FULL HOUSE RESORTS INC

Previous wording

Our primary business is the ownership and/or operation of casino and related hospitality and entertainment facilities, which includes offering, among other amenities, casino gambling, hotel accommodations, dining, golf, RV camping, sports betting, entertainment and retail outlets. We currently operate seven casinos: six on real estate that we own or lease and one located within a hotel owned by a third party. In February 2023, we opened our temporary American Place facility, which we are permitted to operate until August 2027; we have already begun the design work for the permanent replacement facility. In December 2023, we began the phased opening of our newest property, Chamonix Casino Hotel (“Chamonix”), located adjacent to our existing Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado. Additionally, we benefit from seven permitted sports wagering “skins” – three in Colorado, three in Indiana, and one in Illinois. Other companies operate the active sports wagering websites under their brands, paying us a percentage of revenues, as defined, subject to annual minimum amounts. Regarding our remaining idle skins, we continue to evaluate whether to operate them 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.

Current wording

Our primary business is the ownership and/or operation of casino and related hospitality and entertainment facilities, which includes offering, among other amenities, casino gambling, hotel accommodations, dining, golf, RV camping, sports betting, entertainment and retail outlets. We currently operate seven casinos: six on real estate that we own or lease and one located within a hotel owned by a third party. In February 2023, we opened our temporary American Place facility, which we are permitted to operate until August 2027; we have begun the design work for the permanent gaming resort facility that we plan to build on adjoining land. In December 2023, we began the phased opening of our newest property, Chamonix Casino Hotel (“Chamonix”), located adjacent to our existing Bronco Billy’s Casino in Cripple Creek, Colorado. Additionally, we benefit from seven permitted sports wagering “skins” – three in Colorado, three in Indiana, and one in Illinois.

Previous wording

Chamonix Casino Hotel. Designed to integrate with our adjacent Bronco Billy’s Casino, Chamonix is the only luxury casino hotel located near the Colorado Springs metropolitan area. On December 27, 2023, we began its phased opening, starting with the casino, meeting space, and approximately one-third of its 300 guestrooms. The remainder of Chamonix’s guestrooms came online gradually during the first quarter. Our high-end steakhouse, 980 Prime by Barry Dakake, began welcoming its first guests on April 19, 2024, and our pool and spa are expected to begin operations before Memorial Day weekend.

Current wording

Chamonix Casino Hotel. Designed to integrate with our adjacent Bronco Billy’s Casino, Chamonix is the only luxury casino hotel located near the Colorado Springs metropolitan area. On December 27, 2023, we began its phased opening, starting with the casino, meeting space, and approximately one-third of its 300 guestrooms. The remainder of Chamonix’s guestrooms came online gradually during the first quarter. Our high-end steakhouse, 980 Prime, began welcoming its first guests in April 2024, while our rooftop pool and portions of our spa opened in late-May 2024. During the second half of 2024, we expect to complete the opening of Chamonix’s spa and unveil its street-front jewelry store.

Previous wording

American Place. In February 2023, we opened our temporary American Place facility in Waukegan, Illinois, which we are permitted to operate until August 2027. American Place currently includes approximately 940 slot machines, 48 table games, a fine-dining restaurant, two additional restaurants, a center bar and a sportsbook. We have already begun design work for the permanent American Place facility, which is expected to include a world-class casino, state-of-the-art sportsbook, premium boutique hotel comprised of 20 luxurious villas, and various food and beverage outlets.

Current wording

American Place. In February 2023, we opened our temporary American Place facility in Waukegan, Illinois, which we are permitted to operate until August 2027. American Place currently includes approximately 940 slot machines, 48 table games, a fine-dining restaurant, two additional restaurants, a center bar and a sportsbook. We have begun design work for the permanent American Place facility, which is expected to include a world-class casino, state-of-the-art sportsbook, premium boutique hotel comprised of 20 luxurious villas, and various food and beverage outlets.

Previous wording

The following tables summarize our consolidated operating results for the three months ended March 31, 2024 and 2023:

Current wording

The following tables summarize our consolidated operating results for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following discussion is based on our condensed consolidated financial statements for the three months ended March 31, 2024 and 2023.

