Net losses increased for Full House Resorts in Q2 due to costs associated with opening new casinos hit its bottom line.
Revenue for the three months to 30 June at Full House hit $73.5m (£57.8m/€67.3m). This is 23.7% more than Q2 last year at Full House, with casino driving the increase.
Casino revenue was 20.5% higher at $54.7m in Q2, while revenue from food and beverage and hotel operations also increased. The casino rise was aided by the opening of Chamonix Casino Hotel in Colorado and American Place venue in Illinois.
Chamonix began its phased opening in December of last year, with Q2 seeing this continue. During the latest quarter, Chamonix opened a new restaurant, roof-top pool and parts of a new spa. As for American Place, the venue opened its doors in mid-Februrary.
Analysing the results, CEO Daniel Lee focuses on Chamonix in particular, setting out how occupied room nights have continued to increase steadily. Occupancy rose from 2,100 in January to 5,900 by the end of Q2.
“Increased visitation corresponds to the unveiling of new amenities at the property, as well as the commencement of the busier summer season,” Lee said. “The early guest response to Chamonix continues to be very good, reinforcing our confidence in its long-term earnings potential.”
American Place and Chamonix drive Q2 revenue for Full House
As for how the new casinos impacted regional performance, Midwest & South remains the main driver of revenue. The region, which includes American Place in Illinois alongside Silver Slipper Casino and Rising Star Casino, saw revenue rise 11.1% to $55.5m. American Place was responsible for $27.2m of all revenue in Q2.
Turning to the West, which features Chamonix, the impact of the new casino was clear to see. For Q2, revenue jumped 87.3% to $15.2m, with input from Chamonix, Bronco Billy’s Casino, also in Colorado, as well as Grand Lodge Casino and Stockman’s Casino in Nevada.
Away from land-based casino activity, Full House also grew revenue within its contracted sports wagering operation. This covers both retail and online betting skins in Colorado, Indiana and Illinois.
Revenue increased 107.1% to $2.9m, with Full House noting an impact of $900,000 in accelerated revenue from a skin that ceased operations in Colorado.
Casino launch costs hit Full House bottom line in Q2
While revenue growth was expected, given the opening of new venues, higher costs associated with launching casinos and supporting amenities had a negative impact on earnings.
Total operating expenses were 21.1% higher at $71.2m in Q2. The main outgoing for Full House was selling, general and administrative costs at $25.3m, with $8.0m attributed to opening the new casinos.
However, the top line growth helped improve adjusted EBITDA, with this rising by 34.3% to $14.1m.
In fact, costs were higher almost across the board with casino expenses another notable outgoing at $20.7m. Only pre-opening costs declined year-on-year. However that revenue growth helped operating profit climb 289.7% to $2.3m.
Full House also reported $11.0m in interest expenses, meaning pre-tax loss grew to $8.7m, some 74.0% more than last year. The group received $79,000 in income tax benefit, leaving a net loss of $8.6m, compared to $5.6m last year.
H1 revenue up, but interest expenses hit net profit for Full House
Looking to the first half, total revenue in H1 hit $143.3m, up 31%, with the new casinos driving growth. Total casino revenue jumped 30.9% to $106.4m, with revenue also higher in all other reporting units, including contracted sports betting at $10.3m.
Operating costs increased 22.3% to $141.7m. This meant Full House was able to post an operating profit of $1.7m, compared to last year’s $6.4m loss.
Adjusted EBITDA for the half topped $26.6m, up 29.1% from last year.
However, after incurring $21.3m worth of interest expense, this left a pre-tax loss of $19.6m, wider than $16.5m last year. Full House paid $337,000 in income tax, resulting in a net loss of $19.9m, compared to $17m in 2023.
