Updated May 14, 2020 - 9:34 am
The top executive of a small Las Vegas casino company is hoping demand will be as strong as it’s been for tribal casinos that already have opened their doors — especially since one of his five properties is due to open May 22.
Dan Lee, president and CEO of Full House Resorts Inc., on Wednesday cited the experiences of tribal casinos in Idaho and a slot-route operation of Las Vegas-based Golden Entertainment Inc. as evidence that pent-up demand may be stronger than some analysts are anticipating — especially in the regional markets his company operates.
“People showed up and stood in lines to get in,” Lee said of a tribal operation in Idaho that he didn’t name. “They only had half their slot machines turned on. They limited the number of people coming in, and they still had the highest handle in their 20-year history on the day they reopened. I’m not forecasting that we’ll be as fortuitous as they were.”
Lee also noted that Golden Entertainment, which services a collection of slot machines operated in Montana taverns, shared that demand soared to levels reached before state governments shut down gambling operations as a means to stop the spread of the coronavirus.
Lee is focused on that because his 129-room Silver Slipper Casino Hotel in Bay St. Louis, Mississippi, will open its doors May 22 following the lifting of closure orders by regulators in that state.
“Our other properties are expected to follow shortly thereafter, with Stockman’s Casino and Grand Lodge Casino (in Nevada) expected to reopen before the end of May, Bronco Billy’s (in Colorado) expected to reopen in early June, and Rising Star (in Indiana) expected to reopen on June 14,” Lee said.
“Given the fluid nature of the coronavirus situation, these dates may change, but we look forward to welcoming back our guests and employees in relatively short order,” he added.
Lee said many Full House customers are retirees.
“If you’re retired, you can’t be laid off and you still have a $1,200 stimulus check,” he said.
Still, Lee said Full House would take a conservative approach to reopening with lean staffing initially.
“It’s almost like having a development company where you’ve got a handful of employees and you’re looking at opening five casinos and we’ll put all those people back to work,” he said.
At some Full House properties, areas between slot machines will have a Plexiglas slide that can be moved between players — a measure that Lee hopes will be approved for social distancing instead of having to turn off half of the casino’s machines.
In a call with investors, Lee said the company burned through $5 million from mid-March to mid-April, much of it due to the payment of severance packages to employees. The rate is now down to about $3 million a month, which includes $1 million in debt service, real estate taxes and utility costs.
The company received a $5.6 million CARES Act loan with a two-year interest rate of 1 percent that will help Full House make payroll on two eligible properties.
Lee said he expects states that currently have gaming will expand their offerings and states that don’t have it will consider legalizing it because of the budget crunch that will hit states and municipalities.
Responding to a question from an analyst, Lee said he expects some states to expand internet gaming opportunities — pay-to-play slot machines and casino games available online. New Jersey offers internet gaming to companies that have brick-and-mortar properties in the state. Lee also suggested Virginia and Georgia may be candidates to legalize gambling.
Full House shares traded on the Nasdaq closed down 5 cents, 3.3 percent, to $1.45 a share on volume slightly below the daily average.
Full House Resorts Inc.
First-quarter revenue and earnings for Las Vegas-based Full House Resorts Inc., a small regional casino company with properties at Lake Tahoe and in Fallon, and in Colorado and Indiana. (Nasdaq: FLL)
1Q 2020: $30.9 million
1Q 2019: $40.5 million
1Q 2020: $4.4 million
1Q 2019: $1.6 million
Loss per share
1Q 2020: 22 cents
1Q 2019: 6 cents