		$	63,898		$	27,046	$	(32	)	$	—	$	704		$	91,616
Midwest		39,676			12,961		153			—		133			52,923			80,725			24,654		90			—		248			105,717
South		32,210			12,649		110			—		1,985			46,954			50,099			26,343		50			—		10,142			86,634
East		54,411			23,885		9			—		292			78,597			67,164			15,252		11			—		5,230			87,657
Central		—			—		—			—		—			—			2,868			2,215		—			—		767			5,850
Corporate and Other		(111,834	)		1,273		4,063			89,172		310			(17,016	)		(41,377	)		3,694		9,526			10,043		(3,710	)		(21,824	)
Total Excluding Pre-Acquisition	$	65,053		$	69,635	$	4,454		$	89,172	$	2,991		$	231,305		$	223,377		$	99,204	$	9,645		$	10,043	$	13,381		$	355,650

Pre-Acquisition (5):
Divestitures:
East																	$	13,262		$	1,632	$	11		$	—	$	4,564		$	19,469
Total Divestitures (1)																	$	13,262		$	1,632	$	11		$	—	$	4,564		$	19,469

Pre-Acquisition:
West	$	9,525		$	3,694	$	8		$	—	$	4		$	13,231		$	13,635		$	9,271	$	—		$	—	$	8		$	22,914
Midwest		34,819			11,952		51			—		34			46,856			—			—		—			—		—			—
South		25,086			5,693		35			—		184			30,998			355			6,076		—			—		20			6,451
East		(1,072	)		952		—			—		—			(120	)		46,261			24,444		—			—		159			70,864
Central		21,049			5,293		—			—		—			26,342			70,105			22,939		—			—		647			93,691
Corporate and Other		(8,811	)		371		1,631			286		527			(5,996	)		(52,127	)		1,537		—			4,259		31,101			(15,230	)
Total Pre-Acquisition	$	80,596		$	27,955	$	1,725		$	286	$	749		$	111,311

Total Pre-Acquisition (2)																	$	78,229		$	64,267	$	—		$	4,259	$	31,935		$	178,690
Including Pre-Acquisition:
West	$	60,115		$	22,561	$	127		$	—	$	275		$	83,078		$	77,533		$	36,317	$	(32	)	$	—	$	712		$	114,530
Midwest		74,495			24,913		204			—		167			99,779			80,725			24,654		90			—		248			105,717
South		57,296			18,342		145			—		2,169			77,952			50,454			32,419		50			—		10,162			93,085
East		53,339			24,837		9			—		292			78,477			100,163			38,064		—			—		825			139,052
Central		21,049			5,293		—			—		—			26,342			72,973			25,154		—			—		1,414			99,541
Corporate and Other		(120,645	)		1,644		5,694			89,458		837			(23,012	)		(93,504	)		5,231		9,526			14,302		27,391			(37,054	)
Total Including Pre-Acquisition (4)	$	145,649		$	97,590	$	6,179		$	89,458	$	3,740		$	342,616
Total Including Pre-Acquisition and Excluding Divestitures (3)																	$	288,344		$	161,839	$	9,634		$	14,302	$	40,752		$	514,871

We are a holding company and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on the cash flow of our subsidiaries and the ability of our subsidiaries to distribute or otherwise make funds available to us.

Our primary sources of liquidity and capital resources have been existing cash, cash flow from operations, borrowings under our revolving credit facility, ~~and~~ proceeds from the issuance of debt ~~securities.~~securities and proceeds from our disposition of Presque Isle Downs. As of September 30, 2019, we had no outstanding balance and $483.7 million of available borrowing capacity, after consideration of $16.3 million in outstanding letters of credit, under our Revolving Credit Facility. We applied approximately $150.0 million of proceeds from the sale of Presque Isle Downs to repay amounts outstanding under the Revolving Credit Facility. Pursuant to the terms of the indentures governing the Company’s senior notes, the Company will be required to make an offer to purchase a portion of its outstanding senior notes with the excess proceeds from such sale unless it applies the net proceeds of such sale to either permanently repay outstanding indebtedness or make specified acquisitions or capital expenditures within 365 days of the sale of Presque Isle Downs. The Company anticipates applying the proceeds of the Presque Isle Downs sale to permanently repay indebtedness and make qualifying capital expenditures prior to the anniversary of the sale.

Our cash requirements can fluctuate significantly depending on our decisions with respect to business acquisitions or ~~dispositions~~divestitures and strategic capital investments to maintain the quality of our properties. We expect that our primary capital requirements going forward will relate to the operation and maintenance of our properties, taxes, servicing our outstanding indebtedness, ~~and~~rent payments under our Master Lease, continued costs associated with the Elgin and Tropicana ~~acquisitions.~~acquisitions and funding the Caesars acquisition. We expect to fund the anticipated Caesars acquisition with a combination of proceeds from the Debt Financing, the sale-leaseback transactions with VICI with respect to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City, the consideration received from VICI received in connection with amendments to the CPLV Lease and Non-CPLV Lease contemplated by the MTA, asset divestitures, existing cash on our balance sheet and cash flow generated by the Company and Caesars prior to the acquisition. During the remainder of ~~2018,~~2019, we plan to spend ~~$60.9~~approximately $65.0 million on capital expenditures and are in the process of evaluating capital expenses for the properties purchased in the recent acquisitions. We also plan to spend $37.2 million during the remainder of 2018 to pay interest on our outstanding indebtedness, including interest on additional debt incurred in conjunction with the Elgin and Tropicana acquisitions.expenditures. Our capital requirements have increased significantly following the consummation of the acquisitions of Tropicana and Elgin, including as a result of the ~~related~~ obligation to pay annual rent in an

initial amount of approximately $87.6 million under the Master Lease with respect to certain of the Tropicana properties and the required payments under the Lumière Note. We also expect that our capital expenditures will increase significantly in connection with the acquisitions of Tropicana and Elgin and the related increase in the number of properties in our portfolio.

We funded the ~~$328.9~~$328.8 million of cash consideration for the Elgin Acquisition using cash from ongoing operations and borrowings under our revolving credit ~~facility and we~~facility. We funded the $246 million purchase of the real estate underlying Lumière ~~Place~~ with the proceeds of ~~a $246 million~~the Lumière ~~Note and~~Note. We funded the $640 million of consideration ~~payable by the Company~~ in the Tropicana Acquisition and the repayment of amounts outstanding under the Tropicana credit facility with our cash on hand and cash on hand at ~~the Company and~~ Tropicana, borrowings under ~~the Company’s~~our revolving credit facility and proceeds from ~~the Company’s~~our offering of $600 million of ~~6% Senior Notes~~6.0% senior notes due 2026. In addition, ~~the Company’s~~our borrowing capacity on ~~its~~our revolving credit facility increased from $300 million to $500 million effective substantially concurrently with the consummation of the Tropicana Acquisition on October 1, 2018 and we extended the maturity of the revolving credit facility to October 1, 2023. We expect that cash generated from operations will be sufficient to fund our operations and capital requirements and service our outstanding indebtedness for the next twelve months.

AtOperating Cash Flow. For the nine months ended September 30, ~~2018, we had consolidated~~2019, cash flows provided by operating activities totaled $260.1 million compared to $263.4 million for the same prior year period. Our operating cash flows generally follow trends in operating income, excluding non-cash charges. Changes in the balance sheet accounts and the timing of significant payments, including interest, rent and tax payments will impact our operating cash ~~equivalents of $164.1 million, excluding restricted cash. At September 30, 2017, we had consolidated~~flows. The decrease in operating cash ~~and cash equivalents of $134.9 million, excluding restricted cash. This increase in cash~~compared to the same prior year period was primarily due to cash ~~generated from operations~~tax payments related to the Tropicana Acquisition for the nine months ended September 30, ~~2018. We also had $604.1 million in escrow cash related to the issuance of the 6% Senior Notes due 2026 in conjunction with the Tropicana Acquisition that closed on October 1, 2018.~~

~~Operating Cash Flow.~~ ~~For the nine months ended September 30, 2018,~~2019 offset by cash flows ~~provided~~generated by operating activities totaled $263.4 million compared to $71.6 million for the same prior year period. The increase in operating cash was primarily due to cash generated from operations during the nine months ended September 30, 2018 combined with changes in the balance sheet accounts in the normal course of business. Additionally, significant payments were made during the nine months ended September 30, 2017 in conjunction with the acquisition of Isle and impacted operating cash flows.operations.

Investing Cash Flow and Capital ~~Expenditures~~.Expenditures. Net cash flows ~~used in~~provided by investing activities totaled ~~$395.1~~$38.5 million for the nine months ended September 30, ~~2018~~2019 compared to ~~$1.4 billion~~$395.1 million used for investing activities in the same prior year period. Our investing cash flows generally fluctuate depending upon the timing of strategic and maintenance capital expenditures in addition to business acquisitions or dispositions. Net cash provided by investing activities for the nine months ended September 30, 2019 was primarily due to $169.4 million in net proceeds from the sales of Presque Isle Downs and Nemacolin. This increase was partially offset by cash used totaling $135.0 million for capital expenditures for various property enhancement and maintenance projects along with equipment purchases. Net cash flows used in investing activities infor the nine months ended September 30, 2018 were primarily due to $306.3 million used in the Elgin Acquisition and $89.1 million in capital expenditures for various property enhancement and maintenance projects along with equipment purchases. Net cash flows used in investing activities for the nine months ended September 30, 2017 consisted of $1.3 billion related to funds used in the Isle Acquisition, and $52.9 million in capital expenditures for various property enhancement and maintenance projects and equipment purchases.

Financing Cash Flow. Net cash ~~provided by~~used in financing activities for the nine months ended September 30, ~~2018~~2019 totaled ~~$763.7~~$323.4 million compared to ~~$1.4 billion~~$763.7 million provided by financing activities for the same prior year period. The cash ~~provided by~~used in financing activities for the nine months ended September 30, 2019 was principally due to $245 million of net payments under the Revolving Credit Facility and $70.0 million of payments under the Term Loan. For the nine months ended September 30, 2018, cash provided by financing activities was principally due to $600.0 million of proceeds from the issuance of the 6% Senior Notes due 2026 and $180.0 million of net borrowings under the Revolving Credit Facility related to the Elgin Acquisition. During the nine months ended September 30, 2017, cash provided by financing activities consisted primarily of $1.4 billion and $875.0 million of proceeds from the issuance of the credit facility and 6% Senior Notes due 2025, respectively, partially offset by payments of $866.8 million on our credit facility in conjunction with our refinancing of debt in May of 2017.

On November 8, 2018, the Company issued a press release announcing that its Board of Directors has authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which the Company may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that the Company is required to repurchase under the Share Repurchase ~~Program~~Program.

The Company acquired 223,823 shares of common stock at an aggregate value of $9.1 million and an average of $40.80 per share during the year ended December 31, 2018. No shares were repurchased during the nine months ended September 30, 2019.

