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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our results of operations and financial condition should be read together with the other financial information and consolidated financial statements included in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results anticipated in the forward-looking statements as a result of a variety of factors, including those discussed in Part I, Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods. Full House Resorts, Inc., together with its subsidiaries, may be referred to as “Full House,” the “Company,” “we,” “our” or “us.”

Executive Overview

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.

The following table identifies our segments, along with properties and their locations as of December 31, 2024:

​ ​ ​

Segments and Properties ​ Locations

Midwest & South ​ ​

American Place* ​ Waukegan, IL (northern suburb of Chicago)

Rising Star Casino Resort (“Rising Star”) Rising Sun, IN (near Cincinnati)

West ​ ​

Contracted Sports Wagering ​ ​

One active sports wagering website (“skin”), commenced in August 2023 ​ Illinois

__________

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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. Additionally, we benefit from seven permitted sports wagering skins – three in Colorado, three in Indiana, and one in Illinois. Three of these sports skins are currently in use.

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 August 2024, we entered into an agreement to sell Stockman’s to a privately owned company. We closed on the sale of Stockman’s real property in September 2024. We continue to operate the business under a leaseback agreement with the new owners for use of their facilities until the second closing of the Stockman’s sale, which is expected to occur in the first half of 2025.

In October 2024, we completed the phased opening of Chamonix, our newest property, located adjacent to our existing Bronco Billy’s Casino.

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Our financial results are dependent upon the number of patrons that we attract to our properties and the amounts those guests spend per visit. While we provide credit at some of our casinos where permitted by gaming regulations, most of our revenues are cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our revenues are primarily derived from slot machines, but also include other gaming activities, including table games, keno and sports betting. In addition, we derive a significant amount of revenue from our hotels and our food and beverage outlets. We also derive revenues from our golf course and ferry boat service at Rising Star, our RV parks owned at Rising Star and managed at Silver Slipper, and retail outlets and entertainment. We often provide hotel rooms, food and beverages, entertainment, ferry usage, and golf privileges to customers on a complimentary basis; the value of such services is included as revenue in those categories, offset by contra-revenue in the casino revenue category. As a result, the casino revenues in our financial statements reflect patron gaming wins and losses, reduced by the retail value of complimentary services, the value of free play provided to customers, the value of points earned by casino customers that can be redeemed for services or free play, and adjustments for certain progressive jackpots offered by the Company.

We set minimum and maximum betting limits for our slot machines and table games based on market conditions, customer demand and other factors. Our gaming revenues are derived from a broad base of guests that includes both high- and low-stakes players. At Silver Slipper, our sports book operations are in partnership with a company specializing in race and sports betting. At Rising Star, Bronco Billy’s, and American Place, we have contracted with other companies to operate our online sports wagering skins under their own brands in exchange for a percentage of revenues, as defined, subject to annual minimum amounts; the same company also operates our on-site sports book at American Place. Our operating results may also be affected by, among other things, overall economic conditions affecting the disposable income of our guests, weather conditions affecting access to our properties, achieving and maintaining cost efficiencies, taxation and other regulatory changes, and competitive factors, including but not limited to, additions and improvements to the competitive supply of gaming facilities, as well as pandemics and similar widespread health emergencies.

We may experience significant fluctuations in our quarterly operating results due to seasonality, variations in gaming hold percentages and other factors. Consequently, our operating results for any quarter or year are not necessarily comparable and may not be indicative of results in future periods.

Our market environment is highly competitive and capital-intensive. Nevertheless, there are significant restrictions and barriers to entry vis-à-vis opening new casinos in most of the markets in which we operate. We rely on the ability of our properties to generate operating cash flow to pay interest, repay debt, and fund maintenance and certain growth-related capital expenditures. We continuously focus on improving the operating margins of our existing properties through a combination of revenue growth and expense management. We also assess growth and development opportunities, which include capital investments at our existing properties, the development of new properties, and the acquisition of existing properties.

Recent Developments

Stockman’s Sale. On August 28, 2024, we entered into an agreement to sell Stockman’s for total gross proceeds of $9.2 million, plus certain expected working capital adjustments at closing. The sale was designed to be completed in two phases: the sale of Stockman’s real property for $7.0 million, which closed on September 27, 2024; and the sale of certain remaining operating assets and related liabilities for $2.2 million (excluding any adjustments for working capital), upon the receipt of customary gaming approvals.

To accommodate the buyer while it seeks its gaming approvals, we are temporarily continuing to operate Stockman’s under the West segment while leasing back the real property. Upon the second closing that is expected to occur in the first half of 2025, we will transfer all operations of Stockman’s to the buyer and the leaseback will terminate. During 2024, we recognized a $1.9 million gain from the sale of Stockman’s real property to operating income, net of $0.8 million in transaction costs.

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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. Chamonix’s remaining guestrooms came online gradually during the first quarter of 2024. 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 May 2024. We completed Chamonix’s opening in October 2024, with its jewelry store and the rest of its spa.

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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 larger casino, state-of-the-art sportsbook, premium boutique hotel comprised of 20 luxurious villas, and various food and beverage outlets.

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Grand Lodge Casino Lease Extension through December 2034. In July 2024, our lease with the owner of the Hyatt Lake Tahoe to operate the Grand Lodge Casino was amended to further extend the current term through December 31, 2034. The current annual rent of $2.0 million will increase nominally in 2025, followed by annual increases of 2% for the remainder of this extended term. 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 an option to purchase our leasehold interest and related operating assets of the Grand Lodge Casino at any time prior to lease expiration, subject to assumption of applicable liabilities. The option price is an amount equal to Grand Lodge Casino’s positive working capital, plus its earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the 12-month period preceding the acquisition (or pro-rated if less than 12 months remain on the lease), plus the fair market value of Grand Lodge Casino’s personal property.

Contracted Sports Wagering Amendments and Settlements. In July 2024, we amended two contracted sports wagering agreements, resulting in the collection of a total of $2.1 million. Specifically, these amendments settled overdue payments owed to our subsidiaries in Colorado and Indiana, reduced certain future annual amounts due to us under the agreements, and required such annual fees to be paid in advance of each annual term. In January 2025, we received notice that this sports betting operator was discontinuing its operations in Colorado and Indiana, to be effective prior to the June 2025 and December 2025 anniversaries in its agreements with us.

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Key Performance Indicators

We use several key performance indicators to evaluate the operations of our properties. These key operating measures are presented as supplemental disclosures because management uses these measures to better understand period-over-period fluctuations in our casino and hotel operating revenues and as a measure of our performance. These key performance indicators include the following and are disclosed in our discussions, where applicable, for certain jurisdictions on segment performance:

Gaming revenue indicators:

Slot coin-in is the gross dollar amount wagered in slot machines and table game drop is the total amount of cash or credit exchanged into chips at table games for use by our customers. Slot coin-in and table game drop are indicators of volume, and are monitored on a consolidated basis in relation to slot and table game win. Such metrics can be influenced by marketing activity and are not necessarily indicative of profitability trends.

Slot win is the difference between customer wagers and customer winnings on slot machines. Table game hold is the difference between the amount of money or markers exchanged into chips and customer winnings paid. Slot win and table game hold percentages represent the relationship between slot win and coin-in and table game win and drop. Both the slot win and table game hold percentages are monitored on a consolidated basis in our evaluation of Company performance.

Room revenue indicators:

Hotel occupancy rate is an indicator of the utilization of our available rooms. Complimentary room sales, or the retail value of accommodations furnished to customers on a complimentary basis, are included in the calculation of the hotel occupancy rate.

