Forward-Looking Statements, Business Environment and Risk Factors

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. In addition, Century Casinos, Inc. (together with its subsidiaries, 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 at the time such statements are made. 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, 2011. 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. The term "CAD" refers to Canadian dollars.

Amounts presented in this Item 2 are rounded. 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, restaurant and entertainment facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from the hotel, restaurant, bowling and entertainment 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;
- The Century Casino Calgary, Alberta, Canada;
- The Century Casino & Hotel in Central City, Colorado; and
- The Century Casino & Hotel in Cripple Creek, Colorado.

We also operate 12 ship-based casinos onboard four cruise lines; Oceania Cruises, TUI Cruises, Windstar Cruises and Regent Seven Seas Cruises.

The following table summarizes the cruise lines for which we have entered into agreements and the associated ships on which we operate ship-based casinos.

Cruise Line               Ship
Oceania Cruises           Regatta
Oceania Cruises           Nautica
Oceania Cruises           Insignia*
Oceania Cruises           Marina
Oceania Cruises           Riviera**
TUI Cruises               Mein Schiff 1
TUI Cruises               Mein Schiff 2
Windstar Cruises          Wind Surf
Windstar Cruises          Wind Star
Windstar Cruises          Wind Spirit

* The casino operation on board Insignia was suspended on April 5, 2012, as the vessel was leased to a different cruise line by Oceania Cruises. We will not operate the ship-based casino as long as it is leased to a different cruise line. ** The Riviera ship-based casino began operations on May 3, 2012.

We also hold a 33.3% ownership interest in and actively participate in the management of Casinos Poland Ltd ("CPL"), the owner and operator of eight casinos in Warsaw, Katowice, Gydnia, Wroclaw, Lodz (opened February 16, 2012) Krakow (opened March 29, 2012), Sosnowiec (opened April 18, 2012) and Posnan (opened June 28, 2012) in Poland. We account for this investment under the equity method.

The Lodz casino is undergoing a full refurbishment and will have a grand re-opening during the fourth quarter of 2012. CPL has obtained an additional gaming license in the city of Plock, which is scheduled to open in the second half of 2012. In addition, CPL is participating in other license applications, including Warsaw. Decisions from the Polish Minister of Finance on these applications are pending.

We have a long-term management agreement to direct the operation of the casino at the Radisson Aruba Resort, Casino & Spa. We receive a management fee consisting of a fixed fee, plus a percentage of earnings before interest, taxes, depreciation and amortization.

Presentation of Foreign Currency Amounts - 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 six months
                                     ended June 30,                               ended June 30,
Average Rates               2012          2011         % Change         2012          2011         % Change
Canadian dollar (CAD)        1.0104        0.9678           (4.4 %)      1.0060        0.9769           (3.0 %)
Euros (€)                    0.7796        0.6947          (12.2 %)      0.7712        0.7130           (8.2 %)
Polish zloty (PLN)           3.3181        2.7495          (20.7 %)      3.2724        2.8180          (16.1 %)
Source: Pacific Exchange Rate
Service

RECENT DEVELOPMENTS

Developments that we believe have impacted or will impact our results of operations are discussed below.

Century Casino & Hotel (Edmonton, Alberta, Canada)

On July 13, 2012, the Alberta Gaming and Liquor Commission approved the addition of 30 slot machines to the gaming floor. The additional slot machines are expected to be added gradually during the third quarter of 2012. Once added, the 30 additional machines will bring the total slot machine count to 750 at our property in Edmonton.

In June 2012, construction began on Fort Road immediately in front of the casino entrance. Construction is expected to last through September 2012. This may adversely affect traffic to our casino during the third quarter of 2012.

Century Casino & Hotel (Cripple Creek, Colorado, United States)

The Waldo Canyon Wildfire, which occurred in and near Colorado Springs, Colorado in late June and early July 2012, had a significant negative impact on our business in Cripple Creek during the second quarter of 2012. Several thousand people in Colorado Springs, the metropolitan population which the casino primarily serves, were evacuated and the main highway to the casino, Highway 24, was closed for eight days from June 24, 2012 through July 1, 2012. We estimate that this event adversely affected our revenues for the second quarter by $0.2 million.

In August 2012, new owners of the Gold Rush Casino in Cripple Creek are planning to open the casino with approximately 300 slot machines and 3 table games. This casino is directly across the street from our property in Cripple Creek, and management believes the new casino will add additional competition to the already very competitive Cripple Creek market.

