UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





þ  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934




For the quarterly period
ended March 31, 2008





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
      or organization)
            (I.R.S.
      Employer
              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)





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 þ  No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.


Large
      accelerated filer  ̈
            
            Accelerated
      filer þ
            
            Non-accelerated
      filer  ̈
            
            Smaller
      reporting company  ̈(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).     Yes  ̈  No þ





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 per share, 23,864,067 shares outstanding as of May 9,
2008.


--1--


CENTURY
CASINOS, INC.


FORM
10-Q INDEX




PagePART
      I
            
            FINANCIAL
      INFORMATION
            NumberItem
      1.
            
            Condensed
      Consolidated Financial Statements (unaudited)Condensed
      Consolidated Balance Sheets as ofMarch
      31, 2008 and December 31, 2007
            3Condensed
      Consolidated Statements of Earnings for the Three Months Ended March 31,
      2008 and 2007
            4Condensed
      Consolidated Statements of Comprehensive Earnings for the Three Months
      Ended March 31, 2008 and 2007
            5Condensed
      Consolidated Statements of Cash Flows for the Three Months Ended March 31,
      2008 and 2007
            6Notes
      to Condensed Consolidated Financial Statements
            8Item
      2.
            
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            14Item
      3.
            
            Quantitative
      and Qualitative Disclosures About Market Risk
            24Item
      4.
            
            Controls
      and Procedures
            24PART
      II
            
            OTHER
      INFORMATIONItem
      1A.
            
            Risk
      Factors
            25Item
      6.
            
            Exhibits
            26SIGNATURES
            27


--2--


CENTURY
CASINOS, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)





Amounts
      in thousands, except for share information
            
            March 31, 2008
            
            
            December 31, 2007ASSETSCurrent
      Assets:Cash
      and cash equivalents
            
            $
            13,129
            
            
            $
            17,850Restricted
      cash
            
            
            127
            
            
            
            112Receivables,
      net
            
            
            805
            
            
            
            798Prepaid
      expenses
            
            
            1,113
            
            
            
            1,234Inventories
            
            
            425
            
            
            
            442Other
      current assets
            
            
            448
            
            
            
            426Deferred
      income taxes – foreign
            
            
            228
            
            
            
            247Total
      current assets
            
            
            16,275
            
            
            
            21,109Property
      and Equipment, net
            
            
            124,538
            
            
            
            131,877Goodwill
            
            
            14,873
            
            
            
            15,217Casino
      Licenses
            
            
            9,082
            
            
            
            10,780Deferred
      Income Taxes – domestic
            
            
            4,243
            
            
            
            3,318– foreign
            
            
            769
            
            
            
            971Equity
      Investment
            
            
            13,649
            
            
            
            11,974Other
      Assets
            
            
            2,820
            
            
            
            2,837Total
            
            $
            186,249
            
            
            $
            198,083





LIABILITIES
      AND SHAREHOLDERS’ EQUITYCurrent
      Liabilities:Current
      portion of long-term debt
            
            $
            7,876
            
            
            $
            8,745Accounts
      payable and accrued liabilities
            
            
            9,508
            
            
            
            9,389Accrued
      payroll
            
            
            2,061
            
            
            
            2,230Taxes
      payable
            
            
            3,470
            
            
            
            3,534Deferred
      income taxes – domestic
            
            
            5
            
            
            
            5Total
      current liabilities
            
            
            22,920
            
            
            
            23,903Long-Term
      Debt, less current portion
            
            
            47,943
            
            
            
            55,919Other
      Long-Term Accrued Liabilities
            
            
            436
            
            
            
            463Minority
      Interest
            
            
            5,124
            
            
            
            5,809Commitments
      and ContingenciesShareholders’
      Equity:Preferred
      stock; $.01 par value; 20,000,000 shares authorized;  no shares
      issued or outstanding
            
            
            -
            
            
            
            -Common stock; $.01 par value;
      50,000,000 shares authorized; 23,875,443 and 23,668,443 shares issued,
      respectively;23,864,067
      and 23,657,067 shares outstanding, respectively
            
            
            239
            
            
            
            237Additional paid-in
      capital
            
            
            72,200
            
            
            
            71,223Accumulated other
      comprehensive earnings
            
            
            4,052
            
            
            
            7,735Retained
    earnings
            
            
            33,361
            
            
            
            32,820109,852
            
            
            
            112,015Treasury
      stock – 11,376 shares at cost
            
            
            (26
            )
            
            
            (26
            )Total
      shareholders’ equity
            
            
            109,826
            
            
            
            111,989Total
            
            $
            186,249
            
            
            $
            198,083





See notes to condensed consolidated
financial statements.




--3--




CENTURY
CASINOS, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)





For
      the three months
                ended
      March 31,Amounts
      in thousands, except for share information
            
            2008
            
            
            2007Operating
      revenue:Gaming
            
            $
            19,404
            
            
            $
            19,972Hotel,
      food and beverage
            
            
            3,273
            
            
            
            2,867Other
            
            
            524
            
            
            
            493Gross
      revenue
            
            
            23,201
            
            
            
            23,332Less
      promotional allowances
            
            
            2,221
            
            
            
            2,188Net
      operating revenue
            
            
            20,980
            
            
            
            21,144Operating
      costs and expenses:Gaming
            
            
            8,171
            
            
            
            8,153Hotel,
      food and beverage
            
            
            2,558
            
            
            
            2,571General
      and administrative
            
            
            6,794
            
            
            
            5,823Depreciation
            
            
            2,265
            
            
            
            2,019Total
      operating costs and expenses
            
            
            19,788
            
            
            
            18,566Earnings
      from equity investment
            
            
            460
            
            
            
            -Earnings
      from operations
            
            
            1,652
            
            
            
            2,578Non-operating
      income (expense):Interest
      income
            
            
            69
            
            
            
            274Interest
      expense
            
            
            (1,573
            )
            
            
            (1,932
            )Other
      income, net
            
            
            185
            
            
            
            828Non-operating
      (expense), net
            
            
            (1,319
            )
            
            
            (830
            )Earnings
      before income taxes, minority interest and preferred
    dividends
            
            
            333
            
            
            
            1,748(Benefit)
      provision for income taxes
            
            
            (372
            )
            
            
            324Earnings
      before minority interest and preferred dividends
            
            
            705
            
            
            
            1,424Minority
      interest in subsidiary (earnings) losses, net
            
            
            (111
            )
            
            
            337Preferred
      dividends issued by subsidiary
            
            
            (53
            )
            
            
            (219
            )Net
      earnings
            
            $
            541
            
            
            $
            1,542Earnings
      per share:Basic
            
            $
            0.02
            
            
            $
            0.07Diluted
            
            $
            0.02
            
            
            $
            0.06





See notes to condensed consolidated
financial statements.




--4--


CENTURY
CASINOS, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited)





For
      the three months
              ended March 31,Amounts
      in thousands
            
            2008
            
            
            2007Net
      earnings
            
            $
            541
            
            
            $
            1,542Foreign
      currency translation adjustments
            
            
            (3,683
            )
            
            
            (1,514
            )Comprehensive
      (loss) earnings
            
            $
            (3,142
            )
            
            $
            28








See notes
to condensed consolidated financial statements.


