**UNITED
STATES**





**SECURITIES
AND EXCHANGE COMMISSION**





**Washington,
D.C. 20549**





**FORM
10-Q**









___ X ___  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended March
31, 2005





OR





_______  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from ____________ to ___________





Commission
file number   0-22290




**CENTURY
CASINOS, INC.**





(Exact name
of registrant as specified in its charter)





DELAWARE
    84-1271317(State
      or jurisdiction of incorporation
    (I.R.S.
      Employeror
      organization)
    Identification
      No.





1263 A Lake
Plaza Drive, Colorado Springs, Colorado 80906





(Address of
principal executive offices)





(Zip
Code)




(719)
527-8300




(Registrant’s
telephone number, including area code)




(Former
address of principal executive offices)




(Registrant’s
former telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes X  No





Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).  Yes___  No_ X_





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practical date.





Common
stock, $0.01 par value, 13,754,900 shares outstanding as of May 10,
2005.




****










**CENTURY
CASINOS, INC.**





**FORM
10-Q**





**INDEX**





PagePART
      I
    
    FINANCIAL
      INFORMATION (unaudited)
    NumberItem
      1.
    
    Condensed
      Consolidated Financial StatementsCondensed
      Consolidated Balance Sheets as of March 31, 2005 and December 31,
      2004
    3Condensed
      Consolidated Statements of Earnings for the Three Months Ended March 31,
      2005 and 2004
    4Condensed
      Consolidated Statements of Comprehensive (Loss) Earnings for the Three
      Months Ended March 31, 2005 and 2004
    5Condensed
      Consolidated Statements of Cash Flows for the Three Months Ended March 31,
      2005 and 2004
    6Notes
      to Condensed Consolidated Financial Statements
    8Item
      2.
    
    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
    22Item
      3.
    
    Quantitative
      and Qualitative Disclosures About Market Risk
    35Item
      4.
    
    Controls
      and Procedures
    36PART
      II
    
    OTHER
      INFORMATION (unaudited)Item
      1.
    
    Legal
      Proceedings
    37Item
      6.
    
    Exhibits
    37SIGNATURE
    38









2


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)**





*Dollar
      amounts in thousands, except for share information*
    
    **March
      31, 2005**
    
    
    **December
      31, 2004****ASSETS****Current
      Assets:**Cash
      and cash equivalents
    $
    7,061
    
    $
    8,411Restricted
      cash
    
    847
    
    
    706Receivables,
      net
    
    267
    
    
    193Prepaid
      expenses
    
    426
    
    
    437Inventories
    
    181
    
    
    215Other
      current assets
    
    28
    
    
    28Deferred
      income taxes - domestic
    
    97
    
    
    97-
      foreign
    
    88
    
    
    88Total
      current assets
    
    8,995
    
    
    10,175**Property
      and Equipment, net**
    
    50,566
    
    
    48,629**Goodwill,
      net**
    
    8,730
    
    
    8,845**Casino
      Licenses**
    
    1,975
    
    
    2,157**Deferred
      Income Taxes - foreign**
    
    243
    
    
    207**Equity
      Investment in Unconsolidated Subsidiary**
    
    14
    
    
    116**Other
      Assets**
    
    1,067
    
    
    1,075**Total**
    $
    71,590
    
    $
    71,204





**LIABILITIES
      AND SHAREHOLDERS’ EQUITY****Current
      Liabilities:**Current
      portion of long-term debt
    $
    2,246
    
    $
    2,534Accounts
      payable and accrued liabilities
    
    2,964
    
    
    3,548Accrued
      payroll
    
    858
    
    
    1,372Taxes
      payable
    
    484
    
    
    711Other
    
    102
    
    
    102Total
      current liabilities
    
    6,654
    
    
    8,267**Long-Term
      Debt, less current portion**
    
    18,573
    
    
    17,970**Deferred
      Tax Liability - domestic**
    
    345
    
    
    234**Minority
      Interest**
    
    6,206
    
    
    4,354**Commitments
      and Contingencies**
    
    -
    
    
    -**Shareholders’
      Equity:**Preferred
      stock; $.01 par value; 20,000,000 sharesauthorized; no shares issued or outstanding
    
    -
    
    
    -Common
      stock; $.01 par value; 50,000,000 shares authorized;14,485,776
      shares issued;13,754,900
      and 13,694,900 shares outstanding, respectively
    
    145
    
    
    145Additional paid-in capital
    
    21,468
    
    
    21,528Accumulated other comprehensive earnings
    
    2,949
    
    
    4,597Retained earnings
    
    16,917
    
    
    15,91041,479
    
    
    42,180Treasury
      stock - 730,876 and 790,876 shares at cost, respectively
    
    (1,667)
    
    
    (1,801)Total
      shareholders’ equity
    
    39,812
    
    
    40,379**Total**
    $
    71,590
    
    $
    71,204


See notes
to condense consolidated financial statements.







3


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)**




**For
      The Three Months Ended March 31,***Dollar
      amounts in thousands, except for share information*
    
    **2005**
    
    **2004****Operating
      Revenue:**Casino
    $
    9,051
    $
    8,066Hotel,
      food and beverage
    
    1,228
    
    974Other
    
    216
    
    20310,495
    
    9,243Less
      promotional allowances
    
    1,267
    
    1,079Net
      operating revenue
    
    9,228
    
    8,164**Operating
      Costs and Expenses:**Casino
    
    3,541
    
    3,056Hotel,
      food and beverage
    
    768
    
    678General
      and administrative
    
    2,442
    
    2,049Property
      write-downs and other write-offs, net of recoveries
    
    (30)
    
    -Depreciation
    
    852
    
    651Total
      operating costs and expenses
    
    7,573
    
    6,434**(Loss)
      earnings****from
      unconsolidated subsidiary**
    
    (97)
    
    13**Earnings
      from Operations**
    
    1,558
    
    1,743**Non-operating
      Income (expense):**Interest
      expense
    
    (453)
    
    (422)Other
      income, net
    
    33
    
    47Non-operating
      items from unconsolidated subsidiary
    
    (1)
    
    (6)Non-operating
      expense, net
    
    (421)
    
    (381)**Earnings
      before Income Taxes and Minority Interest**
    
    1,137
    
    1,362Provision
      for income taxes
    
    156
    
    443**Earnings
      before Minority Interest**
    
    981
    
    919Minority
      interest in subsidiary loss (earnings)
    
    26
    
    (15)**Net
      Earnings**
    $
    1,007
    $
    904**Earnings
      Per Share:**Basic
    $
    0.07
    $
    0.07Diluted
    $
    0.06
    $
    0.06


See notes
to condense consolidated financial statements.

























4


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS (Unaudited)**




**For
      The Three Months Ended March 31,***Amounts
      in thousands*
    
    **2005**
    
    **2004****Net
      Earnings**
    $
    1,007
    $
    904Foreign
      currency translation adjustments
    
    (1,648)
    
    795Change
      in fair value of interest rate swaps, net of income taxes
    
    -
    
    27**Comprehensive****(Loss)
      Earnings**
    $
    (641)
    $
    1,726


See notes
to condense consolidated financial statements.




5


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**




**For
      The Three Months Ended March 31,***Amounts
      in thousands*
    
    **2005**
    
    **2004****Cash
      Flows from Operating Activities:**Net
      earnings
    $
    1,007
    $
    904Adjustments
      to reconcile net earnings to net cash provided byoperating
      activities:Depreciation
    
    852
    
    651Amortization
      of deferred financing costs
    
    14
    
    29Deferred
      tax expense
    
    46
    
    (23)Minority
      interest in subsidiary loss (earnings)
    
    (26)
    
    15Loss
      (earnings) loss from unconsolidated subsidiary
    
    98
    
    (7)Gain
      on disposition of real estate option and other assets
    
    -
    
    (35)Other
    
    -
    
    (4)Changes
      in operating assets and liabilities:Receivables
    
    (110)
    
    (11)Prepaid
      expenses and other assets
    
    25
    
    -Accounts
      payable and accrued liabilities
    
    (387)
    
    (48)Accrued
      payroll
    
    (476)
    
    (487)Taxes
      payable
    
    (129)
    
    273Net
      cash provided by operating activities
    
    914
    
    1,257**Cash
      Flows from Investing Activities:**Purchases
      of property and equipment
    
    (1,560)
    
    (940)Capital
      Contribution of $2,432 towards interest in subsidiary,
      less net cash
      acquired of $1,679
    
    (753)
    
    -Restricted
      cash increase
    
    (211)
    
    -Proceeds
      from disposition of assets
    
    -
    
    202Net
      cash used in investing activities
    
    (2,524)
    
    (738)











(continued)




6


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**





**For
      the Three Months Ended March 31,***Amounts
      in thousands*
    
    **2005**
    
    **2004****Cash
      Flows from Financing Activities:**Proceeds
      from borrowings
    $
    10,221
    $
    6,380Principal
      repayments
    
    (9,593)
    
    (7,711)Proceeds
      from exercise of options
    
    74
    
    2Net
      cash provided by (used) in financing activities
    
    702
    
    (1,329)**Effect
      of exchange rate changes on cash**
    
    (442)
    
    115**Decrease
      in Cash and Cash Equivalents**
    
    (1,350)
    
    (695)**Cash
      and Cash Equivalents at Beginning of Period**
    
    8,411
    
    4,729**Cash
      and Cash Equivalents at End of Period**
    $
    7,061
    $
    4,034





**Supplemental
Disclosure of Noncash Financing Activities:**





In
February 2005, our wholly owned subsidiary, Century Resorts International
Limited, purchased a 56.4% equity interest in Century Resorts Alberta, Inc by
contributing $2.4 million in cash to Century Resorts Alberta, Inc. In
conjunction with this acquisition, we assumed the following
liabilities:





*Amounts
      in thousands*Fair
      value of assets acquired
    $
    2,631Cash
      paid, net of $1,679 in cash acquired
    
    (753)Liabilities
      assumed
    $
    1,878





The
assets acquired and liabilities assumed are reported in the consolidated balance
sheet.





In
January 2004, our wholly owned subsidiary Century Management u. Beteiligungs
GmbH purchased an additional 40% interest in Casino Millennium, bringing our
total interest to 50%, by contributing gaming equipment with a net book value of
$0.60 million. The contribution of the gaming equipment, along with a cash
contribution made in December 2002 which was accounted for on a cost basis in
Euro and had a value of $0.29 million on January 3, 2004, brought our total
investment in Casino Millennium to $0.89 million, of which $0.26 million was
allocated to a shareholder loan acquired as part of the transaction. The
difference between the cost and the equity of Casino Millennium, of $0.57
million, has been recorded as goodwill.





**Supplemental
Disclosure of Cash Flow Information:**





*Amounts
      in Thousands*
    **For
      the Three Months Ended****2005**
    
    **2004**Interest
      paid
    $
    399
    $
    400Income
      taxes paid
    $
    -
    $
    -


See notes
to condense consolidated financial statements.


7


**CENTURY
CASINOS, INC. AND SUBSIDIARIES**


**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)**





**1.**
    **DESCRIPTION
      OF BUSINESS AND BASIS OF
PRESENTATION**





Century
Casinos, Inc. (“CCI” or the “Company”) is an international gaming company. We
own and/or manage casino operations in the United States, South Africa, the
Czech Republic and international waters through various entities that are wholly
owned or in which we have a majority ownership position.





