UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2024
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File No. 1-32583

FULL HOUSE RESORTS, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		13-3391527 (I.R.S. Employer Identification No.)

One Summerlin, 1980 Festival Plaza Drive, Suite 680 Las Vegas, Nevada (Address of principal executive offices)		89135 (Zip Code)

(702) 221-7800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	FLL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☑	Emerging growth company ☐
Non-accelerated filer ☐	Smaller reporting company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of August 2, 2024, there were 34,799,896 shares of Common Stock, $0.0001 par value per share, outstanding.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues
Casino	$	54,685	$	45,359	$	106,358	$	81,346
Food and beverage		10,403		8,673		20,172		16,333
Hotel		3,742		2,348		6,594		4,492
Other operations, including contracted sports wagering		4,662		3,002		10,292		7,317
		73,492		59,382		143,416		109,488
Operating costs and expenses
Casino		20,719		16,990		41,294		30,334
Food and beverage		10,714		9,030		20,474		16,485
Hotel		2,383		1,228		4,546		2,447
Other operations		990		705		1,781		1,187
Selling, general and administrative		25,285		21,577		50,220		39,806
Project development costs		3		17		3		24
Preopening costs		757		1,086		2,420		11,583
Depreciation and amortization		10,326		8,155		20,951		14,014
Loss on disposal of assets		—		—		18		—
		71,177		58,788		141,707		115,880
Operating income (loss)		2,315		594		1,709		(6,392)
Other (expense) income
Interest expense, net		(11,023)		(5,633)		(21,273)		(10,452)
Gain on insurance settlement		—		—		—		355
		(11,023)		(5,633)		(21,273)		(10,097)
Loss before income taxes		(8,708)		(5,039)		(19,564)		(16,489)
Income tax (benefit) provision		(79)		561		337		526
Net loss	$	(8,629)	$	(5,600)	$	(19,901)	$	(17,015)

Basic loss per share	$	(0.25)	$	(0.16)	$	(0.57)	$	(0.49)
Diluted loss per share	$	(0.25)	$	(0.16)	$	(0.57)	$	(0.49)

See notes to condensed consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share data)


	June 30,		December 31,
	2024		2023
ASSETS
Current assets
Cash and equivalents	$	31,061	$	36,155
Restricted cash		13,636		37,639
Accounts receivable, net of provision for credit losses of $1,582 and $1,189		5,512		5,332
Inventories		2,015		1,839
Prepaid expenses and other		4,312		3,674
		56,536		84,639

Property and equipment, net		460,724		457,907
Operating lease right-of-use assets, net		43,074		44,704
Finance lease right-of-use assets, net		1,647		2,318
Goodwill		21,286		21,286
Other intangible assets, net of accumulated amortization of $377 and $8,140		89,335		76,271
Deposits and other		1,316		1,332
	$	673,918	$	688,457
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	12,009	$	12,794
Income taxes payable		—		489
Construction payable		11,533		20,667
Accrued payroll and related		7,694		4,097
Accrued interest		14,055		14,248
Other accrued expenses and current liabilities		18,631		19,779
Current portion of operating lease obligations		4,298		4,784
Current portion of finance lease obligations		1,768		1,694
		69,988		78,552

Operating lease obligations, net of current portion		39,219		40,248
Finance lease obligations, net of current portion		1,801		2,705
Other long-term liabilities, net of current portion		29,835		16,075
Long-term debt, net		466,638		465,153
Deferred income taxes, net		2,021		1,684
Contract liabilities, net of current portion		4,962		6,192
		614,464		610,609
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $0.0001 par value, 100,000,000 shares authorized; 35,302,549 and 35,302,549 shares issued and 34,799,896 and 34,590,150 shares outstanding		4		4
Additional paid-in capital		114,580		113,329
Treasury stock, 502,653 and 712,399 common shares		(613)		(869)
Accumulated deficit		(54,517)		(34,616)
		59,454		77,848
	$	673,918	$	688,457

See notes to condensed consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands)


