Full House Resorts has reported a 721.8% year-on-year rise in net profit for the third quarter, as the regional US casino operator’s properties rebounded from the novel coronavirus (Covid-19) shutdown earlier this year.
Total revenue for the three months to September 30 amounted to $42.0m, down 5.2% from $44.3m in the corresponding period last year, with certain Covid-19 restrictions still in place on land-based gambling venues.
Casino revenue edged up 4.3% to $31.9m in Q3, but food and beverage revenue dropped 39.8% to $5.6m and hotel revenue was down 19.4%. However, revenue from other activities including online and mobile sports betting increased 46.2% to $1.9m.
The Silver Slipper Casino and Hotel in Mississippi was the only Full House land-based property to see revenue increase, with this rising 10.5% to $20.0m. This was despite restrictions on the number of available slot machines and seating capacity at each table game due to Covid-19.
Revenue at the Rising Star Casino Resort in Indiana fell 18.0% to $11.7m, with this partially down to Covid-19 limitations. The property faced increased competition, after the opening of a new venue near Louisville in December 2019, and the fact racetrack casinos near Indianapolis began offering live table games in January.
Bronco Billy’s Casino and Hotel in Colorado saw revenue fall 6.6% to $8.1m, again mainly due to Covid-19 restrictions, which included the shutdown of all table games at the property and a reduction in the number of slot machines.
Revenue from the Northern Nevada segment – consisting of the Grand Lodge and Stockman’s casinos – was also down 30.2% to $4.4m, as Covid-19 restrictions remained in place at all properties.
Full House did not publish a full breakdown of its online and mobile revenue, it did note that Q3 was its first full quarter of operating three ‘skins’ in Colorado, as well as one of its permitted three skins in Indiana.
When all six of these skins are in operation, Full House said it should receive at least $7m per year in sports gaming revenues, and as this incurs only small costs, almost all of such revenues should translate into income.
The operator was helped in the quarter by launching an online sportsbook with Smarkets in the state of Colorado. Full House also opened a retail sportsbook at its Bronco Billy’s Casino and Hotel in Colorado through a partnership with Churchill Downs Incorporated and its BetAmerica brand.
“We had a phenomenal third quarter; as we noted last quarter, we chose to reopen our properties conservatively in terms of amenities and hours of operation, given the uncertainty of the customer response to reopening in the midst of a pandemic,” Full House president and chief executive Daniel Lee said.
Operating costs and expenses for the quarter reached $31.5m, down 23.0% on last year as Full House was able to make savings across almost all areas. Less was spent on casino operations, food and beverage, hotel and project development, with only selling, general and administrative costs rising, albeit only marginally.
These savings meant that despite the decline in revenue, operating profit was up 205.9% to $10.4m. After accounting for $2.8m in interest and warrants spending, profit before tax was $7.6m, up 981.7% on 2019, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up 115.5% to $12.5m.
Full House also received $93,000 in tax benefits during the quarter, which meant it ended the period with a $7.7m net profit, significantly more than $938,000 in Q3 of last year.
“We are pleased that customers have generally responded positively, recognising that it is possible to operate a casino with appropriate social distancing and health safety measures,” Lee said.
Looking at year-to-date figures, revenue for the nine months to September 30 was $87.3m, down 30.9% on last year, mainly due to the impact of Covid-19 in the second quarter.
Operating costs were 29.5% lower at $84.5m, which left an operating profit of $2.8m, some 57.6% down on the previous year. After including interest and warrant costs totalling $6.2m, loss before tax was $3.4m, compared to a $1.7m loss last year.
Full House ended the nine months with a $3.4m net loss, wider than $1.7m at the same point in 2019.