Welcome to the Century Casinos third quarter 2008 earnings conference call. (Operator Instructions) I would now like to introduce our host for today's call, Peter Hoetzinger. Go ahead, sir.

Thank you, Operator, and welcome everyone to our third quarter 2008 earnings conference call. Joining me on the call today are my Co-CEO and Chairman of the company, Erwin Haitzmann as well as Larry Hannappel, Senior VP and COO, North America, and Ray Sienko, Chief Accounting Officer. Before we begin I need to remind you that in our remarks we will be discussing forward-looking information which involves a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings and encourage you to review these filings. In addition, throughout our call we may refer to several non-GAAP financial measures, including but not limited to adjusted EBITDA. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our news release and in the 10-Q filing, all of which are available in the Investor section of our website at www.CenturyCasinos.com. Let me now present the results of the third quarter. The net results of the third quarter were obviously dominated by the writedown of the goodwill on the books of the two Colorado properties, as well as the fact that we established a valuation allowance for our deferred U.S. tax assets. In light of the deterioration of the U.S. and Colorado economies, we decided to take a conservative approach and have written off the entire goodwill of our property in Cripple Creek in the amount of $7.2 million and of our property in Central City in the amount of $2.1 million. Also because of the deteriorating economic environment in the U.S. and Colorado, we considered it prudent to put all our deferred U.S. tax assets in the amount of $6 million into a reserve, a so-called valuation allowance. If we conclude at a later date that the realization of these deferred taxes is more likely than not, we will reduce the valuation allowance as appropriate, which will then show as income. Excluding these extraordinary write-offs, net earnings for the quarter would have been $1.2 million or $0.05 per share, exactly in line with consensus estimates. Net operating revenue came in at $21.9 million, down 12% year-over-year but up 2% from the second quarter. Adjusted EBITDA was $4.9 million, which is 16% lower year-over-year but 7% higher compared to the second quarter. The group's consolidated EBITDA margin is 22%. The effective management of our cost structure helped to reduce corporate and property specific general and administrative expenses by 13%. Looking at the long-term debt of our company, we have restructured the loan facilities for our Colorado operations and are in full compliance with all financial covenants of all our loan agreements. In the first nine months of this year we have paid our total debt down by $11.7 million. Currently, our net debt position is $41 million. I will now discuss the situation property by property in local currency, beginning with Colorado. Revenue at Womacks Casino in Cripple Creek fell 38% year-over-year. Still, it produced positive EBITDA of $620,000, which equals an EBITDA margin of 20%. The newly introduced smoking ban in Colorado and the slow economy all had an effect. In addition, that casino lost customers due to the opening of a new competitor in the second quarter, and that also hurt in the year-over-year comparison. The Century Casino in Central City generated revenues of $4.7 million, which was down 22% from the third quarter of last year. [Inaudible] but table revenue actually increased a little over 1% quarter-over-quarter. The EBITDA margin of that property is currently at 25%. Recent cost savings initiatives undertaken include the reduction of staff in Cripple Creek by 29% and in Central City by 18% compared to last year. In general, the Colorado casino market will continue to be very competitive for the players' dollars. Promotions in the market are being geared to weekend play, when players are more likely to come up to the gaming house. However, now that Amendment 50 has been approved statewide, the Colorado casino market is poised to evolve into a much larger gaming scale, with the anticipated passage of this amendment in the three casino towns of Cripple Creek, Central City and Black Hawk. The City of Cripple Creek will most likely vote in January. The City of Central City has not set a date yet. As most of you know, Amendment 50 allows increased betting limits of $100 per game, additional gaming hours of up to 24 hours a day, and the addition of craps and roulette games to the casinos. The earliest these new rules can take effect is in July of next year. Amendment 50 also frees the gaming tax at current levels, and the gaming tax could only be increased by a future statewide vote. The gaming towns of Central City and Cripple Creek are close enough to Denver and Colorado Springs that they should capture an increased market of high level players that are currently going to larger gaming destinations such as Las Vegas. We believe this will increase the Colorado casino market and will have a positive effect on our two casinos. Our property in Canada - the Century Casino and Hotel in Edmonton, Alberta - was once again the highlight of the quarter. Year-over-year revenues increased by 15%, EBITDA by 42%, and net earnings by a strong 88%. It achieved an EBITDA margin of 36%, up from 31% a year ago. We saw increases in all aspects of the casino operation, such as win per slot per day and win per table per day, as well as revenue from poker, which tripled year-over-year. These growth rates are impressive considering that a massive construction projects - the city's $25 million Fort