# Full House Resorts Inc: Form 10-Q for the period ended Mar 31, 2024

- Company: [Full House Resorts Inc](/companies/fll.md) (CIK 891482)
- Form: 10-Q
- Filed: 2024-05-09
- Accepted by EDGAR: May 8, 2024, 18:05 ET
- Period: 2024-03-31
- Accession: 0000891482-24-000018
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/891482/000089148224000018/fll-20240331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/891482/000089148224000018/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $69.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2024-01-01 to 2024-03-31 | $24.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | −$606.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $416.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −$11.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.33 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.33 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 34,590,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | −$4.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $22.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | $25.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $57.3m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $670.4m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $62.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | $603.2m | us-gaap:Liabilities |
| Long-term debt | at 2024-03-31 | $465.9m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-03-31 | $67.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 48,438 characters.

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. Please see “*Forward-Looking Statements”* for a discussion of the uncertainties, risks and assumptions that may cause our actual results to differ materially from those discussed in the forward-looking statements. This discussion should be read in conjunction with our historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes for the fiscal year ended December 31, 2023, which were included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 15, 2024. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods. Full House Resorts, Inc., together with its subsidiaries, may be referred to as “Full House,” the “Company,” “we,” “our” or “us,” except where stated or the context otherwise indicates.

### Executive Overview

Our primary business is the ownership and/or operation of casino and related hospitality and entertainment facilities, which includes offering, among other amenities, casino gambling, hotel accommodations, dining, golf, RV camping, sports betting, entertainment and retail outlets. We currently operate seven casinos: six on real estate that we own or lease and one located within a hotel owned by a third party. In February 2023, we opened our temporary American Place facility, which we are permitted to operate until August 2027; we have already begun the design work for the permanent replacement facility. In December 2023, we began the phased opening of our newest property, Chamonix Casino Hotel (“Chamonix”), located adjacent to our existing Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado. Additionally, we benefit from seven permitted sports wagering “skins” – three in Colorado, three in Indiana, and one in Illinois. Other companies operate the active sports wagering websites under their brands, paying us a percentage of revenues, as defined, subject to annual minimum amounts. Regarding our remaining idle skins, we continue to evaluate whether to operate them ourselves or to have other third parties operate them. However, there is no certainty that we will be able to enter into agreements with replacement operators or successfully operate the skins ourselves.

The following table identifies our segments, along with properties and their locations:

|  |  |  |
| --- | --- | --- |
| ​ | ​ | ​ |
| **Segments and Properties** | ​ | **Locations** |
| **Midwest & South** | ​ | **​** |
| American Place\* | ​ | Waukegan, IL (northern suburb of Chicago) |
| Silver Slipper Casino and Hotel |  | Hancock County, MS (near New Orleans) |
| Rising Star Casino Resort |  | Rising Sun, IN (near Cincinnati) |
| **West** | ​ | **​** |
| Bronco Billy’s Casino and Chamonix Casino Hotel\* |  | Cripple Creek, CO (near Colorado Springs) |
| Grand Lodge Casino (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino) |  | Incline Village, NV (North Shore of Lake Tahoe) |
| Stockman’s Casino |  | Fallon, NV (one hour east of Reno) |
| **Contracted Sports Wagering** | ​ | ​ |
| Three sports wagering websites (“skins”), one of which is currently idle | ​ | Colorado |
| Three sports wagering websites (“skins”), two of which are currently idle | ​ | Indiana |
| One sports wagering website (“skin”), commenced in August 2023 | ​ | Illinois |

\* The temporary American Place facility and Chamonix opened on February 17 and December 27, 2023, respectively.

Our financial results are dependent upon the number of patrons that we attract to our properties and the amounts those guests spend per visit. While we provide credit at some of our casinos where permitted by gaming regulations, most of our revenues are cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our revenues are primarily derived from slot machines, but also include other gaming activities, including table games, keno and sports betting. In addition, we derive a significant amount of revenue from our hotels and our food and beverage outlets. We also derive revenues from our golf course and ferry boat service at Rising Star, our RV parks owned at Rising Star and managed at Silver Slipper, and retail outlets and entertainment. We often provide hotel rooms, food and beverages, entertainment, ferry usage, and golf privileges to customers on a complimentary basis; the value of such services is included as revenue in those categories, offset by contra-revenue in the casino revenue category. As a result, the casino revenues in our financial statements reflect patron gaming wins and losses, reduced by the retail value of complimentary services, the value of free play provided to customers, the value of points earned by casino customers that can be redeemed for services or free play, and adjustments for certain progressive jackpots offered by the Company.

We set minimum and maximum betting limits for our slot machines and table games based on market conditions, customer demand and other factors. Our gaming revenues are derived from a broad base of guests that includes both high- and low-stakes players. At Silver Slipper, our sports book operations are in partnership with a company specializing in race and sports betting. At Rising Star, Bronco Billy’s, and American Place, we have contracted with other companies to operate our online sports wagering skins under their own brands in exchange for a percentage of revenues, as defined, subject to annual minimum amounts. Our operating results may also be affected by, among other things, overall economic conditions affecting the disposable income of our guests, weather conditions affecting access to our properties, achieving and maintaining cost efficiencies, taxation and other regulatory changes, and competitive factors, including but not limited to, additions and improvements to the competitive supply of gaming facilities, as well as pandemics and similar widespread health emergencies.

