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Full House Resorts Announces Strong Third Quarter Results

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Full House Resorts Announces Strong Third Quarter Results

 

Full House Resorts, Inc. announced results for the third quarter ended September 30, 2021.

On a consolidated basis, revenues in the third quarter of 2021 were $47.2 million, a 12.6% increase from $42.0 million in the prior-year period. Both periods reflect a full quarter of reopened operations, as all of the Company’s properties reopened by June 2020 after closing in March 2020 due to the pandemic. Net income for the third quarter of 2021 was $4.6 million, or $0.13 per diluted common share, reflecting additional interest expense related to the funding of the Company’s Chamonix development project in Cripple Creek, Colorado, and a credit in the prior-year quarter related to warrants that were retired in early 2021. In the prior-year period, net income was $7.7 million, or $0.28 per diluted common share. Adjusted EBITDA(a) in the 2021 third quarter was $13.6 million, an 8.9% increase from $12.5 million in the third quarter of 2020. Growth in the 2021 period was due to improved results from the Company’s Nevada segment and the sale of “free play” that Indiana’s casinos are permitted to transfer to other casino operators within the state, partially offset by the temporary closure of Silver Slipper due to the passage of Hurricane Ida and the impact of wildfires in the communities surrounding Grand Lodge Casino. Results for the third quarter of 2021 also include $1.6 million of revenue related to the Company’s Contracted Sports Wagering segment, compared to $0.7 million in the prior-year period. Currently, five of the Company’s six permitted sports wagering “skins” in Indiana and Colorado are live.

“We had another strong quarter, with revenue and operating income increases despite some weather challenges,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “Revenues in the third quarter of 2021 increased 12.6%, reflecting the relaxation of pandemic-related restrictions, our sale of ‘free play’ in Indiana (in this year’s third quarter instead of the fourth quarter in prior years), and a continued strong overall performance. Adjusted EBITDA increased to $13.6 million from $12.5 million in the third quarter of 2020.”

Continued Mr. Lee, “At the Silver Slipper, guest visitation remained robust except for a brief downturn as Hurricane Ida made landfall. We had little damage from the hurricane, but it significantly hampered our operations for four days. At Bronco Billy’s, we continue to try and mitigate the impact of Chamonix’s construction on Bronco Billy’s neighboring operations. Despite the loss of on-site parking, Bronco Billy’s continued to perform strongly relative to its average performance over the past decade. Rising Star continues to do well. As noted above, Rising Star benefited in the quarter from the sale of ‘free play,’ whereas prior years had a similar transaction in the fourth quarter. At our Nevada segment, Stockman’s Casino has largely returned to pre-pandemic levels, while Grand Lodge Casino was adversely affected by a low table games hold percentage and smoke from nearby wildfires, particularly over the Labor Day weekend.

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“At our Chamonix project in Cripple Creek, we are currently installing footings and structural walls for the hotel tower and are preparing for the start of vertical construction. It is still relatively early in the construction process, so estimates of cost and completion dates still contain substantial uncertainty, but we are in the process of completing the bidding for a substantial portion of the construction budget.

“We also continue to pursue other growth opportunities in Waukegan, Illinois, and Terre Haute, Indiana. In Illinois, we recently presented our proposal to the Illinois Gaming Board for a new destination casino in Waukegan, a northern suburb of Chicago. Similarly, we are scheduled to present our unique proposal to the Indiana Gaming Commission next week for an iconic casino hotel in Terre Haute, approximately one hour west of Indianapolis. The respective gaming commissions have indicated that they intend to select their winning proposals on November 17 (Indiana) and by early January (Illinois). Both new casinos would be named ‘American Place.’

“Our management team at Full House has a long history of developing some of the most iconic casinos in the world. We look forward to the potential of developing both of these unique proposals over the next few years.”

Renderings and other information regarding both proposals is available at www.AmericanPlace.com.