Current wording

The following discussion is based on our condensed consolidated financial statements for the three and six months ended June 30, 2024 and 2023.

Previous wording

**Revenues.**Consolidated total revenues increased by 39.6% (or $19.8 million) for the three months ended March 31, 2024 compared to the prior-year period. This was primarily due to a full quarter of operations in 2024 at American Place, which opened on February 17, 2023. Revenues during the first quarter of 2024 also benefited from the phased opening of Chamonix, which began on December 27, 2023. Gaming revenues from our integrated Bronco Billy’s/Chamonix facility increased by $3.6 million (or 115.6%), which helped offset gaming revenue declines at the Company’s other properties of $2.0 million (or 8.6%), when compared to the prior-year period.

Current wording

**Revenues.**Consolidated total revenues increased by 23.8% (or $14.1 million) and 31.0% (or $33.9 million) for the respective three and six months ended June 30, 2024, compared to the prior-year periods. This was primarily due to a full six months of operations in 2024 at American Place, which opened on February 17, 2023. Revenues during the 2024 periods also benefited from the phased opening of Chamonix, which began on December 27, 2023. Additionally, revenues in 2024 reflect the contractual commencement of a sports wagering agreement in Illinois on August 15, 2023. To a lesser extent, contracted sports wagering revenue benefited from an acceleration of deferred revenue for a sports agreement that ceased operations in April 2024.

Previous wording

**Operating Expenses.**Consolidated operating expenses increased by 23.5% (or $13.4 million) for the three months ended March 31, 2024, compared to the prior-year period. These increases were primarily due to the commencement of operations at American Place in February 2023 and Chamonix in December 2023. For American Place, these expenses included $6.2 million in selling, general and administrative costs, and $5.5 million in depreciation and amortization. Similarly for Chamonix, these expenses included $1.5 million of preopening costs, $3.8 million in selling, general and administrative costs, and $3.7 million in depreciation and amortization for the three months ended March 31, 2024.

Current wording

**Operating Expenses.**Consolidated operating expenses increased by 21.1% (or $12.4 million) and 22.3% (or $25.8 million) for the three and six months ended June 30, 2024, compared to the prior-year periods. These increases were primarily due to the commencement of operations at American Place in February 2023 and Chamonix in December 2023. For American Place, these expenses included a $3.9 million increase in selling, general and administrative costs for the six months ended June 30, 2024, compared to the prior-year period. Depreciation and amortization for American Place was $4.9 million and $10.3 million for the three and six months ended June 30, 2024. For Chamonix, these expenses included $4.4 million in selling, general and administrative costs, and $4.1 million in depreciation and amortization for the three months ended June 30, 2024. For the six months ended June 30, 2024 at Chamonix, those amounts were $8.2 million and $7.8 million, respectively.

Previous wording

The increase in net interest expense for the three months ended March 31, 2024 was primarily due to reductions in capitalized interest, as construction of the temporary American Place and Chamonix facilities are largely complete. Additionally, as we invested cash into the construction of both projects, our cash balances were lower during the 2024 period, resulting in reduced interest income. Further, we issued $40.0 million in Additional Notes in February 2023, so the prior-year period reflects only a partial quarter of related interest expense.

Current wording

The increases in net interest expense for the three and six months ended June 30, 2024 were primarily due to reductions in capitalized interest, as construction of the temporary American Place facility and Chamonix are largely complete. Additionally, as we invested cash into the construction of both projects, our cash balances were lower during the 2024 period, resulting in reduced interest income. Further, we issued $40.0 million of Additional Notes in February 2023, so the prior-year period reflects only a partial quarter of the related interest expense.

Previous wording

For the three months ended March 31, 2024, we had no other non-operating expense. The corresponding prior-year period had $355,000 of other non-operating income, consisting primarily of insurance settlement proceeds from hurricane damage at Silver Slipper in 2020.

Current wording

For the three and six months ended June 30, 2024, we had no other non-operating expense. The prior-year period had $355,000 of other non-operating income, consisting primarily of insurance settlement proceeds from hurricane damage at Silver Slipper in 2020.