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Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Segment EBITDA Margin and Adjusted Property EBITDA:

Management uses Adjusted EBITDA as a measure of our performance. For a description of Adjusted EBITDA, see “Non-GAAP Financial Measure.” We utilize Adjusted Segment EBITDA as the measure of segment profitability in assessing performance and allocating resources at the reportable segment level. For information regarding our operating segments, see Note 12 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data.” Additionally, we use Adjusted Segment EBITDA Margin, which is calculated by dividing Adjusted Segment EBITDA by the segment’s total revenues.

Same-store Adjusted Segment EBITDA is Adjusted Segment EBITDA further adjusted to exclude the Adjusted Property EBITDA of properties that have not been in operation for a full year. Adjusted Property EBITDA is defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset sales and disposals, project development and acquisition costs, non-cash share-based compensation expense, and corporate-related costs and expenses that are not allocated to each property.

Results of Operations ─ 2024 Compared to 2023

Consolidated operating results

The following tables summarize our consolidated operating results for the years ended December 31, 2024 and 2023:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended ​ ​ ​

(In thousands) ​ December 31, ​ Increase /

Operating income (loss) ​ 2,750 ​ (1,162) N.M.

Interest and other non-operating expenses, net ​ 43,201 ​ 22,593 91.2 %

__________

N.M. Not meaningful.

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended ​ ​ ​

(In thousands) ​ December 31, ​ Increase /

Casino revenues ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Non-casino revenues, net ​ ​ ​ ​ ​ ​ ​ ​ ​

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ Year Ended ​ ​

​ December 31, ​ Increase /

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Slot hold percentage(2) ​ 7.6 % ​ ​ 7.4 % ​ 0.2 pts

Table game hold percentage(2) ​ 17.9 % ​ ​ 18.6 % ​ (0.7) pts

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The following discussion is based on our consolidated financial statements for the years ended December 31, 2024 and 2023.

Revenues. Consolidated total revenues increased by 21.2% (or $51.0 million) in 2024. Such increase was primarily due to a full year of operations at American Place, which opened on February 17, 2023. Revenues during 2024 also benefited from the opening of Chamonix, which opened in phases between December 2023 and October 2024.

For more information, see “Supplemental Information – Same-store Operating Results.”

Operating expenses. Consolidated operating expenses increased by 19.4% (or $47.1 million) in 2024, primarily due to the commencement of operations at American Place in February 2023 and Chamonix in December 2023. Both openings resulted in increased casino, food and beverage, hotel, selling, general and administrative and depreciation expenses. Selling, general and administrative expenses at American Place rose $5.1 million from 2023 to 2024. For Chamonix, selling, general and administrative expenses increased $11.1 million from 2023 to 2024, and depreciation and amortization expense rose by $14.9 million.

See further information within our reportable segments described below.

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Interest and other non-operating expense, net.

Interest Expense

Interest expense, net, consists of the following:

​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended

(In thousands) ​ December 31,

Amortization of debt issuance costs and discounts/premiums ​ 2,987 ​ 2,793

Interest income and other ​ ​ (763) ​ ​ (3,738)

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The increase in net interest expense for 2024 was primarily due to reductions in capitalized interest, as construction of the temporary American Place facility and Chamonix was largely complete during the year. 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 2023 period does not reflect a full year of the related interest expense. See Note 7 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for a more detailed discussion.

Other non-operating expense, net

In 2024, we did not have any other non-operating expense. In 2023, we had $0.4 million of other non-operating income, consisting of insurance settlement proceeds from hurricane damage at Silver Slipper in 2020.

Income taxes. Our effective income tax rates for the years ended December 31, 2024 and 2023 were (0.5%) and (4.8%), respectively. Our tax rates differ from the statutory rate of 21.0% primarily due to the effects of changes in our valuation allowance, state taxes, and items that are permanently treated differently for GAAP and tax purposes. During 2024, we continued to provide a valuation allowance against our deferred tax assets (“DTAs”), net of any available deferred tax liabilities, as applicable, based on our analysis of the timing of reversal of such deferred taxes. For 2024, the valuation allowance was $35.6 million, compared to $24.0 million for 2023. In future years, if it is determined that we meet the “more likely than not” threshold of utilizing our DTAs, then we may reverse some or all of our valuation allowance against our DTAs.

We do not expect to pay any federal income taxes or receive any federal tax refunds related to our 2024 results. Similarly, we do not expect to pay income taxes related to any states the Company operates in. Any future federal taxable income is expected to result in the utilization of our net operating loss carryforwards, which can be used to offset 80% of taxable income. Due to the level of uncertainty regarding sufficient prospective income as measured under GAAP, we maintain a valuation allowance against our DTAs, as mentioned above. See Note 9 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for a more detailed discussion.

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Operating Results — Reportable Segments

We manage our casinos based primarily on geographic regions within the United States and type of income. For more information, please refer to our earlier discussion within the “Executive Overview” section.

The following table presents detail by segment of our consolidated revenues and Adjusted EBITDA (see “Non-GAAP Financial Measure” for more information). Additionally, management uses Adjusted Segment EBITDA as its measure of segment profitability in accordance with GAAP.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(In thousands) ​ Year Ended ​ ​ ​

​ ​ December 31, ​ Increase /

Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​

Adjusted Segment EBITDA and Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Adjusted Segment EBITDA Margin ​ ​ ​ ​ ​ ​ ​ ​ ​

Midwest & South ​ ​ 20.8 % ​ 20.3 % 0.5 pts

West ​ ​ (2.0) % ​ 6.7 % (8.7) pts

Contracted Sports Wagering ​ ​ 108.1 % ​ 91.0 % 17.1 pts

__________

N.M. Not meaningful.

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Supplemental Information — Same-store Operating Results

The following table presents the financial results of our Midwest & South operations on a same-store basis for the years ended December 31, 2024 and 2023 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 properties 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.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(In thousands) ​ Year Ended ​ ​ ​

​ ​ December 31, ​ Increase /

Midwest & South same-store total revenues(1) ​ $ 109,964 ​ $ 115,371 ​ (4.7) %

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Midwest & South Adjusted Segment EBITDA $ 45,737 ​ $ 39,028 17.2 %

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

American Place ​ ​ 26.8 % ​ 23.9 % 2.9 pts

Midwest & South Adjusted Segment EBITDA margin ​ ​ 20.8 % ​ 20.3 % 0.5 pts

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The following table presents the financial results of our Contracted Sports Wagering operations on a same-store basis for the years ended December 31, 2024 and 2023 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 sports wagering contracts 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 and recoveries in connection with contract terminations from same-store operations.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(In thousands) ​ Year Ended ​ ​ ​

​ ​ December 31, ​ Increase /

Contracted Sports Wagering total revenues $ 8,791 ​ $ 12,814 (31.4) %

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Recoveries from contract settlements and modifications(3) ​ ​ 1,408 ​ ​ — ​ N.M.

Contracted Sports Wagering Adjusted Segment EBITDA $ 9,503 ​ $ 11,663 (18.5) %

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

__________

N.M. Not meaningful.

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Midwest & South

Our Midwest & South segment includes Silver Slipper, Rising Star and American Place. Compared to 2023, total revenues in 2024 increased by 14.2% (or $27.3 million), primarily due to the continued ramp-up of operations at American Place. Excluding results from American Place, same-store revenues declined by 4.7% (or $5.4 million), primarily due to lower casino revenue during the year.

