**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 June
      30, 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 other
      jurisdiction of incorporation   (I.R.S.
      Employer


or
      organization)      Identification
      No.)




1263
      Lake Plaza Drive Suite A, 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 outstanding as of August 4, 2005 .
















**CENTURY
      CASINOS, INC.**






**FORM
      10-Q**




**INDEX**




PagePART
                I
            
            FINANCIAL
                INFORMATION (unaudited)
            NumberItem
                1.
            
            Condensed
                Consolidated Financial StatementsCondensed
                Consolidated Balance Sheets as of June 30, 2005 and December 31,
                2004
            3Condensed
                Consolidated Statements of Earnings for the Three Months Ended June
                30,
                2005 and 2004
            4Condensed
                Consolidated Statements of Earnings for the Six Months Ended June
                30, 2005
                and 2004
            5Condensed
                Consolidated Statements of Comprehensive (Loss) Earnings for the
                Three
                Months Ended June 30, 2005 and 2004
            6Condensed
                Consolidated Statements of Comprehensive (Loss) Earnings for the
                Six
                Months Ended June 30, 2005 and 2004
            6Condensed
                Consolidated Statements of Cash Flows for the Six Months Ended June
                30,
                2005 and 2004
            7Notes
                to Condensed Consolidated Financial Statements
            9Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            26Item
                3.
            
            Quantitative
                and Qualitative Disclosures About Market Risk
            40Item
                4.
            
            Controls
                and Procedures
            41PART
                II
            
            OTHER
                INFORMATION (unaudited)Item
                1.
            
            Legal
                Proceedings
            43Item
                6.
            
            Exhibits
            43SIGNATURES
            44


2


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




**CONDENSED
      CONSOLIDATED BALANCE SHEETS (Unaudited)**




*Amounts
                in thousands, except for share information*
            **June
                30,**
              **2005**
            
            **December
                31,**
              **2004****ASSETS****Current
                Assets:**Cash
                and cash equivalents
            $
            5,821
            
            $
            8,411Restricted
                cash
            
            599
            
            
            706Receivables,
                net
            
            248
            
            
            193Prepaid
                expenses
            
            754
            
            
            437Inventories
            
            176
            
            
            215Other
                current assets
            
            29
            
            
            28Deferred
                income taxes - domestic
            
            775
            
            
            97- foreign
            
            86
            
            
            88Total
                current assets
            
            8,488
            
            
            10,175**Property
                and Equipment, net**
            
            51,026
            
            
            48,629**Goodwill,
                net**
            
            8,628
            
            
            8,845**Casino
                Licenses**
            
            1,847
            
            
            2,157**Deferred
                Income Taxes - foreign**
            
            207
            
            
            207**Equity
                Investment in Unconsolidated Subsidiary**
            
            -
            
            
            116**Other
                Assets**
            
            996
            
            
            1,075**Total**
            $
            71,192
            
            $
            71,204




**LIABILITIES
                AND SHAREHOLDERS’ EQUITY****Current
                Liabilities:**Current
                portion of long-term debt
            $
            3,708
            
            $
            2,534Accounts
                payable and accrued liabilities
            
            3,006
            
            
            3,548Accrued
                payroll
            
            1,100
            
            
            1,372Taxes
                payable
            
            26
            
            
            711Other
            
            49
            
            
            102Total
                current liabilities
            
            7,889
            
            
            8,267**Long-Term
                Debt, less current portion**
            
            17,660
            
            
            17,970**Deferred
                Tax Liability - domestic**
            
            455
            
            
            234**Minority
                Interest**
            
            6,126
            
            
            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
            
            1,690
            
            
            4,597Retained
                earnings
            
            17,426
            
            
            15,91040,729
            
            
            42,180Treasury
                stock - 730,876 and 790,876 shares at cost, respectively
            
            (1,667)
            
            
            (1,801)Total
                shareholders’ equity
            
            39,062
            
            
            40,379**Total**
            $
            71,192
            
            $
            71,204




See
      notes
      to condensed consolidated financial statements.






3


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




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




**For
                The Three Months Ended June 30,***Amounts
                in thousands, except for share information*
            
            **2005**
            
            **2004****Operating
                Revenue:**Casino
            $
            8,737
            $
            8,808Hotel,
                food and beverage
            
            941
            
            965Other
            
            155
            
            1079,833
            
            9,880Less
                promotional allowances
            
            925
            
            1,032Net
                operating revenue
            
            8,908
            
            8,848**Operating
                Costs and Expenses:**Casino
            
            3,461
            
            3,421Hotel,
                food and beverage
            
            587
            
            724General
                and administrative
            
            3,033
            
            2,153Depreciation
            
            938
            
            731Total
                operating costs and expenses
            
            8,019
            
            7,029**(Loss)
                earnings from unconsolidated subsidiary**
            
            (12)
            
            39**Earnings
                from Operations**
            
            877
            
            1,858**Non-Operating
                Income (Expense):**Interest
                expense
            
            (566)
            
            (390)Other
                income, net
            
            111
            
            45Non-operating
                items from unconsolidated subsidiary
            
            (3)
            
            (3)Non-operating
                expense, net****
            
            (458)
            
            (348)**Earnings
                before Income Taxes and Minority Interest**
            
            419
            
            1,510(Benefit)
                provision for income taxes
            
            (10)
            
            347**Earnings
                before Minority Interest**
            
            429
            
            1,163Minority
                interest in subsidiary loss (earnings)
            
            80
            
            (16)**Net
                Earnings**
            $
            509
            $
            1,147**Earnings
                Per Share:**Basic
            $
            0.04
            $
            0.08Diluted
            $
            0.03
            $
            0.07




See
      notes
      to condensed consolidated financial statements.




4


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




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




**For
                The Six Months Ended June 30,***Amounts
                in thousands, except for share information*
            
            **2005**
            
            **2004****Operating
                Revenue:**Casino
            $
            17,788
            $
            16,874Hotel,
                food and beverage
            
            2,169
            
            1,939Other
            
            371
            
            30620,328
            
            19,119Less
                promotional allowances
            
            2,192
            
            2,107Net
                operating revenue
            
            18,136
            
            17,012**Operating
                Costs and Expenses:**Casino
            
            7,002
            
            6,473Hotel,
                food and beverage
            
            1,355
            
            1,402General
                and administrative
            
            5,475
            
            4,206Property
                write-downs and other write-offs, net of recoveries
            
            (30)
            
            -Depreciation
            
            1,790
            
            1,382Total
                operating costs and expenses
            
            15,592
            
            13,463**(Loss)
                earnings from unconsolidated subsidiary**
            
            (109)
            
            51**Earnings
                from Operations**
            
            2,435
            
            3,600**Non-Operating
                Income (Expense):**Interest
                expense
            
            (1,034)
            
            (812)Other
                income, net
            
            159
            
            92Non-operating
                items from unconsolidated subsidiary
            
            (4)
            
            (8)Non-operating
                expense, net****
            
            (879)
            
            (728)**Earnings
                before Income Taxes and Minority Interest**
            
            1,556
            
            2,872Provision
                for income taxes
            
            146
            
            790**Earnings
                before Minority Interest**
            
            1,410
            
            2,082Minority
                interest in subsidiary loss (earnings)
            
            106
            
            (31)**Net
                Earnings**
            $
            1,516
            $
            2,051**Earnings
                Per Share:**Basic
            $
            0.11
            $
            0.15Diluted
            $
            0.09
            $
            0.13




See
      notes
      to condensed consolidated financial statements.






5


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




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




**For
                The Three Months Ended June 30,***Amounts
                in thousands*
            
            **2005**
            
            **2004****Net
                Earnings**
            $
            509
            $
            1,147Foreign
                currency translation adjustments
            
            (1,292)
            
            219Change
                in fair value of interest rate swaps, net of income taxes
            
            33
            
            64**Comprehensive
                (Loss) Earnings**
            $
            (750)
            $
            1,430






**For
                The Six Months Ended June 30,***Amounts
                in thousands*
            
            **2005**
            
            **2004****Net
                Earnings**
            $
            1,516
            $
            2,051Foreign
                currency translation adjustments
            
            (2,940)
            
            1,014Change
                in fair value of interest rate swaps, net of income taxes
            
            33
            
            91**Comprehensive
                (Loss) Earnings**
            $
            (1,391)
            $
            3,156




See
      notes
      to condensed consolidated financial statements.




6


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




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




**For
                The Six Months Ended June 30,***Amounts
                in thousands*
            
            **2005**
            
            **2004****Cash
                Flows from Operating Activities:**Net
                earnings
            $
            1,516
            $
            2,051Adjustments
                to reconcile net earnings to net cash provided byoperating
                activities:Depreciation
            
            1,790
            
            1,382Amortization
                of deferred financing costs
            
            95
            
            48Deferred
                tax expense
            
            (527)
            
            44Minority
                interest in subsidiary (losses) earnings
            
            (106)
            
            31Loss
                (Earnings) from unconsolidated subsidiary
            
            113
            
            (43)Gain
                on disposition of real estate option and other assets
            
            (43)
            
            (35)Changes
                in operating assets and liabilities:Receivables
            
            (71)
            
            72Prepaid
                expenses and other assets
            
            (386)
            
            (297)Accounts
                payable and accrued liabilities
            
            (238)
            
            (18)Accrued
                payroll
            
            (212)
            
            (71)Taxes
                payable
            
            (500)
            
            (288)Net cash provided by operating activities
            
            1,431
            
            2,876**Cash
                Flows from Investing Activities:**Purchases
                of property and equipment
            
            (3,988)
            
            (2,465)Cash
                contribution of $2,432 towards interest in subsidiary, less
              net cash acquired of $1,679
            
            (753)
            
            -Proceeds
                from disposition of assets
            
            43
            
            206Net
                cash used in investing activities
            
            (4,698)
            
            (2,259)









(continued)




7


**CENTURY
      CASINOS, INC. AND SUBSIDIARIES**




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




**For
                the Six Months Ended June 30,***Amounts
                in thousands*
            
            **2005**
            
            **2004****Cash
                Flows from Financing Activities:**Proceeds
                from borrowings
            $
            22,660
            $
            13,465Principal
                repayments
            
            (21,300)
            
            (14,844)Proceeds
                from exercise of options
            
            74
            
            2Net
                cash provided by (used in) financing activities
            
            1,434
            
            (1,377)**Effect
                of exchange rate changes on cash**
            
            (757)
            
            143**Decrease
                in Cash and Cash Equivalents**
            
            (2,590)
            
            (617)**Cash
                and Cash Equivalents at Beginning of Period**
            
            8,411
            
            4,729**Cash
                and Cash Equivalents at End of Period**
            $
            5,821
            $
            4,112






**Supplemental
      Disclosure of Noncash Financing Activities:**




On
      February 24, 2005, our wholly owned subsidiary, Century Resorts International
      Limited, purchased a 56.4% 56.4 shares) equity interest in Century Resorts
      Alberta, Inc for the purpose of operating the proposed Celebration Casino and
      Hotel 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 $1,679in
                cash acquired
            
            (753)Liabilities
                assumed
            $
            1,878




The
      assets acquired and liabilities assumed are reported in the consolidated balance
      sheet. Century Resorts Alberta Inc. is a new entity and pro forma information
      is
      not applicable.