Previous wording

Income Tax Expense. We recognized an income tax provision of $416,000 and an income tax benefit of $35,000 for the respective three months ended March 31, 2024 and 2023, which resulted in effective income tax rates of (3.8%) and 0.3%, respectively. The change in the effective income tax rate was primarily due to the effects of tax amortization on indefinite-lived intangibles in 2024, as well as certain permanent differences between tax and financial reporting purposes.

Current wording

Income Tax Expense. We recognized an income tax benefit of $79,000 and an income tax provision of $0.3 million for the respective three and six months ended June 30, 2024, which resulted in effective income tax rates of 0.9% and (1.7%), respectively. For the three and six months ended June 30, 2023, we recognized respective income tax provisions of $0.6 million and $0.5 million, which resulted in effective income tax rates of (11.1%) and (3.2%), respectively. The changes in the effective income tax rates were primarily due to the effects of tax amortization on indefinite-lived intangibles in 2024, as well as certain permanent differences between tax and financial reporting purposes.

Previous wording

We do not expect to pay any federal income taxes or receive any federal tax refunds related to our 2024 results. As we have incurred losses in prior periods, we anticipate any current-year taxable income will be offset by tax carryforwards from prior years. We continue to evaluate the ability to realize our deferred tax assets and need for a valuation allowance on a quarterly basis. The valuation allowance, and the potential reversal of such allowance, have no bearing on the taxes actually paid by the Company.

Current wording

We do not expect to pay any federal income taxes or receive any federal tax refunds related to our 2024 results. As we have incurred losses in prior periods, we anticipate any current-year taxable income will be offset by tax carryforwards from prior years. We continue to evaluate, on a quarterly basis, the ability to realize our deferred tax assets and the need for a valuation allowance. The valuation allowance, and the potential reversal of such allowance, have no bearing on the taxes actually paid by the Company.

Previous wording

The following table presents the financial results of our Midwest & South operations on a same-store basis for the three months ended March 31, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Current wording

The following table presents the financial results of our Midwest & South operations on a same-store basis for the three and six months ended June 30, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Previous wording

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.

Current wording

Same-store operations exclude results of new and acquired operating segments that have not operated 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.

Previous wording

The following table presents the financial results of our Contracted Sports Wagering operations on a same-store basis for the three months ended March 31, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Current wording

The following table presents the financial results of our Contracted Sports Wagering operations on a same-store basis for the three and six months ended June 30, 2024 and 2023 for revenues and Adjusted Segment EBITDA; see “Non-GAAP Financial Measure” for additional information.

Previous wording

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.

Current wording

Same-store operations exclude results of new and acquired operating segments that have not operated 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.

Previous wording

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. Total revenues for the three months ended March 31, 2024 increased by 33.9% (or $13.8 million), primarily due to a full quarter of operations from American Place. Excluding results from American Place, same-store revenues declined by 5.1% (or $1.6 million), in part due to adverse winter weather over several weekend periods, resulting in lower casino revenue.

Current wording

Our Midwest & South segment includes Silver Slipper Casino and Hotel, Rising Star Casino Resort and American Place. Total revenues for the three and six months ended June 30, 2024 increased by 11.1% (or $5.5 million) and 21.4% (or $19.4 million), respectively, due to the continued ramp-up of operations at American Place. Additionally, the six-month period in 2023 reflects only a partial period of operations at American Place, which opened in February 2023. Excluding results from American Place, same-store revenues declined by 4.6% (or $1.4 million) and 4.9% (or $2.9 million) for the respective three and six months ended June 30, 2024, in part due to adverse winter weather over several weekend periods during the first quarter of 2024, followed by severe storms and tornados in the second quarter.

Previous wording

Reflecting the February 2023 opening of American Place, casino revenue increased by 41.8% (or $12.1 million) for the three months ended March 31, 2024. Slot revenue for the segment increased by 30.3% (or $7.7 million), and table games revenue increased by 130.2% (or $4.4 million). Excluding results from American Place, same-store casino revenue declined by 10.4% (or $2.0 million) for the three months ended March 31, 2024, primarily due to lower slot and table games volumes at Silver Slipper and Rising Star, compared to the prior-year period. In addition to the adverse weather noted above, Rising Star continues to compete with a relatively new racetrack casino that opened in September 2022 in Northern Kentucky.

