NEW ROYAL HOLDCO I INC.GDEN
NEW ROYAL HOLDCO I INC. Income Taxes Disclosure
Income Taxes
Income tax provision (benefit) is summarized as follows:
| Year Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 5,989 | $ | (24,499) | $ | 87,840 | |||||||||||
| State | 165 | (3,861) | 6,106 | ||||||||||||||
| Total current tax provision (benefit) | $ | 6,154 | $ | (28,360) | $ | 93,946 | |||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | (9,245) | $ | 50,423 | $ | (17,846) | |||||||||||
| State | — | — | 107 | ||||||||||||||
| Total deferred tax (benefit) provision | (9,245) | 50,423 | (17,739) | ||||||||||||||
| Income tax (benefit) provision | $ | (3,091) | $ | 22,063 | $ | 76,207 | |||||||||||
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in “Note 2 — Summary of Significant Accounting Policies,” the reconciliation of taxes at the federal statutory rate to our (benefit from) provision for income taxes for the year ended December 31, 2025 was as follows:
| Year Ended December 31, 2025 | ||||||||||||||
| (In thousands) | Amount | Rate | ||||||||||||
| $ | (1,918) | 21.00 | % | |||||||||||
| State income taxes, net of federal income taxes | 130 | (1.43) | ||||||||||||
| Foreign tax effects | — | — | ||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | — | — | ||||||||||||
| Effect of cross-border tax laws | — | — | ||||||||||||
| Tax Credits | ||||||||||||||
| FICA credit generated | (1,123) | 12.29 | ||||||||||||
| WOTC credit generated | (388) | 4.25 | ||||||||||||
| Change in valuation allowance | — | — | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Permanent tax differences - Stock Compensation | (983) | 10.76 | ||||||||||||
| Permanent tax differences - Business Meals | 357 | (3.90) | ||||||||||||
| Permanent tax differences - Entertainment | 254 | (2.78) | ||||||||||||
| Permanent tax differences - FICA Credit | 236 | (2.58) | ||||||||||||
| Permanent tax differences - Other | 267 | (2.92) | ||||||||||||
| Changes in unrecognized tax benefits | — | — | ||||||||||||
| Other Adjustments | 77 | (0.85) | ||||||||||||
| Effective tax rate | $ | (3,091) | 33.84 | % | ||||||||||
In accordance with the disclosure guidance in effect prior to the adoption of ASU 2023-09, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023, was as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Statutory federal tax rate | 21.00 | % | 21.00 | % | |||||||
| State income taxes, net of federal income taxes | (5.03) | 2.53 | |||||||||
| Permanent tax differences – stock compensation | 1.62 | (2.12) | |||||||||
| Permanent tax differences – business meals | 0.70 | 0.17 | |||||||||
| Permanent tax differences – executive compensation and other | 0.64 | 2.60 | |||||||||
| Permanent tax differences – goodwill | 16.69 | — | |||||||||
| Change in valuation allowance | — | (1.71) | |||||||||
| FICA credit generated | (1.27) | (0.28) | |||||||||
| WOTC credit generated | (0.14) | — | |||||||||
| Tax benefit due to settlement of uncertain tax positions | (9.38) | — | |||||||||
| Additional tax due to amending tax returns from prior years | 5.01 | — | |||||||||
| Change in tax rate and apportionment | — | 0.43 | |||||||||
| Deferred only adjustment to beginning deferred balances | 0.47 | 0.34 | |||||||||
| Effective tax rate | 30.31 | % | 22.96 | % | |||||||
The effective income tax rate for the year ended December 31, 2025 was 33.84%, which differed from the federal income tax rate of 21% primarily due to the increased benefit related to tax credits and excess tax benefit on stock option exercises. The effective income tax rate for the year ended December 31, 2024 was 30.31%, which differed from the federal income tax rate of 21% primarily due to the tax effect of the sale of the distributed gaming operations in Nevada discussed in “Note 1 — Nature of Business and Basis of Presentation” and the benefit recorded from the reduction of the uncertain tax positions (“UTP”) payable.
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
| December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Accruals and reserves | $ | 4,884 | $ | 3,895 | |||||||
| Share-based compensation expense | 1,616 | 1,997 | |||||||||
| Operating lease obligation | 17,850 | 19,626 | |||||||||
| Other | 10 | — | |||||||||
| Gross deferred tax assets | 24,360 | 25,518 | |||||||||
| Valuation allowance | — | — | |||||||||
| Deferred tax assets, net of valuation allowance | $ | 24,360 | $ | 25,518 | |||||||
| Deferred tax liabilities: | |||||||||||
| Prepaid services | $ | (1,093) | $ | (1,744) | |||||||
| Amortization of intangible assets | (3,173) | (787) | |||||||||
| Depreciation of fixed assets | (15,809) | (26,050) | |||||||||
| Right-of-use assets | (14,862) | (16,478) | |||||||||
| Debt basis | (1,094) | (1,359) | |||||||||
| Other | — | (15) | |||||||||
| Gross deferred tax liabilities | (36,031) | (46,433) | |||||||||
| Deferred tax (liabilities) assets, net | $ | (11,671) | $ | (20,915) | |||||||
| Non-current deferred tax liabilities, net | (11,671) | (20,915) | |||||||||
| Deferred tax liabilities, net | $ | (11,671) | $ | (20,915) | |||||||
The realizability of deferred tax assets is evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. As of December 31, 2025, the Company had net deferred tax liabilities of $11.7 million. As of December 31, 2025, the Company determined that it was more likely than not that the Company would generate sufficient taxable income to conclude that deferred tax assets of $24.4 million were realizable.
The Company’s income tax returns from 2021 onward are subject to examination. In addition, the statute of limitation for assessment for years with net operating losses (“NOLs”) is determined by reference to the year the NOLs were used to reduce the Company’s taxable income. NOLs from the 2012-2014 and 2017-2020 income tax returns were used to reduce taxable income in 2021 and 2022. Consequently, the 2012-2014 and 2017-2020 income tax returns remain subject to examination by taxing authorities. The Company is not currently under any income tax examinations.
On April 30, 2024, the Internal Revenue Service (the “IRS”) notified the Company that the review of the Company’s 2017 and 2018 federal income tax returns was completed. As a result of the review, the Company’s fixed asset classification and related net operating losses for the respective tax years were adjusted and the Company recorded UTP payable until the historical filings were amended and submitted to the IRS. The Company filed the amended tax returns with the IRS such that no UTP remained as of December 31, 2024 and the income tax provision for the year December 31, 2024 included a net tax benefit from the decrease in UTP payable, interest and penalties.
The following table summarizes the Company’s reconciliation of the beginning and ending unrecognized tax benefits:
| December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Balance – beginning of period | $ | — | $ | 7,165 | |||||||
| Settlements | — | (7,165) | |||||||||
| Balance – end of period | $ | — | $ | — | |||||||
As described in “Note 2 — Summary of Significant Accounting Policies,” and upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows:
| (In thousands) | Year Ended December 31, 2025 | |||||||
| Federal | $ | 21,634 | ||||||
| State | 50 | |||||||
| Total cash paid for income taxes, net of refunds | $ | 21,684 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 14, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.