Full House Resorts Announces Sale of Stockman’s Casino for $9.2 Million

Rhea-AI Summary

Full House Resorts (NASDAQ: FLL) has announced the sale of Stockman's Casino in Fallon, Nevada, to privately-owned Clarity Game for $9.2 million. The transaction will occur in two parts: $7 million for the real property, expected to close in late-September 2024, and $2.2 million for remaining operating assets, pending gaming approvals. Full House will continue operating Stockman's, paying $50,000 monthly rent to Clarity until the second closing. This strategic move allows Full House to focus on larger properties, including the newly-opened Chamonix and American Place casinos. CEO Daniel R. Lee expressed confidence in the new owners' ability to drive continued improvement at Stockman's Casino.

Positive

• Sale of Stockman's Casino for $9.2 million, providing additional capital
• Strategic focus on larger properties in the portfolio
• Continued operation and rent income until final closing

Negative

• Divestment of an operating asset from the company's portfolio

Insights

Financial Analyst

The sale of Stockman's Casino for $9.2 million is a strategic move by Full House Resorts to streamline its portfolio. This divestment aligns with the company's focus on larger, more profitable properties. The transaction structure, with separate closings for real estate ($7 million) and operating assets ($2.2 million), suggests a well-planned exit strategy.

The $50,000 monthly rent arrangement during the transition period ensures operational continuity and steady cash flow. However, investors should note that this divestment might result in a short-term revenue dip. The impact on Full House Resorts' financials will depend on Stockman's contribution to overall revenue and profitability, which isn't disclosed in this announcement.

This move could potentially improve Full House Resorts' financial efficiency and allow for better resource allocation towards its newer, larger projects like Chamonix and American Place casinos. Investors should watch for how the company reinvests the proceeds from this sale to drive future growth.

Market Research Analyst

The sale of Stockman's Casino reflects a broader trend in the gaming industry where operators are consolidating their portfolios to focus on higher-yield properties. This strategic shift by Full House Resorts demonstrates adaptability to changing market dynamics and consumer preferences.

The buyers, Michael Gaughan III and David Ross, bring industry expertise which could potentially revitalize Stockman's Casino. This transition might create local competition for Full House Resorts in the Nevada market. However, the company's pivot towards larger properties like Chamonix and American Place suggests a move upmarket, potentially targeting a different customer segment.

Investors should consider how this sale might impact Full House Resorts' market positioning and competitive landscape. While divesting smaller properties can streamline operations, it's important to monitor whether the company can effectively leverage its remaining assets to maintain market share and drive growth in an increasingly competitive industry.

LAS VEGAS, Sept. 03, 2024 (GLOBE NEWSWIRE) -- Full House Resorts (NASDAQ: FLL), through its wholly-owned subsidiary Stockman’s Casino, Inc. (the “Company”), has entered into an agreement with privately-owned Clarity Game LLC (“Clarity”) to sell the land, building, and certain other operating assets of Stockman’s Casino in Fallon, Nevada (“Stockman’s”) for total gross proceeds of approximately $9.2 million. The asset sale is expected to occur in two transactions: the sale of Stockman’s real property for $7.0 million, expected to close in late-September 2024; and the sale of certain remaining operating assets for $2.2 million, upon the receipt of customary gaming approvals. The Company will temporarily pay monthly rent of $50,000 to Clarity – and will continue to operate Stockman’s Casino – until the closing of the second transaction. Upon the second closing, the Company will transfer all of Stockman’s daily operations to Clarity.

“We are pleased to announce the sale of Stockman’s Casino to Michael Gaughan III, David Ross, and the rest of their team,” said Daniel R. Lee, President and Chief Executive Officer of Full House Resorts. “As we have continued to grow in size, we find it prudent to focus on our larger properties in our portfolio, including our newly-opened Chamonix and American Place casinos. We are proud of our transformation of Stockman’s Casino over the years, and know that Michael and David will drive continued improvement under their ownership.”

Cautionary Note Regarding Forward-looking Statements
This press release contains statements by us and our officers that are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “expect,” “future,” “should,” “will” and similar references to future periods. Some forward-looking statements in this press release include the expected timing to complete the sale of Stockman’s real property and certain of its operating assets. Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Such risks include, without limitation, legal or regulatory restrictions, delays, or challenges related to the sale of Stockman’s Casino; and general macroeconomic conditions. Additional information concerning potential factors that could affect our financial condition and results of operations is included in the reports we file with the Securities and Exchange Commission, including, but not limited to, Part I, Item 1A. Risk Factors and Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the most recently ended fiscal year and our other periodic reports filed with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or revise our forward-looking statements as a result of new information, future events or otherwise. Actual results may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

About Full House Resorts, Inc.
Full House Resorts owns, leases, develops and operates gaming facilities throughout the country. Our properties include American Place in Waukegan, Illinois; Silver Slipper Casino and Hotel in Hancock County, Mississippi; Chamonix Casino Hotel and Bronco Billy’s Casino in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; Stockman’s Casino in Fallon, Nevada; and Grand Lodge Casino, located within the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada. For further information, please visit www.fullhouseresorts.com.

FAQ

What is the total sale price for Stockman's Casino?

Full House Resorts (FLL) is selling Stockman's Casino for a total of $9.2 million.

When is the sale of Stockman's Casino expected to close?

The sale is expected to occur in two transactions, with the first closing for the real property in late-September 2024, and the second closing pending gaming approvals.

Who is purchasing Stockman's Casino from Full House Resorts?

Stockman's Casino is being purchased by Clarity Game , a privately-owned company led by Michael Gaughan III and David Ross.

How much rent will Full House Resorts pay to operate Stockman's Casino until the final closing?

Full House Resorts will pay a monthly rent of $50,000 to Clarity Game to continue operating Stockman's Casino until the second closing.