**Parent/Subsidiary
      Relationship**
    **Abbreviation**
    **Parent**
    **Ownership
      Percentage****Century
      Casinos, Inc.**
    **CCI**
    **n/a**
    **n/a****WMCK
      Venture Corp.**
    **WMCK**
    **CCI**
    **100%**WMCK-Acquisition
      Corp.
    ACQ
    WMCK
    100%Century
      Casinos Cripple Creek, Inc.
    CCC
    WMCK
    100%**Century
      Resorts Limited**
    **CRL**
    **CCI**
    **96.5%**Century
      Casinos Africa (Pty) Limited
    CCA
    CRL
    100%Century
      Casinos Caledon (Pty) Limited
    CCAL
    CCA
    100%Century
      Casinos West Rand (Pty) Limited (Dormant)
    CCWR
    CCA
    55%Rhino
      Resort Ltd. (Dormant)
    RRL
    CCA
    50%**Century
      Resorts International Limited**
    **CRI**
    **CCI**
    **100%******Century Resorts Alberta, Inc
    CRA
    CRI
    56.4%**Century
      Casinos Tollgate, Inc**
    **CTI**
    **CCI**
    **100%**CC Tollgate LLC
    CTL
    CTI
    65%**Century
      Casinos Iowa, Inc.**
    **CIA**
    **CCI**
    **100%****Century
      Casinos Management, Inc.**
    **CCM**
    **CCI**
    **100%****Century
      Casinos Nevada, Inc. (Dormant)**
    **CCN**
    **CCI**
    **100%****Century
      Management u. Beteiligungs GmbH**
    **CMB**
    **CCI**
    **100%**


****


**CCI**serves as a holding company,
providing corporate and administrative services to its
subsidiaries.


****


**WMCK** owns and
operates Womacks Casino and Hotel (“Womacks”), a limited-stakes gaming casino in
Cripple Creek, Colorado.


****


**CRL** was
formed to own our South African interests and to provide technical casino
services to some of our foreign and offshore operations. CCI owns 96.5% of CRL.
Certain officers of the Company and their respective family trusts own the
remaining 3.5% of CRL collectively. CRL owns 100% of CCA. **** CCA owns
CCAL which owns and operates The Caledon Hotel, Spa and Casino (“Caledon”) near
Cape Town, South Africa.


****


8


**CRI** serves
as concessionaire of small casinos on eight luxury cruise vessels and provides
technical casino services to Casino Millennium. **** CRI owns
56.4% of CRA which was formed in conjunction with an application for a gaming
license in Edmonton, Alberta, Canada. On October 12, 2004 CRI entered into a
casino services agreement with CC Tollgate LLC to manage the proposed casino in
Central City, Colorado. CRI has entered into an agreement with CCA in which it
earns a fee for the services provided by executive management contracted to
CRI.


****


**CTI** has a 65%
controlling interest in CC Tollgate LLC, and has entered into an agreement with
Tollgate Venture LLC to develop and operate a casino and hotel in Central City,
Colorado.


**CIA** was
formed in 2004 to own our interest in the proposed moored barge casino, hotel
and entertainment facility in Franklin County, Iowa.
  **CCM** provided
technical casino services to some of our operations. The technical services
agreements were re-assigned to CRI in October 2003, but CCM is still
collecting  fees that were earned prior to that time, which remain
unpaid. CCM has entered into a casino services agreement to manage the proposed
project in Iowa as discussed below.
  **CMB** has a
50% equity interest in Casino Millennium located within a five-star hotel in
Prague, Czech Republic. The current period earnings are reported as earnings
(loss) from unconsolidated subsidiary in our consolidated statements of earnings
and cash flows. CMB also provides administrative support for executive
management in Europe.
  **We
regularly pursue additional gaming opportunities internationally and in the
United States, and are currently pursuing the following opportunities:**


****


**Central
City, Colorado** - On
December 30, 2004 we acquired a 65% interest in CC Tollgate LLC which was formed
to develop and operate a casino and hotel in Central City, Colorado and is in
the process of securing project financing and obtaining licensing from the
Colorado Division of Gaming. We have also entered into a long-term agreement to
manage the facility if a gaming license is awarded. The project is planned to
include a 60,000 square foot limited stakes casino with 625 gaming machines, six
gaming tables, 25 hotel rooms, retail, food and beverage amenities and a 500
space on-site covered parking facility. Construction is expected to take
approximately 14 months from finalization of funding arrangements.


****


**Edmonton** - On
February 24, 2005, through our wholly owned subsidiary, Century Resorts
International, we acquired a 56.4% interest in Century Resorts Alberta, Inc.
(“CRA”) for approximately, $2.4 million ($3.0 million Canadian dollars.) The
Company’s local partner, 746306 Alberta, Ltd. contributed a 7.25 acre parcel of
land and an existing 40 room hotel for the remaining 43.6% interest. Century
Resorts Alberta, Inc. plans to develop the Celebrations Casino and Hotel in
Edmonton, Alberta, Canada. Completion of this project is subject to obtaining
acceptable project financing. On December 17, 2004 the AGLC granted approval to
begin construction of the casino property. As is customary, the issuance of the
license does not occur until completion of construction and after all federal
and provincial legislation, regulation and policies, and municipal requirements,
permits, licenses and/or authorizations have been met. We have also entered into
a long-term agreement to manage the facility if a gaming license is
awarded.







**Franklin County, Iowa -** On
October 18, 2004, CCI entered into an agreement with the owners of Landmark
Gaming LC of Franklin County, Iowa, to jointly submit as co-applicant with the
Franklin County Development Association (FCDA) an application to the Iowa Racing
and Gaming Commission (IRGC) to develop and operate a moored barge casino, hotel
and entertainment facility in Franklin County, Iowa. On November 11, 2004, CCI
through Landmark Gaming LC jointly submitted as co-applicant with the FCDA a
casino facility license application to the IRGC for a casino in Franklin County,
Iowa. The
proposed project, The Landmark Hotel and Casino, is a moored barge casino, hotel
and entertainment facility in the Mississippi riverboat style. Landmark Gaming
LC will be 40% owned by Century Casinos Iowa, Inc (“CIA”), a wholly owned
subsidiary of CCI, if a license is granted. The other 60% will be owned by Gayle
Burnett, Roger Burnett and Michael Dunn, the Iowa residents who own the land and
land options which will be developed into the Landmark project. Century Casinos
Management, Inc. has entered into a long term agreement to manage the casino in
return for a share in gross revenues plus a share in EBITDA. Our contribution to
the project at closing will include an initial cash capital contribution of
$1.25 million in return for a 40% interest. The current owners of Landmark
Gaming LC will contribute the land and land options in return for 60% ownership.
Our cash contribution and the beginning of construction are subject to various
conditions and approvals, including, but not limited to awarding of a license by
the IRGC, securing acceptable financing and other due diligence.





9
 
 ****
 **Johannesburg** - In
December of 2004, CCI entered into agreements to sell a portion of its interest
in the Gauteng, South Africa, project we had previously been pursuing jointly
with Silverstar Development Ltd. and granted options to Silverstar and a group
led by Akani Leisure Investments, Ltd. to purchase its remaining interests in
the Gauteng project. CCI received an initial payment of approximately $1.7
million, or 10.0 million Rand, for the sale of 100% of the outstanding common
stock of Verkrans Ontwikkelings Maatskappy (Pty) Ltd., a wholly owned subsidiary
of CCA, whose only asset was land related to this project, and for funds
previously advanced to Silverstar. Also in conjunction with the agreements, we
loaned Silverstar $0.5 million, 3.0 million Rand repayable in six equal
installments with interest. We have, therefore, only recognized net proceeds of
7.0 million Rand in the transaction. The exercise price of the purchase option
granted to Silverstar and the Akani group totals approximately $6.8 million, or
40.3 million Rand. Exercisability of the purchase option is contingent on
regulatory and related approvals being secured by Silverstar and the Akani
group. The outcome of these approvals is unknown at this time.
 
   **Presentation
of Foreign Currency Amounts -** Historical transactions that are denominated in a foreign currency are
translated and presented at the United States 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 exchange rates used to translate balances
at the end of the reported periods are as follows:







**March
      31, 2005**
    **December
      31,2004**
    **March
      31, 2004**South
      African Rand
    6.2190
    5.6640
    6.3095Euros
    0.77099
    0.7388
    0.8135Czech
      Koruna
    23.150
    22.4640
    26.6959Canadian
      Dollars
    1.2096
    1.2036
    1.3440


Source:
Pacific Exchange Rate Service




Certain
reclassifications have been made to the 2004 financial information in order to
conform to the 2005 presentation.




10


The
accompanying condensed consolidated financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
United States of America (“US GAAP”) for interim financial reporting and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The accompanying
consolidated financial statements include the accounts of CCI and its
majority-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated. The financial statements of all foreign
subsidiaries consolidated herein have been converted to US GAAP for financial
statement presentation purposes. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with US GAAP
have been condensed or omitted.




In the
opinion of management, all adjustments considered necessary for fair
presentation of financial position, results of operations and cash flows have
been included. These condensed consolidated financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The
results of operations for the period ended March 31, 2005 are not necessarily
indicative of the operating results for the full year.




**2.**
    **RECENTLY
      ISSUED ACCOUNTING PRONOUNCEMENTS**





In
December 2004, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 123R (SFAS 123R), “Share-Based Payment.”
SFAS 123R requires employee stock options and rights to purchase shares under
stock participation plans to be accounted for under the fair value method, and
eliminates the ability to account for these instruments under the intrinsic
value method prescribed by Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees,” which generally resulted in the
recognition of no compensation cost. SFAS 123R requires the use of an option
pricing model for estimating fair value, which is amortized to expense over the
service periods. The requirements of SFAS 123R are effective with the first
interim or annual reporting period of the registrant’s first fiscal year
beginning on or after June 15, 2005. We are currently assessing the valuation
options allowed under SFAS 123R. We have not yet determined the impact of
applying its various provisions, however based on our current outstanding
options; we believe the impact on earnings will be significant.




In December
2004, the FASB issued SFAS No. 153 (SFAS 153), “Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29.” This eliminates the exception in APB
Opinion No. 29 for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial substance. A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result of the exchange. The provisions of this statement will be effective for
fiscal periods beginning after June 15, 2005. We are currently evaluating the
impact of this new standard, but do not expect the adoption of SFAS 153 to have
a material impact on our financial position, results of operations or cash
flows.





11




**3.**
    **EQUITY
      INVESTMENT IN UNCONSOLIDATED
SUBSIDIARY**





We have a 50%
ownership in Casino Millennium (“CM”) and we account for this investment under
the equity method.




Following is
the summarized financial information of Casino Millennium as of and for the
three months ended:





*Amounts
      shown in thousands*
    
    **As
      of March 31,**
    **As
      of December 31,****2005**
    **2004****Balance
      Sheet:**Current
      Assets
    $
    554
    841Noncurrent
      Assets
    $
    927
    935Current
      Liabilities
    $
    6
    104Noncurrent
      liabilities
    $
    1,164
    1,191**For
      the Three Months Ended March 31,****2005**
    **2004****Operating
      Results:**Net
      operating revenue
    $
    422
    606Net
      earnings (Loss) (1)
    $
    (196)
    14





(1)
    After
      expensing casino services fees paid to the
Company.