We
      incurred $58 thousand and $90 thousand in pre-opening expenses during the three
      and six month periods ending June 30, 2005, respectively, which are included
      in
      general and administrative expenses in the condensed consolidated statement
      of
      earnings.




In
      January 2004, the Company, through its wholly owned subsidiary Century
      Management u. Beteiligungs GmbH (“CMB”), purchased an additional 40% interest in
      Casino Millennium (“CM”), bringing its total interest to 50%, by contributing
      gaming equipment with a net book value of $0.6 million. The contribution of
      the
      gaming equipment, along with a cash contribution made in December 2002 which
      was
      accounted for by CMB on a cost basis in Euro and had a value of $0.3 million
      on
      January 3, 2004, brought the Company’s total investment in CM to $0.9 million,
      of which $0.3 million was allocated to a shareholder loan acquired as part
      of
      the transaction. The difference between the cost and the equity of CM of $0.6
      million has been recorded as goodwill.




**Supplemental
      Disclosure of Cash Flow Information:**




*Amounts
                in Thousands*
            **For
                the Six Months Ended June 30,****2005**
            
            **2004**Interest
                paid
            $
            671
            $
            769Income
                taxes paid
            $
            709
            $
            461




See
      notes
      to condensed consolidated financial statements.




8


**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) Ltd.
            CCA
            CRL
            100%Century
                Casinos Caledon (Pty) Ltd.
            CCAL
            CCA
            100%Century
                Casinos West Rand (Pty) Ltd. (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. (Dormant)**
            **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. CCAL owns and operates The Caledon Hotel, Spa and Casino
      (“Caledon”) near Cape Town, South Africa.




9
 
  **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, which was formed to develop and operate
      a casino and hotel in Central City, Colorado.




**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.




**CMB** has a
      50% equity interest in Casino Millennium located within a five-star hotel in
      Prague, Czech Republic. CMB’s earnings and losses 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, through CTI, we acquired a 65% interest in
      CTL for
      $3.5 million. CTL 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, 26 hotel rooms, retail, food and
      beverage amenities and a 500 space on-site covered parking facility .
      Subsequent to June 30, 2005, the Company obtained a non-binding letter of intent
      to provide approximately $35.0 million in project financing. On August 2, 2005
      we secured $4.5 million in funding from a private investor.




**Edmonton** - On
      February 24, 2005, through CRI, we acquired a 56.4% interest
      in 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. CRA 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. The
      project is planned to include a 81,600 square foot unlimited stakes casino
      with
      600 slot machines, 31 gaming tables, 5 food and beverage facilities, a dinner
      theater and an underground parking facility.




**Johannesburg** -
      In
      December 2004, CCI entered into agreements to sell a portion of its interest
      in
      a project in Gauteng, South Africa that 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
      $1.2 million or 7.0 million Rand in the transaction. The exercise price of
      the
      purchase option granted to Silverstar and the Akani group totals approximately
      $6.0 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.





10
 
  **Franklin
        County, Iowa -** On
        May 11, 2005, the company announced that it was not awarded a license to
        develop
        and operate the proposed Landmark Casino and Hotel project in Franklin County,
        Iowa by the Iowa Gaming and Racing Commission.




*****




**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:




**June
                30, 2005**
            **December
                31,2004**
            **June
                30, 2004**South
                African Rand
            6.6790
            5.6640
            6.2257Euros
            0.8266
            0.7388
            0.8210Czech
                Koruna
            24.8600
            22.4640
            26.2100Canadian
                Dollars
            1.2256
            1.2036
            1.3404




Source:
      Pacific Exchange Rate Service




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




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 June 30, 2005 are
      not
      necessarily indicative of the operating results for the full year.




11


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




In
      May
      2005, the Financial Accounting Standards Board ("FASB") issued SFAS No. 154
      (SFAS 154), “Accounting Changes and Error Corrections,” which replaces APB
      Opinion No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting
      Accounting Changes in Interim Financial Statements.” APB Opinion No. 20 had
      required that changes in accounting principles be recognized by including the
      cumulative effect of the change in the period in which the new accounting
      principle was adopted. SFAS 154 requires retrospective application of the change
      to prior periods’ financial statements, unless it is impracticable to determine
      the period-specific effects of the change. The statement is effective for fiscal
      years beginning after December 15, 2005. We do not expect the adoption of SFAS
      154 to have a material impact on our financial position, results of operations
      or cash flows.




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.




In
      December 2004, 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.




12


**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
      unaudited financial information of CM as of and for the three and six months
      ended:




*Amounts
                in thousands*
            
            **As
                of June 30,**
            
            **As
                of December 31,****2005**
            
            **2004****Balance
                Sheet:**Current
                assets
            $
            867
            $
            841Noncurrent
                assets
            $
            925
            $
            935Current
                liabilities
            $
            75
            $
            104Noncurrent
                liabilities
            $
            1,352
            $
            1,191**For
                the Three Months Ended June 30,****2005**
            
            **2004****Operating
                Results:**Net
                operating revenue
            $
            523
            $
            614Net
                (loss) earnings (1)(2)
            $
            (55)
            $
            69**For
                the Six Months Ended June 30,****2005**
            
            **2004****Operating
                Results:**Net
                operating revenue
            $
            945
            $
            1,220Net
                (loss) earnings (1)(2)
            $
            (256)
            $
            82




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




(2)
            Under
                the equity method of accounting, when an investor’s net investment is
                reduced to zero, the investor should not provide for additional losses
                unless the investor has guaranteed the obligations of the investee.
                The
                Company has not provided this guarantee to Casino Millenium. Accordingly,
                the Company has only recorded its portion of the loss that reduces
                its net
                investment to zero.




Casino
      services fee income for the three months ended June 30, 2005 and 2004 was $0
      and
      $10 thousand, respectively and for the six months ended June 30, 2005 and 2004
      was $40 thousand and $37 thousand, respectively.




An
      explanation of Casino Millennium’s results is included in Management’s
      Discussion and Analysis of Financial Condition and Results of Operation for
      Corporate and Other.





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 equity as goodwill and reported our percentage
      of
      the earnings in CM as earnings (loss) from unconsolidated
      subsidiary.




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




*Amounts
                in thousands*
            **As
                of****June
                30, 2005**Goodwill
            
            539Note
                receivable
            
            248Other
                receivables
            
            200Total
            $
            987






13


**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.




**For
                the Three Months Ended**
              **June
                30,**
            **For
                the Six**
              **Months
                Ended**
              **June
                30,***Amounts
                in thousands, except for share information*
            **2005**
            **2004**
            **2005**
            **2004**Net
                earnings, as reported
            $
            509
            $
            1,147
            $
            1,516
            $
            2,051Deduct:
                Total stock-based employee compensation expense determined under
                fair
                value based     method for all awards,
                net of related
                tax effects
            
            127
            
            269
            
            254
            
            539Pro
                forma net earnings
            $
            382
            $
            878
            $
            1,262
            $
            1,512Earnings
                per shareBasic
            As
                reported
            $
            0.04
            $
            0.08
            $
            0.11
            $
            0.15Pro
                forma
            $
            0.02
            $
            0.06
            $
            0.09
            $
            0.11Diluted
            As
                reported
            $
            0.03
            $
            0.07
            $
            0.09
            $
            0.13Pro
                forma
            $
            0.02
            $
            0.06
            $
            0.08
            $
            0.1




Our original stock-based employee compensation plan expired in April 2004.
      The
      original plan continues to be administered for previously issued and outstanding
      options. There
      are 3,444,210 outstanding options to employees as of June 30, 2005.




Shareholders
      approved a new equity incentive plan (the “2005 Plan”) at the 2005 annual
      meeting on June 17, 2005. The 2005 Plan provides for the grant
      of
      awards to eligible employees in the form of stock, restricted stock, stock
      options, performance units or other stock-based awards, all as defined in the
      2005 Plan. The 2005 Plan provides for the issuance of up to 2,000,000 shares
      of
      common stock to eligible employees through the various forms of awards
      permitted .
      The
      2005 Plan limits the number of options that can be awarded to an employee to
      200,000 per year. Stock options may not be issued at an option price lower
      than
      fair market value at the date of grant. All stock options must have an exercise
      period not to exceed ten years. No options have been granted under the 2005
      Plan
      since it was approved.




All
      options granted under the original 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:




**5** **.**  **GOODWILL**




Changes
      in the carrying amount of goodwill by segment for the six months ended
      June 30, 2005 are as follows:






*Amounts
                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
            
            -
            
            (152)
            
            (65)
            
            (217)Balance
                as of June 30, 2005
            $
            7,232
            $
            857
            $
            539
            $
            8,628




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




The
      principal balance outstanding under the Wells Fargo Bank Revolving Line of
      Credit Facility (“RCF”) as of June 30, 2005 was $16.5 million compared to $15.7 million at December 31, 2004. The amount
      available under the RCF as of June 30, 2005 was $4.4 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 June 30, 2005 and
      December 31, 2004 .
      The interest rate at June 30, 2005 was 6.08% 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 6.5%. In October 2004, an amendment to the RCF
      changed the aggregate commitment reduction schedule under the RCF. The available
      balance under the RCF 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.




14




The
      fair
      value of the Company’s interest rate swap derivatives as of June 30, 2005 and
      December 31, 2004 of $49.0 thousand and $0.1 million, respectively, is reported
      in current liabilities, other in the condensed consolidated balance sheets.
      The
      effective portion on the interest rate swaps of $33 thousand, net of deferred
      income tax expense, for the first six months of 2005, has been reported in
      accumulated other comprehensive earnings in the shareholders’ equity section of
      the accompanying June 30, 2005 condensed consolidated balance sheet. Net
      additional interest expense to the Company under the swap agreements was $49.0
      thousand and $69.2 thousand for the three months ended June 30, 2005 and 2004,
      respectively and $0.1 million for the six months ended June 30, 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
      7.04% and 6.53% for the three months ended June 30, 2005 and 2004, respectively,
      and 6.75% and 6.74% for the six months ended June 30, 2005 and 2004,
      respectively. The swap
      agreement expired on July 1, 2005. We have not entered into any
      new
      swap agreements as of August 4, 2005.