--5--


CENTURY
CASINOS, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)





For
      the three months
              ended March 31,Amounts
      in thousands
            
            2008
            
            
            2007Cash
      Flows from Operating Activities:Net
      earnings
            
            $
            541
            
            
            $
            1,542Adjustments
      to reconcile net earnings to net cash provided by operating
      activities:Depreciation
            
            
            2,265
            
            
            
            2,019Imputed
      interest
            
            
            1
            
            
            
            44Amortization
      of share-based compensation
            
            
            348
            
            
            
            14Amortization
      of deferred financing costs
            
            
            137
            
            
            
            110Deferred
      tax expense
            
            
            (824
            )
            
            
            (166
            )Minority
      interest in subsidiary earnings (losses)
            
            
            111
            
            
            
            (337
            )Earnings
      from unconsolidated subsidiary
            
            
            (460
            )
            
            
            -Other
            
            
            (4
            )
            
            
            -Excess
      tax benefits from stock-based payment arrangements
            
            
            (24
            )
            
            
            (62
            )Changes
      in operating assets and liabilities:Receivables
            
            
            (49
            )
            
            
            4Prepaid
      expenses and other assets
            
            
            18
            
            
            
            (1,235
            )Accounts
      payable and accrued liabilities
            
            
            354
            
            
            
            (3,855
            )Accrued
      payroll
            
            
            (62
            )
            
            
            (366
            )Taxes
      payable
            
            
            179
            
            
            
            1,555Net
      cash provided by (used in) operating activities
            
            
            2,531
            
            
            
            (733
            )Cash
      Flows from Investing Activities:Purchases
      of property and equipment
            
            
            (1,160
            )
            
            
            (1,839
            )Decrease
      in restricted cash
            
            
            -
            
            
            
            218Investment
      in G5 Sp. z o.o.
            
            
            -
            
            
            
            (2,016
            )Proceeds
      from disposition of assets
            
            
            158
            
            
            
            -Net
      cash used in investing activities
            
            
            (1,002
            )
            
            
            (3,637
            )





(continued)


--6--


CENTURY
CASINOS, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)





For
      the three months
              ended March 31,Amounts
      in thousands
            
            2008
            
            
            2007Cash
      Flows from Financing Activities:Proceeds
      from borrowings
            
            $
            4,125
            
            
            $
            7,823Principal
      repayments
            
            
            (10,149
            )
            
            
            (20,523
            )Excess
      tax benefits from stock-based payment arrangements
            
            
            24
            
            
            
            62Deferred
      financing charges
            
            
            (7
            )
            
            
            (20
            )Proceeds
      from exercise of options
            
            
            607
            
            
            
            106Net
      cash used in financing activities
            
            
            (5,400
            )
            
            
            (12,552
            )Effect
      of Exchange Rate Changes on Cash
            
            
            (850
            )
            
            
            (1,238
            )Decrease
      in Cash and Cash Equivalents
            
            
            (4,721
            )
            
            
            (18,160
            )Cash
      and Cash Equivalents at Beginning of Period
            
            
            17,850
            
            
            
            34,969Cash
      and Cash Equivalents at End of Period
            
            $
            13,129
            
            
            $
            16,809





Supplemental
Disclosure of Cash Flow Information:





Amounts
      in Thousands
            
            For
      the three months
              ended March 31,2008
            
            
            2007Interest
      paid
            
            $
            1,212
            
            
            $
            1,703Income
      taxes paid
            
            $
            4
            
            
            $
            -





Supplemental
Disclosure of Non-cash Financing Activities:




Please
refer to Note 3 to the Company’s condensed consolidated financial statements for
details of the Company’s recent acquisitions.






See notes
to condensed consolidated financial statements.


--7--


CENTURY
CASINOS, INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)





1.           DESCRIPTION
OF BUSINESS AND BASIS OF PRESENTATION





Century
Casinos, Inc. (“CCI” or the “Company”) is an international casino entertainment
company. As of March 31, 2008, the Company owns and/or manages casino operations
in North America, South Africa, the Czech Republic and international waters
through various entities that are wholly owned or in which we have a majority
ownership position. The Company also owns a 33.3% ownership interest in Casinos
Poland Ltd (”CPL”), the owner and operator of seven full casinos and one slot
casino in Poland. The Company continues to pursue other international projects
in various stages of development.





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 condensed consolidated financial
statements include the accounts of CCI and its majority-owned subsidiaries. All
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. Certain
reclassifications have been made to the 2007 financial information in order to
conform to the 2008 presentation.





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 consolidated financial statements and notes thereto
included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007. The results of operations for the three months
ended March 31, 2008 are not necessarily indicative of the operating results for
the full year.





*****





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 to the U.S. Dollar used to translate
balances at the end of the reported periods are as follows:





March 31, 2008
            
            
            December 31, 2007
            
            
            March 31, 2007Canadian
      Dollars (CAD)
            
            
            1.02790
            
            
            
            0.9881
            
            
            
            1.1529Czech
      Koruna (CZK)
            
            
            15.9860
            
            
            
            18.2240
            
            
            
            20.9160Euros
      (€)
            
            
            0.6328
            
            
            
            0.6849
            
            
            
            0.7478Polish
      Zloty (PLN)
            
            
            2.2278
            
            
            
            2.4703
            
            
            
            2.8916South
      African Rand (ZAR)
            
            
            8.1450
            
            
            
            6.8618
            
            
            
            7.2968


Source:
Pacific Exchange Rate Service





--8--


2.           RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENT





In March
2008, the Financial Accounting Standards Board issued Statement No. 161,
"Disclosures about Derivative Instruments and Hedging Activities - an amendment
of FASB Statement No. 133" (“SFAS 161”). SFAS 161 requires companies to provide
enhanced disclosures regarding derivative instruments and hedging activities. It
requires companies to better convey the purpose of derivative use in terms of
the risks that such company is intending to manage. Disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under SFAS No. 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect a company's financial position, financial performance, and cash flows are
required. This Statement retains the same scope as SFAS No. 133 and is effective
for fiscal years and interim periods beginning after November 15, 2008. The
Company does not expect the adoption of SFAS 161 to have a material impact, if
any, on the condensed consolidated financial statements.





3. ACQUISITION





On March
12, 2007, CCE purchased G5 Sp. z o.o, a Polish entity that owns a 33.3% interest
in Casinos Poland Ltd (“CPL”). The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the date of
acquisition:





Amounts
      in thousandsInvestment
      in Casinos Poland Ltd.
            
            $
            9,164Accounts
      payable and accrued liabilities
            
            
            (497
            )Long-term
      debt, including intercompany debt assumed
            
            
            (6,651
            )Cash
      paid
            
            $
            2,016





The
assets acquired and liabilities assumed, other than intercompany debt, are
reported in the condensed consolidated balance sheets.





4. EQUITY
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY





The
Company has a 33.3% ownership interest in CPL, and the Company accounts for this
investment under the equity method.





Following
is the summarized unaudited financial information of CPL as of March 31,
2008:





Amounts
      in thousands
            
            As
      ofMarch 31, 2008Balance
      Sheet:Current
      assets
            
            $
            6,668Noncurrent
      assets
            
            $
            23,127Current
      liabilities
            
            $
            20,085Noncurrent
      liabilities
            
            $
            2,036




For
      the Three Months ended March 31, 2008Operating
      Results:Net
      operating revenue
            
            $
            16,277Net
      earnings
            
            $
            1,380





The
Company’s maximum exposure to losses at March 31, 2008 is $13.6 million, the
value of its equity investment in CPL. Of the $13.6 million, $11.4 million
relates to goodwill recorded at the time of our acquisition of our 33.3%
ownership interest.




--9--





5.           PROMOTIONAL
ALLOWANCES





Hotel
accommodations and food and beverage furnished without charge to customers is
included in gross revenue at a value which approximates retail and is then
deducted as complimentary services to arrive at net revenue.