				Additional							Total
	Common Stock			Paid-in		Treasury Stock			Accumulated		Stockholders’
	Shares	Dollars		Capital		Shares	Dollars		Deficit		Equity
Balance, January 1, 2024	35,302	$	4	$	113,329	712	$	(869)	$	(34,616)	$	77,848
Stock-based compensation	—		—		709	—		—		—		709
Net loss	—		—		—	—		—		(11,272)		(11,272)
Balance, March 31, 2024	35,302		4		114,038	712		(869)		(45,888)		67,285
Options exercised and restricted stocks vested	—		—		(198)	(209)		256		—		58
Stock-based compensation	—		—		740	—		—		—		740
Net loss	—		—		—	—		—		(8,629)		(8,629)
Balance, June 30, 2024	35,302	$	4	$	114,580	503	$	(613)	$	(54,517)	$	59,454


				Additional							Total
	Common Stock			Paid-in		Treasury Stock			Accumulated		Stockholders’
	Shares	Dollars		Capital		Shares	Dollars		Deficit		Equity
Balance, January 1, 2023	35,302	$	4	$	110,590	895	$	(1,091)	$	(9,712)	$	99,791
Options exercised	—		—		12	(4)		5		—		17
Stock-based compensation	—		—		748	—		—		—		748
Net loss	—		—		—	—		—		(11,415)		(11,415)
Balance, March 31, 2023	35,302		4		111,350	891		(1,086)		(21,127)		89,141
Options exercised and restricted stocks vested	—		—		(65)	(166)		202		—		137
Stock-based compensation	—		—		655	—		—		—		655
Net loss	—		—		—	—		—		(5,600)		(5,600)
Balance, June 30, 2023	35,302	$	4	$	111,940	725	$	(884)	$	(26,727)	$	84,333

See notes to condensed consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


	Six Months Ended
	June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(19,901)	$	(17,015)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		20,951		14,014
Amortization of debt issuance costs, discounts and premiums		1,485		1,291
Non-cash change in ROU operating lease assets		1,631		1,997
Stock-based compensation		1,449		1,403
Loss on disposal of assets		18		—
Provision for (recovery of) credit losses		538		(33)
Gain on insurance settlement		—		(355)
Other operating activities		—		773
Deferred income taxes		337		526
Increases and decreases in operating assets and liabilities:
Accounts receivable		(718)		(2,021)
Prepaid expenses, inventories and other		(814)		(133)
Income taxes payable		(489)		—
Operating lease liabilities		(1,516)		(1,933)
Contract liabilities		(4,060)		18
Accounts payable and other liabilities		6,812		3,170
Net cash provided by operating activities		5,723		1,702
Cash flows from investing activities:
Capital expenditures		(33,939)		(89,309)
Proceeds from insurance settlement related to property damage		—		355
Acquisition of intangible assets		(1)		(50,250)
Other		15		—
Net cash used in investing activities		(33,925)		(139,204)
Cash flows from financing activities:
Proceeds from Senior Secured Notes due 2028 borrowings		—		40,000
Payment of debt discount and issuance costs		—		(6,490)
Borrowings under revolving credit facility		3,000		36,000
Repayment of revolving credit facility borrowings		(3,000)		(9,000)
Repayment of finance lease obligations		(830)		(759)
Proceeds from exercise of stock options		58		154
Other		(123)		—
Net cash (used in) provided by financing activities		(895)		59,905

Net decrease in cash, cash equivalents and restricted cash		(29,097)		(77,597)
Cash, cash equivalents and restricted cash, beginning of period		73,794		191,176
Cash, cash equivalents and restricted cash, end of period	$	44,697	$	113,579

See notes to condensed consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) – (Continued)

(In thousands)


	Six Months Ended
	June 30,
	2024		2023
Supplemental Cash Flow Disclosure:
Cash paid for interest, net of amounts capitalized	$	19,599	$	10,721
Cash paid for income taxes		489		—

Supplemental Schedule of Non-Cash Investing and Financing Activities:
Payables and accruals incurred for capital expenditures	$	8,344	$	25,949
Accrued liability related to asset acquisition		13,090		—
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		—		30,178
Right-of-use asset and liability remeasurements:
Operating leases		—		2,341
Financing leases		—		(207)

See notes to condensed consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. ORGANIZATION

Organization. Formed as a Delaware corporation in 1987, Full House Resorts, Inc. owns, leases, operates, develops, manages, and/or invests in casinos and related hospitality and entertainment facilities. References in this document to “Full House,” the “Company,” “we,” “our,” or “us” refer to Full House Resorts, Inc. and its subsidiaries, except where stated or the context otherwise indicates.