Road Redevelopment Project - is currently under way in [Frankford] and in the area around our property. [Near] and long-term, the casino is expected to benefit substantially from this master plan's program, which involves the widening of Fort Road from four to six lanes and the development of a new urban village with a revitalized commercial sector and residential community of up to 1,000 units adjacent to the existing light rail transit station, which in turn is adjacent to our casino. We operate there in a market of only 7 gaming competitors within the greater area of Greater Edmonton. The municipal area of Edmonton has over 1 million residents and our casino is the only one located in the northeast section of the city. Our casino also benefits from its competitive edge over the local competition by offering live entertainment showroom, a hotel, catering facilities, a strong monthly direct mail program and, last but not least, heated underground parking which can accommodate 300 cars. In South Africa, our Caledon Casino Resort near Cape Town saw a decrease in revenues by a little under 5%. The current EBITDA margin of that property is 31%. We believe that the addition of 500 slots in a competing casino in Cape Town early this year as well as rising fuel prices during the second and third quarters of '08 have led some customers from Cape Town to gamble in Cape Town as opposed to traveling to our casino. But the gaming market in South Africa remains quite strong and we are optimistic as we are heading into the strong summer season and the busiest times of the year between Christmas and Easter. Century Casino Caledon is situated in the Overberg area of the Western Cape Province of South Africa, which has over 230,000 residents and is about 60 miles from Cape Town. It's also located in close proximity to very popular holiday destinations like Hermanas and Somerset West, all approximately a 30-minute drive away. All five casino licenses for the Western Cape Province have been issued, no other casino is within 50 miles of ours and no new casino is [inaudible] to be entering the market. The Century Casino Caledon is expected to continue to benefit from offering a four-star hotel, restaurants, catering facilities, conference venues, a spa, free parking areas and thermal hot springs. Our Century Casino and Hotel in Newcastle reported a revenue increase of 15% and an even stronger EBITDA increase of 59%. The EBITDA margin improved to 25% in the third quarter of last year to 34% in this quarter. Similar to the development in Edmonton, we saw improvements across the board, from win per slot per day and win per table per day to hotel and food and beverage revenues. Everything was up nicely. The City of Newcastle has over 420,000 residents and is situated halfway between Johannesburg and Durban. It's also a popular holiday destination for tourists to the KwaZulu Natal Midlands and Drakensberg Mountain area, and a stopover for traveling businessmen. All casino licenses for the KwaZulu Natal Province have been issued. No new casino establishment will, therefore, be entering the market and the closest casino is more than a two-hour's drive away from ours. Century Casino Newcastle is offering a four-star hotel, restaurants, catering facilities, conferencing venues and free parking areas. We expect further growth at that property in revenues, EBITDA and net earnings for 2008 over 2007. As most of you know, we have announced our intent to sell the South African properties. We have received a good number of expressions of interest from serious, mostly South African companies. A number of interested parties have been invited to conduct detailed legal, financial and operational due diligence, including various site visits to both locations. The coming weeks will bring the next round of offers from the bidders and further negotiations with them. Interest in the properties is strong, but timing of a deal is difficult to predict. The amount of the purchase price will be the predominant factor in our decision to sell. Finally, I'm moving to Europe for a brief update on Poland. Revenues of Casinos Poland Ltd., of which we own one-third, increased by 13% year-over-year. EBITDA jumped 48% and net earnings grew to five times the earnings of last year. We booked $181,000 in equity earnings in this quarter from our investment in Casinos Poland. These results have been achieved in spite of expansion and renovation works at the flagship operation of Casinos Poland, the casino at the Marriott Hotel in the capital city, Warsaw. These works have now been concluded, and the casino expansion successfully opened in early October to a capacity crowd. Also in October, Casinos Poland successfully launched the first nationwide MegaJackpot. The jackpot amount, the highest in the country, is currently at the equivalent of approximately $250,000 and is a big hit with players. The gaming market in Poland is well regulated and monitored by the authorities. At the moment, 27 casinos and 195 slot arcades have received licenses from the Minister of Finance. The Minister is authorized to issue one casino license for every 250,000 inhabitants of the city and one license to operate a slot arcade for each 100,000 inhabitants. The outlook for the gaming market in Poland is quite positive if the legislation stays the same. Rumors about the new gaming law and different taxation models are coming up on a regular basis [inaudible]. Our goal is to acquire a majority of Casinos Poland. Discussions are continuing, but an outcome, if and when, is still difficult to predict. This concludes my presentation and we can now start the question-and-answer session. Operator?