The
      principal balance outstanding under the principal loan agreement with ABSA
      Bank
      (“ABSA”) as of June 30, 2005 was $1.9 million and $3.2 million at December 31,
      2004 with an interest rate of 17.1% at the end of both periods. The outstanding
      balances on the standby facility with ABSA as of June 30, 2005 and December
      31,
      2004 were $0.2 million and $0.3 million, respectively and the interest rate
      was
      15.1% at the end of both periods. The agreement requires quarterly installment
      payments 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 June 30, 2005 and December
      31,
      2004 .




On
      July
      27, 2005, CCAL entered into an overdraft facility with Nedbank Limited. Pursuant
      to the overdraft facility, Nedbank extended temporary financing to CCAL in
      the
      principal amount of 18.8 million Rand, or $2.8 million (“the financing”). The
      net proceeds from the financing were used by CCAL to repay in full the amount
      outstanding under CCAL’s loan agreement with ABSA bank. The financing bears
      interest at South Africa’s prime interest rate, currently 10.5% as of August 4,
      2005. The financing is secured by the pledge of 4,000 ordinary shares of CCAL’s
      common stock, or 100% of the total outstanding common stock of CCAL. The
      financing is due and payable upon completion of a final loan agreement with
      Nedbank, the terms of which are under negotiation.




Unsecured
      notes payable, in the amount of $1.1 million, as of June 30, 2005 and
      December 31, 2004, to Tollgate Venture LLC, the minority interest
      holder in CC Tollgate LLC, are payable contingent based on the opening date
      of
      the casino. $1.0 million is payable on the opening
      date of the casino, bears interest at an 8%
      rate
      and is considered long-term in the accompanying condensed consolidated balance
      sheets. An additional $135 thousand, non-interest bearing note is payable on
      the
      opening date of the casino and is also classified as long-term as of June 30,
      2005.




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%. The prime
      rate
      on June 30, 2005 was 6.5%. The note is secured by the existing property and
      improvements and by commercial guarantees provided by CCI and Tollgate Venture
      LLC. As of June 30, 2005, $1.6 million of principal is outstanding
      and
      is considered current in the accompanying condensed consolidated balance sheets.




The
      remaining $0.1 million of long term debt as of June 30, 2005 and $0.2 million
      as
      of December 31, 2004 consists of capital leases.




The
      consolidated weighted average interest rate on all borrowings was 8.7% and
      9.1%
      for the six months ended June 30, 2005 and 2004, respectively.




15




Subsequent
      to June 30, 2005, we obtained a non-binding letter of intent to provide
      approximately $35.0 million in project financing. On August 2, 2005 we secured
      $4.5 million in funding from a private lender which bears interest at a rate
      of
      16.7% per annum) and matures in August 2007. In exchange for the funds, CCI
      has
      pledged all the outstanding stock of CTI and its equity interest in CTL.
      Proceeds from these borrowings will be used towards the development of the
      casino in Central City, Colorado.




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




During
      the first six 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 June 30, 2005
      and through August 4, 2005, the Company has not purchased shares of its 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 June 30, 2005, no dividends have 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.




**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
      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 CTI and
      subsidiary which is developing a proposed casino and hotel.





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





The
      operating results of the South African segment are those of CCA and its
      subsidiaries, primarily CCAL 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
      managing corporate gaming projects for which we have secured long-term service
      contracts.




16


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 ("US GAAP"). Management
      believes that EBITDA is a valuable measure of the relative non US GAAP
      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.




*Amounts
                in thousands*
            **Cripple
                Creek, CO**
            **Central
                City, CO**
            **Edmonton,
                Canada****As
                of and for the Three Months Ended June 30,**
            **2005**
            **2004**
            **2005**
            **2004**
            **2005**
            **2004****Net
                operating revenue**
            $
            4,460
            $
            4,602
            $
            6
            $
            -
            $
            37
            $
            -**Operating
                expenses (excluding depreciation)**
            
            2,670
            
            2,732
            
            43
            
            -
            
            58
            
            -**Depreciation**
            
            430
            
            368
            
            -
            
            -
            
            -
            
            -**Earnings
                from unconsolidated subsidiary**
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -**Earnings
                (loss) from operations**
            
            1,360
            
            1,502
            
            (37)
            
            -
            
            (21)
            
            -**Interest
                income**
            
            3
            
            4
            
            -
            
            -
            
            3
            
            -**Interest
                (expense), including debt issuance cost, net (1)**
            
            69
            
            23
            
            (79)
            
            -
            
            -
            
            -**Other
                income, net**
            
            -
            
            -
            
            -
            
            -
            
            4
            
            -**Non-operating
                items from unconsolidated subsidiary**
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -**Earnings
                (loss) before income taxes and minority interest**
            
            1,432
            
            1,529
            
            (116)
            
            -
            
            (14)
            
            -**Income
                tax expense**
            
            (544)
            
            (581)
            
            -
            
            -
            
            -
            
            -**Minority
                interest**
            
            -
            
            -
            
            (20)
            
            -
            
            -
            
            -**Net
                earnings (loss)**
            $
            888
            $
            948
            $
            (136)
            $
            -
            $
            (14)
            $
            -**Reconciliation
                to EBITDA:****Net
                earnings (loss) (US GAAP)**
            $
            888
            $
            948
            $
            (136)
            $
            -
            $
            (14)
            $
            -**Interest
                income**
            
            (3)
            
            (4)
            
            -
            
            -
            
            (3)
            
            -**Interest
                expense (1)**
            
            (69)
            
            (23)
            
            79
            
            -
            
            -
            
            -**Income
                taxes**
            
            544
            
            581
            
            -
            
            -
            
            -
            
            -**Depreciation**
            
            430
            
            368
            
            -
            
            -
            
            -
            
            -**EBITDA**
            $
            1,790
            $
            1,870
            $
            (57)
            $
            -
            $
            (17)
            $
            -




(1)
            The
                negative interest expense results from amounts advanced to the Corporate
                and Other segment, but not repaid, to fund the Company’s acquisitions and
                repurchases of its common stock. We reduce the interest expense incurred
                by WMCK under our credit facility by the amount of interest allocated
                to
                the Corporate & Other segment. As the Company has not repaid the funds
                advanced, the debt and accumulated interest allocated to the Corporate
                & Other segment exceeded the total outstanding borrowing. As a result,
                Womacks reported a net negative interest expense and debt issuance
                cost.


17




*Amounts
                  in thousands*
              **South
                  Africa**
              **Cruise
                  Ships**
              **Corporate
                  and Other****As
                  of and for the Three Months Ended June 30,**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Net
                  operating revenue**
              $
              3,632
              $
              3,403
              $
              775
              $
              833
              $
              279
              $
              10**Operating
                  expenses (excluding depreciation)**
              
              2,789
              
              2,325
              
              519
              
              535
              
              1,283
              
              706**Depreciation**
              
              451
              
              333
              
              36
              
              25
              
              21
              
              5**(Loss)
                  earnings from unconsolidated subsidiary**
              
              -
              
              -
              
              -
              
              -
              
              (12)
              
              39**Earnings
                  (loss) from operations**
              
              392
              
              745
              
              220
              
              273
              
              (1,037)
              
              (662)**Interest
                  income**
              
              27
              
              41
              
              -
              
              -
              
              450
              
              86**Interest
                  (expense), including debt issuance cost (1)**
              
              (412)
              
              (202)
              
              -
              
              -
              
              (520)
              
              (297)**Other
                  income, net**
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -**Non-operating
                  items from unconsolidated subsidiary**
              
              -
              
              -
              
              -
              
              -
              
              (3)
              
              (3)**Earnings
                  (loss) before income taxes and minority interest**
              
              7
              
              584
              
              220
              
              273
              
              (1,110)
              
              (876)**Income
                  tax (expense) benefit**
              
              (29)
              
              (107)
              
              (7)
              
              (8)
              
              590
              
              349**Minority
                  interest**
              
              -
              
              -
              
              -
              
              -
              
              100
              
              (16)**Net
                  earnings (loss)**
              $
              (22)
              $
              477
              $
              213
              $
              265
              $
              (420)
              $
              (543)**Reconciliation
                  to EBITDA:****Net
                  earnings (loss) (US GAAP)**
              $
              (22)
              $
              477
              $
              213
              $
              265
              $
              (420)
              $
              (543)**Interest
                  income**
              
              (27)
              
              (41)
              
              -
              
              -
              
              (450)
              
              (86)**Interest
                  expense (1)**
              
              412
              
              202
              
              -
              
              -
              
              520
              
              297**Income
                  taxes**
              
              29
              
              107
              
              7
              
              8
              
              (590)
              
              (349)**Depreciation**
              
              451
              
              333
              
              36
              
              25
              
              21
              
              5**EBITDA**
              $
              843
              $
              1,078
              $
              256
              $
              298
              $
              (919)
              $
              (676)




(1)
            The
                negative interest expense results from amounts advanced to the Corporate
                and Other segment, but not repaid, to fund the Company’s acquisitions and
                repurchases of its common stock. We reduce the interest expense incurred
                by WMCK under our credit facility by the amount of interest allocated
                to
                the Corporate & Other segment. As the Company has not repaid the funds
                advanced, the debt and accumulated interest allocated to the Corporate
                & Other segment exceeded the total outstanding borrowing. As a result,
                Womacks reported a net negative interest expense and debt issuance
                cost.


