EVERI HOLDINGS INC., 10-Q filed on 11/2/2020
Quarterly Report
v3.20.2
Cover - shares
9 Months Ended
Sep. 30, 2020
Oct. 30, 2020
Cover Page [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2020  
Document Transition Report false  
Entity File Number 001-32622  
Entity Registrant Name EVERI HOLDINGS INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-0723270  
Entity Address, Address Line One 7250 S. Tenaya Way, Suite 100  
Entity Address, City or Town Las Vegas  
Entity Address, State or Province NV  
Entity Address, Postal Zip Code 89113  
City Area Code 800  
Local Phone Number 833-7110  
Title of 12(b) Security Common Stock, $0.001 par value  
Trading Symbol EVRI  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   85,928,252
Entity Central Index Key 0001318568  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
v3.20.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Revenues        
Total revenues $ 112,098 $ 134,569 $ 264,122 $ 388,050
Costs and expenses        
Operating expenses 34,927 37,631 115,428 111,446
Research and development 7,034 8,196 20,958 22,399
Depreciation 16,163 16,015 48,700 46,062
Amortization 18,693 17,156 57,312 51,143
Total costs and expenses 92,360 107,276 286,686 310,006
Operating income (loss) 19,738 27,293 (22,564) 78,044
Other expenses        
Interest expense, net of interest income 18,905 19,297 56,226 60,130
Loss on extinguishment of debt 0 0 7,457 0
Total other expenses 18,905 19,297 63,683 60,130
Income (loss) before income tax 833 7,996 (86,247) 17,914
Income tax provision (benefit) 1,711 (1,319) (3,434) (2,747)
Net (loss) income (878) 9,315 (82,813) 20,661
Foreign currency translation, net of tax 359 (658) (1,295) (189)
Comprehensive (loss) income $ (519) $ 8,657 $ (84,108) $ 20,472
(Loss) earnings per share        
Basic (in dollars per share) $ (0.01) $ 0.13 $ (0.97) $ 0.29
Diluted (in dollars per share) $ (0.01) $ 0.12 $ (0.97) $ 0.27
Weighted average common shares outstanding        
Basic (in shares) 85,556 72,251 85,102 71,361
Diluted (in shares) 85,556 79,125 85,102 77,854
Games        
Revenues        
Total revenues $ 57,241 $ 69,273 $ 135,384 $ 206,079
Cost of revenues [1] 9,975 17,185 27,552 51,343
Costs and expenses        
Operating expenses 13,078 13,968 50,597 44,599
Research and development 5,003 6,369 14,819 17,481
Depreciation 14,777 14,420 44,349 41,283
Amortization 14,838 14,258 45,738 42,644
Total costs and expenses 57,671 66,200 183,055 197,350
Operating income (loss) (430) 3,073 (47,671) 8,729
Games | Gaming operations        
Revenues        
Total revenues 46,968 48,515 106,513 138,377
Cost of revenues [1] 4,245 4,942 10,471 12,792
Games | Gaming equipment and systems        
Revenues        
Total revenues 10,229 19,584 28,795 66,083
Cost of revenues [1] 5,730 11,126 16,625 37,087
Games | Gaming other        
Revenues        
Total revenues 44 1,174 76 1,619
Cost of revenues [1] 0 1,117 456 1,464
FinTech        
Revenues        
Total revenues 54,857 65,296 128,738 181,971
Cost of revenues [1] 5,568 11,093 16,736 27,613
Costs and expenses        
Operating expenses 21,850 23,663 64,831 66,847
Research and development 2,030 1,827 6,138 4,918
Depreciation 1,387 1,595 4,352 4,779
Amortization 3,855 2,898 11,574 8,499
Total costs and expenses 34,690 41,076 103,631 112,656
Operating income (loss) 20,167 24,220 25,107 69,315
FinTech | Cash access services        
Revenues        
Total revenues 33,979 43,152 80,986 123,680
Cost of revenues [1] 1,161 4,112 5,227 9,777
FinTech | Equipment        
Revenues        
Total revenues 6,248 10,188 16,004 25,051
Cost of revenues [1] 3,548 5,957 9,452 14,884
FinTech | Information services and other        
Revenues        
Total revenues 14,630 11,956 31,748 33,240
Cost of revenues [1] $ 859 $ 1,024 $ 2,057 $ 2,952
[1] (1) Exclusive of depreciation and amortization.
v3.20.2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 235,407 $ 289,870
Settlement receivables 33,126 70,282
Trade and other receivables, net of allowances for credit losses of $3,754 and $5,786 at September 30, 2020 and December 31, 2019, respectively 75,997 87,910
Inventory 33,779 26,574
Prepaid expenses and other current assets 18,268 27,896
Total current assets 396,577 502,532
Non-current assets    
Property and equipment, net 113,812 128,869
Goodwill 681,943 681,635
Other intangible assets, net 228,958 279,187
Other receivables, net 14,218 16,661
Other assets 22,696 20,339
Total non-current assets 1,061,627 1,126,691
Total assets 1,458,204 1,629,223
Current liabilities    
Accounts payable and accrued expenses 165,217 173,103
Settlement liabilities 140,229 234,087
Current portion of long-term debt 1,250 0
Total current liabilities 306,696 407,190
Non-current liabilities    
Long-term debt 1,127,191 1,108,078
Deferred tax liability, net 22,613 26,401
Other accrued expenses and liabilities 17,114 33,566
Total non-current liabilities 1,166,918 1,168,045
Total liabilities 1,473,614 1,575,235
Commitments and contingencies (Note 13)
Stockholders’ (deficit) equity    
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at September 30, 2020 and December 31, 2019, respectively 0 0
Common stock, $0.001 par value, 500,000 shares authorized and 111,079 and 85,906 shares issued and outstanding at September 30, 2020, respectively, and 109,493 and 84,497 shares issued and outstanding at December 31, 2019, respectively 111 109
Additional paid-in capital 460,967 445,162
Accumulated deficit (295,753) (212,940)
Accumulated other comprehensive loss (2,114) (819)
Treasury stock, at cost, 25,173 and 24,996 shares at September 30, 2020 and December 31, 2019, respectively (178,621) (177,524)
Total stockholders’ (deficit) equity (15,410) 53,988
Total liabilities and stockholders’ (deficit) equity $ 1,458,204 $ 1,629,223
v3.20.2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current assets    
Allowances for doubtful accounts $ 3,754 $ 5,786
Stockholders’ (deficit) equity    
Convertible preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Convertible preferred stock authorized (in shares) 50,000,000 50,000,000
Convertible preferred stock outstanding (in shares) 0 0
Common stock par value (in dollars per share) $ 0.001 $ 0.001
Common stock authorized (in shares) 500,000,000 500,000,000
Common stock issued (in shares) 111,079,000 109,493,000
Common stock outstanding (in shares) 85,906,000 84,497,000
Treasury stock (in shares) 25,173,000 24,996,000
v3.20.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities    
Net (loss) income $ (82,813) $ 20,661
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:    
Depreciation 48,700 46,062
Amortization 57,312 51,143
Non-cash lease expense 3,615 3,060
Amortization of financing costs and discounts 3,111 2,697
Loss on sale or disposal of assets 111 1,375
Accretion of contract rights 5,345 6,539
Provision for credit losses 6,925 10,010
Deferred income taxes (3,788) (3,173)
Reserve for inventory obsolescence 1,810 1,830
Write-down of assets 11,281 843
Loss on extinguishment of debt 7,457 0
Stock-based compensation 10,108 6,141
Other non-cash items 456 0
Changes in operating assets and liabilities:    
Settlement receivables 36,922 26,774
Trade and other receivables 6,682 (23,820)
Inventory (10,614) (3,341)
Other assets (4,952) (20,866)
Settlement liabilities (93,622) (34,573)
Other liabilities (5,814) 29,002
Net cash (used in) provided by operating activities (1,768) 120,364
Cash flows from investing activities    
Capital expenditures (52,428) (81,642)
Acquisitions, net of cash acquired (15,000) (20,000)
Proceeds from sale of property and equipment 141 56
Placement fee agreements (3,021) (17,102)
Net cash used in investing activities (70,308) (118,688)
Cash flows from financing activities    
Proceeds from incremental term loan 125,000 0
Repayments of incremental term loan (313) 0
Proceeds from revolving credit facility 35,000 0
Repayments of revolving credit facility (35,000) 0
Repayments of existing term loan (13,500) (25,700)
Repayments of unsecured notes (89,619) 0
Fees associated with debt transactions (11,128) 0
Proceeds from exercise of stock options 3,509 11,288
Treasury stock (1,097) (1,021)
Net cash provided by (used in) financing activities 12,852 (15,433)
Effect of exchange rates on cash and cash equivalents (1,370) (1,314)
Cash, cash equivalents and restricted cash    
Net decrease for the period (60,594) (15,071)
Balance, beginning of the period 296,610 299,181
Balance, end of the period 236,016 284,110
Supplemental cash disclosures    
Cash paid for interest 45,331 52,077
Cash paid (refunded) for income tax, net 81 (69)
Supplemental non-cash disclosures    
Accrued and unpaid capital expenditures 2,970 3,989
Accrued and unpaid placement fees added during the year 0 585
Accrued and unpaid liabilities for acquisitions added during the year 0 27,556
Transfer of leased gaming equipment to inventory $ 5,493 $ 9,118
v3.20.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Treasury Stock
Balance, beginning of period (in shares) at Dec. 31, 2018   95,100        
Balance, beginning of period at Dec. 31, 2018 $ (108,895) $ 95 $ 298,929 $ (229,457) $ (1,998) $ (176,464)
Increase (Decrease) in Stockholders' Equity            
Net income 5,860     5,860    
Foreign currency translation 504       504  
Stock-based compensation expense 1,773   1,773      
Exercise of options (in shares)   864        
Exercise of options 4,971 $ 1 4,970      
Restricted shares (in shares)   2        
Restricted share vesting and withholding (15)         (15)
Balance, end of period (in shares) at Mar. 31, 2019   95,966        
Balance, end of period at Mar. 31, 2019 (95,802) $ 96 305,672 (223,597) (1,494) (176,479)
Balance, beginning of period (in shares) at Dec. 31, 2018   95,100        
Balance, beginning of period at Dec. 31, 2018 (108,895) $ 95 298,929 (229,457) (1,998) (176,464)
Increase (Decrease) in Stockholders' Equity            
Net income 20,661          
Balance, end of period (in shares) at Sep. 30, 2019   97,279        
Balance, end of period at Sep. 30, 2019 (72,015) $ 97 316,356 (208,796) (2,187) (177,485)
Balance, beginning of period (in shares) at Mar. 31, 2019   95,966        
Balance, beginning of period at Mar. 31, 2019 (95,802) $ 96 305,672 (223,597) (1,494) (176,479)
Increase (Decrease) in Stockholders' Equity            
Net income 5,486     5,486    
Foreign currency translation (35)       (35)  
Stock-based compensation expense 2,387   2,387      
Exercise of options (in shares)   764        
Exercise of options 4,492 $ 1 4,491      
Restricted shares (in shares)   275        
Restricted share vesting and withholding (965)         (965)
Balance, end of period (in shares) at Jun. 30, 2019   97,005        
Balance, end of period at Jun. 30, 2019 (84,437) $ 97 312,550 (218,111) (1,529) (177,444)
Increase (Decrease) in Stockholders' Equity            
Net income 9,315     9,315    
Foreign currency translation (658)       (658)  
Stock-based compensation expense 1,981   1,981      
Exercise of options (in shares)   263        
Exercise of options 1,825   1,825      
Restricted shares (in shares)   11        
Restricted share vesting and withholding (41)         (41)
Balance, end of period (in shares) at Sep. 30, 2019   97,279        
Balance, end of period at Sep. 30, 2019 $ (72,015) $ 97 316,356 (208,796) (2,187) (177,485)
Balance, beginning of period (in shares) at Dec. 31, 2019 84,497 109,493        
Balance, beginning of period at Dec. 31, 2019 $ 53,988 $ 109 445,162 (212,940) (819) (177,524)
Increase (Decrease) in Stockholders' Equity            
Net income (13,454)     (13,454)    
Foreign currency translation (1,958)       (1,958)  
Stock-based compensation expense 4,173   4,173      
Exercise of options (in shares)   298        
Exercise of options 1,642 $ 1 1,641      
Restricted shares (in shares)   15        
Restricted share vesting and withholding (42)         (42)
Balance, end of period (in shares) at Mar. 31, 2020   109,806        
Balance, end of period at Mar. 31, 2020 $ 44,349 $ 110 450,976 (226,394) (2,777) (177,566)
Balance, beginning of period (in shares) at Dec. 31, 2019 84,497 109,493        
Balance, beginning of period at Dec. 31, 2019 $ 53,988 $ 109 445,162 (212,940) (819) (177,524)
Increase (Decrease) in Stockholders' Equity            
Net income $ (82,813)          
Balance, end of period (in shares) at Sep. 30, 2020 85,906 111,079        
Balance, end of period at Sep. 30, 2020 $ (15,410) $ 111 460,967 (295,753) (2,114) (178,621)
Balance, beginning of period (in shares) at Mar. 31, 2020   109,806        
Balance, beginning of period at Mar. 31, 2020 44,349 $ 110 450,976 (226,394) (2,777) (177,566)
Increase (Decrease) in Stockholders' Equity            
Net income (68,481)     (68,481)    
Foreign currency translation 304       304  
Stock-based compensation expense 4,638   4,638      
Issuance of warrants 502   502      
Exercise of options (in shares)   149        
Exercise of options 473 $ 1 472      
Restricted shares (in shares)   579        
Restricted share vesting and withholding (547)         (547)
Balance, end of period (in shares) at Jun. 30, 2020   110,534        
Balance, end of period at Jun. 30, 2020 (18,762) $ 111 456,588 (294,875) (2,473) (178,113)
Increase (Decrease) in Stockholders' Equity            
Net income (878)     (878)    
Foreign currency translation 359       359  
Stock-based compensation expense 2,985   2,985      
Exercise of options 1,394 287 1,394      
Restricted share vesting and withholding $ (508) $ 258       (508)
Balance, end of period (in shares) at Sep. 30, 2020 85,906 111,079        
Balance, end of period at Sep. 30, 2020 $ (15,410) $ 111 $ 460,967 $ (295,753) $ (2,114) $ (178,621)
v3.20.2
BUSINESS
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BUSINESS BUSINESS
Everi Holdings Inc. (“Everi Holdings,” or “Everi”) is a holding company, the assets of which are the issued and outstanding shares of capital stock of each of Everi Payments Inc. (“Everi FinTech” or “FinTech”) and Everi Games Holding Inc., which owns all of the issued and outstanding shares of capital stock of Everi Games Inc. (“Everi Games” or “Games”). Unless otherwise indicated, the terms the “Company,” “we,” “us,” and “our” refer to Everi Holdings together with its consolidated subsidiaries.
Everi is a leading supplier of imaginative entertainment and trusted technology solutions for the casino and digital gaming industry. Everi’s mission is to transform the casino floor through innovative gaming and financial technology and loyalty solutions. With a focus on both land-based and digital gaming operators and players, the Company develops entertaining games and gaming machines, gaming systems and services that facilitate memorable player experiences, and is a preeminent and comprehensive provider of financial products and services that offer convenient and secure cash and cashless-based financial transactions, self-service player loyalty tools and applications, and intelligence software and other intuitive solutions that improve casino operational efficiencies and fulfill regulatory compliance requirements.
Everi Holdings reports its results of operations based on two operating segments: Games and FinTech.
Everi Games provides gaming operators with gaming technology products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines placed under participation or fixed-fee lease arrangements or sold to casino customers; (ii) providing and maintaining the central determinant systems for the video lottery terminals (“VLTs”) installed in the State of New York and similar technology in certain tribal jurisdictions; and (iii) business-to-business (“B2B”) and business-to-consumer (“B2C”) digital online gaming activities.