~~In April~~ ~~2017,~~ ~~the~~The Company ~~entered into~~is party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 ~~(the~~(as amended, the “Credit Facility”), consisting of a $1.45 billion term loan facility (the “Term Loan Facility” or “Term Loan”) and a ~~$300.0~~$500.0 million revolving credit facility (the “Revolving Credit Facility”). The Company’s obligations under the Revolving Credit Facility will mature on ~~April 17, 2022.~~October 1, 2023. The Company’s obligations under the Term Loan Facility will mature on April 17, 2024. The Company was required to make quarterly principal payments of $3.6 million on the Term Loan Facility on the last day of each fiscal quarter beginning on June 30, 2017 but satisfied this requirement as a result of the principal prepayment of $444.5 million on September 13, 2017 in conjunction with the issuance of the additional 6% Senior Notes due 2025. In addition, the Company is required to make mandatory

payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, and

asset sales and, depending on its consolidated total leverage ratio, the Company may be required to apply a portion of its excess cash flow to repay amounts outstanding under the Credit Facility.

As of September 30, ~~2018,~~2019, the Company had ~~$956.8~~$886.8 million outstanding on the Term Loan and ~~$180.0 million~~no outstanding balance under the Revolving Credit Facility. The Company had ~~$110.9~~$483.7 million of available borrowing capacity, after consideration of ~~$9.1~~$16.3 million in outstanding letters of credit under its Revolving Credit Facility as of September 30, ~~2018.~~2019. The Company applied approximately $150.0 million of proceeds from the sale of Presque Isle Downs to repay amounts outstanding under the Revolving Credit Facility. Pursuant to the terms of the indentures governing the Company’s senior notes, the Company will be required to make an offer to purchase a portion of its outstanding senior notes with the excess proceeds from such sale unless it applies the net proceeds of such sale to either permanently repay outstanding indebtedness or make specified acquisitions or capital expenditures within 365 days of the sale of Presque Isle Downs. The Company anticipates applying the proceeds of the Presque Isle Downs sale to permanently repay indebtedness and make qualifying capital expenditures prior to the anniversary of the sale.

The interest rate per annum applicable to loans under the Revolving Credit Facility are, at our option, either LIBOR plus a margin ranging from 1.75% to 2.50% or a base rate plus a margin from 0.75% to 1.50%, the margin is based on our total leverage ratio. The interest rate per annum applicable to the loans under the Term Loan Facility is, at our option, either LIBOR plus 2.25%, or a base rate plus 1.25%; provided, however, that in no event will LIBOR be less than zero or the base rate be less than 1.00%. Additionally, the Company pays a commitment fee on the unused portion of the Revolving Credit Facility of 0.50% per annum. AtAs of September 30, ~~2018,~~2019, the weighted average interest ~~rates~~rate on the Term Loan ~~and Revolving Credit Facility were 4.17% and 4.54%~~was 4.31%.

~~As of September 30, 2018 we were in compliance with all covenants under the Credit Facility.~~

On September 20, 2018, Delta Merger Sub, Inc. (“Escrow Issuer”), a Delaware corporation and a wholly-owned subsidiary of the Company, issued $600 million aggregate principal amount of 6.0% senior notes due 2026 (the “6% Senior Notes due 2026”) pursuant to an indenture, dated as of September 20, 2018 (the “2026 Indenture”), between Escrow Issuer and U.S. Bank, National Association, as Trustee. Interest on the 6% Senior Notes due 2026 will be paid every semi-annually in arrears on March 15 and September ~~15, commencing March 15, 2019.~~15.

The 6% Senior Notes due 2026 were general unsecured obligations of Escrow Issuer’s upon issuance and, upon the assumption of such obligations by the Company and the subsidiary guarantors (the “Guarantors”) upon consummation of the Tropicana Acquisition, became general unsecured obligations of the Company and the Guarantors, ranking senior in right of payment to all of the Company’s existing and future debt that is expressly subordinated in right of payment to the 6% Senior Notes due 2026 and the guarantees, ranking equally in right of payment with all of the applicable obligor’s existing and future senior liabilities, including the obligations under the Company’s existing 7% Senior Notes due 2023 and 6% Senior Notes due 2025, and are effectively subordinated to all of the applicable obligor’s existing and future secured debt, including indebtedness under the Company’s ~~existing senior secured credit facility~~Term Loan and Revolving Credit Facility and the Lumière Note (as defined in the 2026 Indenture), in each case, to the extent of the value of the collateral securing such debt. In addition, the 6% Senior Notes due 2026 and the related guarantees are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries and other entities in which the Company has an equity interest that do not guarantee the 6% Senior Notes due 2026 (other than indebtedness and liabilities owed to the Company or the Guarantors).

~~The 6% Senior Notes due 2026 are subject to redemption imposed by gaming laws and regulations of applicable gaming regulatory authorities.~~

~~The 2026 Indenture contains certain covenants limiting, among other things, the Company’s ability to:~~

On March 29, 2017, Eagle II issued at par $375.0 million aggregate principal amount of 6.0% senior notes due 2025 (the “6% Senior Notes due 2025”) pursuant to an indenture, dated as of March 29, 2017 (the “2025 Indenture”), between Eagle II and U.S. Bank, National Association, as Trustee. The 6% Senior Notes due 2025 will mature on April 1, 2025, with interest payable semi-annually in arrears on April 1 and October 1. In connection with the consummation of the Isle Acquisition on May 1, 2017, the Company assumed Eagle II’s obligations under the 6% Senior Notes due 2025 and the 2025 Indenture and certain of the Company’s subsidiaries (including Isle and certain of its subsidiaries) executed guarantees of the Company’s obligations under the 6% Senior Notes due 2025.

We borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière. The Lumière Loan bears interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until October 1, 2020, and matures on October 1, 2020. The Lumière Loan was secured by a first priority mortgage on the Lumière real property that was released pursuant to its terms on October 1, 2019. In connection with the issuance of the Lumière Loan, we agreed to use our commercially reasonable efforts to transfer one or more of the Grand Victoria Casino, Isle Casino Bettendorf, Isle Casino Hotel Waterloo, Isle of Capri Lula, Lady Luck Casino Vicksburg and Mountaineer Casino, Racetrack and Resort or such other property or properties mutually acceptable to us and GLPI, provided that the aggregate value of such property, individually or collectively, is at least $246 million (the “Replacement Property”), to GLPI with a simultaneous leaseback to us of such Replacement Property. In connection with such Replacement Property sale, (i) we and GLPI will enter into an amendment to the Master Lease to revise the economic terms to include the Replacement Property, (ii) GLPI, or one of its affiliates, will assume the Lumière Loan and Tropicana St. Louis RE’s obligations under the Lumière Loan in consideration of the acquisition of the Replacement Property and our obligations under the Lumière Loan will be deemed to have been satisfied and (iii) in the event the value of the Replacement Property is greater than the our outstanding obligations under the Lumière Loan, GLPI will pay us the difference between the value of the Replacement Property and the amount of outstanding obligations under the Lumière Loan. If such Replacement Property transaction is not consummated prior to the maturity date of the Lumière Loan, other than as a result of certain failures to perform by GLPI, then the amounts outstanding will be paid in full and the rent under the Master Lease will automatically increase, subject to certain escalations.

As of September 30, ~~2018~~2019, we were in compliance with all of the covenants under the 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026, the Credit Facility and ~~7% Senior Notes due 2023.~~

Our Master Lease is accounted for as a financing obligation and totaled $968.0 million as of September 30, 2019. The Master Lease contains certain covenants, including minimum capital improvement expenditures. As of September 30, 2019, we were in compliance with ~~the issuance~~all of the ~~6% Senior Notes due 2026, the Lumière Loan and~~covenants under the Master Lease. See Note 10 to our Consolidated Financial Statements for additional information about our Master Lease ~~there~~and related matters.

There have been no material changes for the nine months ended September 30, ~~2018~~2019 to our contractual obligations as disclosed in our Annual Report on Form 10‑K for the year ended December 31, ~~2017.~~2018.

We are faced with certain contingencies involving litigation and environmental remediation and compliance. These commitments and contingencies are discussed in “Part II, Item 1. Legal Proceedings” and Note 11 to our unaudited consolidated financial statements, both of which are included elsewhere in this report. In addition, new competition may have a material adverse effect on our revenues, and could have a similar adverse effect on our liquidity. See “Part I, Item 1A. Risk Factors—Risks Related to Our Business” which is included in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 and “Part II, Item IA. Risk Factors” which is included in this Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2018.~~2019.

Our critical accounting policies disclosures are included in our Annual Report on Form 10‑K for the year ended December 31, ~~2017.~~2018. Except as described in ~~Notes~~Note 2 ~~and 3~~ to the accompanying condensed notes of these consolidated financial statements, we believe there have been no material changes since December 31, ~~2017.~~2018. We have not substantively changed the application of our policies and there have been no material changes in assumptions or estimation techniques used as compared to prior periods.

We ~~are~~do not ~~party to~~currently have any off‑balance sheet arrangements.

This report includes “forward‑looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward‑looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this report, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward‑looking statements. Specifically, forward-looking statements may include, among others, statements concerning:

Any forward‑looking statements are based upon ~~a number~~underlying assumptions, including any assumptions mentioned with the specific statements, as of the date such statements were made. Such assumptions are in turn based upon internal estimates and ~~assumptions that, while considered reasonable by us, is inherently subject to significant business,~~analyses of market conditions and trends, management plans and strategies, economic conditions and ~~competitive~~other factors. Such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, ~~and contingencies,~~ many of which are beyond our control, and are subject to change. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend upon future circumstances that may not occur. Actual results ~~of operations~~ may ~~vary~~differ materially from any ~~forward‑looking statements made herein.~~future results, performance or achievements expressed or implied by such statements. Forward‑looking statements speak only as of the date they are made, and we assume no duty to update forward-looking statements. Forward-looking statements should not be regarded as a representation by us or any other person that the forward‑looking statements will be achieved. Undue reliance should not be placed on any forward‑looking statements. Some of the contingencies and uncertainties to which any forward‑looking statement contained herein isare subject include, but are not limited to, the following:

In addition, the ~~Tropicana Acquisition~~acquisition of Caesars, the related real estate transactions with VICI and the ~~Elgin Acquisition, the dispositions~~disposition of ~~Presque Isle Downs and Nemacolin~~Mountaineer and our ~~arrangement with William Hill~~properties located in Cape Girardeau, Caruthersville, Kansas City and Vicksburg and the provisions of the related acquisition agreements create additional risks, uncertainties and other important factors, including but not limited to:

In light of these and other risks, uncertainties and assumptions, the forward‑looking events discussed in this report might not occur. These forward‑looking statements speak only as of the date on which this statement is made, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward‑looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non‑public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We are exposed to changes in interest rates primarily from variable rate long‑term debt arrangements. AtAs of September 30, ~~2018,~~2019, interest on borrowings under our Credit Facility was subject to fluctuation based on changes in short-term interest rates.

