UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, ~~2020~~2021
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File No. 1-32583

FULL HOUSE RESORTS, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		13-3391527 (I.R.S. Employer Identification No.)
~~Delaware~~ ~~(State or other jurisdiction~~ ~~of incorporation or organization)~~		~~13-3391527~~ ~~(I.R.S. Employer~~ ~~Identification No.)~~

One Summerlin, 1980 Festival Plaza Drive, Suite 680 Las Vegas, Nevada (Address of principal executive offices)		89135 (Zip Code)

(702) 221-7800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class	Trading Symbol(s)
~~Title of each Class~~	~~Trading Symbol(s)~~	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	FLL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company ~~and/~~or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐	Emerging growth company ☐
Non-accelerated filer ☑	Smaller reporting company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ~~Yes~~ ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule ~~12b‑2~~12b-2 of the Exchange Act). Yes ☐ No ☑

As of May ~~11, 2020,~~10, 2021, there were ~~27,075,962~~34,109,158 shares of Common Stock, $0.0001 par value per share, outstanding.

Table of Contents

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)


	Three Months Ended
	March 31,
	2020		2019

					Three Months Ended
					March 31,
					2021		2020
Revenues
Casino	$	20,751	$	28,298	$	32,064	$	20,751
Food and beverage		6,990		8,658		6,101		6,990
Hotel		1,974		2,715		2,211		1,974
Other operations, including online/mobile sports operations		1,138		823
Net revenues		30,853		40,494
Other operations, including online/mobile sports						1,832		1,138
						42,208		30,853
Operating costs and expenses
Casino		10,333		11,785		10,339		10,333
Food and beverage		7,136		9,369		5,360		7,136
Hotel		1,173		2,420		1,056		1,173
Other operations		562		769		395		562
Selling, general and administrative		12,981		12,660		14,413		12,981
Project development costs		56		133		47		56
Depreciation and amortization		2,040		2,091		1,800		2,040
Gain on disposal of assets, net		—		(1)
		34,281		39,226
Operating (loss) income		(3,428)		1,268
Loss on disposal of assets, net						104		—
						33,514		34,281
Operating income (loss)						8,694		(3,428)
Other (expense) income
Interest expense, net of $220 and $47 capitalized		(2,491)		(2,703)
Interest expense, net of amounts capitalized of $259 and $220						(4,456)		(2,491)
Loss on extinguishment of debt						(6,134)		—
Adjustment to fair value of warrants		1,656		(40)		(1,347)		1,656
		(835)		(2,743)
						(11,937)		(835)
Loss before income taxes		(4,263)		(1,475)		(3,243)		(4,263)
Income tax provision		95		142		202		95
Net loss	$	(4,358)	$	(1,617)	$	(3,445)	$	(4,358)


Basic loss per share	$	(0.16)	$	(0.06)	$	(0.13)	$	(0.16)
Diluted loss per share	$	(0.22)	$	(0.06)	$	(0.13)	$	(0.22)

See condensed notes to consolidated financial statements.

Table of Contents

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share data)


	March 31,		December 31,
	2020		2019

					March 31,		December 31,
					2021		2020
ASSETS
Current assets
Cash and equivalents	$	24,317	$	28,851	$	98,005	$	37,698
Restricted cash		—		1,000		179,923		—
Accounts receivable, net of allowance of $149 and $141		524		2,206
Accounts receivable, net of allowance of $191 and $176						3,801		4,904
Inventories		2,101		2,292		1,629		1,511
Prepaid expenses and other		3,200		3,340		3,354		2,461
		30,142		37,689

						286,712		46,574

Property and equipment, net		120,193		121,487		117,763		115,772
Operating lease right-of-use assets, net		19,674		19,171		16,600		17,361
Goodwill		21,286		21,286		21,286		21,286
Other intangible assets, net		11,033		11,056		10,941		10,963
Deposits and other		612		646		641		660
	$	202,940	$	211,335
					$	453,943	$	212,616
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,309	$	5,216	$	5,658	$	4,191
Accrued payroll and related		2,102		3,044		3,696		2,397
Other accrued expenses and other		8,580		10,613
Other accrued liabilities						14,310		10,810
Current portion of operating lease obligations		3,113		2,707		3,283		3,283
Current portion of finance lease obligation		473		448		490		491
Current portion of long-term debt		1,100		1,100		799		426
Common stock warrant liability		399		2,055		—		2,653
		21,076		25,183

						28,236		24,251

Operating lease obligations, net of current portion		16,794		16,706		14,094		14,914
Finance lease obligation, net of current portion		3,708		3,829		3,179		3,298
Long-term debt, net		102,874		102,923		305,280		106,832
Deferred income taxes, net		807		712		822		620
Contract liabilities, net of current portion		5,860		5,886		5,298		5,398
		151,119		155,239
Other long-term liabilities						626		626
						357,535		155,939
Commitments and contingencies (Note 8)
Stockholders’ equity
Common stock, $0.0001 par value, 100,000,000 shares authorized; 28,345,525 shares issued and 27,075,962 shares outstanding		3		3
Common stock, $0.0001 par value, 100,000,000 shares authorized; 35,302,549 and 28,385,299 shares issued and 34,075,350 and 27,124,292 shares outstanding						4		3
Additional paid-in capital		64,485		64,402		107,959		64,826
Treasury stock, 1,269,563 common shares		(1,548)		(1,548)
Treasury stock, 1,227,199 and 1,261,007 common shares						(1,496)		(1,538)
Accumulated deficit		(11,119)		(6,761)		(10,059)		(6,614)
		51,821		56,096
	$	202,940	$	211,335
						96,408		56,677
					$	453,943	$	212,616

See condensed notes to consolidated financial statements.

Table of Contents

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands)

												��
				Additional							Total
	Common Stock			Paid-in		Treasury Stock			Accumulated		Stockholders’
	Shares	Dollars		Capital		Shares	Dollars		Deficit		Equity
Balance, January 1, 2020	28,346	$	3	$	64,402	1,270	$	(1,548)	$	(6,761)	$	56,096

																Additional							Total
													Common Stock			Paid-in		Treasury Stock			Accumulated		Stockholders’
													Shares	Dollars		Capital		Shares	Dollars		Deficit		Equity
Balance, January 1, 2021													28,385	$	3	$	64,826	1,261	$	(1,538)	$	(6,614)	$	56,677
Equity offering, net													6,917		1		42,973	—		—		—		42,974
Exercise of stock options													—		—		36	(34)		42		—		78
Stock-based compensation	—		—		83	—		—		—		83	—		—		124	—		—		—		124
Net loss	—		—		—	—		—		(4,358)		(4,358)	—		—		—	—		—		(3,445)		(3,445)
Balance, March 31, 2020	28,346	$	3	$	64,485	1,270	$	(1,548)	$	(11,119)	$	51,821
Balance, March 31, 2021													35,302	$	4	$	107,959	1,227	$	(1,496)	$	(10,059)	$	96,408

Additional

Total

Common Stock

Paid-in

Treasury Stock

Accumulated

Stockholders’


Shares

Dollars

Capital

Shares

Dollars

Deficit

Equity
Balance, January 1, 2019

28,289

$
3

$
63,935

1,357

$
(1,654)

$
(939)

$
61,345
Exercise of stock options

26

—

45

—

—

—

45
Stock-based compensation

—

—

86

—

—

—

86
Net loss

—

—

—

—

—

(1,617)

(1,617)
Balance, March 31, 2019

28,315

$
3

$
64,066

1,357

$
(1,654)

$
(2,556)

$
59,859


				Additional							Total
	Common Stock			Paid-in		Treasury Stock			Accumulated		Stockholders’
	Shares	Dollars		Capital		Shares	Dollars		Deficit		Equity
Balance, January 1, 2020	28,346	$	3	$	64,402	1,270	$	(1,548)	$	(6,761)	$	56,096
Stock-based compensation	—		—		83	—		—		—		83
Net loss	—		—		—	—		—		(4,358)		(4,358)
Balance, March 31, 2020	28,346	$	3	$	64,485	1,270	$	(1,548)	$	(11,119)	$	51,821

See condensed notes to consolidated financial statements.