We may experience significant fluctuations in our quarterly operating results due to seasonality, variations in gaming hold percentages, and other factors. Consequently, our operating results for any quarter, especially contrasted with different seasonal quarters, are not necessarily comparable. Results for any particular quarter or year may not be indicative of future periods’ results.

Our market environment is highly competitive and capital-intensive. Nevertheless, there are significant restrictions and barriers to entry vis-à-vis opening new casinos in most of the markets in which we operate. We rely on the ability of our properties to generate operating cash flow to pay interest, repay debt, and fund maintenance and certain growth-related capital expenditures. We continuously focus on improving the operating margins of our existing properties through a combination of revenue growth and expense management. We also assess growth and development opportunities, which include capital investments at our existing properties, the development of new properties, and the acquisition of existing properties.

#### Recent Developments

***Chamonix Casino Hotel.*** Designed to integrate with our adjacent Bronco Billy’s Casino, Chamonix is the only luxury casino hotel located near the Colorado Springs metropolitan area. On December 27, 2023, we began its phased opening, starting with the casino, meeting space, and approximately one-third of its 300 guestrooms. The remainder of Chamonix’s guestrooms came online gradually during the first quarter. Our high-end steakhouse, 980 Prime by Barry Dakake, began welcoming its first guests on April 19, 2024, and our pool and spa are expected to begin operations before Memorial Day weekend.

***American Place.*** In February 2023, we opened our temporary American Place facility in Waukegan, Illinois, which we are permitted to operate until August 2027. American Place currently includes approximately 940 slot machines, 48 table games, a fine-dining restaurant, two additional restaurants, a center bar and a sportsbook. We have already begun design work for the permanent American Place facility, which is expected to include a world-class casino, state-of-the-art sportsbook, premium boutique hotel comprised of 20 luxurious villas, and various food and beverage outlets.

### Key Performance Indicators

We use several key performance indicators to evaluate the operations of our properties. These key operating measures are presented as supplemental disclosures because management uses these measures to better understand period-over-period fluctuations in our casino and hotel operating revenues. These key performance indicators include the following and are disclosed in our discussions, where applicable, for certain jurisdictions on segment performance:

#### Gaming revenue indicators:

Slot coin-in is the gross dollar amount wagered in slot machines and table game drop is the total amount of cash or credit exchanged into chips at table games for use by our customers. Slot coin-in and table game drop are indicators of volume, and are monitored on a consolidated basis in relation to slot and table game win. Such metrics can be influenced by marketing activity and are not necessarily indicative of profitability trends.

Slot win is the difference between customer wagers and customer winnings on slot machines. Table game hold is the difference between the amount of money or markers exchanged into chips and customer winnings paid. Slot win and table game hold percentages represent the relationship between slot win and coin-in and table game win and drop. Both the slot win and table game hold percentages are monitored on a consolidated basis in our evaluation of Company performance.

#### Room revenue indicators:

Hotel occupancy rate is an indicator of the utilization of our available rooms. Complimentary room sales, or the retail value of accommodations gratuitously furnished to customers, are included in the calculation of the hotel occupancy rate.

#### Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Segment EBITDA Margin and Adjusted Property EBITDA:

Management uses Adjusted EBITDA as a measure of our performance. For a description of Adjusted EBITDA, see “Non-GAAP Financial Measure.” We utilize Adjusted Segment EBITDA, a financial measure in accordance with generally accepted accounting principles in the United States of America (“GAAP”), as the measure of segment profitability in assessing performance and allocating resources at the reportable segment level. For information regarding our operating segments, see Note 8. In addition, we use Adjusted Segment EBITDA Margin, which is calculated by dividing Adjusted Segment EBITDA by the segment’s total revenues.

Same-store Adjusted Segment EBITDA is Adjusted Segment EBITDA further adjusted to exclude the Adjusted Property EBITDA of properties that have not been in operation for a full year. Adjusted Property EBITDA is defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, certain impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, project development and acquisition costs, non-cash share-based compensation expense, and corporate-related costs and expenses that are not allocated to each property.

### Results of Operations

#### Consolidated operating results

The following tables summarize our consolidated operating results for the three months ended March 31, 2024 and 2023:

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2024 | ​ | ​ ​ 2023 | ​ ​ ​ ​ ​ ​ ​ Increase / (Decrease) |
| --- | --- | ---: | --- | ---: | ---: |
| Revenues | ​ | $69,924 | ​ | $50,106 | 39.6% |
| Operating expenses | ​ | 70,530 | ​ | 57,092 | 23.5% |
| Operating loss | ​ | (606) | ​ | (6,986) | 91.3% |
| Interest and other non-operating expenses, net | ​ | 10,250 | ​ | 4,464 | 129.6% |
| Income tax expense (benefit) | ​ | 416 | ​ | (35) | 1,288.6% |
| Net loss | ​ | $(11,272) | ​ | $(11,415) | 1.3% |