The
Company issues 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 in the subsequent month. We expect the net win
from a customer visit to be in excess of the value of the coupon utilized. The
cost of the coupons redeemed is applied against the revenue generated on the day
of the redemption.





Members
of the Company’s casinos’ player clubs earn points based on their volume of play
(typically as a percentage of coin-in) at certain of our casinos. Players can
accumulate points over time that they may redeem at their discretion under the
terms of the program. Points can be redeemed for cash and/or various amenities
at the casino, such as meals, hotel stays and gift shop items. The cost of the
points is offset against the revenue in the period that the revenue generated
the points. The value of unused or unredeemed points is included in accounts
payable and accrued liabilities on our condensed consolidated balance sheet. The
expiration of unused points results in a reduction of the
liability.





Promotional
allowances presented in the condensed consolidated statements of earnings for
the three-month periods ended March 31, 2008 and 2007 include the
following:





For
      the three months
              ended
      March 31,Amounts
      in thousands
            
            2008
            
            
            2007Food
      & Beverage and Hotel
            
            $
            814
            
            
            $
            689Free
      Plays or Coupons
            
            
            810
            
            
            
            788Player
      Points
            
            
            597
            
            
            
            711Total
      Promotional Allowances
            
            $
            2,221
            
            
            $
            2,188





6.           INCOME
TAXES





The
Company adopted the provisions of Financial Accounting Standards Board
Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), on
January 1, 2007. FIN 48 seeks to reduce the diversity in practice associated
with certain aspects of the recognition and measurement related to accounting
for income taxes. The Company has analyzed filing positions in all of the
federal, state and foreign jurisdictions where it is required to file income tax
returns, as well as all open tax years in these jurisdictions.  As a
result of the implementation of FIN 48, the Company recognized a $0.1 million
liability for unrecognized tax liabilities related to tax positions taken in
prior periods, which is recorded as a component of other long-term accrued
liabilities. This increase was accounted for as an adjustment to the opening
balance of retained earnings on January 1, 2007.





--10--


The
income tax provisions are based on estimated full-year earnings for financial
reporting purposes adjusted for permanent differences. The (benefit) provision
for income tax expense consists of the following:





For
      the three months
              ended
      March 31,Amounts
      in thousands
            
            2008
            
            
            2007Benefit
      for U.S. federal income taxes
            
            $
            (788
            )
            
            $
            (62
            )Benefit
      for state income taxes
            
            
            (113
            )
            
            
            (9
            )Provision
      for foreign income taxes
            
            
            529
            
            
            
            395Total
      (benefit) provision for income taxes
            
            $
            (372
            )
            
            $
            324





The
(benefit) provision for income taxes is summarized by jurisdiction in the table
below:





Amounts
      in thousands
            
            For
      the three months
              ended
      March 31, 2008
            
            
            For
      the three months
              ended
      March 31, 2007Pre-tax
              income
            
            
            Income
              tax
            
            
            Tax
              rate
            
            
            Pre-tax
              income
            
            
            Income
              tax
            
            
            Tax
              rateCanada
            
            $
            722
            
            
            $
            227
            
            
            
            31.4
            %
            
            $
            (52
            )
            
            $
            (22
            )
            
            
            42.3
            %United
      States
            
            
            (2,836
            )
            
            
            (901
            )
            
            
            31.8
            %
            
            
            (613
            )
            
            
            (71
            )
            
            
            11.6
            %
            (a)South
      Africa
            
            
            878
            
            
            
            255
            
            
            
            29.0
            %
            
            
            839
            
            
            
            369
            
            
            
            44.0
            %Mauritius
            
            
            1,367
            
            
            
            41
            
            
            
            3.0
            %
            
            
            1,522
            
            
            
            46
            
            
            
            3.0
            %Austria
            
            
            (119
            )
            
            
            6
            
            
            
            -5.0
            %
            
            
            18
            
            
            
            2
            
            
            
            11.1
            %Czech
      Republic
            
            
            (139
            )
            
            
            -
            
            
            
            -
            
            
            
            34
            
            
            
            -
            
            
            
            -Poland
            
            
            460
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Total
            
            $
            333
            
            
            
            (372
            )
            
            
            -111.7
            %
            
            $
            1,748
            
            
            $
            324
            
            
            
            18.5
            %


(a)
Pre-tax income in the United States for the three months ended March 31, 2007
includes $0.5 million in losses that were allocated to the minority partner in
Central City, Colorado.





On
December 31, 2007, the Company purchased the remaining 35% interest in CC
Tollgate LLC from the minority partner in the project. Prior to this date, the
Company did not record a provision for income tax on the losses allocated to the
minority partner.





--11--


7.           EARNINGS
PER SHARE





Basic
      and diluted earnings per share for the three months ended March 31, 2008
      and 2007 were computed as follows:





Amounts
      in thousands,except
      for share information
            
            For
      the three months
              ended
      March 31,2008
            
            
            2007Basic
      Earnings Per Share:Net
      earnings
            
            $
            541
            
            
            $
            1,542Weighted
      average common shares
            
            
            23,302,562
            
            
            
            23,027,661Basic
      earnings per share
            
            $
            0.02
            
            
            $
            0.07Diluted
      Earnings Per Share:Net
      earnings
            
            $
            541
            
            
            $
            1,542Weighted
      average common shares
            
            
            23,302,562
            
            
            
            23,027,661Effect
      of dilutive securities using the treasury stock method:Stock
      options and warrants
            
            
            329,514
            
            
            
            950,566Dilutive
      potential common shares
            
            
            23,632,076
            
            
            
            23,978,227Diluted
      earnings per share
            
            $
            0.02
            
            
            $
            0.06





The
following stock options, warrants and unvested restricted stock are
anti-dilutive and have not been included in the weighted average diluted shares
outstanding calculation:


For
      the three months
              ended
      March 31,2008
            2007Stock
      options and warrants
            
            
            77,500
            -Unvested
      restricted stock
            
            
            400,000
            -





8.           SEGMENT
AND GEOGRAPHIC INFORMATION





Beginning
in the fourth quarter 2007, the Company modified its segment reporting from
seven reportable segments to one reportable segment, as the Company now believes
that its properties can be aggregated together in accordance with SFAS 131,
“Disclosures about Segments of an Enterprise and Related Information.” Based on
a review of SFAS 131, the Company has determined that it operates primarily in
one segment, the operation of casino facilities, which includes the provision of
gaming, hotel accommodations, dining facilities and other amenities. As a gaming
company, the Company’s operating results are highly dependent on the volume of
customers at its casinos. Most of the Company’s revenue is essentially
cash-based, through customers wagering with cash or paying for non-gaming
services with cash or credit cards. Prior period segments have been restated to
conform to the current presentation.





--12--


The
following summary provides information concerning the Company’s principal
geographic areas:





Long-Lived
      Assets*Amounts
      in thousands
            
            March
      31, 2008
            
            
            December
      31, 2007United
      States
            
            $
            74,990
            
            
            $
            75,782International:Canada
            
            $
            35,752
            
            
            $
            37,419Africa
            
            
            36,099
            
            
            
            42,979Europe
            
            
            15,301
            
            
            
            13,668Total
      international
            
            
            87,152
            
            
            
            94,066Total
            
            $
            162,142
            
            
            $
            169,848


*
Long-lived assets consist of property and equipment, goodwill, casino licenses
and equity investment.





