Regional casino operator Full House Resorts raised $350 million last month that it expects to utilize in developing Chamonix Casino Hotel, a new property adjacent to the company’s Bronco Billy’s Casino in Cripple Creek, Colorado.
Macquarie Securities gaming analyst Chad Beynon said the company’s improved cash position might also help in the effort to win its bid for a casino project in Waukegan, Illinois.
Beynon, in a research note, said financing had been a concern surrounding Full House’s American Casino proposal for the city roughly 40 miles north of downtown Chicago and 15 miles south of the Wisconsin state line.
“We believe this improves the capital structure in several ways,” Beynon said, noting the company’s balance sheet “improves the probability of Waukegan.”
Full House’s $375 million American Place development was one of three potential casino projects recommended in October by the Waukegan City Council to state gaming regulators. It’s unclear when a decision will be reached.
Waukegan is one of six locations targeted almost two years ago when Illinois lawmakers approved the nation’s largest gaming industry expansion to an existing market in more than a decade.
In the meantime, Las Vegas-based Full House announced expansion plans for two of the company’s five casinos.
In Colorado, the renovation of Bronco Billy’s was turned last month into a $180 million project named for Chamonix-Mont Blanc, the French alpine resort and site of the first Winter Olympics in 1924.
The planned 300-room hotel will double Cripple Creek’s current hotel capacity.
“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 said.
The historic mining town draws business from Colorado Springs and the South Front Range market, which is 45 miles from the community.
“A more competitive market allows for higher average daily room rate to move up over time,” Beynon said. “A case study done at the beginning of the project suggested that based on factors in comparable markets, Colorado has the ability over time to double gaming revenues.”
Beynon predicted Full House and other Colorado casino operators will benefit when voter-approved Amendment 77 is implemented. The measure 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.
Full House is also looking the expand the Silver Slipper in Bay St. Louis, Mississippi, including doubling the property’s hotel size with a 150-room waterfront addition. Full House said it would spend $75 million on the project.
Shares of Full House closed at $9.50 on the Nasdaq and are up almost 50% over the past 12 months.
Beynon said the company has several catalysts in play that could lift the balance sheet, including sports betting skins that pay Full House $7 million annually, a new Indiana gaming tax rate is scheduled to go into effect in July, and a healthy regional gaming environment.
(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 hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
