Full House Resorts returns to profitability despite a decline in 1Q

A rendering of American Place Waukegan. (Full House Resorts)

Buoyed by the announcement that it will partner with Circa Sports at its sportsbook in Illinois, Full House Resorts Inc. reported a return to profitability in the first quarter despite a slight decline in revenue.

The company on Monday said it faced a tough comparison from a year ago because customers were spending money from stimulus checks in casinos during the first quarter of 2021.

Full House reported net income of $110,000, 0 cents per share, on revenue of $41.4 million for the quarter that ended March 31. In the same quarter a year earlier, Full House reported a net loss of $3.4 million, 13 cents a share, on revenue of $42.2 million, a 1.9 percent decline from last year.

Las Vegas-based Full House is in the midst of two major out-of-state casino construction projects.

“Our first-quarter results were solid, given adverse hold percentages at two of our properties and meaningful – but planned — construction disruptions at Bronco Billy’s (in Cripple Creek, Colorado) to hasten the completion of Chamonix,” said Dan Lee, president and CEO of Full House. “Silver Slipper (in Mississippi) had a solid quarter, though the launch of online sports wagering in nearby Louisiana has resulted in declines in its on-site sports wagering operations. On-site sports wagering operations contributed less than 5 percent of the property’s adjusted cash flow in 2021. Otherwise, our properties continue to perform as expected in recent weeks.”

Lee said massive increases in the costs of insurance and crab legs at the Mississippi property contributed to weaker results there.

Insurance prices went up because of recent hurricanes and flooding that damaged properties along the Gulf Coast. The company also is reluctant to increase its buffet prices because crab legs are a signature dish for the buffet.

“We made significant progress on our expansion plans,” Lee said. “In Waukegan, Illinois, we received approvals last week to begin construction on The Temporary at American Place, and immediately began work on site fencing and erosion control so that excavation for the foundations can begin this week.”

Fabrication of the temporary structure has been completed and is expected to arrive on-site in early June. The company has begun hiring its senior management team for The Temporary.

“It took longer than expected to begin construction, moving our projected opening date from the summer into the fall,” he said.

The Temporary is the name given to the temporary casino site the state has given Full House permission to build on the site of American Place, an entertainment destination within Waukegan’s Fountain Square district.

The permanent casino facility will include 1,600 slot machines, 100 table games, a 20-villa hotel, a 1,500-seat live entertainment venue, and a variety of bars and restaurants. The 20 villas are being built in the initial construction with a 150-room hotel planned in the future.

Chamonix, a resort under construction in central Colorado, is also underway.

“At our Chamonix project in Cripple Creek, Colorado, we have topped out the elevator towers and are working on the guest room and meeting areas,” Lee said.

“We believe Chamonix will be the first high-quality casino hotel in Cripple Creek when it opens in the second quarter of 2023. We expect it to meaningfully grow the market’s gaming revenue and generate a strong return on investment for our company, similar to what has occurred in Black Hawk when higher-quality casinos have been added to that market.”

Lee decried the beating all Wall Street markets took Monday.

Full House, traded on the Nasdaq exchange, fell 77 cents a share, 9.8 percent, to $7.10 a share on volume nearly three times the daily average in Monday trading. After hours, the stock faded even more, 35 cents a share, 4.9 percent, to end at around $6.75 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.