Net
      Operating RevenueFor
      the Three Months
              Ended
      March 31,Amounts
      in thousands
            
            2008
            
            
            2007United
      States
            
            $
            7,291
            
            
            $
            8,580International:Canada
            
            $
            5,557
            
            
            $
            4,152Africa
            
            
            6,931
            
            
            
            7,037Europe
            
            
            1,201
            
            
            
            1,375Total
      international
            
            
            13,689
            
            
            
            12,564Total
            
            $
            20,980
            
            
            $
            21,144





9.           COMMITMENTS,
CONTINGENCIES AND OTHER MATTERS







Debt Covenants
– The Company has met all covenant terms except the adjusted fixed charge
coverage (“AFCC”) covenant related to its term loan at Central City, Colorado.
The Company experienced a large cumulative loss at Central City in fiscal year
2007 related to several non-cash factors. On April 28, 2008, the Company
received a written waiver from its lender related to this covenant in exchange
for approximately $0.2 million. The AFCC ratio is Adjusted EBITDA (earnings
before interest, taxes, depreciation and amortization, or a variant thereof as
defined in the loan agreement) divided by debt service costs (principal plus
interest).  The minimum AFCC ratio reduces until such time that there
are four full trailing quarters with principal payments at the end of the third
quarter. Based on a calendar year 2008 forecast that has been revised to account
for the recent economic downturn, the Company expects to be in compliance with
the AFCC covenant in subsequent periods.




--13--


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 the sections entitled “Risk Factors” under Item 1A in our
Annual Report on Form 10-K for the year ended December 31, 2007 and Item 1A of
Part II of this report. We caution the reader to carefully consider such
factors.  Furthermore, such forward-looking statements speak only as
of the date on which such statements are made.  We undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date of such statements.





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




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


OVERVIEW





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





We own,
operate and manage the following casinos through either wholly-owned or
majority-owned subsidiaries:





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


-
            Womacks
      Casino & Hotel in Cripple Creek,
Colorado;


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


-
            The
      Caledon Hotel, Spa & Casino near Cape Town, South
    Africa;


-
            The
      Century Casino & Hotel in Newcastle, South Africa;
  and


-
            The
      Century Casino Millennium in the Marriott Hotel in Prague, Czech
      Republic.





We also
operate casinos aboard the Silver Cloud, The World of ResidenSea, and the
vessels of Oceania Cruises.




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





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





--14--


Beginning
in the fourth quarter of fiscal year 2007, we modified our segment reporting
from seven reportable segments to one reportable segment in accordance with
Statement of Financial Accounting Standards No. 131, “Disclosures about Segments
of an Enterprise and Related Information” (“SFAS 131”). Based on a review of
SFAS 131, we have determined that we operate primarily in one segment, the
operation of casino facilities, which includes the provision of gaming, hotel
accommodations, dining facilities and other amenities. Prior period segments
have been restated to conform to the current presentation.





As a
gaming company, our operating results are highly dependent on the volume of
customers at our casinos. Most of our revenue is essentially cash-based, through
customers wagering with cash or paying for non-gaming services with cash or
credit cards.





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 average exchange rates to the U.S. Dollar used to
translate balances during each reported period are as follows:





For
      the Three Months EndedMarch 31, 2008
            
            
            March 31, 2007Canadian
      Dollars (CAD)
            
            
            1.0046
            
            
            
            1.1694Czech
      Koruna (CZK)
            
            
            17.0697
            
            
            
            21.2867Euros
      (€)
            
            
            0.6678
            
            
            
            0.7593Polish
      Zloty (PLN)
            
            
            2.3871
            
            
            
            N/ASouth
      African Rand (ZAR)
            
            
            7.5502
            
            
            
            7.2243


Source:
Pacific Exchange Rate Service





RESULTS
OF OPERATIONS





The
results of operations for the three months ended March 31, 2008 and 2007 are
below (in thousands):





For
      the Three Months
              Ended
      March 31,2008
            
            
            2007Gaming
      revenue
            
            $
            19,404
            
            
            $
            19,972Net
      operating revenue
            
            
            20,980
            
            
            
            21,144Total
      operating costs and expenses
            
            
            19,788
            
            
            
            18,566Earnings
      from equity investments
            
            
            460
            
            
            
            -Earnings
      from operations
            
            
            1,652
            
            
            
            2,578Net
      earnings
            
            
            541
            
            
            
            1,542Earnings
      per shareBasic
            
            
            0.02
            
            
            
            0.07Diluted
            
            
            0.02
            
            
            
            0.06





The
decrease in net operating revenue from $21.1 million for the three months ended
March 31, 2007 to $21.0 million for the three months ended March 31, 2008 is
primarily the result of a decline in operations at our property in Cripple
Creek, Colorado and a decline in the average exchange rate between the U.S.
dollar and South African Rand, offset by increased revenues at our property in
Edmonton. Further declines in the average exchange rate between the U.S. dollar
and South African Rand may harm our South African results. The increase in
operating costs and expenses from $18.6 million for the three months ended March
31, 2007 to $19.8 million for the three months ended March 31, 2008 are the
result of an increase in general and administrative costs primarily related to
the amortization of restricted stock, as well as an increase in overall
depreciation charges resulting from gaming and non-gaming equipment additions in
2007.






--15--





The
decrease in net earnings from $1.5 million for the three months ended March 31,
2007 to $0.5 million for the three months ended March 31, 2008 is primarily the
result of the decline in overall operations and a decline in foreign currency
gains recognized period over period of $0.6 million, offset by the recording of
our share of earnings from our investment in Poland of $0.5 million and a
decline in net interest charges of $0.2 million. We did not begin recording
earnings from the investment in Poland until April 2007.





Net
operating revenue by property for the three months ended March 31, 2008 and 2007
is summarized below (in thousands):





For
      the Three Months
              Ended
      March 31,2008
            
            2007Century
      Casino & Hotel (Edmonton, Alberta, Canada)
            $
            5,557
            $
            4,152Womacks
      (Cripple Creek, Colorado)
            
            2,882
            
            4,059Century
      Casino & Hotel (Central City, Colorado)
            
            4,407
            
            4,515The
      Caledon Hotel, Spa & Casino (Caledon, South Africa)
            
            4,218
            
            4,384Century
      Casino & Hotel (Newcastle, South Africa)
            
            2,713
            
            2,653Casino
      Millennium (Prague, Czech Republic)
            
            518
            
            669Cruise
      Ships
            
            683
            
            706Casinos
      Poland (Poland)(1)
            
            -
            
            -Corporate
            
            2
            
            6Net
      operating revenue
            $
            20,980
            $
            21,144


(1)
            Acquired
      March 12, 2007 and accounted for as an equity
  investment.





Earnings
and (losses) from operations by property for the three months ended March 31,
2008 and 2007 are summarized below (in thousands):





For
      the Three Months
              Ended
      March 31,2008
            
            
            2007Century
      Casino & Hotel (Edmonton, Alberta, Canada)
            
            $
            1,557
            
            
            $
            703Womacks
      (Cripple Creek, Colorado)
            
            
            (134
            )
            
            
            904Century
      Casino & Hotel (Central City, Colorado)
            
            
            81
            
            
            
            365The
      Caledon Hotel, Spa & Casino (Caledon, South Africa)
            
            
            1,195
            
            
            
            1,417Century
      Casino & Hotel (Newcastle, South Africa)
            
            
            646
            
            
            
            640Casino
      Millennium (Prague, Czech Republic)
            
            
            (126
            )
            
            
            76Cruise
      Ships
            
            
            84
            
            
            
            84Casinos
      Poland (Poland)(1)
            
            
            460
            
            
            
            -Corporate
            
            
            (2,111
            )
            
            
            (1,611
            )Earnings
      from operations
            
            $
            1,652
            
            
            $
            2,578


(1)
            Acquired
      March 12, 2007 and accounted for as an equity
  investment.





