Full House Resorts has posted its Q1 results for the period ended March 31, 2020, with headline figures taking a hit thanks, inter alia, to the COVID-19 lockdown and accounting for the fair value of outstanding warrants.
On a consolidated basis, net revenues in the first quarter of 2020 decreased 23.8% to $30.9m from $40.5m in the prior-year period. Net loss for the first quarter of 2020 was $(4.4)m compared to a net loss of $(1.6)m year-on-year.
Adjusted EBITDA in the 2020 first quarter was $(1.2)m versus $3.6m year-on-year. Results for the first quarter of 2020 also included $0.4m of revenue guarantees related to a full quarter of operations for one of the company’s three permitted sports wagering websites in Indiana.
Adding some color to the Q1 financials, President and CEO Daniel R Lee noted: “Online sports wagering made significant strides during the first quarter. In Indiana, we had our first full quarter of one of our three permitted ‘skins,’ or sports wagering websites, during the quarter.
“Sports wagering contributed $0.4m to Rising Star’s financial results during the first quarter. We expect our two other websites in Indiana to launch shortly, pending the receipt of customary regulatory approvals.
“In Colorado, we are also permitted three sports wagering websites, and all three operators of those skins received their gaming licenses in April 2020. When all of our sports wagering websites have commenced operations – which we believe will be by the third quarter of this year – our sports wagering revenue guarantees should total at least $7m per year.
“As we have noted, our sports wagering contracts have 10-year minimum terms, with each of our providers having two five-year extension options. Our three sports wagering providers are significant operators in the gaming and/or sports book industry. As mobile sports wagering ramps up, we believe it should contribute a significant portion of the company’s income.”
On the coronavirus and its effect on the business, Lee continued: “We are now approximately two months into the shutdown of our properties. 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. 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. We will also continuously wipe and disinfect our slot machines, paying particular attention to high-touch surfaces, such as buttons and screens.”
