Full House Resorts became the latest land-based operator to see its bottom line heavily impacted by novel coronavirus (Covid-19), as Q1 revenue fell 24.7% to $30.9m and the operator slipped to a loss.
Casino gaming made up the majority of revenue for Full House in the three months to 31 March, at $20.8m. However, this was down 26.6% year-on-year.
Food and beverage revenue, meanwhile, fell 19.3% to $7.0m while hotel revenue was down 27.4% at $2.0m.
Other revenue, including online operations, increased 38.3% to $1.1m. Of this total, $0.4m came from online sports wagering through Rising Star and Churchill Downs Interactive’s BetAmerica online sportsbook in Indiana.
The business will launch an online sportsbook in Colorado in the near future after legal betting began in the state earlier this month. The operator’s Bronco Billy’s Casino property received a licence in April.
In terms of locations, Silver Slipper Casino and Hotel in Mississippi made up just under half of the operator’s revenue, at $15.1m, down 21.7% year-on-year.
Revenue from Rising Star Casino Resort in Indiana, meanwhile, fell 29.4% to $7.7m, and Bronco Billy’s brought in $5.0m, down 22.6%.
The operator’s properties in Northern Nevada, meanwhile, took in revenue of $3.1m, down 20.5%.
Lee, president and chief executive officer of Full House Resorts, said the business had been performing strongly before the pandemic hit.
“At the Silver Slipper, our results through the end of February were ahead of the prior-year period until the arrival of coronavirus-related concerns in March,” Lee said. “Similarly, through the end of February, financial results at our Northern Nevada operations were meaningfully ahead of the prior year period.
“At both Bronco Billy’s and Rising Star, our new slot systems were ramping up. The momentum at our properties was disrupted by the coronavirus and state-mandated closure in March 2020.”
Full House’s operating costs and expenses also declined, but less sharply, by 12.6% to $34.3m.
Casino costs slippedy 12.3% to $10.3m, while food and beverage costs declined 24.1% to $7.1m and hotel costs were slashed by 51.5% to $1.1m. Costs from other operations fell 26.9% to $562,000.
Selling, general and administrative expenses were Full House’s largest cost, at $13.0m, up 2.5% from 2019.
This resulted in an earnings before tax, interest, depreciation and amortization (EBITDA) loss of $1.2m, down from a positive EBITDA of $3.6m in 2019.
Silver Slipper Casino was the only property with a positive EBITDA, but this was still down 52.4% to $1.8m.
Rising Star Casino made an EBITDA loss of $1.1m, after earnings of $404,000 in 2019. Besides the pandemic, the business said some of this decline was due to increased competition in the Indiana-Kentucky border area.
Bronco Billy’s posted a negative EBITDA of $478,000, compared to a positive EBITDA of $615,000 in 2019 while its northern Nevada properties’ EBITDA came to a loss of $390,000, compared to a loss of $6,000 in 2019.
The business made an additional corporate EBITDA loss of $1.1m, down 12.4% from 2019’s EBITDA loss.
Depreciation and amortisation costs slipped 2.5%, to $2.0m while project development costs more than halved to $56,000.
This resulted in an operating loss of $3.4m, compared to a profit of $1.3m.
The business paid $2.5m in other interest expenses, down 7.9% year-on-year, but made $1.7m through adjustments to the fair value of stock warrants, after these adjustments led to a $40,000 loss in 2019.
As a result, Full House’s pre-tax loss came to $4.3m, up 189.0% from 2019’s loss. The business received $95,000 through tax, meaning it made a final loss of $4.4m, up 169.5% year-on-year.
Lee said the business is now focused on taking steps towards the reopening of its casinos.
“We are now approximately two months into the shutdown of our properties,” he said. “These and other government-mandated closures appear to have helped slow the spread of the coronavirus. With the worst days of the pandemic hopefully behind us, we are now beginning to look forward to reopening our properties and safely welcoming back our customers and employees.
“We have spent the last several weeks of the shutdown examining many aspects of our business, from how we sanitize our properties to how we interact with and entertain our guests,” he said. “We began using infrared devices to test employee temperatures prior to our casino shutdowns. We now also intend to screen guest temperatures when we reopen.
“We also intend to allow customers to block adjoining slot machines to ensure social distancing, and we will provide gloves, masks and hand sanitizer to our employees and guests. In some locations, we are installing dividers between our most popular slot machines.
Lee said the Silver Slipper venue was set to be the first to be back in business, scheduled to reopen on 22 May.
“We will also continuously wipe and disinfect our slot machines, paying particular attention to high-touch surfaces, such as buttons and screens. In our restaurants, we are spacing our tables more widely apart and, where appropriate, installing separating screens.”