Casino
services fee income for the three months ended March 31, 2005 and 2004 was $9
thousand and $27 thousand, respectively.




The net
operating revenue and net earnings (loss) decreased significantly, primarily as
a result of a reduction in the guest count which is attributed to poor winter
weather conditions. At the same time, the hold percentage at the casino was
down.





FIN 46(R),
“Consolidation of Variable Interest Entities”, addresses consolidation issues by
business enterprises of variable interest entities in which 1) the equity
interest at risk is not sufficient to finance its activities without additional
subordinated financial support, 2) the equity investors lack one or more
essential characteristics of a controlling financial interest or 3) the equity
investors have voting rights that are not proportionate to their economic
interest. We adopted FIN 46(R) on January 1, 2004. We determined that CM is a
variable interest entity as defined by FIN 46(R). We also determined that we are
not the primary beneficiary as defined by FIN 46(R) and have, therefore,
accounted for our 50% interest in CM on the equity basis. A primary beneficiary
is the party that absorbs a majority of the entity’s expected losses, receives a
majority of its expected returns, or both as defined in FIN 46(R). Under the
equity method of accounting, we have recognized the difference between the
investment and the underlying cost of the equity as goodwill and reported our
percentage of the earnings in CM as earnings (loss) from unconsolidated
subsidiary.





12
 
 
 The Company’s
estimated maximum exposure to losses consists of the
following:





*Amounts
      in thousands*
    **As
      of****March
      31, 2005**Equity
      investment in Casino Millennium
    $
    14Goodwill
    
    578Note
      receivable
    
    265Other
      receivables
    
    200Total
    $
    1,057





**4.**
    **STOCK
      BASED COMPENSATION**





We have
chosen to account for stock-based compensation for employees using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25 (APB 25),
“Accounting for Stock Issued to Employees”, and related Interpretations.
Accordingly, compensation cost for stock options is measured as the excess, if
any, of the quoted market price of our stock at the date of the grant over the
amount an employee must pay to acquire that stock. We value stock-based
compensation granted to non-employees at fair value.




Our
stock-based employee compensation plan expired in April 2004. Accordingly, no
new options can be granted under the plan subsequent to April 2004, but it
continues to be administered for previously issued and outstanding
options.




All options
granted under the plan had an exercise price equal to the market value of the
underlying common stock on the date of the grant. The following table
illustrates the effect on net earnings and earnings per share if we had applied
the fair value recognition provisions of SFAS No. 123, “Accounting for
Stock-Based Compensation”, to stock-based employee compensation.





*Amounts
      in thousands, except for share information*
    **For
      the Three Months Ended****March
      31,****2005**
    
    **2004**Net
      earnings, as reported
    $
    1,007
    $
    904Deduct:
      Total stock-based employee compensation expense determined under fair
      value based method for all awards, net of related tax
    effects
    
    127
    
    269Pro
      forma net earnings
    $
    880
    $
    635Earnings
      per shareBasic
    As
      reported
    $
    0.07
    $
    0.07Pro
      forma
    $
    0.06
    $
    0.05Diluted
    As
      reported
    $
    0.06
    $
    0.06Pro
      forma
    $
    0.05
    $
    0.04





13




**5.**
    **GOODWILL**





Changes in
the carrying amount of goodwill by segment for the three months ended March 31,
2005 are as follows:





*Amounts
      shown in thousands*
    
    **Cripple
      Creek, CO**
    
    **South
      Africa**
    
    **Corp
      & Other**
    
    **Total**Balance
      as of December 31, 2004
    $
    7,232
    $
    1,009
    $
    604
    $
    8,845Effect
      of foreign currency translation
    
    -
    
    (90)
    
    (25)
    
    (115)Balance
      as of March 31, 2005
    $
    7,232
    $
    919
    $
    579
    $
    8,730





**6.**
    **LONG-TERM
      DEBT**





The principal
balance outstanding under the Wells Fargo Bank Revolving Line of Credit Facility
(“RCF”) as of March 31, 2005 was $16.8 million and $15.7 million at December 31,
2004. The amount available under the RCF as of March 31, 2005 was $4.1 million,
net of amounts outstanding as of that date, and $5.3 million at December 31,
2004. The loan agreement includes certain restrictive covenants on financial
ratios of WMCK. The Company was in compliance with the covenants as of March 31,
2005 and December 31, 2004 .
The interest rate at March 31, 2005 was 4.86% for $14.5 million outstanding
under LIBOR based provisions of the loan agreement. The remaining balance of the
outstanding debt is subject to interest under the prime based provisions of the
loan agreement at a rate of 5.75%. In October 2004, an amendment to the RCF
changed the aggregate commitment reduction schedule under the RCF. Effective
with the amendment, there will be no quarterly reduction until July 1, 2005. The
available balance will be reduced by $0.3 million for two quarters beginning
July 1, 2005, by $0.6 million for two quarters beginning January 1, 2006, and
finally by $0.7 million at the beginning of each quarter beginning July 1, 2006
until maturity in August 2007. The change in the scheduled reduction provides us
with approximately $1.8 million additional availability over the next five
quarters.




The fair
value of the Company’s interest rate swap derivatives as of March 31, 2005 and
December 31, 2004 of $0.1 million and $0.1 million, respectively, is reported as
another current liability in the condensed consolidated balance sheets. The
effective portion on the interest rate swaps of $1 thousand, net of deferred
income tax expense of $0 for the first quarter of 2005, has been reported in
accumulated other comprehensive earnings in the shareholders’ equity section of
the accompanying March 31, 2005 condensed consolidated balance sheet. Net
additional interest expense to the Company under the swap agreements was $52.7
thousand and $67.9 thousand for the three months ended March 31, 2005 and 2004,
respectively. Including the impact of the swaps and the amortization of the
deferred financing cost, the effective rate on the borrowings under the RCF was
6.37% and 7.07% for the three months ended March 31, 2005 and 2004,
respectively.




The principal
balance outstanding balance under the principal loan agreement with ABSA Bank
(“ABSA”) as of March 31, 2005 was $2.5 million and $3.2
million at December 31, 2004 and the interest rate was 17.05% at the end of both
periods. The outstanding balances on the standby facility with ABSA as of March
31, 2005 were $0.2 million and $0.3 million at December 31, 2004 and the
interest rate was 15.1% at the end of both periods. The agreement requires
quarterly installments over the remaining term of the loan. The agreement
requires a minimum deposit in the sinking fund equal to four million Rand
(approximately $0.6 million) at the end of each quarter until maturity in June
2006. In addition, one third of the next quarterly principal and interest
payment must be deposited on the last day of each month into the fund and used
for the next quarterly installment. The loan agreement includes certain
restrictive covenants for CCAL. CCAL was in compliance with the covenants as of
March 31, 2005 and December 31, 2004.





14
 
 
 Unsecured
notes payable, in the amount of $1.1 million, as of March 31, 2005 and December
31, 2004, to a minority interest holder in CC Tollgate LLC, are payable
contingent upon the opening date of the casino. $1.0 million is payable based on
opening date of the casino, the note bears interest at 8% rate and is considered
long-term in the accompanying consolidated balance sheets. Two notes are payable
based upon first construction draw, $80 thousand bears interest at 6% rate and
$41 thousand bears interest at 13% rate . Both
are considered current in the accompanying consolidated balance sheets. An
additional $135 thousand, non-interest bearing note is payable based upon the
opening of the opening date of the casino and is also classified as long-term as
of March 31, 2005.
  The remaining
amount of debt of $0.1 million, as of March 31, 2005 and $0.2 million as of
December 31, 2004 consists of capital leases.
  The
consolidated weighted average interest rate on all borrowings was 8.88% and
9.31% for the three months ended March 31, 2005 and 2004,
respectively.
  On April 8,
2005, CC Tollgate LLC entered into a loan agreement with Colorado Business Bank
securing $5.0 million to finance the predevelopment construction costs
associated with the development of a casino in Central City, Colorado. Under the
terms of the agreement, the loan will mature on October 4, 2005 at which time
the principal is due with interest calculated at prime plus 0.5%. At the
inception of the loan, prime is 5.75%. The note is secured by the existing
property and improvements and by commercial guarantees provided by Century
Casinos, Inc. and its partner Tollgate Venture LLC.





**7.**
    **SHAREHOLDERS’
      EQUITY**





During the
first three months of 2005, we did not purchase any shares of the Company’s
common stock on the open market. We issued 60,000 shares of treasury stock in
January 2005 for stock options exercised in cash. Subsequent to March 31, 2005,
and through the date of this report, we have not purchased shares of our common
stock on the open market.




In connection
with the granting of a gaming license to CCAL by the Western Cape Gambling and
Racing Board in April 2000, CCAL issued a total of 200 preference shares, 100
shares each to two minority shareholders, each of whom has one seat on the board
of directors of CCAL, neither of whom are officers, directors or affiliates of
CCI. The preference shares are not cumulative, nor are they redeemable. The
preference shares entitle the holders of the shares to dividends of 20% of the
after-tax profits directly attributable to the CCAL casino business subject to
working capital and capital expenditure requirements and CCAL loan obligations
and liabilities as determined by the directors of CCAL. Should the CCAL casino
business be sold or otherwise dissolved, the preference shareholders are
entitled to 20% of any surplus directly attributable to the CCAL casino
business, net of all liabilities attributable to the CCAL casino business. As of
March 31, 2005, no dividend has been declared for the preference
shareholders.




CCI owns
96.5% of CRL. Certain officers of the Company and their respective family trusts
own the remaining 3.5% of CRL collectively.





15




**8.**
    **SEGMENT
      INFORMATION**





We are
managed in six segments; Cripple Creek, Colorado (formerly Colorado); Central
City, Colorado; Edmonton, Canada; South Africa; Cruise Ships; and Corporate and
Other operations.





The operating
results of the Cripple Creek, Colorado segment are those of WMCK Venture Corp.
and subsidiaries which own Womacks Casino and Hotel (“Womacks”) in Cripple
Creek, Colorado.





The operating
results of the Central City, Colorado segment are those of Century Casinos
Tollgate, Inc. and subsidiary which is developing a proposed casino and
hotel.





The operating
results of the Edmonton, Canada segment are those of Century Resorts Alberta,
Inc. which is developing a proposed casino and hotel.





The operating
results of the South African segment are those of Century Casinos Africa (Pty)
Limited and its subsidiaries, primarily Century Casinos Caledon (Pty) Limited
which owns the Caledon Hotel, Spa and Casino.





Cruise Ship
operations include the revenue and expense of the eight combined shipboard
operations for which we have casino concession agreements.





Corporate and
Other operations include, among other items, the revenue and expense of
corporate gaming projects for which we have secured long-term service
contracts.





Earnings
before interest, taxes, depreciation and amortization (EBITDA) are not
considered a measure of performance recognized as an accounting principle
generally accepted in the United States of America. Management believes that
EBITDA is a valuable measure of the relative performance amongst its operating
segments. The gaming industry commonly uses EBITDA as a method of arriving at
the economic value of a casino operation. It is also used by our lending
institutions to gauge operating performance. Management uses EBITDA to compare
the relative operating performance of separate operating units by eliminating
the interest income, interest expense, income tax expense, and depreciation and
amortization expense associated with the varying levels of capital expenditures
for infrastructure required to generate revenue, and the oftentimes high cost of
acquiring existing operations.