Reflecting the February 2023 opening of American Place, casino revenue during 2024 increased by 16.3% (or $23.7 million), led by a 14.5% increase in slot revenue (or $17.6 million). Table games revenue in 2024 also increased by 25.9% (or $6.1 million). Excluding results from American Place, same-store casino revenue declined by 7.2% (or $5.3 million), primarily due to lower slot volumes at Silver Slipper and Rising Star. Rising Star continues to compete with a racetrack casino that opened in September 2022 in Northern Kentucky.

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Non-casino revenue increased by 7.6% (or $3.6 million), largely due to increases in food and beverage revenue. Food and beverage revenue rose 11.9% (or $3.6 million), including $3.3 million generated by American Place, reflecting increased operating hours at its dining outlets and the February 2024 opening of its high-end steak and seafood restaurant. Non-casino revenue also benefited from $1.7 million in ATM and related surcharge income at American Place during 2024, compared to $1.4 million in 2023. As American Place does not currently have a hotel, hotel revenues for the segment declined in 2024 by 6.0% (or $0.5 million) due to lower guest volumes at Silver Slipper and Rising Star.

Adjusted Segment EBITDA increased by 17.2% (or $6.7 million) from the prior year, reflecting improved efficiencies at American Place versus its first year of operations. American Place generated $29.4 million of Adjusted Property EBITDA, offsetting a same-store Adjusted Segment EBITDA decline of $4.3 million (20.8%) during 2024. Same-store operations were primarily affected by overall declines in casino revenues noted above.

West

Our West segment includes Bronco Billy’s, Chamonix, Grand Lodge, and Stockman’s, which is currently held for sale (see Note 3 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data”). The market in Cripple Creek, Colorado, is typically 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 segment revenues increased by 77.4% (or $27.8 million), primarily due to the phased opening of Chamonix, which was designed to integrate with existing operations at Bronco Billy’s. In November 2024, Chamonix held a grand opening party to celebrate its completion, as it was opened in phases between December 2023 and October 2024.

Casino revenue increased by 51.5% (or $16.2 million), reflecting contributions from Chamonix and the dissipation of construction-related disruption at our adjacent Bronco Billy’s. Slot revenue accounted for most of the increases in 2024; it increased by 54.6% (or $14.8 million), offsetting modest decreases in slot and table games volumes at Grand Lodge. Table games revenue improved by 31.3% (or $1.4 million), attributable entirely to our Colorado operations from higher table games drop.

Non-casino revenue increased by 265.3% (or $11.5 million) for 2024. Food and beverage revenues rose by $4.2 million, and hotel revenues increased by $6.8 million during the year. 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.

Adjusted Segment EBITDA declined by $3.7 million in 2024, compared to the prior year. Results in 2024 reflect the phased opening of Chamonix, which is currently operating less efficiently than we expect 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.

Contracted Sports Wagering

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

For 2024, this segment’s revenues declined by 31.4%, from $12.8 million in 2023 to $8.8 million in 2024, and Adjusted Segment EBITDA declined by 18.5%, from $11.7 million to $9.5 million. These results reflect two contract terminations in 2023, which resulted in the acceleration of deferred revenues totaling $5.8 million. During 2024, a sports wagering agreement in Colorado was terminated early in April 2024, resulting in $0.9 million of accelerated revenues and $1.2 million in expense recoveries. Also in 2024, settlement payments from two other contracts resulted in the reversal of certain prior-period credit loss provisions in Colorado and Indiana for an additional $0.2 million in recoveries in the third quarter. Total recoveries of $1.4 million in 2024 resulted in an Adjusted Segment EBITDA margin of 108.1%, compared to 91.0% in 2023.

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The segment’s results also 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. The market access fee of $5 million, paid to us upon the signing of the contract, is amortized over the contract term and contributes an additional $0.6 million of revenue annually. We also receive a percentage of on-site sports revenue, as defined. For 2024, this Illinois sports wagering agreement alone contributed a total of $5.9 million to revenues and $5.7 million to Adjusted Segment EBITDA. For 2023, the agreement contributed $2.2 million to revenues and also to Adjusted Segment EBITDA.

We had two idle sports skins in each of Indiana and Colorado as of December 31, 2024. In January 2025, we received notice that a contracted sports betting operator was discontinuing its operations in Colorado and Indiana, to be effective prior to the June 2025 and December 2025 anniversaries in its agreements with us. There is no certainty that we will be able to enter into agreements with other third-party operators on similar terms or at all.

Corporate

Corporate expenses were $5.3 million and $4.5 million in 2024 and 2023, respectively, reflecting growth in the Company’s operations.

Non-GAAP Financial Measure

“Adjusted EBITDA” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset sales and disposals, project development and acquisition costs, and non-cash share-based compensation expense. Adjusted EBITDA information is presented solely as supplemental disclosure to measures reported in accordance with generally accepted accounting principles in the United States of America (“GAAP”) because management believes this measure is (i) a widely used measure of operating performance in the gaming and hospitality industries and (ii) a principal basis for valuation of gaming and hospitality companies. In addition, a version of Adjusted EBITDA (known as Consolidated Cash Flow) is utilized in the covenants within our credit facility, although not necessarily defined in the same way as above. Adjusted EBITDA is not, however, a measure of financial performance or liquidity under GAAP. Accordingly, this measure should be considered supplemental and not a substitute for net income (loss) or cash flows as an indicator of our operating performance or liquidity.

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

​ ​ ​ ​ ​ ​

(In thousands) Year Ended

​ December 31,

Other ​ — ​ ​ (384)

Operating income (loss) ​ 2,750 ​ ​ (1,162)

Project development costs ​ 368 ​ ​ 53

Loss on disposal of assets ​ 18 ​ ​ 7

Gain on sale of Stockman’s ​ (1,926) ​ ​ —

Stock-based compensation ​ 2,873 ​ ​ 2,882

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The following tables present reconciliations of operating income (loss) to Adjusted Segment EBITDA and Adjusted EBITDA:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(In thousands)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment

​ (Loss) Amortization of Assets Stockman’s Costs Costs Compensation EBITDA

Reporting segments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(In thousands)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment

​ ​ Operating ​ Depreciation ​ Loss on ​ Project ​ ​ ​ Stock- ​ EBITDA and

​ ​ Income ​ and ​ Disposal ​ Development ​ Preopening ​ Based ​ Adjusted

​ (Loss) Amortization of Assets Costs Costs Compensation EBITDA

Reporting segments ​ ​ ​ ​ ​ ​ ​ ​

Contracted Sports Wagering ​ ​ 11,663 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 11,663

Other operations ​ ​ ​ ​ ​ ​ ​

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Operating expenses deducted to arrive at operating income (loss) in the above tables include facility rents related to: (i) Midwest & South of $5.4 million in 2024 and $5.0 million in 2023, and (ii) West of $2.8 million in 2024 and $1.9 million in 2023. During 2023, $0.8 million of qualifying rent in our West segment was reclassified to preopening costs for our Chamonix construction project, while there was no such amount in 2024. Finance lease payments of $0.7 million in both 2024 and 2023 related to Rising Star’s smaller hotel within the Indiana segment are not deducted, as such payments are accounted for as interest expense and amortization of debt related to the finance obligation.

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Liquidity and Capital Resources

Cash Flows

As of December 31, 2024, we had $40.2 million of cash and equivalents. Over the last several years, we invested in two large construction projects that are now open to the public: the temporary facility at American Place, which opened in February 2023, and Chamonix, which opened in phases between December 2023 and October 2024. Such construction activity is now substantially complete and their operations are in their ramp-up periods. We estimate that between $10 million and $15 million of cash is used in our 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.