Current wording

Reflecting the February 2023 opening of American Place, casino revenue increased by 12.5% (or $4.8 million) and 25.1% (or $16.8 million) for the respective three and six months ended June 30, 2024. For the three months ended June 30, 2024, slot revenue for the segment increased by 11.3% (or $3.6 million), and table games revenue increased by 18.3% (or $1.2 million). For the six months ended June 30, 2024, slot revenue for the segment increased by 19.7% (or $11.3 million), and table games revenue increased by 56.8% (or $5.5 million). Excluding results from American Place, same-store casino revenue declined by 6.4% (or $1.2 million) and 8.4% (or $3.2 million) for the respective three and six months ended June 30, 2024, primarily due to lower slot and table games volumes at Silver Slipper and Rising Star. In addition to the adverse weather noted above, Rising Star continues to compete with a relatively new racetrack casino that opened in September 2022 in Northern Kentucky.

Previous wording

Non-casino revenue increased by 14.8% (or $1.8 million) for the three months ended March 31, 2024, largely due to increases in food and beverage revenue. Food and beverage revenue rose 23.4% (or $1.6 million), reflecting the opening of additional food and beverage venues, and expansion of operating hours, at American Place throughout 2023 and early 2024. Hotel revenues for the segment declined by 1.6% (or $32,000) for the three months ended March 31, 2024, as American Place does not currently have hotel operations.

Current wording

Non-casino revenue increased by 6.7% (or $0.8 million) and 10.8% (or $2.5 million) for the respective three and six months ended June 30, 2024, largely due to increases in food and beverage revenue. Food and beverage revenue rose 10.0% (or $0.8 million) and 16.2% (or $2.4 million) for the respective current-year periods, reflecting increased operating hours and the February 2024 opening of a new restaurant at American Place.

Previous wording

Our West segment includes Grand Lodge, Stockman’s Casino, Bronco Billy’s Casino and Hotel, and Chamonix Casino Hotel, which began its phased opening 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.

Current wording

Our West segment includes Grand Lodge Casino (“Grand Lodge”), Stockman’s Casino, Bronco Billy’s Casino, and Chamonix Casino Hotel, which began its phased opening 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.

Previous wording

Total revenues increased by 60.4% (or $4.9 million) for the three months ended March 31, 2024, primarily due to the phased opening of Chamonix, which was designed to integrate with existing operations at Bronco Billy’s. Results for the prior-year period reflected planned business disruptions to accommodate the construction of Chamonix.

Current wording

Total revenues increased by 87.3% (or $7.1 million) and 73.8% (or $12.0 million) for the respective three and six months ended June 30, 2024, primarily due to the phased opening of Chamonix, which was designed to integrate with existing operations at Bronco Billy’s.

Previous wording

Casino revenue increased by 50.9% (or $3.6 million) for the three months ended March 31, 2024, reflecting contributions from Chamonix and improved operating conditions at Bronco Billy’s. Slot revenue increased by 53.6% (or $3.3 million) for the three months ended March 31, 2024, despite decreases in slot volumes at Grand Lodge and Stockman’s. Table games revenue rose by $0.3 million (or 32.6%) for the three months ended March 31, 2024, with increased table games revenues from our Colorado operations, including Chamonix, accounting for the entire period-over-period change.

Current wording

Casino revenue increased by 64.4% (or $4.6 million) and 57.6% (or $8.2 million) for the respective three and six months ended June 30, 2024, reflecting contributions from Chamonix and improved operating conditions at Bronco Billy’s. Slot revenue accounted for most of the increases in the respective 2024 periods. It increased by 71.8% (or $4.5 million) and 62.8% (or $7.8 million), despite decreases in slot volumes at Grand Lodge and Stockman’s for the current-year periods. Table games revenue rose by $0.1 million (or 9.6%) and $0.4 million (or 22.1%) for the respective three and six months ended June 30, 2024, attributable mostly to our Colorado operations.