*(In thousands)*

| ​ ​ ​ Casino revenues | ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ ​ Increase / (Decrease) ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Slots | ​ | $42,509 | ​ | $31,528 |  | 34.8% |
| Table games | ​ | 9,040 | ​ | 4,351 |  | 107.8% |
| Other | ​ | 124 | ​ | 108 |  | 14.8% |
| ​ | ​ | 51,673 | ​ | 35,987 |  | 43.6% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Non-casino revenues, net** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Food and beverage | ​ | 9,769 | ​ | 7,660 |  | 27.5% |
| Hotel | ​ | 2,852 | ​ | 2,144 |  | 33.0% |
| Other | ​ | 5,630 | ​ | 4,315 |  | 30.5% |
| ​ | ​ | 18,251 | ​ | 14,119 |  | 29.3% |
| **Total revenues** | ​ | $69,924 | ​ | $50,106 |  | 39.6% |

*(In thousands)*

| ​ ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2024 ​ ​ ​ | ​ ​ ​ | ​ ​ ​ 2023 ​ ​ ​ | ​ ​ ​ ​ ​ | ​ ​ ​ Increase / (Decrease) ​ ​ |
| --- | ---: | --- | ---: | --- | ---: |
| Slot coin-in | $724,849 ​ | ​ | $540,228 ​ | ​ | 34.2% |
| Slot win(1) | $53,132 ​ | ​ | $41,165 ​ | ​ | 29.1% |
| Slot hold percentage(2) | ​ 7.3% | ​ | ​ 7.6% | ​ | (0.3) pts |
| Table game drop | $46,928 ​ | ​ | $25,955 ​ | ​ | 80.8% |
| Table game win(1) | $9,260 ​ | ​ | $4,417 ​ | ​ | 109.6% |
| Table game hold percentage(2) | ​ 19.7% | ​ | ​ 17.0% | ​ | 2.7 pts |

(1) Does not reflect reductions in casino revenues from “discretionary comps” (see Note 2 for more information on our customer loyalty programs).

(2) The three-year averages for slot hold percentage and table game hold percentage were 7.4% and 18.3%, respectively. A significant portion of our results in the recent and prospective quarters reflect the opening of two new casinos. Their win percentages may differ from historical averages.

The following discussion is based on our condensed consolidated financial statements for the three months ended March 31, 2024 and 2023.

**Revenues.** Consolidated total revenues increased by 39.6% (or $19.8 million) for the three months ended March 31, 2024 compared to the prior-year period. This was primarily due to a full quarter of operations in 2024 at American Place, which opened on February 17, 2023. Revenues during the first quarter of 2024 also benefited from the phased opening of Chamonix, which began on December 27, 2023. Gaming revenues from our integrated Bronco Billy’s/Chamonix facility increased by $3.6 million (or 115.6%), which helped offset gaming revenue declines at the Company’s other properties of $2.0 million (or 8.6%), when compared to the prior-year period.

For more information, see “*Supplemental Information – Same-store Operating Results.”*

**Operating Expenses.** Consolidated operating expenses increased by 23.5% (or $13.4 million) for the three months ended March 31, 2024, compared to the prior-year period. These increases were primarily due to the commencement of operations at American Place in February 2023 and Chamonix in December 2023. For American Place, these expenses included $6.2 million in selling, general and administrative costs, and $5.5 million in depreciation and amortization. Similarly for Chamonix, these expenses included $1.5 million of preopening costs, $3.8 million in selling, general and administrative costs, and $3.7 million in depreciation and amortization for the three months ended March 31, 2024.

See further information within our reportable segments described below.

### Interest and Other Non-Operating Expenses.

#### Interest Expense

Interest expense, net, consists of the following:

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2024 | ​ | ​ ​ 2023 |
| --- | --- | ---: | --- | ---: |
| Interest expense (excluding bond fee amortization and discounts/premiums) | ​ | $10,208 | ​ | $9,020 |
| Amortization of debt issuance costs and discounts/premiums | ​ | 743 | ​ | 547 |
| Capitalized interest | ​ | (361) | ​ | (3,472) |
| Interest income and other | ​ | ​ (340) | ​ | ​ (1,276) |
| ​ | ​ | $10,250 | ​ | $4,819 |

The increase in net interest expense for the three months ended March 31, 2024 was primarily due to reductions in capitalized interest, as construction of the temporary American Place and Chamonix facilities are largely complete. Additionally, as we invested cash into the construction of both projects, our cash balances were lower during the 2024 period, resulting in reduced interest income. Further, we issued $40.0 million in Additional Notes in February 2023, so the prior-year period reflects only a partial quarter of related interest expense.

#### Other Non-Operating Expenses, Net

For the three months ended March 31, 2024, we had no other non-operating expense. The corresponding prior-year period had $355,000 of other non-operating income, consisting primarily of insurance settlement proceeds from hurricane damage at Silver Slipper in 2020.

