On Thursday, while most gaming stocks either showed gains or remained largely stable, shares of Full House Resorts (NASDAQ: FLL) experienced a notable dip. This downturn followed the regional casino operator’s release of weaker-than-expected third-quarter results late Wednesday. By late trading, the stock had fallen by 8%, with trading volume doubling its daily average.
Full House Resorts’ new report, which included a digital rendering of their planned permanent American Place Casino in Waukegan, Illinois, indicated patience might be necessary for investors. This sentiment was echoed by B. Riley analyst David Bain, who remains optimistic about the long-term prospects of Full House, despite the current dip. Bain upheld his “buy” rating on the stock but adjusted the price target to $8 from $9. His optimism is driven by the anticipated contributions from Full House’s American Place casino hotel in Waukegan and its Chamonix Casino Hotel in Cripple Creek, Colorado.
Bain observed that the developments in Illinois and Colorado are crucial to enhancing the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA). He highlighted that American Place has been making significant progress, particularly with recent marketing improvements boosting gains.
Currently, American Place operates from a temporary venue, with the completion of the permanent facility projected for 2027. Meanwhile, the Waukegan casino is embroiled in an extended legal dispute with the Forest County Potawatomi of Wisconsin. This tribal gaming operator claims that Full House’s gaming license was awarded through an unfair bidding process, causing delays and uncertainty around the American Place project. However, the temporary American Place venue showed strong third-quarter results, and Bain pointed out that the success of the recently opened Hard Rock casino in Rockford, Illinois, suggests a promising future for Full House.
Notably, the Hard Rock Casino in Rockford commenced operations with its permanent facility in late August. By September, its gross gaming revenue surged by 140% month-over-month. Although this doesn’t directly translate to American Place’s future performance, Bain believes it indicates strong potential earnings, contrasting with traditional investor expectations. Given that Waukegan is about a two-hour drive from Rockford and just an hour from Chicago, American Place’s strategic location could yield significant long-term benefits.
Meanwhile, the Chamonix Casino Hotel in Cripple Creek, Colorado, which opened last December, has experienced a turbulent first year regarding EBITDA growth. Despite these initial fluctuations, the venue is seen as a pivotal component of Full House’s long-term strategy. Chamonix is poised to become one of the premier casino resorts in Colorado, offering top-tier amenities and aiming for high ratings.
Bain remarked that, although the EBITDA ramp for Chamonix has been inconsistent, he expects stabilization over time. He emphasized that Chamonix addresses an existing imbalance in gaming income within the Cripple Creek area compared to other Colorado gaming markets. Bain remains confident in the projected EBITDA generation of over $45 million from Chamonix at full maturity, reinforcing the long-term investment thesis for Full House.
 stock dips 8% after weak Q3 results. Analyst remains positive on long-term prospects with new casinos in Illinois and Colorado.){kind=link}