Full House Resorts has reaffirmed its commitment to developing a casino and entertainment destination in Waukegan, Illinois, stressing that its proposal represents “the most unique and beneficial” destination for both city and state.
After submitting an owners gaming licence application during 2019’s final quarter, the company saw American Place become one of three proposals, competing against North Point Casino and Rivers Casino, to secure construction rights certified by the Waukegan City Council.
In its first phase, American Place is expected to include a casino with sportsbook, a boutique hotel comprised of twenty villas, each ranging from 1,500 to 2,500 square feet, a 1,500-seat live entertainment venue and various food and beverage outlets.
If awarded the license by the Illinois Gaming Board, Full House also expects to develop and operate a temporary casino on that site while American Place, ranked as the top proposal at an October meeting, is being constructed.
During the fourth quarter of 2019, project development expenses totalled $500,000, primarily related to the IGB’s required investigation fee of $300,000 from all casino applicants in Waukegan and elsewhere in Illinois, as well as costs related to the preparation of the proposal.
Daniel Lee, president and chief executive officer of Full House Resorts, explained: “During the fourth quarter, we advanced our proposal for a new gaming resort destination in Waukegan, Illinois, located north of Chicago. Our American Place proposal was one of three proposals advanced by the City of Waukegan to the Illinois Gaming Board.
“Over the coming months, we expect that the Illinois Gaming Board will evaluate each of the three proposals and schedule public presentations. We look forward to presenting what we believe is the most unique and beneficial casino destination for both the city of Waukegan and the state of Illinois.”
Reporting “no discernible impact of [the] coronavirus situation to date,” the company anticipates a significant impact to be felt from ongoing and impending sports wagering debuts, commenting that the agreements will be “transformational for our company”.
Net revenue for the quarter decreased 4.1 per cent to $39m (2018: $40.7m), with Full House’s full-year performance increasing less than one percentage point to $165.4m (2018: $163.9m).
Net loss grew to $4.1m (2018: $1m) during the quarter and $5.8m (2018: $4.4m) for the full-year, with the company asserting that “both periods was affected by the accounting for the fair market value of outstanding warrants, as well as a loss on the extinguishment of debt in 2018 related to the company’s debt refinancing”.
Adjusted EBITDA during Q4 dropped 39.4 per cent to $2.3m (2018: $3.8m), reflecting casino downtime during the installation of new slot systems at Bronco Billy’s and Rising Star, as well as a temporary increase in marketing expenses at Rising Star.
For the full-year a drop of 10.1 per cent to $15.9m (2018: $17.7m), reflecting incremental costs related to operating the Christmas casino at Bronco Billy’s, in addition to the aforementioned impacts. Silver Slipper’s operations continued to improve to its best year ever.
Lee continued: “Regarding existing operations, the Silver Slipper achieved new record financial results despite adverse hold in the fourth quarter. Net revenues for 2019 increased 5.6 per cent to a record $73.2m and adjusted property EBITDA rose to $13.2m, reflecting investments over the past several years and the launch of on-site sports wagering in 2018. Our Northern Nevada operations were also affected by adverse hold in the fourth quarter, as well as a temporary decline in visitor activity at the nearby Naval base.
“At both our Bronco Billy’s and Rising Star properties, our efforts to upgrade those properties temporarily affected results. We installed new slot systems at both these properties during the fourth quarter, resulting in downtime at both casinos. The downtime was significantly longer at Rising Star, with nearly half of the property’s slot machines offline for several weeks in November.
“With the new slot systems now in place, we believe that we will be able to compete and market more effectively. At Bronco Billy’s, we launched the Christmas casino in late 2018 in a building located near – but not adjoining – the existing Bronco Billy’s facility.
“We did this as part of a strategic decision to control an important corner in Cripple Creek. The opening of the Christmas casino, however, resulted in more than $1m of incremental expenses during the year without a sufficient increase in revenues to offset it.
“We are in the process of evaluating ways to reduce the cost of our Christmas Casino operations while preserving our strategic goals, including the possibility of using the space for other Christmas-related concepts.
“In total, those events at Bronco Billy’s and Rising Star – along with a temporary mass marketing campaign at Rising Star – adversely affected adjusted EBITDA by an estimated $3m in 2019.”