16





*Amounts
      in thousands*
    **Cripple
      Creek, CO**
    **Central
      City, CO**
    **Edmonton,
      Canada****As
      of and for the Three Months Ended****March
      31,**
    **2005**
    **2004**
    **2005**
    **2004**
    **2005**
    **2004****Property
      and equipment, net**
    $
    22,797
    $
    23,174
    $
    9,433
    $
    -
    $
    3,023
    $
    -**Total
      assets**
    $
    32,720
    $
    32,659
    $
    9,506
    $
    -
    $
    4,883
    $
    -**Net
      operating revenue**
    $
    3,805
    $
    4,379
    $
    -
    $
    -
    $
    -
    $
    -**Operating
      expenses (excluding depreciation)**
    
    2,661
    
    2,563
    
    21
    
    -
    
    32
    
    -**Depreciation**
    
    443
    
    305
    
    -
    
    -
    
    -
    
    -**(Loss)
      earnings from unconsolidated
subsidiary**
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -**Earnings
      (loss) from operations**
    
    701
    
    1,511
    
    (21)
    
    -
    
    (32)
    
    -**Interest
      income**
    
    3
    
    2
    
    -
    
    -
    
    2
    
    -**Interest
      (expense), including debt issuance cost, net (1)**
    
    9
    
    32
    
    -
    
    -
    
    (28)
    
    -**Other
      income (expense), net**
    
    (5)
    
    1
    
    -
    
    -
    
    2
    
    -**Non-operating
      items from unconsolidated subsidiary**
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -**Earnings
      (loss) before income taxes and minority interest**
    
    708
    
    1,546
    
    (21)
    
    
    
    (56)
    
    -**Income
      tax (expense) benefit**
    
    (269)
    
    (587)
    
    -
    
    -
    
    -
    
    -**Minority
      interest**
    
    -
    
    -
    
    20
    
    -
    
    -
    
    -**Net
      earnings (loss)**
    $
    439
    $
    959
    $
    (1)
    $
    -
    $
    (56)
    $
    -**Reconciliation
      to EBITDA:****Net
      earnings (loss) (US GAAP)**
    $
    439
    $
    959
    $
    (1)
    $
    -
    $
    (56)
    $
    -**Interest
      income**
    
    (3)
    
    (2)
    
    -
    
    -
    
    (2)
    
    -**Interest
      expense (1)**
    
    (9)
    
    (32)
    
    -
    
    -
    
    28
    
    -**Income
      taxes**
    
    269
    
    587
    
    -
    
    -
    
    -
    
    -**Depreciation**
    
    443
    
    305
    
    -
    
    -
    
    -
    
    -**EBITDA**
    $
    1,139
    $
    1,817
    $
    (1)
    $
    -
    $
    (30)
    $
    -





(1)
    We
      have not repaid the funds advanced for our acquisitions or the repurchase
      of our common stock, therefore the debt and accumulated interest allocated
      to the Corporate & Other segment exceeded the total outstanding
      borrowing under the RCF in the Colorado segment, resulting in the reported
      negative interest expense for 2004.


17





*Amounts
      in thousands*
    
    **South
      Africa**
    
    **Cruise
      Ships**
    
    **Corporate
      and Other****As
      of and for the Three Months Ended March 31,**
    
    **2005**
    
    **2004**
    
    **2005**
    
    **2004**
    
    **2005**
    
    **2004****Property
      and equipment, net**
    $
    14,283
    $
    14,743
    $
    565
    $
    446
    $
    465
    $
    457**Total
      assets**
    $
    21,458
    $
    21,072
    $
    1,153
    $
    745
    $
    1,870
    $
    2,294**Net
      operating revenue**
    $
    4,734
    $
    3,320
    $
    653
    $
    438
    $
    435
    $
    27**Operating
      expenses (excluding depreciation**)
    
    3,063
    
    2,200
    
    456
    
    329
    
    887
    
    691**Depreciation**
    
    381
    
    321
    
    25
    
    17
    
    3
    
    8**(Loss)
      earnings from unconsolidated subsidiary**
    
    -
    
    -
    
    -
    
    -
    
    (97)
    
    13**Earnings
      (loss) from operations**
    
    1,290
    
    799
    
    172
    
    92
    
    (552)
    
    (659)**Interest
      income**
    
    41
    
    39
    
    -
    
    -
    
    410
    
    90**Interest
      (expense), including debt issuance cost**
    
    (501)
    
    (214)
    
    -
    
    -
    
    (342)
    
    (325)**Other
      income, net**
    
    (10)
    
    -
    
    -
    
    -
    
    (1)
    
    -**Non-operating
      items from unconsolidated subsidiary**
    
    -
    
    -
    
    -
    
    -
    
    (1)
    
    (6)**Earnings
      (loss) before income taxes and minority interest**
    
    820
    
    624
    
    172
    
    92
    
    (486)
    
    (900)**Income
      tax (expense) benefit**
    
    (275)
    
    (208)
    
    (5)
    
    (3)
    
    393
    
    355**Minority
      interest**
    
    -
    
    -
    
    -
    
    -
    
    6
    
    (15)**Net
      earnings (loss)**
    $
    545
    $
    416
    $
    167
    $
    89
    $
    (87)
    $
    (560)**Reconciliation
      to EBITDA:****Net
      earnings (loss) (US GAAP)**
    $
    545
    $
    416
    $
    167
    $
    89
    $
    (87)
    $
    (560)**Interest
      income**
    
    (41)
    
    (39)
    
    -
    
    -
    
    (410)
    
    (90)**Interest
      expense**
    
    501
    
    214
    
    -
    
    -
    
    342
    
    325**Income
      taxes**
    
    275
    
    208
    
    5
    
    3
    
    (393)
    
    (355)**Depreciation**
    
    381
    
    321
    
    25
    
    17
    
    3
    
    8**EBITDA**
    $
    1,661
    $
    1,120
    $
    197
    $
    109
    $
    (545)
    $
    (672)









18




*Amounts
      in thousands*
    
    **Inter-segment
      Elimination**
    
    **Consolidated****As
      of and for the Three Months Ended March 31,**
    
    **2005**
    
    **2004**
    
    **2005**
    
    **2004****Property
      and equipment, net**
    $
    -
    $
    -
    $
    50,566
    $
    38,820**Total
      assets**
    $
    -
    $
    -
    $
    71,590
    $
    56,770**Net
      operating revenue**
    $
    (399)
    $
    -
    $
    9,228
    $
    8,164**Operating
      expenses (excluding depreciation)**
    
    (399)
    
    -
    
    6,721
    
    5,783**Depreciation**
    
    -
    
    -
    
    852
    
    651**(Loss)
      earnings from unconsolidated subsidiary**
    
    -
    
    -
    
    (97)
    
    13**Earnings
      (loss) from operations**
    
    -
    
    -
    
    1,558
    
    1,743**Interest
      income**
    
    (409)
    
    (85)
    
    47
    
    46**Interest
      (expense), including debt issuance cost**
    
    409
    
    85
    
    (453)
    
    (422)**Other
      income, net**
    
    -
    
    -
    
    (14)
    
    1**Non-operating
      items from unconsolidated** **subsidiary**
    
    -
    
    -
    
    (1)
    
    (6)Earnings
      (loss) before income taxes and minority interest
    
    -
    
    -
    
    1,137
    
    1,362**Income
      tax (expense)**
    
    -
    
    -
    
    (156)
    
    (443)**Minority
      interest**
    
    -
    
    -
    
    26
    
    (15)**Net
      earnings (loss)**
    $
    -
    $
    -
    $
    1,007
    $
    904**Reconciliation
      to EBITDA:****Net
      earnings (loss) (US GAAP)**
    $
    -
    $
    -
    $
    1,007
    $
    904**Interest
      income**
    
    409
    
    85
    
    (47)
    
    (46)**Interest
      expense**
    
    (409)
    
    (85)
    
    453
    
    422**Income
      taxes**
    
    -
    
    -
    
    156
    
    443**Depreciation**
    
    -
    
    -
    
    852
    
    651**EBITDA**
    $
    -
    $
    -
    $
    2,421
    $
    2,374







19




**9.**
    **PROMOTIONAL
      ALLOWANCES**





Promotional
allowances presented in the condensed consolidated statements of earnings for
the period ended March 31, 2005 and March 31, 2004 include the
following:





*Amounts
      in thousands*
    **For
      the Three Months Ended March 31,****2005**
    **2004**Food
      & Beverage and Hotel Comps
    $
    381
    $
    373Free
      Plays or Coupons
    
    505
    
    379Player
      Points
    
    381
    
    327Total
      Promotional Allowances
    **$**
    **1,267**
    **$**
    **1,079**





We issue free
play or coupons for the purpose of generating future revenue. Coupons are issued
the month prior to when they can be redeemed and are valid for defined periods
of time ranging up to 7 days. The net win from the coupons is expected to exceed
the value of the coupons issued. The cost of the coupons redeemed is applied
against the revenue generated on the day of the redemption.




Members of
the casinos’ players clubs earn points as a percentage of coin-in. The cost of
the points is offset against the revenue in the period that the revenue
generated the points. The value of the unused or unredeemed points is included
in the accounts payable and accrued liabilities on our condensed consolidated
balance sheets.





**10.**
    **OTHER
      INCOME, NET**





Other income,
net, consists of the following:





*Amounts
      in thousands*
    **For
      the Three Months Ended March 31,****2005**
    
    **2004**Interest
      income
    $
    47
    
    $
    46Other
      expense
    
    (14)
    
    
    1**Other
      Income, net**
    **$**
    **33**
    
    **$**
    **47**


****


20


**11.**
    **INCOME
      TAXES**





The income
tax provisions are based on estimated full-year earnings for financial reporting
purposes adjusted for permanent differences. **** The
provision for income taxes decreased during the first quarter of 2005 compared
to the same period in 2004 due to reduced foreign income taxes on $0.72 million
in management fees and interest expense paid by our South African subsidiary to
its Mauritian parent. These fees and interest are taxed at an effective rate of
3%, instead of the normal 30% foreign statutory rate, and resulted in a decrease
of $0.20 million in income taxes in the first quarter of 2005. These fees and
interest commenced during the third and fourth quarters of 2004 and, therefore,
had no impact on the first quarter of 2004 provision for income
taxes.