18




*Amounts
                  in thousands*
              **Inter-segment
                  Elimination**
              **Consolidated****As
                  of and for the Three Months Ended June 30,**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Net
                  operating revenue**
              $
              (281)
              $
              -
              $
              8,908
              $
              8,848**Operating
                  expenses (excluding depreciation)**
              
              (281)
              
              -
              
              7,081
              
              6,298**Depreciation**
              
              -
              
              -
              
              938
              
              731**(Loss)
                  earnings from unconsolidated subsidiary**
              
              -
              
              -
              
              (12)
              
              39**Earnings
                  from operations**
              
              -
              
              -
              
              877
              
              1,858**Interest
                  income**
              
              (376)
              
              (86)
              
              107
              
              45**Interest
                  expense, including debt issuance cost**
              
              376
              
              86
              
              (566)
              
              (390)**Other
                  income, net**
              
              -
              
              -
              
              4
              
              -**Non-operating
                  items from unconsolidated subsidiary**
              
              -
              
              -
              
              (3)
              
              (3)**Earnings
                  before income taxes and minority interest**
              
              -
              
              -
              
              419
              
              1,510**Income
                  tax benefit (expense)**
              
              -
              
              -
              
              10
              
              (347)**Minority
                  interest**
              
              -
              
              -
              
              80
              
              (16)**Net
                  earnings**
              $
              -
              $
              -
              $
              509
              $
              1,147**Reconciliation
                  to EBITDA:****Net
                  earnings (loss) (US GAAP)**
              $
              -
              $
              -
              $
              509
              $
              1,147**Interest
                  income**
              
              376
              
              86
              
              (107)
              
              (45)**Interest
                  expense**
              
              (376)
              
              (86)
              
              566
              
              390**Income
                  taxes**
              
              -
              
              -
              
              (10)
              
              347**Depreciation**
              
              -
              
              -
              
              938
              
              731**EBITDA**
              $
              -
              $
              -
              $
              1,896
              $
              2,570








19




*Amounts
                in thousands*
            **Cripple
                Creek, CO**
            **Central
                City, CO**
            **Edmonton,
                Canada****As
                of and for the Six Months Ended June 30,**
            **2005**
            **2004**
            **2005**
            **2004**
            **2005**
            **2004****Property
                and equipment, net**
            $
            22,399
            $
            23,785
            $
            10,629
            $
            -
            $
            3,715
            $
            -**Total
                assets**
            $
            33,077
            $
            33,265
            $
            10,691
            $
            -
            $
            4,466
            $
            -**Net
                operating revenue**
            $
            8,265
            $
            8,981
            $
            6
            $
            -
            $
            37
            $
            -**Operating
                expenses (excluding depreciation)**
            
            5,331
            
            5,295
            
            64
            
            -
            
            90
            
            -**Depreciation**
            
            873
            
            673
            
            -
            
            -
            
            -
            
            -**Earnings
                from unconsolidated subsidiary**
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -**Earnings
                (loss) from operations**
            
            2,061
            
            3,013
            
            (58)
            
            -
            
            (53)
            
            -**Interest
                income**
            
            6
            
            6
            
            -
            
            -
            
            5
            
            -**Interest
                (expense), including debt issuance cost, net (1)**
            
            73
            
            55
            
            (79)
            
            -
            
            (28)
            
            -**Other
                income (expense), net**
            
            -
            
            1
            
            -
            
            -
            
            6
            
            -**Non-operating
                items from unconsolidated subsidiary**
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -**Earnings
                (loss) before income taxes and minority interest**
            
            2,140
            
            3,075
            
            (137)
            
            -
            
            (70)
            
            -**Income
                tax (expense)**
            
            (813)
            
            (1,168)
            
            -
            
            -
            
            -
            
            -**Minority
                interest**
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -**Net
                earnings (loss)**
            $
            1,327
            $
            1,907
            $
            (137)
            $
            -
            $
            (70)
            $
            -**Reconciliation
                to EBITDA:****Net
                earnings (loss) (US GAAP)**
            $
            1,327
            $
            1,907
            $
            (137)
            $
            -
            $
            (70)
            $
            -**Interest
                income**
            
            (6)
            
            (6)
            
            -
            
            -
            
            (6)
            
            -**Interest
                expense (1)**
            
            (73)
            
            (55)
            
            79
            
            -
            
            28
            
            -**Income
                taxes**
            
            813
            
            1,168
            
            -
            
            -
            
            -
            
            -**Depreciation**
            
            873
            
            673
            
            -
            
            -
            
            -
            
            -**EBITDA**
            $
            2,934
            $
            3,687
            $
            (58)
            $
            -
            $
            (48)
            $
            -







(1)
            The
                negative interest expense results from amounts advanced to the Corporate
                and Other segment, but not repaid, to fund the Company’s acquisitions and
                repurchases of its common stock. We reduce the interest expense incurred
                by WMCK under our credit facility by the amount of interest allocated
                to
                the Corporate & Other segment. As the Company has not repaid the funds
                advanced, the debt and accumulated interest allocated to the Corporate
                & Other segment exceeded the total outstanding borrowing. As a result,
                Womacks reported a net negative interest expense and debt issuance
                cost.


20




*Amounts
                  in thousands*
              **South
                  Africa**
              **Cruise
                  Ships**
              **Corporate
                  and Other****As
                  of and for the Six Months Ended June 30,**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Property
                  and equipment, net**
              $
              13,290
              $
              14,937
              $
              538
              $
              454
              $
              455
              $
              453**Total
                  assets**
              $
              18,778
              $
              21,331
              $
              1,227
              $
              1,120
              $
              2,953
              $
              2,100**Net
                  operating revenue**
              $
              8,366
              $
              6,723
              $
              1,428
              $
              1,271
              $
              714
              $
              37**Operating
                  expenses (excluding depreciation)**
              
              5,852
              
              4,525
              
              975
              
              864
              
              2,170
              
              1,397**Depreciation**
              
              832
              
              654
              
              61
              
              42
              
              24
              
              13**(Loss)
                  earnings from unconsolidated subsidiary**
              
              -
              
              -
              
              -
              
              -
              
              (109)
              
              51**Earnings
                  (loss) from operations**
              
              1,682
              
              1,544
              
              392
              
              365
              
              (1,589)
              
              (1,322)**Interest
                  income**
              
              68
              
              80
              
              -
              
              -
              
              860
              
              176**Interest
                  (expense), including debt issuance cost (1)**
              
              (923)
              
              (416)
              
              -
              
              -
              
              (862)
              
              (622)**Other
                  loss, net**
              
              -
              
              -
              
              -
              
              -
              
              (1)
              
              -**Non-operating
                  items from unconsolidated subsidiary**
              
              -
              
              -
              
              -
              
              -
              
              (4)
              
              (8)**Earnings
                  (loss) before income taxes and minority interest**
              
              827
              
              1,208
              
              392
              
              365
              
              (1,596)
              
              (1,776)**Income
                  tax (expense) benefit**
              
              (304)
              
              (315)
              
              (12)
              
              (11)
              
              983
              
              704**Minority
                  interest**
              
              -
              
              -
              
              -
              
              -
              
              106
              
              (31)**Net
                  earnings (loss)**
              $
              523
              $
              893
              $
              380
              $
              354
              $
              (507)
              $
              (1,103)**Reconciliation
                  to EBITDA:****Net
                  earnings (loss) (US GAAP)**
              $
              523
              $
              893
              $
              380
              $
              354
              $
              (507)
              $
              (1,103)**Interest
                  income**
              
              (68)
              
              (80)
              
              -
              
              -
              
              (860)
              
              (176)**Interest
                  expense (1)**
              
              923
              
              416
              
              -
              
              -
              
              862
              
              622**Income
                  taxes**
              
              304
              
              315
              
              12
              
              11
              
              (983)
              
              (704)**Depreciation**
              
              832
              
              654
              
              61
              
              42
              
              24
              
              13**EBITDA**
              $
              2,514
              $
              2,198
              $
              453
              $
              407
              $
              (1,464)
              $
              (1,348)




(1)
            The
                negative interest expense results from amounts advanced to the Corporate
                and Other segment, but not repaid, to fund the Company’s acquisitions and
                repurchases of its common stock. We reduce the interest expense incurred
                by WMCK under our credit facility by the amount of interest allocated
                to
                the Corporate & Other segment. As the Company has not repaid the funds
                advanced, the debt and accumulated interest allocated to the Corporate
                & Other segment exceeded the total outstanding borrowing. As a result,
                Womacks reported a net negative interest expense and debt issuance
                cost.


21








*Amounts
                  in thousands*
              **Inter-segment
                  Elimination**
              **Consolidated****As
                  of and for the Six Months Ended June 30,**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Property
                  and equipment, net**
              $
              -
              $
              -
              $
              51,026
              $
              39,629**Total
                  assets**
              $
              -
              $
              -
              $
              71,192
              $
              57,816**Net
                  operating revenue**
              $
              (680)
              $
              -
              $
              18,136
              $
              17,012**Operating
                  expenses (excluding depreciation)**
              
              (680)
              
              -
              
              13,802
              
              12,081**Depreciation**
              
              -
              
              -
              
              1,790
              
              1,382**(Loss)
                  earnings from unconsolidated subsidiary**
              
              -
              
              -
              
              (109)
              
              51**Earnings
                  from operations**
              
              -
              
              -
              
              2,435
              
              3,600**Interest
                  income**
              
              (785)
              
              (171)
              
              154
              
              91**Interest
                  (expense), including debt issuance cost**
              
              785
              
              171
              
              (1,034)
              
              (812)**Other
                  income, net**
              
              -
              
              -
              
              5
              
              1**Non-operating
                  items from unconsolidated subsidiary**
              
              -
              
              -
              
              (4)
              
              (8)**Earnings
                  before income taxes and minority interest**
              
              -
              
              -
              
              1,556
              
              2,872**Income
                  tax (expense)**
              
              -
              
              -
              
              (146)
              
              (790)**Minority
                  interest**
              
              -
              
              -
              
              106
              
              (31)**Net
                  earnings**
              $
              -
              $
              -
              $
              1,516
              $
              2,051**Reconciliation
                  to EBITDA:****Net
                  earnings (loss) (US GAAP)**
              $
              -
              $
              -
              $
              1,516
              $
              2,051**Interest
                  income**
              
              785
              
              171
              
              (154)
              
              (91)**Interest
                  expense**
              
              (785)
              
              (171)
              
              1,034
              
              812**Income
                  taxes**
              
              -
              
              -
              
              146
              
              790**Depreciation**
              
              -
              
              -
              
              1,790
              
              1,382**EBITDA**
              $
              -
              $
              -
              $
              4,332
              $
              4,944




**9.
      PROMOTIONAL ALLOWANCES**




Promotional
      allowances presented in the condensed consolidated statements of earnings for
      the three- and six-month periods ended June 30, 2005 and June 30, 2004 include
      the following:






**For
                the Three Months Ended**
              **June
                30,**
            **For
                the Six Months Ended**
              **June
                30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004**Food
                & Beverage and Hotel Comps
            $
            302
            $
            352
            $
            683
            $
            721Free
                Plays or Coupons
            
            343
            
            366
            
            848
            
            745Player
                Points
            
            280
            
            314
            
            661
            
            641Total
                Promotional Allowances
            **$**
            **925**
            **$**
            **1,032**
            **$**
            **2,192**
            **$**
            **2,107**




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.




22




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:




**For
                the Three Months**
              **Ended
                June 30,**
            **For
                the Six Months**
              **Ended
                June 30,***Amounts
                in thousands*
            **2005**
            
            **2004**
            **2005**
            
            **2004**Interest
                income
            $
            107
            
            $
            45
            $
            154
            
            $
            91Foreign
                currency exchange gains
            
            5
            
            
            -
            
            5
            
            
            -Other
                income (expense)
            
            (1)
            
            
            -
            
            -
            
            
            1**$**
            **111**
            
            **$**
            **45**
            **$**
            **159**
            
            **$**
            **92**




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




The
      income tax provisions are based on estimated full-year earnings for financial
      reporting purposes adjusted for permanent differences.