Table of Contents

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2020		2019

					Three Months Ended
					March 31,
					2021		2020
Cash flows from operating activities:
Net loss	$	(4,358)	$	(1,617)	$	(3,445)	$	(4,358)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,040		2,091		1,800		2,040
Amortization of debt issuance and warrant costs		225		190
Amortization of debt issuance and warrant costs and other						284		225
Stock-based compensation		83		86		124		83
Change in fair value of stock warrants		(1,656)		40		1,347		(1,656)
Change in fair value of interest rate cap		—		69
Gain on disposal of assets		—		(1)
Loss on disposal of assets						104		—
Loss on extinguishment of debt						6,134		—
Increases and decreases in operating assets and liabilities:
Accounts receivable		1,682		486		1,103		1,682
Prepaid expenses, inventories and other		331		(37)		(1,011)		331
Deferred taxes		95		143		202		95
Deferred revenue		(25)		—
Common stock warrant liability						(4,000)		—
Contract liabilities						(350)		(25)
Accounts payable and accrued expenses		(2,583)		(2,129)		5,999		(2,583)
Net cash used in operating activities		(4,166)		(679)
Net cash provided by (used in) operating activities						8,291		(4,166)
Cash flows from investing activities:
Purchase of property and equipment		(1,031)		(1,256)		(3,413)		(1,031)
Other		33		4		(8)		33
Net cash used in investing activities		(998)		(1,252)		(3,421)		(998)
Cash flows from financing activities:
Proceeds from Senior Secured Notes due 2028 borrowings						310,000		—
Proceeds from equity offering, net of issuance costs						42,974		—
Payment of debt discount and issuance costs		—		(3)		(9,510)		—
Repayment of Senior Secured Notes		(275)		(250)
Repayment of Senior Secured Notes due 2024						(106,825)		(275)
Prepayment premiums of Senior Secured Notes due 2024						(1,261)		—
Repayment of finance lease obligation		(95)		(125)		(120)		(95)
Proceeds from exercise of stock options		—		45		78		—
Net cash used in financing activities		(370)		(333)

Net decrease in cash, cash equivalents and restricted cash		(5,534)		(2,264)
Other						24		—
Net cash provided by (used in) financing activities						235,360		(370)

Net increase (decrease) in cash, cash equivalents and restricted cash						240,230		(5,534)
Cash, cash equivalents and restricted cash, beginning of period		29,851		20,634		37,698		29,851
Cash, cash equivalents and restricted cash, end of period	$	24,317	$	18,370	$	277,928	$	24,317

SUPPLEMENTAL CASH FLOW INFORMATION:

Supplemental Cash Flow Information:
Cash paid for interest, net of amounts capitalized	$	2,248	$	2,353	$	812	$	2,248
NON-CASH INVESTING ACTIVITIES:
Non-Cash Investing Activities:
Accounts payable related capital expenditures	$	80	$	459	$	478	$	80

See condensed notes to consolidated financial statements.

Table of Contents

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. ORGANIZATION

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 Company currently operates five ~~casinos;~~casinos: four ~~are part of~~on real estate that ~~it owns~~we own or ~~leases,~~lease and one is located within a hotel owned by a third party. Construction is currently underway at a sixth property, Chamonix Casino Hotel (“Chamonix”), adjacent to the Company’s existing Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado. We also benefit from six permitted sports wagering “skins,” three in Colorado and three in Indiana. Other companies operate or will operate these online sports wagering sites under their brands, paying us a percentage of revenues, as defined, subject to annual minimum amounts. Five of our six permitted skins have commenced operations. The following table identifies ~~the properties~~our five segments, along with properties and their ~~respective dates of acquisition and~~ locations:


Segments and Properties	Locations
Colorado
Bronco Billy’s Casino and Hotel	Cripple Creek, CO (near Colorado Springs)
Chamonix Casino Hotel (under construction)	Cripple Creek, CO (near Colorado Springs)
Indiana
Rising Star Casino Resort	Rising Sun, IN (near Cincinnati)
Mississippi	~~Acquisition~~
~~Property~~	~~Date~~	~~Location~~
Silver Slipper Casino and Hotel	~~2012~~	Hancock County, MS ~~(near~~ (near New Orleans)
~~Bronco Billy’s Casino and Hotel~~Nevada	~~2016~~	~~Cripple Creek, CO~~ ~~(near Colorado Springs)~~
~~Rising Star Casino Resort~~	~~2011~~	~~Rising Sun, IN~~ ~~(near Cincinnati)~~
~~Stockman’s Casino~~	~~2007~~	~~Fallon, NV~~ ~~(one hour east of Reno)~~
Grand Lodge Casino ~~(leased~~ (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)	~~2011~~	Incline Village, NV (North Shore of Lake Tahoe)
Stockman’s Casino	Fallon, NV (one hour east of Reno)
Contracted Sports Wagering
Three sports wagering websites (“skins”)	Colorado
Three sports wagering websites (“skins”)	Indiana

The Company manages its casinos based primarily on geographic regions within the United States. ~~See Note 11~~Our 2021 results reflect a change in our operating segments. We now break out our on-site and online sports wagering skins in Colorado and Indiana as a standalone segment, Contracted Sports Wagering. Certain reclassifications were made to 2020 amounts to conform to current-period presentation for ~~further information.~~enhanced comparability. Such reclassifications had no effect on the previously reported results of operations or financial position.

COVID-19 Pandemic Update. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (“COVID-19”). Although COVID-19 continues to spread throughout the U.S. and the world, vaccines designed to inhibit the severity and the spread of COVID-19 are now being distributed. As a result, the number of newly reported cases has declined in the U.S. from levels seen in late 2020 and early 2021. COVID-19 has resulted in the implementation of significant, government-imposed measures to prevent or reduce its spread, including travel restrictions, business restrictions, closing of borders, “shelter-in-place” orders and business closures. In March 2020, pursuant to state government orders, the Company temporarily closed all of its casino properties.

Table of Contents

As a result, the Company experienced a material decline in its revenues until its properties began reopening when permitted by local authorities. The reopening dates were:

●

Silver Slipper Casino and Hotel ― May 21, 2020

●

Grand Lodge Casino and Stockman’s Casino ― June 4, 2020

●

Bronco Billy’s Casino and Hotel ― June 15, 2020

●

Rising Star Casino Resort ― June 15, 2020.

During the shutdown period, the Company evaluated labor, marketing and other costs at its businesses so that, upon reopening, its properties could reopen with significantly lower operating costs. As a result, the Company’s operating performance since reopening in mid-2020 has been stronger than pre-pandemic levels, despite capacity restrictions throughout its casinos and in its restaurants and certain pandemic-related additional costs. The extent to which the Company’s financial and operating results in future periods may be affected by COVID-19 will largely depend on future developments, which are highly uncertain and cannot be accurately predicted. Significant uncertainties include the ability to operate; new information which may emerge concerning new strains of COVID-19 and their severity; any additional actions imposed by governmental authorities to contain COVID-19 or minimize its impact; increased operating costs and constraints to implement sanitation and social distancing requirements; increased costs for materials due to supply chain constraints; and general economic conditions, among others.

The disruptions arising from COVID-19 continued to impact the Company during the three months ended March 31, 2021. The duration and intensity of this global health emergency and related disruptions are uncertain. While each of the Company’s properties are currently open and operating restrictions have eased over recent weeks, the current economic and regulatory environment in each of the Company’s jurisdictions continues to evolve. The manner in which governments will react as the global and regional impact of the COVID-19 pandemic changes over time is uncertain, and such actions could significantly alter the Company’s current operations.

During the first quarter of 2021, the Company completed several transactions, which include:

●

The February 2021 refinancing of its Senior Secured Notes due 2024 with $310 million of 8.25% Senior Secured Notes due 2028 (the “2028 Notes”), as further described in Note 5 below;

●

The creation of a restricted cash account, initially funded with $180 million dedicated to the construction of Chamonix, as further described in Note 2 below;

●

The March 2021 completion of an underwritten public offering of 6,917,250 shares of the Company’s common stock, resulting in gross proceeds of approximately $46.0 million, as further described in Note 9 below; and

●

An agreement entered into in March 2021 providing for a $15.0 million, five-year, senior secured revolving credit facility to provide additional liquidity, if needed, as further described in Note 5 below.

As of March 31, 2021, the Company had total cash and cash equivalents of $277.9 million, including $179.9 million in restricted cash.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. As permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the Company’s ~~2019~~2020 annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form ~~10‑K~~10-K for the year ended December 31, ~~2019.~~2020.

The interim consolidated financial statements of the Company included herein reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of annualized results for an entire year.

Table of Contents

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

~~Liquidity, Going Concern and Management Plans.~~ The consolidated financial statements have been prepared on the going concern basis of accounting, assuming the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company’s casinos are its primary sources of income and operating cash flows and they are relied upon to remain in compliance with debt covenants and meet the Company’s obligations when due. As described in Note 5, the Senior Secured Notes agreement requires the Company to maintain a total leverage ratio covenant, which measures Consolidated EBITDA (as defined in the indenture) against outstanding debt. As detailed in Notes 2 and 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, in March 2020, the Company temporarily suspended

~~Table of Contents~~

operations at its casinos and hotels pursuant to orders from governmental authorities as a precautionary measure against the ongoing spread of a highly contagious coronavirus that was declared a pandemic (“COVID-19”) by the World Health Organization. The Company currently believes that its properties will reopen to the public according to the following schedule: by May 22, 2020 for the Silver Slipper Casino and Hotel; late May 2020 for Stockman’s Casino and Grand Lodge Casino; early June 2020 for Bronco Billy’s Casino and Hotel; and June 14, 2020 for Rising Star Casino Resort. As COVID-19 is dynamic, such planned opening dates are subject to change. Management believes it has sufficient resources to fund its currently-reduced operations, consisting principally of preservation of assets and a core staff necessary to plan for reopening, beyond the currently-mandated closure periods. However, management does not control and is not qualified to predict the length of the closure of its casinos and hotels due to the pandemic, nor the impact on business volumes once they are open.

