8. LEASES

The Company has no material leases in which it is the lessor. As lessee, the Company has finance leases for a hotel and certain equipment, as well as operating leases for land, casino and office space, equipment, and buildings. The Company’s remaining lease terms, including extensions, range from greater than one year to approximately 96 years as of December 31, 2025. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants, but the land leases at Silver Slipper and American Place do include contingent rent, as further discussed below.

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 or (ii) 2.5% of gross gaming revenue (as defined in the Ground Lease) generated by American Place. We recognized $3.0 million of rent expense including $43,000 of contingent rent during 2025, compared to $3.0 million of rent expense with no contingent rent during 2024.

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 Options to Purchase. In 2004, the Company’s subsidiary, Silver Slipper Casino Venture, LLC, entered into a land lease with Cure Land Company, LLC, for approximately 31 acres of marshlands and a seven-acre parcel on which the Silver Slipper 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 any month where such revenue is in excess of $3.65 million. We recognized $1.5 million of rent expense, including $0.6 million of contingent rents, during 2025, compared to $1.6 million of rent expense, including $0.7 million of contingent rents, during 2024.

Through October 1, 2027, the Company may buy out the lease for $15.5 million, plus a seller-retained interest in Silver Slipper’s operations of 3% of the property’s net income (as defined in the lease) for 10 years following the purchase date. In the event that the Company sells or transfers either: (i) substantially all of the assets of Silver Slipper or (ii) its membership interests in Silver Slipper in its entirety, then the purchase price will increase to $17.1 million, plus the retained interest mentioned above. In either case, the Company also has an option to purchase a four-acre portion from the total 38 acres of leased land for $2.0 million in connection with the development of an owned hotel, which may be exercised at any time and would accordingly reduce the purchase price of the remaining land by $2.0 million.

Chamonix / Bronco Billy’s 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. We recognized $0.5 million of rent expense during each of 2025 and 2024.

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 also 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 option, unless it exercises its purchase buyout right.

Grand Lodge Casino Lease through December 2034. 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 Grand Lodge. 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 7). The lessor has an option to purchase the Company’s leasehold interest and related operating assets of Grand Lodge at any time prior to lease expiration of the Hyatt Lease, subject to payment of certain amounts. The option price is an amount equal to Grand Lodge’s positive working capital, plus Grand Lodge’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 Hyatt Lease), plus the fair market value of Grand Lodge’s personal property.

In July 2024, the Hyatt Lease was further amended to extend the term through December 31, 2034. In the event of a significant renovation of the property, the amended lease permits the lessor to terminate the lease early by providing six months’ notice, with the Company retaining Grand Lodge’s personal property at the end of such period. In January 2025, the annual rent increased nominally from $2.00 million to $2.01 million. However, an amendment made effective in December 2025 extended the timing of the next annual rent increase until January 2028, wherein such rent amounts will increase within stipulated ranges, based on the level of renovation disruption to the Company’s gaming operations at such time. Except as set forth in the amendment, all other terms of the Hyatt Lease remain in full force and effect. Accordingly, the Company has remeasured this lease’s related ROU asset and liability balances upon the effective date of this latest amendment. We recognized $2.2 million of rent expense during 2025, compared to $2.1 million during 2024.

Corporate Office Lease through April 2030. The Company leases 4,479 square feet of office space in Las Vegas, Nevada. In September 2024, the Company entered into an amendment with the landlord to extend the lease through April 30, 2030. The annual rent of $0.20 million in 2024 declined in February 2025 to $0.17 million, will increase in February 2026 to $0.23 million, and then increase 3% annually on each anniversary for the remainder of the extended term. The amended lease also includes one renewal at the Company’s option for five years with rent to be determined at the fair market rate. Accordingly, the Company has remeasured this lease’s related ROU asset and liability balances upon the effective date of this amendment. We recognized $0.2 million of annual rent expense for each of 2025 and 2024.

Stockman’s Sale-Leaseback. In connection with the sale of Stockman’s real estate that closed on September 27, 2024, the Company’s subsidiary, Stockman’s Casino, Inc., entered into a short-term lease for use of the facilities with monthly rent of $50,000. Such leaseback terminated upon the second closing of the Stockman’s sale on April 1, 2025. Accordingly, we recognized $0.2 million of rent expense for each of 2025 and 2024. See Note 3 for details.

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-room 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 project’s original cost of $7.7 million (see Note 4), reduced by the cumulative principal finance lease payments made by the Company during the lease term. At December 31, 2025, such net amount was $1.1 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. Annual payments for this finance lease were $0.7 million for each of 2025 and 2024.

Leases recorded on the balance sheet consist of the following:

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The components of lease expense are as follows:

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Maturities of lease liabilities at December 31, 2025 are summarized as follows:

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

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Supplemental cash flow information related to leases is as follows:

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