As of September 30, ~~2018,~~2019, our long‑term variable‑rate borrowings totaled ~~$956.8~~$886.8 million under the Term Loan. No amounts were outstanding under the Revolving Credit Facility. Long‑term variable‑rate borrowings under the Term Loan and ~~$180.0 under~~ the Revolving Credit Facility ~~representing~~represented approximately ~~38% of our long‑term debt compared to 44%~~30% of our long‑term debt as of September 30, ~~2017.~~2019. During the nine months ended September 30, ~~2018,~~2019, the weighted average interest rates on our variable and fixed rate debt were ~~4.30%~~4.3% and ~~6.28%~~6.5%, respectively.

LIBOR is expected to be discontinued after 2021. The interest rate per annum applicable to loans under our Credit Facility is, at our option, either LIBOR plus a margin or a base rate plus a margin. The Credit Facility permits the administrative agent to select, in its reasonable discretion, an alternative base rate in the event that LIBOR is discontinued, but there can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

The Company evaluates its exposure to market risk by monitoring interest rates in the marketplace and has, on occasion, utilized derivative financial instruments to help manage this risk. The Company does not utilize derivative financial instruments for trading purposes. There were no material quantitative changes in our market risk exposure, or how such risks are managed, for the three months ended September 30, ~~2018.~~2019.

We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, evaluated and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) as of the end of the period covered by this Quarterly Report on Form 10‑Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10‑Q are effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized, evaluated and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required ~~disclosure~~disclosure.

~~Except as noted below, there~~There were no changes in our internal control over financial reporting during the ~~period covered by this Quarterly Report on Form 10‑Q~~three months ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On August 7, 2018 we completed the acquisition of Elgin. See Part I, Item 1, Condensed Notes to Unaudited Consolidated Financial Statements, Note 3: Acquisitions, Preliminary Purchase Price Accounting and Proforma Information, for a discussion of the acquisition and related financial data. The Company is in the process of integrating Elgin and our internal controls over financial reporting. As a result of these integration activities, certain controls will be evaluated and may be changed. Excluding the Elgin Acquisition, there were no changes in our internal control over financial reporting that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

As of November 6, 2019, eight putative class action lawsuits have been filed in connection with the Merger. The Company has been named as a party in three of such actions: Stein v. Caesars Entertainment Corp., et al, Civil Action No. 1:19-cv-01656, United States District Court for the District of Delaware (9/5/2019), Romaniuk v. Caesars Entertainment Corp., et al, Civil Action No 1:19-cv-17871, United States District Court for the District of New Jersey (9/11/2019), and Biasi v. Caesars Entertainment Corp., et al, Civil Action No. 1:19-cv-08547, United States District Court for the Southern District of New York (9/13/2019). In general, the complaints assert claims under sections 14(a), 20(a) and Rule 14a-9 of the Securities Exchange Act of 1934 challenging the adequacy of certain disclosures in the joint proxy statement/prospectus filed in connection with the Merger. In addition, one of the complaints, in which the Company has not been named a party, alleges state law breach of fiduciary duty claims against the Caesars directors. The complaints seek, among other relief, an injunction preventing consummation of the Merger, damages in the event that the Merger is consummated and attorneys’ fees. The Company intends to vigorously defend itself against these claims.

Legal matters are discussed in greater detail in “Part I, Item 3. Legal Proceedings” and Note 1517 to our Consolidated Financial statements included in our Annual Report on Form 10‑K for the year ended December 31, ~~2017.~~2018.

A description of our risk factors can be found in “Part I, Item 1A. Risk Factors” included in our Annual Report on Form 10‑K for the year ended December 31, ~~2017.~~2018. There have been no material changes to those risk factors during the ~~three~~nine months ended September 30, ~~2018,~~2019, except for the following additional risk factors related to the Merger.

The Merger Agreement subjects the Company to restrictions on its business activities during the pendency of the Merger.

The Merger Agreement subjects the Company to restrictions on its business activities and obligates the Company to generally operate its businesses in the ordinary course in all material respects during the pendency of the Merger absent Caesars’ prior written consent. These restrictions could prevent the Company from pursuing attractive business opportunities or responding effectively to competitive pressures and industry developments that arise prior to the consummation of the Merger or termination of the Merger Agreement and are outside the ordinary course of business. In particular, the Merger Agreement restricts the Company from making certain acquisitions and ~~dispositions.~~

~~Some of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases~~dispositions and ~~we could lose possession of the affected casino.~~

We currently lease certain parcels of land on which several of our properties are located, including five of the properties that we acquired in the Tropicana Acquisition. As a ground lessee, we have the right to use the leased land; however, we do not hold fee ownership of the underlying land. Accordingly, with respect to the leased land, we have no interest in the land or improvements thereon at the expiration of the ground leases. Moreover, since we do not completely control the land underlying the property, a landowner could take certaintaking other specified actions ~~to disrupt our rights in the land leased under the long-term leases which are beyond our control.~~absent Caesars’ prior written consent. If the ~~entity owning any leased land chose~~Company is unable to disrupt our use either permanently or for a significant period of time, then the value of our assets could be impaired and our business and operations could be adversely affected. Our leases provide that they may be terminated for a number of reasons, including failure to pay rent, taxes or other payment obligations or the breach of other covenants contained in the leases. In particular, the Master Lease requires initial annual rent payments of $87.62 million and obligates us to make specified minimum capital expenditures with respect to the leased properties. If we were to default on any one or more of these leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected land and any improvements on the land, including the hotels and casinos. A termination of our ground leases or the Master Lease could result in a default under our debt agreements andtake actions it believes are beneficial, such restrictions could have ~~a material~~an adverse effect on ~~our business, financial condition and results of operations. Further, in~~ the event that any lessor with respect to our leased properties, including properties that are subject to the Master Lease, encounters financial, operational, regulatory or other challenges, there can be no assurance that such lessor will be able to comply with its obligations under the applicable lease.

Certain of our leases, including the Master Lease relating to certain of the properties acquired in the Tropicana Acquisition are “triple-net” leases. Accordingly, in addition to rent, we are required to pay, among other things, the following: (1) lease payments to the underlying ground lessor for properties that are subject to ground leases; (2) facility maintenance costs; (3) all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties; (4) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); and (5) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. We are responsible for incurring the costs described in the preceding sentence notwithstanding the fact that many of the benefits received in exchange for such costs shall in part accrue to the lessor as the owner of the associated facilities. In addition, we remain obligated for lease payments and other obligations under the Master Lease and other ground leases even if one or more of such leased facilities is unprofitable or if we decide to withdraw from those locations. We could incur special charges relating to the closing of such facilities including lease termination costs, impairment charges and other special charges that would reduce our net income and could have a material adverse effect on ourCompany’s business, financial condition and results of operations.

Delay or failure to consummate the Merger would prevent the Company from realizing the anticipated benefits of the Merger and the Company would also remain liable for significant transaction costs.

Any delay in consummating the Merger may increase the cash portion of the Merger Consideration and adversely impact the combined company’s ability to realize synergies and other benefits that are anticipated if the Merger is consummated within the expected timeframe. In particular, if the applicable closing conditions set forth in the Merger Agreement are not satisfiedby March 25, 2020, the amount of cash payable by the Company as Merger Consideration per share of Caesars common stock will increase by $0.003333 for each day (provided that such amount will not be payable if the waiting period under the HSR Act has expired or been terminated but (to the extent required) the consents of the holders of Caesar’s 5.00% convertible senior notes due 2024 have not been obtained) from March 25, 2020 until the closing date of the Merger. In addition, the market price of the Company’s common stock may reflect various market assumptions as to whether and when the Merger will be consummated. Consequently, the failure to consummate, or any delay in the consummation of, the Merger could result in significant changes in the market price of the Company’s common stock. In addition, the Company has incurred and will continue to incur significant costs relating to the Merger, such as debt commitment, legal, accounting, financial advisor and printing fees, and, to the extent that the Debt Financing is incurred prior to consummation of the Merger, interest expense, in each case, that may increase in the event that the consummation of the Merger is delayed and will be payable in the event that the Merger is not consummated. For example, pursuant to the A&R Commitment Letter and the related fee letters, if the Debt Financing does not close prior to January 31, 2020, then subject to certain conditions set forth in the A&R Commitment Letter and the related fee letters, the Commitment Parties have the right to require ERI (or an unrestricted subsidiary of ERI) to issue all or a portion of the Debt Financing (other than the commitments for ERI’s new revolving credit facility or 364-day secured bridge facility) into escrow pending consummation of the Merger and satisfaction of the other closing conditions, or in certain circumstances, to allocate a portion of the Debt Financing to lenders, which would result in ERI incurring additional interest expense prior to consummation of the Merger. Moreover, if the Merger Agreement is terminated in certain circumstances, the Company will be obligated to pay a termination fee to Caesars of approximately $154.9 million, or in certain other circumstances, approximately $836.8 million. In addition, the Company will be obligated to reimburse Caesars’ expenses for an amount not to exceed $50.0 million if the Merger Agreement is terminated because of the failure to obtain the required approval of the Company’s stockholders. Further, in the event the MTA is terminated because the Merger Agreement is terminated, the Company is required to pay VICI a fee of $75.0 million pursuant to the terms of the MTA.

Whether or not the Merger is consummated, the pendency of the Merger could cause disruptions in the Company’s business, which could have an adverse effect on its business, financial condition and results of operations.

The ~~sale~~pendency of ~~Presque Isle Downs~~the Merger could cause disruptions in the business of the Company, including the following:

If any of these disruptions were to occur, it could have an adverse effect on the Company’s business, financial condition and ~~Nemacolin~~result of operation.

Obtaining required approvals and ~~our transaction~~satisfying closing conditions may delay or prevent consummation of the Merger.

Consummation of the Merger is subject to various closing conditions, including, among others, (i) the expiration or termination of any applicable waiting period under the HSR Act and receipt of required gaming approvals, (ii) the absence of any governmental order or law prohibiting the consummation of the Merger, (iii) adoption of the Merger Agreement by holders of a majority of the outstanding shares of Caesars common stock entitled to vote, (iv) the approval by the Company’s stockholders of the issuance of shares of Company’s common stock in the Merger (the “Share Issuance”), (v) the effectiveness of the registration statement for the Company’s common stock to be issued in the Merger and the authorization for listing of those shares on the Nasdaq Stock Market, (vi) absence of a material adverse effect on the other party, (vii) the accuracy of the other party’s representations and warranties, subject to customary materiality standards, (viii) compliance of the other party with ~~William Hill~~its respective covenants under the Merger Agreement in all material respects and (ix) conversion or certain amendments of, or another mutually agreed arrangement with respect to, Caesars’ 5.00% convertible senior notes due 2024.