~~As described in~~ Notes 2 and 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, a significant period of closure or significant declines in business volumes upon reopening would negatively impact our ability to remain in compliance with our debt covenants. In the event that the Company would fail to meet its debt covenants in the next twelve months from the issuance of the consolidated financial statements, the Company would either seek covenant waivers or attempt to amend its covenants, though there is no certainty that the Company would be successful in such efforts. For example, the Company’s lenders agreed to amend our leverage covenant for the period ended March 31, 2020, and the parties collectively continue to discuss amending covenants for future quarters. ASC 205-40, Going Concern, calls for management to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the financial statements are issued. Because of the length of this look-forward period and the substantial items that are outside of its control, and despite its intent and best efforts to overcome the challenges in the current environment, management concluded that there is substantial doubt as to the Company’s ability to continue as a going concern. The Company is attempting to mitigate the impacts of COVID-19 on the Company through the plans described above.~~The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.~~

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, such as its interest rate cap (“Interest Rate Cap”) agreement and common stock warrant liability.~~liabilities. Fair value measurements are also used in the Company’s 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:

●

Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities;

●

Level 2: Comparable inputs other than quoted prices that are observable for similar assets or liabilities in less active markets; and

●

Level 3: Unobservable inputs which may include metrics that market participants would use to estimate values, such as revenue and earnings multiples and relative rates of return.

The Company utilizes Level 1 inputs when measuring the fair value of its 2028 Notes (see Note 5).

The Company utilizes Level 2 inputs when measuring the fair value of its ~~Interest Rate Cap~~asset purchases and acquisitions (see Note 5)4).

The Company utilizes Level 3 inputs when measuring the fair value of net assets acquired in business combination transactions, subsequent assessments for impairment, and most financial instruments, including but not limited to the estimated fair value of common stock warrants at issuance and for recurring changes in the related warrant liability (see Note 6).

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 consist of funds initially totaling $180 million, which were ~~funds received from certain sports wagering agreements that had not commenced and were contractually required~~placed into a construction reserve account to ~~be separated from~~fund the Company’s operating cash. In March 2020, such cash was no longer categorized as restricted, as the Company was approved for its “master license” for sports betting by the Colorado Limited Gaming Control Commission on March 19, 2020.

~~Table of Contents~~

~~Cash, cash equivalents and restricted cash consisted~~completion of the ~~following:~~

(In thousands)

March 31,

December 31,



2020

2019
Cash and equivalents

$
24,317

$
28,851
Restricted cash

—

1,000

$
24,317

$
29,851

Chamonix construction project.

Revenue Recognition of Accrued Club Points and Deferred Revenues

Accrued Club Points: 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 the Company’s revenues are derived from casino gaming, principally slot machines.

Gaming revenue is the difference between gaming wins and losses, not the total amount wagered. The Company accounts for its gaming transactions on a portfolio basis as such wagers have similar characteristics and it would not be practical to view each wager 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. 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, primarily for “free casino ~~play/cash back,~~play,” complimentary dining, or hotel stays. Such liabilities were approximately ~~$1.4~~$0.7 million ~~each~~ for March 31, 2021 and $0.8 million for December 31, 2020, and ~~December 31, 2019.~~these amounts are included in “other accrued liabilities” on the consolidated balance sheets. Upon redemption, the related revenue is recognized at retail value within the department providing the goods or services.

Table of Contents

Revenue for food and beverage, hotel, and other revenue transactions is typically the net amount collected from ~~the customer~~customers for such goods and services, plus the retail value of (i) discretionary comps and (ii) comps provided in return for redemption of loyalty points. The Company records such revenue as the good or service is transferred to the customer. Additionally, the Company may collect deposits in advance for future hotel reservations or entertainment, among other services, which represent obligations to the Company until the service is provided to the customer.

Deferred Revenues: Market Access Fees from Sports Wagering Agreements. ~~These liabilities were created in the third quarter of~~In 2019, ~~when~~ the Company entered into several agreements with various unaffiliated companies allowing for online/mobile sports wagering within Indiana and Colorado, as well as on-site sports wagering at Rising Star Casino Resort and at Bronco Billy’s Casino and Hotel (the “Sports Agreements”). The contracts differ as to the percentages of revenues that we receive. Also, some contracts require payments in advance of the contract year, while others call for settlement in arrears. As part of these ~~longer-term~~long-term Sports Agreements, the Company received $6 million in one-time market access fees, ~~in cash,~~ which were recorded as a long-term liability in the same amount and ~~will be~~are being recognized as revenue ratably over the initial term length of each agreement of 10 years, beginning with the commencement of operations. ~~The current and noncurrent portions~~

Indiana. Two of the deferred revenues balance totaling $5.96 million for March 31, 2020 is included with “Other accrued expenses and other” and “Contract liabilities, net of current portion” on the consolidated balance sheets, respectively. Of the Company’s Sports Agreements ~~on-site sports wagering~~ commenced ~~at Rising Star~~operations in December 2019 and April 2021, respectively. The remaining Sports Agreement is expected to go live in the ~~fourth quarter of 2019, as did one of the~~next few months.

Colorado. The Company’s three contracted mobile sports wagering websites commenced online operations in ~~Indiana.~~June 2020, December 2020 and April 2021.

Deferred revenues consisted of the following as discussed above:


(In thousands)		March 31,		December 31,
	Balance Sheet Location	2021		2020
Deferred revenue, current	Other accrued liabilities	$	1,122	$	1,372
Deferred revenue, net of current portion	Contract liabilities, net of current portion		5,298		5,398
		$	6,420	$	6,770

Income Taxes. For interim income tax reporting for the three-months ended March 31, ~~2020,~~2021, the Company estimates its annual effective tax rate and applies it to its year-to-date pretax income or loss.

~~Table of Contents~~

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

Earnings (Loss) Per Share. Earnings (loss) per share is net income (loss) applicable to common stock divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects additional dilutive effects for all potentially-dilutive securities, including ~~common~~share-based awards outstanding under the Company’s stock ~~options~~compensation plan and warrants, using the treasury stock method.

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. ~~ASC 842 requires~~

For material leases with terms greater than a ~~dual approach for lessee accounting under which a lessee would classify and account for leases as either finance leases or operating leases, both of which result in~~year, the ~~lessee recognizing a~~Company records right-of-use (“ROU”) ~~asset~~assets and ~~a corresponding~~ lease ~~liability~~liabilities on the balance sheet, as measured on a discounted ~~basis for leases with terms greater than a year.~~basis. For finance leases, the ~~lessee will recognize~~Company recognizes interest expense associated with the lease liability and depreciation expense associated with the ROU asset; for operating leases, the ~~lessee will recognize~~Company recognizes straight-line rent expense.

Table of Contents

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; therefore, the Company does not allocate contract consideration to the separate lease and non-lease components based on their relative standalone prices.

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. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate as estimated by third-party valuation specialists in determining the present value of future ~~payments.~~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.~~term for operating leases. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement.

~~See Note 3 below regarding lease guidance relief that~~Recent Accounting Pronouncements

Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). This standard simplifies the accounting for income taxes and includes removal of certain exceptions to the general principles of ASC 740, Income Taxes, and updates and simplifies certain areas of the codification. ASU 2019-12 was effective for the Company ~~has taken as they relate to COVID-19.~~ beginning on January 1, 2021, but did not have a material impact on its financial statements upon adoption.

~~Recently Issued Accounting Standards.~~The Company believes that there are no other recently-issued accounting standards not yet effective that are currently likely to have a material impact on its financial statements.

3. LEASES

The Company has no ~~material~~ leases in which it is the lessor. As lessee, the Company has one finance lease for a hotel and various operating leases for land, casino and office space, equipment, buildings, and signage. The Company’s lease terms, including extensions, range from one month to approximately 3837 years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants, but the land lease at Silver Slipper does include contingent rent as further discussed below.

As a result of COVID-19, the Financial Accounting Standards Board (“FASB”), which governs U.S. GAAP, has offered companies the accounting election to apply guidance relief relating to lease concessions for business interruptions brought on by government-mandated closures. Normally, such rent deferments or forgiveness of certain payments that have been granted outside the original contract terms would trigger lease remeasurements. However, without relief in applying the lease accounting guidance, these modifications in terms would require evaluations that would be considered both costly and complex for certain companies. Rather than analyzing each lease contract individually, companies can choose on a reasonable basis to either: (1) apply the modification framework for these concessions in accordance with the applicable codification (see Note 2)

~~Table of Contents~~

~~to calculate lease remeasurements, or (2) forgo such remeasurements and account for the concessions as if they were made under the enforceable rights included in the original agreement.~~

In its efforts to preserve cash, the Company obtained rent concessions as a direct result of business disruptions from COVID-19 for certain material leases, as further discussed below and in Note 12. In summary, the Company has elected to apply guidance relief as granted by FASB for rent deferments as these deferrals of payments only affect the timing of payments; the total rent amounts paid over the course of the original contract remain the same. As such, the Company will continue to accrue for related lease expenses during the deferral period and forgo remeasurement of those leases. In contrast, the Company did not apply the aforementioned election for the rent forgiveness that was granted for the land lease at Silver Slipper, since the amounts paid over the remaining term of the contract reflect an actual reduction from its original lease measurement.

Operating Leases

Silver Slipper Casino Land Lease through April 2058 and Options to Purchase. In 2004, the Company’s subsidiary, Silver Slipper Casino Venture, LLC, entered into a land lease with Cure Land Company, LLC for approximately 31 acres of marshlands and a seven-acre parcel on which the Silver Slipper Casino and Hotel is situated. The agreement includes fixed, base monthly payments of $77,500 plus contingent rents of 3% of monthly gross gaming revenue (as defined in the lease) in excess of $3.65 million, with no scheduled base rent increases through the remaining lease term ending in 2058.