The Company currently operates seven casinos: six on real estate that we own or lease and one located within a hotel owned by a third party. In February 2023, we opened our temporary American Place facility, which we are permitted to operate until August 2027; we have begun the design work for the permanent gaming resort facility that we plan to build on adjoining land. In December 2023, we began the phased opening of our newest property, Chamonix Casino Hotel (“Chamonix”), located adjacent to our existing Bronco Billy’s Casino in Cripple Creek, Colorado. Additionally, we benefit from seven permitted sports wagering “skins” – three in Colorado, three in Indiana, and one in Illinois.

For additional information about the Company’s segments, see Note 8.

The following table presents selected information concerning our segments:


Segments and Properties		Locations
Midwest & South
American Place^*		Waukegan, IL (northern suburb of Chicago)
Silver Slipper Casino and Hotel		Hancock County, MS (near New Orleans)
Rising Star Casino Resort		Rising Sun, IN (near Cincinnati)
West
Bronco Billy’s Casino and Chamonix Casino Hotel^*		Cripple Creek, CO (near Colorado Springs)
Grand Lodge Casino (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)		Incline Village, NV (North Shore of Lake Tahoe)
Stockman’s Casino		Fallon, NV (one hour east of Reno)
Contracted Sports Wagering
One active sports wagering website (“skins”), plus two others that are currently idle		Colorado
One active sports wagering website (“skins”), plus two others that are currently idle		Indiana
One active sports wagering website (“skin”), commenced in August 2023		Illinois

__________

*	The temporary American Place facility and Chamonix opened on February 17 and December 27, 2023, respectively.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. As permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company’s 2023 annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The interim condensed consolidated financial statements of the Company included herein reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of annualized results for an entire year.

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The condensed consolidated financial statements include the accounts of Full House and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Fair Value and the Fair Value Input Hierarchy. Fair value measurements affect the Company’s accounting for net assets acquired in acquisition transactions and certain financial assets and liabilities. Fair value measurements are also used in the Company’s periodic assessments of long-lived tangible and intangible assets for possible impairment, including for property and equipment, goodwill, and other intangible assets. Fair value is defined as the expected price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

GAAP categorizes the inputs used for fair value into a three-level hierarchy:

●

Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities;

●

Level 2: Comparable inputs other than quoted prices that are observable for similar assets or liabilities in less active markets; and

●

Level 3: Unobservable inputs which may include metrics that market participants would use to estimate values, such as revenue and earnings multiples and relative rates of return.

Methods and assumptions used to estimate the fair value of financial instruments are affected by the duration of the instruments and other factors used by market participants to estimate value. The carrying amounts for cash and equivalents, restricted cash, accounts receivable, and accounts payable approximate their estimated fair value because of the short durations of the instruments and inconsequential rates of interest.

Cash Equivalents and Restricted Cash. Cash equivalents include cash involved in operations and cash in excess of daily requirements that is invested in highly liquid, short-term investments with initial maturities of three months or less when purchased.

Restricted cash balances consist of funds placed into an interest-bearing account to fund the completion of the Chamonix construction project, in accordance with the Company’s debt covenants.

Accounts Receivable and Credit Risk. Accounts receivable consist primarily of casino, hotel, certain sports wagering contracts that pay us in arrears, and other receivables. Accounts receivable are typically non-interest bearing, recorded initially at cost, and are carried net of an appropriate reserve to approximate fair value. Loss reserves are estimated based on specific review of customer accounts including the customers’ willingness and ability to pay and nature of collateral, if any, as well as historical collection experience and current and expected economic and business conditions. Accounts are written off when management deems the account to be uncollectible and recoveries of accounts previously written off are recorded when received.


(In thousands)	June 30,		December 31,
	2024		2023
Casino	$	321	$	343
Trade Accounts		3,059		3,479
Other Operations, excluding Contracted Sports Wagering		166		185
Contracted Sports Wagering		2,930		1,932
Other		618		582
		7,094		6,521
Less: Provision for credit losses		(1,582)		(1,189)
	$	5,512	$	5,332

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The following table shows the movement in the provision for credit losses recognized for accounts receivable that occurred during the period:


(In thousands)
	2024		2023
Balance at January 1	$	1,189	$	249
Current period provision for (recovery of) credit losses		538		(33)
Write-offs		(145)		—
Balance at June 30	$	1,582	$	216

At June 30, 2024, estimated loss reserves for the current year include an additional provision of $0.5 million in connection with two online sports wagering agreements, which remain active in Colorado and Indiana. In July 2024, each of the Company’s respective subsidiaries entered into amended agreements with the contracted party to settle such overdue receivables, which included settlement provisions for the outstanding receivable balances (see Note 9).