Third Quarter Highlights and Subsequent Events

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  • Mississippi. The Silver Slipper Casino and Hotel’s operational performance continues to reflect a focus on marketing and labor improvements, as well as the benefit of numerous investments in the property in recent years. Such investments included a substantial renovation of the casino and the buffet, a renovated porte cochere, repainted exterior, new energy-efficient building signage, the Beach Club, the Oyster Bar, and the introduction of on-site sports betting. For the third quarter of 2021, revenues at Silver Slipper increased 7.9% to $21.5 million, reflecting the relaxation of pandemic-related business restrictions during the 2021 period. Adjusted Segment EBITDA was flat at $6.5 million, reflecting the temporary closure of the property due to Hurricane Ida in August 2021.
  • Indiana. Rising Star Casino Resort’s revenues were $12.6 million in the third quarter of 2021, an increase from $9.6 million in the third quarter of 2020. Adjusted Segment EBITDA rose to $3.8 million in the third quarter of 2021 from $2.1 million in the prior-year period. The increase was the result of the sale of “free play,” offsetting somewhat higher operating expenses. The state’s casinos are permitted to transfer “free play” to other casino operators within Indiana. Because Indiana has a progressive gaming tax system and Rising Star is one of the smaller casinos in the state, the property has consistently sold its ability to deduct “free play” in computing gaming taxes to operators in higher tax tiers. Such sales resulted in $2.1 million of revenue and income in the third quarter of 2021. Rising Star also sold its “free play” for $2.1 million during 2020, although not until the fourth quarter.
  • Colorado. This segment includes Bronco Billy’s Casino and Hotel and, upon its opening, will include Chamonix Casino Hotel. Revenues for this segment were $6.3 million in the third quarter of 2021, a decrease from $7.6 million in the third quarter of 2020. Adjusted Segment EBITDA of $1.5 million in the third quarter of 2021 compares to $3.1 million in the prior-year period. Results in the current period were impacted by the loss of all of the property’s on-site parking due to the construction of Chamonix. To alleviate the lack of on-site parking, the Company introduced complimentary valet parking, as well as a free shuttle service to an off-site parking lot. Also, the prior-year period had a $424,000 benefit from the elimination of point redemption liabilities that accrued under the property’s prior loyalty program.

    As discussed above, construction continues on Chamonix Casino Hotel, located adjacent to Bronco Billy’s. When complete, Chamonix will include a new casino, approximately 300 luxury guest rooms and suites, parking garage, meeting and entertainment space, outdoor rooftop pool, spa, and fine-dining restaurant. We are currently installing footings and structural walls for the hotel towers. Vertical construction is expected to commence within the coming weeks. The three principal guestroom towers are anticipated to “top out” between April and August 2022. For detailed renderings of the project and two webcams of the construction underway, please visit www.ChamonixCO.com.

  • Nevada. This segment consists of the Grand Lodge Casino, which is located within the Hyatt Regency Lake Tahoe luxury resort in Incline Village, and Stockman’s Casino, which is located near the Naval Air Station in Fallon. This segment is historically the smallest of the Company’s segments. During the third quarter of 2021, Stockman’s Casino continued to benefit from the relaxation of pandemic-related restrictions, including at the nearby Naval air station. Grand Lodge Casino was adversely affected in the 2021 period by significant wildfires in the region, including a great deal of smoke over the Labor Day holiday weekend. Additionally, Grand Lodge Casino’s results were adversely affected by a table games hold percentage that was 8.4 percentage points lower than the three-year average hold percentage. Revenues for the segment were $5.1 million and $4.1 million for the third quarters of 2021 and 2020, respectively. Adjusted Segment EBITDA was $1.5 million and $1.0 million, respectively.
  • Contracted Sports Wagering. This segment consists of the Company’s on-site and online sports wagering “skins” (akin to websites) in Colorado and Indiana. Revenues and Adjusted Segment EBITDA were both $1.6 million in the third quarter of 2021, reflecting the launch of two additional sports wagering skins on April 1 and April 23, 2021. Currently, five of the Company’s six permitted sports wagering skins are operating. For the third quarter of 2020, when only two sports wagering skins were live, revenues and Adjusted Segment EBITDA were $679,000 and $631,000, respectively.

    We receive a percentage of defined revenues of each skin, subject to annual minimums. When all six skins are in operation, we should receive a contractual minimum of $7 million per year of annualized revenues, with minimal related expenses. We also received $6 million of “market access fees” when the agreements were signed in 2019. Such fees were capitalized and are being recorded as income over the ten-year lives of the contracts.