(Operator Instructions) Your first question comes from Todd Eilers - Roth Capital Partners, LLC.

Peter, I'm wondering, assuming that both Cripple Creek and Central City also pass or approve Amendment 50, what will your plans be at that point? Will you look to expand either of those facilities? Can you just help us out with what your thoughts are there?

Yes, Todd. I'll turn this question over to Erwin.

Yes, our plans are to expand the gaming floor and add additional tables and to make it so that we're able to take advantage of the increased limits.

And would you be ready to go July 1?

Oh, yes. Yes, absolutely.

Peter, how about with regards to the potential sale of one or both of the South African casinos, can your rank order what your priority would be in terms of use of proceeds? Would it be to reduce debt, repurchase stock or are there potential M&A opportunities or new development projects? Can you just maybe talk us through your thoughts there?

Yes, our thoughts circle around these uses of funds, depending on where the stock price will be at that point in time. A share repurchase program is definitely in the cards. We will also reduce some of our debt, in all likelihood some of the Colorado debt. At that point we wouldn't have any debt in South Africa anymore and the debt that we have on our Edmonton property is on terms that are very reasonable, so the Colorado debt would be on the front burner to be reduced. And, as you can imagine, there are quite a number of attractive M&A opportunities out there. Prices have come down somewhat so yes, we want to be a player.

And then maybe Larry, if you could help us out on this one. With the change in the valuation allowance in the quarter, what can we expect for a tax rate going forward or what should we be looking for?

The tax rate going forward is still going to be largely dependent on what kind of taxable income is generated in the U.S. We are working with a tax firm at the moment to implement a plan to utilize the tax losses going forward. This is assuming that there would still be tax losses in the Colorado properties. Again, it's a tough question to answer, Todd, because we have such disparity in the tax rates, ranging from 3% in Mauritius to the highest in the U.S. of 36%. So our goal is just to reduce the tax exposure as much as we can, but I can't give you a forecasted rate based on forecasted earnings right now.

Your next question comes from Ryan Worst - Brean Murray, Carret & Co.

Peter, just a follow up on the information on the progress of the sale of the South African casinos. Where are you exactly? What are the next steps to take place as far as the official bids coming in?

A group of interested bidders has almost concluded really detailed legal, financial and operational due diligence. They've all been at our sites a couple of times. And some time this week and/or next week we'll be sitting down with them to start the final round of negotiations. So we are depending on the outcome. We could see a result, but it all really depends on the price and whether we are happy with what they're offering. But it's an active process that we are actively managing and there's a strong number of interested parties who in most cases are strong enough to handle such a transaction without a great deal of outside funding help.

So do you think an agreement, if you guys choose to pursue that, could be completed by the end of the year?

It's not impossible, but it's also at the same time not possible for me to say because we haven't seen the final and firm offers yet. You know how it is in these days with the markets, so it's just impossible to predict.