~~Effective March 2020, the~~The Company ~~later~~ executed a fourth amendment to the original lease with the landlord, effective March 2020, which granted a waiver of base rent for April and May of 2020. ~~With~~Such abatement totaled $155,000 and the value of such abatement ~~totaling $155,000~~will be amortized over the remaining term of ~~undiscounted cash,~~ the ~~Company chose to remeasure this lease in order to more fairly represent the reduction in payments, as this was the only material lease in which the Company was able to obtain rent forgiveness to date.~~lease. This amendment also ~~delays the beginning of~~restricts the Company’s purchase option period for the leased ~~land. The~~land, so that the Company ~~may~~cannot exercise its purchase option ~~from~~until April 1, ~~2022 (as amended)~~2022. From such date through October 1, 2027, the Company may buy out the lease for $15.5 million plus a seller-retained interest in Silver Slipper Casino and Hotel’s operations of 3% of net income (as defined) for 10 years following the purchase date.

~~In the event that the Company sells or transfers either (i) substantially all~~11

Table of the assets of Silver Slipper Casino Venture, LLC, or (ii) its membership interests in Silver Slipper Casino Venture, LLC in its entirety, the purchase price will increase to $17.1 million, plus the retained interest mentioned above. In either case, the Company also has an option to purchase a four-acre portion from the total 38 acres of leased land for $2.0 million in connection with the development of an owned hotel, which may be exercised at any time and would accordingly reduce the purchase price of the remaining land by $2.0 million. Following a buy-out of the lease, the property would have to purchase or otherwise provide for its drinking water, which is currently provided by the landlord as part of the lease.Contents

Bronco Billy’s Lease through January 2035 and Option to Purchase. Bronco Billy’s leases certain parking lots and buildings, including a portion of the hotel and casino, under a long-term lease. The lease term includes six renewal options in three-year increments to 2035. ~~Bronco Billy’s exercised its first renewal option through January 2020, and currently pays $30,000 per month in rent.~~ In May 2019, Bronco Billy’s ~~also~~ exercised its second renewal option to extend the lease term through January 31, 2023 ~~which will increase the monthly rent to~~and currently pays $32,500 ~~beginning~~per month in ~~February 2021.~~rent. The lease also contains a $7.6 million purchase option exercisable at any time during the lease term, or as extended, and a right of first refusal on any sale of the property. ~~See Note 12 regarding concessions granted for this lease, which are effective in the second quarter of 2020.~~

~~Christmas Casino at Bronco Billy’s~~Chamonix / Third Street Corner Building through August ~~2021~~2023 and Option to Purchase. ~~As part of the Bronco Billy’s expansion, the~~The Company leased a nearby closed casino in August 2018, which it rebranded and ~~opened it as the rebranded Christmas Casino~~reopened in November 2018. The reopened casino did not produce enough incremental revenue to offset the incremental costs, and it was closed in September 2020. As part of the Chamonix development project, this building is currently used as office space for construction personnel. The lease includes a minimum three-year term with annual lease payments of $0.2 million, and can be extended an additional two years with annual lease payments of $0.3 million. The Company ~~can~~ also has the right to purchase the casino at any time during the lease term, or as extended. The purchase price is ~~$2.6~~currently $2.7 million if ~~bought~~exercised by October 31, ~~2020, increasing by $0.1 million on each anniversary thereafter up~~2021 and increases to $2.8 ~~million. No concession was granted~~million for ~~this lease to date.~~purchase dates thereafter.

Grand Lodge Casino Lease through August 2023. The Company’s subsidiary, Gaming Entertainment (Nevada), LLC, has a lease with Hyatt Equities, L.L.C. (“Hyatt”) to operate the Grand Lodge Casino. The lease is collateralized by the Company’s interests under the lease and property (as defined in the lease) and is subordinate to the liens of the ~~senior secured notes due 2024~~2028 Notes (see Note 5). Hyatt currently has an option to purchase the Company’s leasehold interest and related operating assets of

~~Table of Contents~~

the Grand Lodge Casino, subject to assumption of applicable liabilities. The option price is an amount equal to the Grand Lodge Casino’s positive working capital, plus Grand Lodge Casino’s earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the twelve-month period preceding the acquisition (or pro-rated if less than twelve months remain on the lease), plus the fair market value of the Grand Lodge Casino’s personal property. The current monthly rent of $166,667 is applicable through the remaining lease term ending in August 2023. ~~No concession was granted~~

In July 2020, the Company executed a fifth amendment to the Hyatt lease that retroactively reduced rent amounts due during the closure period, specifically a 25% reduction in rent for ~~this lease to date.~~March 2020 and a 50% reduction in rent for each of April and May of 2020. Such reductions totaled $208,000 and such benefit is being amortized over the remaining life of the lease.

Corporate Office Lease through January 2025. ~~In June 2017, the~~The Company ~~leased~~leases 4,479 square feet of office space in Las Vegas, Nevada. Annual rent is approximately $0.2 million and the term of the office lease expires in January 2025. ~~No concession was granted for this lease to date.~~

Finance Lease

Rising Star Casino Hotel Lease through October 2027 and Option to Purchase. The Company’s Indiana subsidiary, Gaming Entertainment (Indiana) LLC, leases a ~~104‑room~~104-room hotel at Rising Star Casino Resort. At any time during the lease term, the Company has the option to purchase the hotel at a price based upon the ~~project’s actual~~hotel’s original cost of $7.7 million, ~~(see Note 4),~~ reduced by the cumulative principal payments made by the Company during the lease term. At March 31, ~~2020,~~2021, such net amount was ~~$4.2~~$3.7 million. Upon expiration of the lease term in October 2027, (i) the landlord has the right to sell the hotel to the Company, and (ii) the Company has the option to purchase the hotel. In either case, the purchase price is $1 plus closing costs. ~~See Note 12 regarding concessions granted for this~~

The components of lease ~~which~~expense are ~~effective in the second quarter~~as follows:


(In thousands)		Three Months Ended
		March 31,
Lease Costs	Statement of Operations Classification	2021		2020
Operating leases:
Fixed/base rent	Selling, General and Administrative Expenses	$	1,159	$	1,200
Variable payments	Selling, General and Administrative Expenses		402		154
Finance lease:
Amortization of leased assets	Depreciation and Amortization		39		40
Interest on lease liabilities	Interest Expense, Net		43		32
Total lease costs		$	1,643	$	1,426

Table of ~~2020.~~Contents

Leases recorded on the balance sheet consist of the following:



(In thousands)


Leases	Balance Sheet Classification	March 31, 2020		December 31, 2019		Balance Sheet Classification	March 31, 2021		December 31, 2020
Assets
Operating lease assets	Operating Lease Right-of-Use Assets, Net	$	19,674	$	19,171	Operating Lease Right-of-Use Assets, Net	$	16,600	$	17,361
Finance lease assets	Property and Equipment, Net(1)		4,997		5,037	Property and Equipment, Net⁽¹⁾		4,840		4,879
Total lease assets		$	24,671	$	24,208		$	21,440	$	22,240


Liabilities
Current
Operating	Current Portion of Operating Lease Obligations	$	3,113	$	2,707	Current Portion of Operating Lease Obligations	$	3,283	$	3,283
Finance	Current Portion of Finance Lease Obligation		473		448	Current Portion of Finance Lease Obligation		490		491
Noncurrent
Operating	Operating Lease Obligations, Net of Current Portion		16,794		16,706	Operating Lease Obligations, Net of Current Portion		14,094		14,914
Finance	Finance Lease Obligation, Net of Current Portion		3,708		3,829	Finance Lease Obligation, Net of Current Portion		3,179		3,298
Total lease liabilities		$	24,088	$	23,690		$	21,046	$	21,986

__________

(1)	Finance lease assets are recorded net of accumulated amortization of $2.9 million and $2.8 million as of March 31, 2021 and December 31, 2020, respectively.

(1)~~Finance lease assets are recorded net of accumulated amortization of $2.7 million as of March 31, 2020.~~

~~Table of Contents~~

~~The components of lease expense are as follows:~~

(In thousands)



Three Months Ended

March 31,
Lease Costs

Statement of Operations Classification

2020

2019
Operating leases:






Fixed/base rent

Selling, General and Administrative Expenses

$
1,200

$
960
Variable payments

Selling, General and Administrative Expenses

154

184
Finance lease:






Amortization of leased assets

Depreciation and Amortization

40

40
Interest on lease liabilities

Interest Expense, Net

32

54
Total lease costs

$
1,426

$
1,238

Maturities of lease liabilities as of March 31, ~~2020~~2021 are summarized as follows:



(In thousands)
	Operating		Financing
Year Ending December 31,	Leases		Lease(1)
2020 (excluding the three months ended March 31, 2020)	$	3,451	$	488
2021		4,684		652
					Operating		Financing
Years Ending December 31,					Leases		Lease⁽¹⁾
2021 (excluding the three months ended March 31, 2021)					$	3,574	$	435
2022		4,468		652		4,576		652
2023		2,876		652		2,984		652
2024		1,135		652		1,243		652
2025						1,046		652
Thereafter		31,017		1,847		30,070		1,195
Total future minimum lease payments		47,631		4,943		43,493		4,238
Less: Amount representing interest		(27,724)		(762)		(26,116)		(569)
Present value of lease liabilities		19,907		4,181		17,377		3,669
Less: Current lease obligations		(3,113)		(473)		(3,283)		(490)
Long-term lease obligations	$	16,794	$	3,708	$	14,094	$	3,179

__________

(1)The Company’s only material finance lease is at Rising Star Casino Resort for a ~~104‑room~~104-room hotel.