Income taxes
reported in the Corporate and Other Segment for the three months ended March 31,
2005 and 2004 are as follows:





***Amounts
      in thousands***
    
    **United
      States**
    
    **Mauritius**
    
    **Other**
    
    **Corporate
      and Other****2005**
    
    **2004**
    
    **2005**
    
    **2004**
    
    **2005**
    
    **2004**
    
    **2005**
    
    **2004**Earnings
      before income taxes and minority
      interest
    $
    (1,212)
    $
    (903)
    $
    724
    $
    -
    $
    2
    $
    3
    $
    (486)
    $
    (900)Income
      tax (expense) benefit
    $
    414
    $
    357
    $
    (19)
    $
    -
    $
    (2)
    $
    (2)
    $
    393
    $
    355Effective
      tax rate
    
    34%
    
    40%
    
    3%
    
    -
    
    100%
    
    67%
    
    81%
    
    39%





**12.**
    **EARNINGS
      PER SHARE**





Basic and
diluted earnings per share for the three months ended March 31, 2005 and 2004
were computed as follows:





*Amounts
      in thousands, except for share information*
    **For
      the Three Months Ended March 31,****2005**
    
    
    **2004**Basic
      Earnings Per Share:Net
      earnings, as reported
    $
    1,007
    
    $
    904Weighted
      average common shares
    
    13,748,011
    
    
    13,681,438Basic
      earnings per share
    $
    0.
      07
    
    $
    0.07Diluted
      Earnings Per Share:Net
      earnings, as reported
    $
    1,007
    
    $
    904Weighted
      average common shares
    
    13,748,011
    
    
    13,681,438Effect
      of dilutive securities:Stock
      options and warrants
    
    2,706,251
    
    
    1,334,123Dilutive
      potential common shares
    
    16,454,262
    
    
    15,015,561Diluted
      earnings per share
    $
    0.
      06
    
    $
    0.06Excluded
      from computation of diluted earnings per shareDue
      to antidilutive effect:Options
      and warrants to purchase common shares
    
    -
    
    
    60,000Weighted
      average exercise price
    $
    -
    
    $
    3.26





21





**Item 2.**
    **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**





**Forward-Looking
Statements, Business Environment and Risk Factors**





Forward-looking
statements and business environment information contained in the following
discussion of results of operations and financial condition of the Company
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which can be identified by the use of words such
as “may”, “will”, “expect”, “anticipate”, “estimate”, or “continue”, or
variations thereon or comparable terminology. In addition, all statements other
than statements of historical facts that address activities, events or
developments that the Company expects, believes or anticipates, will or may
occur in the future, and other such matters, are forward-looking
statements.





The
following discussion should be read in conjunction with our condensed
consolidated financial statements and related notes included elsewhere herein.
Our future operating results may be affected by various trends and factors,
which are beyond our control. These include, among other factors, the
competitive environment in which we operate, our present dependence upon the
Cripple Creek, Colorado and Caledon, South Africa gaming markets, changes in the
rates of gaming-specific taxes, shifting public attitudes toward the
socioeconomic costs and benefits of gaming, actions of regulatory bodies,
dependence upon key personnel, the speculative nature of gaming projects we may
pursue, risks associated with expansion, and other uncertain business conditions
that may affect our business.





We
caution the reader that a number of important factors discussed herein, and in
other reports filed with the Securities and Exchange Commission, could affect
our actual results and cause actual results to differ materially from those
discussed in forward-looking statements.





**Results
of Operations**


****


**Overview**





We are
managed in six segments; Cripple Creek, Colorado (formerly Colorado); Central
City, Colorado; Edmonton, Canada; South Africa; Cruise Ships; and Corporate and
Other operations.





The
operating results of the Cripple Creek, Colorado segment are those of WMCK
Venture Corp. and subsidiaries which own Womacks Casino and Hotel (“Womacks”) in
Cripple Creek, Colorado. Womacks is one of the largest gaming facilities in
Cripple Creek, and we have the capacity to expand Womacks to the rear of the
property on a single level at a later date.





The
operating results of the Central City, Colorado segment are those of Century
Casinos Tollgate, Inc. and subsidiary which is developing a proposed casino and
hotel.





The
operating results of the Edmonton, Canada segment are those of Century Resorts
Alberta which is developing a proposed casino and hotel.





The
operating results of the South African segment are those of Century Casinos
Africa (Pty) Limited and its subsidiaries, primarily Century Casinos Caledon
(Pty) Limited which owns the Caledon Hotel, Spa and Casino.





Cruise
Ship operations include the revenue and expense of the eight combined shipboard
operations for which we have casino concession agreements.





Corporate
and Other operations include, among other items, the revenue and expense of
corporate gaming projects for which we have secured long-term service
contracts.







22




**Consolidated
Results of Operations for The Three Months Ended March 31, 2005 vs.
2004**





We
reported net operating revenue of $9.2 million and $8.2 million for the three
months ended March 31, 2005 and 2004, respectively. Casino revenue for the three
months ended March 31, 2005 and 2004, was $9.1 million compared to $8.1 million,
respectively. Casino expense was $3.5 million and $3.1 million for the three
months ended March 31, 2005 and 2004, respectively. General and administrative
expense was $2.4 million for the three months ended March 31, 2005 compared to
$2.0 million for the three months ended March 31, 2004. Depreciation expense was
$0.85 million and $0.65 million for the three months ended March 31, 2005 and
2004, respectively.





Total
earnings from operations were $1.6 million and $1.7 million for the three months
ended March 31, 2005 and 2004, respectively.





Income
tax expense for the three months ended March 31, 2005 and 2004 was $0.16
million, and $0.44 million, respectively. The provision for income taxes
decreased during the first quarter of 2005 compared to the same period in 2004
due to reduced foreign income taxes on $0.72 million in management fees and
interest expense paid by our South African subsidiary to its Mauritian parent.
These fees and interest are taxed at an effective rate of 3%, instead of the
normal 30% foreign statutory rate, and resulted in a decrease of $0.20 million
in income taxes in the first quarter of 2005. These fees and interest commenced
during the third and fourth quarters of 2004 and, therefore, had no impact on
the first quarter of 2004 provision for income taxes.





The
Company’s net earnings for the three months ended March 31, 2005 and 2004 were
$1.0 million, or $0.07 per share, and $0.9 million, or $0.07 per share,
respectively.





A
discussion by business segment follows below.




**Cripple
Creek, Colorado (Formerly Colorado)**





The
operating results of the Cripple Creek, Colorado segment are those of
WMCK-Venture Corp. and subsidiaries, which own Womacks in Cripple Creek,
Colorado. Womacks’ results of operations for the three months ended March 31,
2005 and 2004 were as follows:





**For
      the three months ended March 31,**
    **Increase
      (Decrease)**
    **%
      Change***Dollar
      amounts in thousands*
    **2005**
    **2004****Operating
      Revenue**Casino
    $
    4,472
    $
    4,875
    $
    (403)
    -8.3%Hotel, food and
      beverage
    
    364
    
    324
    
    40
    12.3%Other (including
      promotional allowances)
    
    (1,031)
    
    (820)
    
    211
    25.7%Net
      operating revenue
    
    3,805
    
    4,379
    
    (574)
    -13.1%**Costs
      and Expenses**Casino
    
    1,624
    
    1,626
    
    (2)
    -0.1%Hotel, food and
      beverage
    
    163
    
    88
    
    75
    85.2%General and
      Administrative
    
    874
    
    849
    
    25
    2.9%Depreciation
    
    443
    
    305
    
    138
    45.2%3,104
    
    2,868
    
    236
    8.2%Earnings
      from operations
    
    701
    
    1,511
    
    (810)
    -53.6%Interest
      (expense), net
    
    9
    
    32
    
    (23)
    -71.9%Other
      income, net
    
    (2)
    
    3
    
    (5)
    -166.7%Earnings
      before income taxes
    
    708
    
    1,546
    
    (838)
    -54.2%Income
      tax (expense)
    
    (269)
    
    (587)
    
    (318)
    -54.2%**Net
      Earnings**
    **$**
    **439**
    **$**
    **959**
    **$**
    **(520)**
    **-54.2%**





23
 
 ****
 **Casino
Market Data**





**For
      the three months ended March 31,**
    **2005**
    **2004**Market
      share of the Cripple Creek market
    
    12.8%
    
    14.3%Average
      number of slot machines
    
    637
    
    618Market
      share of Cripple Creek gaming devices
    
    13.4%
    
    14.4%Average
      slot machine win per day
    
    78
      dollars
    
    85
      dollarsCripple
      Creek average slot machine win per day
    
    80
      dollars
    
    85
      dollars





When
comparing the first quarter of 2005 to the first quarter of 2004, adverse winter
weather conditions contributed to a reduction in gaming revenues, particularly
those achieved on the weekends alone. At the same time, the hold % was lower
than expected. In June 2004 an additional casino opened in Cripple Creek,
bringing the total number of casino licenses to 19 compared to 17 at the same
time last year and reduced Womack market share of gaming devices. Womacks has
installed approximately 196 Ticket-in/Ticket-out (“TITO”) slot machines and is
operating some of them under a required field trial with the Colorado Division
of Gaming. In 2004, the Company also spent approximately $3 million to upgrade
the product mix on the gaming floor, improve the player tracking system and
introduce cashless gaming machines. These ongoing improvements are expected to
add to the customer experience and further improve customer service. The ongoing
efforts have helped reduce the potential impact, limiting the decrease in gaming
revenue to 8.3%.





During this
period, the relative percentage of personnel cost, device fees and the cost of
participation machines to net operating revenue contributed to the erosion in
earnings from operations. Management regularly evaluates these overhead costs to
maintain a good cost benefit relationship.




Management
continues to focus on marketing the casino through its Gold Club in which
patrons can earn rewards, that can be redeemed for discounted or free meals,
rooms, cash and other prizes, as well as through increased TV and radio
advertising. Management continues to refine the Womacks product by upgrading
both the interior of the facilities, and modifying the slot machine
mix.


****


**Hotel,
Food and Beverage**




Hotel
revenue, included in hotel, food and beverage revenue, increased by 2.9%, as a
result of an increase in the hotel occupancy rate to 94.4% in 2005 from 92.1% in
2004, respectively. All of the revenue generated by the hotel operations is
derived from comps to better players, the value of which is included in
promotional allowances.




Womacks
operates two restaurants, “Bob’s Grill” and the “Cut Above Buffet” to provide an
alternative for patrons of the casino. Womacks also operates a total of three
bars. In the three months ended March 31, 2005, food and beverage revenue
increased 14.9% when compared to the same period in 2004 primarily as a result
of the increase in revenue from the “Cut Above Buffet” which opened in May 2004.
Overall cost of operating the “Cut Above Buffet” accounts for the significantly
higher percentage increase in the combined cost of hotel, food and beverage when
compared to the percentage increase in the corresponding revenue. The “Cut Above
Buffet” offers a premium menu, incurring a higher cost of sales, and has
fulfilled the intention of attracting new customers to Womacks Gold Club. The
$68 thousand increase in food and beverage expense when comparing the first
quarter of 2005 to the first quarter of 2004 is primarily the result of higher
payroll costs associated with the opening of the Cut Above Buffet and from
management’s decision to improve service levels in both the buffet and Bob’s
Grill.




24


****


**Other**




Other revenue
(including promotional allowance) was ($1,031) in the first quarter of 2005
compared to ($820) in the first quarter of 2004. The primary reason for the
25.7% change was the redemption of an additional $128 thousand in coupons in
February 2005 that did not result in any significant increase in gaming revenue.
Management has increased the utilization of coupons to attract customers with
the expectation of increasing gaming revenue, while monitoring and adjusting the
programs as necessary.




The $138
thousand increase in depreciation expense when comparing the first quarter of
2005 to the first quarter of 2004 is primarily the result of depreciation on
additions to the Womacks casino facility gaming equipment during 2004.




