Posted on: March 5, 2024, 08:28h.
Last updated on: March 5, 2024, 08:28h.
Full House Resorts (NASDAQ: FLL) delivered estimate-trailing fourth-quarter results today, but the regional casino operator told investors it believes its American Place casino hotel will open in Waukegan, Ill. in 2027, assuming a favorable outcome in litigation brought by a Tribal rival.
Wisconsin’s Potawatomi Band of Indians, which operates a gaming venue in Milwaukee, sued the city of Waukegan and the Illinois Gaming Board (IGB), alleging foul play in the bidding process that ultimately awarded a license to Full House. That litigation was brought back to life last year, but Illinois regulators have granted Full House a permit to operate The Temporary at American Place into 2027. Under Illinois law, temporary casinos have two years to transition to permanent venues meaning that without that regulatory approval, American Place would have to open in 11 months.
We were chosen for that license after a robust public process, whereby an independent consultant hired by the City of Waukegan rated the tribal proposal as being inferior in most respects to all four of the other proposals, including that of Full House Resorts,” said Full House CEO Dan Lee in a statement. “We believe the lawsuit is without merit.”
He added that the IGB and Waukegan pushed the Illinois Supreme Court to review the case and the court agreed noting a ruling possible early next year.
American Place Pivotal to Full House Growth
In addition to The Temporary at American Place and the newly minted Chamonix Casino Hotel in Cripple Creek, Colo., Las Vegas-based Full House runs a pair of gaming properties in Nevada, one in Indiana, Bronco Billy’s in Cripple Creek, and the Silver Slipper in Mississippi.
The company said in the past that when the Cripple Creek and Waukegan venues fully ramp up, those properties will account for more revenue than its other casinos combined. That underscores the importance of American Place to the operator’s long-term and Lee’s goal of tripling the size of Full House.
The bulk of the capital spending required to finish the permanent American Place won’t be required until the back half of 2026 and into the following year with Lee noting Full House can fund most of it from operating cash flows and that he’s confident Full House can make up the difference by issuing debt. Moody’s Investors Service recently reiterated a corporate credit grade of “Caa1” with a “stable” outlook on Full House.
Following a banner month of revenue in December, The Temporary notched $8.2 million in sales in January and more than $9 million in February, according to the operator.
Chamonix Important, Too
Chamonix opened on Dec. 27, so it wasn’t a major contributor to Full House’s fourth-quarter results, but that could change in the coming quarters as the gaming company unveils more of the venue’s amenities and opens more hotel rooms.
The venue is easily the glitziest in Cripple Creek and one of the most posh casino hotels in Colorado, prompting some interesting comparisons from Lee.
“I think we built the prettiest, not the biggest, but the prettiest regional casino in the whole country. You walk in and it’s every bit the quality that Wynn and Bellagio are, and we used a lot of the same designers,” said the Full House chief executive on a conference call.
Lee was part of the Steve Wynn-led team that opened Bellagio in 1998.
