As the gaming industry continues to evolve, Full House Resorts remains at the forefront, capitalizing on opportunities, expanding its reach and delivering compelling experiences to its patrons.
In the second quarter of 2023, Full House Resorts reported consolidated revenues of US$59.4 million, a 33.8 percent increase from the previous year. However, it also incurred a net loss of US $5.6 million, including preopening costs for the Chamonix project and significant depreciation charges for The Temporary. Adjusted EBITDA was US $10.5 million, down from US $12.1 million in the previous year, due to various factors including marketing and training expenses for The Temporary.
Full House Resorts had US$113.6 million in cash and cash equivalents as of end of June 2023. Their debt primarily consists of US$450 million in outstanding senior secured notes due 2028 and US$27.0 million under a revolving credit facility.
Comments from President and CEO
“As with last quarter, our financial results continue to benefit from structural changes throughout the company,” said Daniel Lee, President and CEO of Full House Resorts (in photo above).
“These operating results are significantly above not only the 2020 period, but also meaningfully above any second quarter or first-half results in at least the past five years. These strong continued results have allowed us to continue to re-invest in, and improve, our properties. For example, with the ramp-up of our new marketing systems at Bronco Billy’s and Rising Star largely complete, we now look forward to upgrading the casino marketing systems at our two Nevada properties, scheduled for this year’s fourth quarter.”
First full quarter for The Temporary by American Place
A new casino, The Temporary by American Place reported its first full quarter of operations with US$20.3 million in revenue and US$4.1 million in Adjusted Property EBITDA. Visitor numbers initially surged, and win per admission increased since opening. However, expenses were higher due to personnel training and marketing. The property currently operates 30 out of 48 planned table games due to staffing challenges. The high-end restaurant is set to open later in the year, and an on-site sportsbook partnership with Circa Sports is expected to launch soon.
Hiring dealers inWaukegan, Illinois
The Temporary casino in Waukegan, Illinois, opened in February 2023 with limited services and hours. It now operates 24/7 on weekends and extended hours during the week. The property has increased table game betting limits and is hiring and training more dealers to expand its gaming offerings. An on-site sportsbook in partnership with Circa Sports is also anticipated to open soon.
Chamonix project, Coloradoto open in December
Construction continues at the Chamonix project in Colorado, with the main hotel tower nearing completion. Furniture installation is set to begin, and the casino and high-end restaurant millwork is in progress. Hotel reservations for Chamonix will open soon, with a planned opening date of December 26, 2023, aiming to be one of the best casino hotels in the Midwest.
Second quarter highlights and subsequent Events
In the second quarter of 2023, the Midwest & South segment, which includes Silver Slipper Casino and Hotel, Rising Star Casino Resort, and The Temporary by American Place, reported revenues of US $49.9 million. This marked a substantial 51.5 percent increase compared to the prior-year period when it generated US $32.9 million. Additionally, Adjusted Segment EBITDA increased to US$9.4 million, reflecting a 2.6 percent rise from the previous year’s US$9.1 million.
The significant growth in revenue and Adjusted Segment EBITDA can be attributed to the opening of The Temporary in February 2023. During the second quarter of 2023, The Temporary contributed US$20.3 million in revenue and US$4.1 million in Adjusted Property EBITDA. The company anticipates further improvement in The Temporary’s results in the upcoming quarters as its customer database expands, and early expenses related to marketing and labor normalize. It’s worth noting that in the same quarter of the previous year, Rising Star’s sale of “free play” contributed US$2.1 million in revenue and income.
Excluding the results from The Temporary, same-store revenues decreased to US$29.6 million from US$32.9 million. This decline is primarily attributed to the sale of “free play” at Rising Star, along with increased labor expenses and insurance costs at Silver Slipper, which led to a decline in Same-store Adjusted Segment EBITDA to $US5.3 million fromUS $9.1 million.
Bad weather in Lake Tahoe impacts results
West Segment: The West segment includes Grand Lodge Casino, Stockman’s Casino, Bronco Billy’s Casino and Hotel, and the expected Chamonix Casino Hotel opening in December 2023. In the second quarter of 2023, this segment reported revenues of US$8.1 million, a decrease from the prior-year period when it generated US$9.3 million. Adjusted Segment EBITDA for the current quarter was US$0.2 million, significantly lower than the previous year’s US$1.7 million.
The decline in revenue and Adjusted Segment EBITDA can be attributed to the temporary loss of all on-site parking and on-site hotel rooms at Bronco Billy’s due to the construction of Chamonix. Additionally, heavy winter snowfall in the Lake Tahoe region delayed the return of seasonal residents to Incline Village during the current period.
Growth in sports wagering
The Contracted Sports Wagering segment encompasses on-site and online sports wagering “skins” in Colorado, Indiana, and, upon launch, Illinois. In the second quarter of 2023, both revenues and Adjusted Segment EBITDA were $1.4 million. This reflects the activation of all three permitted skins in Colorado and two of the three skins in Indiana. In the prior-year period, both revenues and Adjusted EBITDA were US $2.2 million. This decrease is primarily due to an acceleration of deferred revenue for two agreements that ceased operations in May 2022 when one of the contracted parties terminated its online operations.
It’s important to note that the results from the Illinois sports skin are not yet included in this segment. For the Illinois sports skin, the company will receive a percentage of revenues as defined in the contract, subject to a minimum amount of $5 million per year. Revenue payments for the Illinois sports skin are expected to commence in August 2023, irrespective of whether online sports wagering operations have begun. The total annualized minimum amount for all six of the company’s current sports wagering agreements will reach $10 million once the Illinois skin is live.
Revolving credit facility
As of June 30, 2023, the company had a total of US$113.6 million in cash and cash equivalents. This amount includes US$78.1 million held in reserve under their bond indentures, allocated for the completion of the Chamonix construction project. The company’s debt primarily consists of US$450.0 million in outstanding senior secured notes due in 2028, which can be called at specified premiums starting in February 2024. Additionally, there is US$27.0 million outstanding under the company’s revolving credit facility.
Full House Stock Qyote (Daily)
Pioneering growth
Full House Resorts is a dynamic player in the gaming industry, with a diverse portfolio of owned, leased and operated gaming facilities across the United States. These properties include The Temporary by American Place in Waukegan, Illinois; Silver Slipper Casino and Hotel in Hancock County, Mississippi; Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; Stockman’s Casino in Fallon, Nevada; and Grand Lodge Casino, located within the Hyatt Regency Lake Tahoe Resort, Spa, and Casino in Incline Village, Nevada.
Full House Resorts has consistently demonstrated its commitment to growth and innovation, as exemplified by the recent opening of The Temporary. This new addition to their portfolio reported impressive revenue and EBITDA figures within its first quarter of operation. The company is poised for further success with the upcoming launch of Chamonix Casino Hotel in Cripple Creek, Colorado, projected for December 2023.
Expansion in the gaming industry
Full House Resorts’ strategic vision and dedication to growth in the gaming industry are evident in its expanding portfolio of properties and the impressive performance of recent additions like The Temporary. With the imminent opening of Chamonix Casino Hotel, Full House Resorts is well-positioned to continue its success and provide exceptional gaming and entertainment experiences to a broad audience.