(Operator Instructions) Your next question comes from Evan Greenberg - Meadowbrook Capital Management.

I had a question about the goodwill writedown and why you decided to take it in Cripple Creek and in Colorado in general. Was there some sort of valuation that was given to you? What was the reason for the writedown on the goodwill?

[inaudible] various valuation scenarios that we are constantly running and with the changes in the U.S. and Colorado economy and the mid-term outlook for the economy, we just thought it is prudent to take the conservative scenario that was on our table amongst the many scenarios that we looked at. You've known us here; I know that you have followed us for many, many years, so you know that we, when having a choice, most of the time we are choosing the conservative approach in similar situations because that's in the long-term best interest of our shareholders.

I respect and appreciate that. I just thought it was a bit extreme, but I appreciate that. Do you still have the financial flexibility right now to acquire Casinos Poland and make other acquisitions and grow the business through the dislocations in the market? You're generating plenty of EBITDA and you're not really that leveraged compared to your competitors as all.

As I've said before, our net debt is now down to $41 million. We paid $11 point something million back just in the last nine months alone this year. So we are really working on keeping and improving our balance sheet. Yes, for the Casinos Poland acquisition, that can be financed. And other than that, of course we are also trying to take a conservative approach with the investment policy right now, but on the Casinos Poland situation, we should be in good shape.

Your next question comes from Todd Eilers - Roth Capital Partners, LLC.

Peter, I know you guys don't typically give guidance but, you know, in light of what's happened in terms of the economy and the market in October, can you maybe talk a little bit directionally about trends in each market that you've seen at the start of fourth quarter? That might be helpful.

Yes. Edmonton, still going strong. South Africa Newcastle, still going strong; Caledon improving. Colorado, not that much of a change. Erwin, would you like to add to that?

No, that's pretty much the picture.

(Operator Instructions) Your next question comes from Nicholas Danna - Sterne, Agee & Leach.

A question regarding the South African sale - two things. One, can you give us some sort of range as to what you think those two assets might be worth? And then second, if you do in fact sell them, kind of the process of taking I guess what would be RAN proceeds and bringing them back to the U.S. and any tax implications there.

The approximate EBITDA that we will be selling, which is 100% of Caledon and 60% of Newcastle is in the $8 million range. And the market will set [the price] to the EBITDA, you know as well as I do. They are [inaudible] a bit from place to place. They have come down a bit from last year. But the fact that there are no more casino licenses available in those areas where we operate and the expansion opportunities of those two properties I think gives us a good position to achieve an attractive result. Yes, we would get RAN that would go into our Mauritian holding company, Century Resorts Ltd. The tax rate there, as Larry indicated, is an effective 3%. And then we'll decide on the use of funds and that will, to a certain extent, also have an implication on whether or not further taxes would have to be paid, for example, if you could bring money back to the U.S., there might be a different situation as compared to using that money outside the U.S. for acquisitions.

Okay, so if you were to bring the money back to the U.S. in order to pay down the Colorado debt, do you have a sense for how much of a hit you would take there?

Would you like to comment on that, Larry?

Nick, it's not necessarily that we would take a hit if we send a certain amount of cash from Mauritius to the U.S. It's likely that we would send at least, say, $4 million to the U.S. to pay off the Womacks revolver, but that isn't necessarily taxable because we've got some intercompany debt between Europe and the U.S.

And then in terms of the multiple, you said a price that would be acceptable to you. Obviously, there's a range of multiples out there and you also have some excess land at Caledon, so can you give us at least a range of what sort of multiple might be in your range of reasonableness?

I can't comment, Nick. I'm sure that the parties interested are also listening today, so I don't really want to give any guidance here.

(Operator Instructions) It appears we have no further questions at this time. We will now turn the program back to Mr. Hoetzinger. Go ahead, sir.

Very good. Thank you all for your interest in Century Casinos and for your participation in the call. For a recording of this call, please visit the Financial Results section of our website at www.CenturyCasinos.com. Thank you.

This does conclude today's conference call. Thank you for attending and have a good day.