FULL HOUSE RESORTS INC

The following table presents the financial results of our Midwest & South operations on a same-store basis for the years ended December 31, 2023 and 2022 for revenues and Adjusted Segment EBITDA; see “Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Segment EBITDA Margin and Adjusted Property EBITDA” for additional information.

Same-store operations exclude results of new and acquired operating segments that have not been in operations for longer than a year, starting from the date of commencement or acquisition through the end of the reporting period. Accordingly, for Midwest & South, we have excluded the results of American Place for periods subsequent to its commencement of operations.

N.M. Not meaningful.

The following table presents the financial results of our Contracted Sports Wagering operations on a same-store basis for the years ended December 31, 2023 and 2022 for revenues and Adjusted Segment EBITDA; see “Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Segment EBITDA Margin and Adjusted Property EBITDA” for additional information.

Same-store operations exclude results of new and acquired operating segments that have not been in operations for longer than a year, starting from the date of commencement or acquisition through the end of the reporting period. Accordingly, for Contracted Sports Wagering, we have excluded the results in Illinois for periods subsequent to its contractual commencement of revenue payments. For comparability, we also excluded accelerated revenues due to contract terminations from same-store operations.

N.M. Not meaningful.

Midwest & South

Our Midwest & South segment includes Silver Slipper Casino and Hotel, Rising Star Casino Resort and American Place, which opened in Waukegan, Illinois, in February 2023. Compared to 2022, total revenues in 2023 increased by 60.4% (or $72.4 million), primarily due to the opening of American Place. Excluding results from American Place, same-store revenues declined by 3.8% (or $4.6 million), primarily due to lower casino revenue during the year.

Reflecting the February 2023 opening of American Place, casino revenue increased by 78.0% (or $63.7 million), led by a 70.2% increase in slot revenue (or $50.0 million). Table games revenue increased by 146.8% (or $14.1 million). Excluding results from American Place, same-store casino revenue declined by 9.9% (or $8.0 million), primarily due to lower slot and table games hold percentages at Silver Slipper and changes in promotions versus the prior year. To a lesser extent, same-store slot revenue for 2023 was adversely impacted by lower slot volumes at Rising Star versus the prior year, likely due to the opening of a new, competing racetrack casino in September 2022 in Northern Kentucky.

Non-casino revenue increased by 22.7% (or $8.7 million), largely due to increases in food and beverage revenue. Food and beverage revenue rose 29.7% (or $7.0 million), including $3.8 million generated by American Place. Non-casino revenue also benefited from $1.4 million in ATM and related surcharge income at American Place during 2023. Hotel revenues for the segment remained relatively flat during the year, as the temporary American Place facility does not have hotel operations.

Adjusted Segment EBITDA increased by 48.0% (or $12.7 million) from the prior year, reflecting the February 2023 opening of American Place, which generated $18.4 million of Adjusted Property EBITDA, offsetting a same-store Adjusted Segment EBITDA decline of $5.8 million (21.8%) during 2023. Same-store operations were primarily affected by declines in casino revenues and higher operating costs at Silver Slipper, such as property insurance, as well as increases in labor expenses generally.

Of note, the temporary American Place facility was not operating at full capacity during 2023. American Place operated only one of its major restaurants in the first quarter, followed by a second restaurant that opened in April 2023. In February 2024, its high-end restaurant opened, thus completing the temporary American Place facility. Also, in September 2023, an on-site sportsbook commenced operations.

West

Our West segment includes Grand Lodge, Stockman’s Casino, Bronco Billy’s Casino and Hotel, and Chamonix Casino Hotel, which opened on December 27, 2023. The market in Cripple Creek, Colorado, is seasonal, favoring the summer months. Our Nevada operations have historically been seasonal, with the summer months accounting for a disproportionate share of annual revenues. Additionally, snowfall levels during the winter months can often affect operations, as Grand Lodge is located near several major ski resorts. While Grand Lodge typically benefits from a “good” snow year, resulting in extended periods of operation at the nearby ski areas, excessive snow levels can also result in challenging driving conditions or the closure of roads leading to the property.