The Company
allocated $0.36 million in interest expense to the Corporate & Other segment
during the three months ended March 31, 2005. Interest expense on the amounts
advanced, but not repaid, to fund our acquisitions and the repurchase of our
common stock is calculated using the effective rate on all borrowings under our
credit facility. We reduce the interest expense incurred by WMCK under our
credit facility by the amount of interest allocated to the Corporate & Other
segment. We have not repaid the funds advanced for our acquisitions or the
repurchase of our common stock, and therefore the debt and accumulated interest
allocated to the Corporate & Other segment exceeded the total outstanding
borrowing. As a result Womacks reported a net negative of $9 thousand in
interest expense and debt issuance cost. During the same period in 2004, Womacks
reported negative interest expense and debt issuance cost, of $32 thousand, net
of $0.32 million in interest expense allocated to the Corporate & Other
segment.




The Cripple
Creek, Colorado segment recognized income tax expense of $0.27 million in the
three months ended March 31, 2005 compared to $0.59 million in the three months
ended March 31, 2004, principally the result of a decrease in earnings before
income taxes.







25




**South
Africa**




The operating
results of the South African segment are those of Century Casinos Africa (Pty)
Limited and its subsidiaries, primarily Century Casinos Caledon (Pty) Limited,
which owns the Caledon Hotel, Spa & Casino.




Improvement
in the Rand versus the dollar when comparing the first quarter of 2005 to the
first quarter of 2004 has had a positive impact on the reported revenues and a
negative impact on expenses.




Operating
results in U.S. dollars for the three months ended March 31, 2005 and 2004 were
as follows: (See the following page for results in Rand)




**CALEDON****For
      the three months ended March 31,**
    
    **Increase
      (Decrease)**
    **%Change***Dollar
      amounts in thousands*
    
    **2005**
    
    **2004****Operating
      Revenue**Casino
    $
    3,978
    $
    2,778
    $
    1,200
    43.2%Hotel,
      food and beverage
    
    864
    
    650
    
    214
    32.9%Other
      (including promotional allowances)
    
    (108)
    
    (108)
    
    -
    0.0%Net
      operating revenue
    
    4,734
    
    3,320
    
    1,414
    42.6%**Costs
      and Expenses**Casino
    
    1,461
    
    1,101
    
    360
    32.7%Hotel,
      food and beverage
    
    605
    
    590
    
    15
    2.5%General
      and administrative
    
    581
    
    473
    
    108
    22.8%Depreciation
    
    381
    
    321
    
    60
    18.7%3,028
    
    2,485
    
    543
    21.9%Earnings
      from operations
    
    1,706
    
    835
    
    871
    104.3%Interest
      expense
    
    (187)
    
    (214)
    
    (27)
    -12.6%Other
      income, net
    
    18
    
    36
    
    (18)
    -50.0%**Earnings
      before Income Taxes**
    
    1,537
    
    657
    
    880
    133.9%Income
      tax (expense)
    
    (493)
    
    (216)
    
    277
    128.2%**Net
      Earnings**
    **$**
    **1,044**
    **$**
    **441**
    **$**
    **603**
    **136.7%**
 
 **CENTURY
      CASINOS AFRICA**Costs
      and ExpensesGeneral
      and administrative
    $
    416
    $
    36
    $
    380
    1055.6%(Income)
      Loss from operations
    
    (416)
    
    (36)
    
    (380)
    -1055.6%Interest
      Expense, net
    
    (324)
    
    -
    
    (324)
    -100.0%Other
      income, net
    
    23
    
    3
    
    20
    666.7%**Earnings
      before Income Taxes**
    
    (717)
    
    (33)
    
    684
    2072.7%Income
      tax benefit
    
    218
    
    8
    
    210
    2625.0%**Net
      Loss**
    **$**
    **(499)**
    **$**
    **(25)**
    **$**
    **474**
    **1896.0%****SOUTH
      AFRICA NET EARNINGS**
    **$**
    **545**
    **$**
    **416**
    **$**
    **129**
    **31.0%****Average
      exchange rate (Rand/USD)**
    
    **6.00**
    
    **6.72**








26


**Operating
results in Rand for the three months ended March 31, 2005 and 2004 are as
follows:

**CALEDON****For
      the three months ended March 31,**
    **Increase
      (Decrease)**
    **%
      Change***Rand
      amounts in thousands*
    
    **2005**
    
    **2004****Operating
      Revenue**Casino
    R
    23,431
    R
    18,672
    R
    4,759
    25.5%Hotel,
      food and beverage
    
    5,091
    
    4,361
    
    730
    16.7%Other (including promotional allowances)
    
    (636)
    
    (737)
    
    (101)
    -13.70%Net
      operating revenue
    
    27,886
    
    22,296
    
    5,590
    25.1%**Costs
      and Expenses**Casino
    
    8,612
    
    7,397
    
    1,215
    16.4%Hotel,
      food and beverage
    
    3,566
    
    3,967
    
    (401)
    -10.1%General
      and administrative
    
    3,430
    
    3,184
    
    246
    7.7%Depreciation
    
    2,248
    
    2,155
    
    93
    4.3%17,856
    
    16,703
    
    1,153
    6.9%Earnings
      from operations
    
    10,030
    
    5,593
    
    4,437
    79.3%Interest
      expense
    
    (1,098)
    
    (1,439)
    
    (341)
    -23.7%Other
      income, net
    
    105
    
    242
    
    (137)
    -56.6%**Earnings
      before income taxes**
    
    9,037
    
    4,396
    
    4,641
    105.6%Income
      tax (expense)
    
    (2,902)
    
    (1,439)
    
    1,463
    101.7%**Net
      Earnings**
    **R**
    **6,135**
    **R**
    **2,957**
    **R**
    **3,178**
    **107.5%**
**CENTURY
      CASINOS AFRICA**Costs
      and ExpensesGeneral
      and administrative
    R
    2,448
    R
    240
    R
    2,208
    920.0%Loss
      from operations
    
    (2,448)
    
    (240)
    
    (2,208)
    -920.0%Interest
      Expense, net
    
    (1,910)
    
    -
    
    (1,910)
    -100.0%Other
      income, net
    
    134
    
    22
    
    112
    509.1%Earnings
      before income taxes
    
    (4,224)
    
    (218)
    
    4,006
    1837.6%Income
      tax benefit
    
    1,267
    
    55
    
    1,212
    2203.6%**Net
      Loss**
    **R**
    **(2,957)**
    **R**
    **(163)**
    **R**
    **2,794**
    **1714.1%****SOUTH
      AFRICA NET EARNINGS**
    **R**
    **3,178**
    **R**
    **2,794**
    **R**
    **384**
    **13.7%****


27


**Casino
Market Data (in Rand)**




**For
      the three months ended March 31,**
    **2005**
    **2004**Market
      share of the Western Cape market
    
    5.97%
    
    5.85%Market
      share of Western Cape gaming devices
    
    11.4%
    
    10.8%Average
      number of slot machines
    
    300
    
    275Average
      slot machine win per day
    
    814
      Rand
    
    694
      RandAverage
      number of tables
    
    9
    
    8Average
      table win per day
    
    1,803
      Rand
    
    1,779
      Rand





The results
discussed below are based on the Rand to eliminate the effect of fluctuations in
foreign currency exchange rates.




The 25.5%
increase in the casino revenue is attributable to the successful marketing
efforts that include the increased marketing of cash couponing, and improved
casino management. The Company markets an array of amenities at the resort to
its guests as a complement to the gaming experience. In addition to the hotel,
spa and casino license, CCAL owns approximately 600 acres of land, which may be
used for future expansion. Caledon also operates a total of four restaurants and
three bars, conference facilities, an equestrian center and operates the program
“Outdoor Experience” (a team building facility).




The 0.1
million Rand change in other operating revenue (including promotional
allowances) is primarily attributable to a reduction in the cost of
complimentaries.




**Hotel,**  **Food
and Beverage**




Conferences
and other functions held at the resort can play a significant role in the
operation of the hotel. Management is attempting to gain additional exposure in
this area through marketing efforts. Management has taken measures to offset the
inflationary pressures in South Africa which have driven up base costs such as
labor, supplies and utilities.




Hotel revenue
increased 32% in the three months ended March 31, 2005 compared to the three
months ended March 31, 2004. The average hotel occupancy rate in the three
months ended March 31, 2005 was 46% compared to 53% in the three months ended
March 31, 2004, but was offset by increases in the average room billing rates.
Conference sales increased 11.8%, and leisure sales increased by 44%. Caledon
was able to reduce hotel expenses by 0.5 million Rand when comparing the first
quarter of 2005 to the first quarter of 2004, primarily by reducing staffing and
advertising cost for the hotel operation. Less reliance on conference sales
during the first quarter contributed to their ability to reduce costs.




Caledon
operated four restaurants in the first quarter of 2005 compared to three in the
first quarter of 2004. Food and beverage revenue increased 6.9% in the three
months ended March 31, 2005 compared to the three months ended March 31, 2004,
primarily as a result of the additional food and beverage facility.




**Other**




General and
administrative expense at CCA in the first quarter of 2005 include 2.4 million
Rand in management fees paid to CRI for services provided to CCA which are
eliminated in consolidation.




Interest
expense for CCAL, including debt issuance cost, decreased 23.7% due to repayment
of term loans and capitalized leases. The weighted-average interest rate on the
borrowings under the loan agreement for our South African subsidiaries was 16.9%
in the three months ended March 31, 2005 and 2004. Interest expense, net for CCA
is comprised exclusively of interest on loan agreements between CCA and CRL and
is eliminated in consolidation.


28


**Cruise
Ships**




Cruise ships’
operating results for the three months ended March 31, 2005 and 2004 were as
follows:





**For
      the three months ended March 31,**
    **Increase
      (Decrease)**
    **%
      Change***Dollar
      amounts in thousands*
    
    **2005**
    
    **2004****Operating
      Revenue**Casino
    $
    601
    $
    413
    $
    188
    45.5%Other (including promotional allowances)
    
    52
    
    25
    
    27
    108.0%Net
      operating revenue
    
    653
    
    438
    
    215
    49.1%**Costs
      and Expenses**Casino
    
    456
    
    329
    
    127
    38.6%General
      and administrative
    
    -
    
    -
    
    -
    -Depreciation
    
    25
    
    17
    
    8
    47.1%481
    
    346
    
    135
    39.0%Earnings
      from operations
    
    172
    
    92
    
    80
    87.0%Other
      income, net
    
    -
    
    -
    
    -
    -Earnings
      before income taxes
    
    172
    
    92
    
    80
    87.0%Income
      tax (expense)
    
    (5)
    
    (3)
    
    2
    66.7%**Net
      Earnings**
    **$**
    **167**
    **$**
    **89**
    **$**
    **78**
    **87.6%**





In the three
months ended March 31, 2005, we operated casinos on a total of seven ships: four
on Silversea Cruises, one on the World of ResidenSea and two on Oceania Cruises,
compared to a total of seven ships during the same period in 2004. However, two
ships, the Silver Cloud and the Insignia, resumed operations late in the first
quarter of 2004 and only contributed marginally to results in that quarter. The
Silver Cloud, a cruise ship operated by Silverseas cruises, resumed its
operations on March 27, 2004 following five months of periodic maintenance. The
Insignia, a cruise ship operated by Oceania Cruises, resumed its operations on
March 29, 2004 following its five-month inaugural voyage, which ended in
September 2003. The Nautica was taken out of service in November 2004 following
completion of its 2004 cruise schedule and will return to service chartered to a
third party for the 2005 season.




We experience
severe fluctuations in the revenue generated on each cruise depending on the
number and quality of the players and passengers. This is a condition that we do
not control.




