CENTURY CASINOS INC /CO/ - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

___X___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2004 OR

_______TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ____________ to ___________

Commission file number 0-22290
------------

CENTURY CASINOS, INC.
---------------------
(Exact name of registrant as specified in its charter)

DELAWARE 84-1271317
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)

1263 Lake Plaza Drive Suite A, Colorado Springs, Colorado 80906
---------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(719) 527-8300
--------------
(Registrant's telephone number, including area code)
157 East Warren Ave., Cripple Creek, Colorado 80813
---------------------------------------------------
(Former address of principal executive offices)
(719) 689-9100
(Registrant's former telephone number, including area code)

Indicate by check mark whether the registrant (1) 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_X_ No ___

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes___ No _X_

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.

Common stock, $0.01 par value, 13,681,900 shares outstanding as of July 28,
2004.

CENTURY CASINOS, INC.
FORM 10-Q
INDEX

Page
Number
PART I FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2004
and December 31, 2003 3

Condensed Consolidated Statements of Earnings for the Three
Months Ended June 30, 2004 and 2003 4

Condensed Consolidated Statements of Earnings for the Six
Months Ended June 30, 2004 and 2003 5

Condensed Consolidated Statements of Comprehensive Earnings
for the Three Months Ended June 30, 2004 and 2003 6

Condensed Consolidated Statements of Comprehensive Earnings
for the Six Months Ended June 30, 2004 and 2003 6

Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2004 and 2003 7

Notes to Condensed Consolidated Financial Statements 9

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 27

Item 3. Quantitative and Qualitative Disclosures About Market Risk 52

Item 4. Controls and Procedures 53

PART II OTHER INFORMATION

Item 1. Legal Proceedings 54

Item 4. Submission of Matters to a Vote of the Security Holders 54

Item 6. Exhibits and Reports on Form 8-K 54

SIGNATURES 55

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------

Dollar amounts in thousands, except for share information June 30, 2004 December 31, 2003
-------------- -----------------
(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents $ 4,112 $ 4,729
Restricted cash 643 598
Receivables, net 203 269
Prepaid expenses 569 441
Inventories 168 131
Other current assets 28 28
Deferred income taxes 74 111
------------ ----------
Total current assets 5,797 6,307

Property and Equipment, net 39,629 36,796
Goodwill, net 8,694 8,088
Casino License Acquisition Costs, net 1,948 1,760
Deferred Income Taxes 608 666
Equity Investment in unconsolidated subsidiary 101 -
Other Assets 1,039 1,200
------------ ----------
Total $ 57,816 $ 54,817
============ ==========

Current Liabilities:
Current portion of long-term debt $ 2,130 $ 2,136
Accounts payable and accrued liabilities 3,363 1,979
Accrued payroll 1,219 1,268
Taxes payable 866 1,088
------------ -----------
Total current liabilities 7,578 6,471

Long-Term Debt, less current portion 13,761 14,913
Other Non-current Liabilities 225 371
Minority Interest 46 14
Commitments and Contingencies - -
Shareholders' Equity:
Preferred stock; $.01 par value; 20,000,000 shares
authorized; no shares issued or outstanding - -
Common stock; $.01 par value; 50,000,000 shares authorized;
14,485,776 shares issued;
13,681,900 and 13,680,500 shares outstanding, respectively 145 145
Additional paid-in capital 21,528 21,529
Accumulated other comprehensive earnings 3,139 2,034
Retained earnings 13,223 11,172
------------ -----------

38,035 34,880
Treasury stock - 803,876 and 805,276 shares at cost,
respectively (1,829) (1,832)
------------ ----------

Total shareholders' equity 36,206 33,048
------------ ----------
Total $ 57,816 $ 54,817
============ ==========
See notes to condensed consolidated financial statements.

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
- --------------------------------------------------------------------------------

For The Three Months Ended June 30,
Dollar amounts in thousands, except for share information 2004 2003
---- ----

Operating Revenue:
Casino $ 8,808 $ 7,625
Hotel, food and beverage 965 817
Other 107 174
---------- ----------
9,880 8,616
Less promotional allowances 1,032 1,063
---------- ----------
Net operating revenue 8,848 7,553
---------- ----------

Operating Costs and Expenses:
Casino 3,421 2,717
Hotel, food and beverage 724 581
General and administrative 2,153 1,925
Depreciation 731 663
---------- ----------

Total operating costs and expenses 7,029 5,886
---------- ----------

Income from unconsolidated subsidiary 39 -

---------- ----------
Earnings from Operations 1,858 1,667
Non-operating Income (expense)
Interest expense (390) (525)
Other income, net 45 71
Non-operating items from unconsolidated subsidiary (3) -
---------- ----------

Non-operating income (expense), net (348) (454)
---------- ----------
Earnings before Income Taxes and Minority Interest 1,510 1,213
Provision for income taxes 347 462
---------- ----------

Earnings before Minority Interest 1,163 751
Minority interest in subsidiary earnings (16) -
---------- ----------
Net Earnings $ 1,147 $ 751
========== ==========

Earnings Per Share:
Basic $ 0.08 $ 0.06
========== ==========
Diluted $ 0.07 $ 0.05
========== ==========

See notes to condensed consolidated financial statements.

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
- --------------------------------------------------------------------------------

For The Six Months Ended June 30,
Dollar amounts in thousands, except for share information 2004 2003
---- ----

Operating Revenue:
Casino $ 16,874 $ 15,145
Hotel, food and beverage 1,939 1,638
Other 276 295
---------- ----------
19,089 17,078
Less promotional allowances 2,111 2,144
---------- ----------
Net operating revenue 16,978 14,934
---------- ----------

Operating Costs and Expenses:
Casino 6,477 5,366
Hotel, food and beverage 1,402 1,150
General and administrative 4,202 3,742
Depreciation 1,382 1,311
---------- ----------

Total operating costs and expenses 13,463 11,569
---------- ----------

Income from unconsolidated subsidiary 51 -

---------- ----------

Earnings from Operations 3,566 3,365
Non-operating Income (expense)
Interest expense (812) (1,052)
Other income, net 126 129
Non-operating items from unconsolidated subsidiary (8) -
---------- ----------

Non-operating income (expense), net (694) (923)
---------- ----------
Earnings before Income Taxes and Minority Interest 2,872 2,442
Provision for income taxes 790 928
---------- ----------

Earnings before Minority Interest 2,082 1,514
Minority interest in subsidiary earnings (31) (8)
---------- ----------
Net Earnings $ 2,051 $ 1,506
========== ==========

Earnings Per Share:
Basic $ 0.15 $ 0.11
========== ==========
Diluted $ 0.13 0.10
========== ==========

See notes to condensed consolidated financial statements.

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited)
- --------------------------------------------------------------------------------

For The Three Months Ended June 30,

Amounts in thousands 2004 2003
---- ----
Net Earnings $ 1,147 $ 751
Foreign currency translation adjustments 219 755
Change in fair value of interest rate swaps, net of
income taxes 64 86
----------- ------------
Comprehensive Earnings $ 1,430 $ 1,592
=========== ============

For The Six Months Ended June 30,

Amounts in thousands 2004 2003
---- ----
Net Earnings $ 2,051 $ 1,506
Foreign currency translation adjustments 1,014 1,310
Change in fair value of interest rate swaps, net of
income taxes 91 117
------------ -------------
Comprehensive Earnings $ 3,156 $ 2,933
============ =============

See notes to condensed consolidated financial statements.

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
- --------------------------------------------------------------------------------

For The Six Months Ended June 30,

Amounts in thousands 2004 2003
---- ----

Cash Flows from Operating Activities:
Net earnings $ 2,051 $ 1,506

Adjustments to reconcile net earnings to net cash provided by
operating activities
Depreciation 1,382 1,311
Amortization of deferred financing costs 48 56
Deferred tax expense 44 66
Minority interest in subsidiary earnings 31 8
Income from unconsolidated subsidiary (43) -
Gain on disposition of real estate option (35) (6)
Other - (43)

Changes in operating assets and liabilities
Receivables 72 (66)
Prepaid expenses and other assets (297) (58)
Accounts payable and accrued liabilities (18) (637)
Accrued payroll (71) (255)
Taxes payable (288) (226)
--------- ---------
Net cash provided by operating activities 2,876 1,656
--------- ---------

Cash Flows from Investing Activities:
Purchases of property and equipment (2,465) (1,029)
Acquisition of subsidiary, net of $664 in cash acquired - (1,259)
Restricted cash decrease - 38
Proceeds from disposition of assets 206 7
--------- ---------
Net cash used in investing activities (2,259) (2,243)
--------- ---------

(continued)

CENTURY CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
- --------------------------------------------------------------------------------

For the Six Months Ended June 30,

Amounts in thousands 2004 2003
---- ----
Cash Flows from Financing Activities:
Proceeds from borrowings $ 13,465 $ 14,523
Principal repayments (14,844) (14,440)
Proceeds from exercise of options 2 8
Purchases of treasury stock - (431)
------------- ------------

Net cash used in financing activities (1,377) (340)
------------- ------------

Effect of exchange rate changes on cash 143 199
------------- ------------

Decrease in Cash and Cash Equivalents (617) (728)

Cash and Cash Equivalents at Beginning of Period 4,729 4,582
------------ ------------

Cash and Cash Equivalents at End of Period $ 4,112 $ 3,854
============ ============

Supplemental Disclosure of Noncash Financing Activities:

See Note 1 for a summary of the Company's subsidiaries and the abbreviations
used in this section.

In January 2003, the Company, through its majority owned subsidiary CCA,
purchased the remaining 35% interest in CCAL for a total of $2.6 million, of
which $1.3 million was used to purchase a loan from the previous minority
shareholder, Caledon Overberg Investments (Proprietary) Limited, and is included
in principal repayments above, $1.0 million was applied to the minority
shareholder liability and $0.3 million increased the carrying value of the land
in Caledon.

In the second quarter of 2003, James Forbes, a former director of the Company,
in accordance with the Company's Employee's Equity Incentive Plan ("EEIP"),
exercised all 618,000 of his outstanding options, carrying an average exercise
price of $1.306. The shares were issued out of treasury stock. Mr. Forbes paid
the exercise price by transferring 357,080 shares of common stock to the Company
at a per share price of $2.26, the closing price on April 16, 2003.

In January 2004, the Company, through its wholly owned subsidiary CMB, purchased
an additional 40% interest in CM, bringing its total interest to 50%, by
contributing gaming equipment with a net book value of $0.60 million. The
contribution of the gaming equipment, along with a cash contribution made in
December 2002 which was accounted for by CMB on a cost basis in Euro and had a
value of $0.29 million on January 3, 2004, brought the Company's total
investment in CM to $0.89 million, of which $0.26 million was allocated to a
shareholder loan acquired as part of the transaction. The difference between the
cost and the equity of CM, of $0.57 million, has been recorded as goodwill.

Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest of $0 in $ 769 $ 1,055
2004 and $26 in 2003 ============ ============

Income taxes paid $ 461 $ 580
============ ============

See notes to condensed consolidated financial statements.

CENTURY CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Century Casinos, Inc. ("CCI" or the "Company") is an international gaming
company. The Company owns and/or manages casino operations in the United States,
South Africa, the Czech Republic and international waters through the entities
listed in the following table:

-------------------------------------------------------------------------------
Parent/Subsidiary Relationship Abbreviation Parent Ownership
Percentage
-------------------------------------------------------------------------------
Century Casinos, Inc. CCI n/a n/a
-------------------------------------------------------------------------------
WMCK Venture Corp. WMCK CCI 100%
-------------------------------------------------------------------------------
WMCK-Acquisition Corp. ACQ WMCK 100%
-------------------------------------------------------------------------------
Century Casinos Cripple Creek Inc. CCC WMCK 100%
-------------------------------------------------------------------------------
Century Resorts Limited (1) CRL CCI 96.5%
-------------------------------------------------------------------------------
Century Casinos Africa (Pty) Ltd. (1) CCA CRL 100%
-------------------------------------------------------------------------------
Century Casinos Caledon (Pty) Ltd. CCAL CCA 100%
-------------------------------------------------------------------------------
Century Casinos West Rand (Pty) Ltd. CCWR CCA 55%
-------------------------------------------------------------------------------
Rhino Resort Ltd. RRL CCA 50%
-------------------------------------------------------------------------------
Century Resorts International Limited CRI CCI 100%
-------------------------------------------------------------------------------
Century Resorts Alberta, Inc. CRA CRI 55%
-------------------------------------------------------------------------------
Century Casinos Management, Inc. CCM CCI 100%
-------------------------------------------------------------------------------
Century Casinos Nevada, Inc. CCN CCI 100%
-------------------------------------------------------------------------------
Century Management u. Beteiligungs GmbH CMB CCI 100%
-------------------------------------------------------------------------------
Casino Millennium a.s. CM CMB 50%
-------------------------------------------------------------------------------

(1) In July 2004, certain officers of the Company exchanged their 3.5% minority
interest in CCA for a 3.5% minority interest in CRL of equal value. CCI now owns
96.5% of CRL and CRL now owns 100% of CCA.