Everi FinTech provides gaming operators with financial technology products and services, including: (i) services and equipment that facilitate casino patrons’ self-service access to cash and cashless funding at gaming facilities via Automated Teller Machine (“ATM”) debit withdrawals (cash dispensing and cashless), credit card cash access transactions and point-of-sale (“POS”) debit card purchase and cash access transactions; (ii) check warranty services; (iii) self-service player loyalty enrollment and marketing equipment, including promotion management software and tools; (iv) software and services that improve credit decision making, automate cashier operations, and enhance patron marketing activities for gaming establishments; (v) equipment that provides cash access and other cash handling efficiency-related services; and (vi) compliance, audit, and data solutions.
Impact of Coronavirus Disease 2019 (“COVID-19”) Pandemic
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility in the financial markets, increased unemployment levels, caused temporary, and in certain cases, closures of many businesses. The gaming industry was not immune to these factors as our casino customers closed their gaming establishments, and as a result, our operations experienced significant disruptions. At the immediate onset of the COVID-19 pandemic, we were affected by various measures, including, but not limited to: the institution of social distancing and sheltering-in-place requirements in many states and communities, which significantly impacted demand for our products and services, and resulted in office closures, the furlough of a majority of our employees, the implementation of temporary base salary reductions for our employees and the implementation of a work-from-home policy.
During the second quarter of 2020, businesses began to adapt to social-distancing measures and various phases of reopening pursuant to government-mandated guidelines. As our gaming customers reopened, a number of their properties initially experienced an elevated level of activity as compared to what was originally anticipated. The revenues generated by this initial pent-up demand flattened to slightly below pre-COVID levels as more casinos reopened through the second quarter of 2020. Revenues then improved throughout the third quarter of 2020, though they still remained at pre-COVID levels. With a majority of our gaming customers reopening properties by the end of September 2020 and our results continuing to improve from the decreased activity rates in the second quarter, we have, among other measures: (i) returned nearly all of our furloughed employees to work on primarily a work-from-home basis; (ii) reinstated base compensation to pre-COVID levels for the employee base; (iii) reversed nearly all compensation reductions for both our Executives and Directors; and (iv) fully paid down the outstanding balance on our revolving line of credit.
It is unclear if and when customer volumes will return consistently to pre-COVID levels, or if in the future a resurgence of COVID-19 could result in the closure of casinos by federal, state, tribal and municipal governmental and regulatory agencies or by the casino operators themselves in an effort to contain the COVID-19 public health emergency or mitigate its impact; however, we continue to monitor the impacts of COVID-19 and we will make adjustments to our business accordingly to the extent the economic environment deteriorates.
In parallel, in connection with the uncertainty facing our customers as a result of COVID-19, we evaluated our business strategies in the second quarter of 2020 and implemented measures to reduce our ongoing operating costs. As a result of this evaluation, we permanently reduced our employee base, with most of the departures resulting from our furloughed employees, to accommodate the current and future operating needs of our customers and our business.
The impact of the COVID-19 pandemic also exacerbates the risks disclosed in our Annual Report, including, but not limited to: our ability to comply with the terms of our indebtedness, our ability to generate revenues, earn profits and maintain adequate liquidity, our ability to service existing and attract new customers, maintain our overall competitiveness in the market, the potential for significant fluctuations in demand for our services, overall trends in the gaming industry impacting our business, as well as potential volatility in our stock price, among other consequences such as cybersecurity exposure.
Results of Operations and Liquidity
To date, our operations have experienced revenue reductions and significant disruptions as a direct consequence of the circumstances surrounding the COVID-19 pandemic. This had a material adverse impact on our overall results of operations and financial condition for the current reporting period. As such, we have implemented a range of actions to maintain balance sheet flexibility and preserve liquidity as a result of the business disruption caused by the rapid nationwide spread of COVID-19, including, but not limited to:
At the onset of COVID-19 pandemic:
we completed the full draw down of our available capacity of $35.0 million under the Revolving Credit Facility in order to improve our liquidity and preserve financial flexibility in light of the uncertainty in our industry and the global economy as a result of COVID-19 (as discussed and defined in “Note 12 — Long-Term Debt”);
we entered into a fourth amendment (the “Fourth Amendment”) to our existing Credit Agreement (as defined in “Note 12 — Long-Term Debt”), which among other things, amended our debt covenants to provide relief with respect to our senior secured leverage ratio (as discussed and defined in “Note 12 — Long-term Debt”);
we also entered into a new credit agreement, which provides for a $125.0 million senior secured term loan, which is secured on a pari passu basis with the loans under our existing Credit Agreement. The entire amount was borrowed upon closing (as discussed and defined in “Note 12 — Long-term Debt”);
our executive officers elected to accept significant reductions to their compensation during the pendency of the COVID-19 pandemic in order to better position the Company to withstand the challenging conditions that have caused global and domestic disruption in the current economic environment;
our independent members of the Board of Directors of the Company elected to forgo their quarterly cash compensation for Board and related committee services;
we furloughed a majority of our staff;
we reduced the salaries of our employee-base from approximately 15% to 70%;
we suspended certain employee benefits, such as providing a Company match on 401(k) contributions;
we implemented a remote working environment;
we canceled or delayed material capital expenditures;
we suspended our share repurchases under our previously authorized repurchase program; and
As of the end of the second quarter of 2020:
we implemented a safe workplace return policy for those of our employees who return to our facilities;
we returned most of our furloughed employees to work;
we returned a portion of base compensation to our executives;
we returned most base compensation to our employee-base;
we returned a portion of cash compensation to our Board of Directors;
we completed a reduction-in-force and incurred severance costs, among other expenses, of approximately $2.7 million; and
we recorded a write-down of assets of approximately $11.0 million, of which $9.2 million and $1.8 million related to our Games and FinTech businesses, respectively, for certain of our trade receivables, inventory, prepaid expenses and other assets, fixed assets and other intangible assets that were not expected to be recoverable. This charge was reflected in Operating Expenses in our Statements of Operations. While we are unable to determine the nature, or amount, of further write-down charges, it is possible that we may record additional amounts to the extent we experience a decline in operations and financial performance in the future.
As of the end of the third quarter of 2020:
we have returned base compensation to our executives and employee-base;
we have returned cash compensation to our Board of Directors; and
we fully repaid the $35.0 million Revolving Credit Facility in light of improved results of operations and liquidity.
Government Relief
In late March 2020, the U.S. government enacted the Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic. We have taken advantage of the following components contained within the CARES Act:
Employee Retention Payroll Tax Credit: We are applying a credit against payroll taxes for 50% of eligible employee wages paid or incurred from March 13, 2020 to December 31, 2020. This employee retention payroll tax credit would be provided for as much as $10,000 of qualifying wages for each eligible employee, including health benefits;
Employer Social Security Tax Payment Deferral: We are deferring payment of the employer portion of the social security taxes due on remaining payments and from enactment of the CARES Act through December 31, 2020, with 50% due by December 31, 2021 and 50% due by December 31, 2022; and
Alternative Minimum Tax (“AMT”) Credit Refund: We are applying for a refund of our AMT tax credits as the CARES Act affords us the ability to accelerate the recovery of such credits.
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2019 Annual Report.
We evaluate the composition of our revenues to maintain compliance with SEC Regulation S-X Section 210.5-3, which requires us to separately present certain categories of revenues that exceed the quantitative threshold on our Statements of Operations.
Revenue Recognition
Overview
We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjust it, as necessary.
Disaggregation of Revenues
We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.”
Contract Balances
Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of cash collections differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections.
The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands):
Nine Months Ended September 30,
20202019
Contract assets(1)
Balance at January 1 — current$8,634 $6,821 
Balance at January 1 — non-current6,774 4,489 
Total
15,408 11,310 
Balance at September 30 - current8,945 8,037 
Balance at September 30 - non-current7,545 4,049 
Total
16,490 12,086 
         Increase $1,082 $776 
Contract liabilities(2)
Balance at January 1 — current$28,510 $14,661 
Balance at January 1 — non-current354 809 
Total
28,864 15,470 
Balance at September 30 - current34,846 28,827 
Balance at September 30 - non-current32 798 
Total
34,878 29,625 
Increase
$6,014 $14,155 
(1)  The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables, net in our Balance Sheets.
(2)  The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets.
We recognized approximately $19.3 million and $10.7 million in revenue that was included in the beginning contract liability balance during the nine months ended September 30, 2020 and 2019, respectively.
Games Revenues
Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B and B2C digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other.
We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $35.9 million and $80.3 million for the three and nine months ended September 30, 2020, respectively and $36.6 million and $104.3 million for the three and nine months ended September 30, 2019, respectively.
FinTech Revenues
Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with cash access-related services, self-service player loyalty and marketing tools, and other information and regulatory compliance-related products and services. These solutions include: access to cash and cashless funding at gaming facilities via debit withdrawals (cash dispensing and cashless), credit card cash access transactions, and POS debit card purchase and cash access transactions; check warranty services; self-service ATMs and fully integrated kiosks and maintenance services; self-service player loyalty enrollment and marketing equipment, including promotion management software and tools; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Cash Access Services; (ii) Equipment; and (iii) Information Services and Other.
Equipment revenues are derived from the sale of our cash access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any new cash access kiosk and related equipment sales contracts accounted for under ASC 842 during the three and nine months ended September 30, 2020. Sales contracts accounted for under ASC 842 were approximately $0.1 million and $2.7 million for the three and nine months ended September 30, 2019, respectively.
Restricted Cash
Our restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) deposits held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) Internet-related cash access activities. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the nine months ended September 30, 2020 (in thousands).
Classification on our Balance Sheets
At September 30, 2020At December 31, 2019
Cash and cash equivalentsCash and cash equivalents$235,407 $289,870 
Restricted cash - currentPrepaid expenses and other current assets508 6,639 
Restricted cash - non-currentOther assets101 101 
Total
$236,016 $296,610 

Goodwill

Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded.

The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation.
Our reporting units are identified as operating segments or one level below. Reporting units must: (i) engage in business activities from which they earn revenues and incur expenses; (ii) have operating results that are regularly reviewed by our segment management to ascertain the resources to be allocated to the segment and assess its performance; and (iii) have discrete financial information available. As of September 30, 2020, our reporting units included: (i) Games; (ii) Cash Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Player Loyalty Sales and Services.

Fair Values of Financial Instruments
The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument.
The carrying amount of cash and cash equivalents, restricted cash, settlement receivables, short-term trade and other receivables, settlement liabilities, accounts payable, and accrued expenses approximate fair value due to the short-term maturities of these instruments. The fair value of the long-term trade and loans receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value of the long-term accounts payable is estimated by discounting the total obligation using the appropriate interest rate. As of September 30, 2020 and December 31, 2019, the fair value of trade and loans receivable approximated the carrying value due to contractual terms generally being slightly over 12 months. The fair value of our borrowings is estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity, and similar instruments trading in more active markets. The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands):
 Level of HierarchyFair ValueOutstanding Balance
September 30, 2020   
Term loan2$715,127 $735,500 
Incremental term loan2$127,805 $124,688 
Senior unsecured notes2$279,673 $285,381 
December 31, 2019   
Term loan2$753,494 $749,000 
Senior unsecured notes2$401,738 $375,000 
Our borrowings were reported at fair value using Level 2 inputs based on quoted market prices for these securities.
Reclassification of Prior Year Balances
Reclassifications were made to the prior-period Financial Statements to conform to the current period presentation where applicable.
Recent Accounting Guidance
Recently Adopted Accounting Guidance
StandardDescriptionDate of AdoptionEffect on Financial Statements
Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments
This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.January 1, 2020
This guidance primarily impacts our trade and other receivables, including those related to revenues from contracts with customers that may contain contract assets with respect to performance obligations that are satisfied for which the customers have not yet been invoiced. We adopted this guidance using the modified retrospective method. The adoption of ASC 326 did not have a material effect on our Financial Statements and did not result in a cumulative-effect adjustment. Refer to “Note 6 — Trade and Other Receivables” for further discussion.
ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).January 1, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”).
March 12, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
Recent Accounting Guidance Not Yet Adopted
StandardDescriptionDate of Planned AdoptionEffect on Financial Statements
ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740.January 1, 2021We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material.
We do not anticipate recently issued accounting guidance to have a significant impact on our Financial Statements as of September 30, 2020.
v3.20.2
LEASES
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
LEASES LEASES
We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease.
Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately 1 to 10 years. The exercise of lease renewal options is generally at our sole discretion. The expected lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. The depreciable life of leased assets and leasehold improvements are limited by the expected term of such assets, unless there is a transfer of title or purchase option reasonably certain to be exercised.
Lessee
The Company leases real estate and vehicles under operating and finance leases, respectively. We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets.
Supplemental balance sheet information related to our operating leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Operating lease ROU assetsOther assets, non-current$16,479 $12,257 
Finance lease ROU assets(2)
Other assets, non-current$522 $— 
Liabilities(1)
Current operating lease liabilitiesAccounts payable and accrued expenses$5,402 $5,824 
Current finance lease liabilitiesAccounts payable and accrued expenses$143 $— 
Non-current operating lease liabilitiesOther accrued expenses and liabilities$15,491 $9,628 
Non-current finance lease liabilitiesOther accrued expenses and liabilities$399 $— 
(1) The amount of operating lease liabilities recorded on our Balance Sheets upon the adoption of ASC 842 on January 1, 2019 was approximately $18.0 million.
(2) Presented net of accumulated depreciation.
Supplemental cash flow information related to leases is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Cash paid for:
Long- and short-term operating leases$2,076 $1,869 $6,325 $5,602 
Finance leases$39 $— $44 $— 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases(1)
$7,594 $— $8,454 $14,595 
(2)
Finance leases(1)
$310 $— $592 $— 
(1) The amounts are presented net of current year terminations and exclude amortization for the period.
(2) The amount includes approximately $13.7 million of operating lease ROU assets obtained in exchange for existing lease obligations due to the adoption of ASC 842 and $0.9 million of operating lease ROU assets obtained in exchange for new lease obligations entered into during the nine months ended September 30, 2019.
Other information related to lease terms and discount rates is as follows:
At September 30, 2020At December 31, 2019
Weighted Average Remaining Lease Term (in years):
Operating leases4.212.96
Finance leases3.62— 
Weighted Average Discount Rate:
Operating leases5.25 %5.25 %
Finance leases3.85 %— 
Components of lease expense, which are included in operating expenses, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Operating Lease Cost:
Operating lease cost$1,475 $1,354 $4,212 $3,629 
Variable lease cost $421 $401 $1,333 $1,240 
Finance Lease Cost:
Amortization of ROU assets$47 $— $70 $— 
Interest expense on lease liabilities$$— $$— 
Maturities of lease liabilities are summarized as follows as of September 30, 2020 (in thousands):
Year Ending December 31, Operating LeasesFinance Leases
2020 (excluding the nine months ended September 30, 2020)$1,516 $40 
20216,181 161
20225,501 161
20233,946 161
20242,977 57
Thereafter3,331 — 
Total future minimum lease payments $23,452 $580 
Amount representing interest 2,559 38
Present value of future minimum lease payments$20,893 $542 
Current lease obligations5,402 143
Long-term lease obligations$15,491 $399 
Lessor
We generate lease revenues primarily from our gaming operations activities, with a majority of our leases being month-to-month relationships. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. The cost of property and equipment the Company is leasing to third-parties as of September 30, 2020 is approximately $203.2 million, which includes accumulated depreciation of approximately $124.7 million.
We did not have any new sales transactions that qualified for sales-type lease accounting treatment during the three and nine months ended September 30, 2020. We generated lease revenue from sales-type leases in the FinTech segment in the amount of approximately $0.1 million and $2.7 million for the three and nine months ended September 2019, respectively. Our interest income recognized in connection with sales-type leases executed in the prior periods is immaterial.
Supplemental balance sheet information related to our sales-type leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Net investment in sales-type leases — currentTrade and other receivables, net$885 $874 
Net investment in sales-type leases — non-currentOther receivables$640 $1,288 
LEASES LEASES
We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease.
Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately 1 to 10 years. The exercise of lease renewal options is generally at our sole discretion. The expected lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. The depreciable life of leased assets and leasehold improvements are limited by the expected term of such assets, unless there is a transfer of title or purchase option reasonably certain to be exercised.
Lessee
The Company leases real estate and vehicles under operating and finance leases, respectively. We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets.