--16--


Revenue





Net
operating revenue for the three months ended March 31, 2008 and 2007 was as
follows (in thousands):





Three
      Months
              Ended
      March 31,2008
            
            
            2007
            
            
            Variance
            
            
            Percentage
              VarianceGaming
            
            $
            19,404
            
            
            $
            19,972
            
            
            $
            (568
            )
            
            
            (2.8
            %)Hotel,
      food and beverage
            
            
            3,273
            
            
            
            2,867
            
            
            
            406
            
            
            
            14.2
            %Other
            
            
            524
            
            
            
            493
            
            
            
            31
            
            
            
            6.3
            %Gross
      revenue
            
            
            23,201
            
            
            
            23,332
            
            
            
            (131
            )
            
            
            (0.6
            %)Less
      promotional allowances
            
            
            (2,221
            )
            
            
            (2,188
            )
            
            
            (33
            )
            
            
            1.5
            %Net
      operating revenue
            
            $
            20,980
            
            
            $
            21,144
            
            
            $
            (164
            )
            
            
            (0.8
            %)





Gaming
revenue





Gaming
revenue decreased by $0.6 million, or 2.8%, from $20.0 million for the three
months ended March 31, 2007 to $19.4 million for the three months ended March
31, 2008. Improved gaming revenue at our casino in Edmonton was offset by a
decline in our Colorado operations.





Gaming
revenue at the Century Casino & Hotel in Edmonton increased by $1.0 million,
or 30.8%, from $3.1 million for the three months ended March 31, 2007 to $4.1
million for the three months ended March 31, 2008, primarily due to increased
play at the casino resulting from more slot machines and increased traffic from
the showroom, as well as an improvement in the exchange rate between the U.S.
dollar and Canadian dollar. Gaming revenue in Canadian dollars increased by CAD
0.5 million to CAD 4.1 million for the three months ended March 31, 2008. This
increase is the result of an increase of 16% in slot revenue and 14% in table
revenue. The Alberta Gaming and Liquor Commission increased the number of slot
machines at the casino from 600 as of March 31, 2007 to 650 as of March 31,
2008. In addition, we introduced 24-hour poker at the casino during the fourth
quarter of 2007.





Gaming
revenue at Womacks decreased by $1.1 million, or 24.5%, from $4.5 million for
the three months ended March 31, 2007 to $3.4 million for the three months ended
March 31, 2008. Management believes that gaming revenue was negatively impacted
by a 12.7% decline in the Cripple Creek gaming market, which is where Womacks is
located, and can be attributed to a decline in consumer discretionary income,
increased fuel prices and a smoking ban that went into effect on January 1,
2008. In addition, management believes that we lost a significant amount of our
customer base due to a renovation that we began during the fourth quarter of
2007 and continued through the first quarter of 2008. We believe the renovation
has upgraded the gaming floor and dining area, but may have inconvenienced
customers which ultimately led to our decreased revenue. Womacks has continued
the effort to improve the customer experience at Womacks by converting 100% of
the total machines on the floor to Ticket in/Ticket (“TITO”) out devices. We are
currently reviewing various strategies to increase gaming revenue at Womacks.
Our market share of the Cripple Creek gaming revenue declined from 12.0% for the
first quarter of 2007 to 10.8% for the first quarter of 2008.





--17--


Gaming
revenue at the Century Casino and Hotel in Central City decreased by $0.3
million, or 4.4%, from $5.1 million for the three months ended March 31, 2007 to
$4.8 million for the three months ended March 31, 2008. Similar to the Cripple
Creek market, management believes that gaming revenue was negatively impacted by
a 9.3% decline in the Central City gaming market, which is where our casino is
located, and  can be attributed to a decline in consumer discretionary
income, increased fuel prices and a smoking ban that went into effect on January
1, 2008. Our market share of the Central City gaming revenue increased from
26.8% for the first quarter of 2007 to 28.2% for the first quarter of
2008.





Gaming
revenue at our casino in Caledon, South Africa decreased by $0.1 million, or by
2.7% from $3.6 million for the three months ended March 31, 2007 to $3.5 million
for the three months ended March 31, 2008, due to the decline in the average
exchange rate between the U.S. dollar and the South African
Rand.  Gaming revenue in Rand increased by ZAR 0.3 million to ZAR 26.7
million for the three months ended March 31, 2008. In May 2007, we increased the
number of slot machines on the floor from 350 to 370. This resulted in a slight
decline in our slot win per day of 3.0% for the three months ended March 31,
2008. Our market share of the Western Cape gaming revenue declined from 4.9% for
the three months ended March 31, 2007 to 4.7% for the three months ended March
31, 2008. The Western Cape operates with the maximum permitted number of
casinos.





Gaming
revenue at the Century Casino & Hotel in Newcastle, South Africa remained
flat at $2.4 million for the three months ended March 31, 2007 compared to the
three months ended March 31, 2008, a result of the decline in the average
exchange rate between the U.S. dollar and the South African Rand. Gaming revenue
in Rand increased by ZAR 0.9 million to ZAR 17.9 million for the three months
ended March 31, 2008. Our market share of the Kwazulu-Natal gaming revenue
declined slightly from 3.4% for the three months ended March 31, 2007 to 3.3%
for the three months ended March 31, 2008.





Combined
gaming revenue at the Century Casino Millennium (Prague, Czech Republic) and
aboard the cruise ships on which we operate decreased by $0.1 million, or 10.3%,
from $1.3 million for the three months ended March 31, 2007 to $1.2 million for
the three months ended March 31, 2008, primarily due to a decline in gaming
revenue at the Century Casino Millennium resulting from a decline in patronage
at the casino. In addition, our revenue related to these operations fluctuate
significantly with the quality of their players. Century Casino Millennium
derives the majority of its gaming revenue from live table games. The quality of
the player has more of an impact on the live game results when compared to the
income derived from slot machines.





Hotel,
food and beverage revenue





Hotel,
food and beverage revenue increased by $0.4 million, or 14.2%, from $2.9 million
for the three months ended March 31, 2007 to $3.3 million for the three months
ended March 31, 2008. Our hotel in Edmonton did not open until March 2007. As a
result, hotel, food and beverage revenue for Edmonton increased $0.3 million
period over period.





Promotional
allowances





Promotional
allowances remained flat at $2.2 million for the three months ended March 31,
2007 compared to the three months ended March 31, 2008. Promotional allowances
at Womacks increased $0.1 million, the direct result of the implementation of an
automated dispensing system used to track beverages. This increase was offset by
a decrease of $0.1 million in promotional allowances at our casino in Central
City, the direct result of a decline in gaming revenue at the property. The
retail value of accommodations, food and beverage, and other services furnished
to guests without charge is included in gross revenue and then deducted as
promotional allowances. As a result, promotional allowances neither increase nor
decrease our overall net operating revenue.