Income
      taxes reported in the Corporate and Other Segment for the three months ended
      June 30, 2005 and 2004 are as follows:




***Amounts
                in thousands***
            
            **United
                States**
            
            **Mauritius**
            
            **Other**
            
            **Reported
                in Corporate and Other****2005**
            
            **2004**
            
            **2005**
            
            **2004**
            
            **2005**
            
            **2004**
            
            **2005**
            
            **2004****Earnings
                (loss) before income taxes and minority interest**
            $
            (1,766)
            $
            (877)
            $
            658
            $
            -
            $
            (2)
            $
            1
            $
            (1,110)
            $
            (876)**Income
                tax (expense) benefit**
            $
            613
            $
            351
            $
            (21)
            $
            -
            $
            (2)
            $
            (2)
            $
            590
            $
            349Effective
                tax rate
            
            35%
            
            40%
            
            3%
            
            -
            
            100%
            
            200%
            
            53%
            
            40%









23




Income
      taxes reported in the Corporate and Other Segment for the six months ended
      June 30, 2005 and 2004 are as follows:




***Amounts
                in thousands***
            
            **United
                States**
            
            **Mauritius**
            
            **Other**
            
            **Reported
                in Corporate and Other****2005**
            
            **2004**
            
            **2005**
            
            **2004**
            
            **2005**
            
            **2004**
            
            **2005**
            
            **2004****Earnings
                (loss) before income taxes and minority interest**
            $
            (2,978)
            $
            (1,780)
            $
            1,382
            $
            -
            $
            0
            $
            4
            $
            (1,596)
            $
            (1,776)**Income
                tax (expense) benefit**
            $
            1,027
            $
            708
            $
            (40)
            $
            -
            $
            (4)
            $
            (4)
            $
            983
            $
            704Effective
                tax rate
            
            34%
            
            40%
            
            3%
            
            -
            
            -
            
            100%
            
            62%
            
            40%




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




Basic
      and
      diluted earnings per share for the three and six months ended June 30, 2005
      and
      2004 were computed as follows:




*Amounts
                in thousands, except for share information*
            **For
                the Three Months Ended**
              **June
                30,**
            **For
                the Six Months Ended**
              **June
                30,****2005**
            **2004**
            **2005**
            **2004**Basic
                Earnings Per Share:Net
                earnings
            $
            509
            $
            1,147
            $
            1,516
            $
            2,051Weighted
                average common shares
            
            13,754,900
            
            13,681,900
            
            13,751,456
            
            13,681,669Basic
                earnings per share
            $
            0.04
            $
            0.08
            $
            0.11
            $
            0.15Diluted
                Earnings Per Share:Net
                earnings, as reported
            $
            509
            $
            1,147
            $
            1,516
            $
            2,051Weighted
                average common shares
            
            13,754,900
            
            13,681,900
            
            13,751,456
            
            13,681,669Effect
                of dilutive securities:Stock
                options and warrants
            
            2,642,481
            
            2,152,253
            
            2,674,802
            
            1,730,343Dilutive
                potential common shares
            
            16,397,381
            
            15,834,153
            
            16,426,258
            
            15,412,012Diluted
                earnings per share
            $
            0.03
            $
            0.07
            $
            0.09
            $
            0.13




As
      of
      June 30, 2005 and 2004, all outstanding options and warrants to purchase common
      shares of the Company’s stock have been included in the computation of diluted
      earnings per share.











24


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




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




This
      quarterly report on Form 10-Q contains “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995. In addition,
      Century Casinos, Inc. (the “Company”) may make other written and oral
      communications from time to time that contain such statements. Forward-looking
      statements include statements as to industry trends and future expectations
      of
      the Company and other matters that do not relate strictly to historical facts
      and are based on certain assumptions by management. These statements are often
      identified by the use of words such as
      "may,""will,""expect,""believe,""anticipate,""intend,""could,""estimate," or
      "continue," and similar expressions or variations. These statements are based
      on
      the beliefs and assumptions of the management of the Company based on
      information currently available to management. Such forward-looking statements
      are subject to risks, uncertainties and other factors that could cause actual
      results to differ materially from future results expressed or implied by such
      forward-looking statements. Important factors that could cause actual results
      to
      differ materially from the forward-looking statements include, among others,
      the
      risks described in Part I, Item I, Business, under “Factors That May Affect
      Future Results,” in the Company’s Annual Report on Form 10-K for the year ended
      December 31, 2004. We caution the reader to carefully consider such factors.
      Furthermore, such forward-looking statements speak only as of the date on which
      such statements are made. We undertake no obligation to update any
      forward-looking statements to reflect events or circumstances after the date
      of
      such statements.




**Available
      Information**




All
      reports filed by the Company with the SEC are available free of charge via
      EDGAR
      through the SEC website at www.sec.gov .
      In
      addition, the public may read and copy materials filed by the Company with
      the
      SEC at the SEC’s public reference room located at 450 Fifth St., N.W.,
      Washington, D.C. 20549. The Company also provides copies of its Forms 8-K,
      10-K,
      10-Q, Proxy and Annual Report at no charge to investors upon request and makes
      electronic copies of its most recently filed reports available through its
      website at www.centurycasinos.com as soon
      as reasonably practicable after filing such material with the SEC.




**Results
      of Operations**




The
      Company is 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
      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 CTI and
      subsidiary which is developing a proposed casino and hotel.




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




The
      operating results of the South African segment are those of CCA and its
      subsidiaries, primarily CCAL which own the Caledon Hotel, Spa &
      Casino.




Cruise
      Ship operations include the revenues and expenses of the eight combined
      shipboard operations for which the Company has casino concession
      agreements.






25


Corporate
      and Other operations include, among other items, the revenues and expenses
      of
      corporate gaming projects for which the Company has secured long-term service
      contracts.




**Consolidated
      Results of Operations**




We
      reported net operating revenue of $8.9 million and $8.8 million for the three
      months ended June 30, 2005 and 2004, respectively and $18.1 million and $17.0
      million for the six months ended June 30, 2005 and 2004, respectively. Casino
      revenue was $8.7 million compared to $8.8 million for the three months ended
      June 30, 2005 and 2004, respectively, and was $17.8 million compared to $16.9
      million, for the six months ended June 30, 2005 and 2004, respectively. Casino
      expense was $3.5 million and $3.4 million for the three months ended June 30,
      2005 and 2004, respectively and was $7.0 million and $6.5 million for the six
      months ended June 30, 2005 and 2004, respectively. General and administrative
      expense was $3.0 million for the three months ended June 30, 2005 compared
      to
      $2.2 million for the three months ended June 30, 2004. General and
      administrative expense was $5.5 million for the six months ended June 30, 2005
      compared to $4.2 million for the six months ended June 30, 2004. Depreciation
      expense was $0.9 million and $0.7 million for the three months ended June 30,
      2005 and 2004, respectively and was $1.8 million and $1.4 million for the six
      months ended June 30, 2005 and 2004, respectively.




Total
      earnings from operations were $0.9 million and $1.9 million for the three months
      ended June 30, 2005 and 2004, respectively, and were $2.4 million and $3.6
      million for the six months ended June 30, 2005 and 2004,
      respectively.




We
      recognized an income tax benefit of $10 thousand for the three months ended
      June
      30, 2005 compared to an income tax expense of $0.4 million for the three months
      ended June 30, 2004. Income tax expense was $0.1 million and $0.8 million for
      the six months ended June 30, 2005 and 2004, respectively.




The
      Company’s net earnings were $0.5 million, or $0.04 per share, and $1.2 million,
      or $0.08 per share, for the three months ended June 30, 2005 and 2004,
      respectively, and were $1.5 million, or $0.11 per share, and $2.1 million,
      or
      $0.15 per share, for the six months ended June 30, 2005 and 2004,
      respectively.




The
      most
      significant impacts on reported earnings for the three and six months ended
      June
      30, 2005 were the cost of complying with Sarbanes Oxley, the cost associated
      with managing the construction of two new projects in development and the costs
      of staffing for expansion. In addition, a major road closure during the most
      recent quarter slowed the revenue growth in Caledon and impacted
      earnings.




A
      discussion by business segment follows below.











26


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




Womacks’
      results of operations for the three and six months ended June 30, 2005 and
      2004
      are as follows:




**For
                the three months**
              **ended
                June 30,**
            **For
                the six months**
              **ended
                June 30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004****Operating
                Revenue**Casino
            $
            4,789
            $
            5,071
            $
            9,261
            $
            9,946Hotel, food and beverage
            
            347
            
            380
            
            711
            
            704Other
                (including promotional allowances)
            
            (676)
            
            (849)
            
            (1,707)
            
            (1,669)Net
                operating revenue
            
            4,460
            
            4,602
            
            8,265
            
            8,981**Costs
                and Expenses**Casino
            
            1,625
            
            1,652
            
            3,249
            
            3,278Hotel, food and beverage
            
            127
            
            143
            
            290
            
            231General and administrative
            
            918
            
            937
            
            1,792
            
            1,786Depreciation
            
            430
            
            368
            
            873
            
            6733,100
            
            3,100
            
            6,204
            
            5,968Earnings
                from operations
            
            1,360
            
            1,502
            
            2,061
            
            3,013Interest
                (expense), net
            
            69
            
            23
            
            73
            
            55Other
                income, net
            
            3
            
            4
            
            6
            
            7Earnings
                before income taxes
            
            1,432
            
            1,529
            
            2,140
            
            3,075Income
                tax expense
            
            544
            
            581
            
            813
            
            1,168**Net
                Earnings**
            **$**
            **888**
            **$**
            **948**
            **$**
            **1,327**
            **$**
            **1,907**




**Casino
      Market Data**




**For
                the three months**
              **ended
                June 30,**
            **For
                the six months**
              **ended
                June 30,****2005**
            **2004**
            **2005**
            **2004**Market
                share of the Cripple Creek gaming revenue
            
            12.7%
            
            13.8%
            
            13.3%
            
            14.1%Average
                number of slot machines
            
            628
            
            639
            
            626
            
            632Market
                share of Cripple Creek gaming devices
            
            13.2%
            
            14.1%
            
            13.3%
            
            14.2%Average
                slot machine win per day
            
            $
                83
            
            $
                87
            
            $
                80
            
            $
                86Cripple
                Creek average slot machine win per day
            
            $
                85
            
            $
                88
            
            $
                82
            
            $
                86









27




Management
      uses points and coupons to attract customers with the expectation of increasing
      gaming revenue, while monitoring and adjusting the programs as necessary.
      Excluding the previously reported high redemption in February 2005, the cost
      of
      points and coupons is in line with management’s expectations and prior year
      results




Womacks
      leases a portion of its slot machines under participation agreements from
      manufacturers, on which it pays a fee calculated as a percentage of the net
      win.
      All of the leases have short term commitment periods not exceeding three months
      and are classified as operating leases. The leases can be cancelled with no
      more
      than 30 days written notice. On a portion of the leases, the manufacturer is
      guaranteed a minimum fee per day that can range from $15 to $35 per slot
      machine for the duration of the lease. In most instances, the branded games
      introduced to the market are not available for purchase. For financial reporting
      purposes, the net win on the slot machines is included in our revenue and the
      amount due to the manufacturer is recorded as an expense, in the period during
      which the revenue is earned, as a casino operating cost. Management makes its
      decisions to introduce these machines based on the consumer demand for the
      product.