  • Corporate. Corporate expenses were higher than the prior-year period and consistent with recent quarters, largely due to additional professional fees, a gradual resumption of activities in late 2020 following the closure period, and an increase in accrued bonus compensation, reflecting the Company’s improved operating results.
  • Terre Haute Casino Proposal. In September 2021, in response to an application process launched by the Indiana Gaming Commission (“IGC”), the Company submitted a proposal for an extraordinary gaming and entertainment destination for Terre Haute, Indiana. Named American Place, it would be developed on 32 acres of land that the Company currently has under contract. The site is located approximately one hour west of Indianapolis and within 100 miles of Champaign-Urbana and Decatur, Illinois, as well as Lafayette, Indiana. It is highly visible from Interstate 70 and convenient to the I-70/SR 46 interchange.

    Full House’s proposed design is unique in several respects. The four-star, 100-room hotel is elevated above an interior greenscape, in a shape resembling a “happy smile.” The hotel appears to float above a fountain that surrounds its base. This design allows a majority of the guest rooms to be located on upper levels and to enjoy extended views. Atop the hotel is a pool deck and restaurant, featuring sushi and robata grill entrees, overlooking the Wabash Valley. Along the busy neighboring freeway, Full House plans to build a large greenhouse, offering a lush interior environment. Within the greenhouse, the project would have two restaurants that offer “outdoor” dining, even in winter, as well as venues for weddings and other group events. The world-class casino would be located between the hotel and the greenhouse and offer approximately 1,000 slot machines, 50 table games, and a state-of-the-art sportsbook. Atop the casino, the Company has planned for a solar energy farm, which would provide green, sustainable energy for a portion of the complex’s electrical needs.

    Full House is slated to present, in person, its American Place proposal to the IGC on November 17. The IGC has indicated that it expects to select its favored proposal from the four submittals on that same day. If awarded the gaming license, the Company has proposed to operate a temporary casino during construction of the larger permanent facility, subject to IGC approval. For detailed renderings of the project, please visit www.AmericanPlace.com.

  • Waukegan Casino Proposal. In October 2019, the Company submitted a proposal to the Illinois Gaming Board (“IGB”) to develop and operate a casino and entertainment destination in Waukegan, Illinois, also to be named American Place. It would include a world-class casino with a state-of-the-art sports book; a premium boutique hotel comprised of twenty luxurious villas, each ranging from 1,500 to 2,500 square feet with full butler service; a 1,500-seat live entertainment venue; a gourmet restaurant that will rival the finest restaurants in Chicago; additional eateries and bars; and other amenities that will attract gaming and non-gaming patrons from throughout Chicagoland and beyond. A second phase of American Place is expected to include a four-star hotel with 150 rooms.

    Full House is one of two finalists, each of which presented the merits of its Waukegan proposal to the IGB in October 2021. The IGB has indicated that it expects to select its favored developer for the Waukegan gaming license by early January 2022. If selected, Full House intends to operate a temporary casino during construction of the larger, more lavish, permanent facility.

Compliance Updates

Tennessee Sports Wagering Council Takes Action Against Illegal Sportsbook

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The Tennessee Sports Wagering Council through its executive director issued $50,000 in fines to Bovada.lv, an unlicensed and therefore illegal sportsbook operating in Tennessee.

Bovada failed to comply with cease and desist letters delivered to addresses in Curaçao, and Council investigators placed wagers through Bovada’s platform on three separate occasions, including as recently as October 16, 2024.

The Sports Gaming Act authorizes the Council to impose a $10,000 fine for the first offense of accepting wagers without a license, which rises to $15,000 for the second offense, and $25,000 for the third offense. Subsequent offenses may lead to the imposition of a $25,000 fine for each occurrence, an occurrence being a single wager accepted in Tennessee.

In the cease and desist letters, the Council ordered Bovada to allow all Tennessee users to withdraw any funds currently held by the unlicensed sportsbook.

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“The Sports Wagering Council recommends that Tennessee users of Bovada withdraw their funds immediately. Our primary role is the protection of the public interest through a safe, regulated environment, and Tennessee sports bettors need to know that just because they can access a sports betting website or app inside Tennessee’s borders does not mean it is licensed to do business here,” Mary Beth Thomas, Executive Director of Tennessee Sports Wagering Council, said.

Legal sportsbook operators provide important bettor protections not found in the illegal market. If an individual wagers with unlicensed sportsbooks, their sensitive financial and personal information may not be protected and could even be shared with criminal enterprises. The bettor’s money could be withheld or disappear without a way to recover it.