CCI serves as a holding company, providing corporate and administrative
services to its subsidiaries.

WMCK owns and operates Womacks Casino and Hotel ("Womacks"), a
limited-stakes gaming casino in Cripple Creek, Colorado. Womacks is one of
the largest gaming facilities in Cripple Creek. The facility has 647 slot
machines, 6 limited stakes gaming tables, 21 hotel rooms and 2 restaurants.

CRL was formed in May 2004, the Company formed CRL to provide technical
casino services to some of the Company's foreign and offshore operations.
In July 2004 certain officers of the Company exchanged their 3.5% minority
ownership in CCA for a 3.5% minority ownership in CRL of equal value. CCI
now owns 96.5% of CRL and CRL owns 100% of CCA.

CCA owns CCAL which owns and operates The Caledon Hotel, Spa & Casino near
Cape Town, South Africa. The resort has 290 slot machines and 9 gaming
tables, a 92-room hotel, mineral hot springs and spa facility, 4
restaurants, 2 bars, conference facilities and an equestrian center. In an
application to the Western Cape Gambling and Racing Board, CCAL has
requested an increase in the number of permitted slot machines to 300.

CRI serves as concessionaire of small casinos on eight luxury cruise
vessels and provides technical casino services to Casino Millennium. The
Company has a total of 208 slot machines and 30 table games, or
approximately 418 gaming positions on the eight combined shipboard casinos
currently in operation. The cruise vessel Insignia resumed operations on
March 29, 2004 after it was taken out of service following completion of
its cruise schedule to various destinations in the western Mediterranean as
of September 26, 2003. The Silver Cloud returned to service on March 27,
2004 following five months of periodic maintenance. On April 10, 2004, the
Company opened a casino aboard the Nautica, a cruise ship operated by
Oceania Cruises, equipped with 42 slot machines and 3 gaming tables. CRI
owns 55% of CRA which was formed in conjunction with an application for a
gaming license in Edmonton, Alberta, Canada.

CMB acquired a 10% equity interest in Casino Millennium located within a
five-star hotel in Prague, Czech Republic through a $0.24 million cash
contribution in December 2002. In January 2004, CMB acquired an additional
40% of Casino Millennium, bringing its total ownership to 50%. The current
period earnings are reported as income from unconsolidated subsidiary in
the Company's condensed consolidated statements of earnings and cash flows.
The investment by the Company for the incremental 40% stake totaled $0.60
million and was paid by contributing gaming equipment. Casino Millennium
has 38 slot machines and 15 gaming tables.

The Company regularly pursues additional gaming opportunities
internationally and in the United States.

Johannesburg - On October 20, 2003, the Company announced that
judgment had been handed down in the High Court of South Africa compelling
the Gauteng Gambling Board ("GGB") to award a casino license to Silverstar
Development Limited ("Silverstar") for the western periphery of
metropolitan Johannesburg in terms of its original 1997 application. On
November 11, 2003, the Company announced that the GGB's subsequent
application for leave to appeal the October 20 judgment had been denied by
the High Court. On December 3, 2003, the Company announced that the GGB
served notice that it had petitioned the South African Supreme Court of
Appeal requesting a further appeal against the judgment of the High Court.
On February 5, 2004, the Supreme Court of Appeal of South Africa overturned
the ruling of the High Court and granted the GGB's request for leave to
appeal. Silverstar informed the Company that it does not have any
indication with regard to the timing of the appeals process.

CCA, through its majority-owned subsidiary, CCWR, remains contracted
to Silverstar by a resort management agreement and retains a right of long
standing to take up a minority equity interest in the venture although its
final level of equity interest remains to be determined. Pursuant to its
1997 application, the Silverstar project provides for up to 1,350 slot
machines and 50 gaming tables in a phased development that includes a hotel
and other entertainment, dining and recreational activities with a first
phase of 950 slot machines and 30 gaming tables. The proposed 400 million
Rand ($64.25 million) hotel/casino resort development would be located in
the greater Johannesburg area of South Africa known as the West Rand.

In January 2000, CCI entered into a brokerage agreement with Novomatic
AG in which CCI received an option to purchase seven eighths of the shares
that Novomatic AG purchased in Silverstar. The agreement was subsequently
amended in July 2003 giving Novomatic AG a put option under which Novomatic
AG can require that CCI buy seven eighths of its shares in Silverstar and
giving CCI a call option under which CCI can require Novomatic AG to sell
seven eighths of its shares in Silverstar to CCI. The price of the option,
which cannot be quantified at this time, will be 75% of the fair market
value as determined at the time of the exercise. Silverstar has no value
until a gaming license is issued. If the transaction were to be completed,
CCI would acquire a 7% interest in Silverstar from Novomatic AG.

Edmonton - In September 2003, the CRI subscribed to 55% of the
outstanding shares of CRA, formed in conjunction with its application for a
gaming license in Edmonton, Alberta, Canada. The proposed project, The
Celebrations Casino and Hotel, is planned to include a casino, food and
beverage amenities, a dinner theater and a 40-room hotel. CRA is owned by
CRI and by the owners of the 7.25 acre property and existing hotel which
will be developed into the Celebrations project, if a license is awarded
and all other approvals and funding are obtained. The Celebrations Casino
and Hotel Project proposed by CRA is estimated to cost 16.50 million
Canadian dollars ($12.3 million), including the 2.50 million Canadian
dollars ($1.9 million) contribution of the existing hotel and property by
the owners of the existing hotel and an approximately 3 million Canadian
dollar ($2.2 million) cash contribution by the Company. CRI also entered
into a long-term agreement to manage the casino if a gaming license is
awarded. On April 19, 2004, the Company announced that CRA had been
selected as the only one of six applicants to move to step seven of eight
steps of the casino licensing process in Edmonton, Alberta, Canada. This is
not an approval or a guarantee that CRA will be issued a casino facility
license. Step seven is the "Investigation stage of the Casino Facility
Application Process" which is a thorough due diligence investigation of the
applicant and the key persons associated with the selected proposal.
Although the Company cannot predict how long the due diligence process will
take, if step seven is successfully completed the eighth step will be a
recommendation to the Board of the Alberta Gaming and Liquor Commission
("AGLC"), by the commission, regarding issuance of a casino facility
license. There is no assurance that a license will be issued to CRA.

Historical transactions that are denominated in a foreign currency are
translated and presented at the United States exchange rate in effect on
the date of the transaction. Commitments that are denominated in a foreign
currency and all balance sheet accounts other than shareholders' equity are
translated and presented based on the exchange rate at the end of the
reported periods. Current period transactions affecting the profit and loss
of operations conducted in foreign currencies are valued at the average
exchange rate for the period in which they are incurred. The exchange rates
used to translate balances at the end of the reported periods are as
follows:

June 30, 2004 December 31, 2003 June 30, 2003

South African Rand 6.2257 6.6858 7.5044

Euros 0.8210 0.7938 0.8693

Czech Koruna 26.2100 25.6634 n/a

Canadian Dollars 1.3404 1.2924 n/a

Source: Pacific Exchange Rate Service

Certain reclassifications have been made to the 2003 financial
information in order to conform to the 2004 presentation.

The accompanying condensed consolidated financial statements and
related notes have been prepared in accordance with accounting principles
generally accepted in the United States of America ("US GAAP") for interim
financial reporting and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. The accompanying consolidated financial statements include
the accounts of CCI and its majority-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated. The financial
statements of all foreign subsidiaries consolidated herein have been
converted to US GAAP for financial statement presentation purposes.
Accordingly, the condensed consolidated financial statements are presented
in accordance with US GAAP. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with US
GAAP have been condensed or omitted. In the opinion of management, all
adjustments (consisting of only normal recurring accruals) considered
necessary for fair presentation of financial position, results of
operations and cash flows have been included. These condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2003. The results of operations
for the period ended June 30, 2004 are not necessarily indicative of the
operating results for the full year.

2. STOCK BASED COMPENSATION

The Company has chosen to account for stock-based compensation for
employees using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to
Employees", and related Interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the quoted market price
of the Company's stock at the date of the grant over the amount an employee
must pay to acquire that stock. The Company values stock-based compensation
granted to non-employees at fair value.

The Company's stock-based employee compensation plan expired in April
2004.

All options granted under the plan had an exercise price equal to the
market value of the underlying common stock on the date of the grant. The
following table illustrates the effect on net earnings and earnings per
share if the Company had applied the fair value recognition provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation", to stock-based
employee compensation.

For the Three Months Ended June 30,
Dollar amounts in thousands, except for share information 2004 2003
---- ----
Net earnings, as reported $ 1,147 $ 751

Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related
tax effects 269 1
-------- -------
Pro forma net earnings $ 878 $ 750
======== =======
Earnings per share
Basic As reported $ 0.08 $ 0.06
Pro forma $ 0.06 $ 0.06

Diluted As reported $ 0.07 $ 0.05
Pro forma $ 0.06 $ 0.05

For the Six Months Ended June 30,
Dollar amounts in thousands, except for share information 2004 2003
---- ----
Net earnings, as reported $ 2,051 $ 1,506

Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related
tax effects 539 2
------- --------
Pro forma net earnings $ 1,512 $ 1,504
======= ========

Earnings per share
Basic As reported $ 0.15 $ 0.11
Pro forma $ 0.11 $ 0.11

Diluted As reported $ 0.13 $ 0.10
Pro forma $ 0.10 $ 0.10

3. CHANGE IN ACCOUNTING PRINCIPLES AND RECENTLY ISSUED STANDARDS

In December 2003, FASB revised Interpretation No. 46, "Consolidation
of Variable Interest Entities". FIN 46(R) addresses consolidation issues by
business enterprises of variable interest entities in which 1) the equity
interest at risk is not sufficient to finance its activities without
additional subordinated financial support, 2) the equity investors lack one
or more essential characteristics of a controlling financial interest or 3)
the equity investors have voting rights that are not proportionate to their
economic interest. The Company adopted FIN 46(R) on January 1, 2004. The
Company has determined that CM (Note 8) is a variable interest entity as
defined by FIN 46 (R). The Company has also determined that it is not the
primary beneficiary as defined by FIN 46 (R) and has, therefore, accounted
for the Company's 50% interest in CM on the equity basis. A primary
beneficiary is the party that absorbs a majority of the entity's expected
losses, receives a majority of its expected returns, or both as defined in
FIN 46(R). Under the equity method of accounting, the Company has
recognized the difference between the investment and the underlying cost of
the equity as goodwill and reported its percentage of the earnings in CM as
income from unconsolidated subsidiary.

Additionally, the Company has reviewed all recently issued, but not
yet effective, accounting pronouncements and does not believe that any such
pronouncements will have a material impact on its financial statements.

4. INCOME TAXES

The income tax provisions are based on estimated full-year earnings
for financial reporting purposes adjusted for permanent differences.

5. EARNINGS PER SHARE
Basic and diluted earnings per share for the three and six
months ended June 30, 2004 and 2003 were computed as follows:
For the Three Months Ended June 30,
Dollar amounts in thousands, except for share 2004 2003
information ---- ----

Basic Earnings Per Share:
Net earnings $ 1,147 $ 751
================ ================
Weighted average common shares 13,681,900 13,630,001
================ ================

Basic earnings per share $ 0.08 $ 0.06
================ ================

Diluted Earnings Per Share:
Net earnings, as reported $ 1,147 $ 751

================ ================
Weighted average common shares 13,681,900 13,630,001
Effect of dilutive securities:

Stock options and warrants 2,152,253 987,474
---------------- ----------------
Dilutive potential common shares 15,834,153 14,617,475
================ ================

Diluted earnings per share $ 0.07 $ 0.05
================ ================

Excluded from computation of diluted earnings per share
Due to antidilutive effect:
Options and warrants to purchase common shares - 15,000
Weighted average exercise price $ - $ 2.27

For the Six Months Ended June 30,
Dollar amounts in thousands, except for share information 2004 2003
---- ----

Basic Earnings Per Share:
Net earnings $ 2,051 $ 1,506
================ ===============

Weighted average common shares 13,681,669 13,604,706
================ ===============

Basic earnings per share $ 0.15 $ 0.11
================ ===============

Diluted Earnings Per Share:
Net earnings, as reported $ 2,051 $ 1,506
================ ===============
Weighted average common shares 13,681,669 13,604,706
Effect of dilutive securities:

Stock options and warrants 1,730,343 1,059,644
---------------- ---------------
Dilutive potential common shares 15,412,012 14,664,350
================ ===============

Diluted earnings per share $ 0.13 $ 0.10
================ ===============

Excluded from computation of diluted earnings per share
Due to antidilutive effect:
Options and warrants to purchase common shares - 15,000
Weighted average exercise price $ - $ 2.27

6. CRIPPLE CREEK, COLORADO

In April 2003, the Company completed construction of a 6,022 square
foot expansion and added a total of 5,000 square feet of gaming space to
Womacks. Having spanned the alley behind the existing property, Womacks
will be able to continue building out the casino to the rear of the
property on a single level at a later date. In January 2004, the Company
sold a purchase option agreement for a property located in Cripple Creek
across Bennett Ave. from Womacks that it had held since 1999, which would
have expired on March 30, 2004, to an unrelated party for a sum of $0.20
million. As a result of the transaction, the Company recognized a pre-tax
gain of $34.7 thousand in 2004, which is included in other income, net.