Total revenues decreased by 0.7% (or $0.2 million), primarily due to planned business disruptions to accommodate the construction of Chamonix. These significant construction disruptions included temporarily-reduced gaming and restaurant capacity at Bronco Billy’s, as well as the absence of all on-site hotel rooms and on-site self-parking until Chamonix’s opening at the end of 2023. To alleviate the lack of on-site parking during 2022 and nearly all of 2023, Bronco Billy’s offered, and incurred the cost of offering, complimentary valet parking, as well as a free shuttle service to an off-site parking lot.

Casino revenue decreased by 2.0% (or $0.7 million), largely due to the construction disruptions at Bronco Billy’s mentioned above. Slot revenue declined by 3.9% (or $1.1 million), despite an increase in slot hold percentages at Bronco Billy’s and Grand Lodge. Table games revenue improved by 11.4% (or $0.4 million) due to an increase in table games drop at Bronco Billy’s, as Bronco Billy’s was undergoing a casino refurbishment for a majority of 2022, and an increase in the table games hold percentage at Stockman’s. Adverse weather also negatively affected gaming volumes in Nevada, especially at Grand Lodge, where heavy snowfall in February and March 2023 created challenging driving conditions and trip cancellations to our property. During the second quarter of 2023, lingering snowfall near Lake Tahoe delayed the return of seasonal residents to Incline Village, which also adversely affected Grand Lodge’s results.

Non-casino revenue improved by $0.4 million during 2023, primarily due to an increase in food and beverage revenues of the same amount, while hotel revenue remained relatively flat during the year.

Adjusted Segment EBITDA decreased by $1.8 million to $2.4 million in 2023 from $4.2 million in the prior year. The segment’s profitability was adversely affected by disruptions from the construction of Chamonix described above, including additional operating expenses related to the operation of our new valet and parking shuttle service. Bronco Billy’s also maintained much of its payroll, despite reduced activity levels, in anticipation of the larger workforce required to open and operate Chamonix. As mentioned, there was also adverse weather at Grand Lodge during the first half of 2023.

In addition to construction disruption due to our neighboring Chamonix project, we are currently undergoing a modest refurbishment of a portion of Bronco Billy’s, which began in May 2022. While Bronco Billy’s casino refurbishment was completed in December 2022, the restaurant refurbishment will continue to impact the property until its anticipated completion in the second half of 2024. With Chamonix now open, Bronco Billy’s is benefiting from its integration with Chamonix, including its new parking garage and approximately 300 on-site guestrooms.

Contracted Sports Wagering

The Contracted Sports Wagering segment consists of our on-site and online sports wagering skins in Colorado, Indiana and Illinois.

For 2023, this segment’s revenues grew 78.1%, from $7.2 million in 2022 to $12.8 million in 2023, and Adjusted Segment EBITDA rose 63.6%, from $7.1 million to $11.7 million. These results reflect the launch of our permitted Illinois sports skin in August 2023. Under the Illinois sports wagering agreement, we receive a percentage of revenues (as defined), subject to an annualized minimum of $5 million, with minimal expected expenses. Additionally, we receive a percentage of on-site sports revenue, as defined. Such agreement contributed $2.2 million each in revenues and Adjusted Segment EBITDA during 2023.

Additionally, these results reflect the acceleration of revenues from the termination of two contracted sports wagering agreements in September 2023, which contributed $5.8 million in revenues and Adjusted Segment EBITDA for 2023, as well as a provision for credit losses on sports wagering receivables of $1.0 million, which adversely affected Adjusted Segment EBITDA for 2023. For the prior year, we recognized accelerated revenues of $1.6 million in 2022, when one of our contracted parties ended its online and retail operations in May 2022 in Indiana and Colorado. We replaced one of these terminated contracts in December 2022, when we entered into a new sports wagering agreement in Colorado, which began contributing to our results in March 2023.

We currently have two idle sports skins in Indiana and one idle sports skin in Colorado. We continue to evaluate whether to operate our idle skins ourselves or to have other third parties operate them. However, there is no certainty that we will be able to enter into agreements with replacement operators or successfully operate the skins ourselves.

Corporate

Corporate expenses declined by 18.7% (or $1.0 million), as an increase in third-party professional services was more than offset by a decrease in accrued bonus compensation. For the years ended 2023 and 2022, corporate expenses were $4.5 million and $5.6 million, respectively.