**Income Tax Expense.** We recognized an income tax provision of $416,000 and an income tax benefit of $35,000 for the respective three months ended March 31, 2024 and 2023, which resulted in effective income tax rates of (3.8%) and 0.3%, respectively. The change in the effective income tax rate was primarily due to the effects of tax amortization on indefinite-lived intangibles in 2024, as well as certain permanent differences between tax and financial reporting purposes.

We do not expect to pay any federal income taxes or receive any federal tax refunds related to our 2024 results. As we have incurred losses in prior periods, we anticipate any current-year taxable income will be offset by tax carryforwards from prior years. We continue to evaluate the ability to realize our deferred tax assets and need for a valuation allowance on a quarterly basis. The valuation allowance, and the potential reversal of such allowance, have no bearing on the taxes actually paid by the Company.

#### Operating Results – Reportable Segments

We manage our casinos based primarily on geographic regions within the United States and type of income. For more information, please refer to our earlier discussion within “Executive Overview” above.

The following table presents detail by segment of our consolidated revenues and Adjusted EBITDA; see “Non-GAAP Financial Measure” for additional information. Additionally, management uses Adjusted Segment EBITDA as the measure of segment profitability in accordance with GAAP.

*(In thousands)*

| ​ ​ ​ Revenues | ​ ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2024 ​ ​ ​ | ​ ​ ​ ​ ​ 2023 ​ ​ ​ | ​ ​ ​ ​ Increase / (Decrease) ​ ​ |
| --- | --- | ---: | ---: | ---: |
| Midwest & South |  | $54,632 ​ | $40,802 | 33.9% |
| West |  | 13,032 ​ | 8,124 | 60.4% |
| Contracted Sports Wagering | ​ | ​ 2,260 ​ | ​ 1,180 ​ | 91.5% |
| ​ |  | $69,924 ​ | $50,106 | 39.6% |
| **Adjusted Segment EBITDA and Adjusted EBITDA** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Midwest & South |  | $12,682 ​ | $10,687 | 18.7% |
| West |  | (133) ​ | 56 | (337.5)% |
| Contracted Sports Wagering | ​ | ​ 1,935 ​ | ​ 1,161 ​ | 66.7% |
| Adjusted Segment EBITDA |  | 14,484 ​ | 11,904 | 21.7% |
| Corporate |  | (2,075) ​ | (1,779) | 16.6% |
| Adjusted EBITDA |  | $12,409 ​ | $10,125 | 22.6% |
| ​ | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| **Adjusted Segment EBITDA Margin** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Midwest & South | ​ | ​ 23.2% | ​ 26.2% | (3.0) pts |
| West | ​ | ​ (1.0)% | ​ 0.7% | (1.7) pts |
| Contracted Sports Wagering | ​ | ​ 85.6% | ​ 98.4% | (12.8) pts |

#### Supplemental Information – Same-store Operating Results

The following table presents the financial results of our Midwest & South operations on a same-store basis for the three months ended March 31, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Same-store operations exclude results of new and acquired operating segments that have not been in operations for longer than a year, starting from the date of commencement or acquisition through the end of the reporting period. Accordingly, for Midwest & South, we have excluded the results of American Place for periods subsequent to its commencement of operations.

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2024 | ​ ​ ​ ​ ​ 2023 | ​ ​ ​ ​ Increase / (Decrease) |
| --- | --- | ---: | ---: | ---: |
| Midwest & South same-store total revenues(1) | ​ | $28,824 ​ | $30,382 ​ | (5.1)% |
| American Place | ​ | 25,808 ​ | 10,420 | 147.7% |
| Midwest & South total revenues | ​ | $54,632 ​ | $40,802 | 33.9% |
| **​** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Midwest & South same-store Adjusted Segment EBITDA(1) | ​ | $5,301 ​ | $7,114 ​ | (25.5)% |
| American Place | ​ | 7,381 ​ | 3,573 | 106.6% |
| Midwest & South Adjusted Segment EBITDA | ​ | $12,682 ​ | $10,687 | 18.7% |
| ​ | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Midwest & South same-store Adjusted Segment EBITDA margin(1) | ​ | ​ 18.4% | ​ 23.4% | (5.0) pts |
| American Place | ​ | ​ 28.6% | ​ 34.3% | (5.7) pts |
| Midwest & South Adjusted Segment EBITDA margin | ​ | ​ 23.2% | ​ 26.2% | (3.0) pts |

(1) Same-store operations exclude results from American Place, which opened on February 17, 2023.

The following table presents the financial results of our Contracted Sports Wagering operations on a same-store basis for the three months ended March 31, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Same-store operations exclude results of new and acquired operating segments that have not been in operations for longer than a year, starting from the date of commencement or acquisition through the end of the reporting period. Accordingly, for Contracted Sports Wagering, we have excluded the results in Illinois for periods subsequent to its contractual commencement of revenue payments.