Supplemental balance sheet information related to our operating leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Operating lease ROU assetsOther assets, non-current$16,479 $12,257 
Finance lease ROU assets(2)
Other assets, non-current$522 $— 
Liabilities(1)
Current operating lease liabilitiesAccounts payable and accrued expenses$5,402 $5,824 
Current finance lease liabilitiesAccounts payable and accrued expenses$143 $— 
Non-current operating lease liabilitiesOther accrued expenses and liabilities$15,491 $9,628 
Non-current finance lease liabilitiesOther accrued expenses and liabilities$399 $— 
(1) The amount of operating lease liabilities recorded on our Balance Sheets upon the adoption of ASC 842 on January 1, 2019 was approximately $18.0 million.
(2) Presented net of accumulated depreciation.
Supplemental cash flow information related to leases is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Cash paid for:
Long- and short-term operating leases$2,076 $1,869 $6,325 $5,602 
Finance leases$39 $— $44 $— 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases(1)
$7,594 $— $8,454 $14,595 
(2)
Finance leases(1)
$310 $— $592 $— 
(1) The amounts are presented net of current year terminations and exclude amortization for the period.
(2) The amount includes approximately $13.7 million of operating lease ROU assets obtained in exchange for existing lease obligations due to the adoption of ASC 842 and $0.9 million of operating lease ROU assets obtained in exchange for new lease obligations entered into during the nine months ended September 30, 2019.
Other information related to lease terms and discount rates is as follows:
At September 30, 2020At December 31, 2019
Weighted Average Remaining Lease Term (in years):
Operating leases4.212.96
Finance leases3.62— 
Weighted Average Discount Rate:
Operating leases5.25 %5.25 %
Finance leases3.85 %— 
Components of lease expense, which are included in operating expenses, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Operating Lease Cost:
Operating lease cost$1,475 $1,354 $4,212 $3,629 
Variable lease cost $421 $401 $1,333 $1,240 
Finance Lease Cost:
Amortization of ROU assets$47 $— $70 $— 
Interest expense on lease liabilities$$— $$— 
Maturities of lease liabilities are summarized as follows as of September 30, 2020 (in thousands):
Year Ending December 31, Operating LeasesFinance Leases
2020 (excluding the nine months ended September 30, 2020)$1,516 $40 
20216,181 161
20225,501 161
20233,946 161
20242,977 57
Thereafter3,331 — 
Total future minimum lease payments $23,452 $580 
Amount representing interest 2,559 38
Present value of future minimum lease payments$20,893 $542 
Current lease obligations5,402 143
Long-term lease obligations$15,491 $399 
Lessor
We generate lease revenues primarily from our gaming operations activities, with a majority of our leases being month-to-month relationships. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. The cost of property and equipment the Company is leasing to third-parties as of September 30, 2020 is approximately $203.2 million, which includes accumulated depreciation of approximately $124.7 million.
We did not have any new sales transactions that qualified for sales-type lease accounting treatment during the three and nine months ended September 30, 2020. We generated lease revenue from sales-type leases in the FinTech segment in the amount of approximately $0.1 million and $2.7 million for the three and nine months ended September 2019, respectively. Our interest income recognized in connection with sales-type leases executed in the prior periods is immaterial.
Supplemental balance sheet information related to our sales-type leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Net investment in sales-type leases — currentTrade and other receivables, net$885 $874 
Net investment in sales-type leases — non-currentOther receivables$640 $1,288 
v3.20.2
BUSINESS COMBINATIONS
9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
BUSINESS COMBINATIONS BUSINESS COMBINATIONS
We had no material acquisitions for the three and nine months ended September 30, 2020.
Atrient, Inc.
On March 8, 2019, we acquired certain assets of Atrient, Inc. (“Atrient” or the “Seller”), a privately held company that develops and distributes hardware and software applications to gaming operators to enhance gaming patron loyalty, pursuant to an asset purchase agreement. Under the terms of the asset purchase agreement, we paid the Seller $20.0 million at the closing of the transaction and an additional $10.0 million during the nine months ended September 30, 2020 with another $10.0 million being due two years following the date of closing. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and were included in accounts payable and accrued expenses as of September 30, 2020 and accounts payable and accrued expenses and other accrued expenses and liabilities as of December 31, 2019.
In addition to the cash payments, we have recorded approximately $9.0 million in contingent consideration liabilities based upon the achievement of certain revenue targets with a maximum payout of up to $10.0 million. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and are remeasured each reporting period. The inputs used to measure the fair value of our liabilities are categorized as Level 3 in the fair value hierarchy. Contingent consideration liabilities as of September 30, 2020 and December 31, 2019 were approximately $9.8 million and $9.4 million, respectively, and were included in accounts payable and accrued expenses and other accrued expenses and liabilities in our Balance Sheets as of September 30, 2020 and December 31, 2019, respectively.
Micro Gaming Technologies, Inc.
On December 24, 2019, we acquired certain assets of Micro Gaming Technologies, Inc. (“MGT”), a privately held company that develops and distributes kiosks and software applications to gaming patrons to enhance patron loyalty, in an asset purchase agreement. The acquired assets consist of existing contracts with gaming operators, technology, and intellectual property intended to allow us to provide gaming operators with self-service patron loyalty functionality delivered through stand-alone kiosk equipment and a marketing platform that manages and delivers gaming operators marketing programs through these patron interfaces. This acquisition further expands our financial technology player loyalty offerings within our FinTech segment. Under the terms of the asset purchase agreement, we paid MGT $15.0 million at the closing of the transaction and per the original agreement, additional $5.0 million was due by April 1, 2020 with a final payment of $5.0 million due two years following the date of closing. In light of the COVID-19 pandemic, we entered into an amendment to the asset purchase agreement allowing us to remit the additional $5.0 million by July 1, 2020, which we paid in June 2020, with a final payment of $5.0 million due by July 1, 2021. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and were included in accounts payable and accrued expenses and other accrued expenses and liabilities as of September 30, 2020 and December 31, 2019 for the current and non-current portions, respectively. The total consideration for this acquisition was approximately $25.0 million. The acquisition did not have a significant impact on our results of operations or financial condition.
The estimates and assumptions incorporated in accounting for the transaction included the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its purchase price accounting. The significant items for which a final fair value has not been determined include, but are not limited to: the valuation and estimated useful lives of intangible assets, contract liabilities, including deferred and unearned revenues, and deferred income taxes. We do not expect our fair value determinations to materially change; however, there may be differences between the amounts recorded at the closing date of the transaction and the final fair value analysis, which we expect to complete no later than the fourth quarter of 2020.
The financial results included in our Statements of Operations for the three and nine months ended September 30, 2020 reflected revenues of approximately $3.1 million and $6.9 million, respectively, attributed to the MGT business. As a result of the integration of the acquired business into our existing player loyalty operations during the current period, presentation of net income contributed by MGT is impracticable. Acquisition-related costs incurred during the three and nine months ended September 30, 2020 were not material.
The unaudited pro forma financial data with respect to the revenue and earnings as if the MGT acquisition occurred on January 1, 2019 would reflect revenues of approximately $138.0 million and $399.0 million for the three and nine months ended September 30, 2019, respectively, and net income of approximately $9.2 million and $20.3 million for the three and nine months ended September 30, 2019, respectively.
v3.20.2
FUNDING AGREEMENTS
9 Months Ended
Sep. 30, 2020
A T M Funding Agreement Disclosure [Abstract]  
FUNDING AGREEMENTS FUNDING AGREEMENTS
We have commercial arrangements with third-party vendors to provide cash for certain of our ATMs. For the use of these funds, we pay a cash usage fee on either the average daily balance of funds utilized multiplied by a contractually defined cash usage rate or the amounts supplied multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Statements of Operations, were approximately $0.7 million and $2.5 million for the three and nine months ended September 30, 2020, respectively, and approximately $1.8 million and $5.5 million for the three and nine months ended September 30, 2019, respectively. We are exposed to interest rate risk to the extent that the applicable rates increase.
Under these agreements, the currency supplied by third-party vendors remains their sole property until the funds are dispensed. As these funds are not our assets, supplied cash is not reflected in our Balance Sheets. The outstanding balances of ATM cash utilized by us from these third parties were approximately $301.6 million and $292.6 million as of September 30, 2020 and December 31, 2019, respectively.
Our primary commercial arrangement, the Contract Cash Solutions Agreement, as amended, is with Wells Fargo, N.A. (“Wells Fargo”). Wells Fargo provides us with cash in the maximum amount of $300 million with the ability to increase the amount by $75 million over a five-day period for holidays, such as the period around New Year’s Day. The term of the agreement expires on June 30, 2022 and will automatically renew for additional one-year periods unless either party provides a 90-day written notice of its intent not to renew.
We are responsible for any losses of cash in the ATMs under this agreement, and we self-insure for this type of risk. There were no material losses for the three and nine months ended September 30, 2020 and 2019.
v3.20.2
TRADE AND OTHER RECEIVABLES
9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
TRADE AND OTHER RECEIVABLES TRADE AND OTHER RECEIVABLES
Trade and other receivables represent short-term credit granted to customers and long-term loans receivable in connection with our Games and FinTech equipment and compliance products. Trade and loans receivable generally do not require collateral. The balance of trade and loans receivable consists of outstanding balances owed to us by gaming establishments. Other receivables include income tax receivables and other miscellaneous receivables.
The balance of trade and other receivables consisted of the following (in thousands):
 At September 30,At December 31,
20202019
Trade and other receivables, net  
Games trade and loans receivable
$42,774 $51,651 
FinTech trade and loans receivable
20,989 23,723 
Contract assets
16,490 15,408 
Insurance settlement receivable(1)
7,650 7,650 
Other receivables
787 3,977 
Net investment in sales-type leases
1,525 2,162 
Total trade and other receivables, net90,215 104,571 
Non-current portion of receivables  
Games trade and loans receivable
(1,769)(1,018)
FinTech trade and loans receivable
(4,264)(7,581)
Contract assets
(7,545)(6,774)
Net investment in sales-type leases
(640)(1,288)
Total non-current portion of receivables(14,218)(16,661)
Total trade and other receivables, current portion$75,997 $87,910 
(1) Refer to “Note 13 — Commitments and Contingencies” for a discussion on the insurance settlement receivable.
Allowance for Credit Losses
As discussed in “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies,” we adopted ASC 326 effective January 1, 2020 using the modified retrospective approach such that the new guidance applies to the reporting periods following the adoption date with prior period presentation not being impacted. The adoption of ASC 326 did not have a material impact on our Financial Statements and did not result in a cumulative-effect adjustment as of the adoption date. Our operations were not significantly impacted, both for short- and long-term accounts receivable, due to the following:
Our FinTech business acts as a merchant of record for settlement transactions for our cash access related customers wherein cash is held by the Company; therefore, we generally have the ability to withhold the necessary funds from customers to satisfy the outstanding receivables associated with equipment, information and other products and services.
Our Games business sells EGMs to gaming establishments on a relatively short-term basis and collections are reasonably certain based on historical experience, financial stability of our customers, and lack of concentration of our receivables. The material portion of long-term loans receivable balance is fully collateralized, and therefore, does not represent a risk of credit loss. The risk of credit loss is further reduced by the fact that both segments generally share the same top customers such that sales made by the Games business to the existing FinTech customers are secured by our ability to withhold the necessary funds through the FinTech revenue arrangements.
We continually evaluate the collectability of outstanding balances and maintain an allowance for credit losses related to our trade and other receivables and notes receivable that have been determined to have a high risk of uncollectability, which represents our best estimates of the current expected credit losses to be incurred in the future. To derive our estimates, we analyze historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness when evaluating the adequacy of our allowance for credit losses. In addition, with respect to our check warranty receivables, we are exposed to risk for the losses associated with warranted items that cannot be collected from patrons issuing these items. We evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the current expected credit losses related to these receivables. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within cash access services cost of revenues in the Statements of Operations.
The activity in our allowance for credit losses for the nine months ended September 30, 2020 and 2019 is as follows (in thousands):
Nine Months Ended September 30,
20202019
Beginning allowance for credit losses$(5,786)$(6,425)
Provision(6,926)(10,010)
Charge-offs and recoveries8,958 10,723 
Ending allowance for credit losses$(3,754)$(5,712)
v3.20.2
INVENTORY
9 Months Ended
Sep. 30, 2020
Inventory Disclosure [Abstract]  
INVENTORY INVENTORYOur inventory primarily consists of component parts as well as work-in-progress and finished goods. The cost of inventory includes cost of materials, labor, overhead and freight, and is accounted for using the first in, first out method. The inventory is stated at the lower of cost or net realizable value.
Inventory consisted of the following (in thousands): 
 At September 30,At December 31,
 20202019
Inventory  
Component parts, net of reserves of $3,426 and $2,007 at September 30, 2020 and December 31, 2019, respectively
$24,175 $24,864 
Work-in-progress
1,481 94 
Finished goods
8,123 1,616 
Total inventory
$33,779 $26,574 
v3.20.2
PREPAID EXPENSES AND OTHER ASSETS
9 Months Ended
Sep. 30, 2020
Prepaid Expense and Other Assets [Abstract]  
PREPAID EXPENSES AND OTHER ASSETS PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets include the balance of prepaid expenses, deposits, debt issuance costs on our Revolving Credit Facility (defined herein), restricted cash, operating lease ROU assets, and other assets. The current portion of these assets is included in prepaid expenses and other current assets and the non-current portion is included in other assets, both of which are contained within the Balance Sheets.
The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands):
 At September 30,At December 31,
 20202019
Prepaid expenses and other current assets  
Prepaid expenses
$11,652 $11,272 
Restricted cash(1)
508 6,639 
Deposits
4,221 8,501 
Other
1,887 1,484 
Total prepaid expenses and other current assets
$18,268 $27,896 
(1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance.
The balance of the non-current portion of other assets consisted of the following (in thousands): 
 At September 30,At December 31,
 20202019
Other assets  
Operating lease ROU assets
$16,479 $12,257 
Prepaid expenses and deposits
5,279 7,378 
Debt issuance costs of revolving credit facility
315 460 
Other
623 244 
Total other assets
$22,696 $20,339 
v3.20.2
PROPERTY AND EQUIPMENT
9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT PROPERTY AND EQUIPMENT
Property and equipment consists of the following (dollars in thousands): 
  At September 30, 2020At December 31, 2019
Useful Life
(Years)
CostAccumulated
Depreciation
Net Book
Value
CostAccumulated
Depreciation
Net Book
Value
Property and equipment       
Rental pool - deployed
2-4
$203,247 $124,697 $78,550 $196,571 $106,888 $89,683 
Rental pool - undeployed
2-4
27,805 20,342 7,463 31,901 22,970 8,931 
FinTech equipment
3-5
31,991 21,826 10,165 29,947 22,114 7,833 
Leasehold and building improvementsLease Term10,924 8,173 2,751 11,815 8,150 3,665 
Machinery, office, and other equipment
2-5
45,458 30,575 14,883 48,860 30,103 18,757 
Total
 $319,425 $205,613 $113,812 $319,094 $190,225 $128,869 
Depreciation expense related to property and equipment totaled approximately $16.2 million and $48.7 million for the three and nine months ended September 30, 2020, respectively. Depreciation expense related to property and equipment totaled approximately $16.0 million and $46.1 million for the three and nine months ended September 30, 2019, respectively.
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS
9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was approximately $681.9 million and $681.6 million at September 30, 2020 and December 31, 2019, respectively. We have the following reporting units: (i) Games; (ii) Cash Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Player Loyalty Sales and Services.
We test our goodwill for impairment on October 1 each year, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We generally conduct the test by utilizing a “Step 1” analysis, which requires a comparison of the carrying amount of each reporting unit to its estimated fair value.
Interim Assessment for Impairment of Goodwill
The impact of COVID-19 and the closure of most casino properties during the second quarter of 2020 qualified as a triggering event and accordingly, we performed a goodwill impairment test during the second quarter of 2020, for which we utilized the “Step 1” approach that required a comparison of the carrying amount of each reporting unit to its estimated fair value.