Since
      the
      beginning of 2004 we have spent approximately $3 million to upgrade the product
      mix on the gaming floor, improve the player tracking system and introduce
      cashless (Ticket-in/Ticket-out or “TITO”) gaming machines. We currently have 204
      TITO machines installed. The Company expects that these ongoing improvements
      will add to the customer experience and further improve customer service.
      Management believes that these ongoing efforts have helped limit the decrease
      in
      gaming revenue.




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, or cash and other prizes, as well as through increased TV and radio
      advertising. Management continues to refine the Womacks product by upgrading
      the
      interior of the facilities and modifying the slot machine mix. In
      addition, Womacks is one of the largest gaming facilities inCripple
      Creek, and we have the capacity to expand Womacks to the rear of the property
      on
      a single level at a later date.




Womacks
      operated two restaurants, “Bob’s Grill” and the “Cut Above Buffet” to provide an
      alternative to patrons of the casino. The “Cut Above Buffet” was opened in May
      2004 and operates on the second floor of the casino. Although it attracted
      new
      customers to Womacks Gold Club, it was not a significant stimulus to
      gaming
      revenue and was closed
      on July 30, 2005.




The
      increase in depreciation for 2005 is primarily the result of the addition of
      casino facility gaming equipment during 2004.




The
      negative interest expense results from amounts advanced to the Corporate and
      Other segment, but not repaid, to fund the Company’s acquisitions and
      repurchases of its common stock. We reduce the interest expense incurred by
      WMCK
      under our credit facility by the amount of interest allocated to the Corporate
      & Other segment. As the Company has not repaid the funds advanced, the debt
      and accumulated interest allocated to the Corporate & Other segment exceeded
      the total outstanding borrowing. As a result, Womacks reported a net negative
      interest expense and debt issuance cost.




Womacks’ effective tax rate has remained stable at approximately 38%.




**Three
      Months Ended June 30, 2005 vs. 2004**




Casino
      revenue was 5.6% lower than during the same period last year compared to a
      6.4%
      reduction in the market share of gaming devices, primarily as a result of the
      two additional casinos in town.




Based
      on
      management’s change to the comp policies at the casino, Other Revenue (net ofpromotional allowances) was 14.1% of casino revenue compared to 16.7%
      in
      the same period last year.




Management efforts to contain costs limited the negative impact on the net
      earnings within the segment during the quarter.




28


**Six
      Months Ended June 30, 2005 vs. 2004**




Casino
      revenue was 6.9% lower than the same period last year compared to a 6.3%
      reduction in the market share of gaming devices. Womacks’ market share of gaming
      devices fell from 14.2% in the first six months of 2004 to 13.3% in 2005. This
      was due to an additional casino opening in Cripple Creek in June 2004, bringing
      the total number of casino licenses to 19. Womacks has not yet overcome the
      dilution in the market but continues to take measures to compete in this
      region.




In
      January 2004, the Company sold a purchase option agreement that it had held
      since 1999, which would have expired on September 30, 2004, to an unrelated
      party for a sum of $0.2 million. As a result of the transaction, the Company
      recognized a pre-tax gain of $34.7 thousand in 2004, which is included in
      Operating Revenue, Other.




**South
      Africa**




Operating
      results in U.S. dollars for the three and six months ended June 30, 2005 and
      2004 were as follows:




**CALEDON**
            **For
                the three months**
              **ended
                June 30,**
            **For
                the six months**
              **ended
                June 30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004****Operating
                Revenue**Casino
            $
            3,223
            $
            2,946
            $
            7,201
            $
            5,724Hotel, food and beverage
            
            594
            
            585
            
            1,458
            
            1,235Other
                (including promotional allowances)
            
            (185)
            
            (128)
            
            (293)
            
            (236)Net
                operating revenue
            
            3,632
            
            3,403
            
            8,366
            
            6,723**Costs
                and Expenses**Casino
            
            1,317
            
            1,230
            
            2,778
            
            2,331Hotel, food and beverage
            
            460
            
            581
            
            1,065
            
            1,171General and administrative
            
            661
            
            498
            
            1,243
            
            971Depreciation
            
            451
            
            333
            
            832
            
            6542,889
            
            2,642
            
            5,918
            
            5,127Earnings
                from operations
            
            743
            
            761
            
            2,448
            
            1,596Interest
                expense, net
            
            (123)
            
            (202)
            
            (309)
            
            (416)Other
                income, net
            
            14
            
            35
            
            32
            
            71Earnings
                before income taxes
            
            634
            
            594
            
            2,171
            
            1,251Income
                tax expense
            
            (217)
            
            (111)
            
            (710)
            
            (327)**Net
                Earnings**
            **$**
            **417**
            **$**
            **483**
            **$**
            **1,461**
            **$**
            **924**







**CENTURY
                CASINOS AFRICA******Costs
                and Expenses**General and administrative
            $
            351
            $
            16
            $
            766
            $
            52Loss
                from operations
            
            (351)
            
            (16)
            
            (766)
            
            (52)Interest
                expense, net
            
            (289)
            
            -
            
            (614)
            
            -Other
                income, net
            
            13
            
            6
            
            36
            
            9Loss
                before income taxes
            
            (627)
            
            (10)
            
            (1,344)
            
            (43)Income
                tax benefit
            
            188
            
            4
            
            406
            
            12**Net
                Loss**
            **$**
            **(439)**
            **$**
            **(6)**
            **$**
            **(938)**
            **$**
            **(31)****SOUTH
                AFRICA NET (LOSS) EARNINGS**
            **$**
            **(22)**
            **$**
            **477**
            **$**
            **523**
            **$**
            **893****Average
                exchange rate (Rand/USD)**
            
            **6.42**
            
            **6.56**
            
            **6.16**
            
            **6.64**














29


Operating
      results in Rand for the three and six months ended June 30, 2005 and 2004 are
      as
      follows:




**CALEDON**
            **For
                the three months ended June 30,**
            **For
                the six months**
              **ended
                June 30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004****Operating
                Revenue**Casino
            R
            20,651
            R
            19,326
            R
            44,082
            R
            37,998Hotel, food and beverage
            
            3,826
            
            3,844
            
            8,917
            
            8,205Other
                (including promotional allowances)
            
            (1,200)
            
            (795)
            
            (1,836)
            
            (1,533)Net
                operating revenue
            
            23,277
            
            22,375
            
            51,163
            
            44,670**Costs
                and Expenses**Casino
            
            8,453
            
            8,091
            
            17,065
            
            15,488Hotel, food and beverage
            
            2,953
            
            3,815
            
            6,519
            
            7,782General and administrative
            
            4,252
            
            3,260
            
            7,682
            
            6,443Depreciation
            
            2,916
            
            2,191
            
            5,164
            
            4,34618,574
            
            17,357
            
            36,430
            
            34,059Earnings
                from operations
            
            4,703
            
            5,018
            
            14,733
            
            10,611Interest
                expense, net
            
            (794)
            
            (1,326)
            
            (1,892)
            
            (2,766)Other
                income, net
            
            93
            
            234
            
            198
            
            477Earnings
                before income taxes
            
            4,002
            
            3,926
            
            13,039
            
            8,322Income
                tax expense
            
            (1,380)
            
            (752)
            
            (4,282)
            
            (2,191)**Net
                Earnings**
            **R**
            **2,622**
            **R**
            **3,174**
            **R**
            **8,757**
            **R**
            **6,131**






**CENTURY
                CASINOS AFRICA******Costs
                and Expenses**General and administrative
            R
            2,264
            R
            119
            R
            4,712
            R
            359Loss
                from operations
            
            (2,264)
            
            (119)
            
            (4,712)
            
            (359)Interest
                expense, net
            
            (1,857)
            
            -
            
            (3,767)
            
            -Other
                income, net
            
            83
            
            36
            
            217
            
            58Loss
                before income taxes
            
            (4,038)
            
            (83)
            
            (8,262)
            
            (301)Income
                tax benefit
            
            1,211
            
            22
            
            2,478
            
            77**Net
                Loss**
            **R**
            **(2,827)**
            **R**
            **(61)**
            **R**
            **(5,784)**
            **R**
            **(224)****SOUTH
                AFRICA NET (LOSS) EARNINGS**
            **R**
            **(205)**
            **R**
            **3,113**
            **R**
            **2,973**
            **R**
            **5,907**






























30


**Casino
      Market Data (in Rand)**




**For
                the three months**
              **ended
                June 30,**
            **For
                the six months**
              **ended
                June 30,****2005**
            **2004**
            **2005**
            **2004**Market
                share of the Western Cape gaming revenue
            
            5.3%
            
            5.8%
            
            5.7%
            
            5.8%Market
                share of Western Cape gaming devices
            
            10.5%
            
            11.4%
            
            10.5%
            
            11.1%Average
                number of slot machines
            
            300
            
            290
            
            300
            
            283Average
                slot machine win per day
            
            709
                Rand
            
            647
                Rand
            
            761
                Rand
            
            674
                RandAverage
                number of tables
            
            9.0
            
            9.0
            
            9.0
            
            8.5Average
                table win per day
            
            1,572
                Rand
            
            2,482
                Rand
            
            1,687
                Rand
            
            2,045
                Rand




Improvement
      in the Rand versus the Dollar has had a positive impact on the segment’s
      reported results. The
      results discussed below are based on theRand to eliminate the effect of
      fluctuations in foreign currency exchange rates.




Cash
      couponing and a variety of other marketing efforts have been used to stimulate
      the casino revenues in Caledon. Improvement in the casino management has also
      been a key element in managing the growth at the resort.




The
      conversion to cashless gaming in March 2005 has resulted in a significant
      accumulation of points earned by players reported as an offset to Operating
      Revenue, Other. All patrons are required to create a personal players account
      and play with a card on which they always earn points .
      Although gaming revenues increased, the point liability to 40,000 active player
      accounts, compared to 5,000 active player accounts in the first quarter 2005,
      affects the reported results




CCAL
      offers an array of amenities to guests of the resort as a complement to the
      gaming experience. The resort operates a total of four restaurants, three bars,
      a conference facility and the
“Outdoor Experience” (a team building facility). We are reviewing plans to
      re-use the former equestrian center, which was not in service during the second
      quarter, in conjunction with a proposed golf course development. In addition
      to
      the casino license, hotel and spa ,
      CCAL
      owns approximately 600 acres of land which may be used for future expansion.




