Electronic Gaming Machines (EGMs) and Systems

12 Months Ended

Dec. 31, 2011

Electronic Gaming Machines (EGMs) and Systems

Electronic Gaming Machines (EGMs) and Systems

Note 7.Electronic Gaming Machines (EGMs) and Systems

As a result of the Quasi-Reorganization, the asset carrying values were adjusted to a new cost basis and the accumulated depreciation of EGMs and systems were also removed to adjust the basis as of December 31, 2010 (Please see Note 1 for more details). Additions of EGMs and systems in 2011 are stated at cost.

The major categories of EGMs and systems and accumulated depreciation are presented below:

	Useful
	Life	December 31,
(amounts in thousands)	(years)	2011			2010
EGMs	3-5	$	12,116		$	11,379
Systems	5	1,008			981
		13,124			12,360
Less: accumulated depreciation		(4,235		)	—
		$	8,889		$	12,360

Depreciation expenses for the years ended December 31, 2011 and 2010 were approximately $4.9 million and $8.0 million, respectively, which were recorded in cost of EGM participation in the consolidated statements of operations.  Due to the Quasi-Reorganization, depreciation expenses are not comparable between the years ended December 31, 2011 and 2010 as the basis of the assets are different.

During the year ended December 31, 2011, the Company had written off non-performing gaming assets of approximately $1.4 million.

During the year ended December 31, 2010, the Company had written off gaming assets of approximately $388,000 primarily related to the closure of a non-performing venue.