DISCUSSION OF RESULTS


Century Casinos, Inc. and Subsidiaries

                       For the three months                                        For the six months
                           ended June 30,                                             ended June 30,
Amounts in
thousands                2012           2011         Change       % Change          2012          2011         Change       % Change
Gaming Revenue       $     15,709     $  15,928     $   (219 )         (1.4 %)   $   30,968     $  30,753     $    215            0.7 %
Hotel, Bowling,
Food and Beverage
Revenue                     3,135         3,141           (6 )         (0.2 %)        6,456         6,384           72            1.1 %
Other Revenue               1,103         1,004           99            9.9 %         2,046         1,939          107            5.5 %
Gross Revenue              19,947        20,073         (126 )         (0.6 %)       39,470        39,076          394            1.0 %
Less Promotional
Allowances                 (2,156 )      (2,071 )         85            4.1 %        (4,110 )      (3,959 )        151            3.8 %
Net Operating
Revenue                    17,791        18,002         (211 )         (1.2 %)       35,360        35,117          243            0.7 %
Gaming Expenses            (7,459 )      (7,341 )        118            1.6 %       (14,692 )     (14,272 )        420            2.9 %
Hotel, Bowling,
Food and Beverage
Expenses                   (2,420 )      (2,553 )       (133 )         (5.2 %)       (4,857 )      (5,064 )       (207 )         (4.1 %)
General and
Administrative
Expenses                   (5,320 )      (5,848 )       (528 )         (9.0 %)      (10,624 )     (11,216 )       (592 )         (5.3 %)
Total Operating
Costs and Expenses        (16,379 )     (17,407 )     (1,028 )         (5.9 %)      (32,531 )     (33,858 )     (1,327 )         (3.9 %)
Earnings from
Equity Investment             283           382          (99 )        (25.9 %)          438           474          (36 )         (7.6 %)
Earnings from
Operations                  1,695           977          718           73.5 %         3,267         1,733        1,534           88.5 %
Net Earnings         $      1,148     $     644     $    504           78.3 %    $    2,281     $   1,008     $  1,273          126.3 %

Earnings Per Share
  Basic              $       0.05     $    0.03     $   0.02           66.7 %    $     0.10     $    0.04     $   0.06          150.0 %
  Diluted            $       0.05     $    0.03     $   0.02           66.7 %    $     0.09     $    0.04     $   0.05          125.0 %

Net operating revenue decreased by $0.2 million, or 1.2%, and increased by $0.2 million, or 0.7%, for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011. Following is a breakout of net operating revenue by property or category for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011:

? Net operating revenue at our property in Edmonton decreased by $0.2 million, or 2.9%, and increased by less than $0.1 million, or 0.1%; ? Net operating revenue at our property in Calgary decreased by $0.1 million, or 2.8%, and decreased by $0.1 million, or 1.1%; ? Net operating revenue at our property in Central City increased by $0.1 million, or 1.3%, and increased by $0.2 million, or 1.9%; ? Net operating revenue at our property in Cripple Creek decreased by $0.1 million, or 1.9%, and decreased by less than $0.1 million, or 0.3%; and ? Net operating revenue from our ship-based casinos and other increased by less than $0.1 million, or 2.3%, and increased by $0.1 million, or 4.4%.

Total operating costs and expenses decreased by $1.0 million, or 5.9%, and $1.3 million, or 3.9%, for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011. Following is a breakout of total operating costs and expenses by property or category for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011:

· Total operating costs and expenses at our property in Edmonton decreased by $0.1 million, or 2.7%, and decreased by $0.1 million, or 1.2%;

· Total operating costs and expenses at our property in Calgary increased by less than $0.1 million, or 1.4%, and decreased by $0.1 million, or 1.7%;

· Total operating costs and expenses at our property in Central City decreased by $0.3 million, or 7.2%, and decreased by $0.5 million, or 6.1%;

· Total operating costs and expenses at our property in Cripple Creek decreased by $0.1 million, or 4.0%, and decreased by less than $0.1 million, or 1.3%;

· Total operating costs and expenses for our ship-based casinos and other increased by $0.1 million, or 6.5%, and increased by $0.2 million, or 6.2%; and

· Total operating costs and expenses for corporate other decreased by $0.6 million, or 31.4%, and decreased by $0.7 million, or 21.6%.

As a result of the foregoing, net earnings increased by $0.5 million, or 78.3%, and $1.3 million, or 126.3%, for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011. Following is a breakout of net earnings by property or category for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011:

? Net earnings at our property in Edmonton decreased by $0.1 million, or 9.1%, and increased by $0.1 million, or 3.5%; ? Net earnings at our property in Calgary decreased by less than $0.1 million, or 26.0%, and increased by $0.2 million, or 64.4%; ? Net earnings at our property in Central City increased by $0.2 million, or 123.7%, and increased by $0.4 million, or 108.6%; ? Net earnings at our property in Cripple Creek increased by less than $0.1 million, or 11.9%, and increased by less than $0.1 million, or 7.3%; ? Net earnings from our ship-based casinos and other decreased by $0.1 million, or 43.1%, and decreased by $0.1 million, or 21.5%; and ? Net loss for corporate other decreased by $0.5 million, or 41.8%, and decreased by $0.7 million, or 34.9%.