To estimate the fair value of each reporting unit, we used a combination of an income valuation approach and a market valuation approach. The income valuation approach is based on a discounted cash flow (“DCF”) analysis. This method involves estimating the after-tax net cash flows attributable to a reporting unit and then discounting them to a present value using a risk-adjusted discount rate. Assumptions applied in the DCF to derive our after-tax net cash flows require the use of significant judgment, including, but not limited to: appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The projected cash flows are based on our most recent expectations. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future after-tax net cash flow projections used in the DCF are based on estimates of the weighted average cost of capital (the “WACC”) of market participants relative to each respective reporting unit. The market valuation approach considers comparable market data based on multiples of revenue or earnings before interest, taxes, depreciation and amortization (“EBITDA”). To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded.
In connection with the interim assessment conducted during the second quarter of 2020, we determined that no goodwill impairment adjustments were necessary as a result of the fair value of each reporting unit exceeding its carrying amount. Our Games reporting unit had a carrying amount of approximately $449.0 million as of May 31, 2020, which represented a majority of the total goodwill balance. The fair value of this reporting unit exceeded carrying value by approximately 10% as of May 31, 2020.

As casinos reopened and our business continued to recover in the third quarter of 2020, there were no new triggering events identified that would have an adverse impact on our business; and therefore, no impairment was identified for our goodwill as of September 30, 2020.

As additional facts and circumstances evolve, we continue to observe and assess our reporting units with a specific focus on the Games reporting unit, particularly as a direct consequence of the circumstances surrounding COVID-19. To the extent new information becomes available that may impact our results of operations and financial condition, we expect to revise our projections accordingly as our estimates of future net after-tax cash flows are highly dependent upon certain assumptions, including, but not limited to, the amount and timing of the economic recovery globally, nationally and specifically within the gaming industry. More specifically, we may need to further adjust our assumptions and we may be required to perform either a quantitative or qualitative assessment of our goodwill in future periods given the significant degree of uncertainty with respect to: (i) the timing of reopening, and the subsequent reclosing, of certain casino properties; (ii) regulatory and governmental restrictions; and (iii) the demand from patrons that visit gaming establishments.

Furthermore, the evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future, especially in light of the uncertainty surrounding the COVID-19 pandemic. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation.
Other Intangible Assets
Other intangible assets consist of the following (dollars in thousands): 
  At September 30, 2020At December 31, 2019
Useful Life
(Years)
CostAccumulated
Amortization
Net Book
Value
CostAccumulated
Amortization
Net Book
Value
Other intangible assets       
Contract rights under placement fee agreements
3-7
$60,497 $25,777 $34,720 $58,516 $20,888 $37,628 
Customer contracts
3-14
71,975 53,174 18,801 71,975 49,477 22,498 
Customer relationships
3-7
231,100 121,308 109,792 231,100 105,584 125,516 
Developed technology and software
1-6
309,323 245,942 63,381 314,343 224,274 90,069 
Patents, trademarks, and other
2-18
19,682 17,418 2,264 19,682 16,206 3,476 
Total$692,577 $463,619 $228,958 $695,616 $416,429 $279,187 
Amortization expense related to other intangible assets was approximately $18.7 million and $57.3 million for the three and nine months ended September 30, 2020, respectively. Amortization expense related to other intangible assets was approximately $17.2 million and $51.1 million for the three and nine months ended September 30, 2019, respectively.
We paid approximately $2.1 million and $3.0 million in placement fees for the three and nine months ended September 30, 2020, respectively. The payment for the three and nine months ended September 30, 2020 did not include imputed interest. We paid approximately $5.6 million and $17.7 million in placement fees, including $0.1 million and $0.6 million of imputed interest, for the three and nine months ended September 30, 2019, respectively.
During the three months ended September 30, 2020, there were no material write-downs of intangible assets. During the nine months ended September 30, 2020, we recorded a full write-down of intangible assets of approximately $5.9 million, of which $5.5 million and $0.4 million, related to our Games and Fintech businesses, respectively, for certain of our internally developed and third-party software projects that were not expected to be pursued. This charge was reflected in Operating Expenses of our Statements of Operations.
v3.20.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
9 Months Ended
Sep. 30, 2020
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED EXPENSES ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The following table presents our accounts payable and accrued expenses (in thousands):
 At September 30,At December 31,
 20202019
Accounts payable and accrued expenses  
Trade accounts payable
$58,857 $78,627 
Contract liabilities
34,846 28,510 
Litigation accrual(1)
12,903 14,000 
Contingent consideration and acquisition-related liabilities(2)
24,353 14,902 
Accrued interest
6,419 1,347 
Operating lease liabilities
5,402 5,824 
Payroll and related expenses
14,526 18,058 
Cash access processing and related expenses
2,065 5,511 
Other
3,619 3,893 
Accrued taxes
2,227 1,846 
Placement fees
— 585 
Total accounts payable and accrued expenses
$165,217 $173,103 
(2) Refer to “Note 4 — Business Combinations.
v3.20.2
LONG-TERM DEBT
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
LONG-TERM DEBT LONG-TERM DEBT
The following table summarizes our outstanding indebtedness (dollars in thousands):
 MaturityInterestAt September 30,At December 31,
 DateRate20202019
Long-term debt  
$820 million Term Loan Facility
2024
LIBOR+2.75%
$735,500 $749,000 
$125 million Incremental Term Loan Facility
2024
LIBOR+10.50%
124,688 — 
 $35 million Revolving Credit Facility
2022
LIBOR+4.50%
— — 
Senior Secured Credit Facilities
860,188 749,000 
$375 million 2017 Unsecured Notes
20257.50%285,381 375,000 
Total debt
1,145,569 1,124,000 
Debt issuance costs and discount(17,128)(15,922)
Total debt after debt issuance costs and discount
1,128,441 1,108,078 
Current portion of long-term debt(1,250)— 
Total long-term debt, net of current portion$1,127,191 $1,108,078 
Senior Secured Credit Facilities
Our Senior Secured Credit Facilities consist of: (i) an $820.0 million, seven-year senior secured term loan facility (the “Term Loan Facility”); (ii) a $125.0 million, seven-year senior secured term loan (the “Incremental Term Loan”); and (iii) a $35.0 million, five-year senior secured revolving credit facility (the “Revolving Credit Facility”) provided for under our credit agreement with Everi Payments, as borrower, and Everi Holdings with the lenders party thereto and Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender, letter of credit issuer, sole lead arranger and sole book manager (the “Credit Agreement”).
In March 2020, we completed the full draw down of our available capacity of $35.0 million under the Revolving Credit Facility in order to improve our liquidity and preserve financial flexibility in light of the uncertainty in our industry and the global economy as a result of COVID-19. In accordance with the terms of the Revolving Credit Facility, the proceeds from this borrowing were being used for working capital, general corporate purposes and other permitted uses. On September 14, 2020, we repaid in full the $35.0 million under the Revolving Credit Facility that we had previously drawn at the onset of the global pandemic.
On April 21, 2020, we entered into the Fourth Amendment to our existing Credit Agreement, which among other things: (i) permits the incurrence of incremental equivalent debt subject to a 4.50:1.00 Consolidated Secured Leverage Ratio (as defined in the Credit Agreement) for calculation periods prior to December 31, 2021; and (ii) amends the consolidated secured leverage ratio covenant, including to remove the maximum consolidated secured leverage ratio for the quarters ending June 30, 2020, September 30, 2020 and December 31, 2020 and to change the computation methodology of the consolidated leverage ratio for the quarters ending March 31, 2021, June 30, 2021, and September 30, 2021.
On April 21, 2020 (the “Closing Date”), we entered into a new credit agreement, dated as of April 21, 2020 (the “Incremental Term Loan Credit Agreement”), which provides for a $125.0 million Incremental Term Loan, which is secured on a pari passu basis with the loans under our existing Credit Agreement. The entire amount of the Incremental Term Loan was borrowed on April 21, 2020.
The Incremental Term Loan matures May 9, 2024. The interest rate per annum applicable to the Incremental Term Loan will be, at Everi Payment’s option, the Eurodollar rate plus 10.50% or the base rate plus 9.50%.
Voluntary prepayments of the Incremental Term Loan prior to the two-year anniversary of the Closing Date will be subject to a make-whole premium, and voluntary prepayments for the subsequent six-month period will be subject to a prepayment premium of 1.00% of the principal amount repaid.
The Incremental Term Loan Credit Agreement contains certain covenants that, among other things, limit our ability, and the ability of certain of our subsidiaries, to incur additional indebtedness, sell assets or consolidate or merge with or into other companies, pay dividends or repurchase or redeem capital stock, make certain investments, issue capital stock of subsidiaries, incur liens, prepay, redeem or repurchase subordinated debt, and enter into certain types of transactions with our affiliates. The Incremental Term Loan Credit Agreement also requires us, together with our subsidiaries, to comply with a maximum consolidated secured leverage ratio, except that no such requirement shall apply for the quarters ending September 30, 2020, and December 31, 2020.
In connection with the issuance of the Incremental Term Loan on April 21, 2020, we also issued warrants to Sagard Credit Partners, LP and Sagard Credit Partners (Cayman), LP (collectively, “Sagard”) to acquire 184,670 and 40,330 shares of our common stock with an exercise price equal to $5.37 per share. The warrants were issued in connection with the Incremental Term Loan as further consideration based on the level of participation in the arrangement by Sagard. The warrants expire on the fifth anniversary of the date of issuance. The number of shares issuable pursuant to the warrants and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, recapitalization, mergers and certain other events.
The weighted average interest rate on the Term Loan was 3.82% and 4.02% for the three and nine months ended September 30, 2020, respectively. The weighted average interest rate on the Revolving Credit Facility was 5.50% and 5.52% for the three and nine months ended September 30, 2020, respectively. The weighted average interest rate on the Incremental Term Loan Credit Facility was 11.50% for the three and nine months ended September 30, 2020, respectively.
Senior Unsecured Notes
In December 2017, we issued $375.0 million in aggregate principal amount of 7.50% Senior Unsecured Notes due 2025 (the “2017 Unsecured Notes”) under an indenture (the “2017 Notes Indenture”), dated December 5, 2017, among Everi Payments (as issuer), Everi Holdings and certain of its direct and indirect domestic subsidiaries as guarantors, and Deutsche Bank Trust Company Americas, as trustee. Interest on the 2017 Unsecured Notes accrues at a rate of 7.50% per annum and is payable semi-annually in arrears on each June 15 and December 15 since June 15, 2018.
In January 2020, we completed a partial redemption payment of approximately $84.5 million of aggregate principal with respect to the 2017 Unsecured Notes. In March 2020, we completed an open market repurchase of approximately $5.1 million of aggregate principal with respect to the 2017 Unsecured Notes. The total outstanding balance of the 2017 Unsecured Notes following the redemption and repurchase transactions was approximately $285.4 million. We incurred a loss on extinguishment of debt of approximately $7.5 million, which consisted of a $6.4 million redemption premium related to the satisfaction and redemption of a portion of the 2017 Unsecured Notes, and non-cash charges for the accelerated amortization of the related debt issuance costs of approximately $1.1 million.
Compliance with Debt Covenants
We were in compliance with the covenants and terms of the Senior Secured Credit Facilities and the 2017 Unsecured Notes as of September 30, 2020.
v3.20.2
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
We are involved in various legal proceedings in the ordinary course of our business. While we believe resolution of the claims brought against us, both individually and in the aggregate, will not have a material adverse impact on our financial condition or results of operations, litigation of this nature is inherently unpredictable. Our views on these legal proceedings, including those described below, may change in the future. We intend to vigorously defend against these actions, and ultimately believe we should prevail.
Legal Contingencies
We evaluate matters and record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss may be reasonably estimated. We evaluate legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect: (i) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings, and other relevant events and developments; (ii) the advice and analyses of counsel; and (iii) the assumptions and judgment of management. Legal costs associated with such proceedings are expensed as incurred. Due to the inherent uncertainty of legal proceedings as a result of the procedural, factual, and legal issues involved, the outcomes of our legal contingencies could result in losses in excess of amounts we have accrued.
We accrued approximately $14.0 million for the legal contingencies in connection with Fair and Accurate Credit Transactions Act (“FACTA”)-related matters based on ongoing settlement negotiations with by and among the various plaintiffs described in the FACTA-related matters discussion below and Everi by and on behalf of itself and Everi FinTech. Within the next year we expect to recover approximately $7.7 million of the amount accrued from certain of our insurance providers, for which we recorded an insurance settlement receivable included within trade and other receivables, net on our Balance Sheets, as recovery is deemed to be probable. In addition, we are seeking relief from Peleus Insurance Company pursuant to the provisions of our policy; however, we have not recorded any amounts with respect to this specific insurance carrier as there have been no commitments, settlements or determinations entered into as of the date of this periodic filing.
FACTA-related matters:
Geraldine Donahue, et. al. v. Everi FinTech, et. al. (“Donahue”), is a putative class action matter filed on December 12, 2018, in the Circuit Court of Cook County, Illinois County Division, Chancery Division. The original defendant was dismissed and the Company was substituted as the defendant on April 22, 2019. Plaintiff, on behalf of himself and others similarly situated, alleges that Everi FinTech and the Company (i) have violated certain provisions of FACTA by their failure, as agent to the original defendant, to properly truncate patron credit card numbers when printing cash access receipts as required under FACTA, and (ii) have been unjustly enriched through the charging of service fees for transactions conducted at the original defendant’s facilities. Plaintiff seeks an award of statutory damages, attorney’s fees, and costs. The parties have reached an agreement in principle for settlement of this matter, which will include the settlement and resolution of all the FACTA-related matters pending against the Company and Everi FinTech. In the third quarter of 2020, the court granted preliminary approval of the settlement agreement between the parties, which will include the settlement and resolution of all the FACTA-related matters pending against Everi. The final approval hearing is scheduled for November 30, 2020. The third-party claims administrator began contacting potential claimants via electronic and regular mail as of September 1, 2020. The objection date is October 19, 2020 and claims forms must be postmarked by February 1, 2021.
Oneeb Rehman, et. al. v. Everi FinTech and Everi Holdings, was a putative class action matter pending in the U.S. District Court for the Southern District of Florida, Ft. Lauderdale Division filed on October 16, 2018. The original defendant was dismissed and the Company was substituted as the defendant on April 22, 2019. Plaintiff, on behalf of himself and others similarly situated, alleged that Everi FinTech and the Company (i) had violated certain provisions of FACTA by their failure, as agent to the original defendant, to properly truncate patron credit card numbers when printing cash access receipts as required under FACTA, and (ii) had been unjustly enriched through the charging of service fees for transactions conducted at the original defendant’s facilities. Plaintiff sought an award of statutory damages, attorney’s fees, and costs. This matter has been dismissed in anticipation of court approval of the settlement in Donahue.
Mat Jessop, et. al. v. Penn National Gaming, Inc., was a putative class action matter filed on October 15, 2018, pending in the U.S. District Court for the Middle District of Florida, Orlando Division. Everi FinTech was added as a defendant on December 21, 2018. Penn National Gaming, Inc. (“Penn National”) was dismissed by the Court with prejudice on October 28, 2019, leaving only claims against Everi FinTech. Plaintiff, on behalf of himself and others similarly situated, alleged that Everi FinTech had been unjustly enriched through the charging of service fees for transactions conducted at Penn National facilities. Plaintiff sought injunctive relief against both parties, and an award of statutory damages, attorney’s fees, and costs. This matter has been dismissed in anticipation of court approval of the settlement in Donahue.
Everi Payments Inc. and Everi Holdings Inc. v Peleus Insurance Company is a civil action filed by the Company on January 28, 2020, pending in the District Court, Clark County, Nevada alleging defendant breached its contractual obligations under an excess insurance policy when it denied the Company coverage of the FACTA-related matters described above. Everi FinTech and the Company are seeking actual and consequential damages for breach of contract, costs, attorney’s fees, and other fees and expenses incurred by Everi FinTech and the Company, up to and including amounts related to the settlement in Donahue.