In
      previous years, CCAL has advertised the casino and hotel operations separately.
      Current marketing efforts have focused on emphasizing the overall resort
      qualities of the operation, inclusive of both the casino and the hotel. This
      has
      helped reduce the marketing cost by combining labor efforts and advertising
      dollars. The combined cost is included in casino cost, thereby contributing
      to
      the reduction in hotel, food and beverage expenses.




CCAL
      operated all four restaurants during the entire six-month period in 2005. During
      the same period in 2004, we operated three restaurants until June, at which
      time
      the fourth restaurant opened.




Depreciation
      expense has been affected by the completion of a number of improvement projects
      at CCAL in 2004. From June 30, 2004 to June 30, 2005, depreciable assets have
      increased by 12.1 million Rand.




Interest
      expense, net for CCAL has decreased due to the scheduled repayment of the term
      loan with ABSA and the early repayment of a series of capital leases in February
      2005. The weighted average interest on the borrowings under term loan agreements
      for our South African subsidiaries was 16.9% for all reported periods. Interest
      expense, net for Century Casinos Africa (“CCA”) is comprised exclusively of
      interest on loan agreements between CCA and the Corporate and Other Segment
      (consequently, the amounts eliminate in consolidation.)




31




General
      and administrative expenses for CCA include fees paid to the Corporate and
      Other
      segment for services provided to CCA. These fees, as described below, eliminate
      in consolidation. The fee agreement went into effect in the fourth quarter
      of
      2004 .




**Three
      Months Ended June 30, 2005 vs. 2004**




Revenue
      growth in the three months ended June 30, 2005 slowed due to the closure of
      a
      significant portion of the main east/west highway from April 11, 2005 to May
      27,
      2005 . In
      addition, during the current quarter, the South African government introduced
      new currency notes. The casino experienced an initial rejection rate of 80%
      on
      these new notes, which has been diminishing as the Company installed new bill
      validation software for the wide variety of slot machines maintained by the
      casino. Despite these issues, Caledon was still able to achieve a 6.9% growth
      in
      casino revenue. Additionally, Caledon managed to increase the slot win
      per
      day by 9.6% during the same period that it increased the average number of
      slot
      machines. The impact of the road damage also affected hotel, food and beverage
      revenue .




Operating
      Revenue, Other for the three months ended June 30, 2005 was impacted by a
      0.5 million Rand increase in points attributable to the conversion to
      cashless gaming and an increase in overall play.




The
      0.9
      million Rand reduction in hotel, food and beverage expenses results primarily
      from elimination of the marketing staff at the hotel.




The
      Company has spent an additional 0.4 million Rand on legal, professional and
      accounting services when comparing the three months ended June 30, 2005 to
      the
      same period in 2004. The majority of this increase relates to the implementation
      of the previously mentioned services agreements and the defense of a
      South
      African Revenue Services audit .




During
      the three months ended June 30, 2005, there have been costs in fully
      implementing our cashless system, in preparing the development of unused land,
      the upgrade of 20 deluxe hotel rooms and the relocation of six treatment
      rooms, sauna, gym and reception into our hotel.




Fees
      paid
      by CCA to the Corporate and Other segment totaled 1.9 million Rand during the
      three months ended June 30, 2005. There were no fees paid during the three
      months ended June 30, 2004.




**Six
      Months Ended June 30, 2005 vs. 2004**




Despite
      the road damage that slowed traffic to Caledon, the casino still managed to
      increase slot win per day by 12.9%.




Operating
      Revenue, Other for the six months ended June 30, 2005 was impacted by a 0.5
      million Rand increase in points attributable to the conversion to cashless
      gaming in March 2005 and an increase in overall play.




The
      1.3
      million Rand reduction in hotel, food and beverage expenses results primarily
      from the elimination of the separate marketing staff, decreasing advertising
      and
      promotion costs for the hotel.




We
      have
      spent an additional 0.4 million Rand on legal, professional and accounting
      services when comparing the first six months of 2005 to the same period in
      2004.
      The majority of the in crease
      in
      cost is related to the implementation of the previously mentioned management
      agreements and the defense of the ongoing tax audit.




Fees
      paid
      by CCA to the Corporate and Other segment total 4.2 million Rand during the
      first six months of 2005. There were no fees paid during the first six months
      of
      2004.




32


**Cruise
      Ships**




The
      Cruise Ships segment’s operating results for the three and six months ended June
      30, 2005 and 2004 were as follows:




**For
                the three months**
              **ended
                June 30,**
            **For
                the six months**
              **ended
                June 30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004****Operating
                Revenue**Casino
            $
            725
            $
            791
            $
            1,326
            $
            1,204Other
                (including promotional allowances)
            
            50
            
            42
            
            102
            
            67Net
                operating revenue
            
            775
            
            833
            
            1,428
            
            1,271**Costs
                and Expenses**Casino
            
            519
            
            535
            
            975
            
            864Depreciation
            
            36
            
            25
            
            61
            
            42555
            
            560
            
            1,036
            
            906Earnings
                from operations before income taxes
            
            220
            
            273
            
            392
            
            365Income
                tax expense
            
            7
            
            8
            
            12
            
            11**Net
                Earnings**
            **$**
            **213**
            **$**
            **265**
            **$**
            **380**
            **$**
            **354**




We
        experience fluctuations in the casino revenue generated on each cruise depending
        on the number and gaming quality of the players and passengers, and these
        fluctuations may be extreme.  In addition, the cruise ships on which
        we
        conduct operations may be out of service from time to time for periodic
        maintenance or based on the operating schedule set by the cruise line. 
        As
        a result, revenues in our cruise ship segment may fluctuate significantly
        from
        period to period.


The
      Silver Cloud, a cruise ship operated by Silversea 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. On April 10, 2004, the Company opened a casino
      aboard the Nautica, a cruise ship operated by Oceania Cruises. The casino is
      equipped with 42 slot machines and three gaming tables. The Nautica was taken
      out of service in November 2004 following the completion of its 2004 cruise
      schedule. We
      expect
      that the Nautica will resume operations in November 2005. The casino consession
      agreement with the Silver
      Shadow will terminate at the end of September 2005 and will not be renewed.




Concession
      fees paid to the ship operators, as discussed for the three- and six-month
      periods below, and staff costs which include the transportation cost to rotate
      personnel to and from the ships, are the most significant costs of operating
      the
      casinos aboard the ships. Staff costs have remained relatively stable in
      relation to the casino revenues generated.











33


**Three
      Months Ended June 30, 2005 vs. 2004**




For
        three
        months ended June 30, 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 eight ships during the same period in 2004. As a result,
        cruise ship revenue declined 7.0% for the three months ended June 30, 2005
        as
        compared to the same period in 2004.




Concession
      fees paid to the ship operators in accordance with the agreements accounted
      for
      $0.3 million of the total casino expenses incurred for both
      periods.


**Six
      Months Ended June 30, 2005 vs. 2004**




In
      the
      first six months of 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 eight ships during the same period in 2004. As noted
      above, several of the cruise ships were inactive for periods of 2004. We cannot
      operate our casinos while the ships are in port. As a result, 2004 revenues
      were
      negatively impacted.




Concession
      fees paid to the ship operators in accordance with the agreements accounted
      for
      $0.6 million and $0.5 million of the total casino expenses incurred
      in the
      first six months ended June 30, 2005 and 2004,
      respectively.




**Corporate
      & Other**




**For
                the three months ended June 30,**
            **For
                the six months**
              **ended
                June 30,***Amounts
                in thousands*
            **2005**
            **2004**
            **2005**
            **2004****Operating
                Revenue**Other
            **$**
            279
            **$**
            10
            **$**
            714
            $
            37Net
                operating revenue
            
            279
            
            10
            
            714
            
            37**Costs
                and Expenses**General
                and administrative
            
            1,283
            
            706
            
            2,200
            
            1,397Property
                write-down and other write-offs, net of recoveries
            
            -
            
            -
            
            (30)
            
            -Depreciation
            
            21
            
            5
            
            24
            
            131,304
            
            711
            
            2,194
            
            1,410Loss
                (Earnings) from unconsolidated subsidiary
            
            (12)
            
            39
            
            (109)
            
            51Loss
                from operations
            
            (1,037)
            
            (662)
            
            (1,589)
            
            (1,322)Interest
                (expense), net
            
            (520)
            
            (297)
            
            (862)
            
            (622)Other
                income, net
            
            450
            
            86
            
            859
            
            176Non-operating
                items from unconsolidated subsidiary
            
            (3)
            
            (3)
            
            (4)
            
            (8)Loss
                before income taxes and minority interest
            
            (1,110)
            
            (876)
            
            (1,596)
            
            (1,776)Income
                tax benefit
            
            590
            
            349
            
            983
            
            704Minority
                interest
            
            100
            
            (16)
            
            106
            
            (31)**Net
                Loss**
            **$**
            **(420)**
            **$**
            **(543)**
            **$**
            **(507)**
            **$**
            **(1,103)**




Revenue
      in the corporate and other segment includes fees paid by the South African
      segment for services ,
      which
      eliminate in consolidation. Additionally, this segment records fees paid by
      Casino Millennium under the technical services agreement we have with the owner
      of the Marriott Hotel.




34




General
      and administrative expenses have increased largely due to costs associated
      with
      new expansion projects, increases in corporate staffing and preliminary costs
      associated with Sarbanes-Oxley compliance. Compliance with the Sarbanes-Oxley
      Act has also resulted in increased auditing costs.




We
      increased our staffing levels in advance of our two new projects in order to
      effectively integrate these operations into our corporate structure. In
      addition, we have also increased staffing to better comply with the requirements
      of Sarbanes-Oxley.




**Three
      Months Ended June 30, 2005 vs. 2004**




The
      South
      African segment paid $0.3 million in fees to its parent company during the
      three
      month period.




As
      a
      result of additional staffing, compensation costs (included in general and
      administrative expenses) increased by $0.2 million for the three month
      period.




During
      the three-month period ended June 30, 2005, we incurred $0.2 million in
      non-recurring legal and consultancy fees for charges relating to SEC filings
      and
      Sarbanes-Oxley work.




In
      the
      second quarter of 2005, we began depreciating the non-operating casino property
      held in Nevada, as a result of our determiniation that the property could no
      longer be classified as held for sale, accounting for the increase in
      depreciation expense.




**Six
      Months Ended June 30, 2005 vs. 2004**




The
      South
      African segment paid $0.7 million in fees to its parent company during the
      six
      month period.