Results by property are discussed in further detail in the following pages.

Casinos

Edmonton
                     For the three months                                          For the six months
                         ended June 30,                                               ended June 30,
Amounts in
thousands             2012             2011        $ Change       % Change          2012           2011        $ Change       % Change
Gaming Revenue     $     4,290       $  4,452     $     (162 )         (3.6 %)   $     8,468     $  8,536     $      (68 )         (0.8 %)
Hotel, Food and
Beverage Revenue         1,433          1,449            (16 )         (1.1 %)         2,911        2,871             40            1.4 %
Other Revenue              569            533             36            6.8 %          1,097          997            100           10.0 %
Gross Revenue            6,292          6,434           (142 )         (2.2 %)        12,476       12,404             72            0.6 %
Less Promotional
Allowances                (286 )         (249 )           37           14.9 %           (528 )       (466 )           62           13.3 %
Net Operating
Revenue                  6,006          6,185           (179 )         (2.9 %)        11,948       11,938             10            0.1 %
Gaming Expenses         (1,681 )       (1,681 )            0            0.0 %         (3,390 )     (3,293 )           97            2.9 %
Hotel, Food and
Beverage
Expenses                (1,032 )         (959 )           73            7.6 %         (2,024 )     (1,882 )          142            7.5 %
General and
Administrative
Expenses                (1,324 )       (1,382 )          (58 )         (4.2 %)        (2,674 )     (2,760 )          (86 )         (3.1 %)
Total Operating
Costs and
Expenses                (4,281 )       (4,399 )         (118 )         (2.7 %)        (8,574 )     (8,676 )         (102 )         (1.2 %)
Earnings from
Operations               1,725          1,786            (61 )         (3.4 %)         3,374        3,262            112            3.4 %
Net Earnings       $     1,075       $  1,182     $     (107 )         (9.1 %)   $     2,153     $  2,080     $       73            3.5 %

Three Months Ended June 30, 2012 and 2011 Net operating revenue at our property in Edmonton decreased by $0.2 million, or 2.9%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net operating revenue is due to a decrease in the average exchange rate between the U.S. dollar and Canadian dollar of 4.4% for the three months ended June 30, 2012 compared to the three months June 30, 2011 (the "4.4% exchange rate decrease").

In CAD, net operating revenue increased by $0.1 million, or 1.3%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The increase is due to increases in gaming, hotel, food, beverage and other revenue for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The increase in gaming revenue is due to 32 additional slot machines added to the floor during the second quarter of 2012. The increase in hotel, food and beverage revenue is due to higher hotel room occupancy. The increase in other revenue is due to increased showroom and Comedy Club ticket sales for the three months ended June 30, 2012 compared to the three months ended June 30, 2011.

Total operating costs and expenses decreased by $0.1 million, or 2.7%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in total operating costs and expenses occurred as a result of the 4.4% exchange rate decrease.

In CAD, total operating costs and expense increased by $0.1 million, 1.6%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The increase is due to higher advertising, promotional, food and payroll costs of $0.2 million offset by a decrease in depreciation expense of $0.1 million for the three months ended June 30, 2012 compared to the three months ended June 30, 2011.

As a result of the foregoing, earnings from operations decreased by $0.1 million, or 3.4%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. In CAD, earnings from operations increased by less than $0.1 million, or 0.6%, for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011.

Net earnings decreased by $0.1 million, or 9.1%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net earnings is due to foregoing operational items as well as an increase in interest expense and deferred financing charges of $0.2 million resulting from prepayment penalties related to early payoff of the mortgage related to the Edmonton property ("Edmonton Mortgage") offset by a decrease in income tax expense of $0.1 million. In CAD, net earnings decreased by $0.2 million, or 22.0%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net earnings is due to an increase in interest expense of $0.2 million from the early payoff of the Edmonton Mortgage and an increase in foreign currency losses of $0.2 million due to the 4.4% exchange rate decrease offset by a decrease in income tax expense of $0.1 million.