Management regularly evaluates the adequacy of the Company’s recorded reserves. As of June 30, 2024, we believe that no significant concentrations of credit risk existed for which a reserve had not already been recorded.

Other Intangible Assets. In March 2023, the Company paid $50.3 million to the Illinois Gaming Board (“IGB”) for required gaming license fees to operate the temporary American Place facility, and upon its opening, the permanent facility. Management has deemed the gaming license in Illinois as having an indefinite economic life, as such license is eligible for renewal every four years if all regulatory requirements are met. There is an additional one-time reconciliation fee, based on interim gaming revenues, which is calculated three years after commencing operations and paid over the ensuing six years. The minimum present value of this long-term obligation was determined as of June 30, 2024 to be $28.0 million, which is accounted for as an increase in the cost basis for the gaming license in Illinois. See Note 6 for details.

The long-term obligation for the Company’s gaming license in Illinois consisted of the following, as discussed above:


(In thousands)	June 30,		December 31,
	2024		2023
IGB Reconciliation Fee*	$	39,525	$	22,092
Less: Amount representing interest		(11,530)		(7,187)
Present value of IGB Reconciliation Fee	$	27,995	$	14,905

__________

*	Calculated based upon gaming revenues generated through June 2024. This one-time fee will be paid in six annual installments beginning in February 2026.

Additionally, during the second quarter of 2024, the Company retired $7.8 million of fully amortized intangible assets, which consisted primarily of acquired player loyalty programs. This resulted in net accumulated amortization of $0.4 million at June 30, 2024, compared to $8.1 million at December 31, 2023.

Revenue Recognition:

Accrued Club Points and Customer Loyalty Programs: Operating Revenues and Related Costs and Expenses. The Company’s revenues consist primarily of casino gaming, food and beverage, hotel, and other revenues (such as sports wagering, golf, RV park operations, and entertainment). The majority of the Company’s revenues are derived from casino gaming, principally slot machines.

The transaction price for a casino wager is the difference between gaming wins and losses, not the total amount wagered. As such wagers have similar characteristics, the Company accounts for its gaming transactions on a portfolio basis by recognizing net win per gaming day versus on an individual basis.

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The Company sometimes provides discretionary complimentary goods and services (“discretionary comps”). For these types of transactions, the Company allocates revenue to the department providing the complimentary goods or services based upon its estimated standalone selling price, offset by a reduction in casino revenues.

Many of the Company’s casino customers choose to earn points under its customer loyalty programs. As points are accrued, the Company defers a portion of its casino revenue based on the estimated standalone value of loyalty points being earned by the customer. The standalone value of loyalty points is derived from the retail value of food, beverages, hotel rooms, and other goods or services for which such points may be redeemed. A liability related to these customer loyalty points is recorded, net of estimated breakage and other factors, until the customer redeems these points for various loyalty program benefits, primarily for “free casino play,” complimentary dining, or hotel stays, among others, depending on each property’s specific offers. Upon redemption, the related revenue is recognized at retail value within the department providing the goods or services. Unredeemed points are forfeited if the customer becomes and remains inactive for a specified period of time. Such liabilities were approximately $0.9 million at June 30, 2024 and $0.8 million at December 31, 2023, and these amounts are included in “other accrued expenses and current liabilities” on the condensed consolidated balance sheets.

Revenue for food and beverage, hotel, and other revenue transactions, as described in “Other Revenues” below, includes the retail value of (i) discretionary comps and (ii) comps provided in return for redemption of loyalty points. Additionally, the Company may collect deposits in advance for future hotel reservations or entertainment, among other services, which represent obligations of the Company until the service is provided to the customer.

Deferred Revenues: Market Access Fees from Sports Wagering Agreements. The Company entered into several agreements with various unaffiliated companies allowing for online sports wagering within Indiana, Colorado and Illinois, as well as on-site sports wagering at American Place (the “Sports Agreements”). As part of these long-term Sports Agreements, the Company received one-time “market access” fees, which are recorded as long-term liabilities and then recognized as revenue ratably over the initial contract terms (or as accelerated due to early termination), beginning with the earlier of operations commencement or contractual commencement. In the third quarter of 2023, a contracted party ceased online operations in Indiana and Colorado, thus creating one available skin in each state. Another contracted party ceased online operations in Colorado during the second quarter of 2024, resulting in $0.9 million of accelerated revenue from market access fees.

