Analyst: Full House expansion to its Colorado casino a plus for the region Howard Stutz, CDC Gaming Reports · February 8, 2021 at 7:52 am One gaming analyst suggested the plans by casino operator Full House Resorts to expand its casino in Cripple Creek, Colorado would not only improve the company’s standing in the state but change the entire market. In a research note published last week, Macquarie Securities gaming analyst Chad Beynon predicted Full House’s $180 million expansion and redevelopment of Bronco Billy’s Casino and Hotel, coupled with Colorado’s voter enacted gaming changes, could serve as the impetus to the state doubling its annual gaming revenues over time. “We think the proposed Cripple Creek expansion has the potential to transform the property and market, and we believe investors share our enthusiasm for the project,” Beynon wrote. Last week, Full House said it was raising $300 million in new debt to help cover the costs of the expansion, which the Las Vegas-based company increased in size and scope by 67%, including a 300-room luxury hotel tower. Other planned amenities for the expansion – a new parking garage, meeting and entertainment space, an outdoor rooftop pool, spa, and a fine-dining restaurant – remain largely unchanged. Colorado’s newly expanded gaming offerings propelled the expansion. Last November, Colorado voters approved Amendment 77, which removed the state’s $100 wagering limit on a single bet and allows casinos to begin offering several previously forbidden games, such as baccarat, keno, and the big six wheel. “While the company still had grandiose plans, recent financing only allowed for a $15 million parking garage, which was halted to conserve capital,” Beynon told investors. “However, after a record third quarter (and) the passing of Amendment 77, Full House is now in position to construct its dream project.” Full House said it would complete the expansion in one phase by the end of 2022. Cripple Creek draws customers from Colorado Springs and the state’s South Front Range, which 45 miles from the community. Analysts have said the passage of the gaming expansion could be worth millions of dollars in revenue to casino operators in Central City, Black Hawk, and Cripple Creek. Meanwhile, Full House said in a Securities and Exchange Commission filing it would use the $300 million in new debt to redeem $106.8 million of debt due in 2024 and fund the Bronco Billy’s expansion. Any leftover proceeds would go toward fees and expenses related to the offer and for general corporate purposes. Full House had total debt at the end of September of $107.1 million, in addition to $5.6 million in outstanding secured loans obtained under the CARES Act last April. Beynon cited several other catalysts for Full House, including its sports betting deals in Colorado and Indiana that are supplying $7 million in annual revenue to the company, and a healthy regional gaming market. In addition to Cripple Creek, Full House operates the Silver Slipper on the Mississippi Gulf Coast, Rising Star in Indiana, and two casinos in Northern Nevada at the Hyatt in Lake Tahoe and Stockman’s in Fallon. Full House is also in the running for a casino project in Waukegan, Illinois. Beynon increased his stock price target for Full House from $6 a share to $8. The company closed Friday on the Nasdaq at $6.71. (Disclosure: Ken Adams, CDC Gaming Reports’ senior analyst, is a member of the Full House board of directors) Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.