Regional casino operator Full House Resorts is running a little more than half its slot machines at its five casinos in four states with just three of its properties open for only a few weeks in June.
Despite operating constraints, that included the extra costs associated with health, safety, cleaning and social distancing guidelines under the state’s COVID-19 protocols, CEO Dan Lee had an upbeat attitude Thursday toward the Las Vegas-based company’s second-quarter results.
“It’s odd to say this, but it was an extremely good quarter,” Lee said on a conference call, describing what it was like operating during a pandemic. “It was an unprecedented situation”
He said the company had reduced payroll and promotional expenses in all the company’s markets.
For example, in June consolidated cash flow was up 60% over the same month last year. He credited the company’s flagship Silver Slipper property in Bay St. Louis, Mississippi, which reopened in late May.
“On several metrics, June 2020 was the best month in the Silver Slipper’s 14-year history,” Lee said.
For the quarter, Full House Resorts net revenue declined 65% to $14.5 million, compared to $41.7 million in the 2019 second quarter. The company’s net loss was $6.7 million compared to a loss of $1 million a year ago. Cash flow was a loss of $1.4 million.
“We are currently operating only about 1,650 slot machines to ensure proper distancing between slot players, versus the nearly 3,000 slot machines that we operated in the first quarter,” Lee said.
Full House did pick up revenues of roughly $500,000 in the second quarter from limited online sports betting operations in Indiana and Colorado. The company has six online betting skins – three associated with Rising Star in Indiana and three with Bronco Billy’s in Colorado.
“Our final four skins are expected to launch this quarter, pending the receipt of customary regulatory approvals,” Lee said. “When all of our contracted sports wagering websites have commenced operations, our sports wagering revenue, based on the contractual minimums, should total at least $7 million on an annualized basis.”
Silver Slipper, which reopened on May 21 following its March 16 closure, had net revenues of $6.4 million during June and $9.1 million for the full quarter. During June, cash flow at the casino increased 28% to $1.7 million from $1.3 million in June 2019, despite the numerous operating restrictions.
Lee said Full House is holding off on a hotel expansion at the Silver Slipper due to the pandemic.
Total revenues at Bronco Billy’s in Cripple Creek were $1.7 million in just 16 days of operation during June compared to $2.3 million a year ago. Adjusted cash flow at the property during June increased 95% to $677,000 from $348,000 in June 2019.
Full House said its Bronco Billy’s and Rising Star received a combined $5.6 million of total loan proceeds under the CARES Act. Lee said the money was used to rehire several hundred employees at the two casinos. The loans have a 1% interest rate and mature in May 2022, though recently passed legislation allows for the maturity date to potentially be extended to May 2025.
Shares of Full House closed at $1.68 on the Nasdaq Thursday, up 27 cents or 19.15%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