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2024 | ​ ​ ​ ​ ​ 2023 | ​ ​ ​ ​ Increase / (Decrease) |
| --- | --- | ---: | ---: | ---: |
| Contracted Sports Wagering same-store total revenues(1) | ​ | $825 ​ | $1,180 ​ | (30.1)% |
| Illinois | ​ | 1,435 ​ | — | N.M. |
| Contracted Sports Wagering total revenues | ​ | $2,260 ​ | $1,180 | 91.5% |
| **​** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Contracted Sports Wagering same-store Adjusted Segment EBITDA(1) | ​ | $546 ​ | $1,161 ​ | (53.0)% |
| Illinois | ​ | 1,389 ​ | — | N.M. |
| Contracted Sports Wagering Adjusted Segment EBITDA | ​ | $1,935 ​ | $1,161 | 66.7% |
| ​ | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ |
| Contracted Sports Wagering same-store Adjusted Segment EBITDA margin(1) | ​ | ​ 66.2% | ​ 98.4% | (32.2) pts |
| Illinois | ​ | ​ 96.8% | ​ —% | 96.8 pts |
| Contracted Sports Wagering Adjusted Segment EBITDA margin | ​ | ​ 85.6% | ​ 98.4% | (12.8) pts |

N.M. Not meaningful.

(1) Same-store operations exclude results from Illinois, which contractually commenced on August 15, 2023.

### Midwest & South

Our Midwest & South segment includes Silver Slipper Casino and Hotel, Rising Star Casino Resort and American Place, which opened in Waukegan, Illinois, in February 2023. Total revenues for the three months ended March 31, 2024 increased by 33.9% (or $13.8 million), primarily due to a full quarter of operations from American Place. Excluding results from American Place, same-store revenues declined by 5.1% (or $1.6 million), in part due to adverse winter weather over several weekend periods, resulting in lower casino revenue.

Reflecting the February 2023 opening of American Place, casino revenue increased by 41.8% (or $12.1 million) for the three months ended March 31, 2024. Slot revenue for the segment increased by 30.3% (or $7.7 million), and table games revenue increased by 130.2% (or $4.4 million). Excluding results from American Place, same-store casino revenue declined by 10.4% (or $2.0 million) for the three months ended March 31, 2024, primarily due to lower slot and table games volumes at Silver Slipper and Rising Star, compared to the prior-year period. In addition to the adverse weather noted above, Rising Star continues to compete with a relatively new racetrack casino that opened in September 2022 in Northern Kentucky.

Non-casino revenue increased by 14.8% (or $1.8 million) for the three months ended March 31, 2024, largely due to increases in food and beverage revenue. Food and beverage revenue rose 23.4% (or $1.6 million), reflecting the opening of additional food and beverage venues, and expansion of operating hours, at American Place throughout 2023 and early 2024. Hotel revenues for the segment declined by 1.6% (or $32,000) for the three months ended March 31, 2024, as American Place does not currently have hotel operations.

Adjusted Segment EBITDA increased by 18.7% (or $2.0 million) for the three months ended March 31, 2024. This increase reflects a full quarter of operations at American Place, which generated $7.4 million of Adjusted Property EBITDA, offsetting a decline in same-store Adjusted Segment EBITDA from $7.1 million to $5.3 million (or 25.5%) for the three months ended March 31, 2024. Same-store operations were primarily affected by significant snowfall over several weekends, when the majority of guests typically visit our casinos, declines in casino revenues and higher operating costs at Silver Slipper, including property insurance.

### West

Our West segment includes Grand Lodge, Stockman’s Casino, Bronco Billy’s Casino and Hotel, and Chamonix Casino Hotel, which began its phased opening on December 27, 2023. The market in Cripple Creek, Colorado, is seasonal, favoring the summer months. Our Nevada operations have historically been seasonal, with the summer months accounting for a disproportionate share of annual revenues. Additionally, snowfall levels during the winter months can often affect operations, as Grand Lodge is located near several major ski resorts. While Grand Lodge typically benefits from a “good” snow year, resulting in extended periods of operation at the nearby ski areas, excessive snow levels can also result in challenging driving conditions or the closure of roads leading to the property.

Total revenues increased by 60.4% (or $4.9 million) for the three months ended March 31, 2024, primarily due to the phased opening of Chamonix, which was designed to integrate with existing operations at Bronco Billy’s. Results for the prior-year period reflected planned business disruptions to accommodate the construction of Chamonix.

Casino revenue increased by 50.9% (or $3.6 million) for the three months ended March 31, 2024, reflecting contributions from Chamonix and improved operating conditions at Bronco Billy’s. Slot revenue increased by 53.6% (or $3.3 million) for the three months ended March 31, 2024, despite decreases in slot volumes at Grand Lodge and Stockman’s. Table games revenue rose by $0.3 million (or 32.6%) for the three months ended March 31, 2024, with increased table games revenues from our Colorado operations, including Chamonix, accounting for the entire period-over-period change.

Non-casino revenue improved by $1.3 million for the three months ended March 31, 2024. Food and beverage revenues increased by $0.5 million for the three months ended March 31, 2024, and hotel revenues rose by $0.7 million. These improvements came from Chamonix, which benefited from the opening of its 300-room hotel gradually throughout the first quarter of 2024 and related increases in guest volumes at Chamonix’s and Bronco Billy’s restaurants.