Concession
fees paid to the ship operators in accordance with the agreements accounted for
$0.26 million and $0.17 million of the total casino expenses incurred in the
three months ended March 31, 2005 and 2004, respectively. The cost of travel
expenses to rotate personnel to and from the ships decreased $24 thousand when
comparing 2005 to 2004.




The ship
concession agreements, assigned to CRI, the Company’s wholly owned subsidiary in
Mauritius, is taxed at the statutory rate of 15%, less current tax credits of
12%, resulting in a net rate of 3%.









29


**Corporate
& Other**





**For
      the three months ended March 31,**
    **Increase
      (Decrease)**
    **%
      Change***Dollar
      amounts in thousands*
    
    **2005**
    
    **2004****Operating
      Revenue**Other
    $
    435
    $
    27
    $
    408
    1511.1%Net
      Operating Revenue
    
    435
    
    27
    
    408
    1511.1%**Costs
      and Expenses**Casino
    
    -
    
    -
    
    -
    -General and
      Administrative
    
    917
    
    691
    
    226
    32.7%Property write-down
      and other write-offs, net of (recoveries)
    
    (30)
    
    -
    
    (30)
    -100.0%Depreciation
    
    3
    
    8
    
    (5)
    -62.5%890
    
    699
    
    191
    27.3%(Loss)
      earnings from unconsolidated subsidiary
    
    (97)
    
    13
    
    (110)
    -846.2%Loss
      from operations
    
    (552)
    
    (659)
    
    (107)
    -16.2%Interest
      expense
    
    (342)
    
    (325)
    
    17
    5.2%Other
      income, net
    
    409
    
    90
    
    319
    354.4%Non-operating
      items from unconsolidated subsidiary
    
    (1)
    
    (6)
    
    (5)
    -83.3%Loss
      before income taxes and minority interest
    
    (486)
    
    (900)
    
    (414)
    -46.0%Income
      tax benefit
    
    393
    
    355
    
    38
    10.7%Minority
      interest in subsidiary loss (earnings)
    
    6
    
    (15)
    
    21
    140.0%**Net
      Loss**
    **$**
    **(87)**
    **$**
    **(560)**
    **$**
    **(473)**
    **-84.5%**





Revenue in
the corporate and other segment for the three months ended March 31, 2005
includes $0.4 million in fees paid by CCA to CRI for services provided to CCA
which are eliminated in consolidation.




General and
administrative expenses increased quarter over quarter largely due to costs
associated with new projects, increases in corporate staffing and preliminary
costs associated with Sarbanes Oxley compliance.




The loss from
unconsolidated subsidiary and non-operating items related to the operations at
Casino Millennium were impacted significantly, primarily as a result of a
reduction in the guest count which is attributed to poor winter weather
conditions. At the same time, the hold percentage (casino gaming revenue divided
by coin-in) at the casino was down.




Property
write-down and other write-offs, net of (recoveries) is the repayment of
receivables by Casino Millennium that were previously written off in
2002.




Included in
interest expense is the interest on debt incurred to fund the Company’s
acquisitions and the repurchase of the Company’s common stock, and related tax
effects. Included on Other income, net for the three months ended March 31, 2005
is $0.32 million in interest income on debt between CRL and CCA. The interest
income is eliminated against the interest expense included in the South African
segment; consequently, there is no effect on the consolidated net
income.





30
 
 
 The tax
benefit provided for increased during the first quarter of 2005 compared to the
same period in 2004 due to reduced foreign income taxes on $0.72 million in
management fees and interest expense paid by our South African subsidiary to its
Mauritian parent. These fees and interest are taxed at an effective rate of 3%,
instead of the normal 30% foreign statutory rate, and resulted in a decrease of
$0.20 million in income taxes in the first quarter of 2005. These fees and
interest commenced during the third and fourth quarters of 2004 and, therefore,
had no impact on the first quarter of 2004 provision for income taxes. See Note
11.
  Minority
interest includes $19 thousand in the first three months of 2005 and $15
thousand in the first three months of 2004 for the 3.5% minority interest in the
earnings of CRL. Also included in minority interest is $25 thousand for
pre-opening expenses incurred by CRA. Income from unconsolidated subsidiary is
comprised of the Company’s 50% interest in CM earnings.





**Central
City, Colorado**




We
are **** developing
a casino and hotel project in Central City, Colorado. The proposed $40 million
development includes a 60,000 square foot casino and back of house with 625 slot
machines, six table games, 25 hotel rooms, retail, food and beverage amenities
and a 500-space on-site covered parking garage. We have also entered into a
long-term agreement to manage the facility upon completion and licensing.
Completion of the project is subject to various conditions and approvals,
including, but not limited to securing acceptable financing, satisfactory
environmental studies and licensing by the Colorado Division of Gaming. Casino
licenses in Colorado are not limited in number by state gaming laws and are
primarily subject to successful background investigations by the Colorado
Division of Gaming. Century currently is licensed in Colorado for gaming at
Womacks Casino and Hotel in Cripple Creek. Construction is expected to be
completed approximately 14 months after funding arrangements have been
finalized.





Construction
contracts were awarded in April 2005 and work has commenced on the underground
utility work and for demolition, foundation and restructuring of existing
buildings.




In the three
months ending March 31, 2005, we incurred $21 thousand dollars in pre-opening
expenses included in general and administrative expenses.





**Edmonton,
Canada**




We
are **** developing
a casino and hotel project in Edmonton, Canada. The project is expected to
include a casino with 600 gaming machines, 31 gaming tables, food and beverage
amenities, a dinner theater, a 300 space underground parking facility,
approximately 600 surface parking spaces and a 40-room hotel. The project is
expected to cost approximately $22.7 million ($27.5 million Canadian dollars).
Completion of this project is subject to obtaining acceptable project financing.
Construction is expected to take approximately 14 months from finalization of
funding arrangements. Upon completion of construction, Century Resorts Alberta,
Inc. expects to receive its gaming license from the Alberta Gaming and Liquor
Commission (AGLC). On December 17, 2004, the AGLC granted approval to begin
construction of the casino property. As is customary, the issuance of the
license does not occur until completion of construction and after all federal
and provincial legislation, regulation and policies, and municipal requirements,
permits, licenses and/or authorizations have been met. We have also entered into
a long-term agreement to manage the facility if a gaming license is
awarded.





In the three
months ending March 31, 2005, we incurred $32 thousand dollars in pre-opening
expenses included in general and administrative expenses.





31


**Franklin
County, Iowa**





On October
18, 2004, we entered into an agreement with the owners of Landmark Gaming LC of
Franklin County, Iowa, to jointly submit as co-applicant with the Franklin
County Development Association (FCDA) an application to the Iowa Racing and
Gaming Commission (IRGC) to develop and operate a moored barge casino, hotel and
entertainment facility in Franklin County, Iowa. The application was submitted
on November 11, 2004.





If a license
is granted, we will contribute $1.25 million in cash through Century Casinos
Iowa, Inc., our wholly owned subsidiary, to Landmark Gaming LC, in exchange for
a 40% ownership interest. The current owners of Landmark Gaming LC will
contribute the land to be used for the project and certain land options in
return for a 60% ownership interest. Century Casinos Management, Inc. has
entered into a long term agreement to manage the casino once the project is
operational in return for a share in gross revenues plus a share in EBITDA. Our
cash contribution and the beginning of construction are subject to various
conditions and approvals, including but not limited to awarding of a license by
the IRGC, securing acceptable financing and other due diligence. We anticipate
that the IRGC will notify us on May 11, 2005 whether a license has been granted
to us.





**Liquidity
and Capital Resources**





Cash and cash
equivalents totaled $7.1 million plus restricted cash of $0.8 million at March
31, 2005, and the Company had working capital (current assets minus current
liabilities) of $2.3 million. Additional liquidity may be provided by the
Company’s revolving credit facility with Wells Fargo Bank, under which the
Company had a total commitment of $26 million ($20.95 million net of the
quarterly reduction) and unused borrowing capacity of approximately $4.1 million
at March 31, 2005. The maturity date of the borrowing commitment is August 2007. The
available balance will be reduced by $0.3 million, each of the quarters
beginning  July 1, 2005 and October 1, 2005, further reduced by $0.6
million each of the quarters beginning January 1, 2006 and April 1, 2006, and
then further reduced by $0.72 million at the beginning of each quarter beginning
July 1, 2006 until maturity in August 2007. Borrowings under the credit facility
may be used for
various business projects and investments.




For the three
months ended March 31, 2005, cash provided by operating activities was $0.9
million compared with $1.3 million in the prior-year period. Please refer to the
condensed consolidated statements of cash flows and management’s discussion of
the results of operation by segment.




Cash used in
investing activities of $2.5 million for the first three months of 2005
consisted of a $2.4 million contribution by us towards our investment in Century
Resorts Alberta Inc., less $1.6 million in net cash acquired, an increase of
$0.2 million in restricted cash, $0.3 million in capital additions at Womacks,
$0.5 million in capital additions at Caledon, South Africa, $0.2 million in
expenditures to upgrade some of the cruise ships with Ticket-out slot
machines, $0.2 million towards construction in Central City, Colorado, and $0.3
million in additional expenditures towards construction of the property in
Edmonton, Canada. Cash used in investing activities of $0.7 million for the
first three months of 2004 include $0.19 million towards the upgrade of the slot
accounting system, $0.26 million towards new slot games, $48 thousand for new
slot stools and $7 thousand for restaurant equipment at Womacks, $0.2 million in
improvements to the property in Caledon, South Africa, $0.1 million in
expenditures to outfit the cruise ships and $85 thousand in expenditures for
other long-lived assets, less $0.2 million in proceeds from the disposition of
assets.




Cash used in
financing activities of $0.7 million for the first three months of 2005
consisted of net borrowings of $1.2 million under the credit facility with Wells
Fargo, $74 thousand in proceeds from the exercise of stock options and $0.1 in
borrowings, less net repayments of $0.5 million under the Caledon loan agreement
we have entered into with ABSA, and other net repayments of $0.2 million. Cash
used in financing activities of $1.3 million for the first three months of 2004
consisted of net repayments of $1.1 million under the RCF with Wells Fargo, net
repayments of $0.3 under the loan agreement with ABSA and other net repayments
of $38 thousand, less net borrowing of $90 thousand from a former director and
$2 thousand in proceeds from the exercise of stock options.





32
 
 
 The Company’s
Board of Directors has approved a discretionary program to repurchase up to $5
million of the Company’s outstanding common stock. During the first three months
of 2005, the Company did not
purchase any shares of its common stock on the open market .
Since the inception of the program through March 31, 2005, the Company has
repurchased 2,559,004 shares of its common stock at a total cost of
approximately $3.8 million.
  We believe
that our cash at March 31, 2005, together with expected cash flows from
operations and borrowing capacity under the Wells Fargo credit facility, will be
sufficient to fund our anticipated operating costs, capital expenditures at
existing properties and satisfy our current debt repayment
obligations.
  On April 8,
2005, CC Tollgate LLC entered into a loan agreement with Colorado Business Bank
securing $5.0 million to finance the predevelopment construction costs
associated with the development of a casino in Central City, Colorado. Under the
terms of the agreement, the loan will mature on October 4, 2005 at which time
the principal is due with interest calculated at prime plus 0.5%. At the
inception of the loan, prime is 5.75%. The note is secured by the existing
property and improvements and by commercial guarantees provided by Century
Casinos, Inc. and its partner Tollgate Venture LLC.
  The primary
source of our future operating cash flows will be from gaming operations. We
will continue to rely on revolving lines of credit with commercial banks or
other debt instruments to supplement our working capital and investing
requirements. We anticipate that these sources of cash flows are sufficient to
meet our near-term operating cash requirements. We will continue to evaluate our
planned capital expenditures at each of our existing locations in light of the
operating performance of the facilities at such locations. From time to time the
Company expects to have cash needs for the development of new properties that
exceed our current borrowing capacity and we may be required to seek additional
financing in the debt or equity markets. We may be unable to obtain additional
debt or equity financing on acceptable terms. As a result, limitations on our
capital resources could delay or cause us to abandon certain plans for the
development of new properties.





