US casino operator Full House Resorts reported a net loss for the first quarter of 2023 after a rise in expenses offset a 21.0% year-on-year increase in revenue.
Full House experienced growth within its core Midwest and South segment during the three months to March 31, but posted declines across both its West and Contracted Sports Betting businesses.
However, chief executive and president Daniel Lee was upbeat about the performance in Q1, singling out a number of developments that he said will help drive further revenue growth in the long run.
These included the opening of The Temporary by American Place in Illinois in February, as well confirmation its sportsbook will launch in the state in August and that the new Chamonix Casino Hotel will open in Colorado in December.
“This was a transformational quarter for our company, with the first phase of our American Place project now open and already contributing meaningfully to our financial results,” Lee said. “As The Temporary’s database continues to expand and its remaining amenities come online, we expect continued growth in the property’s revenue and profit contributions.
“We also have finalized an opening day for Chamonix. On that day, we expect to open with a near-complete experience, with all three of our hotel towers, our new casino, fine dining restaurant, and parking garage.
“We look forward to welcoming our first guests to what we believe will be the most unique casino destination in Colorado.”
Spending and operating costs drives business to loss in Q1
Looking at the operator’s results for Q1, revenue amounted to $50.1m, up from $41.4m in the corresponding period last year.
Casino revenue was 23.7% higher at $36.0m, while food and beverage revenue climbed by 18.5% to $7.7m, hotel revenue remained level at $2.1m, and other operations, including contracted sports wagering, was up 19.4% to $4.3m.
In terms of segmental performance, Midwest and South revenue jumped 36.5% to $40.8m, helped by the opening of The Temporary. West revenue sipped 5.8% to $8.1m due to the temporary loss of on-site parking and hotel rooms at Bronco Billy’s to accommodate the construction of Chamonix, as well as significant snowfall impacting traffic at the Grand Lodge and Bronco Billy’s properties.
Contracted sports wagering revenue was also down 57.1% to $1.2m, which Full House said reflected an acceleration of deferred revenue for two agreements that ceased operations in May 2022, when one of the operator’s contracted parties ended its online operations.
Turning to spending and operating costs were 58.2% higher year-on-year at $57.1m, with increases across a number of key areas such as casino; selling, general and administrative; and pre-opening costs, primarily related to The Temporary.
After also accounting for $4.5m in finance costs, this left a pre-tax loss of $11.5m, compared to a $110,000 profit at the same point in 2022.
Full House received $35,000 in tax benefits, pushing net loss down slightly to $11.4m, in contrast to the $110,000 net profit posted in the previous year. However, adjusted EBITDA was 20.6% higher at $10.1m in the quarter.