Cash flows – operating activities. On a consolidated basis, cash provided by operations during 2024 was $13.8 million, compared to $22.3 million in 2023. 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 2024, we benefited from a full year of operations at American Place, which opened in February 2023. Net interest expense also rose in 2024 when compared to the prior year, the result of declines in both interest income and capitalized interest, as we began the phased opening of Chamonix in December 2023.

Cash flows – investing activities. On a consolidated basis, cash used in investing activities during 2024 was $45.7 million. These investments primarily related to the construction of Chamonix, partially offset by proceeds from the sale of Stockman’s. In 2023, such amount was $198.8 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.

Cash flows – financing activities. On a consolidated basis, cash used in financing activities during 2024 was $1.5 million, while cash provided by financing activities during 2023 was $59.0 million. 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.

Other Factors Affecting Liquidity

We have significant outstanding debt and contractual obligations. Our principal debt matures in February 2028. Certain planned capital expenditures designed to grow the Company, such as the permanent American Place facility, may require additional financing and/or temporarily reduce the Company’s ability to repay debt.

Our operations are subject to financial, economic, competitive, regulatory and other factors, many of which are beyond our control. Such future developments are highly uncertain and cannot be accurately predicted at this time.

Long-Term Debt. At December 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 $1.7 million related to our finance lease of a hotel at Rising Star. With the exception of our Credit Facility, all of our debt is at fixed interest rates.

See Note 7 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for details on our debt obligations.

Hyatt 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 8 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for further information about this option and related rental commitments that could affect our liquidity and capital resources.

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Capital Investments. In addition to normal maintenance capital expenditures, we made significant capital investments related to the completion of Chamonix, and we expect to do the same for the permanent American Place facility.

Chamonix ⸺ We opened Chamonix in phases between December 2023 and October 2024. 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 its construction (see Note 7 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data”). As we completed construction of Chamonix in the fourth quarter of 2024, such restricted cash balance was $0 as of December 31, 2024.

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 we are permitted to operate until August 2027. We expect to internally generate a portion of the needed funds to complete American Place, but we will likely need additional financing. While there is no certainty that we will be able to do so, we intend to arrange such additional funding along with the refinancing of our existing debt. Such debt is currently callable and otherwise scheduled to mature in February 2028.

Other Capital Expenditures ⸺ Additionally, we may fund various other capital expenditure projects, depending on our financial resources. Our capital expenditures may fluctuate due to decisions regarding strategic capital investments in new or existing facilities, and the timing of capital investments to maintain the quality of our properties. No assurance can be given that any of our planned capital expenditure projects will be completed or that any completed projects will be successful. Our annual capital expenditures typically include some number of new slot machines and related equipment; to some extent, we can coordinate such purchases to match our resources.

We evaluate projects based on a number of factors, including profitability forecasts, length of the development period, the regulatory and political environment, and the ability to secure the funding necessary to complete the development or acquisition, among other considerations. No assurance can be given that any additional projects will be pursued or completed or that any completed projects will be successful.

Principal Debt Arrangements

See Note 7 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for more information.

Critical Accounting Estimates and Policies

Our consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America. Certain of our accounting policies require that we apply significant judgment in defining the appropriate assumptions for calculating estimates that affect reported amounts and disclosures. By their nature, judgments are subject to an inherent degree of uncertainty, and therefore, actual results may differ from our estimates. We believe the following critical accounting policies affect the most significant judgments and estimates used in the preparation of our consolidated financial statements.

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Impairment of Long-lived Assets, Goodwill and Indefinite-Lived Intangibles

Our long-lived assets include property and equipment, goodwill, license rights, tradenames, and other indefinite-lived intangibles. They are evaluated at least annually (and more frequently when circumstances warrant) to determine if events or changes in circumstances indicate that the carrying value may not be recoverable. Examples of such events or changes in circumstances that might indicate impairment testing is warranted might include, as applicable, an adverse change in the legal, regulatory or business climate relative to gaming nationally or in the jurisdictions in which we operate, or a significant long-term decline in historical or forecasted earnings or cash flows or the fair value of our property or business, possibly as a result of competitive or other economic or political factors. In evaluating whether a loss in value is other than temporary, we consider: (i) the length of time and the extent to which the fair value or market value has been less than cost; (ii) the financial condition and near-term prospects of the casino property, including any specific events which may influence the operations; (iii) our intent related to the asset and ability to retain it for a period of time sufficient to allow for any anticipated recovery in fair value; (iv) the condition and trend of the economic cycle; (v) historical and forecasted financial performance; and (vi) trends in the general market.

We review the carrying value of our property and equipment used in our operations whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is recorded based on the fair value of the asset. Fair value is typically measured using a discounted cash flow model whereby future cash flows are discounted using a weighted-average cost of capital, developed using a standard capital-asset pricing model, based on guideline companies in our industry.

We test our goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter or when a triggering event occurs. For our 2024 annual impairment tests, we performed selective quantitative analyses and certain qualitative analyses for our goodwill and indefinite-lived intangibles, and concluded it was “more likely than not” that the fair values of such intangibles exceeded their carrying values. Accordingly, the Company’s annual assessment for goodwill and indefinite lived intangible assets as of December 31, 2024 resulted in no impairment charges.

There are significant judgments and estimates included in the quantitative analysis of goodwill for impairment and actual results may differ materially from our estimates. Estimates of future cash flow levels, by their nature, are complex and subjective. In addition, the market multiples and discount rates used in impairment tests are highly judgmental and dependent in large part on expectations of future market conditions. These assumptions pose a high degree of sensitivity to the resulting fair values, and if certain future operating results do not meet current expectations, or there are changes to certain underlying assumptions and variables, many of which are derived from external factors that we cannot control or influence, there could be a material impact on the results of future tests. Any impairment charges incurred are not reversed if a subsequent evaluation concludes a higher valuation than the carrying value. For further discussion of goodwill and other intangible assets, see Note 2 and Note 5 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data.”

Fixed Asset Capitalization and Depreciation Policies

We define fixed assets as certain property and equipment with economic useful lives that extend beyond a year. Such fixed assets are stated at cost. For a significant amount of our property and equipment, cost was determined at the acquisition date based on estimated fair values. We acquired Bronco Billy’s in May 2016, Silver Slipper in October 2012, Rising Star in April 2011, and Stockman’s in January 2007. Project development costs, which are amounts expended on the pursuit of new business opportunities, acquisition-related costs, as well as other business development activities in the ordinary course of business, are expensed as incurred. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are also expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. For our constructed assets, we capitalize direct costs of the project, including fees paid to architects and contractors and property taxes. Salaries are capitalized only for employees working directly on the project. In addition, interest cost associated with major development and construction projects is capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended on the project using the weighted-average cost of our outstanding borrowings. Capitalization of interest starts when construction activities begin and ceases when construction is substantially complete or development activity is suspended for more than a brief period.

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We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered a maintenance expense or a capital asset is sometimes a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also may be a matter of judgment. In addition, our depreciation expense is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based on our experience with similar assets, engineering studies, and our estimate of the usage of the asset. Whenever events or circumstances occur, which would change the estimated useful life of an asset, we account for the change prospectively. The depreciation expense for tax purposes follows different rules than under GAAP and can sometimes result in a significantly different depreciation schedule.

