Route and Customer Acquisition Costs

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Route and Customer Acquisition Costs

Route and Customer Acquisition CostsThe Company enters into contracts with third parties and licensed video gaming locations throughout the State of Illinois which allow the Company to install and operate video gaming terminals. When video gaming operations commence, payments are primarily due monthly. Gross payments due, based on the number of live locations, are approximately $6.4 million and $7.4 million as of December 31, 2020 and 2019, respectively. Payments are due over varying terms of the individual agreements and are discounted at the Company’s incremental borrowing rate associated with its long-term debt at the time the contract is acquired. The net present value of payments due is $5.7 million and $6.5 million as of December 31, 2020 and 2019, respectively,

of which approximately $1.6 million and $1.7 million is included in current liabilities in the accompanying consolidated balance sheets as of December 31, 2020 and 2019, respectively. The route and customer acquisition cost asset is comprised of upfront payments made on the contracts of $17.7 million and $18.7 million as of December 31, 2020 and 2019, respectively. The Company has upfront payments of commissions paid to the third parties for the acquisition of the customer contracts that are subject to a claw back provision if the customer cancels the contract prior to completion. The payments subject to a claw back are $1.7 million and $2.2 million as of December 31, 2020 and 2019, respectively.

Route and customer acquisition costs consist of the following at December 31 (in thousands):

	2020		2019
Cost	$	27,364	$	28,501
Accumulated amortization	(12,113)		(11,102)
Route and customer acquisition costs, net	$	15,251	$	17,399

Amortization expense of route and customer acquisition costs was $1.8 million, $1.7 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company's amortization expense is lower in 2019 and 2020 due to the adoption of ASC Topic 606 as the amortization period for route and customer acquisition costs was extended to include expected renewals.