Forward-Looking Statements, Business Environment and Risk Factors

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (the "Company") may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management. These statements are often identified by the use of words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue," and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled "Risk Factors" under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2008. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

References in this item to "we," "our," or "us" are to the Company and its subsidiaries on a consolidated basis unless the context otherwise requires.

Amounts presented in this Item 2 are rounded to whole dollar amounts. As such, rounding differences could occur in period over period changes and percentages reported throughout this Item 2.

OVERVIEW

Since our inception in 1992, we have been primarily engaged in developing and operating gaming establishments and related lodging and restaurant facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from the hotel and restaurant facilities that are a part of the casinos.

We currently own, operate and manage the following casinos through wholly-owned subsidiaries:

- The Century Casino & Hotel in Edmonton, Alberta, Canada;

- Womacks Casino & Hotel in Cripple Creek, Colorado; and

- The Century Casino & Hotel in Central City, Colorado.

We also operate ship-based casinos aboard the Silver Cloud and the vessels of Oceania Cruises. Effective October 16, 2008, we terminated operations aboard the World of Residensea. On November 24, 2008, we entered into an exclusive, long-term agreement with TUI Cruises GmbH ("TUI Cruises"), a joint venture between Royal Caribbean Cruise Line and German tour operator TUI Reisen, under which we have agreed to operate casinos on all cruise ships that TUI Cruises places into service before December 31, 2012. The first vessel went into service in May 2009.

Furthermore, we hold a 33.3% ownership interest in and actively participate in the management of Casinos Poland Ltd ("CPL"), the owner and operator of seven full casinos and one slot casino in Poland. At CPL, day to day decision making is controlled by a management board consisting of three persons. Long term decision making is controlled by a supervisory board consisting of three persons. As we are the only shareholder with experience in the gaming industry, we chair both the management board and the supervisory board. No material decisions can be made without our consent, including the removal of the chairman of each board. Based on this influence, management believes that it is appropriate to account for our investment in CPL as a component of our operations.

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On December 19, 2008, a subsidiary of ours entered into an agreement to sell all of the outstanding shares of Century Casinos Africa ("CCA") for a gross selling price of ZAR 460.0 million (approximately $59.4 million) less the balance of third party South African debt and other agreed to amounts. CCA owned the Caledon Hotel, Spa & Casino and 60% of the Century Casino & Hotel in Newcastle, Africa. Net proceeds of ZAR 253.5 million ($32.8 million) were paid to us at closing on June 30, 2009. On September 29, 2009, we received an additional ZAR 17.3 million ($2.3 million) that was previously held in retention and an additional ZAR 3.2 million ($0.4 million) based on a net asset value ("NAV") adjustment. At closing, we recognized a gain of ZAR 163.1 million (approximately $19.8 million). In September 2009, we recorded an additional gain of ZAR 3.2 million ($0.4 million) as a result of the NAV adjustment. Final transaction approval by the KwaZulu-Natal Gambling Board was received on October 7, 2009. On October 14, 2009, we received the final outstanding payment for the sale of CCA of ZAR 98.8 million ($13.4 million). An additional gain of ZAR 12.2 million (approximately $1.6 million) has been recorded in October 2009.

With the proceeds from the sale of CCA, on July 7, 2009, we repaid the entire principal balance outstanding of $2.7 million on our debt related to our Cripple Creek, Colorado property. On July 17, 2009, we repaid $6.0 million of principal on our debt related to our Central City, Colorado property. On October 22, 2009, we repaid the outstanding balance of $7.2 million on our Central City debt, which includes principal, accrued interest and unpaid charges arising from earlier prepayments of principal. In connection with these repayments, we wrote off unamortized deferred financing charges of $1.0 million during the third quarter of 2009.

On July 27, 2009, Century Resorts Ltd ("CRL") entered into an agreement to purchase the remaining 3.5% of its outstanding shares of common stock that the Company previously did not own for $1.6 million. CRL paid $1.1 million in August 2009. The Company expects to repay the remainder in November 2009. Our Co CEOs and their respective family trusts/foundation collectively owned these shares.

Unless otherwise indicated, the information contained in this report refers to the Company's continuing operations. The operations of the Century Casino Millennium and CCA are reported as discontinued operations throughout this report.

Our industry is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development.

As a gaming company, our operating results are highly dependent on the volume of customers at our casinos. Most of our revenue is essentially cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Management believes that in Colorado, less consumer discretionary spending and increased competition have significantly impacted our operations.