--18--


Operating Costs and
Expenses





Operating
costs and expenses for the three months ended March 31, 2008 and 2007 were as
follows (in thousands):





Three
      Months
              Ended
      March 31,2008
            
            
            2007
            
            
            Variance
            
            
            Percentage
              VarianceGaming
            
            $
            8,171
            
            
            $
            8,153
            
            
            $
            18
            
            
            
            0.2
            %Hotel,
      food and beverage
            
            
            2,558
            
            
            
            2,571
            
            
            
            (13
            )
            
            
            (0.5
            %)General
      and administrative
            
            
            6,794
            
            
            
            5,823
            
            
            
            971
            
            
            
            16.7
            %Depreciation
            
            
            2,265
            
            
            
            2,019
            
            
            
            246
            
            
            
            12.2
            %Total
      operating costs and expenses
            
            $
            19,788
            
            
            $
            18,566
            
            
            $
            1,222
            
            
            
            6.6
            %





Gaming
expenses





Gaming
expenses increased slightly from the three months ended March 31, 2007 to the
three months ended March 31, 2008, primarily due to increased expenses at our
casino in Edmonton that are directly related to increased gaming revenue which
were offset by declines in gaming expenses at our remaining
casinos.





Gaming
expenses at the Century Casino & Hotel in Edmonton increased $0.4 million,
or 25.1%, from $1.2 million for the three months ended March 31, 2007 to $1.6
million for the three months ended March 31, 2008. This increase is primarily
due to a $0.2 million increase in payroll expense resulting from the
introduction of 24-hour poker in the fourth quarter of 2007.





Gaming
expenses at Womacks decreased $0.1 million, or 7.3%, from $1.4 million for the
three months ended March 31, 2007 to $1.3 million for the three months ended
March 31, 2008. The decrease in 2008 is the result of a $0.1 million decrease in
gaming taxes resulting from the decrease in gaming revenue.  Womacks
was not able to offset the decrease in revenue by decreasing variable expenses
in the first quarter of 2008 but management has since reduced staff levels as
part of a plan to bring expenses back in line with revenue levels. Management
continues to evaluate various marketing strategies that are needed to attract
customers back to the casino.





Gaming
expenses at the Century Casino & Hotel in Newcastle decreased by $0.1
million, or 12.8%, from $1.0 million for the three months ended March 31, 2007
to $0.9 million for the three months ended March 31, 2008. The decrease in
gaming expenses is primarily the result of several small decreases in payroll
expenses, marketing expenses and leased equipment.





Gaming
expenses at our remaining properties remained flat for the three months ended
March 31, 2007 compared to the three months ended March 31, 2008 as slight
increases in payroll and slot conversion expenses were offset by decreases in
marketing expenditures and gaming taxes.





Hotel,
food and beverage expenses





Hotel,
food and beverage expenses remained flat at $2.6 million for the three months
ended March 31, 2007 compared to the three months ended March 31, 2008. For the
three months ended March 31, 2007, we were operating a dinner theater in
Edmonton that was incurring significant costs. We closed the dinner theater in
the second quarter of 2007, resulting in a decrease in overall hotel, food and
beverage expenses at the casino. The facility has since been reopened as a
showroom/conference center and now operates at improved cost
levels.





--19--


General
and administrative expenses





General
and administrative expenses increased by $1.0 million, or 16.7%, from $5.8
million for the three months ended March 31, 2007 to $6.8 million for the three
months ended March 31, 2008. General and administrative expenses at the
properties include facility maintenance, utilities, property and liability
insurance, property taxes, housekeeping, and all administrative departments,
such as information technology, accounting, human resources and internal
audit.





General
and administrative expenses at the Century Casino & Hotel in Edmonton
increased by $0.2 million, or 22.3%, from $1.0 million for the three months
ended March 31, 2007 to $1.2 million for the three months ended March 31, 2008.
The increase is primarily the result of an increase in utility charges of $0.1
million and an increase in payroll expense of $0.1 million.





General
and administrative expenses at Womacks decreased by $0.1 million, or 9.9%, from
$1.0 million for the three months ended March 31, 2007 to $0.9 million for the
three months ended March 31, 2008, primarily due to decreases in insurance
charges.





General
and administrative expenses at the Century Casino & Hotel in Central City,
Colorado increased by $0.2 million, or 23.2%, from $0.9 million for the three
months ended March 31, 2007 to $1.1 million for the three months ended March 31,
2008. The increase is primarily the result of a $0.2 million increase in our
property tax accrual.





General
and administrative expenses at the Caledon remained flat for the three months
ended March 31, 2007 compared to the three months ended March 31,
2008.  Increases in payroll expenses resulting from additional wages
at the casino and from corporate allocations offset decreases in professional
fees.





General
and administrative expenses at the Century Casino & Hotel in Newcastle,
South Africa increased by $0.2 million, or 24.2%, from $0.5 million for the
three months ended March 31, 2007 to $0.7 million for the three months ended
March 31, 2008. The increase is primarily the result of increases in payroll,
professional fees and taxes.





Combined
general and administrative expenses at the Century Casino Millennium and aboard
the cruise ships remained flat for the three months ended March 31, 2007
compared to the three months ended March 31, 2008.





Corporate
expenses increased by $0.4 million, or 30.0%, from $1.6 million for the three
months ended March 31, 2007 to $2.0 million for the three months ended March 31,
2008. The increase in 2008 is primarily due to a $0.4 million increase in
payroll expense due to the amortization of costs associated with restricted
stock and stock options issued in July 2007 and $0.1 million in increased legal,
accounting and other professional fees.





At March
31, 2008, there was $2.8 million of total unrecognized compensation expense
related to unvested stock options and unvested restricted stock remaining to be
recognized. Of this amount, $1.1 million will be recognized during 2008, and
$1.7 million will be recognized in subsequent years through 2011.





Depreciation





Depreciation
expense increased by $0.3 million, or 12.2%, from $2.0 million for the three
months ended March 31, 2007 to $2.3 million for the three months ended March 31,
2007. This increase in depreciation expense is primarily due to $1.6 million of
gaming equipment and non-gaming equipment additions during 2007. These assets
are depreciated over periods varying from three to seven years.





--20--


Non-operating income
(expense)





Non-operating
income (expense) for the three months ended March 31, 2008 and 2007 was as
follows (in thousands):





Three
      Months
              Ended
      March 31,2008
            
            
            2007
            
            
            Variance
            
            
            Percentage
              VarianceInterest
      income
            
            $
            69
            
            
            $
            274
            
            
            $
            (205
            )
            
            
            (74.8
            %)Interest
      expense
            
            
            (1,573
            )
            
            
            (1,932
            )
            
            
            359
            
            
            
            (18.6
            %)Gains
      of foreign currency translation and other
            
            
            185
            
            
            
            828
            
            
            
            (643
            )
            
            
            (77.7
            %)Non-operating
      expense
            
            $
            (1,319
            )
            
            $
            (830
            )
            
            $
            (489
            )
            
            
            58.9
            %





Interest
income





Interest
income is directly related to the cash reserves we have on hand. For the three
months ended March 31, 2007, these cash reserves included amounts raised from a
stock offering in 2005 and the exercise of stock options that were deposited in
interest-bearing accounts. During 2007, we repaid approximately $12.7 million of
principal towards our loan associated with our casino in Central City, Colorado.
This decrease in available cash, combined with a decrease in interest rates that
we earn on our deposits, contributed to the overall decline in interest income
for the three months ended March 31, 2008 compared to the three months ended
March 31, 2007.





Interest
expense





Interest
expense decreased $0.3 million, or 18.6%, from $1.9 million for the three months
ended March 31, 2007 to $1.6 million for the three months ended March 31, 2008.
This is primarily due to a decrease in interest rates and a decrease in our
average debt balance from $72.3 million for the three months ended March 31,
2007 to $60.4 million for the three months ended March 31, 2008. Our weighted
average interest rate, excluding the impact of the amortization of deferred
financing charges and a one-time charge for the three months ended March 31,
2008 of $0.2 million for a waiver related to a financial covenant towards our
Central City debt, was 8.4% and 10.0% for the three months ended March 31, 2008
and 2007, respectively.





