Timing right for suitors to pursue Full House

In the grand scheme of things, the proxy fight over Full House Resorts seems like small potatoes.

But with regional markets on a downward trajectory, the company is ripe for the taking.

Las Vegas-based Full House owns three regional casinos and has a management contract for a Lake Tahoe resort. Full House, which is traded on Nasdaq, has a market capitalization of less than $24 million.

As a comparison, MGM Resorts International is spending more than four times Full House’s value to build its Park dining and entertainment development between New York-New York and the Monte Carlo.

A Full House buyout isn’t going to rile up the investment community.

A group of Full House investors, led by former Pinnacle Entertainment CEO Dan Lee, predicts better days for the casino operator if it can remake the board and map out a new direction.

“We see great value and potential for the company,” said Bradley Tirpak, a Full House shareholder and professional investor who worked for several Wall Street firms.

The group controls 6.2 percent of Full House shares and received Securities and Exchange Commission permission Tuesday to approach other company stockholders about a special meeting to vote on a board restructuring.

A trust set up by the company’s late CEO that owns 9.4 percent of Full House sided with the shareholder group.

The proxy fight hasn’t drawn much interest from analysts.

Macquarie Securities is advising Full House in the matter, which sidelines analyst Chad Beynon. Sterne Agee gaming analyst David Bain hasn’t commented on the company since May.

The proxy fight comes as regional gaming markets hit rock bottom.

Through September, just four out of 22 states have shown gaming revenue increases over 2013. Two states, Indiana (leading the downturn at 12 percent) and Mississippi (down 4 percent) are home to Full House casinos.

The company’s Rising Star Casino in Indiana has been hurt by new competition across the Ohio River in Cincinnati. Since 2011, Rising Star’s revenue is down 47 percent.

Statewide, Indiana’s gaming revenue declined 40 times in the past 45 months, according to Macquarie. The Indiana region that draws from the Cincinnati market has experienced 30 consecutive monthly declines.

In other words, this the perfect time for Lee and his investment group to make a run at Full House.

The company put itself on the market last week and invited Lee’s group “to participate in the sale process.”

Lee said it’s unclear whether Full House can actually be sold, and if a buyer will surface. Gaming and Leisure Properties, the real estate investment trust that was spun off from Penn National Gaming could have some interest.

Declining gaming revenues nationwide have worked to drag down stock prices of regional casino companies, including Pinnacle Entertainment, Boyd Gaming Corp., Penn National Gaming, Isle of Capri Casinos and Caesars Entertainment Corp.

Penn National’s revenue fell nearly 10 percent in the third quarter, but the company’s overall results still beat most analyst projections. Penn National has 26 casinos and racetracks in 17 states and provinces, and sits at ground zero in the regional gaming downturn.

“The operating environment in the regional markets continues to be challenging, given the frugality of the consumer and the cannibalization from supply additions,” Deutsche Bank gaming analyst Andrew Zarnett said.

Wells Fargo Securities gaming analyst Cameron McKnight said new and expanded regwional casinos, such as the Horseshoe Casino Baltimore, are slicing into existing customer bases as markets grow more competitive.

“Industry trends should improve in 2015 given limited additional supply growth,” McKnight said.

Beynon said stock prices of regional gaming companies underperformed Standard &Poor’s average by 6 percent, so consumer spending continues to be muted.

“Our channel checks indicate that tier-one and (tier)-two players are moderately healthy, but lower-tier players aren’t showing up at the same rate they did years ago,” Beynon said.

Full House has suffered along with other regional casino operators. That’s one reason the company dumped plans to buy a Tunica, Miss., casino earlier this year, even though the company lost 97 percent of a $1.75 million escrow account and $300,000 in professional fees.

Full House is still part of two groups seeking casino opportunities in upstate New York and the company has expressed interest in potential racetrack projects in Kentucky.

Lee is skeptical about the current regional environment.

“Management’s pursuit of new projects requiring capital and attention could represent a tremendous risk to stockholders,” Lee said.

Howard Stutz’s Inside Gaming column appears Wednesdays and Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. Follow on Twitter: @howardstutz.

Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like