Table of Contents

Other information related to lease term and discount rate is as follows:



Lease Term and Discount Rate	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Weighted-average remaining lease term
Operating leases	19.3	years	20.2	years	20.97	years	20.4	years
Finance lease	7.5	years	7.8	years	6.5	years	6.8	years
Weighted-average discount rate
Operating leases~~(1)~~	9.38	%	9.40	%	9.43	%	9.41	%
Finance lease	4.50	%	4.50	%	4.50	%	4.50	%

(1)~~Upon adoption of the new lease standard, discount rates used for existing operating leases were established on January 1, 2019.~~

~~Table of Contents~~

Supplemental cash flow information related to leases is as follows:



(In thousands)	Three Months Ended				Three Months Ended
	March 31,
					March 31,
Cash paid for amounts included in the measurement of lease liabilities:	2020		2019		2021		2020
Operating cash flows for operating leases	$	1,209	$	961	$	1,218	$	1,209
Operating cash flows for finance lease	$	32	$	54	$	43	$	32
Financing cash flows for finance lease	$	95	$	125	$	120	$	95

4. ~~PROPERTY AND EQUIPMENT~~ACQUISITIONS

~~Property~~Cripple Creek Land and ~~equipment, including finance lease assets, consists~~Real Estate Purchase. As part of the ~~following:~~

(In thousands)

March 31,

December 31,

2020

2019
Land and improvements

$
16,144

$
16,144
Buildings and improvements

107,139

106,946
Furniture and equipment

48,138

47,886
Finance lease assets (see Note 3)

7,726

7,726
Construction in progress

11,112

10,856

190,259

189,558
Less: Accumulated depreciation

(70,066)

(68,071)

$
120,193

$
121,487

development of Chamonix, the Company closed on the purchase of Carr Manor, a boutique hotel with 14 guest rooms. This transaction closed on March 31, 2021 as an asset purchase for total consideration of $2.8 million (see Note 2). The purchase included five parcels of land, which adds to the Company’s land ownership in Cripple Creek by approximately 1.6 acres and provides additional guest parking. The addition of Carr Manor allows Bronco Billy’s to provide overnight accommodations to its guests, as Bronco Billy’s existing hotel rooms are either currently closed or will be demolished as part of the construction of Chamonix.

5. LONG-TERM DEBT

Long-term debt, related discounts and issuance costs consist of the following:



(In thousands)	March 31,		December 31,		March 31,		December 31,
	2020		2019
Senior Secured Notes	$	107,650	$	107,925
					2021		2020
Senior Secured Notes due 2028⁽¹⁾					$	310,000	$	—
Senior Secured Notes due 2024⁽²⁾						—		106,825
Unsecured Loans (CARES Act)⁽²⁾						5,606		5,606
Less: Unamortized discounts and debt issuance costs		(3,676)		(3,902)		(9,527)		(5,173)
		103,974		104,023
						306,079		107,258
Less: Current portion of long-term debt		(1,100)		(1,100)		(799)		(426)
	$	102,874	$	102,923
					$	305,280	$	106,832

__________

~~Senior Secured Notes and Waiver.~~ On April 28, 2020, the Company executed the Third Amendment to Indenture dated as of April 28, 2020 (the “Amendment”) to amend the Indenture dated as of February 2, 2018 (as amended and supplemented, the “Indenture”), which governs the senior secured notes due 2024 issued by the Company in the aggregate principal amount of $110.0 million (collectively, the “Notes”).Reflecting the impact of the temporary closures of the Company’s properties due to COVID-19, the Amendment (i) deleted the total leverage ratio covenant as of March 31, 2020, and (ii) resolved any potential ambiguities regarding a qualified auditor opinion in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company paid an amendment fee of 0.35%, or $376,775 to the holders of its Notes, based on the outstanding balance of the aggregate principal amount as of March 31, 2020. Additionally, as set forth below, the Amendment increased the optional premiums by 15 basis points, plus accrued and applicable unpaid interest, if the Company chooses to redeem all or a part of the Notes prior to maturity:

(1)
~~Redemption Periods~~	~~Percentage Premium~~
~~On February 2, 2020 to February 1,~~As of March 31, 2021,	~~1.65~~	%
~~On February 2, 2021 to February 1, 2022~~	~~0.65~~	%
~~On or after February 2, 2022~~	~~0.15~~	% the estimated fair value of these notes was approximately $331.8 million. The fair value was estimated using quoted market prices for these notes (see Note 2).

(2)	The estimated fair value for these non-traded debt instruments can be approximated by their respective carrying values because management believes their terms are representative of market conditions.

Table of Contents

Debt Refinancing: Notes Issuance. On February 12, 2021, the Company refinanced its existing outstanding Senior Secured Notes due 2024 (the “Prior Notes”) with the issuance of $310 million aggregate principal amount of 8.25% Senior Secured Notes due 2028 (the “2028 Notes”). The 2028 Notes bear interest at a fixed rate of 8.25% per year and mature on February 15, 2028. There is no mandatory debt amortization prior to the maturity date. Interest on the 2028 Notes is payable on February 15 and August 15 of each year, with the first interest payment due on August 15, 2021.

The net proceeds from the sale of the 2028 Notes were used to redeem all of the Prior Notes (including a 0.90% prepayment premium) and to repurchase all outstanding warrants. Additionally, $180 million of bond proceeds were placed into a construction reserve account to fund construction of Chamonix. Accordingly, this amount is recorded as restricted cash. Net of transaction fees and expenses, approximately $8 million was added to unrestricted cash and equivalents.

The 2028 Notes are guaranteed, jointly and severally (such guarantees, the “Guarantees”), by each of the Company’s restricted subsidiaries (collectively, the “Guarantors”). The 2028 Notes and the Guarantees are the Company’s and the Guarantors’ general senior secured obligations, subject to the terms of the Collateral Trust Agreement (as defined in the Indenture), ranking senior in right of payment to all of the Company’s and the Guarantors’ existing and future debt that is expressly subordinated in right of payment to the 2028 Notes and the Guarantees, if any. The 2028 Notes and the Guarantees will rank equally in right of payment with all of the Company’s and the Guarantors’ existing and future senior debt.

The 2028 Notes contain customary representations and warranties, financial covenants, and restrictions on dividends. Mandatory prepayments of the 2028 Notes will be required upon the occurrence of certain events, including sales of certain assets, upon certain changes of control, or should the Company have certain unused funds in the construction disbursement account following the completion of Chamonix.

On or prior to February 15, 2024, we may redeem up to 35% of the original principal amount of the 2028 Notes with proceeds of certain equity offerings at a redemption price of 108.25%, plus accrued and unpaid interest to the redemption date. In addition, we may redeem some or all of the 2028 Notes prior to February 15, 2024 at a redemption price of 100% of the principal amount of the 2028 Notes, plus accrued and unpaid interest to the redemption date and a “make-whole” premium.

At any time on or after February 15, 2024, the Company may redeem some or all of the 2028 Notes for cash at the following redemption prices:


Redemption Periods	Percentage Premium
February 15, 2024 to February 14, 2025	104.125	%
February 15, 2025 to February 14, 2026	102.063	%
February 15, 2026 and Thereafter	100.000	%

Prior Notes. On February 2, 2018, the Company sold $100 million of Prior Notes to qualified institutional buyers. On May 10, 2019, the Company sold an additional $10 million in aggregate principal amount of Prior Notes. Collectively, the Prior Notes were due to mature on February 2, 2024 and included quarterly principal payments as defined and interest based on the greater of the three-month London Interbank Offered Rate (“LIBOR”) or 1.0%, plus a margin rate of 7.0%. ~~Interest on the~~The Prior Notes ~~is payable quarterly in arrears, on March 31, June 30, September 30 and December 31~~also had a prepayment premium of ~~each year until the Notes mature~~0.9% when repaid on February 2, 2024. On each interest payment date, the Company is required to make principal payments of $275,000 with a balloon payment for the remaining $103.7 million due upon maturity. Excluding the exercise of any optional early redemptions as detailed above, this increase to the original balloon payment of an additional $165,000 includes 0.15% applied to the aggregate principal amount of the Notes repaid according to the Amendment.12, 2021.

The Prior Notes ~~are collateralized by substantially all of the Company’s assets and are guaranteed by all of its material subsidiaries.~~

~~Interest Rate Cap Agreement.~~ The Company maintains an Interest Rate Cap from Capital One, N.A. (“Capital One”) in order to manage expected interest rate increases on the Notes. The agreement is for a notional amount of $50 million and expires on March 31, 2021. The Interest Rate Cap has a strike rate of 3.00% and resets every three months at the end of March, June, September, and December. If the three-month LIBOR exceeds the strike rate at the end of any covered period, the Company will receive cash payments from Capital One. For details regarding fair value measurements, see Note 2.

~~Covenants. The Indenture governing the Notes contains~~contained customary representations and warranties, events of default, and ~~positive and negative covenants, including~~ financial covenants. The Company iswas required to maintain a total leverage ratio, which ~~measures~~measured Consolidated EBITDA (as defined in the ~~Indenture)~~indenture) against outstanding debt. ~~The~~Due to the impact of the COVID-19 pandemic on the Company’s business operations in 2020, the Company ~~is allowed~~executed amendments to ~~deduct up to $15 million of its cash and equivalents (beyond estimated cash utilized in daily operations) in calculating the numerator of such ratio. The Amendment deleted~~delete the total leverage ratio covenant as of March 31, June 30, and September 30, among other items.