Previous wording

Non-casino revenue improved by $1.3 million for the three months ended March 31, 2024. Food and beverage revenues increased by $0.5 million for the three months ended March 31, 2024, and hotel revenues rose by $0.7 million. These improvements came from Chamonix, which benefited from the opening of its 300-room hotel gradually throughout the first quarter of 2024 and related increases in guest volumes at Chamonix’s and Bronco Billy’s restaurants.

Current wording

Non-casino revenue increased by 247.8% (or $2.5 million) and 189.3% (or $3.8 million) for the respective three and six months ended June 30, 2024. Food and beverage revenues increased by $0.9 million and $1.4 million for the respective 2024 periods, and hotel revenues rose by $1.5 million and $2.2 million, respectively. These improvements came from Chamonix, which gradually opened its approximately 300-room hotel throughout the first quarter of 2024. Guest volume increases from Chamonix’s new hotel also benefited food and beverage venues throughout Chamonix and Bronco Billy’s.

Previous wording

Adjusted Segment EBITDA of $(0.1) million for the three months ended March 31, 2024 compares to $0.1 million in the prior-year period. Current-period results reflect the phased opening of Chamonix Casino Hotel, which is currently operating less efficiently than expected in future quarters. Elevated expenses include the training of new employees and additional marketing costs expected to benefit future operations. Results in the current period also reflect significant snowfall over several weekends, when guest traffic at our casinos is typically strongest, and the loss of electrical power to the entire city of Cripple Creek for three days.

Current wording

Adjusted Segment EBITDA improved by 388.7% (or $0.7 million) and 212.4% (or $0.5 million) for the respective three and six months ended June 30, 2024. Current-period results reflect the phased opening of Chamonix Casino Hotel, which is currently operating less efficiently than expected in future quarters. Elevated expenses include the training of new employees and additional marketing costs expected to benefit future operations, as well as the cost of operating many amenities at the new resort while continuing to complete construction. Results in the current-year period also reflect significant snowfall over several weekends – when guest traffic at our casinos is typically strongest – in the first quarter, and the loss of electrical power to the entire city of Cripple Creek for three days.

Previous wording

For the three months ended March 31, 2024, revenues grew 91.5%, from $1.2 million in the prior-year period to $2.3 million, and Adjusted Segment EBITDA rose 66.7%, from $1.2 million to $1.9 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 $1.4 million in revenues, as well as Adjusted Segment EBITDA, during the 2024 period.

Current wording

For the three months ended June 30, 2024, revenues grew 108.6%, from $1.4 million in the prior-year period to $2.9 million, and Adjusted Segment EBITDA rose 89.3%, from $1.4 million to $2.6 million. Similarly, for the six months ended June 30, 2024, revenues grew 100.7%, from $2.6 million in the prior-year period to $5.1 million, and Adjusted Segment EBITDA rose 78.9%, from $2.5 million to $ 4.5 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 online revenues (as defined), subject to an annualized minimum of $5 million, with minimal expected expenses. We also receive a percentage of on-site sports revenue, as defined. This agreement contributed $1.4 million in revenues, as well as Adjusted Segment EBITDA, during the three months ended June 30, 2024. For the six months ended June 30, 2024, such amounts were $2.9 million and $2.8 million, respectively.

Previous wording

Additionally, these results reflect the commencement of a replacement contract in Colorado, which began contributing to our results in March 2023, as well as a provision for credit losses on sports wagering receivables of $0.3 million in the first quarter of 2024. There was no such provision for the prior-year period.

Current wording

The segment’s results also reflect the commencement of a sports agreement in Colorado, which contributed to our results from March 2023 until operations were ceased in April 2024. Additionally, provisions for credit losses on sports wagering receivables of $0.3 million and $0.5 million were applied to the three and six months ended June 30, 2024, respectively. There were no such provisions for the prior-year periods.

Previous wording

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.