Adjusted Segment EBITDA of $(0.1) million for the three months ended March 31, 2024 compares to $0.1 million in the prior-year period. Current-period results reflect the phased opening of Chamonix Casino Hotel, which is currently operating less efficiently than expected in future quarters. Elevated expenses include the training of new employees and additional marketing costs expected to benefit future operations. Results in the current period also reflect significant snowfall over several weekends, when guest traffic at our casinos is typically strongest, and the loss of electrical power to the entire city of Cripple Creek for three days.

### Contracted Sports Wagering

The Contracted Sports Wagering segment consists of our on-site and online sports wagering skins in Colorado, Indiana and Illinois.

For the three months ended March 31, 2024, revenues grew 91.5%, from $1.2 million in the prior-year period to $2.3 million, and Adjusted Segment EBITDA rose 66.7%, from $1.2 million to $1.9 million. These results reflect the launch of our permitted Illinois sports skin in August 2023. Under the Illinois sports wagering agreement, we receive a percentage of revenues (as defined), subject to an annualized minimum of $5 million, with minimal expected expenses. Additionally, we receive a percentage of on-site sports revenue, as defined. Such agreement contributed $1.4 million in revenues, as well as Adjusted Segment EBITDA, during the 2024 period.

Additionally, these results reflect the commencement of a replacement contract in Colorado, which began contributing to our results in March 2023, as well as a provision for credit losses on sports wagering receivables of $0.3 million in the first quarter of 2024. There was no such provision for the prior-year period.

We currently have two idle sports skins in Indiana and one idle sports skin in Colorado. We continue to evaluate whether to operate our idle skins ourselves or to have other third parties operate them. However, there is no certainty that we will be able to enter into agreements with replacement operators or successfully operate the skins ourselves.

### Corporate

Corporate expenses for the three months ended March 31, 2024 rose 16.6% (or $0.3 million), primarily due to an increase in third-party professional services, as compared to the prior-year period. Corporate expenses were $2.1 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively.

#### Non-GAAP Financial Measure

“Adjusted EBITDA” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, certain impairment charges, asset write-offs, recoveries, gain (loss) from asset disposals, project development and acquisition costs, and non-cash share-based compensation expense. Adjusted EBITDA information is presented solely as supplemental disclosure to measures reported in accordance with generally accepted accounting principles in the United States of America (“GAAP”) because management believes this measure is (i) a widely used measure of operating performance in the gaming and hospitality industries and (ii) a principal basis for valuation of gaming and hospitality companies. In addition, a version of Adjusted EBITDA (known as Consolidated Cash Flow) is utilized in the covenants within the Credit Facility, although not necessarily defined in the same way as above. Adjusted EBITDA is not, however, a measure of financial performance or liquidity under GAAP. Accordingly, this measure should be considered supplemental and not a substitute for net income (loss) or cash flows as an indicator of the Company’s operating performance or liquidity.

The following table presents a reconciliation of net loss and operating loss to Adjusted EBITDA:

*(In thousands)*

| ​ ​ ​ | ​ ​ Three Months Ended March 31, 2024 | ​ | ​ ​ 2023 |
| --- | --- | --- | --- |
| **Net loss** | $(11,272) | ​ | $(11,415) |
| Income tax expense (benefit) | ​ 416 | ​ | ​ (35) |
| Interest expense, net | ​ 10,250 | ​ | ​ 4,819 |
| Gain on insurance settlement | ​ — | ​ | ​ (355) |
| **Operating loss** | ​ (606) | ​ | ​ (6,986) |
| Project development costs | ​ — | ​ | ​ 7 |
| Preopening costs | ​ 1,663 | ​ | ​ 10,497 |
| Depreciation and amortization | ​ 10,625 | ​ | ​ 5,859 |
| Loss on disposal of assets | ​ 18 | ​ | ​ — |
| Stock-based compensation | ​ 709 | ​ | ​ 748 |
| **Adjusted EBITDA** | $12,409 | ​ | $10,125 |

The following tables present reconciliations of operating income (loss) to Adjusted Segment EBITDA and Adjusted EBITDA.

*Three Months Ended March 31, 2024*

*(In thousands)*

| ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reporting segments | ​ ​ ​ ​ ​ ​ Operating Income (Loss) ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Depreciation and Amortization ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Loss on Disposal of Assets ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ Preopening Costs ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Stock- Based Compensation ​ | ​ ​ ​ ​ ​ | ​ ​ Adjusted Segment EBITDA and Adjusted EBITDA ​ |
| --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Midwest & South ​ | $5,809 | ​ | $6,736 | ​ | $18 | ​ | $119 | ​ | $— | ​ | $12,682 |
| West ​ | (5,536) | ​ | 3,859 | ​ | — | ​ | 1,544 | ​ | — | ​ | (133) |
| Contracted Sports Wagering ​ | ​ 1,935 | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ | ​ 1,935 |
| ​ ​ | 2,208 | ​ | 10,595 | ​ | 18 | ​ | 1,663 | ​ | — | ​ | 14,484 |
| **Other operations** |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  |
| Corporate ​ | (2,814) | ​ | 30 | ​ | — | ​ | — | ​ | 709 | ​ | (2,075) |
| ​ ​ | $(606) | ​ | $10,625 | ​ | $18 | ​ | $1,663 | ​ | $709 | ​ | $12,409 |