Womacks has installed a limited number of Ticket-in/Ticket out
("TITO") machines and is currently conducting a required field trial with
the Division of Gaming that will last approximately 90 days. Upon
completion of the field trial, Womacks may expand the number of TITO
machines.

In May 2004, Womacks added an additional restaurant, the "Cut Above
Buffet", on the second floor of the casino. The restaurant operates on a
limited schedule and provides an alternative menu for patrons of the
casino.

7. CALEDON, SOUTH AFRICA

In January 2003, CCA purchased the remaining 35% interest in CCAL,
becoming the sole owner of all of the common stock of CCAL. The Company
paid 21.5 million Rand ($2.53 million). In accordance with FASB Statement
No. 141, "Business Combinations", the cost of acquisition was allocated to
the assets acquired and the liabilities assumed based on fair values at the
date of acquisition. The assets and liabilities of CCAL, which were carried
in the Company's consolidated financial statements at the date of
acquisition, had fair values that approximated their carrying value, with
the exception of land to which $0.34 million of the acquisition price was
allocated. Simultaneous with the transaction, the hotel management
agreement between CCAL and Fortes King Hospitality (Pty) Limited ("FKH")
was cancelled and CCA assumed the management of the hotel. Financing for
the transaction was provided by the Wells Fargo Bank revolving line of
credit.

In addition to the casino license, hotel and spa, CCAL owns
approximately 600 acres of land, which may be used for future expansion.

In June 2004, CCAL added a fourth restaurant to the already varied
selection. The most recent restaurant offers patrons an Italian cuisine.

8. PRAGUE, CZECH REPUBLIC

In January 1999, the Company, through CCM, entered into a 20-year
agreement with Casino Millennium a.s., a Czech company ("CM"), and with
B.H. Centrum a.s., a Czech subsidiary of Bau Holding AG (now known as
Strabag AG), to operate a casino in the five-star Marriott Hotel in Prague,
Czech Republic. The Company provided technical casino services in exchange
for 10% of the casino's gross revenue, and provided gaming equipment for
45% of the casino's net profit. The hotel and casino opened in July 1999.

In December 2002, CMB acquired a 10% ownership interest in CM with the
payment of $0.24 million in cash. Effective January 3, 2004, CMB, acquired
an additional 40% of CM by contributing gaming equipment with a net book
value of $0.60 million. The contribution of the gaming equipment, along
with the cash contribution which was previously accounted for by CMB on a
cost basis and had a value of $0.29 million on January 3, 2004, brought the
Company's total investment in CM to $0.89 million. The Company allocated
$0.26 million to a shareholder loan acquired as part of the transaction. CM
issued additional shares for the contribution of the gaming equipment
towards the Company's additional 40% investment in CM. The difference of
$0.57 million between the cost and the equity in CM has been recorded as
goodwill. In addition to the 50% ownership, the Company retains its rights
under the 1999 casino services agreement which, as amended in October 2003,
requires CM to make monthly payments of Euro 7,250 to CRI.

CM had approximately $2.4 million in assets as of June 30, 2004 and
reported earnings for the three and six months ended June 30, 2004 of
approximately $68 thousand and $82 thousand, respectively, after expensing
casino services fees paid to the Company.

The Company's estimated maximum exposure to losses at June 30, 2004
consists of the following (Amounts in thousands):

Equity investment in Casino Millennium $ 101
Goodwill 543
Note receivable 249
Other receivables 199
----------
Total $ 1,092
==========

Casino services fee income for the three months ended June 30,
2004 and 2003 was $10 thousand and $8 thousand, respectively and for
the six months ended June 30, 2004 and 2003 was $37 thousand and $8
thousand, respectively.

9. GOODWILL (Amounts in thousands):
Balance as of December 31, 2003 $ 8,088
Goodwill recorded in the acquisition of an
additional 40% interest in Casino Millennium,
as valued on January 3, 2004 565
Effect of exchange rate on goodwill 41
----------
Balance as of June 30, 2004 $ 8,694
==========

10. LONG-TERM DEBT

The principal balance outstanding under the Wells Fargo Bank Revolving
Line of Credit Facility ("RCF") as of June 30, 2004 was $11.44 million
compared to $11.76 million at December 31, 2003. The amount available under
the RCF as of June 30, 2004 was $10.23 million, net of amounts outstanding
as of that date, compared to $11.35 million at December 31, 2003. The loan
agreement includes certain restrictive covenants on financial ratios of
WMCK. The Company was in compliance with the covenants as of June 30, 2004.
The interest rate at June 30, 2004 was 3.41% for $10.5 million outstanding
under LIBOR based

provisions of the loan agreement. The remaining balance of the outstanding
debt is subject to interest under the prime based provisions of the loan
agreement at a rate of 4.25%.

The fair value of the Company's interest rate swap derivatives as of
June 30, 2004 and December 31, 2003 of $0.22 million and $0.37 million,
respectively, is reported as an other non-current liability in the
condensed consolidated balance sheets. The net gain on the interest rate
swaps of $63.8 thousand, net of deferred income tax expense of $38.0
thousand for the first three months of 2004, has been reported in
accumulated other comprehensive earnings in the shareholders' equity
section of the accompanying June 30, 2004 condensed consolidated balance
sheet. The net gain on the interest rate swaps of $91.4 thousand, net of
deferred income tax expense of $54.4 thousand for the first six months of
2004, has been reported in accumulated other comprehensive earnings in the
shareholders' equity section of the accompanying June 30, 2004 condensed
consolidated balance sheet. Net additional interest expense to the Company
under the swap agreements was $69.2 thousand and $0.15 million for the
three months ended June 30, 2004 and 2003, respectively and $0.14 million
and $0.29 million for the six months ended June 30, 2004 and 2003,
respectively. Including the impact of the swaps and the amortization of the
deferred financing cost, the effective rate on the borrowings under the RCF
was 6.53% and 9.02% for the three months ended June 30, 2004 and 2003,
respectively, and 6.20% and 8.49% for the six months ended June 30, 2004
and 2003, respectively.

In April 2000, CCAL entered into a loan agreement with PSG Investment
Bank Limited ("PSGIB"), which was subsequently acquired by ABSA Bank
("ABSA"), which provided for a principal loan of approximately $6.20
million (based on an exchange rate of 7.6613 rand per dollar at the time
the funds were advanced) to fund development of the Caledon project. The
outstanding balances as of June 30, 2004 and December 31, 2003 were $3.70
million and $4.14 million, respectively and the interest rate was 17.05%.
The outstanding balances on the standby facility with PSGIB as of June 30,
2004 and December 31, 2003 were $0.37 million and $0.41 million,
respectively and the interest rate was 15.1%. The agreement requires
quarterly installments over the remaining term of the loan. The agreement
requires a minimum deposit in the sinking fund equal to four million Rand
(approximately $0.64 million) at the end of each quarter. In addition, one
third of the next quarterly principal and interest payment must be
deposited on the last day of each month into the fund and used for the next
quarterly installment. The loan agreement includes certain restrictive
covenants for CCAL. CCAL was in compliance with the covenants as of June
30, 2004.

An unsecured note payable, in the amount of $0.38 million, to a
founding shareholder bears interest at 6%, payable quarterly. The entire
outstanding principal was paid on April 1, 2004. Accordingly, the note is
classified as current in the accompanying condensed consolidated balance
sheets as of December 31, 2003.

An unsecured note payable, in the amount of $90 thousand, to a former
director bears interest at 0% and is classified as current in the
accompanying condensed consolidated balance sheet as of June 30, 2004.

The remaining amount of debt of $0.30 million, as of June 30, 2004,
consists of capital leases.

The consolidated weighted average interest rate on all borrowings was
9.10% and 10.54% for the six months ended June 30, 2004 and 2003,
respectively.

11. SHAREHOLDERS' EQUITY

During the first six months of 2004, the Company did not purchase any
shares of its common stock on the open market. The Company issued 1,400
shares of treasury stock in February 2004 for employee option exercises.
Subsequent to June 30, 2004, the Company has not purchased shares of its
common stock on the open market.

In January 2004, 60,000 options were issued to the Company's outside
directors with an exercise price of $3.26
..
In March 2004, 1,352,710 options were granted by the independent
members of the Company's Incentive Plan Committee to eight officers and
employees of the Company with an exercise price of $2.93. The Employee
Equity Incentive Plan expired in April 2004

In connection with the granting of a gaming license to CCAL by the
Western Cape Gambling and Racing Board in April 2000, CCAL issued a total
of 200 preference shares, 100 shares each to two minority shareholders,
each of whom has one seat on the board of directors of CCAL, neither of
whom are officers, directors or affiliates of CCI. The preference shares
are not cumulative, nor are they redeemable. The preference shares entitle
the holders of the shares to dividends of 20% of the after-tax profits
directly attributable to the CCAL casino business subject to working
capital and capital expenditure requirements and CCAL loan obligations and
liabilities as determined by the directors of CCAL. Should the CCAL casino
business be sold or otherwise dissolved, the preference shareholders are
entitled to 20% of any surplus directly attributable to the CCAL casino
business, net of all liabilities attributable to the CCAL casino business.
As of June 30, 2004, no dividend has been declared for the preference
shareholders.

12. SEGMENT INFORMATION

The Company is managed in four segments; Colorado, South Africa,
Cruise Ships and Corporate operations.

The operating results of the Colorado segment are those of WMCK
Venture Corp. and subsidiaries, which own Womacks Hotel and Casino
("Womacks") in Cripple Creek, Colorado.

The operating results of the South African segment are those of
Century Casinos Africa (Pty) Limited and its subsidiaries, primarily
Century Casinos Caledon (Pty) Limited, which own the Caledon Hotel, Spa &
Casino.

Cruise Ship operations include the revenue and expense of the eight
combined shipboard operations for which the Company has casino concession
agreements.

Corporate operations include, among other items, the revenue and
expense of corporate gaming projects for which the Company has secured
long-term service contracts.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) is not considered a measure of performance recognized as an
accounting principle generally accepted in the United States of America.
Management believes that EBITDA is a valuable measure of the relative
performance amongst its operating segments. The gaming industry commonly
uses EBITDA as a method of arriving at the economic value of a casino
operation. It is also used by our lending institutions to gauge operating
performance. Management uses EBITDA to compare the relative operating
performance of separate operating units by eliminating the interest income,
interest expense, income tax expense, and depreciation and amortization
expense associated with the varying levels of capital expenditures for
infrastructure required to generate revenue, and the oftentimes high cost
of acquiring existing operations.

Reclassification adjustments for 2003 have been made to the Colorado
and Corporate segment presentations for corporate bonuses that were charged
to Colorado but are attributable to the consolidated results of operations,
the interest on debt incurred to fund the purchase of the Company's
acquisitions and the repurchase of the Company's common stock, and the
related tax effects. There is no effect on the consolidated results.

Amounts in thousands Colorado South Africa Cruise Ships

As of and for the Three Months
Ended June 30, 2004 2003 2004 2003 2004 2003
_________________________________
Net operating revenue $ 4,602 $ 4,568 $ 3,403 $ 2,619 $ 833 $ 358
Operating expenses (excluding
depreciation) $ 2,732 $ 2,563 $ 2,325 $ 1,862 $ 535 $ 270
Depreciation $ 368 $ 347 $ 333 $ 257 $ 25 $ 17
Income from unconsolidated
subsidiary $ - $ - $ - $ - $ - $ -
Earnings from operations $ 1,502 $ 1,658 $ 745 $ 500 $ 273 $ 71
Interest income $ 4 $ 4 $ 41 $ 54 $ - $ -
Interest expense,
including debt issuance cost (1) $ (23) $ 12 $ 202 $ 231 $ - $ -
Other income (expense), net $ - $ - $ - $ - $ - $ 5
Non-operating income from
unconsolidated subsidiary $ - $ - $ - $ - $ - $ -
Earnings (loss) before income taxes
and minority interest $ 1,529 $ 1,650 $ 584 $ 323 $ 273 $ 76
Income tax expense (benefit) $ 581 $ 627 $ 107 $ 123 8 $ 30
Minority interest expense $ - $ - $ - $ - $ - $ -
Net earnings (loss) $ 948 $ 1,023 $ 477 $ 200 $ 265 $ 46

Reconciliation to EBITDA:
Net earnings (loss) (US GAAP) $ 948 $ 1,023 $ 477 $ 200 $ 265 $ 46
Interest income $ (4) $ (4) $ (41) $ (54) $ - $ -
Interest expense (1) $ (23) $ 12 $ 202 $ 231 $ - $ -
Income taxes $ 581 $ 627 $ 107 $ 123 $ 8 $ 30
Depreciation $ 368 $ 347 $ 333 $ 257 $ 25 $ 17
EBITDA $ 1,870 $ 2,005 $ 1,078 $ 757 $ 298 $ 93
..