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

                             For the three months          For the nine months
                              ended September 30,          ended September 30,
                              2009           2008           2009          2008
Canadian dollar (CAD)           1.0984        1.0407         1.1702        1.0185
Czech koruna (CZK)                 N/A       16.0745        21.1428       16.3418
Euros (€)                       0.6995        0.6668         0.7337        0.6582
Polish zloty (PLN)              2.9346        2.2040         3.2170        2.2571
South African rand (ZAR)        7.8000        7.7805         8.7347        7.6998

Source: Pacific Exchange Rate Service

RESULTS OF OPERATIONS

The results of operations for the three and nine months ended September 30, 2009
and 2008 are below (in thousands, except per share data). Unless otherwise
noted, these results exclude discontinued operations.

                                     For the three months          For the nine months
                                      ended September 30,          ended September 30,
                                      2009           2008           2009          2008

Gaming revenue                     $    12,804     $  13,122     $   35,414     $  39,108
Net operating revenue                   13,724        13,966         37,607        41,369
Total operating costs and
expenses                                12,969        23,111         37,226        50,839
Earnings from equity investment             33           218            276           766
Operating earnings (loss) from
continuing operations                      788        (8,927 )          657        (8,704 )
Loss from continuing operations         (1,179 )     (15,335 )       (3,683 )     (15,984 )
Earnings from discontinued
operations                                 461         1,268         23,140         3,473
Net (loss) earnings attributable
to Century Casinos, Inc. and
subsidiaries                              (727 )     (14,198 )       18,521       (12,822 )
Earnings per share
Basic
Loss from continuing operations          (0.05 )       (0.65 )        (0.15 )       (0.69 )
Net (loss) earnings                      (0.03 )       (0.60 )         0.79         (0.55 )
Diluted
Loss from continuing operations          (0.05 )       (0.65 )        (0.15 )       (0.69 )
Net (loss) earnings                      (0.03 )       (0.60 )         0.79         (0.55 )

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The decrease in net operating revenue from $14.0 million for the three months ended September 30, 2008 to $13.7 million for the three months ended September 30, 2009 is the result of a $0.6 million decline in gaming revenue at our property in Edmonton, partially offset by an increase in net operating revenue at our properties in Colorado of $0.3 million resulting from increased betting limits, new table games and 24 hour gambling. Net operating revenue in Edmonton was down due to lower table game revenue and a decline in the average exchange rate between the U.S. dollar and Canadian dollar of 5.5% during the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

The decrease in net operating revenue from $41.4 million for the nine months ended September 30, 2008 to $37.6 million for the nine months ended September 30, 2009 can be attributed to decreased gaming revenue at all of our properties period over period and a decline in the average exchange rate between the U.S. dollar and Canadian dollar of 14.9%. Further declines in the average exchange rate between the U.S. dollar and the Canadian dollar may adversely affect the results of operations of our Canadian casino when reported in U.S. dollars.

The decrease in operating costs and expenses from $23.1 million for the three months ended September 30, 2008 to $13.0 million for the three months ended September 30, 2009 is primarily the result of (i) the write-off of $9.3 million of goodwill related to our investments in our properties in Central City, Colorado and Cripple Creek, Colorado in 2008, which increased our operating expenses for the three months ended September 30, 2008, (ii) a decrease in gaming expenses in Canada that are directly related to the decline in gaming revenue during the third quarter of 2009 as compared to the third quarter of 2008, and (iii) a decline in the average exchange rate between the U.S. dollar and Canadian dollar of 5.5% during the third quarter of 2009, partially offset by an increase in gaming expenses at our Colorado casinos resulting from improved revenue and additional staffing during the third quarter of 2009 as compared to the third quarter of 2008.

The decrease in operating costs and expenses from $50.8 million for the nine months ended September 30, 2008 to $37.2 million for the nine months ended September 30, 2009 is primarily the result of the write-off of $9.3 million of goodwill related to our investments in our properties in Central City, Colorado and Cripple Creek, Colorado in 2008, cost saving measures undertaken at our Colorado casinos during the first nine months of 2009 and a decline in the average exchange rate between the U.S. dollar and Canadian dollar of 14.9% during the first nine months of 2009 as compared to the first nine months of 2008.

The decrease in losses from continuing operations from a loss of $15.3 million for the three months ended September 30, 2008 to a loss of $1.2 million for the three months ended September 30, 2009 was due to a decrease in operating losses from continuing operations of $9.7 million (of which $9.3 million of the difference relates to the write-off of goodwill during the third quarter of 2008) and the establishment of a tax valuation allowance of $6.0 million during the third quarter of 2008. This was offset by an increase in interest expense of $0.7 million resulting primarily from the write off of unamortized deferred financing charges related to the early repayment of our Central City debt, a decrease of $0.2 million in earnings from our equity investment in CPL and additional foreign currency losses of $0.1 million.