As
      a
      result of additional staffing, compensation costs (included in general and
      administrative expenses) increased by $0.3 million for the six month
      period.




During
      the six months ended June 30, 2005 we incurred $0.3 million in non-recurring
      legal and consultancy fees for charges relating to SEC filings and
      Sarbanes-Oxley work.




Casino
        Millennium’s results, reported as (loss) earnings from unconsolidated
        subsidiary, were significantly behind the prior year periods. The net operating
        revenue and net (loss) earnings decreased significantly, primarily as a result
        of a reduction in the guest count which is attributed to poor winter weather
        conditions in the first part of the year. Low hold percentages, particularly
        in
        the live games, have had a negative impact on their results.
    The
        significant increase in other income, net relates to the interest earned
        on debt
        between the South African segment and its parent company (which is included
        as a
        part of the Corporate and Other segment). The related loan agreement went
        into
        effect in the third quarter of 2004. This interest earned eliminates against
        the
        interest expense included in the South African segment; consequently there
        is no
        effect on the consolidated net income.
  The
        change in
        minority interest reflects the pre-opening losses incurred by the Central
        City,
        Colorado and Edmonton segments assigned to the minority partn


35


**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, 26 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 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. The
      Company is currently licensed in Colorado for gaming at Womacks Casino and
      Hotel
      in Cripple Creek. Our current expectation is that we will complete construction
      during the third quarter of 2006.







We awarded
      partial construction contracts in April 2005. Work has commenced on the
      underground utility work and for the demolition, foundation, shoring and sub
      floor construction for the casino.





For
      the
      three and six months ending June 30, 2005, we incurred $43 thousand and $64
      thousand dollars in pre-opening expenses, respectively, which are 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 Company
      expects the project to cost approximately $25.2 million ($30.8
      million Canadian). Completion of this project is subject to obtaining acceptable
      project financing, although we have commenced initial construction. We expect
      construction 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.




We
      issued
      a letter of commitment totaling $3.9 million Canadian in May 2005 and work
      immediately began on the construction of the underground parking facility and
      other site development. In July 2005 we signed an additional letter of
      commitment totaling $2.0 million Canadian for completion of the underground
      parking facility and for material orders needed for the timely construction
      of
      the framework of the casino.





For
      the
      three and six months ending June 30, 2005, we incurred $58 thousand and $90
      thousand dollars in pre-opening expenses, respectively, which are included
      in
      general and administrative expenses.







36


**Liquidity
      and Capital Resources**




Cash
      and
      cash equivalents totaled $5.8 million plus restricted cash of $0.6 million
      at
      June 30, 2005, and the Company had working capital (current assets minus current
      liabilities) of $0.6 million. Additional liquidity may be provided by the
      Company’s revolving credit facility with Wells Fargo Bank, under which the
      Company had an original commitment of $26 million (currently $20.9 million
      net of the quarterly reduction) and unused borrowing capacity of approximately
      $4.4 million at June 30, 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
      six months ended June 30, 2005, cash provided by operating activities was $1.4
      million compared with $2.9 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 $4.7 million for the first six 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, $0.3 million in property and equipment additions at Womacks, $0.8 million in property and equipment additions at
      Caledon, South Africa, $0.2 million in expenditures to upgrade some of the
      cruise ships with Ticket-out slot machines, $1.4 million towards construction
      in
      Central City, Colorado, and $1.3 million in additional expenditures towards
      construction of the property in Edmonton, Canada, less $0.1 million in proceeds
      from the disposition of property. Cash used in investing activities of $2.3
      million for the first six months of 2004 included $0.2 million towards the
      upgrade of the slot accounting system and $1.2 million towards new slot games
      at
      Womacks; $0.6 million in improvements to the property in Caledon, South Africa;
      and $0.2 million in expenditures to outfit the cruise ships.




Cash
      provided by financing activities of $1.4 million for the first six months of
      2005 consisted of net borrowings of $0.8 million under the RCF with Wells Fargo,
      net borrowings of $1.6 million under the credit facility with Colorado Business
      Bank, $74 thousand in proceeds from the exercise of stock options and $0.01
      in
      other borrowings ,
      less
      net repayments of $0.9 million under the Caledon loan agreement we have entered
      into with ABSA, and other net repayments of $0.3 million. Cash used in financing
      activities of $1.4 million for the first six months of 2004 consisted
      of
      net repayments of $0.3 million under the RCF with Wells Fargo, net repayments
      of
      $0.7 million under the loan agreement with ABSA and repayment of $0.4 million
      to
      a founding shareholder.




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 six 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 June 30, 2005, the Company has
      repurchased 2,559,004 shares of its common stock at a total cost of
      approximately $3.8 million.




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 the Central City, Colorado project. As of
      June 30, 2005, $1.6 million of principal is outstanding. 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%.
      The
      note is secured by the existing property and improvements and by commercial
      guarantees provided by the Company and Tollgate Venture LLC.




37


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 believe that our cash at June 30, 2005, together
      with
      expected cash flows from operations and borrowing capacity under the Wells
      Fargo
      RCF, will be sufficient to fund our anticipated operating costs, capital
      expenditures at existing properties and satisfy our current debt repayment
      obligations. 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 .




Subsequent
      to June 30, 2005, we obtained a non-binding letter of intent to provide
      approximately $35.0 million in additional financing. On August 2, 2005
      we
      secured $4.5 million in funding from a private lender which bears interest
      at a
      rate of 16.7% per annum and matures in August 2007. In exchange for the funds,
      the Company has pledged all the outstanding stock of CTI and its equity interest
      in CTL. Proceeds from these borrowings will be used towards the development
      of
      the previously mentioned casino in Central City, Colorado.




In
      July
      2005, the Company filed a shelf registration statement with the SEC, under
      which
      we could issue up to $50 million in aggregate issue price of securities,
      preferred stock, debt securities and depository certificates.


**Critical
      Accounting Policies**




We
      believe the following material accounting policies are the most critical to
      an
      investor’s understanding of the Company’s financial results and condition and/or
      require complex management judgment.




***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
      June 30, 2005, our assets included goodwill of approximately
      $8.6
      million and casino licenses of approximately $1.8 million.




***Property
      and Equipment*** - At
      June 30, 2005, we had property and equipment totaling $51.0 million,
      representing 72% 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. 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.





38
 **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 June 30,
      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 outstanding debt is subject to fluctuations in the
      prime interest rate as set by Wells Fargo, or LIBOR index charges.




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 receives 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. In
      an environment of falling interest rates, the swap agreements are
      disadvantageous. Without the swap agreements the weighted-average interest
      rate
      on the credit facility for the three months ended June 30, 2005 and 2004 would
      have been 5.85% and 4.13%, respectively and for the six months ended June 30,
      2005 and 2004 would have been 5.49% and 4.34%. The $4.0 million swap agreement
      that we entered into in May 2000 expired on July 1, 2005. We
      have
      not entered into any new swap agreements subsequent to June 30,
      2005.




We
      are
      also subject to interest rate risk on the outstanding borrowing with Colorado
      Business Bank. Interest on amounts outstanding under this credit agreement
      is
      variable and is subject to fluctuations in the prime interest rate.











39


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




A
      total
      of 46.1% of our net operating revenues for the six months ended June 30, 2005
      was derived from our South African operations and principally denominated in
      South African Rand. A total of 45.1% of our expenses for the six months ended
      June 30, 2005 were paid in currencies other than US dollars of which 42.9%
      was
      paid in South African Rand, 0.6% was paid in Canadian dollars and 1.6% was
      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
      realized from such an arrangement may 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 may 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.




**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 1934, 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 -*** In
      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 lack of a substantive
      policy on the capitalization of fixed assets and a deficiency in our internal
      review process as it relates to the South African operation were the reasons
      attributed to the failure in detecting this weakness.





We
      are in
      the process of developing a complete plan to remediate the identified material
      weakness in our internal controls over financial reporting. We have instituted
      a
      series of policies to improve the control over the capital asset activity in
      South Africa and have completed a physical inventory of the same ..
      We
      have also instituted changes to the authorization and approval processes by
      which entries are recorded to the financial statements. Subject to a review
      by
      an independent third party in
      conjunction with our SOX 404 compliance work, we believe that these changes,
      as
      of June 30, 2005 have materially improved, or are reasonably likely to
      materially improve, our internal controls over financial reporting (as defined
      in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).




40




***Risks
      Regarding Controls and Procedures -*** In
addition
      to remedying the identified material weakness in our internal control over
      financial reporting discussed above, we are in 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 is applicable to us for our fiscal
      year ending December 31, 2005 as
      a
      result of our classification as an accelerated filer based on the market value
      of our outstanding common stock held by non-affiliates exceeding $75 million
      as
      of June 30, 2005.  On that date, the market value of our outstanding
      common
      stock held by non-affiliates was approximately $85 million.  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.




41




**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 3 - None**




**Item
      4 -** Submission
      of Matters to a Vote of Security Holders




The
      2005
      annual meeting of the stockholders of the Company was held on June 17, 2005.
      At
      the annual meeting there were two proposals submitted to a vote.





In
      the
      first proposal, one Class II director, Peter Hoetzinger, was re-elected to
      the
      Board for a three year term. On this proposal the votes were: 10,150,714 for,
      and 2,494,156 withheld. The terms of Robert S. Eichberg, Dinah
      Corbachi, Erwin Haitzmann and Gottfried Schellmann as directors continued after
      the meeting.





In
      the
      second proposal, the Company’s 2005 equity incentive plan was approved. On this
      proposal the votes were: 5,255,102 for, 4,829,676 against, 9,415 abstained
      and
      2,550,677 not voted.




**Item
      5 - None**




**Item
      6. - Exhibits**






(a)
      Exhibits - The following exhibits are filed herewith:






10.148 
      Promissory Note and Business Loan Agreement between Tollgate LLC and Colorado
      Business Bank dated April 8, 2005, and associate commercial guarantees provided
      by Century Casinos, Inc. (incorporated by reference to Current Report on Form
      8-K filed on April 15, 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,
      Co Chief Executive
      Officer and President.






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,
      Co Chief Executive
      Officer and President.






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.




42


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 (Principal Financial Officer)




Date:
      August 4, 2005




43










**Exhibit
                  No.**
              
              **Document**
   10.148  Promissory
        Note and Business Loan Agreement between Tollgate LLC and Colorado Business
        Bank
        dated April 8, 2005, and associated commercial guarantee provided by Century
        Casinos, Inc. (incorporated by reference to Current Report on Form 8-K filed
        on
        April 15, 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,
        Co Chief Executive Officer and President.
   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,
        Co Chief Executive Officer and President.
   32.3  Certification
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
   Senior
        Vice President.
   32.3  Certification
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
   Chief
        Accounting Officer.
  
  44