**Critical
Accounting Policies**





In accordance
with recent Securities and Exchange Commission guidance, those material
accounting policies that we believe are the most critical to an investor’s
understanding of the Company’s financial results and condition and/or require
complex management judgment have been expanded and are discussed
below.





***Goodwill
and Other Intangible Assets*** - Our
goodwill results from the acquisitions of casino and hotel operations and
represents excess of the purchase price over the fair value of identifiable net
tangible and intangible assets acquired. Goodwill and intangible assets with
indefinite lives are required to be tested for impairment at least annually or
more frequently if an event occurs or circumstances change that may reduce the
fair value of the asset below its carrying value. We have completed our
assessment of goodwill and other intangibles with indefinite lives for
impairment at December 31, 2004 and determined that there have been no
significant changes in the fair value of the assets, no adverse changes in the
projected cash flows or any events or circumstances that would lead management
to believe that the fair value of the assets are less than the current carrying
value of the reporting units. For reporting units with goodwill and/or
intangible assets with indefinite lives, this test requires the comparison of
the implied fair value of each reporting unit to its carrying value. The implied
fair value includes estimates of future cash flows, as well as estimates of
critical valuation inputs such as discount rates, terminal values and similar
data based on reasonable and supportable assumptions that represent our best
estimates. Changes in estimates or application of alternative assumptions and
definitions could produce significantly different results. We will continue to
assess goodwill and other intangibles with indefinite lives for impairment at
least annually hereafter. We will also continue to assess the propriety of our
assignment of indefinite useful lives to intangible assets through analysis of
all pertinent factors used in making such estimates. As of March 31, 2005, our
assets included goodwill of approximately $8.7 million and casino licenses of
approximately $2.0 million.





33





***Property
and Equipment*** - At
March 31, 2005, we had property and equipment totaling $50.6 million,
representing 71% of total assets. We capitalize the cost of property and
equipment. Maintenance and repairs that neither materially add to the value of
the property nor appreciably prolong its life are charged to expense as
incurred. We depreciate property and equipment on a straight-line basis over
their estimated useful lives. The estimated useful lives are based on the nature
of the assets and our current operating expectations. Future events such as
property expansions, new competition and new regulations could result in a
change in the manner in which we are using certain assets requiring a change in
the estimated useful lives of such assets. We evaluate long-lived assets for
impairment whenever events or changes in circumstances indicate that such
carrying values may not be recoverable. Under current standards, the assets must
be carried at historical cost if the projected cash flows from their use will
recover their carrying amounts on an undiscounted basis and without considering
interest. However, if projected cash flows are less than their carrying value,
the long-lived assets must be reduced to their estimated fair value.
Considerable judgment is required to project such cash flows and, if required,
estimate the fair value of the impaired long-lived asset. The estimated future
cash flows are based upon, among other things, assumptions about expected future
operating performance and may differ from actual cash flows. There can be no
assurance that future long-lived asset impairments will not occur. We capitalize
the cost of property and equipment that is contributed in a business combination
at the fair value of the assets that are contributed. Capital assets contributed
by our minority interest partner in CC Tollgate LLC were recorded at estimated
fair value based on an appraisal at the time of the contribution. Appraisals, by
their nature, involve estimations and judgment.





34





**Item
      3.**
    **QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK**





We are
exposed to market risk principally related to changes in interest rates and
foreign currency exchange rates. To mitigate some of these risks, we utilize
derivative financial instruments to hedge these exposures. We do not use
derivative financial instruments for speculative or trading purposes. All of the
potential changes noted below are based on information available at March 31,
2005. Actual results may differ materially.





***Interest
Rate Sensitivity*** ****





We are
subject to interest rate risk on the outstanding borrowing under our credit
facility with Wells Fargo Bank. Interest on amounts outstanding under the credit
facility is variable and is computed on a base interest rate we select.
Accordingly interest on the outstanding debt is subject to fluctuations in the
prime interest rate as set by Wells Fargo, or LIBOR index changes.




In order to
minimize the risk of increases in the prime rate or LIBOR, we have entered into
interest-rate swap agreements from time to time. In May 2000, we entered into a
five-year interest rate swap agreement which matures on July 1, 2005 on $4.0
million notional amount of debt under the credit facility, whereby we pay a
fixed rate of 7.95% and receive a LIBOR-based floating rate, reset quarterly
based on the three-month LIBOR rate. Generally, the swap arrangement is
advantageous to us to the extent that interest rates increase in the future and
disadvantageous to the extent that they decrease. Therefore, by entering into
the interest rate swap agreements, we have a cash flow risk when interest rates
drop. With the expiration of the swap agreement on the $7.5 million notional
amount of debt on October 1, 2003, each hypothetical 100 basis point increase
results in an increased use of $40 thousand in cash on an annual basis. In
an environment of falling interest rates, as we have seen in the last two years,
the swap agreements are disadvantageous. Without the swap agreements, the
weighted-average interest rate on the credit facility for the three months ended
March 31, 2005 and 2004 would have been 5.04% and 4.63%, respectively. The
Company has not entered into any new swap agreements subsequent to March 31,
2005.




***Foreign
Currency Exchange Risk*** ****





A total of
51.3% of our revenue for the three months ended March 31, 2005 was derived from
our South African operations and principally denominated in South African Rand.
A total of 47.6% of our expenses for the three months ended March 31, 2005 were
paid in currencies other than US dollars of which 45.5% were paid in South
African Rand, 0.4% were
paid in Canadian Dollars and 1.7% were paid in Euros. Our US operations generate
revenues denominated in US dollars. If an arrangement provides for us to receive
payments in a foreign currency, revenue reported from such an arrangement will
be lower if the value of such foreign currency declines. Similarly, if an
arrangement provides for us to make payments in a foreign currency, cost of
services and operating expenses for such an arrangement will be higher if the
value of such foreign currency increases. For example, a 10% change in the
relative value of such foreign currency could cause a related 10% change in our
previously expected revenue, cost of services, and operating expenses. If the
international portion of our business continues to grow, more revenue and
expenses will be denominated in foreign currencies, which increase our exposure
to fluctuations in currency exchange rates. We have not hedged against foreign
currency exchange rate changes related to our international
operations.





35





**Item
      4.**
    **CONTROLS
      AND PROCEDURES**


******


***Evaluation of
Disclosure Controls and Procedures -*** Our
management, with the participation of our Chief Executive Officers, Senior
Vice-President and Chief Accounting Officer, has evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15(2) and
15d-15(e) under the Securities Exchange Act of 1937, as amended (the “Exchange
Act”), as of the end of the period covered by this report. Based on such
evaluation, our principal executive officers and principal financial officer
have concluded that as of such date, our disclosure controls and procedures were
designed to ensure that information required to be disclosed by us in reports
that we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in applicable SEC rules and forms
and were effective with the exception of the material weakness relating to
internal control over the recording of fixed assets in our South African
operating subsidiary as discussed hereafter.




***Changes in
Internal Control Over Financial Reporting -*** I n
conjunction with the 2004 audit, our independent registered public accounting
firm notified us that they had identified matters involving internal control
over financial reporting and its operation that they consider to be a material
weakness. These matters relate to the controls over the recording of fixed
assets in our South African operating subsidiary. The failure to detect the
weakness can be attributed to a lack of substantive policy on capitalization of
fixed assets and a deficiency in our internal review process as it relates to
the South African operation.




We are in the
process of developing a complete plan to remediate the identified material
weakness in our internal controls over financial reporting. We immediately
instituted a series of policies to improve the control over the capital asset
activity in South Africa and have begun a complete physical inventory of the
same which we expect to complete by the end of the second quarter of 2005. We
have also instituted changes to the process by which entries to the financials
are authorized and approved. We believe that the change in our internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the quarter ended March 31, 2005 has
materially improved, or is reasonably likely to materially improve, our internal
control over financial reporting.




***Risks
Regarding Controls and Procedures -*** In
addition to remedying the identified material weakness in our internal control
over financial reporting discussed above, we are beginning the process of
documenting and testing our internal control procedures in order to satisfy the
requirements of Section 404 of the Sarbanes-Oxley Act, which we expect to be
applicable to us for our fiscal year ending December 31, 2005. We are exposed to
increased costs and risks associated with complying with these requirements, and
we will need to spend management time and internal and external resources to
document and test our internal controls in anticipation of Section 404 reporting
requirements.




Our
management, including our Chief Executive Officers, Senior Vice-President and
Chief Accounting Officer, does not expect that our disclosure controls or our
internal controls will prevent all possible error or fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.








36


**PART
II - OTHER INFORMATION**





**Item
1. Legal Proceedings**





The
Company is not a party to, nor is it aware of, any pending or threatened
litigation which, in management’s opinion, could have a material adverse effect
on the Company’s financial position or results of operations.





**Items
2 to 5 - None**





**Item
6. Exhibits**





Exhibits - The
following exhibits are filed herewith:





10.143  Amendment
to Employment Agreement, Dr. Erwin Haitzmann, Dated February 3, 2005
incorporated by reference to Form 8-K, dated February 3, 2005.





10.144  Amendment
to Employment Agreement, Mag. Peter Hoetzinger, Dated February 3, 2005
incorporated by reference to Form 8-K, dated February 3, 2005.





10.145  Assignment
of Management Agreement by and between Century Casinos, Inc and Flyfish Casino
Consulting AG, Dated February 23, 2005 incorporated by reference to Form 8-K,
dated March 1, 2005.





10.146  Assignment
of Management Agreement by and between Century Casinos, Inc and Focus Casino
Consulting AG, Dated February 23, 2005 incorporated by reference to Form 8-K,
dated March 1, 2005.





10.147  Employment
Agreement by and between Century Casinos, Inc and Mr. Larry Hannappel, Dated
March 22, 2005 incorporated by reference to Form 8-K, dated March 22,
2005.





31.1  Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Chairman of the Board
and Co-Chief Executive Officer.





31.2  Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Vice-Chairman,
President and Co-Chief Executive Officer.





31.3  Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Senior
Vice-President.





31.4  Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Chief Accounting
Officer.





32.1  Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chairman of the Board
and Co-Chief Executive Officer.





32.2  Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Vice-Chairman,
President and Co-Chief Executive Officer.





32.3  Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Senior
Vice-President.





32.4  Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Accounting
Officer.


37




**SIGNATURES:**





Pursuant
to the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.


CENTURY
CASINOS, INC.





/s/  Larry
Hannappel


___________________________


Larry
Hannappel


Senior
Vice-President


Date: May
10, 2005




38