(1) The Company has not repaid the funds advanced for the Company's
acquisitions or the repurchase of the Company's common stock, therefore the
debt and accumulated interest allocated to the Corporate & Other segment
exceeded the total outstanding borrowing under the RCF in the Colorado
segment, resulting in the reported negative interest expense for 2004.

Inter-segment
Amounts in thousands Corporate and Other Elimination Consolidated

As of and for the Three Months
Ended June 30, 2004 2003 2004 2003 2004 2003
________________________________
Net operating revenue $ 10 $ 8 $ - $ - $ 8,848 $ 7,553
Operating expenses (excluding
depreciation) $ 706 $ 528 $ - $ - $ 6,298 $ 5,223
Depreciation $ 5 $ 42 $ - $ - $ 731 $ 663
Income from unconsolidated
subsidiary $ 39 $ - $ - $ - $ 39 $ -
Earnings from operations $ (662) $ (562) $ - $ - $ 1,858 $ 1,667
Interest income $ 86 $ 86 $ (86) $ (86) $ 45 $ 58
Interest expense,
including debt issuance cost $ 297 $ 368 $ (86) $ (86) $ 390 $ 525
Other income, net $ - $ 8 $ - $ - $ - $ 13
Non-operating items from
unconsolidated subsidiary $ (3) $ - $ - $ - $ (3) $ -
Earnings (loss) before income taxes
and minority interest $ (876) $ (836) $ - $ - $ 1,510 $ 1,213
Income tax expense (benefit) $ (349) $ (318) $ - $ - $ 347 $ 462
Minority interest expense $ (16) $ - $ - $ - $ (16) $ -
Net earnings (loss) $ (543) $ (518) $ - $ - $ 1,147 $ 751

Reconciliation to EBITDA:
Net earnings (loss) (US GAAP) $ (543) $ (518) $ - $ - $ 1,147 $ 751
Interest income $ (86) $ (86) $ 86 $ 86 $ (45) $ (58)
Interest expense $ 297 $ 368 $ (86) $ (86) $ 390 $ 525
Income taxes $ (349) $ (318) $ - $ - $ 347 $ 462
Depreciation $ 5 $ 42 $ - $ - $ 731 $ 663
EBITDA $ (676) $ (512) $ - $ - $ 2,570 $ 2,343

Amounts in thousands Colorado South Africa Cruise Ships

As of and for the Six Months
Ended June 30, 2004 2003 2004 2003 2004 2003
________________________________
Property and equipment, net $ 23,785 $ 21,648 $ 14,937 $ 12,425 $ 454 $ 334
Total assets $ 33,265 $ 31,944 $ 21,331 $ 17,179 $ 1,120 $ 895

Net operating revenue $ 8,947 $ 9,212 $ 6,723 $ 5,026 $ 1,271 $ 688
Operating expenses (excluding
depreciation) $ 5,295 $ 5,160 $ 4,525 $ 3,572 $ 864 $ 484
Depreciation $ 673 $ 699 $ 654 $ 496 $ 42 $ 32
Income from unconsolidated
subsidiary $ - $ - $ - $ - $ - $ -
Earnings from operations $ 2,979 $ 3,353 $ 1,544 $ 958 $ 365 $ 172
Interest income $ 6 $ 7 $ 80 $ 107 $ - $ -
Interest expense,
including debt issuance cost (1) $ (55) $ 36 $ 416 $ 467 $ - $ -
Other income, net $ 35 $ - $ - $ - $ - $ 5
Non-operating items from
unconsolidated subsidiary $ - $ - $ - $ - $ - $ -
Earnings (loss) before income taxes
and minority interest $ 3,075 $ 3,324 $ 1,208 $ 598 $ 365 $ 177
Income tax expense (benefit) $ 1,168 $ 1,263 $ 315 $ 234 11 $ 68
Minority interest expense $ - $ - $ - $ (8) $ - $ -
Net earnings (loss) $ 1,907 $ 2,061 $ 893 $ 356 $ 354 $ 109

Reconciliation to EBITDA:
Net earnings (loss) (US GAAP) $ 1,907 $ 2,061 $ 893 $ 356 $ 354 $ 109
Interest income $ (6) $ (7) $ (80) $ (107) $ - $ -
Interest expense (1) $ (55) $ 36 $ 416 $ 467 $ - $ -
Income taxes $ 1,168 $ 1,263 $ 315 $ 234 $ 11 $ 68
Depreciation $ 673 $ 699 $ 654 $ 496 $ 42 $ 32
EBITDA $ 3,687 $ 4,052 $ 2,198 $ 1,446 $ 407 $ 209

(1) The Company has not repaid the funds advanced for the Company's
acquisitions or the repurchase of the Company's common stock, therefore the
debt and accumulated interest allocated to the Corporate & Other segment
exceeded the total outstanding borrowing under the RCF in the Colorado
segment, resulting in the reported negative interest expense in 2004.

Inter-segment
Amounts in thousands Corporate and Other Elimination Consolidated

As of and for the Six Months
Ended June 30, 2004 2003 2004 2003 2004 2003
_________________________________
Property and equipment, net $ 453 $ 1,050 $ - $ - $ 39,629 $ 35,457
Total assets $ 2,100 $ 2,215 $ - $ - $ 57,816 $ 52,233

Net operating revenue $ 37 $ 8 $ - $ - $ 16,978 $ 14,934
Operating expenses (excluding
depreciation) $ 1,397 $ 1,042 $ - $ - $ 12,081 $ 10,258
Depreciation $ 13 $ 84 $ - $ - $ 1,382 $ 1,311
Income from unconsolidated
subsidiary $ 51 $ - $ - $ - $ 51 $ -
Earnings from operations $ (1,322) $ (1,118) $ - $ - $ 3,566 $ 3,365
Interest income $ 176 $ 172 $ (171) $ (171) $ 91 $ 115
Interest expense,
including debt issuance cost $ 622 $ 720 $ (171) $ (171) $ 812 $ 1,052
Other income, net $ - $ 9 $ - $ - $ 35 $ 14
Non-operating items from
unconsolidated subsidiary $ (8) $ - $ - $ - $ (8) $ -
Earnings (loss) before income taxes
and minority interest $ (1,776) $ (1,657) $ - $ - $ 2,872 $ 2,442
Income tax expense (benefit) $ (704) $ (637) $ - $ - $ 790 $ 928
Minority interest expense $ (31) $ - $ - $ - $ (31) $ (8)
Net earnings (loss) $ (1,103) $ (1,020) $ - $ - $ 2,051 $ 1,506

Reconciliation to EBITDA:
Net earnings (loss) (US GAAP) $ (1,103) $ (1,020) $ - $ - $ 2,051 $ 1,506
Interest income $ (176) $ (172) $ 171 $ 171 $ (91) $ (115)
Interest expense $ 622 $ 720 $ (171) $ (171) $ 812 $ 1,052
Income taxes $ (704) $ (637) $ - $ - $ 790 $ 928
Depreciation $ 13 $ 84 $ - $ - $ 1,382 $ 1,311
EBITDA $ (1,348) $ (1,025) $ - $ - $ 4,944 $ 4,682

13. OTHER INCOME, NET
Other income, net, consists of the following:
For the Three Months Ended June 30,
Amounts in thousands 2004 2003
---- ----

Interest income $ 45 $ 58
Gain on disposition of assets - 6
Foreign currency exchange gains - 7
--------- ----------
$ 45 $ 71
========= ==========

For the Six Months Ended June 30,
Amounts in thousands 2004 2003
---- ----

Interest income $ 91 $ 115
Gain on disposition of assets - 6
Gain on sale of real estate option (1) 35 -
Foreign currency exchange gains - 8
--------- ----------
$ 126 $ 129
========= ==========

(1) In January 2004, the Company sold a purchase option agreement for a
property located in Cripple Creek across Bennett Ave. from Womacks that it
had held since 1999, which would have expired on March 31, 2004, to an
unrelated party for a sum of $0.2 million. As a result of the transaction,
the Company recognized a pre-tax gain of $34.7 thousand in 2004.

14. PROMOTIONAL ALLOWANCES

Promotional allowances presented in the condensed consolidated
statements of earnings for the period ended June 30, 2004 and June 30, 2003
include the following:

For the Three Months Ended June 30,
Amounts in thousands 2004 2003
---- ----
Food & Beverage and Hotel Comps $ 352 $ 307
Free Plays or Coupons 366 418
Player Points 314 338
------------- -------------
Total Promotional Allowances $ 1,032 $ 1,063
============= =============

For the Six Months Ended June 30,
Amounts in thousands 2004 2003
---- ----
Food & Beverage and Hotel Comps $ 725 $ 634
Free Plays or Coupons 745 819
Player Points 641 691
------------- ------------
Total Promotional Allowances $ 2,111 $ 2,144
============= ============

We issue free play or coupons for the purpose of generating future
revenue. The coupons are valid for a limited number of days (generally not
exceeding 7 days). The net win from the coupons is expected to exceed the
value of the coupons issued. The cost of the coupons redeemed is applied
against the revenue generated on the day of the redemption.

Members of the casinos' players clubs earn points as a percentage of
coin-in. The cost of the points is offset against the revenue in the period
that the revenue generated the points. The value of the unused or
unredeemed points is included in the accounts payable and accrued
liabilities on our condensed consolidated balance sheets.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward-Looking Statements, Business Environment and Risk Factors

Forward-looking statements and business environment information
contained in the following discussion of results of operations and
financial condition of the Company contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
which can be identified by the use of words such as "may", "will",
"expect", "anticipate", "estimate", or "continue", or variations thereon or
comparable terminology. In addition, all statements other than statements
of historical facts that address activities, events or developments that
the Company expects, believes or anticipates, will or may occur in the
future, and other such matters, are forward-looking statements.

The following discussion should be read in conjunction with the
Company's condensed consolidated financial statements and related notes
included elsewhere herein. The Company's future operating results may be
affected by various trends and factors, which are beyond the Company's
control. These include, among other factors, the competitive environment in
which the Company operates, the Company's present dependence upon the
Cripple Creek, Colorado and Caledon, South Africa gaming markets, changes
in the rates of gaming-specific taxes, shifting public attitudes toward the
socioeconomic costs and benefits of gaming, actions of regulatory bodies,
dependence upon key personnel, the speculative nature of gaming projects
the Company may pursue, risks associated with expansion, and other
uncertain business conditions that may affect the Company's business.

The Company cautions the reader that a number of important factors
discussed herein, and in other reports filed with the Securities and
Exchange Commission, could affect the Company's actual results and cause
actual results to differ materially from those discussed in forward-looking
statements.

Results of Operations

Three Months Ended June 30, 2004 vs. 2003

The Company is managed in four segments; Colorado, South Africa, Cruise
Ships and Corporate operations.

The operating results of the Colorado segment are those of WMCK Venture
Corp. and subsidiaries, which own Womacks in Cripple Creek, Colorado.

The operating results of the South African segment are those of Century
Casinos Africa (Pty) Limited and its subsidiaries, primarily Century Casinos
Caledon (Pty) Limited which own the Caledon Hotel, Spa & Casino.

Cruise Ship operations include the revenue and expense of the eight
combined shipboard operations for which the Company has casino concession
agreements.

Corporate operations include, among other items, the revenue and
expense of corporate gaming projects for which the Company has secured long-term
service contracts.

Consolidated Results of Operations

The Company reported net operating revenue of $8.8 million and $7.6 million
for the three months ended June 30, 2004 and 2003, respectively. Casino revenue
for the three months ended June 30, 2004 and 2003, was $8.8 million compared to
$7.6 million, respectively. Casino expense was $3.4 million and $2.7 million for
the three months ended June 30, 2004 and 2003, respectively. General and
administrative expense was $2.2 million for the three months ended June 30, 2004
compared to $1.9 million for the three months ended June 30, 2003. Depreciation
expense was $0.73 million and $0.66 million for the three months ended June 30,
2004 and 2003, respectively.

Total Company earnings from operations were $1.9 million and $1.7 million
for the three months ended June 30, 2004 and 2003, respectively.

Income tax expense for the three months ended June 30, 2004 and 2003 was
$0.35 million, and $0.46 million, respectively.

The Company's net earnings for the three months ended June 30, 2004 were
$1.15 million, or $0.08 per share, and were $0.75 million, or $0.06 per share
for the three months ended June 30, 2003, respectively.

A discussion by business segment follows below.