Revolving Credit Facility. On March 31, 2021, the Company entered into an agreement, which provides for a $15.0 million, senior secured five-year revolving credit facility and includes a letter of credit sub-facility (the “Credit Facility”). The Credit Facility may be used for working capital and other ongoing general purposes.

Until the completion of Chamonix, the interest rate per annum applicable to loans under the Credit Facility will be, at the Company’s option, either (i) LIBOR plus a margin equal to 3.50%, or (ii) a base rate plus a margin equal to 2.50%. After

Table of Contents

completion of Chamonix (as defined in the agreement), the interest rate per annum applicable to loans under the Credit Facility will be reduced to, at the Company’s option, either (i) LIBOR plus a margin equal to 3.00%, or (ii) a base rate plus a margin equal to 2.00%. The commitment fee per annum payable is equal to 0.50% of the unused portion of the Credit Facility. The Company has also agreed to pay customary letter of credit fees. The Credit Facility is available, subject to the satisfaction of customary conditions, until March 31, 2026, at which time all amounts borrowed must be repaid. As of March 31, 2021, there were no drawn amounts under the Credit Facility or any outstanding letters of credit.

The Credit Facility is equally and ratably secured by the same assets and guarantees securing the 2028 Notes. The Company may make prepayments of any amounts outstanding under the Credit Facility (without any reduction of the revolving commitments) in whole or in part at any time without penalty.

The Credit Facility contains a number of negative covenants that, subject to certain exceptions, are substantially similar to the covenants contained in the 2028 Notes. The Credit Facility also includes a requirement that the Company maintain, for the first two fiscal quarters following the closing of the Credit Facility, cash and equivalents totaling at least $20.0 million, excluding any amounts in the construction reserve accounts reserved for construction of Chamonix. The Credit Facility also requires compliance with a financial covenant as of the last day of each fiscal quarter, such that Adjusted EBITDA (as defined) for the trailing twelve-month period ~~ended~~must equal or exceed the utilized portion of the Credit Facility, if drawn. The Company was in compliance with both covenants as of March 31, ~~2020. For~~2021.

Unsecured Loans Under the ~~remainder~~CARES Act. On May 8, 2020, two wholly-owned subsidiaries of the ~~year,~~Company executed promissory notes (the “Promissory Notes”) evidencing unsecured loans in the ~~total leverage ratio maximum is 5.75x~~aggregate amount of $5,606,200 through ~~September 30, 2020~~programs established under the CARES Act (the “Loans”) and ~~5.50x~~administered by the U.S. Small Business Administration (the “SBA”). Such funds were principally used to rehire several hundred employees at Rising Star and Bronco Billy’s in advance of, and subsequent to, their reopenings in mid-June. The Loans were made through ~~December 31, 2020. Due~~Zions Bancorporation, N.A. dba Nevada State Bank (the “Lender”), bear interest at a rate of 1.00% per annum, and originally had a two-year term.

Recently-passed legislation extended the original maturity dates to May 3, 2025 with no change to the ~~impact of COVID-19,~~annual interest rate. After a 15-month deferment period for principal and interest payments, the Company is ~~currently~~required to make monthly loan payments totaling $128,557 beginning in ~~discussions~~September 2021. The Loans may be prepaid at any time prior to maturity with ~~its lenders regarding amendments with respect~~no prepayment penalties. Such Loans may be forgiven, either in whole or in part, depending on the amount of such proceeds that are used for certain eligible expenses over a 24-week period, including primarily the payroll and health benefits of employees who might otherwise have been without jobs or health benefits. The Company has through the maturity date of the loans to ~~leverage ratio covenants in future periods. However,~~apply for forgiveness; however, there ~~can~~is no certainty that any or all of such Loans will be ~~no assurances that the Company will remain in compliance with all covenants and/or that it would be successful in obtaining waivers or modifications in the event of noncompliance in the future.~~forgiven.

6. COMMON STOCK WARRANT LIABILITY

On February 12, 2021, the Company used a portion of the proceeds from the 2028 Notes offering to redeem all of its outstanding warrants. As part of the Company’s former Second Lien Credit Facility, ~~on May 13, 2016,~~which was retired in 2018, the Company granted the ~~Second Lien Credit Facility~~second lien lenders 1,006,568 ~~warrants, which have an exercise~~warrants. The settled repurchase price ~~of $1.67 and expire on May 13, 2026. The warrants also provide for redemption rights, preemptive rights under certain circumstances~~ to maintain their ownership interest in the Company, piggyback registration rights and mandatory registration rights. In addition to a refinancing, the redemption rights allow the warrant-holders, at their option, to require the Company to repurchase all or a portion ofredeem the warrants upon the occurrence of certain events, including: (i) a liquidity event, as defined in the warrant purchase agreement, or (ii) the Company’s insolvency. The repurchase value is the 21‑day average price of the Company’s common stock at the time of such liquidity event, net of the warrant exercise price. If the redemption rights are exercised, the repurchase amount is payable by the Company in cash or through the issuance of an unsecured note with a four-year term and a minimum interest rate of 13.25%, as further defined in the warrant purchase agreement, and would be guaranteed by the Company’s subsidiaries. Alternatively, the warrant-holders may choose to have the Company register and sell the shares related to the warrants through a public stock offering.

~~The Company’s debt refinancing of the Second Lien Credit Facility during 2018~~ was considered a “triggering event” for the possible redemption or registration of the warrants. The Company’s warrant-holders have not yet requested the redemption or registration of their outstanding warrants, though they may do so on any six-month anniversary of the refinancing date prior to warrant expiration. Accordingly, the obligation is reflected as a current liability.$4.0 million.

The Company ~~measures~~previously measured the fair value of the warrants at each reporting period (see Note 2). ~~At March 31, 2020,~~However, upon redemption of the ~~estimated~~warrants on February 12, 2021, the fair value was determined ~~using~~based on the ~~following assumptions:~~repurchase price of $4.0 million. This resulted in an ~~expected contractual term~~incremental fair value adjustment of ~~6.12 years, an expected~~$1.3 million in the quarter, to increase the warrant liability from $2.7 million at December 31, 2020, when the Company’s stock ~~price volatility rate of 58.85%, an expected dividend yield of 0%, and an expected risk-free interest rate of 0.47%.~~traded at lower prices.

~~Table of Contents~~

7. INCOME TAXES

The Company’s effective income tax rate for the three-months ended March 31, 2021 and 2020 was (6.2)% and ~~2019 was (2.2%) and (9.6%)~~(2.2)%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% primarily due to the effects of valuation allowances against net deferred tax assets, as well as certain permanent item differences between tax and financial reporting purposes.

On March 18, 2020, the Families First Coronavirus Response Act (the “FFCR Act”), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) were each enacted in response to COVID-19. The FFCR Act and the CARES Act contain numerous income tax provisions, such as relaxing limitations on the deductibility16

Table of ~~interest and the use of net operating losses arising in taxable years beginning after December 31, 2017; however, these benefits do not impact the Company’s current tax provision.~~Contents

8. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is party to a number of pending legal proceedings related to matters that occurred in the normal course of business. Management does not expect that the outcome of any such proceedings, either individually or in the aggregate, will have a material effect on the Company’s financial position, results of operations and cash flows.

~~Options to Purchase or Lease~~ Land and Real Estate Purchases

~~La Posada del Llano Racetrack Proposal in New Mexico.~~ ~~During July 2018,~~Cripple Creek Land and Real Estate Purchases. On April 16, 2021, the Company ~~paid $125,000~~purchased a lot and building near its operations in Cripple Creek, Colorado for options to purchase approximately 520 acres of adjoining land in Clovis, New Mexico as part of its racetrack casino proposal to the New Mexico Racing Commission. The proposal was in response to the New Mexico Racing Commission’s request for proposals related to the potential issuance of the state’s sixth racing license. During July 2019, the Company paid an additional $125,000 in total to renew these two options, as detailed below. In August 2019, the New Mexico Racing Commission announced that it would not issue the sixth racing license at this time, but may do so in the future. The New Mexico options consisted of:

A $75,000 option to purchase 200 acres of land, which ended on the earlier of either July 2019 or 60 days following the granting of the sixth license to conduct horseracing by the New Mexico Racing Commission and New Mexico Gaming Control Board (“License Award”) and all related approvals, permits, and other licenses. In July 2019, the Company extended the purchase option by one year for another $75,000 under the same terms. Prior to the end of this first option extension, the Company may extend the purchase option by one year for an additional $75,000 under the same terms. Additionally, prior to the end of this first extension period, or as further extended, the Company may purchase the land for $1.4 million, which can be reduced by the option payments.

A $50,000 option to purchase 320 acres of land, which ended on the earlier of either July 2019 or 60 days following the granting of the License Award and all related approvals, permits, and other licenses. In July 2019, the Company extended the purchase option by one year for another $50,000 under the same terms. Prior to the end of this option extension, the Company may purchase the land for $1.6 million, which can be reduced by the option payments.

$600,000.