Income Taxes

We are subject to federal and state taxes in the United States. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our net DTAs. Such valuation allowance was $35.6 million for 2024 and $24.0 million for 2023. We make estimates and judgments about our future taxable income that are based on assumptions consistent with our future plans. Tax laws, regulations, and administrative practices may be subject to change due to economic or political conditions, including fundamental changes to the applicable tax laws.

Our income tax returns are subject to examination by the IRS and other tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not ultimately be accepted by the IRS or other tax authorities. We assess our tax positions using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold. It is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Additionally, we recognize accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense. For further discussion of income taxes, see Note 9 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data.”

Recently Issued Accounting Pronouncements Not Yet Adopted

See Note 2 to the consolidated financial statements set forth in Part II, Item 8. “Financial Statements and Supplementary Data” for a discussion of recently issued accounting pronouncements not yet adopted.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

As a smaller reporting company during the year ended December 31, 2024, as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.

​

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Item 8. Financial Statements and Supplementary Data.

​ ​

​ ​

Financial Statements: Page

Notes to Consolidated Financial Statements: 63

​ Note 1 ​ Organization 63

​ Note 3 ​ Assets Held for Sale 72

​ Note 4 ​ Property and Equipment, Net 72

​ Note 5 ​ Goodwill and Other Intangibles 73

​ Note 6 ​ Other Accrued Liabilities 75

​ Note 7 ​ Long-Term Debt 75

​ Note 8 ​ Leases 78

​ Note 9 ​ Income Taxes 82

​ Note 10 ​ Commitments and Contingencies 84

​ Note 11 ​ Stock-Based Compensation 85

​ Note 12 ​ Segment Reporting 87

​

​

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

​

To the stockholders and the Board of Directors of Full House Resorts, Inc.

​

Opinion on Internal Control over Financial Reporting

​

We have audited the internal control over financial reporting of Full House Resorts, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

​

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024 of the Company and our report dated March 11, 2025, expressed an unqualified opinion on those financial statements.

​

Basis for Opinion

​

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

​

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

​

Definition and Limitations of Internal Control over Financial Reporting

​

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

​

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

​

/s/ Deloitte & Touche LLP

​

Las Vegas, Nevada

March 11, 2025

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

​

To the stockholders and the Board of Directors of Full House Resorts, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Full House Resorts, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 11, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Goodwill ─ Refer to Notes 2 and 5 of the financial statements

Critical Audit Matter Description

The Company tests goodwill for impairment annually or more frequently if indicators of impairment exist, by comparing the fair value of each reporting unit to its carrying value.

The Company determines the fair value of its reporting units using the discounted cash flow model and the market approach. The determination of the fair value using the discount cash flow model requires management to make significant estimates and assumptions related to (1) the expected cash flows and projected financial results, including forecasted revenues and expenses (collectively the “forecasts”), and (2) discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to the selection of valuation multiples. The fair value of the Bronco Billy’s Casino reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

We identified goodwill for the Bronco Billy’s Casino reporting unit as a critical audit matter because of the significant assumptions and estimates management makes to estimate the fair value of the reporting unit and the sensitivity of those assumptions to the fair value determination. This required a higher degree of auditor judgment, increased level of audit effort, use of more experienced audit professionals, as well as the involvement of our fair value specialists, when performing audit procedures related to forecasts and selection of discount rates and valuation multiples.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s forecasts, discount rates and valuation multiples used by management to determine the fair value of the Company’s Bronco Billy’s Casino reporting unit included the following, among others:

o Conducting inquiries with management.

​

/s/ Deloitte & Touche LLP

​

Las Vegas, Nevada

March 11, 2025

​

We have served as the Company’s auditor since 2019.

​

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

​

​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended

​ ​ December 31,

Revenues ​ ​

Other operations, including contracted sports wagering ​ 17,605 ​ 20,719

Operating costs and expenses ​ ​ ​ ​

Project development costs ​ 368 ​ 53

Loss on disposal of assets ​ ​ 18 ​ 7

Gain on sale of Stockman’s ​ ​ (1,926) ​ ​ —

Operating income (loss) ​ 2,750 ​ (1,162)

Other (expense) income ​ ​ ​ ​ ​ ​

Other ​ ​ — ​ ​ 384

Income tax expense ​ ​ 221 ​ ​ 1,149

​ ​ ​ ​ ​ ​ ​

Basic loss per share ​ $ (1.16) ​ $ (0.72)

Diluted loss per share ​ $ (1.16) ​ $ (0.72)

​ ​ ​ ​ ​ ​ ​

​

The accompanying notes are an integral part of these consolidated financial statements.

​

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

​ ​ ​ ​ ​ ​ ​

​ ​ December 31,

ASSETS ​ ​ ​ ​ ​ ​

Current assets ​ ​ ​ ​ ​ ​

Restricted cash ​ ​ — ​ ​ 37,639

Prepaid expenses and other ​ 3,516 ​ 3,674

Assets held for sale ​ ​ 2,486 ​ ​ —

​ ​ ​ ​ ​ ​ ​

Operating lease right-of-use assets, net ​ ​ 55,957 ​ ​ 44,704

Finance lease right-of-use assets, net ​ ​ 976 ​ ​ 2,318

LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​

Current liabilities ​ ​ ​ ​ ​ ​

Income taxes payable ​ ​ — ​ ​ 489

Accrued payroll and related ​ 6,435 ​ 4,097

Current portion of operating lease obligations ​ ​ 4,226 ​ ​ 4,784

Current portion of finance lease obligations ​ ​ 1,610 ​ ​ 1,694

Liabilities related to assets held for sale ​ ​ 86 ​ ​ —

​ ​ ​ ​ ​ ​ ​

Operating lease obligations, net of current portion ​ 52,324 ​ 40,248

Finance lease obligations, net of current portion ​ ​ 1,095 ​ ​ 2,705

Other long-term liabilities, net of current portion ​ ​ 37,328 ​ ​ 16,075

Deferred income taxes, net ​ 1,946 ​ 1,684

Contract liabilities, net of current portion ​ ​ 4,550 ​ ​ 6,192

Commitments and contingencies (Note 10) ​ ​

Stockholders’ equity ​ ​

​

The accompanying notes are an integral part of these consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ Total

​ ​ Common Stock ​ Paid-in ​ Treasury Stock ​ Accumulated ​ Stockholders’

​ ​ Shares ​ Dollars ​ Capital ​ Shares ​ Dollars ​ Deficit ​ Equity

Net loss ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ (24,904) ​ ​ (24,904)

Stock-based compensation ​ — ​ ​ — ​ ​ 2,882 ​ — ​ ​ — ​ ​ — ​ ​ 2,882

Net loss ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ (40,672) ​ ​ (40,672)

Stock-based compensation ​ — ​ ​ — ​ ​ 2,873 ​ — ​ ​ — ​ ​ — ​ ​ 2,873

​

The accompanying notes are an integral part of these consolidated financial statements.