If such conditions are not satisfied, the Merger will not be consummated unless such conditions are validly waived. Such conditions may jeopardize or delay consummation of the Merger or may reduce the anticipated benefits of the Merger. Further, no assurance can be given that the required approvals will be obtained or that the conditions to closing will be satisfied. Even if all such approvals are obtained, no assurance can be given as to the terms, conditions and timing of such approvals or that they will satisfy the terms of the Merger Agreement. If the Merger is not consummated by June 24, 2020 (as may be extended to a date no later than December 24, 2020 upon satisfaction of certain conditions to extension set forth in the Merger Agreement), either the Company or Caesars may terminate the Merger Agreement.

The Merger is subject to the receipt of governmental approvals ~~and clearances~~ that may impose conditions that could have an adverse effect on usthe Company or, if not obtained, could prevent ~~completion~~consummation of the ~~transactions.~~Merger or, in some circumstances, require the Company to pay Caesars a termination fee of approximately $836.8 million.

~~Completion~~Consummation of the ~~dispositions of Presque Isle Downs and Nemacolin and the closing of our agreement to partner with William Hill~~Merger is conditioned upon the receipt of certain governmental approvals, including, without limitation, antitrust and gaming ~~regulatory. There~~regulatory approvals. Although each of the Company and Caesars has agreed to use its reasonable best efforts to obtain the requisite governmental approvals, there can be no assurance that these approvals will be obtained and that the other conditions to ~~completing~~consummating the ~~dispositions~~Merger will be ~~satisfied in a timely fashion, or at all.~~satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the ~~completion~~consummation of the ~~transactions~~Merger or require changes to the terms of the Merger Agreement or other agreements ~~governing~~to be entered into in connection with the ~~transactions.~~Merger Agreement. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the ~~dispositions~~Merger or of imposing additional costs or limitations on usthe Company following ~~completion~~consummation of the ~~transactions,~~Merger, any of which might have an adverse effect on ~~us. The waiting period under~~ the ~~Hart-Scott-Rodino Antitrust Improvement Acts~~Company’s business, financial condition and results of ~~1976, as amended, has been~~operations. In addition, if the Merger Agreement is terminated (i) due to a law or order relating to gaming or antitrust laws that prohibits or permanently enjoins the consummation of the Merger, (ii) because the required regulatory approvals were not obtained prior to June 24, 2020 (as may be extended to a date no later than December 24, 2020 upon satisfaction of certain conditions to extension set forth in the Merger Agreement) or (iii) due to the Company willfully and materially breaching certain obligations with respect to the ~~Presque Isle Downs disposition~~actions required to be taken by the Company to obtain required antitrust approvals, the Company will be required to pay Caesars a termination fee of approximately $836.8 million.

Moreover, the special meetings at which Caesars stockholders will vote on a proposal to adopt the Merger Agreement and the ~~William Hill transaction.~~ Company’s stockholders will vote on a proposal to approve the Share Issuance may take place before all governmental approvals have been obtained and, in cases where such approvals have not been obtained, before the terms of any conditions to obtain such approvals that may be imposed are known. As a result, if the requisite stockholder approvals are obtained at such meetings, the Company and Caesars may make decisions after the special meetings to waive a condition or approve certain actions required to obtain necessary approvals without seeking further stockholder approval. Such actions could have an adverse effect on the combined company’s business, financial condition and results of operations following the Merger.

Antitrust approvals that are required to consummate the Merger may not be received, may take longer than expected or may impose conditions, including the requirement to divest assets, that could have an adverse effect on the combined company following the Merger.

Under the provisions of the HSR Act, the Merger may not be consummated until filings are made with the Antitrust Division of the DOJ and the FTC and the expiration of a 30-calendar day waiting period, or the early termination of that waiting period, following the parties’ filings. ERI and Caesars filed their respective notification and report forms under the HSR Act on July 16, 2019. On August 15, 2019, ERI withdrew its notification and report form and re-filed the same on August 19, 2019, which began a new 30-day waiting period. On September 18, 2019, each of ERI and Caesars received a Request for Additional Information and Documentary Material (a “Second Request”) from the FTC in connection with the FTC’s review of the Merger, which extends the waiting period until 30 days after both parties have substantially complied with the Second Request, unless the FTC early terminates the additional waiting period or the parties otherwise agree not to consummate the Merger for a period of time after substantial compliance. ERI and Caesars are working with the FTC to complete its investigation as soon as practicable.

In addition, private parties who may be adversely affected by the Merger and individual states may bring legal actions under the antitrust laws in certain circumstances. Although the Company and Caesars believe the consummation of the Merger will not likely be prevented by antitrust laws, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if a challenge is made, what the result will be. Under the Merger Agreement, the Company and Caesars have agreed to use their reasonable best efforts to obtain all regulatory clearances necessary to consummate the Merger at the earliest practicable date.

In addition, in order to consummate the Merger, the Company and Caesars may be required to comply with conditions, terms, obligations or restrictions imposed by regulatory entities, including divestitures, and such conditions, terms, obligations or restrictions may have the effect of delaying consummation of the Merger, imposing additional material costs on or materially limiting the revenue of the combined company after the consummation of the Merger, or otherwise reducing the anticipated benefits to the Company of the Merger. Such conditions, terms, obligations or restrictions may result in the delay or abandonment of the Merger.

Gaming regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Consummation of the Merger is conditioned on the receipt of approvals from a number of gaming regulatory authorities, including, among others, the Ak Chin Community Tribal Gaming Commission, the Arizona Department of Gaming, the Cherokee Tribal Gaming Commission, the Colorado Division of Gaming, the Illinois Gaming Board, the Indiana Gaming Commission, the Indiana Horse Racing Commission, the Iowa Racing and Gaming Commission, the Kentucky Horse Racing Commission, the Louisiana Gaming Control Board, the Louisiana State Racing Commission, the Maryland Lottery and Gaming Control Agency, the Mississippi Gaming Commission, the Missouri Gaming Commission, the National Indian Gaming Commission, the Nevada Gaming Commission, the New Jersey Casino Control Commission, the New Jersey Division of Gaming Enforcement, the Pennsylvania Gaming Control Board, the Pennsylvania State Horse Racing Commission, the Ohio Lottery Commission, the Gauteng Gambling Board (South Africa), the Alcohol and Gaming Commission of Ontario, the Ministry of Culture, Sports and Tourism (Korea) and the Gambling Commission (United Kingdom). In some instances, these approvals include findings of suitability for the Company’s officers and continuing members of the Company’s Board of Directors. These approvals and findings may not be received at all, may not be received in a timely fashion and/or may contain conditions on the consummation of the Merger. In addition, these regulatory bodies may impose conditions on the granting of such approvals and findings. Such conditions and the process of obtaining such regulatory approvals could have the effect of delaying consummation of the Merger or of imposing additional costs or limitations on the combined company following the Merger. In addition, to the extent any officer of the Company is found unsuitable, the Company would need to find a replacement, which may take time and could adversely impact the Company’s financial and operational performance, including the Company’s ability to successfully consummate the Merger and integrate Caesars into the Company. Any such finding of unsuitability by regulatory authorities and resulting resignation or removal of an officer of the Company could also impact the governance structure of the combined company following the Merger.

There can be no assurance that the Company will be able to secure the financing in connection with the Merger and the transactions contemplated by the Merger Agreement on acceptable terms, in a timely manner, or at all.

The ~~pending dispositions~~Company intends to finance at least a portion of the cash required in connection with the Merger, including expenses in connection with the Merger, with the Debt Financing in accordance with the A&R Commitment Letter. The A&R Commitment Letter provides for funding to (i) the Company of (a) a $1,000.0 million senior secured revolving credit facility, (b) a $3,000.0 million senior secured term loan B facility, (c) a $3,600.0 million senior secured 364-day bridge facility and (d) a $1,800.0 million senior unsecured bridge loan facility and (ii) a subsidiary of Caesars a $2,400.0 million senior secured incremental term loan B facility. The senior secured 364-day bridge facility will only be funded in accordance with the A&R Commitment Letter to the extent that the net cash proceeds of certain asset sales and certain transactions contemplated with VICI as described in the next succeeding paragraph are not available on the closing date of the Merger to be applied to finance the Merger and expenses in connection therewith. In addition to the Debt Financing, the Company also recently entered into letter agreements with certain financial institutions which additional letter agreements provide (i) for commitments from such financial institutions to provide an increase to the senior secured term loan B facility being provided to the Company and additional revolving credit facility commitments for the Company and (ii) the engagement of such financial institutions to act as arrangers for additional debt financing, in each case, in the event the Company elects to refinance certain existing indebtedness of Caesars Resort Collection, LLC and its subsidiaries and for working capital and general corporate purposes upon the consummation of the Merger. Additionally, the Company may continue to evaluate alternative financing structures and amounts based on its needs and capital markets conditions. The proceeds of the Debt Financing may be ~~disruptive~~used (A) to ~~our business.~~pay all or a portion of the cash portion of the Merger Consideration, (B) to refinance all of the Company’s existing syndicated bank credit facilities and outstanding senior notes, (C) to refinance certain of Caesars’ and its subsidiaries’ existing debt, (D) to pay transaction fees and expenses related to the foregoing and/or (E) for working capital and general corporate purposes. The availability of the borrowings under the Debt Financing is subject to the satisfaction of certain customary conditions, including the substantially concurrent consummation of the Merger. In the event some or all of the financing contemplated by the Commitment Letter is not available, the Company is obligated to use its reasonable best efforts to obtain alternative financing from alternative institutions in an amount at least equal to the amount of such unavailable portion of the financing contemplated by the A&R Commitment Letter and in an amount sufficient to enable the Company to consummate the Merger.

~~Whether or not~~In connection with the ~~dispositions~~execution of the Merger Agreement and the A&R Commitment Letter, the Company entered into the MTA with VICI. The Company intends to finance at least a portion of the cash required in connection with the Merger with the proceeds of transactions that are ~~completed,~~subject to the ~~pendency~~MTA, including approximately $1.8 billion of proceeds from the expected sale leaseback of certain properties expected to be acquired upon consummation of the Merger, including Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City (or, under certain circumstances, if necessary, certain replacement properties specified in the MTA), and approximately $1.4 billion of proceeds expected to be received in consideration of the amendment of certain existing leases between subsidiaries of Caesars and VICI. The consummation of the transactions contemplated by the MTA is subject to satisfaction of certain conditions, including execution of agreements, receipt of required regulatory approvals, the accuracy of the representations and warranties, compliance with covenants, delivery of certain closing deliverables and the absence of any governmental order or action seeking to prohibit the consummation of the transactions contemplated by the MTA. The Company is currently negotiating the sale leaseback documents, lease amendments and other agreements contemplated by the MTA and cannot assure you as to the timing or outcome of those negotiations with VICI. Although the Company expects the transactions contemplated by the MTA to be consummated substantially concurrently with the Merger, there can be no assurance as to the timing of the closing of such transactions or that the closings will occur on the terms set forth in the MTA or at all. In the event that the closings of some or all of the transactions contemplated by the MTA are delayed or do not occur, the Company may be required to incur the 364-day secured bridge facility under the Debt Financing or other additional indebtedness to pay the cash portion of the Merger Consideration, repay the Company’s and certain of Caesars’ and its subsidiaries’ outstanding debt and/or pay transaction fees and expenses related thereto, which could ~~cause disruptions~~have an adverse impact on the business, financial condition and results of operations of the combined company following the Merger.