Current wording

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

Previous wording

Corporate expenses for the three months ended March 31, 2024 rose 16.6% (or $0.3 million), primarily due to an increase in third-party professional services, as compared to the prior-year period. Corporate expenses were $2.1 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Corporate expenses for the respective three and six months ended June 30, 2024 rose 273.5% (or $1.2 million) and 65.9% (or $1.5 million), primarily due to increases in accrued bonus compensation, as compared to the prior-year periods. Corporate expenses were $1.6 million and $0.4 million for the three months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, corporate expenses were $3.7 million and $2.2 million, respectively.

Previous wording

The following table presents a reconciliation of net loss and operating loss to Adjusted EBITDA:

Current wording

The following table presents a reconciliation of net loss and operating income (loss) to Adjusted EBITDA:

Previous wording

Operating expenses deducted to arrive at operating income (loss) in the above tables for the three-month periods ended March 31, 2024 and 2023 included facility rents related to: (i) Midwest & South of $1.4 million in 2024 and $0.9 million in 2023, and (ii) West of $0.6 million in 2024 and $0.7 million in 2023.

Current wording

Operating expenses deducted to arrive at operating income (loss) in the above tables for the three-month periods ended June 30, 2024 and 2023 included facility rents related to: (i) Midwest & South of $1.4 million during each of 2024 and 2023, and (ii) West of $0.6 million in 2024 and $0.7 million in 2023.

Previous wording

As of March 31, 2024, we had $46.3 million of cash and equivalents, including $20.6 million of restricted cash dedicated to the completion of Chamonix’s construction. We estimate that between $10 million and $15 million of cash is used in our current day-to-day operations, including on-site cash in our slot machines, change and redemption kiosks, and cages. We believe that current cash balances, together with the available borrowing capacity under our revolving credit facility and cash flows from operating activities, will be sufficient to meet our liquidity and capital resource needs for the next 12 months of operations. Over the last several years, we invested in two large construction projects that are now open to the public: American Place, which opened in February 2023, and Chamonix, which opened in December 2023.

Current wording

As of June 30, 2024, we had $44.7 million of cash and equivalents, including $13.6 million of restricted cash dedicated to Chamonix’s construction. Chamonix began opening in phases beginning in December 2023, and is expected to complete construction in the third quarter of 2024. We estimate that between $10 million and $15 million of cash is used in our current day-to-day operations, including on-site cash in our slot machines, change and redemption kiosks, and cages. We believe that current cash balances, together with the available borrowing capacity under our revolving credit facility and cash flows from operating activities, will be sufficient to meet our liquidity and capital resource needs for the next 12 months of operations. Over the last several years, we invested in two large construction projects that are now open to the public: American Place, which opened in February 2023, and Chamonix, as noted above.

Previous wording

**Cash flows – operating activities.**On a consolidated basis, cash used in operations during the three months ended March 31, 2024 was $4.4 million, compared to cash used in operations of $7.3 million in the prior-year period. Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but are also affected by changes in working capital. During the current period, we benefited from a full quarter of operations at American Place, which opened in February 2023.

Current wording

**Cash flows – operating activities.**On a consolidated basis, cash provided by operations during the six months ended June 30, 2024 was $5.7 million, compared to cash provided by operations of $1.7 million in the prior-year period. Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but are also affected by changes in working capital. During the current period, we benefited from a full six months of operations at American Place, which opened in February 2023.

Previous wording

**Cash flows – investing activities.**On a consolidated basis, cash used in investing activities during the three months ended March 31, 2024 was $22.6 million, primarily related to Chamonix. Cash used in investing activities during the prior-year period was $101.7 million, which included a gaming license payment of $50.3 million required to open American Place, as well as capital expenditures to construct Chamonix and American Place.

Current wording

**Cash flows – investing activities.**On a consolidated basis, cash used in investing activities during the six months ended June 30, 2024 was $33.9 million, primarily related to Chamonix. Cash used in investing activities during the prior-year period was $139.2 million, which included a gaming license payment of $50.3 million required to open American Place, as well as capital expenditures to construct Chamonix and American Place.