​

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended

​ ​ December 31,

Cash flows from operating activities: ​ ​

Amortization of debt issuance costs, discounts and premiums ​ 2,987 ​ 2,793

Non-cash change in ROU operating lease assets ​ ​ 2,770 ​ ​ 3,586

Loss on disposal of assets ​ 18 ​ 7

Gain on sale of Stockman’s ​ ​ (1,926) ​ ​ —

Provision for credit losses ​ ​ 212 ​ ​ 940

Other ​ ​ — ​ ​ 122

Deferred income taxes ​ 262 ​ 660

Increases and decreases in operating assets and liabilities: ​ ​ ​ ​ ​

Accounts receivable ​ 19 ​ (2,190)

Prepaid expenses, inventories and other ​ (91) ​ 2,150

Income taxes payable ​ ​ (489) ​ ​ 489

Operating lease liabilities ​ ​ (2,505) ​ ​ (3,390)

Contract liabilities ​ ​ (1,963) ​ ​ 1,889

Accounts payable and other liabilities ​ 10,249 ​ 6,219

Net cash provided by operating activities ​ 13,845 ​ 22,345

Cash flows from investing activities: ​ ​ ​ ​ ​

Proceeds from sale of Stockman’s ​ ​ 7,000 ​ ​ —

Acquisition of intangible assets ​ ​ (1) ​ ​ (50,528)

Net cash used in investing activities ​ (45,670) ​ (198,758)

Cash flows from financing activities: ​ ​ ​ ​ ​

Proceeds from Senior Secured Notes due 2028 borrowings ​ — ​ 40,000

Payment of debt discount and issuance costs ​ — ​ (6,493)

Borrowings under revolving credit facility ​ ​ 13,000 ​ ​ 42,950

Repayment of revolving credit facility borrowings ​ ​ (13,000) ​ ​ (15,950)

Repayment of finance lease obligations ​ ​ (1,694) ​ ​ (1,477)

Proceeds from exercise of stock options ​ 448 ​ 79

Net cash (used in) provided by financing activities ​ (1,498) ​ 59,031

​ ​ ​ ​ ​ ​ ​

Less: cash classified within current assets held for sale ​ ​ (250) ​ ​ —

Cash, cash equivalents and restricted cash, end of period ​ $ 40,221 ​ $ 73,794

The accompanying notes are an integral part of these consolidated financial statements.

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)

(In thousands)

​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended

​ ​ December 31,

Supplemental Cash Flow Disclosure: ​ ​ ​ ​ ​ ​

Cash paid for interest, net of amounts capitalized ​ $ 39,184 ​ $ 22,463

Cash paid for income taxes ​ ​ 895 ​ ​ —

​ ​ ​ ​ ​ ​ ​

Supplemental Schedule of Non-Cash Investing and Financing Activities: ​ ​

Payables and accruals incurred for capital expenditures ​ $ 5,264 ​ $ 22,507

Note payable incurred for asset acquisition ​ ​ — ​ ​ 1,500

Accrued liability related to asset acquisition ​ ​ 19,961 ​ ​ 14,905

Right-of-use assets obtained in exchange for lease liabilities: ​ ​ ​ ​ ​ ​

Operating leases ​ ​ — ​ ​ 30,178

Right-of-use asset and liability remeasurements: ​ ​ ​ ​ ​ ​

Financing leases ​ ​ — ​ ​ (150)

The accompanying notes are an integral part of these consolidated financial statements.

​

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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

Formed as a Delaware corporation in 1987, Full House Resorts, Inc. owns, leases, operates, develops, manages, and/or invests in casinos and related hospitality and entertainment facilities. References in this document to “Full House,” the “Company,” “we,” “our,” or “us” refer to Full House Resorts, Inc. and its subsidiaries, except where stated or the context otherwise indicates.

The following table identifies our segments, along with properties and their locations as of December 31, 2024:

​

​ ​ ​

Segments and Properties ​ Locations

Midwest & South ​ ​

American Place* ​ Waukegan, IL (northern suburb of Chicago)

Rising Star Casino Resort (“Rising Star”) Rising Sun, IN (near Cincinnati)

West ​ ​

Contracted Sports Wagering ​ ​

One active sports wagering website (“skin”), commenced in August 2023 ​ Illinois

__________

The Company currently operates seven casinos: six on real estate that we own or lease, and one located within a hotel owned by a third party. Additionally, we benefit from three active permitted sports wagering skins – one each in Colorado, Indiana, and Illinois.

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 August 2024, we entered into an agreement to sell Stockman’s to a privately owned company (see Note 3).

In October 2024, we completed the phased opening of Chamonix, our newest property, located adjacent to our existing Bronco Billy’s Casino.

For additional information about the Company’s segments, see Note 12.

​

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2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Accounting.The consolidated financial statements include the accounts of Full House and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Except when otherwise required by accounting principles generally accepted in the United States of America (“GAAP”) and disclosed herein, the Company measures all of its assets and liabilities on the historical cost basis of accounting.

Use of Estimates. The consolidated financial statements have been prepared in conformity with GAAP. These principles require the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value and the Fair Value Input Hierarchy. Fair value measurements affect the Company’s accounting for net assets acquired in acquisition transactions and certain financial assets and liabilities. Fair value measurements are also used in its periodic assessments of long-lived tangible and intangible assets for possible impairment, including for property and equipment, goodwill, and other intangible assets. Fair value is defined as the expected price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

GAAP categorizes the inputs used for fair value into a three-level hierarchy:

Methods and assumptions used to estimate the fair value of financial instruments are affected by the duration of the instruments and other factors used by market participants to estimate value. The carrying amounts for cash and equivalents, restricted cash, accounts receivable, and accounts payable approximate their estimated fair value because of the short durations of the instruments and inconsequential rates of interest.

Cash Equivalents and Restricted Cash. Cash equivalents include cash involved in operations and cash in excess of daily requirements that is invested in highly liquid, short-term investments with initial maturities of three months or less when purchased.

Restricted cash balances consisted of funds placed into a construction reserve account to fund the completion of the Chamonix construction project, in accordance with the Company’s debt covenants. Chamonix began its phased opening in December 2023 and completed its opening in October 2024. Accordingly, there are no restrictions on any cash balances at December 31, 2024.

Accounts Receivable and Credit Risk. Accounts receivable consist primarily of casino, hotel, certain sports wagering contracts that previously paid us in arrears, and other receivables.Accounts receivable are typically non-interest bearing, recorded initially at cost, and are carried net of an appropriate reserve to approximate fair value. Loss reserves are estimated based on specific review of customer accounts including the customers’ willingness and ability to pay and nature of collateral, if any, as well as historical collection experience and current and expected economic and business conditions. Accounts are written off when management deems the account to be uncollectible and recoveries of accounts previously written off are recorded when received.

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Accounts receivable consists of the following:

​ ​ ​ ​ ​ ​ ​

(In thousands) ​ December 31,

Other Operations, excluding Contracted Sports Wagering ​ ​ 144 ​ ​ 185

Contracted Sports Wagering(1) ​ ​ 1,017 ​ ​ 1,932

Less: Provision for credit losses ​ ​ (138) ​ ​ (1,189)

__________

​

The following table shows the movement in the provision for credit losses recognized for accounts receivable that occurred during the period:

​

​ ​ ​ ​ ​ ​ ​

(In thousands) ​ ​ ​ ​ ​ ​

Current period provision for credit losses ​ ​ 212 ​ ​ 940

Write-offs ​ ​ (1,263) ​ ​ —

​

​

At December 31, 2024, estimated loss reserves reflect activity related to two online sports wagering agreements, which remain active in Colorado and Indiana (until their next anniversaries in 2025, as subsequently amended). In July 2024, the Company’s respective subsidiaries in Colorado and Indiana each amended its respective sports wagering agreement, resulting in collections totaling $2.1 million. Specifically, these amendments settled overdue payments owed to the Company, reduced certain future annual amounts due to the Company under the sports wagering agreements, and required such annual fees to be paid in advance of each annual term. Except as set forth in the respective amendments, all other terms of the sports wagering agreements remained in full force and effect in 2024.