The consummation of the Merger is not conditioned on the Company’s ability to obtain financing or the consummation of the transactions contemplated by the MTA. If the Company is unable to obtain funding contemplated by the Commitment Letter from its financing sources for the cash required in ~~our~~connection with the Merger, the Company may be compelled to specifically perform its obligations to consummate the Merger or could otherwise be subject to claims under the Merger Agreement, each of which could have a material adverse effect on the Company.

Litigation challenging the Merger could delay or prevent the consummation of the Merger.

One of the conditions to the Merger is that no law, statute, rule, regulation, ordinance, code, ruling, subpoena, order, writ, injunction, decree, judgment, ruling, determination, directive, award or settlement issued by a governmental entity (including any gaming authority) shall have been adopted, promulgated or issued that would prohibit, restrain, enjoin or render unlawful the consummation of the Merger or the Share Issuance. As of November 6, 2019, eight complaints have been filed challenging the Merger. Seven of the complaints generally assert claims under Sections 14(a) and 20(a) of the Exchange Act challenging the adequacy of certain disclosures made in the version of this joint proxy statement/prospectus filed with the SEC on September 3, 2019. Those complaints seek, among other relief, an injunction preventing consummation of the Merger, damages in the event that the Merger is consummated and attorneys’ fees. The eighth complaint, filed in Nevada state court, asserts claims for breach of fiduciary duty by, among other things, approving the Merger at an unfair price and disseminating materially misleading information in connection with the Merger. There can be no assurance that additional claims will not be filed by stockholders of the Company or Caesars seeking damages relating to, or otherwise challenging, the Merger. If the plaintiffs in any such action secure injunctive or other relief prohibiting, delaying or otherwise adversely affecting the Company’s and Caesars’ ability to consummate the Merger, then such injunctive or other relief may prevent the Merger from becoming effective within the expected time frame or at all. If consummation of the Merger is prevented or delayed, it could result in substantial costs to the Company. In addition, whether or not any plaintiff’s claim is successful, the Company could incur significant costs in connection with any such litigation, including costs associated with the indemnification of the Company’s and Caesars’ directors and officers, and the attention and resources of the respective management of ERI and Caesars could be diverted from the consummation of the Merger and ongoing business activities, which could have an adverse effect on ~~our~~the Company’s business, financial condition and results of operations.

The Merger Agreement contains provisions that limit the Company’s ability to pursue alternatives to the Merger, could discourage a potential competing acquiror of the Company from making a favorable alternative transaction proposal and, in specified circumstances, could require the Company to pay Caesars a termination fee.

The Merger Agreement contains certain provisions that restrict the Company’s ability to solicit, initiate, knowingly facilitate or knowingly encourage any inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, a competing proposal, engage, continue or otherwise participate in any substantive discussions or negotiations regarding, or furnish any non-public information to any person in connection with or for the purpose of encouraging or facilitating, a competing proposal, subject to customary exceptions and limitations. In addition, Caesars generally has an opportunity to offer to modify the terms of the Merger Agreement in response to any third-party alternative transaction proposal before the Company’s board of directors may change, qualify, withhold, withdraw or modify its recommendation that the Company’s stockholders approve the Share Issuance. Upon termination of the Merger Agreement in certain circumstances relating to changes in the recommendation of the Company’s board of directors in favor of the Share Issuance or entry by the Company into an alternative transaction, the Company will be required to pay a termination fee of approximately $154.9 million to Caesars, as well as reimburse Caesars’ expenses in an amount not to exceed $50.0 million if the Merger Agreement is terminated because of the Company’s failure to obtain the required approval of its stockholders (creditable against any termination fee that may subsequently be paid by the Company). In such a scenario, the Company may also be required to pay VICI a fee of $75.0 million pursuant to the terms of the MTA.

These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of the Company or pursuing an alternative transaction with the Company from considering or proposing such a transaction or might result in a potential third-party acquiror or merger partner proposing to pay a lower price to the stockholders of the Company than it might otherwise have proposed to pay because of the added expense of the termination fee and expense reimbursement that may become payable in certain circumstances.

If the Merger is not consummated, the price of the Company’s common stock and the Company’s future businesses and ~~financial results. These disruptions~~operations could ~~include~~be harmed.

~~current and prospective customers may anticipate changes in how they are served or~~Company will not have realized any of the potential benefits ~~offered our loyalty reward program~~of the Merger having been consummated and may ~~as a result, choose~~be subject to ~~discontinue their patronage; and~~material risks, including:

•

failure to consummate the Merger may result in negative publicity and a negative impression of the Company in the investment community;

•

the diversion of management attention from day-to-day business and the unavoidable disruption to its employees and relationships with customers, vendors, joint venture partners and other third parties as a result of efforts and uncertainties relating to the Merger may detract from the ability of the Company to grow revenue and minimize costs, which, in turn, may lead to a loss of market position that the Company could be unable to regain if the Merger does not occur;

~~the attention of our management may be diverted from the operation of our business.~~

•

under the Merger Agreement, the Company is subject to certain restrictions on the conduct of its business prior to consummating the Merger, which may affect the Company’s ability to execute certain of its business strategies or respond effectively to competitive pressures and industry developments; and

•

in certain circumstances, the Company may be required to pay a termination fee of approximately $154.9 million or approximately $836.8 million to Caesars, and may be required to reimburse Caesars’ expenses in an amount not to exceed $50.0 million;

•

the Company may be required to pay a $75.0 million termination fee to VICI pursuant to the terms of the MTA if the MTA is terminated as a result of the termination of the Merger Agreement;

•

if the Company’s board of directors seeks an alternative transaction to the Merger, a potential third-party acquiror or merger partner may propose to pay a lower price to ERI stockholders as a result of the applicable termination fee and expense reimbursement;

•

the price of the Company’s common stock may decline to the extent that the current market price of the Company common stock reflects a higher price than it otherwise would have based on the assumption that the Merger will be consummated;

•

the Company would have incurred significant expenses relating to the Merger that they may be unable to recover; and

•

the Company may be subject to litigation related to the failure to consummate the Merger or to perform its obligations under the Merger Agreement.

The integration of ~~our operations with Tropicana~~the Company and ~~the Grand Victoria~~Caesars following the ~~acquisitions~~Merger may present significant ~~challenges and impair our~~challenges. We cannot be sure that we will be able to realize the anticipated benefits of the Merger in the anticipated time frame or at all.

The Company’s ability to realize the anticipated benefits of the ~~acquisitions~~Merger will depend, to a large extent, on the Company’s ability to integrate Caesars’ businesses into the Company in the anticipated time frame or at all.

Our ability to realize the anticipated benefits of the acquisitions will depend, to a large extent, on our ability to integrate the business of Tropicana and the Grand Victoria into our operations in the anticipated time frame or at all. We The Company may face significant challenges in combining ~~the~~Caesars’ operations ~~of the acquired companies~~ into ~~our~~its operations in a timely and efficient manner. The combination of two independent businesses is a complex, costly and time-consuming process. As a result, wethe Company will be required to devote significant management attention and resources to integrating the business practices and operations of Caesars into those of the ~~acquired companies into our operations.~~Company. The integration process may disrupt the ~~business of the acquired properties~~businesses and, if implemented ineffectively or inefficiently, ~~could~~would preclude realization of the full benefits ~~that we expect.~~expected by the Company and Caesars. The failure to successfully integrate Caesars into the ~~acquired properties~~Company and to manage the challenges presented by the integration process successfully may result in an interruption of, or loss of momentum in, the ~~combined~~ business of the Company, which may have the effect of depressing the market price of ~~our~~the Company’s common stock following the ~~closing of the transactions.~~Merger.

~~In addition, while we expect~~The Company may be unable to realize anticipated synergies or may incur additional costs.

The Company expects to realize cost synergies from combining ~~the sales~~administrative and ~~general and administrative~~other overlapping functions of Caesars and the ~~acquired businesses with ours, we~~Company, as well as revenue synergies. However, the Company will be required to incur costs, including severance and related expenses, to realize the anticipated synergies. In addition, the amount of synergies realized after consummation of the Merger may be reduced from anticipated levels as a result of cost ~~savings.~~reduction programs that have been implemented, or may be implemented, by Caesars prior to consummation of the Merger, including Caesars’ previously announced initiatives expected to result in cost savings of $50.0 million. While ~~we believe that~~the Company’s management believes the combined ~~entity~~company will benefit from ~~cost~~ synergies, wethe Company may be unable to realize all of ~~the expected cost~~these synergies within the time frame expected or at all. In addition, wethe Company may incur additional or unexpected costs in order to realize these ~~cost~~ synergies.

~~The acquisition of Tropicana and~~

Unanticipated costs relating to the ~~Grand Victoria may not be accretive and may cause dilution to our~~Merger could reduce the Company’s future earnings per ~~share, which may negatively affect the price of our common stock.~~share.

We ~~currently anticipate~~believe that we have reasonably estimated the ~~acquisitions will be accretive~~likely incremental costs of the combined operations of the Company and Caesars following the Merger. However, it is possible that unexpected transaction costs such as taxes, fees or professional expenses or unexpected future operating expenses such as unanticipated costs to integrate the ~~earnings per share~~two businesses or increased personnel costs, as well as other types of unanticipated adverse developments, could have an adverse effect on the business, financial condition and results of operations of the combined company ~~in 2019. This expectation is based on preliminary estimates and assumes certain synergies expected to be realized by the combined company over a 12-month period~~ following the ~~completion of~~Merger. In addition, if actual costs are materially different than expected costs, the ~~acquisitions. Such estimates and assumptions~~Merger could ~~materially change due to additional transaction-related costs, delays in regulatory approvals,~~have a significant dilutive effect on the failure to realize any or all of the benefits expected in the acquisitions or other factors beyond our control. All of these factors could delay, decrease or eliminate the expected accretive effect of the acquisitions and cause resulting dilution to our earnings per share or to the price of our common stock.Company’s earnings.

WeThe Company will have a substantial amount of debt outstanding following the ~~acquisition of Tropicana~~Merger and ~~the Grand Victoria and we~~ may incur additional ~~indebtedness.~~indebtedness in the future, which could restrict the Company’s ability to pay dividends and fund working capital and planned capital expenditures.