Previous wording

**Cash flows – financing activities.**On a consolidated basis, cash used in financing activities during the three months ended March 31, 2024 was $0.5 million, compared to cash provided by financing activities of $60.2 million in the prior-year period. During 2023, net borrowings from the Credit Facility totaled $27.0 million, and we received $40.0 million of gross proceeds from the issuance of our Additional Notes to open American Place.

Current wording

**Cash flows – financing activities.**On a consolidated basis, cash used in financing activities during the six months ended June 30, 2024 was $0.9 million, compared to cash provided by financing activities of $59.9 million in the prior-year period. During 2023, net borrowings from the Credit Facility totaled $27.0 million, and we received $40.0 million of gross proceeds from the issuance of our Additional Notes to open American Place.

Previous wording

**Long-term Debt.**At March 31, 2024, we had $450.0 million of principal indebtedness outstanding under the Notes, and $27.0 million outstanding under the Credit Facility. We also owe $2.1 million related to our finance lease of a hotel at Rising Star. With the exception of the Credit Facility, all of our debt is at fixed interest rates. See Note 4 for details on our debt obligations.

Current wording

**Long-term Debt.**At June 30, 2024, we had $450.0 million of principal indebtedness outstanding under the Notes and $27.0 million outstanding under the Credit Facility. We also owe $2.0 million related to our finance lease of a hotel at Rising Star. With the exception of the Credit Facility, all of our debt is at fixed interest rates. See Note 4 for details on our debt obligations.

Previous wording

Chamonix. We began the phased opening of Chamonix on December 27, 2023. To fund Chamonix’s construction, we issued our 2028 Notes and placed a portion of such proceeds into a restricted cash account dedicated to the completion of Chamonix’s construction (see Note 4). As of March 31, 2024, the balance of such restricted cash account was approximately $20.6 million, which we expect to invest in the second and third quarters of 2024. In April 2024, we opened Chamonix’s high-end steakhouse; its spa and rooftop pool are expected to open in the second quarter of 2024.

Current wording

Chamonix. We began the phased opening of Chamonix on December 27, 2023. To fund Chamonix’s construction, we issued our 2028 Notes and placed a portion of such proceeds into a restricted cash account dedicated to the completion of Chamonix’s construction (see Note 4). As of June 30, 2024, the balance of such restricted cash account was approximately $13.6 million, which we expect to invest in the second half of 2024. In April 2024, we opened Chamonix’s high-end steakhouse, followed by its rooftop pool and portions of its spa in May 2024. During the third quarter of 2024, we expect to complete construction of the spa and a street-front retail store.

Previous wording

American Place. We were selected by the IGB to develop and operate American Place in Waukegan, Illinois. While the larger permanent facility is under development, we are operating the temporary American Place facility, which opened in February 2023. As previously noted, we have been approved to operate the temporary American Place facility until August 2027, thus delaying any expected meaningful capital expenditures for the permanent American Place facility until 2026 and 2027. During 2024, we currently expect to invest modest additional amounts into the temporary American Place facility, primarily related to the February 2024 completion of the property’s high-end restaurant and, potentially, modest additional amounts related to construction planning for the permanent American Place facility. While we expect to internally generate a portion of the needed funds to complete American Place, we will likely need additional financing, as well. Lawsuits filed by an unsuccessful bidder for the Waukegan gaming license – and against parties unrelated to us – may impact our ability to arrange such financing and, therefore, delay the start of meaningful construction.

Current wording

American Place. We were selected by the IGB to develop and operate American Place in Waukegan, Illinois. While the larger permanent facility is under development, we are operating the temporary American Place facility, which opened in February 2023. As previously noted, we have been approved to operate the temporary American Place facility until August 2027, thus delaying any expected meaningful capital expenditures for the permanent American Place facility until 2026 and 2027. During the second half of 2024, we may invest modest additional amounts, primarily related to construction planning for the permanent American Place facility. While we expect to internally generate a portion of the needed funds to complete American Place, we will likely need additional financing. Lawsuits filed by an unsuccessful bidder for the Waukegan gaming license – and against parties unrelated to us – may impact our ability to arrange such financing and, therefore, delay the start of meaningful construction.