The decrease in losses from continuing operations from a loss of $16.0 million for the nine months ended September 30, 2008 to a loss of $3.7 million for the nine months ended September 30, 2009 was due to a decrease in operating losses from continuing operations of $9.4 million (of which $9.3 million of the difference relates to the write-off of goodwill during the third quarter of 2008) and the establishment of a tax valuation allowance of $6.0 million during the third quarter of 2008. This was offset by an increase in interest expense of $0.3 million, a decrease of $0.5 million in earnings from our equity investment in CPL and additional foreign currency losses of $0.4 million.

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Net operating revenue by property for the three and nine months ended September 30, 2009 and 2008 is summarized below (in thousands):

                                       For the three months               For the nine months
                                      ended September 30, (1)           ended September 30, (1)
                                       2009              2008            2009              2008

Century Casino & Hotel
(Edmonton, Alberta, Canada)        $      5,090       $    5,656     $     14,729       $   17,008
Womacks (Cripple Creek,
Colorado)                                 3,246            3,086            8,259            8,827
Century Casino & Hotel (Central
City, Colorado)                           4,791            4,655           13,132           13,679
Cruise Ships                                597              569            1,487            1,852
Casinos Poland (Poland) (2)                   -                -                -                -
Corporate                                     -                -                -                3
Net operating revenue              $     13,724       $   13,966     $     37,607       $   41,369

(1) Excludes discontinued operations

(2) Accounted for as an equity investment

Earnings (losses) from operations by property for the three and nine months ended September 30, 2009 and 2008 are summarized below (in thousands):

                                       For the three months               For the nine months
                                      ended September 30, (1)           ended September 30, (1)
                                       2009              2008            2009              2008

Century Casino & Hotel
(Edmonton, Alberta, Canada)        $      1,436       $    1,674     $      4,146       $    5,133
Womacks (Cripple Creek,
Colorado) (2)                               461           (7,121 )            567           (7,259 )
Century Casino & Hotel (Central
City, Colorado) (3)                         454           (1,700 )            993           (1,158 )
Cruise Ships                                 65               (3 )             16              119
Casinos Poland (Poland) (4)                  33              218              276              766
Corporate                                (1,661 )         (1,995 )         (5,341 )         (6,305 )
Earnings (loss) from operations    $        788       $   (8,927 )   $        657       $   (8,704 )

(1) Excludes discontinued operations

(2) Goodwill impairment decreased earnings from operations by $7.2 million in 2008

(3) Goodwill impairment decreased earnings from operations by $2.1 million in 2008

(4) Accounted for as an equity investment

Three months ended September 30, 2009 vs 2008

Revenue

The following revenue discussion excludes discontinued operations. Net operating revenue for the three months ended September 30, 2009 and 2008 was as follows (in thousands):

                                    Three months
                                ended September 30,
                                                                          Percentage
                                 2009           2008        Variance       Variance

Gaming                        $    12,804     $ 13,122     $     (318 )          (2.4 %)
Hotel, food and beverage            2,279        2,396           (117 )          (4.9 %)
Other                                 523          511             12             2.3 %
Gross revenue                      15,606       16,029           (423 )          (2.6 %)
Less promotional allowances         1,882        2,063           (181 )          (8.8 %)
Net operating revenue         $    13,724     $ 13,966     $     (242 )          (1.7 %)

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Gaming revenue decreased by $0.3 million, or 2.4%, from $13.1 million for the three months ended September 30, 2008 to $12.8 million for the three months ended September 30, 2009. Lower gaming revenue in Edmonton, primarily due to decreased play and a decline in the average exchange rate between the U.S. dollar and Canadian dollar, was partially offset by increased gaming revenue at our U.S. properties, which management attributes to the increase in betting limits, the introduction of new table games and 24-hour gaming in Colorado.

Gaming revenue at the Century Casino & Hotel in Edmonton decreased by $0.6 million, or 13.8%, from $4.3 million for the three months ended September 30, 2008 to $3.7 million for the three months ended September 30, 2009, primarily resulting from a lower hold on table games and a 5.5% decline in the average exchange rate between the U.S. dollar and Canadian dollar for the three months ended September 30, 2009 compared to the average exchange rate for the three months ended September 30, 2008. Gaming revenue in Canadian dollars decreased by CAD 0.4 million, or 9.0%, from CAD 4.4 million for the three months ended September 30, 2008 to CAD 4.0 million for the three months ended September 30, 2009. This decrease is the result of a decrease of 16.8% in table revenue (particularly baccarat) and a decrease of 3.1% in slot revenue. Management believes that revenue at our casino in Edmonton has been negatively impacted by a slow economy and road construction that is making accessibility to our casino difficult. The road construction was completed the first week of November.