The SWC is working closely with its network of law enforcement at the state and federal level to eradicate illegal sportsbooks such as Bovada and others.

Tennessee is the largest “online-only” sports betting market in the US, with more than $4.7 billion wagered in Tennessee last fiscal year through online sportsbooks licensed by the Council.

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Gambling in the USA

Phoenix Link by Aristocrat Gaming Now Lighting Up Casino Floors

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The hottest new game from Aristocrat Gaming, Phoenix Link, is now live on casino floors, with Yaamava’ Resort & Casino being the first in North America to offer the highly-anticipated game. As the next evolution of the international hit game, Dragon Link, Phoenix Link features player-favorite mechanics from top games with all-new themes, features, and bonuses.

“We have been humbled by the incredible global fanfare Dragon Link has received over the years but are never ones to rest on our laurels. The teams have been working tirelessly on a follow-up that brings together all the player-favorite elements in a new and exciting way with Phoenix Link as the proud result. We were thrilled to partner with Yaamava’ to premiere Phoenix Link with flair, excitement, and celebration,” said Victor Duarte, executive vice president of product for Aristocrat Gaming.

Phoenix Link players will enjoy the game’s additional denominations, configurations, and jackpots on each of the launch game theme titles. Gameplay features include Hold & Spin, Free Games with multiplier wilds or twin spin reels, Phoenix Mystery trigger, and more new bonus twists. Phoenix Link is available on the Neptune Single cabinet.

“Yaamava’ is thrilled to host yet another world premiere in gaming with the launch of Phoenix Link by Aristocrat Gaming. Our Club Serrano members are already raving about this captivating extension of the player-favorite Dragon Link. It’s a great addition to the Yaamava’ gaming floor,” said Kenji Hall, General Manager of Yaamava’ Resort & Casino at San Manuel, said.

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Latest News

Panel on the benefits of regulation in the Mexican iGaming market

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On November 6, the iGaming industry in Mexico is preparing for a key event in which the benefits and challenges that regulation has brought to the Mexican market will be discussed. Under the title “Benefits of Regulation in the Mexican Market”, this panel will offer an in-depth look at the impact of regulation on transparency, competition and consumer protection, critical issues in the new digital era of iGaming.

The event, moderated by Geraldine Alexandra García Torres, Media Manager of Digital Gaming News, will feature the participation of recognized figures in the sector such as Daniel Magariños, representative of BMM Testlabs, and Hermilo Peregrina Cabrera of Prometeo IT Solutions. Both panelists will contribute their extensive knowledge and experience in regulation and certification in the Mexican market, and will analyze with the public the challenges and opportunities that companies face in an increasingly competitive and regulated context.

BMM Testlabs, who will participate as a Gold Sponsor, underlines with its sponsorship the importance of regulation to strengthen the iGaming sector in Mexico and demonstrates its commitment to progress and transparency in the Mexican market. For its part, Kushki joins as a Silver Sponsor, promoting the dialogue and analysis necessary for the industry.

Daniel Magariños, from BMM Testlabs, expressed his enthusiasm for participating in this digital webinar: “It has been a pleasure to be able to share our comments as a Laboratory on a market like the Mexican one and exchange opinions with a reference like Hermilo and the company Prometeo IT Solutions, with its excellent track record in this market. A relaxed talk with a lot of learning that I hope will be interesting for the attendees.”

For his part, Hermilo Peregrina, from Prometeo IT Solutions, highlighted the relevance of these spaces for dialogue: “Thank you to Conferencias iGaming for the invitation to participate in this panel. Thanks to Geraldine for coordinating us, and it was a pleasure to share ideas and opinions with my friend Daniel from BMM Testlabs, who has extensive experience in international regulations and certifications.”

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Sponsor Support

The panel has the support of important sponsors who recognize the relevance of regulation in the development of the iGaming market in Mexico. Among them, BMM Testlabs as Gold Sponsor, and Kushki as Silver Sponsor.

Event Details:

Date: November 6

Time: 10:00 a.m. (Mexico)

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Registration: Register here

Don’t miss the opportunity to be part of this essential conversation for the future of the industry. Secure your place and access a key analysis on the dynamic iGaming market in Mexico!

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