Indiana. Under the Company’s one active Sports Agreement in Indiana that commenced in December 2021, we receive a percentage of revenues (as defined), subject to an annualized minimum amount. Additionally, a $1.0 million market access fee, received upon signing of the agreement, is being amortized over the initial 10-year term of the agreement. During the third quarter of 2024, the agreement was amended to settle overdue payments and to reduce future annual amounts for the remainder of the initial term through November 2031, as well as for any renewal periods (see Note 9). The Company also has two idle skins, which the Company could operate itself or allow third-party operators to utilize. There is no certainty that the Company will be able to enter into agreements with other third-party operators or successfully operate the skins itself.

Colorado. Similarly in Colorado, under the Company’s one active Sports Agreement that commenced in June 2020, we receive a percentage of revenues (as defined), subject to an annualized minimum amount. Additionally, a $1.0 million market access fee, received upon signing of the agreement, is being amortized over the initial 10-year term of the agreement. During the third quarter of 2024, the agreement was amended to settle overdue payments and to reduce future annual amounts for the remainder of the initial term through June 2030, as well as for any renewal periods (see Note 9). The Company also has two idle skins, which the Company could operate itself or allow third-party operators to utilize. There is no certainty that the Company will be able to enter into agreements with other third-party operators or successfully operate the skins itself.

Illinois. Under the Company’s Sports Agreement in Illinois, we receive a percentage of revenues (as defined), subject to a minimum of $5.0 million per year. A market access fee of $5.0 million is being amortized over the eight-year term of the Sports Agreement, which began its contractual term in August 2023.

In addition to the market access fees, deferred revenue includes annual prepayments of contracted revenue. With the July 2024 amendment of two Sports Agreements, the prepayment of contracted revenue is now required in all of the Company’s active Sports Agreements.

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Deferred revenues consisted of the following, as discussed above:


(In thousands)		June 30,		December 31,
	Balance Sheet Location	2024		2023
Deferred revenue, current	Other accrued expenses and current liabilities	$	3,346	$	6,175
Deferred revenue, net of current portion	Contract liabilities, net of current portion		4,962		6,192
		$	8,308	$	12,367

Other Revenues. The transaction price of rooms, food and beverage, and retail contracts is the net amount collected from the customer for such goods and services. The transaction price for such contracts is recorded as revenue when the good or service is transferred to the customer over their stay at the hotel or when the delivery is made for the food, beverage, retail and other contracts. Sales and usage-based taxes are excluded from revenues.

Revenue by Source. The Company presents earned revenue as disaggregated by the type or nature of the good or service (casino, food and beverage, hotel, and other operations comprised mainly of retail, golf, entertainment, and contracted sports wagering) and by relevant geographic region within Note 8.

Income Taxes. For interim income tax reporting for the three and six months ended June 30, 2024, the Company estimates its annual effective tax rate and applies it to its year-to-date pretax income or loss.

Reclassifications. The Company made certain minor financial statement presentation reclassifications to prior-period amounts to conform to the current-period presentation. Such reclassifications had no effect on the previously reported results of operations or financial position.

Earnings (Loss) Per Share. Earnings (loss) per share is net income (loss) applicable to common stock divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects additional dilutive effects for all potentially-dilutive securities, including share-based awards outstanding under the Company’s stock compensation plan, using the treasury stock method.

Leases. The Company determines if a contract is, or contains, a lease at inception or modification of the agreement. A contract is, or contains, a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration. Control over the use of the identified asset means that the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

For material leases with terms greater than a year, the Company records right-of-use (“ROU”) assets and lease liabilities on the balance sheet, as measured on a discounted basis. For finance leases, the Company recognizes interest expense associated with the lease liability, as well as depreciation (or amortization) expense associated with the ROU asset, depending on whether those ROU assets are expected to transfer to the Company upon lease expiration. If ownership of a finance lease ROU asset is expected to transfer to the Company upon lease expiration, then it is included with the Company’s property and equipment; other qualifying finance lease ROU assets, based on other classifying criteria under Accounting Standards Codification 842 (“ASC 842”), are disclosed separately as “Finance Lease Right-of-Use Assets, Net.” For operating leases, the Company recognizes straight-line rent expense.