AsThe Company expects to enter into the Debt Financing in order to consummate the Merger and refinance the Company’s existing syndicated bank credit facilities and senior notes, and a portion of September 30, 2018 and after giving effect to the acquisition of Tropicana and the Grand Victoria, we had approximately $3.2 billion of debt and an additional $87.6 million of other annual obligations relating to the Master LeaseCaesars’ outstanding indebtedness will remain outstanding following the completion of such acquisitions. In addition, we had an additional $310.9 million of borrowing capacity under our revolving credit facility after giving effect to the increase in borrowing capacity from $300 million to $500 million effective at the time of the consummation of the ~~Tropicana acquisition.~~Merger. As a result, the Company will have a significant amount of additional indebtedness outstanding following the consummation of the Merger. In addition, wethe Company expects to have the ability to incur additional debt under its anticipated $1.0 billion revolving credit facility and Caesars Resorts Collection, LLC’s existing $1.0 billion revolving credit facility. The Company also continually evaluates alternative financing structures and amounts based on its needs and capital markets conditions. The Company may be required to incur ~~debt~~indebtedness under the 364-day secured bridge facility provided under the Debt Financing or other additional indebtedness to finance ~~costs associated~~the Merger Consideration if the transactions contemplated by the MTA or the previously announced sales of certain of the Company’s properties are not consummated prior to or in connection with the consummation of the Merger. This amount of leverage could have important consequences, including:

•

the Company may be required to use a substantial portion of its cash flow from operations to make interest and principal payments on the Company’s debt, which will reduce funds available for operations, future business opportunities and dividends;

•

the Company may have limited flexibility to react to changes in its business and its industry;

•

it may be more difficult for the Company to satisfy its other obligations;

•

the Company may have a limited ability to borrow additional funds or to sell assets to raise funds if needed for working capital, capital expenditures, acquisitions or other purposes;

•

the Company may become more vulnerable to general adverse economic and industry conditions and changes in interest rates, including changes in interest rates resulting from the expected discontinuation of LIBOR; and

•

the Company may be at a disadvantage compared to its competitors that have less debt.

Future interest expense will be significantly higher than historic interest expense as a result of higher levels of indebtedness incurred to consummate the Merger. The Company’s ability to make payments on its debt and potential to pay dividends on its common stock, which the Company has not historically done, will depend on its ability to generate cash in the future, which will depend on many factors beyond its control. The Company cannot assure you that:

•

its business will generate sufficient cash flow from operations to service and repay its debt, pay dividends on its common stock and fund working capital and planned capital expenditures;

•

future borrowings will be available under its credit facilities or any future credit facilities in an amount sufficient to enable it to repay its debt, pay dividends on its common stock and fund working capital and planned capital expenditures; or

•

it will be able to refinance any of its debt on commercially reasonable terms or at all.

If the Company cannot generate sufficient cash from its operations to meet its debt service obligations, it may need to reduce or delay capital expenditures, the development of its business generally and any acquisitions. If the Company becomes unable to meet its debt service and repayment obligations (or those of its subsidiaries following the Merger), it (or its applicable subsidiaries) would be in default under the terms of the applicable credit agreement or indenture, which would allow its lenders or noteholders to declare all outstanding indebtedness thereunder to be due and payable and terminate any commitments to lend thereunder. If the amounts outstanding under its (or its subsidiaries’) credit facilities or indentures were to be accelerated, the Company cannot assure you that its (or its subsidiaries’) assets would be sufficient to repay in full the money owed.

Following consummation of the Merger and the transactions contemplated by the MTA, the Company and its subsidiaries will be required to pay a ~~mixed-use entertainment~~significant portion of their cash flow from operations to third parties pursuant to leasing and ~~hospitality destination~~related arrangements.

The Company and Caesars currently lease certain parcels of land on which several of their respective properties are located and, pursuant to the terms of MTA, are expected to enter into leases with VICI with respect to parcels of land on which Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City are located and will increase the lease rate on an existing lease agreement between a subsidiary of Caesars and VICI, which will require the Company’s subsidiaries that are parties to such leases to apply a significant amount of their cash flow to required rental payments. These leases also are expected to require certain levels of capital expenditures to be ~~located~~made on ~~unused land adjacent to~~ the ~~Pompano casino and racetrack or for other purposes.~~properties leased under these leases on an ongoing basis. As a result of the ~~increased levels~~obligation to pay rent and make capital expenditures under the new and existing leases, the ability of the combined company to fund its operations or development projects, raise capital, make acquisitions and otherwise respond to competitive and economic changes may be adversely affected. For example, the obligations under these lease agreements may:

•

make it more difficult for the combined company to satisfy its obligations with respect to its (or its subsidiaries’) indebtedness and to obtain additional indebtedness;

•

increase vulnerability to general or regional adverse economic and industry conditions or a downturn in the combined company’s business;

•

require the combined company to dedicate a substantial portion of its cash flow from operations to making lease payments, thereby reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate purposes and acquisitions;

•

limit flexibility in planning for, or reacting to, changes in the combined company’s business and the industry in which it operates; and

•

restrict the combined company’s ability to raise capital, make acquisitions and divestitures and engage in other significant transactions.

In addition, the annual rent escalations under these lease agreements will continue to apply regardless of the amount of cash flows generated by the properties that are subject to these lease agreements. Accordingly, if the cash flows generated by such properties decrease, or do not increase at the same rate as the rent escalations, the rents payable under these lease agreements could comprise a higher percentage of the cash flows generated by the applicable entity, which could exacerbate, perhaps materially, the issues described above. Any of the above listed factors could have an adverse effect on the combined company’s business, financial condition and results of operations.

Moreover, if the combined company were to default on any one or more of these lease agreements, the applicable lessors could terminate the affected leases and we could lose possession of the land leased under the affected leases and any improvements on that land, including the hotels and casinos. A termination of these lease agreements could result in a default under the Company’s (or its subsidiaries’) applicable credit agreements, which would allow its lenders to declare all outstanding ~~indebtedness~~borrowings to be due and payable and terminate any commitments thereunder, and could have a material adverse effect on the combined company’s business, financial condition and results of operations.

The guaranties to be entered into by the Company in connection with the existing and new leases with VICI will include covenants that may restrict the ability of the Company to pay dividends and repurchase its shares following the ~~acquisition~~Merger.

The Company will guaranty the obligations of ~~Tropicana and the Grand Victoria and rent payments~~its subsidiaries under the ~~Master Lease, future interest expense, rent~~existing and ~~debt service obligations will be significantly higher than our historic interest expense and other obligations associated~~new leases with ~~financing.~~

We have entered into a partnership agreement to expand our sportsbook business and engage in online sportsbook, casino gaming and poker. There can be no assurance that regulations authorizing such activities will be approved in the jurisdictions in which we operate or that the market for such gaming activities will develop as expected.

During the second quarter of 2018, the U.S. Supreme Court overturned the Federal ban on sports betting. As a result of the change in regulations, we expanded, and expect to further expand, our sportsbook and online sportsbook, casino gaming and poker business. We currently accept wagers on sporting events in Nevada, New Jersey and Mississippi and anticipate accepting wagers on sporting events during the fourth quarter of 2018 or first quarter of 2019 at our casinos located in West Virginia and Pennsylvania. Our ability to expand our sports betting and online operations is dependent on adoption of regulations permitting sports betting industry in the United States. There can be no assurances as to when, or if, such regulations will be adopted, or the terms of such regulations, in certain of the jurisdictions in which we operate.

~~Following the repeal of the Federal ban on sports betting, we entered into a definitive agreement with William Hill PLC and its U.S. subsidiary (“William Hill”)~~VICI pursuant to which ~~William Hill has agreed to operate as our sports betting operator, including with respect to mobile and online sports wagering, for a period~~the Company’s subsidiaries will lease certain parcels of ~~25 years. Pursuant to our agreement with William Hill, we~~land on which several of their respective properties are located. These guaranties will ~~receive a 20% equity stake in a U.S. subsidiary of William Hill as well as ordinary shares of William Hill with a value of $50 million. In addition, we~~include covenants, which, among other things, may ~~in the future enter into agreements that provide other online gaming operators with~~restrict the ability ~~to operate online and mobile betting and gaming activities under the authority of our licenses. The closing~~ of the ~~transaction with William Hill~~Company to pay dividends or repurchase its shares if its market capitalization is less than $5.5 billion, and ~~any similar arrangement~~may restrict the ability of the Company to make non-cash dividends, in each case, following the ~~future~~Merger.

Delay or failure to consummate the sale of properties previously announced by the Company may ~~be,~~require the Company to incur additional debt to pay the cash portion of the Merger Consideration or to repay outstanding indebtedness of the Company or otherwise adversely impact the business, financial condition and results of operations of the combined company following the Merger.

On June 17, 2019, the Company entered into an agreement to sell Lady Luck Caruthersville, Isle Casino Cape Girardeau and Mountaineer Casino, Racetrack & Resort for aggregate consideration of $385.0 million, and on July 10, 2019, the Company entered into an agreement to sell Isle of Capri Casino Kansas City and Lady Luck Casino Vicksburg for aggregate consideration of $230.0 million, in each case subject to ~~the~~certain adjustments. The consummation of each transaction is subject to satisfaction of customary conditions, including receipt of required regulatory ~~approvals. There can be no assurance that these~~ approvals, ~~will be obtained~~the accuracy of the parties’ representations and ~~that the other conditions to completing such transactions will be satisfied in a timely fashion, or at all.~~

~~The market for sports betting and online gaming is rapidly evolving and highly competitive~~warranties, compliance with ~~an increasing number~~covenants, delivery of ~~competitors. The success of our sportsbook and online betting and gaming partners, the value of our equity interest William Hill~~certain closing deliverables and the ~~results~~absence of ~~operations from sports betting and online sportsbook and gaming conducted at our properties~~any governmental order or ~~under~~action seeking to prohibit the ~~authority~~consummation of ~~our licenses are dependent on a number~~the transaction. Although the Company expects such sale transactions to be consummated prior to consummation of ~~factors that are beyond our control, including:~~

the ~~timing of adoption of regulations authorizing such betting and gaming activities and the restrictions contained in such regulations;~~

~~the tax rates and license fees ;~~

~~our ability to gain market share in a newly developing market;~~

~~the potential that the market does not develop at all or does not develop as we anticipate;~~

~~our ability to compete with new entrants in the market;~~

~~changes in consumer demographics and public tastes and preferences; and~~

~~the availability and popularity of other forms of entertainment.~~

~~There~~Merger, there can be no assurance as to the ~~returns~~timing of the closing of such sales or that wethe closings will ~~receive from our current~~occur on the terms set forth in the purchase agreements relating to the sales, or at all. In the event that the closing of either sale is delayed or does not occur, the Company may be required to incur the 364-day secured bridge facility under the Debt Financing or other additional indebtedness to pay the cash portion of the Merger Consideration, to repay the Company’s and ~~anticipated sports betting~~certain of Caesars’ and ~~online gaming~~its subsidiaries outstanding debt and/or to pay transaction fees and expenses related thereto, which could adversely impact the business, financial condition and results of operations of the combined company following the Merger.