As previously mentioned, on July 2, 2009, gaming establishments in Colorado were permitted to raise the maximum betting limit from $5 to $100, be open for 24 hours and have roulette and craps tables. Management believes that these changes have positively impacted gaming revenue at our Colorado casinos, but the effect has been diluted due to poor economic conditions.

Gaming revenue at Womacks in Cripple Creek increased by $0.2 million, or 6.4%, from $3.3 million for the three months ended September 30, 2008 to $3.5 million for the three months ended September 30, 2009. Management attributes this increase to the change in gaming laws in Colorado, but ,as described above, believes that growth has been limited due to the poor economic conditions. The Cripple Creek gaming market increased by 2.4% from the three months ended September 30, 2008 to the three months ended September 30, 2009. Our share of the Cripple Creek gaming market increased from 8.1% for the three months ended September 30, 2008 to 8.6% for the three months ended September 30, 2009.

Gaming revenue at the Century Casino and Hotel in Central City remained flat at $5.0 million when comparing the three months ended September 30, 2009 to the three months ended September 30, 2008. The combined Central City and Black Hawk gaming market increased by 9.9% from the three months ended September 30, 2008 to the three months ended September 30, 2009. Management attributes this increase to the change in gaming laws in Colorado, but, as described above, believes that growth has been limited due to the poor economic conditions. Our market share of the combined Central City and Black Hawk gaming revenue decreased from 3.3% for the three months ended September 30, 2008 to 3.0% for the three months ended September 30, 2009. Management believes this decline is the result of our larger competitors attracting more customers during the period immediately after the new gaming laws went into effect. Our share of the Central City gaming revenue decreased from 28.6% for the three months ended September 30, 2008 to 27.5% for the three months ended September 30, 2009.

Gaming revenue aboard the cruise ships on which we operate remained flat at $0.6 million for the three months ended September 30, 2009 as compared to the three months ended September 30, 2008.

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Hotel, food and beverage revenue

Hotel, food and beverage revenue decreased by $0.1 million, or 4.9%, from $2.4 million for the three months ended September 30, 2008 to $2.3 million for the three months ended September 30, 2009. Hotel, food and beverage revenue at Womacks declined by $0.1 million, resulting primarily from the elimination of a special food promotion that we offered during the third quarter of 2008.

Promotional allowances

Promotional allowances decreased by $0.2 million, or 8.8%, from $2.1 million for the three months ended September 30, 2008 to $1.9 million for the three months ended September 30, 2009, primarily due to a decline in coupons awarded at the casinos. The retail value of accommodations, food and beverage, and other services furnished to guests without charge ("complimentaries") is included in gross revenue and then deducted as promotional allowances. As a result, complimentaries neither increase nor decrease our overall net operating revenue.

Operating Costs and Expenses

The following operating cost and expense discussion excludes discontinued
operations. Operating costs and expenses for the three months ended September
30, 2009 and 2008 were as follows (in thousands):

                                           Three months
                                        ended September 30,
                                                                                   Percentage
                                        2009           2008        Variance         Variance

Gaming                               $     5,196     $   5,284     $     (88 )            (1.7 %)
Hotel, food and beverage                   1,807         1,918          (111 )            (5.8 %)
General and administrative                 4,440         4,793          (353 )            (7.4 %)
Impairments and other write-offs               -         9,357        (9,357 )               -
Depreciation                               1,526         1,759          (233 )           (13.2 %)
Total operating costs and expenses   $    12,969     $  23,111     $ (10,142 )           (43.9 %)

Gaming expenses

Gaming expenses decreased $0.1 million, or 1.7%, from $5.3 million for the three months ended September 30, 2008 to $5.2 million for the three months ended September 30, 2009. Declines in gaming expenses in Edmonton that are directly related to a decline in gaming revenue and a decline in the average exchange rate between the U.S. dollar and the Canadian dollar, were partially offset by increased gaming expenses in Colorado as discussed below.

Gaming expenses at the Century Casino & Hotel in Edmonton decreased $0.3 million, or 17.9%, from $1.7 million for the three months ended September 30, 2008 to $1.4 million for the three months ended September 30, 2009. In Canadian dollars, gaming expenses decreased by CAD 0.3 million, or 14.4%, from CAD 1.8 million for the three months ended September 30, 2008 to CAD 1.5 million for the three months ended September 30, 2009, primarily due to a decrease in payroll.

Gaming expenses at Womacks increased $0.2 million, or 14.8%, from $1.1 million for the three months ended September 30, 2008 to $1.3 million for the three months ended September 30, 2009. Payroll expenses at the casino increased by $0.2 million, the result of adding dealers for new table games at the casino and additional staff needed to keep the casino open 24 hours a day beginning on July 2, 2009.

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Gaming expenses at the Century Casino & Hotel in Central City increased $0.1 . . .