Colorado

The operating results of the Colorado segment are those of WMCK-Venture
Corp. and subsidiaries, which own Womacks in Cripple Creek, Colorado. Womacks'
results of operations for the three months ended June 30, 2004 and 2003 were as
follows:

For the three months ended June 30, Increase %
(Decrease) Change
Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 5,071 $ 5,164 $ (93) -1.8%
Hotel, food and beverage 380 283 97 34.3%
Other (including promotional allowances) (849) (879) -30 -3.4%
-------- ---------
Net operating revenue 4,602 4,568 34 0.7%
-------- ---------
Costs and Expenses
Casino 1,652 1,572 80 5.1%
Hotel, food and beverage 143 76 67 88.2%
General and administrative 937 915 22 2.4%
Depreciation 368 347 21 6.1%
-------- ---------
3,100 2,910 190 6.5%
-------- ---------
Earnings from operations 1,502 1,658 (156) -9.4%
Interest (expense) 23 (12) (35) -291.7%
Other income, net 4 4 - 0.0%
-------- ---------
Earnings before income taxes 1,529 1,650 (121) -7.3%
Income tax expense 581 627 (46) -7.3%
-------- ---------
Net Earnings $ 948 $ 1,023 $ (75) -7.3%
======== =========

Excluded from the above results are corporate bonuses that were previously
charged to Womacks, but which are attributable to the consolidated resul`ts of
operations, the interest on debt incurred to fund the purchase of the Company's
acquisitions and the repurchase of the Company's common stock and related tax
effects. Reclassifications have been made to the Colorado and Corporate & Other
segments of the 2003 financial information in order to conform to the 2004
presentation.

Operating results for Womacks were impacted by the casino results detailed
below.

Market Data

-------------------------------------------------------------------------
For the three months ended June 30, 2004 2003
---- ----
-------------------------------------------------------------------------
Market share of the Cripple Creek market 13.81% 14.50%
-------------------------------------------------------------------------
Average number of slot machines 639 601
-------------------------------------------------------------------------
Market share of Cripple Creek gaming devices 14.0% 14.40%
-------------------------------------------------------------------------
Average slot machine win per day 87 dollars 93 dollars
-------------------------------------------------------------------------
Cripple Creek average slot machine win per day 88 dollars 92 dollars
-------------------------------------------------------------------------

In June 2004 an additional casino opened in Cripple Creek, bringing the
total number of casino licenses to 19 compared to 17 at the same time last year.
In recent months, the Company has committed approximately $3 million to upgrade
the product mix on the gaming floor, improve the player tracking system and
introduce cashless gaming machines. These ongoing improvements are expected to
add to the customer experience and further improve customer service.

During this period, the relative percentage of personnel cost, device fees
and the cost of participation machines to net operating revenue contributed to
the erosion in earnings from operations. Management regularly evaluates these
overhead costs to maintain a good cost benefit relationship.

During the three months ended June 30, 2004, Womacks leased approximately
an average of 37 slot machines under participation agreements from
manufacturers, on which it pays a fee calculated as a percentage of the net win.
All of the leases have short term commitment periods not exceeding three months
and are classified as operating leases. The leases can be cancelled with no more
than 30 days written notice. On a portion of the leases, the manufacturer is
guaranteed a minimum fee per day that can range from 15 dollars to 35 dollars
for the duration of the lease. In most instances, the branded games that are
being introduced to the market are not available for purchase. For financial
reporting purposes, the net win on the slot machines is included in our revenue
and the amount due to the manufacturer is recorded as an expense, in the period
during which the revenue is earned, as casino operating cost. Management makes
its decisions to introduce these machines based on the consumer demand for the
product. The amount paid under these agreements was $85 thousand and $99
thousand for the three months ended June 30, 2004 and 2003, respectively.

Management continues to focus on marketing the casino through its Gold Club
in which patrons can earn rewards, that can be redeemed for discounted or free
meals, rooms, cash and other prizes, as well as through increased TV and radio
advertising. Management continues to refine the Womacks product by upgrading
both the interior of the facilities, and modifying the slot machine mix.

Hotel, Food and Beverage

Hotel revenue, included in hotel, food and beverage revenue, increased by
26.3%, as a result of an increase in the hotel occupancy rate to 94.4% in 2004
from 78.6% in 2003, respectively. All of the revenue generated by the hotel
operations is derived from comps to better players, the value of which is
included in promotional allowances.

In May 2004, Womacks added an additional restaurant, the "Cut Above
Buffet", on the second floor of the casino. The restaurant operates on a limited
schedule and provides an alternative menu for patrons of the casino. In the
three months ended June 30, 2004 food and beverage revenue increased 36.3% when
compared to the same period in 2003. The cost of food and beverage promotional
allowances, which are included in casino costs, increased to $0.29 million in
the three months ended June 30, 2004 from $0.21 million in the three months
ended June 30, 2003.

Other

The Company allocated $0.30 million in interest expense to the Corporate &
Other segment during the three months ended June 30, 2004. Interest expense on
the amounts advanced, but not repaid, to fund the Company's acquisitions and the
repurchase of the Company's common stock is calculated using the effective rate
on all borrowings under the RCF. The Company reduces the interest expense
incurred by WMCK under the RCF by the amount of interest allocated to the
Corporate & Other segment. The Company has not repaid the funds advanced for the
Company's acquisitions or the repurchase of the Company's common stock, and
therefore the debt and accumulated interest allocated to the Corporate & Other
segment exceeded the total outstanding borrowing. As a result Womacks reported a
net of $23 thousand in interest income and debt issuance cost. During the same
period in 2003, Womacks reported interest expense and debt issuance cost, of $12
thousand, net of $0.36 million in interest expense allocated to the Corporate &
Other segment. Such decrease is attributable to the decrease in the
weighted-average interest rate on the borrowings under the RCF, including
effects of swap agreements, to 6.53% from 9.02% and a reduction in the average
outstanding balance under the RCF to $11.54 million during the three months
ended June 30, 2004 from $13.5 million during the three months ended June 30,
2003.

The Colorado segment recognized income tax expense of $0.58 million in the
three months ended June 30, 2004 compared to $0.63 million in the three months
ended June 30, 2003, principally the result of a decrease in earnings before
income taxes.

South Africa

The operating results of the South African segment are those of Century
Casinos Africa (Pty) Limited and its subsidiaries, primarily Century Casinos
Caledon (Pty) Limited, which owns the Caledon Hotel, Spa & Casino.

Improvement in the Rand versus the dollar when comparing the first three
months of 2004 to the first three months of 2003 has had a positive impact
on the reported revenues and a negative impact on expenses.

Operating results in U.S. dollars for the three months ended June 30, 2004
and 2003 were as follows: (See next page for results in Rand)

CALEDON
For the three months ended June 30, Increase %
(Decrease) Change
Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 2,946 2,115 $ 831 39.3%
Hotel, food and beverage 585 534 51 9.6%
Other (including promotional
allowances) (124) (29) (95) -327.6%
------------ -----------
Net operating revenue 3,407 2,620 787 30.0%
------------ -----------

Costs and Expenses
Casino 1,234 878 356 40.5%
Hotel, food and beverage 581 505 76 15.0%
General and administrative 498 379 119 31.4%
Depreciation 333 257 76 29.6%
------------ -----------
2,646 2,019 627 31.1%
------------ -----------
Earnings from operations 761 601 160 26.6%
Interest expense (202) (231) (29) -12.6%
Other income, net 35 45 (10) -22.2%
------------ -----------
Earnings before income taxes 594 415 179 43.1%
Income tax expense 111 149 (38) 25.5%
------------ -----------
Net Earnings $ 483 266 $ 217 81.6%
============ ===========

CENTURY CASINOS AFRICA

Costs and Expenses
General and administrative $ 16 $ 100 $ (84) -84.0%
------------ ----------
(Income) Loss from operations (16) (100) (84) -84.0%
Other income, net 6 8 (2) -25.0%
------------ ----------
Loss before income taxes (10) (92) (82) -89.1%
Income tax benefit 4 26 (22) -84.6%
------------ ----------
Net Loss $ (6) $ (66) $ (60) -90.9%
============ ==========

------------ ----------
SOUTH AFRICA NET EARNINGS $ 477 $ 200 $ 277 138.5%
============ ==========

- -----------------------------------------------------------------------------------------
Average exchange rate (Rand/USD) 6.56 7.65 -14.2%
- -----------------------------------------------------------------------------------------

Operating results in Rand for the three months ended June 30, 2004 and 2003 are
as follows:

CALEDON
For the three months ended June 30, Increase %
Decrease) Change
Rand amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino R 19,326 R 16,175 R 3,151 19.5%
Hotel, food and beverage 3,844 4,084 (240) -5.9%
Other (including promotional
allowances) (795) (211) (584) 276.8%
------------- -----------
Net operating revenue 22,375 20,048 2,327 11.6%
------------- -----------

Costs and Expenses
Casino 8,091 6,716 1,375 20.5%
Hotel, food and beverage 3,815 3,868 (53) -1.4%
General and administrative 3,260 2,895 365 12.6%
Depreciation 2,191 1,965 226 11.5%
------------- -----------
17,357 15,444 1,913 12.4%
------------- -----------
Earnings from operations 5,018 4,604 414 9.0%
Interest expense (1,326) (1,769) (443) -25.0%
Other income, net 234 345 (111) -32.2%
------------- -----------
Earnings before income taxes 3,926 3,180 746 23.5%
Income tax expense 752 1,140 (388) -34.0%
------------- -----------
Net Earnings R 3,174 R 2,040 R 1,134 55.6%
============= ===========

CENTURY CASINOS AFRICA

Costs and Expenses
General and administrative R 119 R 768 R (649) -84.5%
------------- -----------
Loss from operations (119) (768) (649) -84.5%
Other income, net 36 66 (30) -45.5%
------------- -----------
Loss before income taxes (83) (702) (619) -88.2%
Income tax benefit 22 195 (173) -88.7%
------------- -----------
Net Loss R (61) R (507) R (446) -88.0%
============= ===========

------------- -----------
SOUTH AFRICA NET EARNINGS R 3,113 R 1,533 R 1,580 103.1%
============= ===========

Casino Market Data (in Rand)
-----------------------------------------------------------------------
For the three months ended June 30, 2004 2003
---- ----
---------------------------------------------------------------------
Market share of the Western Cape market * 5.8% 5.9%
---------------------------------------------------------------------
Market share of Western Cape gaming devices * 11.4% 10.5%
---------------------------------------------------------------------
Average number of slot machines 290 268
---------------------------------------------------------------------
Average slot machine win per day 647 Rand 606 Rand
---------------------------------------------------------------------
Average number of tables 9 8
---------------------------------------------------------------------
Average table win per day 2,482 Rand 1,947 Rand
---------------------------------------------------------------------
* Market share results are reported for the two months ended May 31, 2004.
---------------------------------------------------------------------

The results discussed below are based on the Rand to eliminate the effect
of fluctuations in foreign currency exchange rates.

The 19.5% increase in the casino revenue is attributable to the successful
marketing efforts that include the introduction of cash couponing, an expanded
smoking section and improved employee and management training. The Company
markets an array of amenities at the resort to its guests as a complement to the
gaming experience. These currently include a 92-room hotel, a variety of dining
experiences, the historic mineral hot spring and spa, the outdoor experience (a
team building facility) and an equestrian center.

The 0.58 million Rand change in other revenue (including promotional
allowances) is attributable to the introduction of cash couponing in the second
quarter of 2003 and to the expanded use of player points to attract customers.

Hotel, Food and Beverage

Conferences and trade shows held at the resort play a significant role in
the operation of the hotel. Management is attempting to gain additional exposure
in this area through marketing efforts. A number of repairs in the hotel
infrastructure, including electrical and plumbing, were undertaken in 2003 in
order to increase the quality of the facility. Management has taken measures to
offset the inflationary pressures in South Africa which have driven up base
costs such as labor, supplies and utilities.

Hotel revenue decreased 4.7% in the three months ended June 30, 2004
compared to the three months ended June 30, 2003. The average hotel occupancy
rate in the three months ended June 30, 2004 was 46.0% compared to 56.0% in the
three months ended June 30, 2003. Conference sales decreased 50%, while leisure
sales improved 1.4%.

In June 2004, CCAL added a fourth restaurant to the already varied
selection. The most recent restaurant offers patrons an Italian cuisine. Food
and beverage revenue increased 19.1% in the three months ended June 30, 2004
compared to the three months ended June 30, 2003, primarily as a result of the
additional food and beverage facility, plus changes in operating hours and a
general price increase.

Other

Interest expense, including debt issuance cost, decreased 25.0% as the
principal balance of the term loans and capitalized leases are repaid. The
weighted-average interest rate on the borrowings under the ABSA loan agreement
was 16.9% in the three months ended June 30, 2004 and 2003. Income tax expense
for the quarter has been reduced by 729 thousand Rand as a result of an
adjustment to the prior years' tax liability.