The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less. However, costs related to short-term leases with terms greater than one month, which the Company deems material, are disclosed as a component of lease expenses when applicable. Additionally, the Company accounts for new and existing leases containing both lease and non-lease components (“embedded leases”) together as a single lease component by asset class for gaming-related equipment; therefore, the Company does not allocate contract consideration to the separate lease and non-lease components based on their relative standalone prices.

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Operating Leases

Waukegan Ground Lease through February 2122 and Option to Purchase. In January 2023, the Company’s subsidiary, FHR-Illinois, LLC, entered into a 99-year ground lease (the “Ground Lease”) for approximately 32 acres of land (the “City-Owned Parcel”) with the City of Waukegan in Illinois (the “City”). The ground lease commenced concurrently with the opening of American Place on February 17, 2023. The City-Owned Parcel and an adjacent 10-acre parcel owned by the Company comprise the location of American Place, including its temporary facility. Annual rent under the Ground Lease is the greater of (i) $3.0 million (the “Annual Guaranteed Minimum Rent”), or (ii) 2.5% of gross gaming revenue (as defined in the lease) generated by American Place.

The Company has the right to purchase the City-Owned Parcel at any time during the term of the Ground Lease for $30 million. If it does so prior to the opening of the permanent American Place facility, then it must continue to pay rent due to the City under the Ground Lease until the permanent casino is open.

Silver Slipper Casino Land Lease through April 2058 and Option to Purchase. In 2004, the Company’s subsidiary, Silver Slipper Casino Venture, LLC, entered into a land lease for approximately 31 acres of marshlands and a seven-acre parcel on which the Silver Slipper Casino and Hotel is situated. Annual minimum rent is $0.9 million throughout the lease term until 2058, plus contingent rents of 3% of gross gaming revenue (as defined in the lease) in excess of $3.65 million per month. Rent paid through the first half of 2024, including contingent rent, was $0.8 million.

Through October 1, 2027, the Company may buy out the lease for $15.5 million, plus a seller-retained interest in Silver Slipper Casino and Hotel’s operations of 3% of net income (as defined) for 10 years following the purchase date.

Bronco Billy’s / Chamonix Lease through January 2035 and Option to Purchase. The Company’s subsidiary, FHR-Colorado LLC, leases certain parcels, including a portion of the hotel and casino, under a long-term lease. The lease term includes six renewal options in three-year increments to 2035. The Company exercised its fourth renewal option to extend the lease term through January 2029, with current annual lease payments of $0.4 million. Annual minimum rent will increase to $0.5 million starting in February 2026 with adjustments on each anniversary thereafter, based on the consumer price index. The lease contains a $7.6 million purchase option exercisable at any time during the lease term, or as extended, and a right of first refusal on any sale of the property.

The Company’s related ROU asset and liability balances on its balance sheet factor in all renewal terms through January 2035, as the Company is deemed likely to exercise each renewal unless it exercises its purchase buyout right.

Grand Lodge Casino Lease through December 2024. The Company’s subsidiary, Gaming Entertainment (Nevada), LLC, has a lease (the “Hyatt Lease”) with Incline Hotel, LLC, the owner of the Hyatt Regency Lake Tahoe Resort (“Hyatt Lake Tahoe”), to operate the Grand Lodge Casino. It is collateralized by the Company’s interests under the lease and property (as defined in the lease) and is subordinate to the liens of the Notes (see Note 4). The lessor has an option to purchase the Company’s leasehold interest and related operating assets of the Grand Lodge Casino at any time prior to lease expiration, subject to assumption of applicable liabilities. The option price is an amount equal to the Grand Lodge Casino’s positive working capital, plus Grand Lodge Casino’s earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the 12-month period preceding the acquisition (or pro-rated if less than 12 months remain on the lease), plus the fair market value of the Grand Lodge Casino’s personal property.

The current annual rent of $2.0 million is applicable through December 2024. In July 2024, the lease was further amended to extend the current term through December 31, 2034 and, additionally, permits the lessor to terminate the lease early with six months’ notice for a significant renovation of the property (see Note 9). Accordingly, the Company will remeasure this lease’s related ROU asset and liability balances on its balance sheet upon the effective date of the amendment.

Corporate Office Lease through January 2025. The Company leases 4,479 square feet of office space in Las Vegas, Nevada. Annual rent is approximately $0.2 million and the term of the office lease expires in January 2025.