On September 26, 2019, ERI and VICI entered into the Real Estate Purchase Agreements for the sale of Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City for aggregate consideration of approximately $1.8 billion, subject to satisfaction of customary conditions, including receipt of required regulatory approvals. In the event that the closing of any of the sales is delayed or ~~our partnership with William Hill~~does not occur within a certain timeframe, the Company may be required to incur the 364-day secured bridge facility under the Debt Financing or ~~future similar arrangements with~~ other ~~market service providers.~~additional indebtedness to pay the cash portion of the Merger Consideration, to repay the Company’s and certain of Caesars’ and its subsidiaries outstanding debt and/or to pay transaction fees and expenses related thereto, which could adversely impact the business, financial condition and results of operations of the combined company following the Merger.

ITEM 2.

UNREGISTERED SALES OF ~~EQUI~~TYEQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

E~~XHIBITS.~~EXHIBITS.

Exhibit Number	Description of Exhibit	Method of Filing

2.1	~~Agreement~~Purchase and ~~Plan of Merger by and among Eldorado Resorts, Inc., Delta Merger Sub, Inc., GLP Capital, L.P. and Tropicana Entertainment Inc.,~~Sale Agreement dated as of ~~April 15, 2018~~September 26, 2019 by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Harrah’s New Orleans; New Orleans, Louisiana)	Previously filed on Form 8-K filed on ~~April 16, 2018.~~September 26, 2019.

2.2	~~Interest~~ Purchase ~~Agreement by~~ and ~~among MGM Elgin Sub, Inc., Illinois RBG, L.L.C., Eldorado Resorts, Inc., Elgin Holdings I LLC, Elgin Holdings II LLC, Elgin Riverboat Resort-Riverboat Casino and MGM Resorts International,~~Sale Agreement dated as of ~~April 15, 2018~~September 26, 2019 by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Harrah’s Resort Atlantic City and Harrah’s Atlantic City Waterfront Conference Center; Atlantic City, New Jersey)	Previously filed on Form 8-K filed on ~~April 16, 2018.~~September 26, 2019.

~~4.1~~2.3	~~Sixth Supplemental Indenture,~~Purchase and Sale Agreement dated as of ~~August 7, 2018,~~September 26, 2019 by and ~~among~~between Eldorado Resorts, Inc.~~, the guarantors party thereto~~ and ~~U.S. Bank National Association, as Trustee, under the 2023 Notes Indenture~~VICI Properties L.P. (Harrah’s Laughlin Hotel and Casino; Laughlin, Nevada)	Previously filed on Form ~~10-Q~~8-K filed on ~~August 7, 2018.~~September 26, 2019.

~~4.2~~2.4*	~~Third Supplemental Indenture,~~Amendment No. 1 to Agreement and Plan of Merger, dated as of August ~~7, 2018,~~15, 2019, by and among Caesars Entertainment Corporation, Eldorado Resorts, Inc.~~, the guarantors party thereto~~ and ~~U.S. Bank National Association, as Trustee, under the 2025 Notes Indenture~~	~~Previously filed on Form 10-Q filed on August 7, 2018.~~

~~4.3~~	~~Indenture dated as of September 20, 2018, by and between Delta~~Colt Merger Sub, Inc. ~~and U.S. Bank, National Association~~	Previously filed on Form 8-K filed on ~~September 20, 2018~~

~~4.4~~	~~Loan Agreement, dated as of October 1, 2018, by and among Eldorado Resorts, Inc. and GLP Capital, L.P.~~	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~4.5~~	~~Supplemental Indenture, dated as of October 1, 2018, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association, as Trustee, under the 2026 Notes Indenture~~	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~4.6~~	Seventh Supplemental Indenture, dated as of October 1, 2018, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association, as Trustee, under the 2023 Notes Indenture	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~4.7~~	Fourth Supplemental Indenture, dated as of October 1, 2018, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association, as Trustee, under the 2025 Notes Indenture	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~10.1~~	~~Master Lease by and among Eldorado Resorts, Inc. and GLP Capital, L.P., dated as of October 1, 2018~~	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~10.2~~	Amendment Agreement No. 3, dated October 1, 2018, by and between Eldorado Resorts, Inc. and JPMorgan Chase, N.A., as administrative agent in connection with the Credit Agreement, dated as of April 17, 2017	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~10.3~~	~~Amendment No. 1 to Amended and Restated Employment Agreement, dated September 28, 2018, by and between Thomas Reeg and Eldorado Resorts, Inc.~~	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~10.4~~	~~Amendment No. 1 to Amended and Restated Employment Agreement, dated September 28, 2018, by and between Gary Carano and Eldorado Resorts, Inc.~~	~~Previously filed on Form 8-K filed on October 1, 2018~~

~~10.5~~	~~Amendment No. 1 to Amended and Restated Employment Agreement, dated September 29, 2018, by and between Anthony Carano and Eldorado Resorts, Inc.~~	~~Previously filed on Form 8-K filed on October 1, 2018~~August 16, 2019.

31.1	Certification of ~~Gary L. Carano~~Thomas R. Reeg pursuant to Rule 13a‑14a and Rule 15d‑14(a)	Filed herewith.

31.2	Certification of ~~Thomas R. Reeg~~Bret Yunker pursuant to Rule 13a‑14a and Rule 15d‑14(a)	Filed herewith.

32.1	Certification of ~~Gary L. Carano~~Thomas R. Reeg in accordance with 18 U.S.C. Section 1350	Filed herewith.

32.2	Certification of ~~Thomas R. Reeg~~Bret Yunker in accordance with 18 U.S.C. Section 1350	Filed herewith.

101.1	Inline XBRL Instance Document	Filed herewith.

101.2	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.

101.3	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.

101.4	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

101.5	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.

101.6	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.


*	Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Eldorado will furnish supplementally copies of omitted schedules and exhibits to the U.S. Securities and Exchange Commission upon its request.

~~SIGNATURES~~SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ELDORADO RESORTS, INC.

Date: November ~~8, 2018~~6, 2019		/s/ ~~Gary L. Carano~~
		~~Gary L. Carano~~
		~~Chief Executive Officer and Chairman of the Board~~

~~Date: November 8, 2018~~		~~/s/~~ Thomas R. Reeg
		Thomas R. Reeg
		~~President and~~ Chief ~~Financial~~Executive Officer (Principal Executive Officer)
		~~(Principal~~
Date: November 6, 2019		/s/ Bret Yunker
		Bret Yunker
		Chief Financial Officer (Principal Financial Officer)

6280

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.00001 par value	ERI	NASDAQ Stock Market

Large accelerated filer	☒		Accelerated filer	☐
Non‑accelerated filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
Emerging growth company	☐

		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	FINANCIAL STATEMENTS	2
	Consolidated Balance Sheets at September 30, ~~2018~~2019 (unaudited) and December 31, ~~2017~~2018	2
	Consolidated Statements of ~~Operations~~Income for the Three and Nine ~~months~~Months Ended September 30, 2019 and 2018 ~~and 2017~~ (unaudited)	3
	Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and Nine ~~months~~Months Ended September 30, 2019 and 2018 ~~and 2017~~ (unaudited)	4
	Consolidated Statements of ~~Cash Flows~~Stockholders’ Equity for the Nine ~~months~~Months Ended September 30, 2019 and 2018 ~~and 2017~~ (unaudited)	5
	~~Condensed Notes to Unaudited~~ Consolidated ~~Financial~~ Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	6
	Condensed Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3544
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5667
Item 4.	CONTROLS AND PROCEDURES	5668
PART II. OTHER INFORMATION		5769
Item 1.	LEGAL PROCEEDINGS	5769
Item 1A.	RISK FACTORS	5769
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	6078
Item 3.	DEFAULTS UPON SENIOR SECURITIES	6078
Item 4.	MINE SAFETY DISCLOSURES	6078
Item 5.	OTHER INFORMATION	6078
Item 6.	EXHIBITS	6179
SIGNATURES		6280

	September 30, 2019
Weighted Average Remaining Lease Term
Operating leases		34.1 years
Finance leases		34.0 years
Weighted Average Discount Rate
Operating leases(1)		7.2%
Finance leases		10.2%

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Operating lease cost:
Operating lease cost	$	7,674	$	22,729
Short-term and variable lease cost		1,573		5,211
Finance lease cost:
Interest expense on lease liabilities		24,696		73,931
Amortization of ROU assets		2,628		7,766
Total lease cost	$	36,571	$	109,637


Segment	Property	Date Acquired	State
West	Eldorado Resort Casino Reno ("Eldorado Reno")	(a)	Nevada
	Silver Legacy Resort Casino ("Silver Legacy")	(a)	Nevada
	Circus Circus Reno ("Circus Reno")	(a)	Nevada
	MontBleu Casino Resort & Spa ("MontBleu")	October 1, 2018	Nevada
	Tropicana Laughlin Hotel & Casino ("Laughlin")	October 1, 2018	Nevada
	Isle Casino Hotel - Blackhawk ("Isle Black Hawk")	May 1, 2017	Colorado
	Lady Luck Casino - Black Hawk ("Lady Luck Black Hawk")	May 1, 2017	Colorado

Midwest	Isle Casino Waterloo ("Waterloo")	May 1, 2017	Iowa
	Isle Casino Bettendorf ("Bettendorf")	May 1, 2017	Iowa
	Isle of Capri Casino Boonville ("Boonville")	May 1, 2017	Missouri
	Isle Casino Cape Girardeau ("Cape Girardeau")	May 1, 2017 (c)	Missouri
	Lady Luck Casino Caruthersville ("Caruthersville")	May 1, 2017 (c)	Missouri
	Isle of Capri Casino Kansas City ("Kansas City")	May 1, 2017 (c)	Missouri

South	Isle Casino Racing Pompano Park ("Pompano")	May 1, 2017	Florida
	Eldorado Resort Casino Shreveport ("Eldorado Shreveport")	(a)	Louisiana
	Isle of Capri Casino Hotel Lake Charles ("Lake Charles")	May 1, 2017	Louisiana
	Belle of Baton Rouge Casino & Hotel ("Baton Rouge")	October 1, 2018	Louisiana
	Isle of Capri Casino Lula ("Lula")	May 1, 2017	Mississippi
	Lady Luck Casino Vicksburg ("Vicksburg")	May 1, 2017 (c)	Mississippi
	Trop Casino Greenville ("Greenville")	October 1, 2018	Mississippi