Cruise Ships

Cruise ships' operating results for the three months ended June 30, 2004
and 2003 were as follows:

For the three months ended June 30, Increase %
(Decrease) Change

Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 791 $ 346 445 128.6%
Other (including promotional
allowances) 42 12 30 250.0%
---------- ---------
Net operating revenue 833 358 475 132.7%
---------- ---------

Costs and Expenses
Casino 535 267 268 100.4%
General and administrative - 3 (3) -100.0%
Depreciation 25 17 8 47.1%
---------- ---------
560 287 273 95.1%
---------- ---------
Earnings from operations 273 71 202 284.5%
Other income, net - 5 (5) -100.0%
---------- ---------
Earnings before income taxes 273 76 197 259.2%
Income tax expense 8 30 (22) -73.3%
---------- ---------
Net Earnings $ 265 $ 46 219 476.1%
========== =========

In the three months ended June 30, 2004, the Company operated casinos on a
total of eight ships: four on Silversea Cruises, one on the World of ResidenSea
and three on Oceania Cruises, compared to a total of seven ships during the same
period in 2003. On April 10, 2004, the Company opened a casino aboard the
Nautica, a cruise ship operated by Oceania Cruises equipped with 42 slot
machines and three gaming tables.

We experience severe fluctuations in the revenue generated on each cruise
depending on the number and quality of the players and passengers. This is a
condition that we do not control.

Concession fees paid to the ship operators in accordance with the
agreements accounted for $0.31 million and $94 thousand of the total casino
expenses incurred in the three months ended June 30, 2004 and 2003,
respectively.

The decrease in income tax expense is attributable to the assignment of the
concession agreements from CCI to CRI as of October 1, 2003. The income assigned
to CCI was taxed at a U.S. effective rate of approximately 38%. The income
assigned to CRI, the Company's wholly owned subsidiary in Mauritius, is taxed at
the statutory rate of 15%, less current tax credits of 12%, resulting in a net
rate of 3%.

Corporate & Other
For the three months ended June 30, Increase %Change
(Decrease)

Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Other $ 10 $ 8 $ 2 25.0%
-------- --------
Net Operating Revenue 10 8 2 25.0%

Costs and Expenses
General and administrative 706 528 178 33.7%
Depreciation 5 42 (37) -88.1%
-------- --------
711 570 141 24.7%
-------- --------
Income from unconsolidated subsidiary 39 - 39 n/a
-------- --------
Loss from operations (662) (562) 100 17.8%
Interest expense (297) (368) (71) -19.3%
Other income, net 86 94 (8) -8.5%
Non-operating items from
unconsolidated subsidiary (3) - 3 n/a
-------- --------
Loss before income taxes and minority
interest (876) (836) 40 4.8%
Income tax benefit (349) (318) 31 9.7%
Minority interest expense (16) - 16 n/a
-------- --------
Net Loss $ (543) $ (518) $ 25 4.8%
======== ========

Included in the above results are corporate bonuses that were previously
charged to Womacks, but which are attributable to the consolidated results of
operations, the interest on debt incurred to fund the Company's acquisitions and
the repurchase of the Company's common stock, and related tax effects.
Reclassifications have been made to the Colorado and Corporate & Other segments
of the 2003 financial information in order to conform to the 2004 presentation.
Additionally, general and administrative expenses increased quarter over quarter
largely due to an increase in the current year estimate for corporate bonuses
based on management's current estimate of annual results.

The decrease in depreciation expense is attributable to the acquisition of
50% of CM. Effective January 3, 2004 CMB acquired an additional 40% of CM by
contributing gaming equipment, valued at approximately $0.60 million. The gaming
equipment, previously allocated to and depreciated in the Corporate & Other
segment, is depreciated by CM and therefore affects the income from
unconsolidated subsidiary (see Note 8 to the condensed consolidated financial
statements).

Minority interest expense is comprised of $16 thousand for the 3.5%
minority interest in the earnings of CCA. Income from unconsolidated subsidiary
is comprised of the Company's 50% interest in CM earnings.

Results of Operations

Six Months Ended June 30, 2004 vs. 2003

Consolidated Results of Operations

The Company reported net operating revenue of $17.0 million and $14.9
million for the six months ended June 30, 2004 and 2003, respectively. Casino
revenue for the six months ended June 30, 2004 and 2003, was $16.9 million
compared to $15.1 million, respectively. Casino expense was $6.5 million and
$5.4 million for the six months ended June 30, 2004 and 2003, respectively.
General and administrative expense was $4.2 million for the six months ended
June 30, 2004 compared to $3.7 million for the six months ended June 30, 2003.
Depreciation expense was $1.4 million and $1.3 million for the six months ended
June 30, 2004 and 2003, respectively.

Total Company earnings from operations were $3.6 million and $3.4 million
for the six months ended June 30, 2004 and 2003, respectively.

Tax expense for the six months ended June 30, 2004 and 2003 was $0.79
million, and $0.93 million, respectively.

The Company's net earnings for the six months ended June 30, 2004 were $2.1
million, or $0.15 per share, and were $1.5 million, or $0.11 per share for the
six months ended June 30, 2003.

A discussion by business segment follows below.

Colorado

The operating results of the Colorado segment are those of WMCK-Venture
Corp. and subsidiaries, which own Womacks in Cripple Creek, Colorado. Womacks'
results of operations for the six months ended June 30, 2004 and 2003 were as
follows:

For the six months ended June 30, Increase %
(Decrease) Change
Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 9,946 $ 10,457 $ (511) -4.9%
Hotel, food and beverage 704 579 125 21.6%
Other (including promotional
allowances) (1,703) (1,824) (121) -6.6%
--------- --------
Net operating revenue 8,947 9,212 (265) -2.9%
--------- --------

Costs and Expenses
Casino 3,278 3,213 65 2.0%
Hotel, food and beverage 231 145 86 59.3%
General and administrative 1,786 1,802 (16) -0.9%
Depreciation 673 699 (26) -3.7%
--------- --------
5,968 5,859 109 1.9%
--------- --------
Earnings from operations 2,979 3,353 (374) -11.2%
Interest (expense) 55 (36) (91) -252.8%
Other income, net 41 7 34 485.7%
--------- --------
Earnings before income taxes 3,075 3,324 (249) -7.5%
Income tax expense 1,168 1,263 (95) -7.5%
--------- --------
Net Earnings $ 1,907 $ 2,061 $ (154) -7.5%
========= ========

Excluded from the above results are corporate bonuses that were previously
charged to Womacks, but which are attributable to the consolidated results of
operations, the interest on debt incurred to fund the purchase of the Company's
acquisitions and the repurchase of the Company's common stock and related tax
effects. Reclassifications have been made to the Colorado and Corporate & Other
segments of the 2003 financial information in order to conform to the 2004
presentation.

Operating results for Womacks were impacted by the casino results detailed
below.

Market Data

-------------------------------------------------------------------------
For the six months ended June 30, 2004 2003
---- ----
-------------------------------------------------------------------------
Market share of the Cripple Creek market 14.1% 15.3%
-------------------------------------------------------------------------
Average number of slot machines 632 634
-------------------------------------------------------------------------
Market share of Cripple Creek gaming devices 14.3% 15.0%
-------------------------------------------------------------------------
Average slot machine win per day 86 dollars 90 dollars
-------------------------------------------------------------------------
Cripple Creek average slot machine win per day 86 dollars 88 dollars
-------------------------------------------------------------------------

Womacks' market share is 1.2 percentage points lower than a year ago. In
June 2004 an additional casino opened in Cripple Creek, bringing the total
number of casino licenses to 19 compared to 17 at the same time last year. In
recent months, the Company has committed approximately $3 million to upgrade the
product mix on the gaming floor, improve the player tracking system and
introduce cashless gaming machines. These ongoing improvements are expected to
add to the customer experience and further improve customer service.

During this period, the relative percentage of personnel cost, device fees
and the cost of participation machines to net operating revenue contributed to
the erosion in earnings from operations. Management regularly evaluates these
overhead costs to maintain a good cost benefit relationship.

During the six months ended June 30, 2004, Womacks leased approximately an
average of 40 slot machines from manufacturers, on which it pays a fee
calculated as a percentage of the net win. All of the leases have short term
commitment periods not exceeding three months and are classified as operating
leases. The leases can be cancelled with no more than 30 days written notice. On
a portion of the leases, the manufacturer is guaranteed a minimum fee per day
that can range from 15 dollars to 35 dollars for the duration of the lease. In
most instances, the branded games that are being introduced to the market are
not available for purchase. For financial reporting purposes, the net win on the
slot machines is included in our revenue and the amount due to the manufacturer
is recorded as an expense, in the period during which the revenue is earned, as
casino operating cost. Management makes its decisions to introduce these
machines based on the consumer demand for the product. The amount paid under
these agreements was $0.19 million and $0.22 million for the six months ended
June 30, 2004 and 2003, respectively.

Management continues to focus on marketing the casino through its Gold Club
in which patrons can earn rewards that can be redeemed for discounted or free
meals, rooms, cash and other prizes, as well as through increased TV and radio
advertising. Management continues to refine the product by upgrading both the
interior of the facilities, and modifying the slot machine mix.

Hotel, Food and Beverage

Hotel revenue, included in hotel, food and beverage revenue, increased by
16.5%, as a result of an increase in the hotel occupancy rate to 94.6% in 2004
from 84.3% in 2003, respectively. All of the revenue generated by the hotel
operations is derived from comps to better players, the value of which is
included in promotional allowances.

In May 2004, Womacks added an additional restaurant, the "Cut Above
Buffet", on the second floor of the casino. The restaurant operates on a limited
schedule and provides an alternative menu for patrons of the casino. In the six
months ended June 30, 2004 food and beverage revenue increased 22.9% when
compared to the same period in 2003. In the first quarter of 2003, the Gold Mine
restaurant was closed and Bob's Grill was expanded in order to provide better
service on the gaming floor and improve accessibility. The cost of food and
beverage promotional allowances, which are included in casino costs, increased
to $0.53 million in the first six months of 2004 from $0.43 million in the first
six months of 2003.

Other

The Company allocated $0.61 million in interest expense to the Corporate &
Other segment during the first six months of 2004. Interest expense on the
amounts advanced, but not repaid, to fund the Company's acquisitions and the
repurchase of the Company's common stock is calculated using the effective rate
on all borrowings under the RCF. The Company reduces the interest expense
incurred by WMCK under the RCF by the amount of interest allocated to the
Corporate & Other segment. The Company has not repaid the funds advanced for the
Company's acquisitions or the repurchase of the Company's common stock, and
therefore the debt and accumulated interest allocated to the Corporate & Other
segment exceeded the total outstanding borrowing. As a result Womacks reported a
net of $55 thousand in interest income and debt issuance cost. During the same
period in 2003, Womacks reported interest expense and debt issuance cost, of $36
thousand, net of $0.71 million in interest expense allocated to the Corporate &
Other segment. Such decrease is attributable to the decrease in the
weighted-average interest rate on the borrowings under the RCF, including
effects of swap agreements, to 6.20% from 8.49% and a reduction in the average
outstanding balance under the RCF to $11.4 million in the first six months of
2004 from $13.1 million in the first six months of 2003.

In January 2004, the Company sold a purchase option agreement that it had
held since 1999, which would have expired on June 30, 2004, to an unrelated
party for a sum of $0.20 million. As a result of the transaction, the Company
recognized a pre-tax gain of $34.7 thousand in 2004, which is included in Other
income, net.

The Colorado segment recognized income tax expense of $1.17 million in the
first six months of 2004 versus $1.26 million in the first six months of 2003,
principally the result of a decrease in earnings before income taxes.

South Africa

The operating results of the South African segment are those of Century
Casinos Africa (Pty) Limited and its subsidiaries, primarily Century Casinos
Caledon (Pty) Limited, which owns the Caledon Hotel, Spa & Casino.

Improvement in the Rand versus the dollar when comparing the first six
months of 2004 to the first six months of 2003 has had a positive impact on
the reported revenues and a negative impact on expenses.

