The chairman of Full House Resorts’s audit committee blamed Moody’s downgrading of its liquidity rating on the slow start of the company’s two new casinos, one in Colorado and the other in Illinois.
Michael Shaunnessy addressed the issue Thursday when the Nevada Gaming Commission approved his licensing. He addressed a question from Commission member Brian Krolicki about Moody’s change in its ratings.
Reports show that Moody’s lowered the casino operator’s speculative-grade liquidity, noting that the company faces a difficult path in bolstering its financial status. The reports said Full House has a corporate credit grade of Caa1 – a rating judged to be of poor standing and subject to very high credit risk.
Shaunnessy said most of Full House’s debt of several hundred million dollars is at a fixed rate and that variances over the last 18 to 24 months have “no material impact on us.”
Full House Resorts reported an $11.3 million loss in the first quarter. With the new properties in Illinois and Colorado, revenue was up 39.6%, reaching $69.6 million. Cash flow was $12.4 million, a 22.6 percent increase from the first quarter of last year.
Shaunnessy said, “As is almost always the case, new properties don’t quite live up to the expectations. Ours have been no different. Our property (American Place) in Waukegan, Illinois, is doing phenomenally, but we’re not the top performer in the state. Rivers Casino (in Des Plaines) does four times as much, because it’s in a better location. The expectation was we would do 20% to 30% more than we’re doing in Illinois. It’s been open a year. It’s performing great and we love the property.”
The Temporary at American Place reported $25.8 million in revenue and $7.4 million in cash flow. The casino opened in mid-February 2023.
Full House opened Chamonix in Colorado at the end of 2023 and it got off to a slow start, due to winter weather, Shaunnessy said. He said it’s not yet doing what they expected it to do.
“It was not a good opening. In the first couple of months, we were barely breaking even. Both casinos have begun to perform better. They’re collectively greater than what the company was before they opened. That’s why they were a big reflection on future expectations, at least over the next 12 months. That’s why they took a look at rating adjustments.”
Also Thursday, the Commission approved a first-time license for a new chief information and product-transformation officer at Caesars Entertainment. The Commission asked in Rajendran Anbalagan about the cyberattack against the casino operator last fall that compromised patron data, but avoided the major impact by MGM Resorts International that had systems shut down.
Anbalagan, who came on board last summer, said data security is the highest priority on which they need to continue to spend time and improve, especially with the technology landscape shifting rapidly and widely.