*Three Months Ended March 31, 2023*

*(In thousands)*

| ​ ​ ​ ​ ​ ​ Reporting segments | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Operating Income (Loss) ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Depreciation and Amortization ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Project Development Costs ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ Preopening Costs ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Stock- Based Compensation ​ | ​ ​ ​ ​ ​ | ​ ​ Adjusted Segment EBITDA and Adjusted EBITDA ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Midwest & South | ​ | $(4,666) | ​ | $5,256 | ​ | $— | ​ | $10,097 | ​ | $— | ​ | $10,687 |
| West | ​ | (916) | ​ | 572 | ​ | — | ​ | 400 | ​ | — | ​ | 56 |
| Contracted Sports Wagering | ​ | ​ 1,161 | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ | ​ 1,161 |
| ​ | ​ | (4,421) | ​ | 5,828 | ​ | — | ​ | 10,497 | ​ | — | ​ | 11,904 |
| **Other operations** | **​** |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  |
| Corporate | ​ | (2,565) | ​ | 31 | ​ | 7 | ​ | — | ​ | 748 | ​ | (1,779) |
| ​ | ​ | $(6,986) | ​ | $5,859 | ​ | $7 | ​ | $10,497 | ​ | $748 | ​ | $10,125 |

Operating expenses deducted to arrive at operating income (loss) in the above tables for the three-month periods ended March 31, 2024 and 2023 included facility rents related to: (i) Midwest & South of $1.4 million in 2024 and $0.9 million in 2023, and (ii) West of $0.6 million in 2024 and $0.7 million in 2023.

### Liquidity and Capital Resources

#### Cash Flows

As of March 31, 2024, we had $46.3 million of cash and equivalents, including $20.6 million of restricted cash dedicated to the completion of Chamonix’s construction. We estimate that between $10 million and $15 million of cash is used in our current day-to-day operations, including on-site cash in our slot machines, change and redemption kiosks, and cages. We believe that current cash balances, together with the available borrowing capacity under our revolving credit facility and cash flows from operating activities, will be sufficient to meet our liquidity and capital resource needs for the next 12 months of operations. Over the last several years, we invested in two large construction projects that are now open to the public: American Place, which opened in February 2023, and Chamonix, which opened in December 2023.

**Cash flows – operating activities.** On a consolidated basis, cash used in operations during the three months ended March 31, 2024 was $4.4 million, compared to cash used in operations of $7.3 million in the prior-year period. Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but are also affected by changes in working capital. During the current period, we benefited from a full quarter of operations at American Place, which opened in February 2023.

**Cash flows – investing activities.** On a consolidated basis, cash used in investing activities during the three months ended March 31, 2024 was $22.6 million, primarily related to Chamonix. Cash used in investing activities during the prior-year period was $101.7 million, which included a gaming license payment of $50.3 million required to open American Place, as well as capital expenditures to construct Chamonix and American Place.

**Cash flows – financing activities.** On a consolidated basis, cash used in financing activities during the three months ended March 31, 2024 was $0.5 million, compared to cash provided by financing activities of $60.2 million in the prior-year period. During 2023, net borrowings from the Credit Facility totaled $27.0 million, and we received $40.0 million of gross proceeds from the issuance of our Additional Notes to open American Place.

#### Other Factors Affecting Liquidity

We have significant outstanding debt and contractual obligations, in addition to planned capital expenditures related to the completion of Chamonix. Our principal debt matures in February 2028. Certain planned capital expenditures designed to grow the Company, such as the permanent American Place facility and the potential future expansion of Silver Slipper, may require additional financing and/or temporarily reduce the Company’s ability to repay debt.

Our operations are subject to financial, economic, competitive, regulatory and other factors, many of which are beyond our control. Such future developments are highly uncertain and cannot be accurately predicted at this time.

#### Debt

**Long-term Debt.** At March 31, 2024, we had $450.0 million of principal indebtedness outstanding under the Notes, and $27.0 million outstanding under the Credit Facility. We also owe $2.1 million related to our finance lease of a hotel at Rising Star. With the exception of the Credit Facility, all of our debt is at fixed interest rates. See Note 4 for details on our debt obligations.

#### Other

**Capital Investments.** In addition to normal maintenance capital expenditures, we expect to make significant capital investments related to the completion of Chamonix and, in the future, the permanent American Place facility.

*Chamonix.* We began the phased opening of Chamonix on December 27, 2023. To fund Chamonix’s construction, we issued our 2028 Notes and placed a portion of such proceeds into a restricted cash account dedicated to the completion of Chamonix’s construction (see Note 4). As of March 31, 2024, the balance of such restricted cash account was approximately $20.6 million, which we expect to invest in the second and third quarters of 2024. In April 2024, we opened Chamonix’s high-end steakhouse; its spa and rooftop pool are expected to open in the second quarter of 2024.