Previous wording

**Hyatt Owner’s Option to Purchase our Leasehold Interest and Related Assets.**Our lease with the owner of the Hyatt Lake Tahoe to operate the Grand Lodge Casino contains an option for the lessor to purchase our leasehold interest and related casino operating assets. The lease, which has been extended several times in the past, currently expires on December 31, 2024. We believe that we have an excellent and synergistic relationship with the lessor and hope to again extend the lease before its expiration, but there is no certainty that this will be the case. See Note 3 for more information.

Current wording

**Hyatt Owner’s Option to Purchase our Leasehold Interest and Related Assets.**Our lease with the owner of the Hyatt Lake Tahoe to operate the Grand Lodge Casino has been extended several times and currently expires on December 31, 2034. In the event of a significant renovation, the lessor may terminate the lease early with six months’ notice. Similar to previous lease arrangements, the lessor also has the ability to purchase our leasehold interest and related casino operating assets at any time prior to lease expiration. See Note 3 for more information.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. These forward-looking statements can be identified by use of terms such as “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “future,” “possible,” “seeks,” “may,” “could,” “should,” “will,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” “we cannot assure you,” “although no assurance can be given,” or “there is no way to anticipate with certainty.” Examples of forward-looking statements include, among others, statements we make regarding our plans, beliefs or expectations regarding our growth strategies; our expected construction budgets, estimated commencement and completion dates, expected amenities, and our expected operational performance for Chamonix and American Place; our expectations regarding the legal proceedings related to the process whereby we were granted the gaming license for American Place; our expectations regarding our ability to generate operating cash flow and to obtain debt financing on reasonable terms and conditions for the construction of the permanent American Place facility; our investments in capital improvements and other projects, including the amounts of such investments, the timing of commencement or completion of such capital improvements and projects, and the resulting impact on our financial results; our sports wagering contracts with third-party providers, including the expected revenues and expenses and our expectations regarding the operation and usage of our available idle sports wagering contracts, our ability to replace any terminated sports wagering contracts or our ability to operate sports wagering contracts ourselves; our expectations regarding our ability to extend the lease at the Grand Lodge Casino; adequacy of our financial resources to fund operating requirements and planned capital expenditures and to meet our debt and contractual obligations; expected sources of revenue; anticipated sources of funds; anticipated or potential legislative actions; beliefs in connection with our marketing efforts; factors that affect the financial performance of our properties; adequacy of our insurance; competitive outlook; outcome of legal and litigation matters; impact of recently issued accounting standards; and estimates regarding certain accounting and tax matters, among others.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. These forward-looking statements can be identified by use of terms such as “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “future,” “possible,” “seeks,” “may,” “could,” “should,” “will,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” “we cannot assure you,” “although no assurance can be given,” or “there is no way to anticipate with certainty.” Examples of forward-looking statements include, among others, statements we make regarding our plans, beliefs or expectations regarding our growth strategies; our expected construction budgets, estimated commencement and completion dates, expected amenities, and our expected operational performance for Chamonix and American Place, including its permanent facility; our expectations regarding the legal proceedings related to the process whereby we were granted the gaming license for American Place; our expectations regarding our ability to generate operating cash flow and to obtain debt financing on reasonable terms and conditions for the construction of the permanent American Place facility; our investments in capital improvements and other projects, including the amounts of such investments, the timing of commencement or completion of such capital improvements and projects, and the resulting impact on our financial results; our sports wagering contracts with third-party providers, including the expected revenues and expenses and our expectations regarding the operation and usage of our available idle sports wagering contracts, our ability to replace any terminated sports wagering contracts or our ability to operate sports wagering contracts ourselves; adequacy of our financial resources to fund operating requirements and planned capital expenditures and to meet our debt and contractual obligations; expected sources of revenue; anticipated sources of funds; anticipated or potential legislative actions; beliefs in connection with our marketing efforts; factors that affect the financial performance of our properties; adequacy of our insurance; competitive outlook; outcome of legal and litigation matters; impact of recently issued accounting standards; and estimates regarding certain accounting and tax matters, among others.