NRT matter:
NRT Technology Corp., et. al. v. Everi Holdings Inc., et. al., is a civil action filed on April 30, 2019 against the Company and Everi FinTech in the United States District Court for the District of Delaware by NRT Technology Corp. and NRT Technology, Inc., alleging monopolization of the market for unmanned, integrated kiosks in violation of federal antitrust laws, fraudulent procurement of patents on functionality related to such unmanned, integrated kiosks and sham litigation related to prior litigation brought by Everi FinTech (operating as Global Cash Access Inc.) against the plaintiff entities. Plaintiffs seek compensatory damages, trebled damages, and injunctive and declaratory relief. We are currently unable to determine the probability of the outcome of this legal matter or estimate the range of reasonably possible loss, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them.
In addition, we have commitments with respect to certain lease obligations discussed in “Note 3 — Leases” and installment payments under our asset purchase agreements discussed in “Note 4 — Business Combinations.”
v3.20.2
STOCKHOLDERS' (DEFICIT) EQUITY
9 Months Ended
Sep. 30, 2020
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' (DEFICIT) EQUITY STOCKHOLDERS’ (DEFICIT) EQUITYIn February 2020, our Board of Directors authorized and approved a new share repurchase program granting us the authority to repurchase an amount not to exceed $10.0 million of outstanding Company common stock with no minimum number of shares that the Company is required to repurchase. This new repurchase program commenced in the first quarter of 2020 and authorizes us to buy our common stock from time to time in open market transactions, block trades or in private transactions in accordance with trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of such methods, including compliance with the Company’s finance agreements. The share repurchase program is subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors, and may be suspended or discontinued at any time without prior notice. In light of COVID-19, we have suspended our share repurchase program. There were no share repurchases during the three and nine months ended September 30, 2020.
v3.20.2
WEIGHTED AVERAGE COMMON SHARES
9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
WEIGHTED AVERAGE COMMON SHARES WEIGHTED AVERAGE COMMON SHARES
The weighted average number of shares of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): 
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Weighted average shares  
Weighted average number of common shares outstanding - basic85,556 72,251 85,102 71,361 
Potential dilution from equity awards(1)
— 6,874 — 6,493 
Weighted average number of common shares outstanding - diluted(1)
85,556 79,125 85,102 77,854 
(1)  We were in a net loss position for the three and nine months ended September 30, 2020; and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to purchase approximately 7.3 million and 6.5 million shares of common stock for the three and nine months ended September 30, 2020, respectively, as the application of the treasury stock method, as required, makes them anti-dilutive. The potential dilution excludes the weighted average effect of equity awards to purchase approximately 0.2 million and 1.7 million shares of common stock for the three and nine months ended September 30, 2019, respectively, as the application of the treasury stock method, as required, makes them anti-dilutive.
v3.20.2
SHARE-BASED COMPENSATION
9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION SHARE-BASED COMPENSATION
Equity Incentive Awards
Generally, we grant the following types of awards: (i) time-based options; (ii) market-based options; (iii) time-based restricted stock units (“RSUs”); and (iv) performance-based stock units (“PSUs”).
A summary of award activity is as follows (in thousands): 
Stock Options GrantedRestricted Stock Units Granted
Outstanding, December 31, 201911,969 3,451 
Granted— 2,183 
Exercised options or vested shares(734)(852)
Canceled or forfeited(146)(192)
Outstanding, September 30, 202011,089 4,590 
There are approximately 0.5 million awards of our common stock available for future equity grants under our existing equity incentive plans.
Stock Options
Our time-based stock options granted under our equity plans generally vest evenly over a four-year period on each of the applicable anniversaries of the grant dates, and typically expire after a ten-year period. Our market-based options granted generally vest evenly over a four-year period on each of the applicable anniversaries of the grant date, provided that as of the vesting date for each vesting tranche, the closing price of our shares on the New York Stock Exchange is at least a specified price hurdle, defined as a percentage premium to the closing stock price on the grant date. If the price hurdle is not met as of the vesting date for a vesting tranche, then it shall vest and become vested shares on the last day of a period of 30 consecutive trading days during which the closing price is at least the price hurdle. These options typically expire after a ten-year period.
The following table presents the options activity for the nine months ended September 30, 2020:
Number of
Options
(in thousands)
Weighted Average
Exercise Price
(per Share)
Weighted
Average Life
Remaining
(Years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding, December 31, 201911,969 $5.06 5.5$100,143 
Granted—  
Exercised(734)$4.78  
Canceled or forfeited(146)$5.42  
Outstanding, September 30, 202011,089 $5.08 4.8$36,542 
Vested and expected to vest, September 30, 202011,045 $5.08 4.8$36,340 
Exercisable, September 30, 202010,159 $5.20 4.6$32,362 
There were no option awards granted during the three and nine months ended September 30, 2020 and 2019. The total intrinsic value of options exercised was approximately $0.6 million and $2.3 million for the three and nine months ended September 30, 2020, respectively, and $1.3 million and $8.8 million for the three and nine months ended September 30, 2019, respectively.
There was approximately $0.6 million in unrecognized compensation expense related to options expected to vest as of September 30, 2020. This cost was expected to be recognized on a straight-line basis over a weighted average period of 0.5 years. We recorded approximately $1.2 million in non-cash compensation expense related to options granted that were expected to vest for the nine months ended September 30, 2020. We received approximately $1.4 million and $3.5 million in cash from the exercise of options for the three and nine months ended September 30, 2020, respectively.
There was approximately $1.8 million in unrecognized compensation expense related to options expected to vest as of September 30, 2019. This cost was expected to be recognized on a straight-line basis over a weighted average period of 1.3 years. We recorded approximately $2.1 million in non-cash compensation expense related to options granted that were expected to vest for the nine months ended September 30, 2019. We received approximately $1.8 million and $11.3 million in cash from the exercise of options for the three and nine months ended September 30, 2019.
Restricted Stock Units
The fair value of each RSU grant is based on the market value of our common stock at the date of grant. The RSUs generally vest evenly either over a three- or four-year period on each of the applicable anniversaries of the dates of grants. The PSUs vest upon achievement of stipulated performance criteria.
The following table presents our RSU awards activity for the nine months ended September 30, 2020:
Shares
Outstanding
(in thousands)
Weighted
Average Grant
Date Fair Value
(per share)
Weighted
Average Life
Remaining
(years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding, December 31, 20193,451 $9.05 1.7$46,342 
Granted2,183 $6.08   
Vested(852)$8.39   
Forfeited(192)$9.32   
Outstanding, September 30, 20204,590 $7.75 1.4$37,855 
Vested and expected to vest, September 30, 20203,765 $7.58 1.4$31,064 
There were approximately 2.2 million and 2.0 million shares of RSU awards granted for the nine months ended September 30, 2020 and 2019, respectively. There were approximately 852,469 and 287,929 RSU awards that vested during the nine months ended September 30, 2020 and 2019, respectively.
There was approximately $18.1 million and $15.3 million in unrecognized compensation expense related to RSU awards expected to vest as of September 30, 2020 and 2019, respectively. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.0 and 2.7 years as of September 30, 2020 and 2019, respectively. We recorded approximately $8.9 million and $4.0 million in non-cash compensation expense related to the RSU awards during the nine months ended September 30, 2020 and 2019, respectively.
v3.20.2
INCOME TAXES
9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The income tax provision for the three months ended September 30, 2020, reflected an effective income tax rate of 205.4%, which was greater than the statutory federal rate of 21.0%, primarily due to an increase in our valuation allowance as a result of a reduction of certain indefinite-lived deferred tax assets that can be offset against our indefinite-lived deferred tax liabilities. The income tax benefit for the nine months ended September 30, 2020 reflected an effective income tax rate of 4.0%, which was less than the statutory federal rate of 21.0%, primarily due to an increase in our valuation allowance due to book loss incurred during the period, partially offset by certain indefinite-lived deferred tax assets that can be offset against our indefinite lived deferred tax liabilities. The income tax benefit for the three and nine months ended September 30, 2019 reflected an effective income tax rate of negative 16.5% and negative 15.3%, respectively, which was less than the statutory federal rate of 21.0%, primarily due to a decrease in our valuation allowance for deferred tax assets, the benefit from stock option exercises and the benefit from a research credit.
We have analyzed filing positions in all of the federal, state, and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As of September 30, 2020, we recorded approximately $1.4 million of unrecognized tax benefits, all of which would impact our effective tax rate, if recognized. We do not anticipate that our unrecognized tax benefits will materially change within the next 12 months. We have not accrued any penalties and interest for our unrecognized tax benefits. We may, from time to time, be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax in our Statements of Operations.
For interim income tax reporting, the Company estimates its annual effective tax rate and applies it to its year-to-date ordinary income. Our projection of certain indefinite lived deferred tax assets affecting the valuation allowance is particularly dependent upon current and anticipated future revenue and cash outflows. However, we could be impacted by unanticipated developments or by events beyond our control, including developments related to the COVID-19 pandemic. Future changes to estimates used in this projection could result in material changes in the annual effective tax rate with a corresponding impact on the provision for income taxes.
As discussed in “Note 1 — Business,” in late March 2020, the CARES Act was enacted in light of the COVID-19 pandemic. We are participating in certain of the relief measures provided by various income and payroll tax provisions in the CARES Act and we are continuing to analyze its impact on our tax related accounts.
v3.20.2
SEGMENT INFORMATION
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group (the “CODM”). Our CODM consists of the Chief Executive Officer, the President and Chief Operating Officer, and the Chief Financial Officer. Our CODM allocates resources and measures profitability based on our operating segments, which are managed and reviewed separately, as each represents products and services that can be sold separately to our customers. Our segments are monitored by management for performance against our internal forecasts.
We have reported our financial performance based on our segments in both the current and prior periods. Our CODM determined that our operating segments for conducting business are: (i) Games and (ii) FinTech:
The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment- related experiences including: leased gaming equipment; sales of gaming equipment; gaming systems; digital online solutions; and ancillary products and services.
The FinTech segment provides solutions directly to gaming establishments to offer their patrons cash access-related services and products, including: access to cash and cashless funding at gaming facilities via debit withdrawals (cash dispensing and cashless); credit card cash access transactions and POS debit card cash access transactions; check warranty services; kiosks for cash access and other services; self-service enrollment, player loyalty and marketing equipment; maintenance services; compliance, audit, and data software; casino credit data and reporting services; and other ancillary offerings.
Corporate overhead expenses have been allocated to the segments either through specific identification or based on a reasonable methodology. In addition, we record depreciation and amortization expenses to the business segments.
Our business is predominantly domestic with no specific regional concentrations and no significant assets in foreign locations.
The following tables present segment information (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Games  
Revenues  
Gaming operations$46,968 $48,515 $106,513 $138,377 
Gaming equipment and systems10,229 19,584 28,795 66,083 
Gaming other44 1,174 76 1,619 
Total revenues$57,241 $69,273 $135,384 $206,079 
Costs and expenses  
Cost of revenues(1)
  
Gaming operations4,245 4,942 10,471 12,792 
Gaming equipment and systems5,730 11,126 16,625 37,087 
Gaming other— 1,117 456 1,464 
Cost of revenues9,975 17,185 27,552 51,343 
Operating expenses13,078 13,968 50,597 44,599 
Research and development5,003 6,369 14,819 17,481 
Depreciation14,777 14,420 44,349 41,283 
Amortization14,838 14,258 45,738 42,644 
Total costs and expenses57,671 66,200 183,055 197,350 
Operating (loss) income$(430)$3,073 $(47,671)$8,729 
(1) Exclusive of depreciation and amortization.
* Rounding may cause variances.
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
FinTech  
Revenues  
Cash access services$33,979 $43,152 $80,986 $123,680 
Equipment6,248 10,188 16,004 25,051 
Information services and other14,630 11,956 31,748 33,240 
Total revenues$54,857 $65,296 $128,738 $181,971 
Costs and expenses  
Cost of revenues(1)
  
Cash access services1,161 4,112 5,227 9,777 
Equipment3,548 5,957 9,452 14,884 
Information services and other859 1,024 2,057 2,952 
Cost of revenues5,568 11,093 16,736 27,613 
Operating expenses21,850 23,663 64,831 66,847 
Research and development2,030 1,827 6,138 4,918 
Depreciation1,387 1,595 4,352 4,779 
Amortization3,855 2,898 11,574 8,499 
Total costs and expenses34,690 41,076 103,631 112,656 
Operating income$20,167 $24,220 $25,107 $69,315 
(1)  Exclusive of depreciation and amortization.
* Rounding may cause variances.
 At September 30,At December 31,
 20202019
Total assets  
Games$837,357 $902,888 
FinTech620,847 726,335 
Total assets$1,458,204 $1,629,223 
Major Customers. No single customer accounted for more than 10% of our revenues for the three and nine months ended September 30, 2020 and 2019. Our five largest customers accounted for approximately 17% and 16% of our revenues for the three and nine months ended September 30, 2020, respectively, and approximately 15% of our revenues for the three and nine months ended September 30, 2019, respectively.
v3.20.2
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTSAs of the filing date, we had not identified, and were not aware of, any subsequent event for the period.
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2019 Annual Report.
Overall - Revenue Recognition
Revenue Recognition
Overview
We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjust it, as necessary.
Disaggregation of Revenues
We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.”
Contract Balances
Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of cash collections differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections.
The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands):
Nine Months Ended September 30,
20202019
Contract assets(1)
Balance at January 1 — current$8,634 $6,821 
Balance at January 1 — non-current6,774 4,489 
Total
15,408 11,310 
Balance at September 30 - current8,945 8,037 
Balance at September 30 - non-current7,545 4,049 
Total
16,490 12,086 
         Increase $1,082 $776 
Contract liabilities(2)
Balance at January 1 — current$28,510 $14,661 
Balance at January 1 — non-current354 809 
Total
28,864 15,470 
Balance at September 30 - current34,846 28,827 
Balance at September 30 - non-current32 798 
Total
34,878 29,625 
Increase
$6,014 $14,155 
(1)  The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables, net in our Balance Sheets.
(2)  The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets.
We recognized approximately $19.3 million and $10.7 million in revenue that was included in the beginning contract liability balance during the nine months ended September 30, 2020 and 2019, respectively.
Games Revenues
Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B and B2C digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other.
We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $35.9 million and $80.3 million for the three and nine months ended September 30, 2020, respectively and $36.6 million and $104.3 million for the three and nine months ended September 30, 2019, respectively.
FinTech Revenues
Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with cash access-related services, self-service player loyalty and marketing tools, and other information and regulatory compliance-related products and services. These solutions include: access to cash and cashless funding at gaming facilities via debit withdrawals (cash dispensing and cashless), credit card cash access transactions, and POS debit card purchase and cash access transactions; check warranty services; self-service ATMs and fully integrated kiosks and maintenance services; self-service player loyalty enrollment and marketing equipment, including promotion management software and tools; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Cash Access Services; (ii) Equipment; and (iii) Information Services and Other.
Equipment revenues are derived from the sale of our cash access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any new cash access kiosk and related equipment sales contracts accounted for under ASC 842 during the three and nine months ended September 30, 2020. Sales contracts accounted for under ASC 842 were approximately $0.1 million and $2.7 million for the three and nine months ended September 30, 2019, respectively.
Restricted Cash Restricted CashOur restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) deposits held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) Internet-related cash access activities
Goodwill
Goodwill

Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded.

The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation.
Our reporting units are identified as operating segments or one level below. Reporting units must: (i) engage in business activities from which they earn revenues and incur expenses; (ii) have operating results that are regularly reviewed by our segment management to ascertain the resources to be allocated to the segment and assess its performance; and (iii) have discrete financial information available.
Fair Values of Financial Instruments
Fair Values of Financial Instruments
The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument.
The carrying amount of cash and cash equivalents, restricted cash, settlement receivables, short-term trade and other receivables, settlement liabilities, accounts payable, and accrued expenses approximate fair value due to the short-term maturities of these instruments. The fair value of the long-term trade and loans receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value of the long-term accounts payable is estimated by discounting the total obligation using the appropriate interest rate.
Recent Accounting Guidance Recently Adopted Accounting Guidance
StandardDescriptionDate of AdoptionEffect on Financial Statements
Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments
This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.January 1, 2020
This guidance primarily impacts our trade and other receivables, including those related to revenues from contracts with customers that may contain contract assets with respect to performance obligations that are satisfied for which the customers have not yet been invoiced. We adopted this guidance using the modified retrospective method. The adoption of ASC 326 did not have a material effect on our Financial Statements and did not result in a cumulative-effect adjustment. Refer to “Note 6 — Trade and Other Receivables” for further discussion.
ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).January 1, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”).
March 12, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
Recent Accounting Guidance Not Yet Adopted
StandardDescriptionDate of Planned AdoptionEffect on Financial Statements
ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740.January 1, 2021We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material.
We do not anticipate recently issued accounting guidance to have a significant impact on our Financial Statements as of September 30, 2020.
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Contract Asset and Liability
The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands):
Nine Months Ended September 30,
20202019
Contract assets(1)
Balance at January 1 — current$8,634 $6,821 
Balance at January 1 — non-current6,774 4,489 
Total
15,408 11,310 
Balance at September 30 - current8,945 8,037 
Balance at September 30 - non-current7,545 4,049 
Total
16,490 12,086 
         Increase $1,082 $776 
Contract liabilities(2)
Balance at January 1 — current$28,510 $14,661 
Balance at January 1 — non-current354 809 
Total
28,864 15,470 
Balance at September 30 - current34,846 28,827 
Balance at September 30 - non-current32 798 
Total
34,878 29,625 
Increase
$6,014 $14,155 
(1)  The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables, net in our Balance Sheets.
(2)  The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets.
Reconciliation of Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the nine months ended September 30, 2020 (in thousands).
Classification on our Balance Sheets
At September 30, 2020At December 31, 2019
Cash and cash equivalentsCash and cash equivalents$235,407 $289,870 
Restricted cash - currentPrepaid expenses and other current assets508 6,639 
Restricted cash - non-currentOther assets101 101 
Total
$236,016 $296,610 
Reconciliation of Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the nine months ended September 30, 2020 (in thousands).
Classification on our Balance Sheets
At September 30, 2020At December 31, 2019
Cash and cash equivalentsCash and cash equivalents$235,407 $289,870 
Restricted cash - currentPrepaid expenses and other current assets508 6,639 
Restricted cash - non-currentOther assets101 101 
Total
$236,016 $296,610 
Estimated fair value and outstanding balances of borrowings The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands):
 Level of HierarchyFair ValueOutstanding Balance
September 30, 2020   
Term loan2$715,127 $735,500 
Incremental term loan2$127,805 $124,688 
Senior unsecured notes2$279,673 $285,381 
December 31, 2019   
Term loan2$753,494 $749,000 
Senior unsecured notes2$401,738 $375,000 
Summary of Recent Accounting Guidance Recently Adopted Accounting Guidance
StandardDescriptionDate of AdoptionEffect on Financial Statements
Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments
This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.January 1, 2020
This guidance primarily impacts our trade and other receivables, including those related to revenues from contracts with customers that may contain contract assets with respect to performance obligations that are satisfied for which the customers have not yet been invoiced. We adopted this guidance using the modified retrospective method. The adoption of ASC 326 did not have a material effect on our Financial Statements and did not result in a cumulative-effect adjustment. Refer to “Note 6 — Trade and Other Receivables” for further discussion.
ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).January 1, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”).
March 12, 2020The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures.
Recent Accounting Guidance Not Yet Adopted
StandardDescriptionDate of Planned AdoptionEffect on Financial Statements
ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740.January 1, 2021We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material.
v3.20.2
LEASES - (Tables)
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Balance Sheet Information
Supplemental balance sheet information related to our operating leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Operating lease ROU assetsOther assets, non-current$16,479 $12,257 
Finance lease ROU assets(2)
Other assets, non-current$522 $— 
Liabilities(1)
Current operating lease liabilitiesAccounts payable and accrued expenses$5,402 $5,824 
Current finance lease liabilitiesAccounts payable and accrued expenses$143 $— 
Non-current operating lease liabilitiesOther accrued expenses and liabilities$15,491 $9,628 
Non-current finance lease liabilitiesOther accrued expenses and liabilities$399 $— 
(1) The amount of operating lease liabilities recorded on our Balance Sheets upon the adoption of ASC 842 on January 1, 2019 was approximately $18.0 million.
(2) Presented net of accumulated depreciation.
Cash Flow Information
Supplemental cash flow information related to leases is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Cash paid for:
Long- and short-term operating leases$2,076 $1,869 $6,325 $5,602 
Finance leases$39 $— $44 $— 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases(1)
$7,594 $— $8,454 $14,595 
(2)
Finance leases(1)
$310 $— $592 $— 
(1) The amounts are presented net of current year terminations and exclude amortization for the period.
(2) The amount includes approximately $13.7 million of operating lease ROU assets obtained in exchange for existing lease obligations due to the adoption of ASC 842 and $0.9 million of operating lease ROU assets obtained in exchange for new lease obligations entered into during the nine months ended September 30, 2019.
Lease Costs
Other information related to lease terms and discount rates is as follows:
At September 30, 2020At December 31, 2019
Weighted Average Remaining Lease Term (in years):
Operating leases4.212.96
Finance leases3.62— 
Weighted Average Discount Rate:
Operating leases5.25 %5.25 %
Finance leases3.85 %— 
Components of lease expense, which are included in operating expenses, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Operating Lease Cost:
Operating lease cost$1,475 $1,354 $4,212 $3,629 
Variable lease cost $421 $401 $1,333 $1,240 
Finance Lease Cost:
Amortization of ROU assets$47 $— $70 $— 
Interest expense on lease liabilities$$— $$— 
Payments Due
Maturities of lease liabilities are summarized as follows as of September 30, 2020 (in thousands):
Year Ending December 31, Operating LeasesFinance Leases
2020 (excluding the nine months ended September 30, 2020)$1,516 $40 
20216,181 161
20225,501 161
20233,946 161
20242,977 57
Thereafter3,331 — 
Total future minimum lease payments $23,452 $580 
Amount representing interest 2,559 38
Present value of future minimum lease payments$20,893 $542 
Current lease obligations5,402 143
Long-term lease obligations$15,491 $399 
Sales-type lease
Supplemental balance sheet information related to our sales-type leases is as follows (in thousands):
Classification on our Balance SheetsAt September 30, 2020At December 31, 2019
Assets
Net investment in sales-type leases — currentTrade and other receivables, net$885 $874 
Net investment in sales-type leases — non-currentOther receivables$640 $1,288 
v3.20.2
TRADE AND OTHER RECEIVABLES - (Tables)
9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Schedule of components of trade and other receivables
The balance of trade and other receivables consisted of the following (in thousands):
 At September 30,At December 31,
20202019
Trade and other receivables, net  
Games trade and loans receivable
$42,774 $51,651 
FinTech trade and loans receivable
20,989 23,723 
Contract assets
16,490 15,408 
Insurance settlement receivable(1)
7,650 7,650 
Other receivables
787 3,977 
Net investment in sales-type leases
1,525 2,162 
Total trade and other receivables, net90,215 104,571 
Non-current portion of receivables  
Games trade and loans receivable
(1,769)(1,018)
FinTech trade and loans receivable
(4,264)(7,581)
Contract assets
(7,545)(6,774)
Net investment in sales-type leases
(640)(1,288)
Total non-current portion of receivables(14,218)(16,661)
Total trade and other receivables, current portion$75,997 $87,910 
(1) Refer to “Note 13 — Commitments and Contingencies” for a discussion on the insurance settlement receivable.
Activity in Allowance for Credit Losses
The activity in our allowance for credit losses for the nine months ended September 30, 2020 and 2019 is as follows (in thousands):
Nine Months Ended September 30,
20202019
Beginning allowance for credit losses$(5,786)$(6,425)
Provision(6,926)(10,010)
Charge-offs and recoveries8,958 10,723 
Ending allowance for credit losses$(3,754)$(5,712)
v3.20.2
INVENTORY - (Tables)
9 Months Ended
Sep. 30, 2020
Inventory Disclosure [Abstract]  
Schedule of components of inventory
Inventory consisted of the following (in thousands): 
 At September 30,At December 31,
 20202019
Inventory  
Component parts, net of reserves of $3,426 and $2,007 at September 30, 2020 and December 31, 2019, respectively
$24,175 $24,864 
Work-in-progress
1,481 94 
Finished goods
8,123 1,616 
Total inventory
$33,779 $26,574 
v3.20.2
PREPAID EXPENSES AND OTHER ASSETS - (Tables)
9 Months Ended
Sep. 30, 2020
Prepaid Expense and Other Assets [Abstract]  
Schedule of components of current portion of prepaid and other assets
The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands):
 At September 30,At December 31,
 20202019
Prepaid expenses and other current assets  
Prepaid expenses
$11,652 $11,272 
Restricted cash(1)
508 6,639 
Deposits
4,221 8,501 
Other
1,887 1,484 
Total prepaid expenses and other current assets
$18,268 $27,896 
(1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance.
Schedule of components of non-current portion of prepaid and other assets
The balance of the non-current portion of other assets consisted of the following (in thousands): 
 At September 30,At December 31,
 20202019
Other assets  
Operating lease ROU assets
$16,479 $12,257 
Prepaid expenses and deposits
5,279 7,378 
Debt issuance costs of revolving credit facility
315 460 
Other
623 244 
Total other assets
$22,696 $20,339 
v3.20.2
PROPERTY AND EQUIPMENT - (Tables)
9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
Schedule of components of property, equipment and leased assets
Property and equipment consists of the following (dollars in thousands): 
  At September 30, 2020At December 31, 2019
Useful Life
(Years)
CostAccumulated
Depreciation
Net Book
Value
CostAccumulated
Depreciation
Net Book
Value
Property and equipment       
Rental pool - deployed
2-4
$203,247 $124,697 $78,550 $196,571 $106,888 $89,683 
Rental pool - undeployed
2-4
27,805 20,342 7,463 31,901 22,970 8,931 
FinTech equipment
3-5
31,991 21,826 10,165 29,947 22,114 7,833 
Leasehold and building improvementsLease Term10,924 8,173 2,751 11,815 8,150 3,665 
Machinery, office, and other equipment
2-5
45,458 30,575 14,883 48,860 30,103 18,757 
Total
 $319,425 $205,613 $113,812 $319,094 $190,225 $128,869 
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS - (Tables)
9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of other intangible assets
Other intangible assets consist of the following (dollars in thousands): 
  At September 30, 2020At December 31, 2019
Useful Life
(Years)
CostAccumulated
Amortization
Net Book
Value
CostAccumulated
Amortization
Net Book
Value
Other intangible assets       
Contract rights under placement fee agreements
3-7
$60,497 $25,777 $34,720 $58,516 $20,888 $37,628 
Customer contracts
3-14
71,975 53,174 18,801 71,975 49,477 22,498 
Customer relationships
3-7
231,100 121,308 109,792 231,100 105,584 125,516 
Developed technology and software
1-6
309,323 245,942 63,381 314,343 224,274 90,069 
Patents, trademarks, and other
2-18
19,682 17,418 2,264 19,682 16,206 3,476 
Total$692,577 $463,619 $228,958 $695,616 $416,429 $279,187 
v3.20.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - (Tables)
9 Months Ended
Sep. 30, 2020
Payables and Accruals [Abstract]  
Schedule of accounts payable and accrued expenses
The following table presents our accounts payable and accrued expenses (in thousands):
 At September 30,At December 31,
 20202019
Accounts payable and accrued expenses  
Trade accounts payable
$58,857 $78,627 
Contract liabilities
34,846 28,510 
Litigation accrual(1)
12,903 14,000 
Contingent consideration and acquisition-related liabilities(2)
24,353 14,902 
Accrued interest
6,419 1,347 
Operating lease liabilities
5,402 5,824 
Payroll and related expenses
14,526 18,058 
Cash access processing and related expenses
2,065 5,511 
Other
3,619 3,893 
Accrued taxes
2,227 1,846 
Placement fees
— 585 
Total accounts payable and accrued expenses
$165,217 $173,103 
(2) Refer to “Note 4 — Business Combinations.
v3.20.2
LONG-TERM DEBT - (Tables)
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Schedule of outstanding indebtedness
The following table summarizes our outstanding indebtedness (dollars in thousands):
 MaturityInterestAt September 30,At December 31,
 DateRate20202019
Long-term debt  
$820 million Term Loan Facility
2024
LIBOR+2.75%
$735,500 $749,000 
$125 million Incremental Term Loan Facility
2024
LIBOR+10.50%
124,688 — 
 $35 million Revolving Credit Facility
2022
LIBOR+4.50%
— — 
Senior Secured Credit Facilities
860,188 749,000 
$375 million 2017 Unsecured Notes
20257.50%285,381 375,000 
Total debt
1,145,569 1,124,000 
Debt issuance costs and discount(17,128)(15,922)
Total debt after debt issuance costs and discount
1,128,441 1,108,078 
Current portion of long-term debt(1,250)— 
Total long-term debt, net of current portion$1,127,191 $1,108,078 
v3.20.2
WEIGHTED AVERAGE COMMON SHARES - (Tables)
9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Schedule of weighted average number of common shares outstanding used in computation of basic and diluted earnings per share
The weighted average number of shares of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): 
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Weighted average shares  
Weighted average number of common shares outstanding - basic85,556 72,251 85,102 71,361 
Potential dilution from equity awards(1)
— 6,874 — 6,493 
Weighted average number of common shares outstanding - diluted(1)
85,556 79,125 85,102 77,854 
(1)  We were in a net loss position for the three and nine months ended September 30, 2020; and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to purchase approximately 7.3 million and 6.5 million shares of common stock for the three and nine months ended September 30, 2020, respectively, as the application of the treasury stock method, as required, makes them anti-dilutive. The potential dilution excludes the weighted average effect of equity awards to purchase approximately 0.2 million and 1.7 million shares of common stock for the three and nine months ended September 30, 2019, respectively, as the application of the treasury stock method, as required, makes them anti-dilutive.
v3.20.2
SHARE-BASED COMPENSATION - (Tables)
9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Summary of award activity
A summary of award activity is as follows (in thousands): 
Stock Options GrantedRestricted Stock Units Granted
Outstanding, December 31, 201911,969 3,451 
Granted— 2,183 
Exercised options or vested shares(734)(852)
Canceled or forfeited(146)(192)
Outstanding, September 30, 202011,089 4,590 
Summary of options activity
The following table presents the options activity for the nine months ended September 30, 2020:
Number of
Options
(in thousands)
Weighted Average
Exercise Price
(per Share)
Weighted
Average Life
Remaining
(Years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding, December 31, 201911,969 $5.06 5.5$100,143 
Granted—  
Exercised(734)$4.78  
Canceled or forfeited(146)$5.42  
Outstanding, September 30, 202011,089 $5.08 4.8$36,542 
Vested and expected to vest, September 30, 202011,045 $5.08 4.8$36,340 
Exercisable, September 30, 202010,159 $5.20 4.6$32,362 
Nonvested Restricted Stock Units Activity Table Text Block
The following table presents our RSU awards activity for the nine months ended September 30, 2020:
Shares
Outstanding
(in thousands)
Weighted
Average Grant
Date Fair Value
(per share)
Weighted
Average Life
Remaining
(years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding, December 31, 20193,451 $9.05 1.7$46,342 
Granted2,183 $6.08   
Vested(852)$8.39   
Forfeited(192)$9.32   
Outstanding, September 30, 20204,590 $7.75 1.4$37,855 
Vested and expected to vest, September 30, 20203,765 $7.58 1.4$31,064 
v3.20.2
SEGMENT INFORMATION - (Tables)
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Schedule of segment information
The following tables present segment information (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Games  
Revenues  
Gaming operations$46,968 $48,515 $106,513 $138,377 
Gaming equipment and systems10,229 19,584 28,795 66,083 
Gaming other44 1,174 76 1,619 
Total revenues$57,241 $69,273 $135,384 $206,079 
Costs and expenses  
Cost of revenues(1)
  
Gaming operations4,245 4,942 10,471 12,792 
Gaming equipment and systems5,730 11,126 16,625 37,087 
Gaming other— 1,117 456 1,464 
Cost of revenues9,975 17,185 27,552 51,343 
Operating expenses13,078 13,968 50,597 44,599 
Research and development5,003 6,369 14,819 17,481 
Depreciation14,777 14,420 44,349 41,283 
Amortization14,838 14,258 45,738 42,644 
Total costs and expenses57,671 66,200 183,055 197,350 
Operating (loss) income$(430)$3,073 $(47,671)$8,729 
(1) Exclusive of depreciation and amortization.
