Illinois’ Full House Resorts heralded a significant leap in Q2 revenue for 2023, thanks in large part to the recently inaugurated casino, The Temporary by American Place. However, not all was smooth sailing, with high initial costs chipping away at the quarterly profits.
A New Casino’s Influence on Revenue
Daniel Lee, the President and CEO of Full House, pinpointed a significant contribution from The Temporary by American Place, situated in Chicagoland, for the 33.7% increase in revenue. By the close of June 2023, this revenue reached $59.4 million.
“The Temporary by American Place completed its first full quarter of operations, recording $20.3m in revenue and $4.1m in adjusted property EBITDA,” Lee highlighted. Visitor numbers, Lee noted, had an initial surge during the mid-February launch, saw a brief drop, and then climbed steadily since April.
The contribution of The Temporary boosts Full House’s Midwest and South segment revenue to $49.9 million, marking a 51.5% year-on-year growth. This segment encapsulates earnings from not only The Temporary but also Silver Slipper Casino and Hotel and the Rising Star Casino Resort. Meanwhile, Full House’s operations in the west, inclusive of entities like Grand Lodge Casino and Stockman’s Casino, reported $8.0 million in revenue.
Despite the promising numbers, The Temporary did present some hiccups. Lee emphasized that current expenses, especially in training new personnel and marketing, exceed what they anticipate in a mature operation. A notable challenge was the hiring cost attributed to a shortage of casino dealers.
The deficiency has meant that the casino is operating at a reduced capacity, with only 30 of its 48 tables functional. “We continue to operate our own dealer school,” Lee explained, underscoring the essential step to reach the property’s potential despite its impact on profitability.
A Glimpse at the Balance Sheet
Diving deeper into the financials, casinos were the heavyweight in Q2 revenue generation at $45.3 million, a staggering 55.8% rise year-on-year. Full House’s other services also chimed in, with food and beverages drawing $8.6 million and hotel revenues at $2.3 million. However, there was a noticeable 45.9% dip in other operations, which includes contracted sports wagering.
Increased operating costs, amounting to $58.7 million (a 62.5% rise from Q2 2022), culminated in a sharp fall in operating income from $8.2 million to just $594,000. By the end of the quarter, after considering tax benefits and other variables, Full House reported a net loss of $5.6 million.
Implications for the US iGaming Industry
- Evolving Revenue Streams: Full House’s journey exemplifies how new ventures, like The Temporary, can substantially influence revenue, reiterating the importance of diversification in the iGaming sector.
- Operational Challenges: As demonstrated by the initial challenges of The Temporary, launching new operations can lead to increased short-term expenses. This factor underscores the need for long-term planning and risk management in the industry.
- Dynamic Markets: The rise and fall in different revenue areas, from casinos to sports wagering, signify the constantly changing preferences and dynamics in the gaming sector, highlighting the importance of adaptability.