Management regularly evaluates the adequacy of the Company’s recorded reserves. At December 31, 2024, we believe that no significant concentrations of credit risk existed for which a reserve had not already been recorded.

Inventories. Inventories consist primarily of food, beverage and retail items, and are stated at the lower of cost or net realizable value. Costs are determined using the first-in, first-out and the weighted average methods.

Property and Equipment. Property and equipment are stated at cost and are capitalized and depreciated, while normal repairs and maintenance are expensed in the period incurred. A significant amount of the Company’s property and equipment was acquired through business combinations, and therefore, were recognized at fair value measured at the acquisition date. Gains or losses on dispositions of property and equipment are included in operating expenses, effectively as adjustments to depreciation estimates.

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Certain events or changes in circumstances may indicate that the recoverability of the carrying amount of property, plant and equipment should be assessed, including, among others, a significant decrease in market value, a significant change in the business climate in a particular market, or a current period operating or cash flow loss combined with historical losses or projected future losses. For assets to be held and used, the Company reviews for impairment whenever indicators of impairment exist. When such events or changes in circumstances are present, the Company estimates the future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, then the Company would recognize an impairment loss based on the fair value of the asset, typically measured using a discounted cash flow model.

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, whichever is appropriate under the circumstances. The Company determines the estimated useful lives based on our experience with similar assets, estimated usage of the asset, and industry practice. Whenever events or circumstances occur, which change the estimated useful life of an asset, the Company accounts for the change prospectively.

Depreciation and amortization is provided over the following estimated useful lives:

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​ Estimated

Class of Assets ​ Useful Lives

Land improvements 10 to 18 years

Buildings and improvements 3 to 44 years

Furniture, fixtures and equipment 2 to 10 years

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Capitalized Interest.Interest costs associated with major construction projects are capitalized and included in the cost of the projects. When no debt is incurred specifically for construction projects, interest is capitalized on amounts expended using the weighted average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or construction activity is suspended for more than a brief period.

Leases.The Company determines if a contract is, or contains, a lease at inception or modification of the agreement. A contract is, or contains, a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration. Control over the use of the identified asset means that the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

For material leases with terms greater than a year, the Company records right-of-use (“ROU”) assets and lease liabilities on the balance sheet, as measured on a discounted basis. For finance leases, the Company recognizes interest expense associated with the lease liability, as well as depreciation (or amortization) expense associated with the ROU asset, depending on whether those ROU assets are expected to transfer to the Company upon lease expiration. If ownership of a finance lease ROU asset is expected to transfer to the Company upon lease expiration, then it is included with the Company’s property and equipment; other qualifying finance lease ROU assets, based on other classifying criteria under Accounting Standards Codification 842 (“ASC 842”), are disclosed separately on their own line, “Finance Lease Right-of-Use Assets, Net.” For operating leases, the Company recognizes straight-line rent expense.

The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less. However, costs related to short-term leases with terms greater than one month, which the Company deems material, are disclosed as a component of lease expenses when applicable. Additionally, the Company accounts for new and existing leases containing both lease and non-lease components (“embedded leases”) together as a single lease component by asset class for gaming-related equipment; as a result, the Company will not allocate contract consideration to the separate lease and non-lease components based on their relative standalone prices.

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Finance and operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement, plus any qualifying initial direct costs paid prior to commencement for ROU assets. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate in determining the present value of future payments based on the information available at the commencement date and/or modification date. The expected lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term for operating leases. For finance leases, the ROU asset depreciates/amortizes on a straight-line basis over the shorter of the lease term or useful life of the ROU asset as applicable, and the lease liability accretes interest based on the interest method using the discount rate determined at such lease commencement or modification.

Goodwill and Indefinite-lived Intangible Assets. Goodwill represents the excess of the purchase price of Bronco Billy’s, Silver Slipper, and Stockman’s over the estimated fair value of their net tangible and other intangible assets on the acquisition date, net of subsequent impairment charges, if any. The Company’s other indefinite-lived intangible assets primarily include certain license rights to conduct gaming in certain jurisdictions and trade names. Goodwill and other indefinite-lived intangible assets are not amortized, but are periodically tested for impairment. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value.

Tests of goodwill and indefinite-lived intangible assets start with a qualitative assessment to determine whether it is necessary to perform a quantitative test. Items that are considered in the qualitative assessment include, but are not limited to, the following: macroeconomic conditions, industry and market conditions and overall financial performance. If the results of the qualitative assessment indicate it is “more likely than not” that a reporting unit’s carrying value exceeds its fair value, or if the Company elects to bypass the qualitative assessment, then a quantitative test is performed.

For indefinite-lived intangible assets, if quantitative tests are performed, the value of the gaming license rights is determined using a multi-period excess earnings method, which is a specific discounted cash flow model.

For goodwill, if quantitative tests are performed, the Company estimates the fair value of the reporting unit utilizing a weighted average allocation of both the income approach (discounted cash flow method) and a market-based approach that utilizes a comparison of the reporting unit to comparable publicly-traded companies and transactions and, based on the observed business enterprise value multiples, ultimately selects market multiples to apply to the reporting unit.

The determination of fair value under the income approach requires the use of significant estimates about expected revenues and operating profit, as well as discount rates to determine the estimated fair value. Changes in the assumptions can materially affect these estimates. Thus, to the extent that gaming volumes deteriorate in the future, discount rates increase significantly, or reporting units do not meet projected performance, the Company could have impairment losses in the future and such amounts could be material. These tests for impairment are performed annually during the fourth quarter or when a triggering event occurs.

Finite-lived Intangible Assets. The Company’s finite-lived intangible assets primarily include land lease acquisition costs and water rights. Finite-lived intangible assets are amortized over the shorter of their contractual or economic lives. The Company periodically evaluates the remaining useful lives of these intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization and the possible need for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, then the Company would recognize an impairment loss.

Debt Issuance Costs and Debt Discounts/Premiums. Debt issuance costs and debt discounts/premiums incurred in connection with the issuance of debt have been included as a component of the carrying amount of debt, and are amortized/accreted over the contractual term of the debt to interest expense, using the straight-line method, which approximates the effective interest method. When its existing debt agreements are determined to have been modified, the Company amortizes such costs to interest expense using the effective interest method over the terms of the modified debt agreement.

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Revenue Recognition:

Accrued Club Points and Customer Loyalty Programs: Operating Revenues and Related Costs and Expenses.The Company’s revenues consist primarily of casino gaming, food and beverage, hotel, and other revenues (such as sports wagering, golf, RV park operations, and entertainment). The majority of its revenues are derived from casino gaming, principally slot machines.

The transaction price for a casino wager is the difference between gaming wins and losses, not the total amount wagered. As such wagers have similar characteristics, the Company accounts for its gaming transactions on a portfolio basis by recognizing net win per gaming day versus on an individual basis.

The Company sometimes provides discretionary complimentary goods and services (“discretionary comps”). For these types of transactions, the Company allocates revenue to the department providing the complimentary goods or services based upon its estimated standalone selling price, offset by a reduction in casino revenues.

