US – Full House Resorts says it had a ‘phenomenal’ end to the yearBy Phil - 10 March 2021
Las Vegas-based Full House Resorts, has said it had a ‘phenomenal’ fourth quarter fuelled by ‘new marketing programs and staffing improvements’ as well as more sports betting options with a number of new betting sites launched in the quarter.
Revenues at the company’s casinos; Silver Slipper Casino in Mississippi, Grand Lodge and Stockman’s in Nevada, Rising Star Casino Resort in Indiana and Bronco Billy’s in Colorado, were down to $38.3 million from $39m for the prior-year quarter whilst net income for the fourth quarter of 2020 rose to $3.5m from a net loss of $4.1m.
The company said: “This strong growth primarily reflects new marketing programs and staffing improvements enacted in late 2019 and early 2020 at the company’s properties. Results for the fourth quarter of 2020 also include $0.6m of revenue related to a full quarter of operations for two of the company’s six permitted sports wagering websites and approximately one week of operations from a third sports wagering website. The company expects the other three websites to begin operations shortly.”
“Much like our third quarter, we had a phenomenal fourth quarter,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “The fourth quarter tends to be seasonally weaker than the third quarter, but our properties continued to perform extremely well adjusted for the seasonality. Adjusted EBITDA for the second half of 2020 was more than the total for all of 2019. We now have approximately eight months of successful ‘reset operations’ behind us. While capacity restrictions remain, as well as some additional costs related to the pandemic, so do the structural changes that we have made regarding our marketing and the ways we operate. We continue to believe that these results of the past several months are sustainable.”
“Many of the changes to our business operations were in the implementation process prior to the pandemic. For example, at both Bronco Billy’s and Rising Star, we replaced antiquated slot marketing systems late in 2019. With the improved systems, we are now able to provide a better customer experience, while the improved analytics of those systems have allowed us to eliminate unprofitable marketing offerings that cost us more than the incremental revenue they created.
“Physical improvements that we made in recent years have also helped our results. We refurbished the casino and buffet at the Silver Slipper, for example, in 2019. We built a new restaurant at Rising Star, also in 2019, which now supplants the unprofitable buffet we had been operating. The ferry boat service we implemented at Rising Star in 2018 has now become a contributor to our results when one considers the same-day gaming activity of ferry boat passengers, which we can track with the new system.
“Our sports ‘skins’ also continue to go live. In late 2020, an affiliate of Wynn Resorts launched its sports offering through one of our licenses in Colorado. As of today, two of our three permitted skins are live in Colorado and one of our three permitted skins is live in Indiana. We receive a percentage of defined revenues of each skin, subject to annual minimums. Combined, these three sports wagering websites represent a minimum of $3.5m of annualized contractual revenue. We continue to expect our three remaining skins to go live shortly. When all six skins are in operation, we should receive a contractual minimum of $7m per year of sports gaming revenues. Since we incur very little expense related to these operations, almost all of such revenues should result in income.”
Mr. Lee added: “Prior to completing the funding of our Cripple Creek project, we expanded the project’s size. In November, Colorado voters eliminated betting limits and permitted new table games, which significantly enhanced the already-favorable feasibility of the project. To address this larger opportunity, we increased the size of our Cripple Creek hotel by 67 per cent to 300 guest rooms, leaving other aspects of the project largely unchanged. For various reasons, this required the approval of the Cripple Creek City Council and the city’s Historic Preservation Commission, which we received in January and February. The total remaining investment to complete our Cripple Creek project is approximately $180m, which was fully funded through our recent debt offering. We believe that our project will be transformational for Cripple Creek. It is not an expansion of our existing Bronco Billy’s casino; it is an entirely new casino hotel, with its own unique name and personality, that happens to be located adjacent to, and behind, Bronco Billy’s. We look forward to disclosing that name and personality at a future date. With funding complete, we recently restarted construction of the project and plan to welcome guests to our new casino hotel beginning in the fourth quarter of 2022. Bronco Billy’s will remain open during construction and points earned in the Bronco Billy’s loyalty program will be redeemable at the new property, which will be connected to Bronco Billy’s.”