Casino operator Full House Resorts posted a net loss in 2022 following a drop in revenue due to the absence of government stimulus checks, construction impact and increased competition in neighboring states.
Full House experienced year-on-year growth in Nevada and in its contracted sports betting division, but revenue fell in Mississippi, its core market, as well as in Colorado and Indiana.
The operator said the primary reason for the overall year-on-year decline was that players in 2021 received government stimulus checks as a way of helping the economy in the wake of the pandemic. However, these were not issued in 2022, with the economy having recovered sufficiently for the government to withdraw the initiative.
Full House also noted the impact of the partial closure of its Bronco Billy’s Casino and Hotel in Colorado due to construction of the Chamonix Casino Hotel, which is due to open in the third quarter of this year.
Approximately 41% of pre-existing gaming space was closed in November 2021 to facilitate construction, while further gaming capacity was closed in May 2022 for refurbishment. The refurbished portion of the casino reopened in late December, though the site continues to operate with approximately half the gaming positions than it had prior to the pandemic.
In addition, Full House said its operations in Mississippi were impacted by the launch of legal online sports betting in neighboring Louisiana.
Fourth quarter
Breaking down the performance, and beginning with the fourth quarter, revenue for the three months to December 31 was $36.1m, down 16.4% from $43.3m in the previous year.
Revenue fell across all markets, with Mississippi revenue falling 18.2% to $18.4m, Indiana 7.2% to $9.0m, Colorado 30.0% to $3.5m, Nevada 4.7% to $4.1m and contracted sports betting 38.9% to $1.1m.
In terms of segments, revenue was also down across the board, with casino experiencing the largest decline as revenue slipped 18.0% to $25.6m for the quarter.
Operating expenses increased 4.2% to $39.3m and after including an additional $3.8m in finance-related costs, this left a pre-tax loss of $7.0m, compared to a $5.1m profit at the same point in 2021.
Full House paid just $15,000 in income tax but ended the quarter with a net loss of $7.0m, in contrast to the $5.0m profit posted in the previous year. In addition, adjusted EBITDA fell 50.6% to $3.9m.
Full year
Looking at the full year and the results made for similar reading, with revenue falling 9.4% from $180.2m to $163.3m. Revenue was down in all segments with the exception of other operations, which includes contracted sports betting.
Mississippi revenue was down by 10.7% to $80.9m, while Indiana revenue slipped 4.6% to $39.1m and Colorado revenue declined 31.7% to $16.2m.
However, Nevada revenue edged up 8.1% to $20.0m, helped by the recovery of tourism to the Lake Tahoe region, while contracted sports betting revenue increased 22.0% to $7.2m, helped by the launch of an additional skin in late 2021.
Turning to costs, operating expenses were up 5.6% at $150.6m, while when also accounting for $27.5m in financial costs, this left a pre-tax loss of $14.8m, in contrast to the $12.1m profit in 2021.
Full House paid $31,000 in income tax, resulting in a net loss of $14.8m, compared to the $11.7m profit at the end of 2021. In addition, adjusted EBTIDA was 32.0% lower at $32.1m.
The Temporary by American Place
Meanwhile, Full House gave an update on its new temporary casino in Illinois. Opened on February 17, The Temporary by American Place welcomed more than 40,000 guests through its doors during its first 12 days of operation.
“Typical of many new casinos, we opened at less than full capacity,” Full House president and chief executive Daniel Lee said. “On opening night, for example, only approximately 80% of our slot floor and 60% of our permitted table games were available.
“Over the coming weeks, we expect to further augment the number of available games on our floor and increase the hours of operation for our table games, which currently operate from 2pm to 2am. As our team gains more experience, we also expect to operate the casino 24 hours per day, versus our current schedule of 8am to 4am.
“Given the early response to The Temporary, we remain confident in our ability to generate attractive returns from both The Temporary and our future American Place destination.”