Operating results in U.S. dollars for the six months ended June 30, 2004
and 2003 were as follows: (See next page for results in Rand)

CALEDON
For the six months ended June 30, Increase %
(Decrease) Change
Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 5,724 $ 4,019 $ 1,705 42.4%
Hotel, food and beverage 1,235 1,059 176 16.6%
Other (including promotional
allowances) (232) (51) 181 354.9%
--------- ---------
Net operating revenue 6,727 5,027 1,700 33.8%
---------- ---------

Costs and Expenses
Casino 2,335 1,672 663 39.7%
Hotel, food and beverage 1,171 1,005 166 16.5%
General and administrative 971 710 261 36.8%
Depreciation 654 496 158 31.9%
---------- ---------
5,131 3,883 1,248 32.1%
---------- ---------
Earnings from operations 1,596 1,144 452 39.5%
Interest expense (417) (467) (50) -10.7%
Other income, net 72 91 (19) -20.9%
---------- ---------
Earnings before income taxes 1,251 768 483 62.9%
Income tax expense 327 281 46 16.4%
---------- ---------
Net Earnings $ 924 $ 487 $ 437 89.7%
========== =========

CENTURY CASINOS AFRICA

Costs and Expenses
General and administrative $ 52 $ 185 $ (133) -71.9%
---------- --------
(Income) Loss from operations (52) (185) (133) -71.9%
Other income, net 9 15 (6) -40.0%
---------- --------
Loss before income taxes (43) (170) (127) -74.7%
Income tax benefit 12 47 (35) -74.7%
---------- --------
Net Loss $ (31) $ (123) $ (92) -74.8%
========== ========

MINORITY INTEREST EXPENSE $ - $ 8 $ (8) -100.0%
---------- --------
SOUTH AFRICA NET EARNINGS $ 893 $ 356 $ 537 150.8%
========== ========

- -------------------------------------------------------------------------------------
Average exchange rate (Rand/USD) 6.64 7.96 16.5%
- -------------------------------------------------------------------------------------

Operating results in Rand for the six months ended June 30, 2004 and 2003 are as
follows:

CALEDON
For the six months ended June 30, Increase %
(Decrease) Change
Rand amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino R 37,998 R 31,899 R 6,099 19.1%
Hotel, food and beverage 8,205 8,408 (203) -2.4%
Other (including promotional
allowances) (1,533) (392) (1,141) 291.1%
---------- ----------
Net operating revenue 44,670 39,915 4,755 11.9%
---------- ----------

Costs and Expenses
Casino 15,488 13,285 2,203 16.6%
Hotel, food and beverage 7,782 8,003 (221) -2.8%
General and administrative 6,443 5,630 813 14.4%
Depreciation 4,346 3,939 407 10.3%
---------- ----------
34,059 30,857 3,202 10.4%
---------- ----------
Earnings from operations 10,611 9,058 1,553 17.1%
Interest expense (2,766) (3,719) (953) -25.6%
Other income, net 477 721 (244) -33.8%
---------- ----------
Earnings before income taxes 8,322 6,060 2,262 37.3%
Income tax expense 2,191 2,218 (27) -1.2%
---------- ----------
Net Earnings R 6,131 R 3,842 R 2,289 59.6%
========== ==========

CENTURY CASINOS AFRICA

Costs and Expenses
General and administrative R 359 R 1,473 R (1,114) -75.6%
---------- ----------
Loss from operations (359) (1,473) (1,114) -75.6%
Other income, net 58 132 (74) -56.1%
---------- ----------
Loss before income taxes (301) (1,341) (1,040) -77.6%
Income tax benefit 77 386 (309) -80.1%
---------- ----------
Net Loss R (224) R (955) R (731) -76.5%
========== ==========

MINORITY INTEREST EXPENSE BENEFIT R - R 71 R (71) -100.0%
---------- ----------
SOUTH AFRICA NET EARNINGS R 5,907 R 2,816 R 3,091 109.8%
========== ==========

Casino Market Data (in Rand)

-----------------------------------------------------------------------
For the six months ended June 30, 2004 2003
---- ----
-----------------------------------------------------------------------
Market share of the Western Cape market * 5.8% 6.0%
-----------------------------------------------------------------------
Market share of Western Cape gaming devices * 11.1% 10.7%
-----------------------------------------------------------------------
Average number of slot machines 281 271
-----------------------------------------------------------------------
Average slot machine win per day 674 Rand 596 Rand
-----------------------------------------------------------------------
Average number of tables 8 8
-----------------------------------------------------------------------
Average table win per day 2,045 Rand 1,826 Rand
-----------------------------------------------------------------------
* Market share results are reported for the five months ended May 31, 2004.
-----------------------------------------------------------------------

The results discussed below are based on the Rand to eliminate the effect
of fluctuations in foreign currency exchange rates.

The 19.1% increase in the casino revenue is attributable to the successful
marketing efforts that include introduction of cash couponing, an expanded
smoking section and improved employee and management training. The Company
markets an array of amenities at the resort to its guests as a complement to the
gaming experience. These currently include a 92-room hotel, a variety of dining
experiences, the historic mineral hot spring and spa, the outdoor experience (a
team building facility) and an equestrian center.

The 1.1 million Rand change in other revenue (including promotional
allowances) is attributable to the introduction of cash couponing in the second
quarter of 2003 and to the expanded use of player points to attract customers.

Hotel, Food and Beverage

Conferences and trade shows held at the resort play a significant role in
the operation of the hotel. Management is attempting to gain additional exposure
in this area through marketing efforts. A number of repairs in the hotel
infrastructure, including electrical and plumbing, were undertaken in 2003 in
order to increase the quality of the facility. Management has taken measures to
offset the inflationary pressures in South Africa which have driven up base
costs such as labor, supplies and utilities.

Hotel revenue increased 1.8% in the first six of 2004 compared to the first
six months of 2003. The average hotel occupancy rate in the first six months of
2004 was 50% compared to 57% in the first six months of 2003. Conference sales
decreased 50%, while leisure sales improved 7%.

In June 2004, CCAL added a fourth restaurant to the already varied
selection. The most recent restaurant offers patrons an Italian cuisine. Food
and beverage revenue increased 27.6% in the first six months of 2004 compared to
the first six months of 2003, as a result of the additional food and beverage
facility, plus changes to operating hours and a general price increase.

Other

Interest expense, including debt issuance cost, decreased 25.6% as the
principal balance of the term loans and capitalized leases are repaid. The
weighted-average interest rate on the borrowings under the ABSA loan agreement
was 16.9% in the first six months of 2004 and 2003. Income tax expense for the
current year has been reduced by 729 thousand Rand as a result of an adjustment
to the prior years' tax liability.

Cruise Ships

Cruise ships' operating results for the six months ended June 30, 2004 and
2003 were as follows:

For the six months ended June 30, Increase %
(Decrease) Change

Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Casino $ 1,204 $ 669 535 80.0%
Other (including promotional
allowances) 67 19 48 252.6%
-------- --------
Net operating revenue 1,271 688 583 84.7%
-------- --------

Costs and Expenses
Casino 864 481 383 79.6%
General and administrative - 3 (3) -100.0%
Depreciation 42 32 10 31.3%
-------- --------
906 516 390 75.6%
-------- --------
Earnings from operations 365 172 193 112.2%
Other income, net - 5 (5) -100.0%
-------- --------
Earnings before income taxes 365 177 188 106.2%
Income tax expense 11 68 (57) -83.8%
-------- --------
Net Earnings $ 354 $ 109 245 224.8%
======== ========

In the first six months of 2004, the Company operated casinos on a total of
eight ships: four on Silversea Cruises, one on the World of ResidenSea and two
on Oceania Cruises, compared to a total of seven ships during the same period in
2003. Two ships, the Silver Cloud and the Insignia, resumed operations late in
the first quarter of 2004. The Silver Cloud, a cruise ship operated by Silversea
Cruises, resumed its operations on March 27, 2004 following five months of
periodic maintenance. The Insignia, a cruise ship operated by Oceania Cruises,
resumed its operations on March 29, 2004 following its five-month inaugural
voyage, which ended in September 2003. On April 10, 2004, the Company opened a
casino aboard the Nautica, a cruise ship operated by Oceania Cruises. The casino
is equipped with 42 slot machines and three gaming tables.

We experience severe fluctuations in the revenue generated on each cruise
depending on the number and quality of the players and passengers. This is a
condition that we do not control.

Concession fees paid to the ship operators in accordance with the
agreements accounted for $0.48 million and $0.21 million of the total casino
expenses incurred in the first six months ended June 30, 2004 and 2003,
respectively.

The decrease in income tax expense is attributable to the assignment of the
concession agreements from CCI to CRI as of October 1, 2003. The income assigned
to CCI was taxed at a U.S. effective rate of approximately 38%. The income
assigned to CRI, the Company's wholly owned subsidiary in Mauritius, is taxed
the statutory rate of 15%, less current tax credits of 12%, resulting in a net
rate of 3%.

Corporate & Other
For the six months ended June 30, Increase %
(Decrease) Change

Dollar amounts in thousands 2004 2003
---- ----
Operating Revenue
Other $ 37 $ 8 $ 29 362.5%
--------- ----------
Net Operating Revenue 37 8 29 362.5%

Costs and Expenses
General and administrative 1,397 1,042 355 34.1%
Depreciation 13 84 (71) -84.5%
--------- ----------
1,410 1,126 284 25.2%
--------- ----------
Income from unconsolidated
subsidiary 51 - 51 n/a
--------- ----------
Loss from operations (1,322) (1,118) 204 18.2%
Interest expense (622) (720) (98) -13.6%
Other income, net 176 181 (5) -2.8%
Non-operating items from
unconsolidated subsidiary (8) - 8 n/a
--------- ----------
Loss before income taxes and
minority interest (1,776) (1,657) 119 7.2%
Income tax benefit (704) (637) 67 10.5%
Minority interest expense (31) - (31) n/a
--------- ----------
Net Loss $ (1,103) $ (1,020) $ 83 8.1%
========= ==========

Included in the above results are corporate bonuses that were previously
charged to Womacks, but which are attributable to the consolidated results of
operations, the interest on debt incurred to fund the Company's acquisitions and
the repurchase of the Company's common stock, and related tax effects.
Reclassifications have been made to the Colorado and Corporate & Other segments
of the 2003 financial information in order to conform to the 2004 presentation.
Additionally, general and administrative expenses increased year to date 2004
over year to date 2003 largely due to an increase in the current year estimate
for corporate bonuses based on management's current estimate of annual results.

The decrease in depreciation expense is attributable to the acquisition of
50% of CM. Effective January 3, 2004, the Company through its wholly-owned
subsidiary, CMB, acquired an additional 40% of CM by contributing gaming
equipment, valued at approximately $0.60 million. The gaming equipment,
previously allocated to and depreciated in the Corporate & Other segment, is
depreciated by CM and therefore affects the income from unconsolidated
subsidiary (see Note 8 to the condensed consolidated financial statements).

Minority interest expense is comprised of $31 thousand for the 3.5%
minority interest in the earnings of CCA. Income from unconsolidated subsidiary
is comprised of the Company's 50% interest in CM earnings.

Liquidity and Capital Resources

Cash and cash equivalents totaled $4.1 million plus restricted cash of
$0.64 million at June 30, 2004, and the Company had deficit working capital of
$1.78 million. Additional liquidity may be provided by the Company's revolving
credit facility ("RCF") with Wells Fargo Bank, under which the Company had a
total commitment of $26 million ($21.67 million net of the quarterly reduction)
and unused borrowing capacity of approximately $10.23 million at June 30, 2004.
The maturity date of the borrowing commitment is August 2007. Funds available
under the RCF are reduced by $0.7 million each quarter beginning with the first
quarter of 2003. The Company has the flexibility to use the funds for various
business projects and investments.

For the six months ended June 30, 2004, cash provided by operating
activities was $2.9 million compared with $1.7 million in the prior-year period.
Please refer to the condensed consolidated statements of cash flows and
management's discussion of the results of operation by segment.

Cash used in investing activities of $2.3 million for the first six months
of 2004 include $0.2 million towards the upgrade of the slot accounting system,
$1.2 million towards new slot games, $48 thousand for new slot stools and $24
thousand for restaurant equipment at Womacks, $0.6 million in improvements to
the property in Caledon, South Africa, $0.17 million in expenditures to outfit
the cruise ships and $0.2 million in expenditures for other long-lived assets,
less $0.2 million in proceeds from the disposition of assets. Cash used in
investing activities of $2.2 million for the first six months of 2003 consisted
of: $0.5 million towards the expansion of the Womacks casino at the rear of the
property that was completed in the second quarter of 2003, providing additional
gaming space; $0.22 million for additional improvements to the property in
Caledon, South Africa, including $61 thousand additional capitalized building
costs related to the original construction; $1.3 million towards the purchase of
the remaining 35% interest in Century Casinos Caledon (Pty) Limited, $1.0
million of which was applied against the minority shareholder liability and $0.3
million of which increased the carrying value of the land in Caledon; $0.15
million principally for outfitting one of the two new casinos aboard the luxury
cruise ships operated by Oceania and to finish re-outfitting the Silver Wind;
$0.15 million due to expenditures for other long-lived assets, net of $7
thousand in proceeds from the disposition of assets; and a decrease of $38
thousand in restricted cash.

Cash used in financing activities of $1.4 million for the first six months
of 2004 consisted of net repayments of $0.32 million under the RCF with Wells
Fargo, net repayments of $0.69 million under the loan agreement with ABSA,
repayment of a $0.38 million from a founding shareholder, and other net
repayments of $81 thousand, less net borrowing of $90 thousand from a former
director and $2 thousand in proceeds from the exercise of stock options. Cash
used in financing activities of $0.34 million for the first six months of 2003
consisted of net borrowings of $2.0 million under the RCF with Wells Fargo plus
$7 thousand in proceeds from the exercise of stock options, less net repayments
of $0.56 million under the loan agreement with ABSA, $1.2 million to acquire a
loan to CCAL held by an unaffiliated minority shareholder; $0.13 million
towards the repurchase of Company's stock on the open market at cost; $.30
million towards the purchase of 132,184 shares of common stock from a former
director, at a per share price of $2.26; and other net repayments of $0.16
million.