* Rounding may cause variances.
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
FinTech  
Revenues  
Cash access services$33,979 $43,152 $80,986 $123,680 
Equipment6,248 10,188 16,004 25,051 
Information services and other14,630 11,956 31,748 33,240 
Total revenues$54,857 $65,296 $128,738 $181,971 
Costs and expenses  
Cost of revenues(1)
  
Cash access services1,161 4,112 5,227 9,777 
Equipment3,548 5,957 9,452 14,884 
Information services and other859 1,024 2,057 2,952 
Cost of revenues5,568 11,093 16,736 27,613 
Operating expenses21,850 23,663 64,831 66,847 
Research and development2,030 1,827 6,138 4,918 
Depreciation1,387 1,595 4,352 4,779 
Amortization3,855 2,898 11,574 8,499 
Total costs and expenses34,690 41,076 103,631 112,656 
Operating income$20,167 $24,220 $25,107 $69,315 
(1)  Exclusive of depreciation and amortization.
* Rounding may cause variances.
 At September 30,At December 31,
 20202019
Total assets  
Games$837,357 $902,888 
FinTech620,847 726,335 
Total assets$1,458,204 $1,629,223 
v3.20.2
BUSINESS - Narrative (Details)
1 Months Ended 3 Months Ended 9 Months Ended
Sep. 14, 2020
USD ($)
Mar. 31, 2020
USD ($)
Sep. 30, 2020
USD ($)
Jun. 30, 2020
USD ($)
Sep. 30, 2020
USD ($)
segment
Sep. 30, 2019
USD ($)
Apr. 21, 2020
USD ($)
May 09, 2017
USD ($)
Debt Instrument [Line Items]                
Number of operating segments | segment         2      
Proceeds from revolving credit facility         $ 35,000,000 $ 0    
Severance costs       $ 2,700,000        
Write-down of assets       11,000,000.0 11,281,000 843,000    
Repayments of credit facility         $ 35,000,000 $ 0    
Games                
Debt Instrument [Line Items]                
Write-down of assets       9,200,000        
FinTech Segment                
Debt Instrument [Line Items]                
Write-down of assets       $ 1,800,000        
Non-Executive Employee | Minimum                
Debt Instrument [Line Items]                
Percentage of reduction in salary         15.00%      
Non-Executive Employee | Maximum                
Debt Instrument [Line Items]                
Percentage of reduction in salary         70.00%      
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Senior secured notes                
Debt Instrument [Line Items]                
Principal amount of debt             $ 125,000,000.0  
Revolving credit facility | New Credit Agreement, dated May 9, 2017                
Debt Instrument [Line Items]                
Proceeds from revolving credit facility   $ 35,000,000.0            
Principal amount of debt               $ 35,000,000.0
Repayments of credit facility $ 35,000,000.0   $ 35,000,000.0          
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Disaggregation of Revenue [Line Items]        
Contract with customer liability     $ 19,300 $ 10,700
Total revenues $ 112,098 $ 134,569 $ 264,122 388,050
Contractual terms of trade and loans receivable     12 months  
Games        
Disaggregation of Revenue [Line Items]        
Total revenues 57,241 69,273 $ 135,384 206,079
Games | Gaming operations, leased equipment        
Disaggregation of Revenue [Line Items]        
Total revenues $ 35,900 36,600 $ 80,300 104,300
FinTech Segment | Equipment        
Disaggregation of Revenue [Line Items]        
Revenues   $ 100   $ 2,700
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Asset and Liability (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Contract assets        
Contract assets, current $ 8,945 $ 8,037 $ 8,634 $ 6,821
Contract assets, noncurrent 7,545 4,049 6,774 4,489
Total 16,490 12,086 15,408 11,310
Increase 1,082 776    
Contract liabilities        
Contract liabilities, current 34,846 28,827 28,510 14,661
Contract liabilities, noncurrent 32 798 354 809
Total 34,878 29,625 $ 28,864 $ 15,470
Increase $ 6,014 $ 14,155    
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Sep. 30, 2019
Dec. 31, 2018
Cash and Cash Equivalents [Line Items]        
Cash and cash equivalents $ 235,407 $ 289,870    
Total 236,016 296,610 $ 284,110 $ 299,181
Cash and Cash Equivalents        
Cash and Cash Equivalents [Line Items]        
Cash and cash equivalents 235,407 289,870    
Prepaid Expenses and Other Current Assets        
Cash and Cash Equivalents [Line Items]        
Restricted cash - current 508 6,639    
Other Assets        
Cash and Cash Equivalents [Line Items]        
Restricted cash - non-current $ 101 $ 101    
v3.20.2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Fair Value and Outstanding Balances of Borrowings (Details) - Level 2 - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Fair Value | Term loan    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 715,127 $ 753,494
Fair Value | Incremental term loan    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt 127,805  
Fair Value | Senior unsecured notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt 279,673 401,738
Outstanding Balance | Term loan    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt 735,500 749,000
Outstanding Balance | Incremental term loan    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt 124,688  
Outstanding Balance | Senior unsecured notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 285,381 $ 375,000
v3.20.2
LEASES - Additional Information (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Lessee, Lease, Description [Line Items]          
Cost $ 319,425,000   $ 319,425,000   $ 319,094,000
Accumulated Depreciation 205,613,000   205,613,000   $ 190,225,000
Sales-type lease, revenue $ 0 $ 100,000 $ 0 $ 2,700,000  
Minimum          
Lessee, Lease, Description [Line Items]          
Renewal term (in years) 1 year   1 year    
Maximum          
Lessee, Lease, Description [Line Items]          
Renewal term (in years) 10 years   10 years    
Assets leased to others          
Lessee, Lease, Description [Line Items]          
Cost $ 203,200,000   $ 203,200,000    
Accumulated Depreciation $ 124,700,000   $ 124,700,000    
v3.20.2
LEASES - Balance Sheet Information (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Jan. 01, 2019
Leases [Abstract]      
Operating lease ROU assets $ 16,479 $ 12,257  
Finance lease ROU assets 522 0  
Current operating lease liabilities 5,402 5,824  
Current finance lease liabilities 143 0  
Non-current operating lease liabilities 15,491 9,628  
Non-current finance lease liabilities 399 $ 0  
Operating lease, liability $ 20,893   $ 18,000
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] us-gaap:OtherAssets us-gaap:OtherAssets  
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] us-gaap:OtherAssets us-gaap:OtherAssets  
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent  
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent  
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent  
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent  
v3.20.2
LEASES - Cash Flow Information (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Cash paid for:        
Long- and short-term operating leases $ 2,076 $ 1,869 $ 6,325 $ 5,602
Finance leases 39 0 44 0
Right-of-use assets obtained in exchange for lease obligations:        
Operating leases 7,594 0 8,454 14,595
Finance leases $ 310 $ 0 $ 592 0
ROU assets obtained in exchange for existing lease obligations       13,700
New ROU assets obtained in exchange for existing lease obligations       $ 900
v3.20.2
LEASES - Lease Costs (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Leases [Abstract]          
Weighted average remaining lease term, operating leases 4 years 2 months 15 days   4 years 2 months 15 days   2 years 11 months 15 days
Weighted average remaining lease term, finance leases 3 years 7 months 13 days   3 years 7 months 13 days    
Weighted average discount rate, operating leases 5.25%   5.25%   5.25%
Weighted average discount rate, finance leases 3.85%   3.85%   0.00%
Operating lease cost $ 1,475 $ 1,354 $ 4,212 $ 3,629  
Variable lease cost 421 401 1,333 1,240  
Finance lease, amortization of ROU assets 47 0 70 0  
Finance lease, interest expense on lease liabilities $ 5 $ 0 $ 8 $ 0  
v3.20.2
LEASES - Payments Due (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Jan. 01, 2019
Operating Leases      
2020 (excluding the nine months ended September 30, 2020) $ 1,516    
2021 6,181    
2022 5,501    
2023 3,946    
2024 2,977    
Thereafter 3,331    
Total future minimum lease payments 23,452    
Amount representing interest 2,559    
Present value of future minimum lease payments 20,893   $ 18,000
Current operating lease liabilities 5,402 $ 5,824  
Long-term lease obligations 15,491 9,628  
Finance Leases      
2020 (excluding the nine months ended September 30, 2020) 40    
2021 161    
2022 161    
2023 161    
2024 57    
Thereafter 0    
Total future minimum lease payments 580    
Amount representing interest 38    
Present value of future minimum lease payments 542    
Current finance lease liabilities 143 0  
Non-current finance lease liabilities $ 399 $ 0  
v3.20.2
LEASES - Sales-type lease (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
Net investment in sales-type leases — current $ 885 $ 874
Net investment in sales-type leases — non-current $ 640 $ 1,288
v3.20.2
BUSINESS COMBINATIONS - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Dec. 24, 2021
Jul. 01, 2021
Mar. 08, 2021
Jul. 01, 2020
Apr. 01, 2020
Dec. 24, 2019
Mar. 08, 2019
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Mar. 31, 2019
Business Acquisition [Line Items]                          
Contingent consideration liability               $ 9.8   $ 9.8   $ 9.4  
Atrient                          
Business Acquisition [Line Items]                          
Contingent consideration liability                         $ 9.0
Maximum payout for contingent consideration liability                         $ 10.0
Atrient | FinTech Segment                          
Business Acquisition [Line Items]                          
Payments to acquire businesses             $ 20.0     10.0      
Atrient | FinTech Segment | Forecast                          
Business Acquisition [Line Items]                          
Payments to acquire businesses     $ 10.0                    
Micro Gaming Technologies, Inc.                          
Business Acquisition [Line Items]                          
Revenue attributed to acquiree               $ 3.1   $ 6.9      
Pro forma revenue                 $ 138.0   $ 399.0    
Pro forma net income (loss)                 $ 9.2   $ 20.3    
Micro Gaming Technologies, Inc. | FinTech Segment                          
Business Acquisition [Line Items]                          
Payments to acquire businesses       $ 5.0 $ 5.0 $ 15.0              
Total consideration transferred           $ 25.0              
Micro Gaming Technologies, Inc. | FinTech Segment | Forecast                          
Business Acquisition [Line Items]                          
Payments to acquire businesses $ 5.0 $ 5.0                      
v3.20.2
FUNDING AGREEMENTS - Narrative (Details) - Indemnification Guarantee - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Contract Cash Solutions Agreement          
Funding Agreements          
Cash usage fees incurred $ 700,000 $ 1,800,000 $ 2,500,000 $ 5,500,000  
Outstanding balance 301,600,000   301,600,000   $ 292,600,000
Contract Cash Solutions Agreement, as amended          
Funding Agreements          
Maximum amount $ 300,000,000   300,000,000    
Ability to increase maximum amount     $ 75,000,000    
Guarantor obligations, increase period     5 days    
Guarantor obligations, non-renewal notice period     90 days    
v3.20.2
TRADE AND OTHER RECEIVABLES - Balance of Trade and Other Receivables (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Trade and other receivables, net    
Contract assets $ 16,490 $ 15,408
Insurance settlements receivable 7,650 7,650
Other receivables 787 3,977
Net investment in sales-type leases 1,525 2,162
Total trade and other receivables, net 90,215 104,571
Non-current portion of receivables (14,218) (16,661)
Contract assets (7,545) (6,774)
Net investment in sales-type leases (640) (1,288)
Total trade and other receivables, current portion 75,997 87,910
Gaming operations    
Trade and other receivables, net    
Trade receivables, net 42,774 51,651
Non-current portion of receivables (1,769) (1,018)
FinTech    
Trade and other receivables, net    
Trade receivables, net 20,989 23,723
Non-current portion of receivables $ (4,264) $ (7,581)
v3.20.2
TRADE AND OTHER RECEIVABLES - Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning allowance for credit losses $ (5,786) $ (6,425)
Provision (6,926) (10,010)
Charge-offs and recoveries 8,958 10,723
Ending allowance for credit losses $ (3,754) $ (5,712)
v3.20.2
INVENTORY (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Inventory    
Component parts, net of reserves of $3,426 and $2,007 at September 30, 2020 and December 31, 2019, respectively $ 24,175 $ 24,864
Work-in-progress 1,481 94
Finished goods 8,123 1,616
Total inventory 33,779 26,574
Component parts, reserves $ 3,426 $ 2,007
v3.20.2
PREPAID EXPENSES AND OTHER ASSETS - Other Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Prepaid expenses and other current assets    
Prepaid expenses $ 11,652 $ 11,272
Restricted cash 508 6,639
Deposits 4,221 8,501
Other 1,887 1,484
Total prepaid expenses and other current assets 18,268 27,896
Other assets    
Operating lease ROU assets 16,479 12,257
Prepaid expenses and deposits 5,279 7,378
Debt issuance costs of revolving credit facility 315 460
Other 623 244
Total other assets $ 22,696 $ 20,339
v3.20.2
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Property, Plant and Equipment [Line Items]          
Cost $ 319,425   $ 319,425   $ 319,094
Accumulated Depreciation 205,613   205,613   190,225
Net Book Value 113,812   113,812   128,869
Depreciation 16,163 $ 16,015 48,700 $ 46,062  
FinTech          
Property, Plant and Equipment [Line Items]          
Depreciation 1,387 $ 1,595 4,352 $ 4,779  
Rental pool - deployed          
Property, Plant and Equipment [Line Items]          
Cost 203,247   203,247   196,571
Accumulated Depreciation 124,697   124,697   106,888
Net Book Value 78,550   $ 78,550   89,683
Rental pool - deployed | Minimum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     2 years    
Rental pool - deployed | Maximum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     4 years    
Rental pool - undeployed          
Property, Plant and Equipment [Line Items]          
Cost 27,805   $ 27,805   31,901
Accumulated Depreciation 20,342   20,342   22,970
Net Book Value 7,463   $ 7,463   8,931
Rental pool - undeployed | Minimum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     2 years    
Rental pool - undeployed | Maximum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     4 years    
Leasehold and building improvements          
Property, Plant and Equipment [Line Items]          
Cost 10,924   $ 10,924   11,815
Accumulated Depreciation 8,173   8,173   8,150
Net Book Value 2,751   2,751   3,665
Machinery, office, and other equipment          
Property, Plant and Equipment [Line Items]          
Cost 45,458   45,458   48,860
Accumulated Depreciation 30,575   30,575   30,103
Net Book Value 14,883   14,883   18,757
Machinery, office, and other equipment | FinTech          
Property, Plant and Equipment [Line Items]          
Cost 31,991   31,991   29,947
Accumulated Depreciation 21,826   21,826   22,114
Net Book Value $ 10,165   $ 10,165   $ 7,833
Machinery, office, and other equipment | Minimum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     2 years    
Machinery, office, and other equipment | Minimum | FinTech          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     3 years    
Machinery, office, and other equipment | Maximum          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     5 years    
Machinery, office, and other equipment | Maximum | FinTech          
Property, Plant and Equipment [Line Items]          
Useful Life (Years)     5 years    
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
May 31, 2020
Dec. 31, 2019
Funding Agreements            
Goodwill $ 681,943,000   $ 681,943,000     $ 681,635,000
Impairment of goodwill     0      
Amortization of intangible assets 18,700,000 $ 17,200,000 57,300,000 $ 51,100,000    
Placement fee 2,100,000 5,600,000 3,000,000.0 17,700,000    
Imputed interest in placement fees   $ 100,000   $ 600,000    
Impairment of intangible assets $ 0          
Games            
Funding Agreements            
Goodwill         $ 449,000,000.0  
Fair value cushion         10.00%  
Software Developed            
Funding Agreements            
Impairment of intangible assets     5,900,000      
Software Developed | Games            
Funding Agreements            
Impairment of intangible assets     5,500,000      
Software Developed | FinTech Segment            
Funding Agreements            
Impairment of intangible assets     $ 400,000      
v3.20.2
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]    
Cost $ 692,577 $ 695,616
Accumulated Amortization 463,619 416,429
Net Book Value 228,958 279,187
Contract rights under placement fee agreements    
Finite-Lived Intangible Assets [Line Items]    
Cost 60,497 58,516
Accumulated Amortization 25,777 20,888
Net Book Value $ 34,720 37,628
Contract rights under placement fee agreements | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 3 years  
Contract rights under placement fee agreements | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 7 years  