East (b)	Eldorado Gaming Scioto Downs ("Scioto Downs")	(a)	Ohio
	Mountaineer Casino, Racetrack & Resort ("Mountaineer")	(a) (c)	West Virginia
	Tropicana Casino and Resort, Atlantic City ("Trop AC")	October 1, 2018	New Jersey

Central	Grand Victoria Casino ("Elgin")	August 7, 2018	Illinois
	Lumière Place Casino ("Lumière")	October 1, 2018	Missouri
	Tropicana Evansville ("Evansville")	October 1, 2018	Indiana

Leases	Classification on the Balance Sheet	September 30, 2019
ASSETS
Operating lease ROU assets		$	245,344
Finance lease ROU assets	Property and equipment, net(1)	$	646,353
LIABILITIES
Current:
Operating		$	21,963
Finance	Current portion of long-term debt	$	133
Noncurrent:
Operating		$	229,297
Finance	Long-term financing obligation and debt	$	968,138

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	19,382
Operating cash flows for finance leases	$	65,785

	Operating Leases			Finance Leases
Year ending December 31,
2019 (excluding the nine months ended September 30, 2019)	$	8,462		$	22,314
2020		19,666			89,246
2021		20,786			90,463
2022		19,784			91,756
2023		19,823			92,990
Thereafter		821,046			3,506,672
Total future minimum lease payments		909,567			3,893,441
Less: amount representing interest		(658,307	)		(3,345,270	)
Present value of future minimum lease payments		251,260			548,171
Less: current lease obligations		(21,963	)		(133	)
Plus: residual values - GLPI		—			420,100
Long-term lease obligations	$	229,297		$	968,138

	Three Months Ended September 30, 2017
	As Reported			ASC 606 Adjustments			Other Reclassifications⁽¹⁾			As Adjusted
Gross revenues	$	483,036		$	(39,651	)	$	29,493		$	472,878
Promotional allowances		(38,162	)		41,785			(3,623	)		—
Net revenues	$	444,874		$	2,134		$	25,870		$	472,878
Operating income	$	78,924		$	182		$	2,386		$	81,492
Net income	$	29,554		$	133		$	—		$	29,687

	Nine Months Ended September 30, 2017
	As Reported			ASC 606 Adjustments			Other Reclassifications⁽¹⁾			As Adjusted
Gross revenues	$	1,088,754		$	(88,225	)	$	50,368		$	1,050,897
Promotional allowances		(87,776	)		93,838			(6,062	)		—
Net revenues	$	1,000,978		$	5,613		$	44,306		$	1,050,897
Operating income	$	60,955		$	172		$	3,926		$	65,053
Net (loss) income	$	(15,754	)	$	196		$	—		$	(15,558	)

	Outstanding Chip Liability					Player Loyalty Liability						Customer Deposits and Other Deferred Revenue
	2019			2018		2019			2018			2019		2018
Balance at January 1	$	8,930		$	4,743	$	17,639		$	11,752		$	27,588	$	5,487
Balance at September 30		8,494			5,481		14,122			11,189			172,631		4,764
Increase / (decrease)	$	(436	)	$	738	$	(3,517	)	$	(563	)	$	145,043	$	(723	)

Purchase consideration calculation (dollars in thousands)
Cash consideration paid	$	640,000
Lumière Loan		246,000
Cash paid to retire Tropicana's long-term debt		35,000
ERI portion of taxes due		6,333
Purchase consideration	$	927,333

Current and other assets	$	178,581
Property and equipment		436,416
Property subject to the financing obligation		957,300
Goodwill		211,232
Intangible assets (i)		247,976
Other noncurrent assets		54,570
Total assets		2,086,075
Current liabilities		(174,847	)
Financing obligation to GLPI		(957,300	)
Noncurrent liabilities		(26,595	)
Total liabilities		(1,158,742	)
Net assets acquired	$	927,333

Purchase consideration calculation (dollars in thousands)
Cash consideration paid	$	327,500
Working capital and other adjustments		~~1,386~~1,304
Purchase consideration	$	~~328,886~~328,804

Cash and cash equivalents	$	~~22,612~~
~~Other current assets~~		~~2,237~~25,349
Property and equipment		~~60,812~~60,792
Goodwill		~~60,086~~59,774
Intangible assets (i)		205,296
Other noncurrent assets		915
Total assets		~~351,958~~352,126
Current liabilities		(~~21,322~~21,572	)
Noncurrent liabilities		(1,750	)
Total liabilities		(~~23,072~~23,322	)
Net assets acquired	$	~~328,886~~328,804

	Nine Months Ended
	September 30, ~~2017~~2018
Net operating revenues	$	~~1,379,466~~2,063,604
Net income		~~84,134~~78,730

	Restricted Stock Units						Restricted Stock Awards
	Units				Weighted- Average Grant Date Fair Value		Units				Weighted- Average Grant Date Fair Value
					(in millions)						(in millions)
Unvested outstanding as of December 31, 2017		1,579,499		$		12.25		10,809		$		19.13
Granted		317,904				32.97		—				—
Vested		(783,672	)			8.05		(10,809	)			19.13
Canceled		(9,885	)			19.13		—				—
Unvested outstanding as of September 30, 2018		1,103,846		$		21.14		—		$		—

				Weighted-
				Average
				Exercise
	Options			Price

Outstanding as of December 31, 2017		271,852		$	9.63
Expired		(15,776	)		10.89
Exercised		(120,120	)		9.09
Outstanding as of September 30, 2018		135,956		$	9.96

		Balance at January 1, 2018		Acquisitions		Impairments			Finalization of Isle Purchase Price Accounting			Assets Held for Sale			Balance at September 30, 2018
	(in thousands)
Goodwill by reportable segment:
West		$	152,775	$	—	$	—			(14	)		—		$	152,761
Midwest			327,088		—		—			(4,343	)		—			322,745
South			200,417		—		(9,815	)		(1,752	)		—			188,850
East			66,826		—		—			—			(3,122	)		63,704
Central			—		60,086		—			—			—			60,086
Total Goodwill		$	747,106	$	60,086	$	(9,815	)	$	(6,109	)	$	(3,122	)	$	788,146

Year	Percentage
2021		104.500	%
2022		103.000	%
2023		101.500	%
2024 and thereafter		100.000	%

	September 30, 2018
Assets:	Level 1		Level 2		Total
Restricted cash and investments	$	7,600	$	3,928	$	11,528
Marketable securities		9,486		7,571		17,057
Escrow cash		604,100		—		604,100


	December 31, 2017
Assets:	Level 1		Level 2		Total
Restricted cash and investments	$	9,055	$	4,098	$	13,153
Marketable securities		7,906		9,725		17,631

	September 30, 2018				December 31, 2017
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial liabilities:
7% Senior Notes due 2023	$	368,630	$	393,750	$	367,854	$	400,800
6% Senior Notes due 2025		880,289		889,263		880,889		914,375
6% Senior Notes due 2026		598,105		606,000		—		—
Term Loan		937,910		961,534		938,002		956,750
Revolving Credit Facility		180,000		180,000		—		—
Other long-term debt		2,463		2,463		2,531		2,531
Capital leases		484		484		917		917

2019 (excluding the nine months ended September 30, 2019)	$	22,214
2020		89,168
2021		90,417
2022		91,691
2023		92,990
Thereafter		3,506,672
Total future payments		3,893,152
Less: amounts representing interest at 10.2%		(3,345,270	)
Plus: residual values		420,100
Financing obligation to GLPI	$	967,982

	Level 3 Investments			Level 3 Other Liabilities
Fair value of investment and liabilities at December 31, 2018	$	16,008		$	—
Value of additional investment received		27,329			8,774
Unrealized loss		(412	)		(871	)
Fair value at September 30, 2019	$	42,925		$	7,903

~~Segment~~	~~Property~~	~~State~~
~~West~~	~~Eldorado Reno~~	~~Nevada~~
	~~Silver Legacy~~	~~Nevada~~
	~~Circus Reno~~	~~Nevada~~
	~~Isle Black Hawk~~	~~Colorado~~
	~~Lady Luck Black Hawk~~	~~Colorado~~

~~Midwest~~	~~Waterloo~~	~~Iowa~~
	~~Bettendorf~~	~~Iowa~~
	~~Boonville~~	~~Missouri~~
	~~Cape Girardeau~~	~~Missouri~~
	~~Caruthersville~~	~~Missouri~~
	~~Kansas City~~	~~Missouri~~

~~South~~	~~Pompano~~	~~Florida~~
	~~Eldorado Shreveport~~	~~Louisiana~~
	~~Lake Charles~~	~~Louisiana~~
	~~Lula~~	~~Mississippi~~
	~~Vicksburg~~	~~Mississippi~~

~~East~~	~~Presque Isle Downs~~	~~Pennsylvania~~
	~~Nemacolin~~	~~Pennsylvania~~
	~~Scioto Downs~~	~~Ohio~~
	~~Mountaineer~~	~~West Virginia~~

~~Central~~	~~Elgin~~	~~Illinois~~

	Three Months Ended						Nine months ended
	Ended September 30,						Ended September 30,
	2018			2017			2018				2017
	(in thousands)
Revenues and expenses
West:
Net operating revenues	$	129,092		$	134,324		$		346,550		$	297,564
Operating income		31,894			32,657				63,898			50,590
Midwest:
Net operating revenues		99,834			103,651				301,235			171,292
Operating income		26,637			24,264				80,725			39,676
South:
Net operating revenues		106,569			107,934				341,612			228,954
Operating income		16,176			13,682				50,099			32,210
East:
Net operating revenues		127,722			126,796				370,576			352,721
Operating income		23,637			21,215				67,164			54,411
Central:
Net operating revenues		23,897			—				23,897			—
Operating income		2,868			—				2,868			—
Corporate:
Net operating revenues		139			173				377			366
Operating loss		(9,443	)		(10,326	)			(41,377	)		(111,834	)
Total Reportable Segments
Net operating revenues	$	487,253		$	472,878		$		1,384,247		$	1,050,897
Operating income	$	91,769		$	81,492		$		223,377		$	65,053
Reconciliations to consolidated net income (loss):								��
Operating income	$	91,769		$	81,492		$		223,377		$	65,053
Unallocated income and expenses:
Interest expense, net		(34,085	)		(29,183	)			(96,579	)		(69,380	)
Loss on early retirement of debt, net		—			(10,030	)			(162	)		(37,347	)
(Provision) benefit for income taxes		(19,980	)		(12,592	)			(31,281	)		26,116
Net income (loss)	$	37,704		$	29,687		$		95,355		$	(15,558	)

	Nine Months Ended September 30,
	2018		2017
	(in thousands)
Capital Expenditures, Net
West	$	49,060	$	30,498
Midwest		14,516		6,545
South		12,307		4,003
East		8,953		6,540
Central		237		—
Corporate		4,009		5,344
Total	$	89,082	$	52,930