In January 2000, CCI entered into an agreement with Novomatic AG in which
CCI received an option to purchase seven eighths of the shares that Novomatic AG
purchased in Silverstar at a price equal to 85% of their fair market value at
the time of exercise. The agreement was subsequently amended in July 2003 giving
Novomatic AG a put option under which Novomatic AG can require that CCI buy
seven eighths of its shares in Silverstar and giving CCI a call option under
which CCI can require Novomatic AG to sell seven eighths of its shares in
Silverstar to CCI. The price of the option, which cannot be quantified at this
time, will be 75% of the fair market value as determined at the time

of the exercise. If the transaction were to be completed, CCI would acquire a 7%
interest in Silverstar from Novomatic AG.

CRA has submitted an application to the Alberta Gaming and Liquor
Commission ("AGLC") for an additional casino facility license in the greater
Edmonton area. The proposed project, The Celebrations Casino and Hotel, is
planned to include a casino, food and beverage amenities, a dinner theater and a
40-room hotel. CRA is owned by CRI (previously named CRL), a wholly owned
subsidiary of the Company and by 746306 Alberta Ltd, the owners of the 7.25 acre
property and existing hotel which will be developed into the Celebrations
project, if a license is awarded and all other approvals and funding are
obtained. The Celebrations Casino and Hotel Project proposed by CRA is valued at
16.5 million Canadian dollars ($12.3 million), including the contribution of the
existing hotel and property, valued at 2.5 million Canadian dollars ($1.9
million) by the owners of the existing hotel and an approximately 3 million
Canadian dollar ($2.2 million) cash contribution by the Company. On April 19,
2004, the Company announced that CRA had been selected as the only one of six
applicants to move to step seven of eight steps of the casino licensing process
in Edmonton, Alberta, Canada. This is not an approval or a guarantee that the
CRA will be issued a casino facility license. Step seven is the "Investigation
stage of the Casino Facility Application Process" which is a thorough due
diligence investigation of the applicant and the key persons associated with the
selected proposal. Although the Company cannot predict how long the due
diligence process will take, once step seven is successfully completed, the
eighth step will be a recommendation to the Board of the AGLC, by the evaluating
committee, regarding issuance of a casino facility license. There is no
assurance that a license will be issued to CRA.

In January 2004, the Company signed commitments for gaming equipment and
upgrades to its slot accounting system at Womacks totaling approximately $3.0
million. As of June 30, 2004 the Company has expended or accrued $2.5 million
towards the commitments.

The Company's Board of Directors has approved a discretionary program to
repurchase up to $5 million of the Company's outstanding common stock. During
the first six months of 2004, the Company did not purchase any shares of its
common stock on the open market. Through June 30, 2004, the Company had
repurchased 2,559,004 shares of its common stock at a total cost of
approximately $3.8 million.

Management believes that the Company's cash at June 30, 2004, together with
expected cash flows from operations, its borrowing capacity under the RCF and
its ability to secure additional project financing with competitive terms will
be sufficient to fund its anticipated capital expenditures, pursue additional
business growth opportunities for the foreseeable future, and satisfy its debt
repayment obligations.

Critical Accounting Policies

In accordance with recent Securities and Exchange Commission guidance,
those material accounting policies that we believe are the most critical to an
investor's understanding of the Company's financial results and condition and/or
require complex management judgment have been expanded and are discussed below.

Consolidation - The accompanying consolidated financial statements include the
accounts of CCI and its majority-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated. The financial
statements of all foreign subsidiaries consolidated herein have been converted
to US GAAP for financial statement presentation purposes. Accordingly, the
consolidated financial statements are presented in accordance with US GAAP.

In January 2004, the Company adopted FASB revised Interpretation 46 ("FIN 46
(R)"), "Consolidation of Variable Interest Entities". FIN 46(R) addresses
consolidation issues by business enterprises of variable interest entities in
which 1) the equity interest at risk is not sufficient to finance its activities
without additional subordinated financial support, 2) the equity investors lack
one or more essential characteristics of a controlling financial interest or 3)
the equity investors have voting rights that are not proportionate to their
economic interest. The Company has determined that CM (Note 8) is a variable
interest entity as defined by FIN 46 (R). The Company has also determined that
it is not the primary beneficiary as defined by FIN 46 (R) and has, therefore,
accounted for the Company's 50% interest in CM under the equity method.

Revenue Recognition - Casino revenue is the net win from gaming activities,
which is the difference between gaming wins and losses. Management and
consulting fees are recognized as revenue as services are provided. The
incremental amount of unpaid progressive jackpot is recorded as a liability and
a reduction of casino revenue in the period during which the progressive jackpot
increases.

Goodwill and Other Intangible Assets - The Company's goodwill results from the
acquisitions of casino and hotel operations.

SFAS No. 142 "Goodwill and Other Intangible Assets" addresses the methods used
to capitalize, amortize and to assess impairment of intangible assets, including
goodwill resulting from business combinations accounted for under the purchase
method. Effective with the adoption of SFAS No. 142, the Company no longer
amortizes goodwill and other intangible assets with indefinite useful lives,
principally deferred casino license costs. In evaluating the Company's
capitalized casino license cost related to CCAL, which comprises principally all
of its other intangible assets, management considered all of the criteria set
forth in SFAS No. 142 in determining its useful life. Of particular significance
in that evaluation was the existing regulatory provision for annual renewal of
the license at minimal cost and the current practice of the Western Cape
Gambling and Racing Board ("Board") of granting such renewals as long as all
applicable laws are complied with, as well as compliance with the original
conditions of the casino operator license as set forth by the Board. Among other
things, the Company also evaluated the following criteria; 1) the high value of
the assets it has placed in service and the significant barrier that a high
initial investment poses to potential competitors, 2) the future potential of
the resort property, 3) the unique attraction of the resort property, 4) the
dependence of the hotel and other amenities of the resort property upon the
casino operation, and 5) the intentions of the Company to operate the casino
indefinitely. Based on its evaluation, the Company has deemed the casino license
costs to have an indefinite life. Goodwill recognized in the acquisition of 40%
of the outstanding stock of CM, which has been accounted for on the equity
method, was $0.57 million. Included in assets at June 30, 2004 is unamortized
goodwill of approximately $8.69 million and unamortized casino license costs of
approximately $1.95 million. The Company will continue to assess goodwill and
other intangibles for impairment at least annually. Management has not
identified any impairment indicators with respect to the casino license or
goodwill during the three and six months ended June 30, 2004.

Impairment of Long-Lived Assets - The Company reviews long-lived assets for
possible impairment whenever events or circumstances indicate that the carrying
amount of an asset may not be recoverable. If there is an indication of
impairment, which is estimated as the difference between anticipated
undiscounted future cash flows and carrying value, the carrying amount of the
asset is written down to its estimated fair value by a charge to operations.
Fair value is estimated based on the present value of estimated future cash
flows using a discount rate commensurate with the risk involved. Estimates of
future cash flows are inherently subjective and are based on management's best
assessment of expected future conditions.

The carrying value of the non-operating property held for sale in Wells Nevada,
is subject to periodic evaluation. The property has been listed for sale since
April 1998. In 2001 we attempted to reach agreement with an interested
third-party that would have recouped our investment through a long-term lease
agreement that contained a purchase option, which enabled us to conclude that
the carrying value was still reasonable. We could not reach an agreement and, as
the result of no further activity, reduced the value of the property to its
estimated fair value in 2002. An appraisal of the property, which was completed
on January 26, 2004, continues to support the net fair value of the assets as
recorded in the Consolidated Balance Sheet as of June 30, 2004.

Foreign Exchange - Current period transactions affecting the profit and loss of
operations conducted in foreign currencies are valued at the average exchange
rate for the period in which they are incurred. Except for equity transactions
and balances denominated in U.S. dollars, the balance sheet is translated based
on the exchange rate at the end of the period.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are exposed to market risk principally related to changes in interest
rates and foreign currency exchange rates. To mitigate some of these risks, we
utilize derivative financial instruments to hedge these exposures. We do not use
derivative financial instruments for speculative or trading purposes. All of the
potential changes noted below are based on information available at June 30,
2004. Actual results may differ materially.

Interest Rate Sensitivity

The Company is subject to interest rate risk on the outstanding borrowing
under the RCF with Wells Fargo Bank. Interest on the agreement is variable based
on the interest rate option selected by the Company, whereby the interest on the
outstanding debt is subject to fluctuations in the prime interest rate as set by
Wells Fargo, or LIBOR.

In order to minimize the risk of increases in the prime rate or LIBOR, the
Company has one remaining interest-rate swap agreement on a total of $4.0
million notional amount of debt. In 1998, the Company entered into a five-year
interest rate swap agreement that matured on October 1, 2003 on $7.5 million
notional amount of debt under the RCF, whereby the Company paid a LIBOR-based
fixed rate of 5.55% and received a LIBOR-based floating rate reset quarterly
based on a three-month rate. In May 2000, the Company entered into a second
five-year interest rate swap agreement which matures on July 1, 2005 on $4.0
million notional amount of debt under the RCF, whereby the Company pays a
LIBOR-based fixed rate of 7.95% and receives a LIBOR-based floating rate reset
quarterly based on a three-month rate. Generally, the swap arrangement is
advantageous to the Company to the extent that interest rates increase in the
future and disadvantageous to the extent that they decrease. Therefore, by
entering into the interest rate swap agreements, we have a cash flow risk when
interest rates drop. With the expiration of the swap agreement on the $7.5
million notional amount of debt on October 1, 2003, each hypothetical 100 basis
point increase results in an increased use of $40 thousand in cash on an annual
basis. In an environment of falling interest rates, as we have seen in the last
two years, the swap agreements are disadvantageous. Without the swap agreements
the weighted-average interest rate on the RCF for the three months ended June
30, 2004 and 2003 would have been 4.13% and 4.63%, respectively and for the six
months ended June 30, 2004 and 2003 would have been 4.34% and 4.70%. The Company
has not entered into any new swap agreements subsequent to June 30, 2004.

Foreign Currency Exchange Risk

A total of 39.6% of our revenue for the six months ended June 30, 2004 was
derived from our South African operations and principally denominated in South
African Rand. A total of 40% of our expenses for the six months ended June 30,
2004 were paid in currencies other than US dollars of which 39.1% were paid in
South African Rand and less than 1% were paid in Euros. Our US operations
generate revenues denominated in US dollars. If an arrangement provides for us
to receive payments in a foreign currency, revenue realized from such an
arrangement may be lower if the value of such foreign currency declines.
Similarly, if an arrangement provides for us to make payments in a foreign
currency, cost of services and operating expenses for such an arrangement may be
higher if the value of such foreign currency increases. For example, a 10%
change in the relative value of such foreign currency could cause a related 10%
change in our previously expected revenue, cost of services, and operating
expenses. If the international portion of our business continues to grow, more
revenue and expenses will be denominated in foreign currencies, which increases
our exposure to fluctuations in currency exchange rates. We have not hedged
against foreign currency exchange rate changes related to our international
operations.

Item 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, including
its principal executive officer and principal financial officer, the Company has
evaluated the effectiveness of the design and operation of its disclosure
controls and procedures (which are designed to ensure that information required
to be disclosed in the reports submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms) as of the end of the period covered by this report. Based
on their evaluation, the Company's principal executive officer and principal
financial officer have concluded that these controls and procedures are
effective.

There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation. There were no significant deficiencies or material
weaknesses, and therefore there were no corrective actions taken.

* * * * * * * * * * * * * * * * * * * *

PART II
OTHER INFORMATION

Item 1. - Legal Proceedings

The Company is not a party to, nor is it aware of, any pending or
threatened litigation which, in management's opinion, could have a
material adverse effect on the Company's financial position or results
of operations.

Items 2. to 3. - None

Item 4. - Submission of Matters to a Vote of Security Holders The 2004 annual
meeting of the stockholders of the Company was held on May 17, 2004.
At the annual meeting the two Class I directors to the Board, Robert
S. Eichberg and Dinah Corbaci were re-elected to the Board for a three
year term. On this proposal to elect the Class I directors, the votes
were: Robert S. Eichberg, 9,950,464 for, and 2,566,705 withheld; Dinah
Corbaci, 9,950,064 for and 2,567,105 withheld. No other proposals were
brought for a vote of the stockholders.

Item 5. - None

Item 6. - Exhibits and Reports on Form 8-K

(a) Exhibits - The following exhibits are filed herewith:

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, Chairman of the Board and Chief Executive Officer.

31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, Vice-Chairman and President.

31.3 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, Chief Accounting Officer.

32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, Chairman of the Board and Chief Executive Officer.

32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, Vice-Chairman and President.

32.3 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, Chief Accounting Officer

(b) Reports on Form 8-K:

On May 14, 2004, the Registrant furnished a Current Report on Form
8-K, reporting Item 12, in which it announced it had posted to its
website a presentation of the review of financial results of
operations and financial condition as of and for the period ended
March 31, 2004.

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

CENTURY CASINOS, INC.

/s/ Larry Hannappel
- ---------------------------
Larry Hannappel
Chief Accounting Officer
Date: July 28, 2004