~~Table of Contents~~

9. EARNINGS (LOSS) PER SHARE AND STOCKHOLDERS’ EQUITY

Earnings (Loss) Per Share

The table below reconciles basic and diluted loss per share of common stock:



(In thousands)	Three Months Ended March 31,				Three Months Ended March 31,
	2020		2019
					2021		2020
Numerator:
Net loss - basic	$	(4,358)	$	(1,617)
Net loss – basic					$	(3,445)	$	(4,358)
Adjustment for assumed conversion of warrants		(1,656)		—		—		(1,656)
Net loss - diluted	$	(6,014)	$	(1,617)

Net loss – diluted					$	(3,445)	$	(6,014)

Denominator:
Weighted-average common and common share equivalents - basic		27,076		26,940		27,357		27,076
Potential dilution from assumed conversion of warrants		364		—		—		364
Weighted-average common and common share equivalents - diluted		27,440		26,940		27,357		27,440
Anti-dilutive share-based awards and warrants excluded from the calculation of diluted loss per share		2,844		3,556		3,140		2,844

Stockholders’ Equity

On March 29, 2021, the Company completed an underwritten public offering (the “Offering”) for a total of 6,917,250 shares of its common stock, par value $0.0001 per share (the “Common Stock”), which includes 902,250 shares of Common Stock sold pursuant to the underwriters’ exercise of an option to purchase additional shares of Common Stock to cover over-allotments. The price to the public in the Offering was $6.65 per share of Common Stock, and net proceeds were approximately $43.0 million after deducting underwriting discounts, commissions and offering expenses. The Company intends to use the net proceeds from this offering for general corporate purposes, including its current and future development projects.

10. SHARE-BASED COMPENSATION

As of March 31, ~~2020,~~2021, the Company had ~~489,635~~8,000 share-based awards authorized by shareholders and available for grant from the 2015 Equity Incentive Plan (the “2015 Plan”).

Table of Contents

The following table summarizes information related to the Company’s common stock options as of March 31, ~~2020:~~2021:


		Weighted
	Number	Average
	of Stock	Exercise
	Options	Price
Options outstanding at January 1, 2020	2,844,405	$	1.71

					Weighted
				Number	Average
				of Stock	Exercise
				Options	Price
Options outstanding at January 1, 2021				3,183,708	$	1.71
Granted	—		—	32,027		3.93
Exercised	—		—	(67,616)		2.29
Canceled/Forfeited	—		—	(8,000)		1.73
Expired	—		—	—		—
Options outstanding at March 31, 2020	2,844,405	$	1.71
Options exercisable at March 31, 2020	2,211,671	$	1.57
Options outstanding at March 31, 2021				3,140,119	$	1.72
Options exercisable at March 31, 2021				2,432,757	$	1.63

Share-based compensation expense totaled ~~$83,000~~$124,000 and ~~$86,000~~$83,000 for the three-months ended March 31, 2021 and 2020, respectively. The expense for 2021 includes estimates for certain performance-based shares in connection with the employment agreement of Daniel R. Lee, the Company’s President and ~~2019, respectively.~~Chief Executive Officer, as well as his awarded stock options conditioned upon stockholders increasing the number of shares available for issuance under the 2015 Plan. As of March 31, ~~2020,~~2021, there was approximately ~~$0.4~~$0.8 million of unrecognized compensation cost related to unvested stock options previously granted that is expected to be recognized over a weighted-average period of approximately ~~1.9~~2.0 years.

11. SEGMENT REPORTING AND DISAGGREGATED REVENUE

The Company manages its ~~casinos~~reporting segments based on geographic regions within the United ~~States.~~States and type of income. The casino/resort operations include ~~four segments: Silver Slipper Casino~~five segments as of 2021: Mississippi, Indiana, Colorado, Nevada, and ~~Hotel (Hancock County, Mississippi); Rising Star Casino Resort, consisting~~Contracted Sports Wagering. The Company’s management views the states where each of ~~Rising Star Casino Resort (Rising Sun, Indiana)~~its casino resorts are located as operating segments, in addition to its contracted sports wagering segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate, and their management and reporting structure. During the first quarter of 2021, since it is a significantly different business than its ~~ferry boat~~core casino business, the Company changed the aggregation of its operations ~~(connecting Rising Sun, Indiana with Boone County, Kentucky); Bronco Billy’s Casino~~to present Contracted Sports Wagering as a separate segment. This change of the reportable segments reflects realignment within the Company stemming from the expansion of the Company’s contracted on-site and ~~Hotel (including~~online sports wagering skins. Additionally, this new segment breakout aims to enhance transparency of operations and allow more appropriate valuation of the ~~Christmas Casino & Inn, both in Cripple Creek, Colorado); and the Northern Nevada segment, consisting of Grand Lodge Casino (Incline Village, Nevada) and Stockman’s Casino (Fallon, Nevada).~~

~~Table of Contents~~

Company’s various business components. See Note 1 for further information.

The Company utilizes Adjusted ~~Property~~Segment EBITDA as the measure of segment profit in assessing performance and allocating resources at the reportable segment level. Adjusted ~~Property~~Segment EBITDA is defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, pre-opening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset 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.~~segment. As a result of the change in reportable segments described above, the Company has recast previously-reported segment information to conform to the current presentation in the following tables for enhanced comparability, which had no effect on previously reported results of operations or financial position.

Table of Contents

The following tables present the Company’s segment information:



(In thousands)	Three Months Ended March 31, 2020												Three Months Ended March 31, 2021
	Silver				Bronco
	Slipper		Rising Star		Billy’s		Northern
	Casino		Casino		Casino		Nevada
	and Hotel		Resort		and Hotel		Casinos		Corporate		Total
Net Revenues
																					Contracted
																					Sports
													Mississippi		Indiana		Colorado		Nevada		Wagering		Total
Revenues
Casino	$	9,070	$	5,028	$	4,005	$	2,648	$	—	$	20,751	$	16,040	$	6,715	$	5,264	$	4,045	$	—	$	32,064
Food and beverage		4,679		1,153		767		391		—		6,990		4,693		748		413		247		—		6,101
Hotel		969		858		147		—		—		1,974		1,170		919		122		—		—		2,211
Other operations		374		632		63		69		—		1,138		453		208		106		76		989		1,832
	$	15,092	$	7,671	$	4,982	$	3,108	$	—	$	30,853

Adjusted Property EBITDA	$	1,831	$	(1,093)	$	(478)	$	(390)	$	—	$	(130)
													$	22,356	$	8,590	$	5,905	$	4,368	$	989	$	42,208

Adjusted Segment EBITDA													$	7,630	$	1,134	$	1,710	$	1,224	$	976	$	12,674
Other operating costs and expenses:
Depreciation and amortization												(2,040)												(1,800)
Corporate expenses												(1,119)												(1,905)
Project development costs												(56)												(47)
Loss on disposal of asset, net																								(104)
Stock-based compensation												(83)												(124)
Operating loss												(3,428)
Other (expense) income:
Operating income																								8,694
Other expenses:
Interest expense, net												(2,491)												(4,456)
Loss on extinguishment of debt																								(6,134)
Adjustment to fair value of warrants												1,656												(1,347)
												(835)
																								(11,937)
Loss before income taxes												(4,263)												(3,243)
Income tax provision												95												202
Net loss											$	(4,358)											$	(3,445)

1819

Table of Contents



(In thousands)	Three Months Ended March 31, 2019												Three Months Ended March 31, 2020
	Silver				Bronco
	Slipper		Rising Star		Billy’s		Northern
	Casino		Casino		Casino		Nevada
	and Hotel		Resort		and Hotel		Casinos		Corporate		Total
Net Revenues
																					Contracted
																					Sports
													Mississippi		Indiana		Colorado		Nevada		Wagering		Total
Revenues
Casino	$	12,379	$	7,343	$	5,243	$	3,333	$	—	$	28,298	$	9,070	$	5,028	$	4,005	$	2,648	$	—	$	20,751
Food and beverage		5,371		1,813		974		500		—		8,658		4,679		1,153		767		391		—		6,990
Hotel		1,144		1,423		148		—		—		2,715		969		858		147		—		—		1,974
Other operations		387		289		75		72		—		823		374		208		63		69		424		1,138
	$	19,281	$	10,868	$	6,440	$	3,905	$	—	$	40,494

Adjusted Property EBITDA	$	3,845	$	404	$	615	$	(9)	$	—	$	4,855
													$	15,092	$	7,247	$	4,982	$	3,108	$	424	$	30,853

Adjusted Segment EBITDA													$	1,831	$	(1,490)	$	(471)	$	(390)	$	390	$	(130)
Other operating costs and expenses:
Depreciation and amortization												(2,091)												(2,040)
Corporate expenses												(1,278)												(1,119)
Project development costs												(133)												(56)
Gain on disposal of assets, net												1												—
Stock-based compensation												(86)												(83)
Operating income												1,268
Operating loss																								(3,428)
Other (expense) income:
Interest expense, net												(2,703)												(2,491)
Loss on extinguishment of debt																								—
Adjustment to fair value of warrants												(40)												1,656
												(2,743)
																								(835)
Loss before income taxes												(1,475)												(4,263)
Income tax provision												142												95
Net loss											$	(1,617)											$	(4,358)

(In thousands)

March 31,

December 31,

2020

2019
Total Assets

Silver Slipper Casino and Hotel

$
83,574

$
87,980
Rising Star Casino Resort

34,917

40,277
Bronco Billy's Casino and Hotel

42,470

45,034
Northern Nevada Casinos

14,469

18,612
Corporate and Other

27,510

19,432

$
202,940

$
211,335


(In thousands)	March 31,		December 31,
	2021		2020
Total Assets
Mississippi	$	85,467	$	83,809
Indiana		35,268		37,798
Colorado		227,580		44,961
Nevada		13,082		13,248
Contracted Sports Wagering		1,948		1,329
Corporate and Other		90,598		31,471
	$	453,943	$	212,616

~~12. SUBSEQUENT EVENTS~~

~~Continuation of Temporary Casino Closures.~~ As a precautionary measure against the ongoing spread of COVID-19, various state governments ordered the temporary closure of all casinos in their respective states. As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, all of the Company’s casinos and related operations temporarily closed in mid-March 2020. While these closures are expected to be temporary, the current circumstances are dynamic and the impacts of COVID-19 on the Company’s business operations, including the duration and impact on overall customer demand, the timing of the reopening of its casinos, the timing of the launch of mobile sports wagering in Indiana and Colorado by the Company’s contracted parties, new information which may emerge concerning the severity of COVID-19, and the actions to contain COVID-19 or treat its impact, among others, cannot be reasonably estimated at this time and the Company anticipates this could have a material adverse impact on its business, results of operations, financial position and cash flows.