Six Months Ended June 30, 2012 and 2011
Net operating revenue at our property in Edmonton increased by less than $0.1 million, or 0.1%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The increase in net operating revenue is due to increases in hotel, food, beverage and other revenue offset by a decrease in gaming revenue for the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

The increase in hotel, food and beverage revenue is due to higher hotel room occupancy, increased customer volumes on the gaming floor as well as increased showroom event attendance for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The increase in other revenue is due to increased showroom and Comedy Club ticket sales for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease in gaming revenue is due a decrease in the average exchange rate between the U.S. dollar and Canadian dollar of 3.0% for the six months ended June 30, 2012 compared to the three months June 30, 2011 (the "3.0% exchange rate decrease"). In CAD, gaming revenue increased by $0.2 million, or 2.2%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 due to a total of 56 additional slot machines added to the floor during the third quarter of 2011 and first and second quarter of 2012. In CAD, net operating revenue increased by $0.4 million, or 3.1%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

Total operating costs and expenses decreased by $0.1 million, or 1.2%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease in total operating costs and expenses is due to the 3.0% exchange rate decrease.

In CAD, total operating costs and expense increased by $0.2 million, or 1.8%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The increase is due to higher advertising, promotional, food and payroll costs of $0.4 million offset by a decrease in depreciation expense of $0.2 million for the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

As a result of the foregoing, earnings from operations increased by $0.1 million, or 3.4%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. In CAD, earnings from operations increased by $0.2, or 6.6%, million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. In addition, net earnings increased by $0.1 million, or 3.5%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. In CAD, net earnings increased by $0.1 million, or 2.7%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

Calgary
                      For the three months                                         For the six months
                          ended June 30,                                              ended June 30,
Amounts in
thousands              2012             2011        $ Change      % Change          2012           2011        $ Change       % Change
Gaming Revenue      $     1,588       $  1,646     $      (58 )        (3.5 %)   $     3,266     $  3,163     $      103            3.3 %
Bowling, Food and
Beverage Revenue            683            747            (64 )        (8.6 %)         1,533        1,711           (178 )        (10.4 %)
Other Revenue               283            211             72          34.1 %            457          436             21            4.8 %
Gross Revenue             2,554          2,604            (50 )        (1.9 %)         5,256        5,310            (54 )         (1.0 %)
Less Promotional
Allowances                 (156 )         (137 )           19          13.9 %           (257 )       (254 )            3            1.2 %
Net Operating
Revenue                   2,398          2,467            (69 )        (2.8 %)         4,999        5,056            (57 )         (1.1 %)
Gaming Expenses          (1,089 )         (912 )          177          19.4 %         (2,052 )     (1,859 )          193           10.4 %
Bowling, Food and
Beverage Expenses          (517 )         (666 )         (149 )       (22.4 %)        (1,106 )     (1,383 )         (277 )        (20.0 %)
General and
Administrative
Expenses                   (762 )         (769 )           (7 )        (0.9 %)        (1,558 )     (1,595 )          (37 )         (2.3 %)
Total Operating
Costs and
Expenses                 (2,577 )       (2,541 )           36           1.4 %         (5,129 )     (5,220 )          (91 )         (1.7 %)
(Losses) from
Operations                 (179 )          (74 )         (105 )      (141.9 %)          (130 )       (164 )           34           20.7 %
Net (Loss)          $       (92 )     $    (73 )   $      (19 )       (26.0 %)   $       (84 )   $   (236 )   $      152           64.4 %

Three Months Ended June 30, 2012 and 2011 Net operating revenue at our property in Calgary decreased by $0.1 million, or 2.8%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net operating revenue is due to the 4.4% exchange rate decrease.

In CAD, net operating revenue increased by less than $0.1 million, or 1.5%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. Net operating revenue increased due to increased other revenue of $0.1 million, or 41.4%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2012 due to higher showroom ticket sales when the casino began self-promoting concert events at the casino and featured a concert by BB King. The increase in other revenue was offset by a less than $0.1 million, or 5.0% decrease in bowling, food and beverage revenue due to a decrease in the participation of bowling leagues for the three months ended June 30, 2012 compared to the three months ended June 30, 2011.

Total operating costs and expenses increased by less than $0.1 million, or 1.4%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The increase is due to higher advertising, promotional, food and payroll costs for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. In CAD, total operating costs and expenses in Calgary increased by $0.2 million, or 5.9%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011.

As a result of the foregoing, earnings from operations decreased by $0.1 million, or 141.9%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. In CAD, earnings from operations decreased by $0.1 million, or 152.8% for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011.

Net earnings decreased by less than $0.1 million, or 26.0%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net earnings is due to the foregoing operational items as well as an increase in income tax benefit of $0.1 million. In CAD, net earnings decreased by $0.2 million, or 700.0%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011. The decrease in net earnings is due to an increase in foreign currency losses of $0.2 million due to the 4.4% exchange rate decrease partially offset by an increase in the income tax benefit of $0.1 million.

Six Months Ended June 30, 2012 and 2011
Net operating revenue at our property in Calgary decreased by $0.1 million, or . . .