Customer contracts    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 71,975 71,975
Accumulated Amortization 53,174 49,477
Net Book Value $ 18,801 22,498
Customer contracts | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 3 years  
Customer contracts | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 14 years  
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 231,100 231,100
Accumulated Amortization 121,308 105,584
Net Book Value $ 109,792 125,516
Customer relationships | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 3 years  
Customer relationships | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 7 years  
Developed technology and software    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 309,323 314,343
Accumulated Amortization 245,942 224,274
Net Book Value $ 63,381 90,069
Developed technology and software | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 1 year  
Developed technology and software | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 6 years  
Patents, trademarks, and other    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 19,682 19,682
Accumulated Amortization 17,418 16,206
Net Book Value $ 2,264 $ 3,476
Patents, trademarks, and other | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 2 years  
Patents, trademarks, and other | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Useful Life (Years) 18 years  
v3.20.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Sep. 30, 2019
Dec. 31, 2018
Payables and Accruals [Abstract]        
Trade accounts payable $ 58,857 $ 78,627    
Contract liabilities 34,846 28,510 $ 28,827 $ 14,661
Litigation accrual 12,903 14,000    
Contingent consideration and acquisition-related liabilities 24,353 14,902    
Accrued interest 6,419 1,347    
Operating lease liabilities 5,402 5,824    
Payroll and related expenses 14,526 18,058    
Cash access processing and related expenses 2,065 5,511    
Other 3,619 3,893    
Accrued taxes 2,227 1,846    
Placement fees 0 585    
Settlement liabilities $ 165,217 $ 173,103    
v3.20.2
LONG-TERM DEBT - Summary of Indebtedness (Details) - USD ($)
9 Months Ended
Sep. 30, 2020
Apr. 21, 2020
Dec. 31, 2019
Dec. 31, 2017
May 09, 2017
Debt Instrument [Line Items]          
Total debt $ 1,145,569,000   $ 1,124,000,000    
Debt issuance costs and discount (17,128,000)   (15,922,000)    
Total debt after debt issuance costs and discount 1,128,441,000   1,108,078,000    
Current portion of long-term debt (1,250,000)   0    
Total long-term debt, net of current portion 1,127,191,000   1,108,078,000    
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017          
Debt Instrument [Line Items]          
Total debt $ 735,500,000   749,000,000    
Principal amount of debt         $ 820,000,000.0
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR)          
Debt Instrument [Line Items]          
Basis spread 2.75%        
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty          
Debt Instrument [Line Items]          
Total debt $ 124,688,000   0    
Principal amount of debt   $ 125,000,000      
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | London Interbank Offered Rate (LIBOR)          
Debt Instrument [Line Items]          
Basis spread 10.50%        
Revolving credit facility | New Credit Agreement, dated May 9, 2017          
Debt Instrument [Line Items]          
Total debt $ 0   0    
Principal amount of debt         $ 35,000,000.0
Revolving credit facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR)          
Debt Instrument [Line Items]          
Basis spread 4.50%        
Senior secured notes          
Debt Instrument [Line Items]          
Total debt $ 860,188,000   749,000,000    
Senior secured notes | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty          
Debt Instrument [Line Items]          
Principal amount of debt   $ 125,000,000.0      
Senior unsecured notes | 2017 Unsecured Notes          
Debt Instrument [Line Items]          
Total debt $ 285,381,000   $ 375,000,000    
Principal amount of debt       $ 375,000,000.0  
Interest rate (as a percent)       7.50%  
v3.20.2
LONG-TERM DEBT - Narrative (Details)
1 Months Ended 3 Months Ended 9 Months Ended
Sep. 14, 2020
USD ($)
Apr. 21, 2020
USD ($)
$ / shares
shares
May 09, 2017
USD ($)
Mar. 31, 2020
USD ($)
Sep. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Jan. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
Debt Instrument [Line Items]                        
Proceeds from revolving credit facility               $ 35,000,000 $ 0      
Repayments of credit facility               35,000,000 0      
Long-term debt         $ 1,128,441,000     1,128,441,000     $ 1,108,078,000  
Repayments of unsecured notes               89,619,000 0      
Loss on extinguishment of debt         $ 0 $ 7,500,000 $ 0 $ 7,457,000 $ 0      
Senior unsecured notes | FinTech Segment                        
Debt Instrument [Line Items]                        
Principal amount of debt       $ 285,400,000   285,400,000            
2017 Unsecured Notes                        
Debt Instrument [Line Items]                        
Repayments of unsecured notes       5,100,000                
Loss on extinguishment of debt           6,400,000            
2017 Unsecured Notes | Senior unsecured notes                        
Debt Instrument [Line Items]                        
Principal amount of debt                       $ 375,000,000.0
Interest rate (as a percent)                       7.50%
2017 Unsecured Notes | Senior unsecured notes | FinTech Segment                        
Debt Instrument [Line Items]                        
Long-term debt                   $ 84,500,000    
Non-Cash Charge                        
Debt Instrument [Line Items]                        
Loss on extinguishment of debt           $ 1,100,000            
Credit Agreement Dated Twenty One April Two Thousand Twenty                        
Debt Instrument [Line Items]                        
Leverage ratio   4.50                    
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Sagard Credit Partners, LP | Common Stock                        
Debt Instrument [Line Items]                        
Number of shares called by warrants | shares   184,670                    
Exercise price per share | $ / shares   $ 5.37                    
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Sagard Credit Partners (Cayman), LP | Common Stock                        
Debt Instrument [Line Items]                        
Number of shares called by warrants | shares   40,330                    
Exercise price per share | $ / shares   $ 5.37                    
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Senior secured notes                        
Debt Instrument [Line Items]                        
Principal amount of debt   $ 125,000,000.0                    
Debt term   7 years                    
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017                        
Debt Instrument [Line Items]                        
Principal amount of debt     $ 820,000,000.0                  
Debt term     7 years                  
Weighted average interest rate during period (as a percent)         3.82%     4.02%        
Senior secured term loan facility | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty                        
Debt Instrument [Line Items]                        
Voluntary prepayments period subject to make-whole premium   2 years                    
Period after second anniversary subject to premium   6 months                    
Prepayment penalty   1.00%                    
Revolving credit facility | New Credit Agreement, dated May 9, 2017                        
Debt Instrument [Line Items]                        
Principal amount of debt     $ 35,000,000.0                  
Debt term     5 years                  
Proceeds from revolving credit facility       $ 35,000,000.0                
Repayments of credit facility $ 35,000,000.0       $ 35,000,000.0              
Weighted average interest rate during period (as a percent)         5.50%     5.52%        
Eurodollar Borrowings | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Eurodollar                        
Debt Instrument [Line Items]                        
Basis spread   10.50%                    
Base Rate Borrowings | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Base Rate                        
Debt Instrument [Line Items]                        
Basis spread   9.50%                    
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty                        
Debt Instrument [Line Items]                        
Principal amount of debt   $ 125,000,000                    
Weighted average interest rate during period (as a percent)         11.50%     11.50%        
v3.20.2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]    
Litigation accrual $ 12,903 $ 14,000
Expected recovery $ 7,700  
v3.20.2
STOCKHOLDERS' (DEFICIT) EQUITY - Narrative (Details)
Feb. 29, 2020
USD ($)
February Twenty Twenty Stock Repurchase Program  
Class of Stock [Line Items]  
Stock repurchase program, authorized amount $ 10,000,000.0
v3.20.2
WEIGHTED AVERAGE COMMON SHARES - Narrative (Details) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Weighted average common shares outstanding        
Weighted average number of common shares outstanding - basic (in shares) 85,556 72,251 85,102 71,361
Potential dilution from equity awards (in shares) 0 6,874 0 6,493
Weighted average number of common shares outstanding - diluted (in shares) 85,556 79,125 85,102 77,854
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) 7,300 200 6,500 1,700
v3.20.2
SHARE-BASED COMPENSATION - Award Activity (Details) - shares
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Stock Options    
Stock Options Granted    
Outstanding (in shares) 11,969,000  
Granted (in shares) 0  
Exercised options (in shares) (734,000)  
Canceled or forfeited (in shares) (146,000)  
Outstanding (in shares) 11,089,000  
Restricted Stock Units    
Restricted Stock Granted    
Outstanding (in shares) 3,451,000  
Granted (in shares) 2,183,000 2,000,000.0
Vested (in shares) (852,469) (287,929)
Canceled or forfeited (in shares) (192,000)  
Outstanding (in shares) 4,590,000  
Common Stock    
Restricted Stock Granted    
Number of shares available for grant 500,000  
v3.20.2
SHARE-BASED COMPENSATION - Stock Options, Narrative (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Stock options        
Proceeds from exercise of stock options     $ 3,509 $ 11,288
Time Based Options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period     4 years  
Expiration period     10 years  
Market Performance Based Options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period     4 years  
Expiration period     10 years  
Number of consecutive trading days the average stock price meets certain target prices, which satisfy vesting requirements     30 days  
Stock Options        
Stock options        
Options exercised, intrinsic value $ 600 $ 1,300 $ 2,300 8,800
Unrecognized compensation expense 600 1,800 $ 600 $ 1,800
Weighted-average period for recognition of unrecognized compensation expense     6 months 1 year 3 months 18 days
Non-cash compensation expense     $ 1,200 $ 2,100
Proceeds from exercise of stock options $ 1,400 $ 1,800 $ 3,500 $ 11,300
v3.20.2
SHARE-BASED COMPENSATION - Schedule of Stock Options Activity (Details) - Stock Options - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
9 Months Ended 12 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Stock Options Granted    
Outstanding (in shares) 11,969  
Granted (in shares) 0  
Exercised options (in shares) (734)  
Canceled or forfeited (in shares) (146)  
Outstanding (in shares) 11,089 11,969
Vested and expected to vest (in shares) 11,045  
Exercisable (in shares) 10,159  
Weighted Average Exercise Price    
Outstanding (in dollars per share) $ 5.06  
Granted (in dollars per share)  
Exercised options (in dollars per share) 4.78  
Canceled or forfeited (in dollars per share) 5.42  
Outstanding (in dollars per share) 5.08 $ 5.06
Vested and expected to vest (in dollars per share) 5.08  
Exercisable (in dollars per share) $ 5.20  
Weighted Average Life Remaining    
Outstanding 4 years 9 months 18 days 5 years 6 months
Vested and expected to vest 4 years 9 months 18 days  
Exercisable 4 years 7 months 6 days  
Aggregate Intrinsic Value    
Outstanding (in dollars) $ 36,542 $ 100,143
Vested and expected to vest (in dollars) 36,340  
Exercisable (in dollars) $ 32,362  
v3.20.2
SHARE-BASED COMPENSATION - Restricted Stock Units (Details) - Restricted Stock Units - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended 12 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Restricted Stock Granted      
Outstanding (in shares) 3,451,000    
Granted (in shares) 2,183,000 2,000,000.0  
Vested (in shares) (852,469) (287,929)  
Forfeited (in shares) (192,000)    
Outstanding (in shares) 4,590,000   3,451,000
Vested and expected to vest (in shares) 3,765,000    
Weighted Average Grant Date Fair Value      
Outstanding (in dollars per share) $ 9.05    
Granted (in dollars per share) 6.08    
Vested (in dollars per share) 8.39    
Forfeited (in dollars per share) 9.32    
Outstanding (in dollars per share) 7.75   $ 9.05
Vested and expected to vest (in dollars per share) $ 7.58    
Weighted Average Life Remaining      
Outstanding 1 year 4 months 24 days   1 year 8 months 12 days
Vested and expected to vest 1 year 4 months 24 days    
Aggregate Intrinsic Value      
Outstanding (in dollars) $ 37,855   $ 46,342
Vested and expected to vest (in dollars) $ 31,064    
v3.20.2
SHARE-BASED COMPENSATION - Restricted Stock Units, Narrative (Details) - Restricted Stock Units - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Options granted (in shares) 2,183,000 2,000,000.0
Vested (in shares) 852,469 287,929
Unrecognized compensation expense $ 18.1 $ 15.3
Weighted-average period for recognition of unrecognized compensation expense 2 years 2 years 8 months 12 days
Non-cash compensation expense $ 8.9 $ 4.0
Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 3 years  
Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 4 years  
v3.20.2
INCOME TAXES - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Tax Disclosure [Abstract]        
Effective income tax rate (as a percent) 205.40% (16.50%) 4.00% (15.30%)
Statutory federal rate (as a percent) 21.00%   21.00% 21.00%
Unrecognized tax benefits $ 1.4   $ 1.4  
v3.20.2
SEGMENT INFORMATION - Revenues, Operating Income, and Assets (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Revenues          
Total revenues $ 112,098 $ 134,569 $ 264,122 $ 388,050  
Costs and expenses          
Operating expenses 34,927 37,631 115,428 111,446  
Research and development 7,034 8,196 20,958 22,399  
Depreciation 16,163 16,015 48,700 46,062  
Amortization 18,693 17,156 57,312 51,143  
Total costs and expenses 92,360 107,276 286,686 310,006  
Operating (loss) income 19,738 27,293 (22,564) 78,044  
Total assets          
Total assets 1,458,204   1,458,204   $ 1,629,223
Games          
Revenues          
Total revenues 57,241 69,273 135,384 206,079  
Costs and expenses          
Cost of revenues [1] 9,975 17,185 27,552 51,343  
Operating expenses 13,078 13,968 50,597 44,599  
Research and development 5,003 6,369 14,819 17,481  
Depreciation 14,777 14,420 44,349 41,283  
Amortization 14,838 14,258 45,738 42,644  
Total costs and expenses 57,671 66,200 183,055 197,350  
Operating (loss) income (430) 3,073 (47,671) 8,729  
Total assets          
Total assets 837,357   837,357   902,888
Games | Gaming operations          
Revenues          
Total revenues 46,968 48,515 106,513 138,377  
Costs and expenses          
Cost of revenues [1] 4,245 4,942 10,471 12,792  
Games | Gaming equipment and systems          
Revenues          
Total revenues 10,229 19,584 28,795 66,083  
Costs and expenses          
Cost of revenues [1] 5,730 11,126 16,625 37,087  
Games | Gaming other          
Revenues          
Total revenues 44 1,174 76 1,619  
Costs and expenses          
Cost of revenues [1] 0 1,117 456 1,464  
FinTech          
Revenues          
Total revenues 54,857 65,296 128,738 181,971  
Costs and expenses          
Cost of revenues [1] 5,568 11,093 16,736 27,613  
Operating expenses 21,850 23,663 64,831 66,847  
Research and development 2,030 1,827 6,138 4,918  
Depreciation 1,387 1,595 4,352 4,779  
Amortization 3,855 2,898 11,574 8,499  
Total costs and expenses 34,690 41,076 103,631 112,656  
Operating (loss) income 20,167 24,220 25,107 69,315  
Total assets          
Total assets 620,847   620,847   $ 726,335
FinTech | Cash access services          
Revenues          
Total revenues 33,979 43,152 80,986 123,680  
Costs and expenses          
Cost of revenues [1] 1,161 4,112 5,227 9,777  
FinTech | Equipment          
Revenues          
Total revenues 6,248 10,188 16,004 25,051  
Costs and expenses          
Cost of revenues [1] 3,548 5,957 9,452 14,884  
FinTech | Information services and other          
Revenues          
Total revenues 14,630 11,956 31,748 33,240  
Costs and expenses          
Cost of revenues [1] $ 859 $ 1,024 $ 2,057 $ 2,952  
[1] (1) Exclusive of depreciation and amortization.
v3.20.2
SEGMENT INFORMATION - Major Customers (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Five largest customers | Customer risk | Revenue from Contract with Customer        
Revenue, Major Customer [Line Items]        
Concentration risk (as a percent) 17.00% 15.00% 16.00% 15.00%