Many of the Company’s customers choose to earn points under its customer loyalty programs. The Company’s properties have separate customer loyalty programs: the Slipper Rewards Club, the Bronco Billy’s / Chamonix Casino’s Mile High Rewards Club, the Rising Star VIP Club, the Grand Lodge Players Advantage Club, the Stockman’s Winner’s Club, and American Place’s Legacy Rewards. As points are accrued, the Company defers a portion of its gaming revenue based on the estimated standalone value of loyalty points being earned by the customer. The standalone value of loyalty points is derived from the retail value of food, beverages, hotel rooms, and other goods or services for which such points may be redeemed. A liability related to these customer loyalty points is recorded, net of estimated breakage and other factors, until the customer redeems these points under such loyalty programs for various benefits, such as “free casino play,” complimentary dining, or hotel stays, among others, depending on each property’s specific offers. Upon redemption, the related revenue is recognized at retail value within the department providing the goods or services. Unredeemed points are forfeited if the customer becomes and remains inactive for a specified period of time. Liabilities based on the standalone retail value of such benefits were approximately $0.9 million at December 31, 2024 and $0.8 million at December 31, 2023, and these amounts are included in “other accrued liabilities” on the consolidated balance sheets.

Revenue for food and beverage, hotel, and other revenue transactions, as described in “Other Revenues” below, includes the retail value of (i) discretionary comps and (ii) comps provided in return for redemption of loyalty points. Additionally, the Company may collect deposits in advance for future hotel reservations or entertainment, among other services, which represent obligations of the Company until the service is provided to the customer.

Deferred Revenues: Market Access Fees from Sports Wagering Agreements. The Company entered into several agreements with various unaffiliated companies allowing for online sports wagering within Indiana, Colorado and Illinois, as well as on-site sports wagering at American Place (the “Sports Agreements”). As part of these long-term Sports Agreements, the Company received one-time “market access” fees, which are recorded as long-term liabilities and then recognized as revenue ratably over the initial contract terms (or as accelerated due to early termination), beginning with the earlier of operations commencement or contractual commencement. In the third quarter of 2023, one of the Company’s contracted parties ceased online operations in Indiana and Colorado. Accordingly, this accelerated the revenue recognition of $1.5 million in related market access fees, which was recognized in the third quarter of 2023. Another contracted party ceased online operations in Colorado during the second quarter of 2024, resulting in $0.9 million of accelerated revenue from market access fees.

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Indiana. Under the Company’s one active Sports Agreement in Indiana that commenced in December 2021, we receive a percentage of revenues (as defined), subject to an annualized minimum amount. Additionally, a $1.0 million market access fee, received upon signing of the agreement, is being amortized over the initial 10-year term of the agreement. In July 2024, the agreement was amended to settle overdue payments and to reduce future annual amounts for the remainder of the initial term, which resulted in annualized straight-line revenues of $0.5 million through the remainder of the current term. In January 2025, such operator gave notice that it was discontinuing operations in Indiana prior to its next anniversary in December 2025.

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Colorado. Similarly in Colorado, under the Company’s one active Sports Agreement that commenced in June 2020, we receive a percentage of revenues (as defined), subject to an annualized minimum amount. Additionally, a $1.0 million market access fee, received upon signing of the agreement, is being amortized over the initial 10-year term of the agreement. In July 2024, the agreement was amended to settle overdue payments and to reduce future annual amounts for the remainder of the initial term, which resulted in annualized straight-line revenues of $0.5 million through the remainder of the current term. In January 2025, such operator gave notice that it was discontinuing operations in Colorado prior to its next anniversary in June 2025.

Illinois. Under the Company’s Sports Agreement in Illinois, we receive a percentage of revenues (as defined), subject to a minimum of $5.0 million per year. A market access fee of $5.0 million is being amortized over the eight-year term of the Sports Agreement, which began its contractual term in August 2023.

In addition to the market access fees, deferred revenue includes annual prepayments of contracted revenue. With the July 2024 amendment of two Sports Agreements, all of the Company’s active Sports Agreements require the prepayment of contracted revenue.

Deferred revenues consisted of the following as discussed above:

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(In thousands) ​ ​ ​ December 31,

Deferred revenue, current ​ Other accrued liabilities ​ $ 5,854 ​ $ 6,175

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Other Revenues. The transaction price of rooms, food and beverage, and retail contracts is the net amount collected from the customer for such goods and services. The transaction price for such contracts is recorded as revenue when the good or service is transferred to the customer over their stay at the hotel or when the delivery is made for the food, beverage, retail and other contracts. Sales and usage-based taxes are excluded from revenues.

Revenue by Source. The Company presents earned revenue as disaggregated by the type or nature of the good or service (casino, food and beverage, hotel, and other operations comprised mainly of retail, golf, entertainment, and contracted sports wagering) and by relevant geographic region within Note 12.

Contract and Contract-Related Liabilities. There may be a difference between the timing of cash receipts from the customer and the recognition of revenue, resulting in a contract or contract-related liability. The Company generally has four types of liabilities related to contracts with customers: (1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer; (2) players club points, which represents the deferred allocation of revenue relating to loyalty program incentives earned; (3) contracted sports wagering, which represents payments received in advance from contracted parties relating to Sports Agreements to be recognized as revenue ratably over their respective initial contract terms; and (4) progressive jackpots and other, which represents accumulated slot jackpots not yet won, and includes unpaid wagers and advance payments on goods and services yet to be provided such as deposits on rooms and convention space. With the exception of noncurrent portions of deferred revenues from contracted sports wagering, these liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Other accrued liabilities” on the consolidated balance sheets.

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The following table summarizes the activity related to short-term and long-term contract and contract related liabilities:

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Outstanding ​ Players ​ Contracted ​ Progressive

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Advertising Costs. Costs for advertising are expensed as incurred, or the first time the advertising takes place, and are included in selling, general and administrative expenses. Total advertising costs were $8.4 million and $8.5 million for the years ended December 31, 2024 and 2023, respectively.

Project Development and Acquisition Costs. Project development and acquisition costs consist of amounts expended on the pursuit of new business opportunities and acquisitions, as well as other business development activities in the ordinary course of business, which are expensed as incurred.

Preopening costs.Preopening costs are related to the preopening phases of new ventures, in accordance with accounting standards regarding start-up activities, and are expensed as incurred. These costs consist of payroll, advertising, outside services, organizational costs and other expenses directly related to both the Chamonix and American Place developments.

Stock-based Compensation. The Company has various stock-based compensation programs, which provide for equity awards including stock options, time-based restricted stock and performance-based restricted stock. Stock-based compensation costs are measured at the grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for stock options, and based on the closing share price of the Company’s stock on the grant date for restricted and performance stock. These costs are recognized as an expense on a straight-line basis over the recipient’s requisite service period (the vesting period of the award), net of forfeitures and cancellations, which are recognized as they occur, and are included within selling, general and administrative expense on the consolidated statements of operations.

Estimated compensation costs for performance stock, in particular, reflect meeting certain growth-rate targets for the applicable year-to-date period and may be subject to partial or full reversals in the current or following year if not completely met at year-end.

Income Taxes. We classify deferred tax assets and liabilities, along with any related valuation allowance, as non-current on the consolidated balance sheets. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are provided against deferred tax assets when it is deemed “more likely than not” that some portion or all of the deferred tax assets will not be realized within a reasonable time period.

Our income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not ultimately be accepted by the IRS or other tax authorities. We assess our tax positions using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Additionally, we recognize accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

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Reclassifications.To conform to the current-period presentation, the Company made certain minor financial statement presentation reclassifications to prior-period amounts. Such reclassifications had no effect on the previously reported results of operations or financial position.

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Earnings (loss) per share.Earnings (loss) per share is computed by dividing net income (loss) applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the additional dilution for all potentially-dilutive securities, including stock options, restricted stock and performance-based shares, using the treasury stock method.