Gain
of foreign currency transactions and other





We
recognized foreign currency gains of $0.2 million and $0.8 million for the three
months ended March 31, 2008 and 2007, respectively, resulting from the exchange
of currency. We have outstanding cash denominated in U.S. dollars, Canadian
dollars, Euros and South African Rand.





Other
Items





Earnings
from equity investment





On March
12, 2007, we completed the acquisition of G5 Sp. z o.o. (“G5”). G5 owns 33.3% of
all shares issued by CPL. Our portion of CPL’s earnings are recorded as earnings
from equity investment. We began reporting our share of CPL’s earnings in April
2007. For the three months ended March 31, 2008, we recorded $0.5 million of
earnings from our investment in CPL.





--21--


Taxes





Our
effective tax rate was -111.7% and 18.5% for the three months ended March 31,
2008 and 2007, respectively. The mix of domestic losses and foreign earnings
significantly impacts our rate. The tax benefit received on losses incurred by
our U.S. domestic entities is significantly higher than the tax on income at our
foreign operations, particularly in South Africa and Mauritius. For the three
months ended March 31, 2008, we incurred pre-tax losses for our U.S. based
operations (including corporate losses) of $2.8 million compared to pre-tax
earnings at our remaining operations of $3.2 million. Our taxes are further
adjusted for non-deductible permanent differences.





Minority
interest in subsidiary earnings and losses





For the
three months ended March 31, 2008. we allocated earnings of $0.1 million to
various parties who hold a minority interest in our properties. For the three
months ended March 31, 2007, we allocated losses of $0.3 million to these
parties. For the 2007 period, we allocated approximately $0.5 million in losses
to a former partner at our Central City casino. On December 31, 2007, we
purchased this partner’s interest in the casino. As a result, we now retain all
the earnings and losses for the casino in Central City.





Preference
dividends issued by subsidiary





Preference
shareholders of our subsidiary, Century Casinos Caledon (Pty) Ltd., are entitled
to per share dividends of 0.009% of the annual gross gambling revenue of the
Caledon, Hotel, Spa & Casino after the deduction of gaming taxes and value
added tax. Dividends issued by Caledon to preference shareholders decreased by
$0.2 million, or 75.8%, from $0.2 million for the three months ended March 31,
2007 to $0.1 million for the three months ended March 31, 2008. The dividends
issued for the three months ended March 31, 2007 included a one time dividend
payment of $0.2 million to a preference shareholder who exchanged its original
preference shares for a new class of preference shares.





LIQUIDITY
AND CAPITAL RESOURCES





Cash
Flows





Cash and
cash equivalents totaled $13.1 million at March 31, 2008, and the Company had
negative working capital (current assets minus current liabilities) of $6.6
million compared to cash and cash equivalents of $17.9 million and negative
working capital of $2.8 million at December 31, 2007.





We use
the cash flows that we generate to fund reinvestment in existing properties for
both refurbishment and expansion projects and to pursue additional growth
opportunities via new development opportunities. When necessary, we supplement
the cash flows generated by our operations with either cash on hand or funds
provided by financing activities.





For the
three months ended March 31, 2008, $2.5 million of net cash was provided by
operating activities. For the three months ended March 31, 2007, $0.7 million of
net cash was used in operating activities.  The change from the 2007
period relates primarily to changes in working capital items, which can vary
from period to period based on the timing of cash receipts and payments, offset
by cash generated from operations. For a description of the operating activities
of the Company, please refer to the condensed consolidated statements of cash
flows and management’s discussion of the results of operations.





Cash used
in investing activities of $1.0 million for the first three months of 2008
consisted of $0.4 million in capital project additions at Womacks; $0.1 million
of furniture and non-gaming equipment additions in Edmonton; $0.5 million in
capital project additions at Caledon; and $0.2 million of cumulative additions
at our other remaining properties. These cash payments were offset by $0.2
million received from the disposition of assets.






--22--





Cash used
in investing activities of $3.6 million for the first three months of 2007
consisted of $2.0 million towards the acquisition of G5; $0.1 million in
property and equipment additions at Womacks; $0.4 million towards construction
in Edmonton; $0.2 million in gaming equipment additions in Central City; $0.8
million towards property improvements and furniture and fixtures in Newcastle;
and $0.3 million of cumulative additions at our other remaining properties.
These cash payments were offset by the release of $0.2 million of restricted
cash in Edmonton.





Cash used
in financing activities of $5.4 million for the first three months of 2008
consisted of repayments of $0.6 million towards the Central City term loan;
repayment of $0.4 million towards the Edmonton term loan; net repayments of $4.2
million towards the Womacks revolving credit facility; net repayments of $0.6
million towards our South African debt; and other debt repayments of $0.2
million. These repayments were offset by $0.6 million of proceeds from stock
option exercises.





Cash used
in financing activities of $12.6 million for the first three months of 2007
consisted of net repayments of $12.0 million towards the Central City term loan;
net repayments of $0.8 million towards the Womacks revolving credit facility;
and net repayments of $0.8 million towards our South African debt. These
repayments were offset by borrowings of $0.9 million under the loan agreement
for the Edmonton property and $0.2 million of proceeds and tax benefits from
stock option exercises.





Common Stock Repurchase
Program





Since 2000, we have
hada
discretionary program to repurchase up to $5.0million ofouroutstanding common
stock.We did not purchase any
shares of our common stock on the open market during the three months ended
March 31, 2008 and 2007. The total remaining authorization under the repurchase
program was $1.2 million as of March 31, 2008. The repurchase program has no set
expiration or termination date.





Sources
of Liquidity





In
addition to our cash on hand, additional liquidity at Womacks may be provided by
our revolving credit facility with Wells Fargo Bank (“Wells Fargo”), under which
we currently have a total available commitment of $10.0 million and no unused
borrowing capacity, based on Womacks’ current EBITDA, at March 31, 2008. The
borrowing capacity on Womacks’ revolving credit facility is re-measured at the
end of each quarter. Management believes that it is unlikely we will have any
significant capacity in 2008.  The maturity date of the borrowing
commitment is December 2009. Borrowings under the credit
facility may be used for capital expenditures and working capital atCripple
Creekand
corporate headquarters. Womacks is also permitted to make cash distributions to
us up to the amount of our capital contributions subject toalimitation based on Womacks’
current EBITDA.





Additional liquidity for our
Central City property may be provided by our $2.5 million revolving line
of credit with Wells Fargo. The revolving line of credit matures on November 21,
2011. Availability under the line of credit is conditional upon CC Tollgate
LLC’s compliance with all of the financial and other covenants contained in the
loan agreement at the time of a particular drawdown, and our continued ability
to make certain representations and warranties. For the quarter ended March 31,
2008, we have met all covenant terms related to this loan agreement except the
adjusted fixed charge coverage (“AFCC”) covenant. On April 28, 2008, we received
a written waiver from our lender related to this covenant in exchange for
approximately $0.2 million. Based on a calendar year 2008 forecast that has been
revised to account for the recent economic downturn, we expect to be in
compliance with the AFCC covenant in subsequent periods.





We are
currently reviewing strategies to reduce our overall interest charges. This
includes, but is not limited to, the refinancing of some or all of our
outstanding debt. The Company is also negotiating a revolving credit facility
with a South African bank as a means of providing additional
liquidity.