*American Place.* We were selected by the IGB to develop and operate American Place in Waukegan, Illinois. While the larger permanent facility is under development, we are operating the temporary American Place facility, which opened in February 2023. As previously noted, we have been approved to operate the temporary American Place facility until August 2027, thus delaying any expected meaningful capital expenditures for the permanent American Place facility until 2026 and 2027. During 2024, we currently expect to invest modest additional amounts into the temporary American Place facility, primarily related to the February 2024 completion of the property’s high-end restaurant and, potentially, modest additional amounts related to construction planning for the permanent American Place facility. While we expect to internally generate a portion of the needed funds to complete American Place, we will likely need additional financing, as well. Lawsuits filed by an unsuccessful bidder for the Waukegan gaming license – and against parties unrelated to us – may impact our ability to arrange such financing and, therefore, delay the start of meaningful construction.

*Other Capital Expenditures.* Additionally, we may fund various other capital expenditure projects, depending on our financial resources. Our capital expenditures may fluctuate due to decisions regarding strategic capital investments in new or existing facilities, and the timing of capital investments to maintain the quality of our properties. No assurance can be given that any of our planned capital expenditure projects will be completed or that any completed projects will be successful. Our annual capital expenditures typically include some number of new slot machines and related equipment; to some extent, we can coordinate such purchases to match our resources.

We evaluate projects based on a number of factors, including profitability forecasts, length of the development period, the regulatory and political environment, and the ability to secure the funding necessary to complete the development or acquisition, among other considerations. No assurance can be given that any additional projects will be pursued or completed or that any completed projects will be successful.

**Hyatt Owner’s Option to Purchase our Leasehold Interest and Related Assets.** Our lease with the owner of the Hyatt Lake Tahoe to operate the Grand Lodge Casino contains an option for the lessor to purchase our leasehold interest and related casino operating assets. The lease, which has been extended several times in the past, currently expires on December 31, 2024. We believe that we have an excellent and synergistic relationship with the lessor and hope to again extend the lease before its expiration, but there is no certainty that this will be the case. See Note 3 for more information.

### Off-balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

### Critical Accounting Estimates and Policies

We describe our critical accounting estimates and policies in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2023. We also discuss our critical accounting estimates and policies in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the year ended December 31, 2023. There has been no significant change in our estimation methods since the end of 2023.

### Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. These forward-looking statements can be identified by use of terms such as “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “future,” “possible,” “seeks,” “may,” “could,” “should,” “will,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” “we cannot assure you,” “although no assurance can be given,” or “there is no way to anticipate with certainty.” Examples of forward-looking statements include, among others, statements we make regarding our plans, beliefs or expectations regarding our growth strategies; our expected construction budgets, estimated commencement and completion dates, expected amenities, and our expected operational performance for Chamonix and American Place; our expectations regarding the legal proceedings related to the process whereby we were granted the gaming license for American Place; our expectations regarding our ability to generate operating cash flow and to obtain debt financing on reasonable terms and conditions for the construction of the permanent American Place facility; our investments in capital improvements and other projects, including the amounts of such investments, the timing of commencement or completion of such capital improvements and projects, and the resulting impact on our financial results; our sports wagering contracts with third-party providers, including the expected revenues and expenses and our expectations regarding the operation and usage of our available idle sports wagering contracts, our ability to replace any terminated sports wagering contracts or our ability to operate sports wagering contracts ourselves; our expectations regarding our ability to extend the lease at the Grand Lodge Casino; adequacy of our financial resources to fund operating requirements and planned capital expenditures and to meet our debt and contractual obligations; expected sources of revenue; anticipated sources of funds; anticipated or potential legislative actions; beliefs in connection with our marketing efforts; factors that affect the financial performance of our properties; adequacy of our insurance; competitive outlook; outcome of legal and litigation matters; impact of recently issued accounting standards; and estimates regarding certain accounting and tax matters, among others.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those risks discussed in Part I, Item 1A—Risk Factors and throughout Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of our Annual Report on Form 10-K for the year ended December 31, 2023, and in Part II, Item 1A—Risk Factors and elsewhere of this Form 10-Q. In addition, you should consult other disclosures made by us (such as in our other filings with the SEC or in company press releases) for other factors that may cause actual results to differ materially from those projected by us. You should read this Form 10-Q, and the documents that we reference in this Form 10-Q and have filed with the SEC, and our Annual Report on Form 10-K for the year ended December 31, 2023, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events or conditions, except as required by law. New risks emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements. You should also be aware that while we communicate from time to time with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us.

## Controls and procedures

As filed, 1,557 characters.

**Evaluation of Disclosure Controls and Procedures —** As of March 31, 2024, we completed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2024, our disclosure controls and procedures are effective at a reasonable assurance level in timely alerting them to material information relating to us, which is required to be included in our periodic SEC filings.

We have established controls and procedures designed at the reasonable assurance level to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosure.

**Changes in Internal Control Over Financial Reporting —** There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 179 characters.

There were no material changes from the risk factors set forth under Part I, Item 1A “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023.

Filed May 9, 2024.
Source: SEC EDGAR, the filing index for accession 0000891482-24-000018. Last ingested by Listed: Nov 5, 2026, 19:30 ET. No prices; not investment advice.