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Finance Lease

Rising Star Casino Hotel Lease through October 2027 and Option to Purchase. The Company’s Indiana subsidiary, Gaming Entertainment (Indiana) LLC, leases a 104-guestroom hotel at Rising Star Casino Resort. At any time during the lease term, the Company has the option to purchase the hotel, and approximately 3.01 acres of land on which it resides, at a price based upon the hotel’s original cost of $7.7 million, reduced by the cumulative principal payments made by the Company during the lease term. At June 30, 2024, such potential purchase price was $2.0 million. Upon expiration of the lease term in October 2027, (i) the landlord has the right to sell the hotel to the Company, and (ii) the Company has the option to purchase the hotel. In either case, the purchase price is $1 plus closing costs.

The components of lease expenses are as follows:


(In thousands)		Three Months Ended				Six Months Ended
	Classification within	June 30,				June 30,
Lease Costs	Statement of Operations	2024		2023		2024		2023
Operating leases:
Fixed/base rent	Selling, General and Administrative Expenses	$	1,964	$	2,170	$	3,927	$	3,962
Short-term payments	Selling, General and Administrative Expenses		—		—		—		22
Variable payments	Selling, General and Administrative Expenses		316		349		579		654
Finance leases:
Amortization of leased assets	Depreciation and Amortization		374		348		749		701
Interest on lease liabilities	Interest Expense, Net		70		109		149		220
Total lease costs		$	2,724	$	2,976	$	5,404	$	5,559

Leases recorded on the balance sheet consist of the following:


(In thousands)
		June 30,		December 31,
Leases	Balance Sheet Classification	2024		2023
Assets
Operating lease assets	Operating Lease Right-of-Use Assets, Net	$	43,074	$	44,704
Finance lease assets	Property and Equipment, Net⁽¹⁾		4,331		4,409
Finance lease assets	Finance Lease Right-of-Use Assets, Net⁽²⁾		1,647		2,318
Total lease assets		$	49,052	$	51,431

Liabilities
Current
Operating	Current Portion of Operating Lease Obligations	$	4,298	$	4,784
Finance	Current Portion of Finance Lease Obligations		1,768		1,694
Noncurrent
Operating	Operating Lease Obligations, Net of Current Portion		39,219		40,248
Finance	Finance Lease Obligations, Net of Current Portion		1,801		2,705
Total lease liabilities		$	47,086	$	49,431

__________

(1)	Finance lease assets are recorded net of accumulated amortization of $2.8 million for June 30, 2024 and $2.7 million for December 31, 2023.

(2)

These finance lease assets are recorded separately from Property and Equipment due to meeting qualifying classification criteria under ASC 842, but ownership of such assets is not expected to transfer to the Company upon term expiration. Additionally, amortization of these assets are expensed over the duration of the lease term or the assets’ estimated useful lives, whichever is earlier.

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Maturities of lease liabilities as of June 30, 2024 are summarized as follows:


(In thousands)
	Operating		Finance
Years Ending December 31,	Leases		Leases
2024 (excluding the six months ended June 30, 2024)	$	3,924	$	978
2025		5,722		1,721
2026		4,864		652
2027		4,515		489
2028		4,515		—
Thereafter		312,066		—
Total future minimum lease payments		335,606		3,840
Less: Amount representing interest		(292,089)		(271)
Present value of lease liabilities		43,517		3,569
Less: Current lease obligations		(4,298)		(1,768)
Long-term lease obligations	$	39,219	$	1,801

Other information related to lease term and discount rate is as follows:


	June 30,		December 31,
Lease Term and Discount Rate	2024		2023
Weighted-average remaining lease term
Operating leases	69.8	years	67.9	years
Finance leases	2.3	years	2.8	years
Weighted-average discount rate
Operating leases	10.92	%	10.91	%
Finance leases	7.19	%	7.46	%

Supplemental cash flow information related to leases is as follows:


(In thousands)	Six Months Ended
	June 30,
Cash paid for amounts included in the measurement of lease liabilities:	2024		2023
Operating cash flows for operating leases	$	3,812	$	3,898
Operating cash flows for finance leases	$	149	$	220
Financing cash flows for finance leases	$	830	$	759

4. LONG-TERM DEBT

Long-term debt consists of the following:


(In thousands)	June 30,		December 31,
	2024		2023
Revolving Credit Facility due 2026	$	27,000	$	27,000
8.25% Senior Secured Notes due 2028		450,000		450,000
Less: Unamortized debt issuance costs and discounts/premiums, net		(10,362)		(11,847)
	$	466,638	$	465,153

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Senior Secured Notes due 2028. On February 12, 2021, the Company issued $310.0 million aggregate principal amount of 8.25% Senior Secured Notes due 2028 (the “2028 Notes”) to refinance all of its prior notes and repurchase all of its outstanding warrants. Additionally, $180 million of bond proceeds were initially placed into a construction reserve account to fund the construction of Chamonix, which was later increased to $221 million in January 2022 to reflect an expansion of the project.

On February 7, 2022, the Company closed a private offering for an additional $100.0 million of Senior Secured Notes due 2028, which sold at a price of 102.0% of such principal amount. Proceeds from this sale were used: (i) to develop, equip and open the temporary American Place facility, which the Company intends to operate while it designs and constructs its permanent facility, (ii) to pay the transaction fees and expenses of such offer and sale, and (iii) for general corporate purposes. The additional notes from this sale were issued pursuant to the indenture, dated as of February 12, 2021 (the “Original Indenture”), to which the Company issued the $310.0 million of 2028 Notes described above. In connection with the issuance of the additional notes in February 2022, the Company and the subsidiary guarantors party to the Original Indenture also entered into three Supplemental Indentures with Wilmington Trust, National Association, as trustee.

On February 21, 2023, the Company issued an additional $40.0 million of senior secured notes (the “Additional Notes”), thereby increasing the outstanding borrowing under the 2028 Notes to $450.0 million (collectively, the “Notes”). Related to the issuance of the Additional Notes, the Company further amended the indenture governing the Notes (collectively, the “Amended Indenture”) and amended its revolving credit facility. Proceeds from the offering of the Additional Notes, net of related expenses and discounts, were approximately $34 million and were used: (i) to open American Place, including the payment of related Illinois gaming license fees in March 2023, and (ii) for general corporate purposes. The Additional Notes are essentially identical to the 2028 Notes, as they are treated as a single series of senior secured debt securities with the 2028 Notes and also as a single class for all purposes under the Amended Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

The Notes bear interest at a fixed rate of 8.25% per year and mature on February 15, 2028. There is no mandatory debt amortization prior to the maturity date. Interest on the Notes is payable on February 15 and August 15 of each year.

The Notes are guaranteed, jointly and severally (such guarantees, the “Guarantees”), by each of the Company’s restricted subsidiaries (collectively, the “Guarantors”). The Notes and the Guarantees are the Company’s and the Guarantors’ general senior secured obligations, subject to the terms of the Collateral Trust Agreement (as defined in the Amended Indenture), ranking senior in right of payment to all of the Company’s and the Guarantors’ existing and future debt that is expressly subordinated in right of payment to the Notes and the Guarantees, if any. The Notes and the Guarantees will rank equally in right of payment with all of the Company’s and the Guarantors’ existing and future senior debt.

The Notes contain representations and warranties, covenants, and restrictions on dividends customary for notes of this type. Mandatory prepayments, in whole or in part, of the Notes will be required upon the occurrence of certain events, including sales of certain assets (unless such net proceeds are reinvested in the business), upon certain changes of control, or should the Company have certain unused funds in the construction disbursement account following the completion of Chamonix.

The Company may redeem some or all of the Notes for cash at the following redemption prices:


Redemption Periods	Percentage Premium
February 15, 2024 to February 14, 2025	104.125	%
February 15, 2025 to February 14, 2026	102.063	%
February 15, 2026 and Thereafter	100.000	%


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PART I FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	3
	Condensed Consolidated Balance Sheets at June 30, 2024 and December 31, 2023	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	8
	Note 1 ⸺ Organization	8
	Note 2 ⸺ Basis of Presentation and Significant Accounting Policies	8
	Note 3 ⸺ Leases	13
	Note 4 ⸺ Long-Term Debt	16
	Note 5 ⸺ Income Taxes	18
	Note 6 ⸺ Commitments and Contingencies	19
	Note 7 ⸺ Earnings (Loss) Per Share	19
	Note 8 ⸺ Segment Reporting and Disaggregated Revenue	19
	Note 9 ⸺ Subsequent Events	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	42
Item 5.	Other Information	42

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 6.	Exhibits	43

Signatures		44