--23--


Short-Term
Liquidity and Capital Requirements





We expect
that the primary source of our future operating cash flows will be from gaming
operations. Expected short-term uses of cash include ordinary operations,
foreign income tax payments, and interest and principal payments on outstanding
debt.





We
believe that our cash at March 31, 2008, together with expected cash flows from
operations, will be sufficient to fund our anticipated operating costs and
capital expenditures at existing properties and to 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 we expect to
have cash needs for the development of new properties or expansion of existing
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 or at
all.  As a result, limitations on our capital resources could delay or
cause us to abandon certain plans for the development of new properties or
expansion and/or renovation of existing properties.





Item
3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





We had no
significant changes in our exposure to market risks from that previously
reported in our Annual Report on Form 10-K for the year ended December 31,
2007.





Item
4.    CONTROLS AND PROCEDURES





Evaluation of
Disclosure Controls and Procedures –Our management, with the
participation of our Co Chief Executive Officers, Principal Financial Officer
and Chief Accounting Officer, has evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) 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, principal financial officer and chief accounting officer
have concluded that as of such date, our disclosure controls and procedures were
effective 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 Securities and
Exchange Commission rules and forms.





Changes in
Internal Control Over Financial Reporting –  There has been no
change in our internal controls over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
three months ended March 31, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.





--24--


PART
II - OTHER INFORMATION





Item
1A. – Risk Factors





The
information presented below updates and should be read in conjunction with Part
I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2007. In addition to the other information set forth in the Form
10-K and this report, you should carefully consider the facts discussed in Part
I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2007, which could materially affect our business, financial
condition or future results. The risks described in our Annual Report on Form
10-K are not the only risks facing our Company.  Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial
condition or operating results.





A
downturn in general economic and geopolitical conditions may adversely affect
our results of operations.





Our
business operations are subject to changes in international, national and local
economic conditions. Our business is fueled by discretionary income. Recessions
or downturns in the general economies in which we operate could result in fewer
customers visiting our properties, which would adversely affect our results of
operations. Our operations in Colorado and in Caledon, South Africa are located
approximately one hour away from the major markets they serve. Management
believes that rising fuel prices and the introduction of a smoking ban at all
casinos in 2008 (in Colorado) has contributed to a decline in these
markets.





Our
indebtedness imposes restrictive covenants on us, which limits our operating
flexibility.





Our
various credit agreements require us, among other obligations, to maintain
specified financial ratios and satisfy certain financial tests, including
leverage ratios, total fixed charge coverages and minimum annualized EBITDA
(earnings before interest, taxes, depreciation and amortization, or a variant
thereof). In addition, these agreements restrict our ability to incur additional
indebtedness, repay indebtedness or amend debt instruments, pay dividends,
create liens on assets, make investments, make acquisitions, engage in mergers
or consolidations, make capital expenditures or engage in certain transactions
with subsidiaries and affiliates. There can be no assurances that we or our
subsidiaries would be able to obtain a waiver to these restrictive covenants if
necessary. If we fail to comply with the restrictions contained in these credit
agreements, the resulting event of default could result in a lender accelerating
the repayment of all outstanding amounts due under these agreements. There can
be no assurances that we would be successful in obtaining alternative sources of
funding to repay these obligations should this event occur. For the three months
ended March 31, 2008, we paid approximately $0.2 million to obtain a waiver
towards a financial covenant on our debt in Central City, Colorado.





We
may be required in the future to record impairment losses related to the
indefinite lived intangible assets and the equity investment we currently carry
on our balance sheet.





We have
$14.9 million of goodwill, $9.1 million of casino licenses and a $13.6 million
equity investment as of March 31, 2008. Accounting rules require that we make
certain estimates and assumptions related to our determinations as to the future
recoverability of these assets. If we were to determine that the values of
the goodwill, the casino licenses or the equity investment carried on our
balance sheet are impaired, we may be required to record an impairment charge to
write down the value of these assets, which would adversely affect our results
during the period in which we recorded the impairment charge. For instance, in
2006, we recorded an impairment of goodwill related to our investment in Prague,
Czech Republic of approximately $0.2 million. If operations at Womacks do not
improve in future periods, we may be required to record an impairment of
goodwill up to $7.2 million.





--25--


Item
6. – Exhibits





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




3.1
              Certificate
      of Incorporation is hereby incorporated by reference to Century Casinos’
      Proxy Statement for the 1994 Annual Meeting of
    Stockholders.3.2
              Amended
      and Restated Bylaws of Century Casinos, Inc., is hereby incorporated by
      reference from Exhibit 11.14 to Century Casinos’ Quarterly Report on Form
      10-Q for the quarterly period ended June 30, 2002.4.1
              Rights
      Agreement, dated as of April 29, 1999, between the Company and the
      American Securities Transfer & Trust, Inc., as Rights Agent, is hereby
      incorporated by reference from Exhibit 1 to Century Casinos Form 8-A dated
      May 7, 1999.4.2
              First
      Supplement to Rights Agreement dated April 2000, between Century Casinos,
      Inc. and American Securities Transfer & Trust, Inc., as Rights Agent,
      is hereby incorporated by reference from Exhibit A to Century Casinos’
      Proxy Statement for the 2000 Annual Meeting of
    Stockholders.4.3
              Second
      Supplement to Rights Agreement dated July 2002, between Century Casinos,
      Inc. and Computershare Investor Services, Inc. as Rights Agent, is hereby
      incorporated by reference from Exhibit 11.13 to Century Casinos’ Quarterly
      Report on Form 10-Q for the quarterly period ended June 30,
      2002.31.1
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer.31.2
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer and President.31.3
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Principal
      Financial Officer.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,Co
      Chief Executive Officer.32.2
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer and President.32.3
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Principal
      Financial Officer.32.4
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Chief
      Accounting Officer.


--26--


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: May
9, 2008








--27--


CENTURY
CASINOS, INC.


INDEX TO
EXHIBITS




Exhibit
      No.
              Document3.1
              Certificate
      of Incorporation is hereby incorporated by reference to Century Casinos’
      Proxy Statement for the 1994 Annual Meeting of
    Stockholders.3.2
              Amended
      and Restated Bylaws of Century Casinos, Inc., is hereby incorporated by
      reference from Exhibit 11.14 to Century Casinos’ Quarterly Report on Form
      10-Q for the quarterly period ended June 30, 2002.4.1
              Rights
      Agreement, dated as of April 29, 1999, between the Company and the
      American Securities Transfer & Trust, Inc., as Rights Agent, is hereby
      incorporated by reference from Exhibit 1 to Century Casinos Form 8-A dated
      May 7, 1999.4.2
              First
      Supplement to Rights Agreement dated April 2000, between Century Casinos,
      Inc. and American Securities Transfer & Trust, Inc., as Rights Agent,
      is hereby incorporated by reference from Exhibit A to Century Casinos’
      Proxy Statement for the 2000 Annual Meeting of
    Stockholders.4.3
              Second
      Supplement to Rights Agreement dated July 2002, between Century Casinos,
      Inc. and Computershare Investor Services, Inc. as Rights Agent, is hereby
      incorporated by reference from Exhibit 11.13 to Century Casinos’ Quarterly
      Report on Form 10-Q for the quarterly period ended June 30,
      2002.31.1
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer.31.2
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer and President.31.3
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,Principal
      Financial Officer.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,Co
      Chief Executive Officer.32.2
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Co
      Chief Executive Officer and President.32.3
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Principal
      Financial Officer.32.4
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,Chief
      Accounting Officer.