1920

Table of Contents

We currently believe that our properties will reopen to the public according to the following schedule: by May 22, 2020 for the Silver Slipper Casino and Hotel; late May 2020 for Stockman’s Casino and Grand Lodge Casino; early June 2020 for Bronco Billy’s Casino and Hotel; and June 14, 2020 for Rising Star Casino Resort. As COVID-19 is dynamic, such planned opening dates are subject to change.

The Company currently believes that, through its current cash balances, it has the liquidity necessary to sustain closure beyond the currently-mandated closure periods. To preserve liquidity, upon the temporary closure of its properties in March 2020, the Company significantly reduced staffing levels at each of its properties and at its corporate office to a small group of essential employees. The Company also elected to suspend construction of the Phase One parking garage at Bronco Billy’s, allowing it to use the cash designated for such construction to provide the Company with additional liquidity until its casinos are permitted to reopen. No assurance can be given that, should the casino closures extend for a prolonged period or if business volumes are significantly impacted after opening and require it to seek additional liquidity, the Company will be able to successfully raise additional funds. As stated above, the Company will work diligently to reopen its casinos as soon as it is permitted to do so.

~~Waiver and Amendment of Debt Covenants.~~On April 28, 2020, the Company executed the Amendment dated as of April 28, 2020 to amend the Indenture to the Notes, which deleted the total leverage covenant for the period ended March 31, 2020, amongst other items (see Note 5).

~~Sports Wagering in Indiana and Colorado.~~ The Colorado Limited Gaming Control Commission approved the Company for its three permitted “Sports Betting Master Licenses” in March 2020. Additionally, in April 2020, the Company’s three providers for mobile sports wagering were approved for their “Temporary Internet Sports Betting Operator Licenses.” On May 1, 2020, online/mobile sports wagering in Colorado went live, though without significant sporting events and games to wager on. The Company currently expects that at least one of its contracted sports wagering websites will launch in Colorado in the second quarter of 2020, and that all three contracted websites will have launched in Colorado by the end of the third quarter of 2020.

~~In Indiana, one of the Company’s three providers for sports wagering websites launched operations on December 30, 2019. The remaining two companies await licensure.~~

Contractually, these six sports betting agreements in Colorado and Indiana are expected to result in a combined minimum of $7 million per year in revenues for the Company after their launch of operations, with minimal expected related costs.

~~Unsecured Loans Under the CARES Act.~~ On May 8, 2020, two wholly-owned subsidiaries of the Company executed promissory notes (the “Promissory Notes”) evidencing unsecured loans in the aggregate amount of $5,606,200 through programs established under the CARES Act and administered by the U.S. Small Business Administration (the “SBA”). Such funds will be used principally to rehire several hundred employees at Rising Star and Bronco Billy’s in preparation for the reopening of these businesses. The Loans are being made through Zions Bancorporation, N.A. dba Nevada State Bank (the “Lender”), have a two-year term, bear interest at a rate of 1.00% per annum, and mature on May 3, 2022. Monthly principal and interest payments are deferred for six months. Beginning in December 2020, the Company is required to make monthly payments of principal and interest to the Lender. The Loans may be prepaid at any time prior to maturity with no prepayment penalties. Such Loans may be forgiven, either in whole or in part, depending on the amount of such proceeds that are used for certain eligible expenses, including primarily the payroll and health benefits of employees who would otherwise be without jobs or health benefits. The details of such potential loan forgiveness are still being developed by the SBA and there is no certainty that any or all of such Loans will be forgiven.

~~Concessions Obtained for Certain Leases.~~ In the second quarter of 2020, the Company was able to obtain deferments as a direct result of business disruptions from COVID-19 for its operating lease at Bronco Billy’s and its finance lease at Rising Star. Effective March 2020, the Company also obtained rent abatements for April and May of 2020 of its casino land lease at Silver Slipper. For details and discussion of accounting treatment, see Note 3.

Subsequently in April 2020 at Bronco Billy’s, the Company executed a letter agreement to the original lease with the landlord, which granted partial lease deferrals for specified amounts (separately, the “First Deferral Amount” and “Second Deferral Amount”). For each of May, June and July of 2020, the First Deferral Amount would reduce the base rent by $8,000. Also, for each of August, September and October of 2020, the Second Deferral Amount would reduce the base rent by $5,300. Altogether, the deferrals totaling $39,900 of undiscounted cash require the Company to make such payments in full no later

~~Table of Contents~~

than December 1, 2021. As the Company determined that this concession affected only the timing of payments, it took the guidance relief of not remeasuring the lease liability and corresponding ROU asset, which would have been required under the existing modification framework in ASC 842. Additionally, the Company will accrue for the full amount of lease expenses corresponding to the respective periods as if no changes to rent payments were made.

~~At Rising Star, the Company was able to obtain approvals from the landlord for deferments of payments due for April and May 2020 until its reopening. As COVID-19 is dynamic,~~ ~~the Company believes Rising Star will reopen to the public on June 14, 2020, with such planned opening dates subject to change.~~ Altogether, the deferrals amount to approximately $109,000 of undiscounted cash. As the Company determined that this concession affected only the timing of payments, it took the guidance relief of not remeasuring the lease liability and corresponding ROU asset, which would have been required under the existing modification framework in ASC 842. Additionally, the Company will accrue for the full amount of interest expenses corresponding to the respective periods as if no changes to rent payments were made.

~~Table of Contents~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions that may cause our actual results to differ materially from those discussed in the forward-looking statements. This discussion should be read in conjunction with our historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Quarterly Report on Form ~~10‑Q,~~10-Q, and the audited consolidated financial statements and notes for the fiscal year ended December 31, ~~2019,~~2020, which were included in our Annual Report on Form ~~10‑K,~~10-K, filed with the Securities and Exchange Commission (“SEC”) on March ~~30, 2020.~~12, 2021. 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,” except where stated or the context otherwise indicates.

Executive Overview

Our primary business is the ownership and/or operation of casino and related hospitality and entertainment facilities, which includes offering casino gambling, hotel accommodations, dining, ~~golfing,~~golf, RV camping, sports betting, entertainment, and retail outlets, among other amenities. We currently own or operate five casino properties in four ~~states:~~states – Mississippi, Colorado, Indiana and ~~Nevada.~~Nevada – and are constructing a sixth casino hotel in Colorado. We view our Mississippi ~~Colorado~~ and Indiana properties as distinct operating ~~segments~~segments. Because they share certain overhead costs, we view both of our Colorado properties (including our Chamonix construction project) as an operating segment, and both of our Nevada properties as ~~one~~an operating segment. We also benefit from six permitted sports “skins” that we are allowed to operate, three in Colorado and three in Indiana. We have contracted with other companies to operate these online sports wagering sites under their own brands in exchange for a percentage of revenues, as defined, subject to annual minimum amounts. As of this report date, five of our six permitted skins have commenced operations. We expect our last remaining skin to begin operations in Indiana in the next few months.

~~Our portfolio consists~~During the first quarter of 2021, because it is a significantly different business from our core casinos, we changed the ~~following:~~aggregation of our operations to present Contracted Sports Wagering as a separate segment. This enhances transparency of our operations and allows more appropriate valuation of our various business components.

The following table identifies our five segments, along with properties and their locations:


Segments and Properties	Locations
Colorado
Bronco Billy’s Casino and Hotel	Cripple Creek, CO (near Colorado Springs)
Chamonix Casino Hotel (under construction)	Cripple Creek, CO (near Colorado Springs)
Indiana
Rising Star Casino Resort	Rising Sun, IN (near Cincinnati)
Mississippi	~~Acquisition~~
~~Property~~	~~Date~~	~~Location~~
Silver Slipper Casino and Hotel	~~2012~~	Hancock County, MS ~~(near~~ (near New Orleans)
~~Bronco Billy’s Casino and Hotel~~Nevada	~~2016~~	~~Cripple Creek, CO~~ ~~(near Colorado Springs)~~
~~Rising Star Casino Resort~~	~~2011~~	~~Rising Sun, IN~~ ~~(near Cincinnati)~~
~~Stockman’s Casino~~	~~2007~~	~~Fallon, NV~~ ~~(one hour east of Reno)~~
Grand Lodge Casino ~~(leased~~ (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)	~~2011~~	Incline Village, NV (North Shore of Lake Tahoe)
Stockman’s Casino	Fallon, NV (one hour east of Reno)
Contracted Sports Wagering
Three sports wagering websites (“skins”)	Colorado
Three sports wagering websites (“skins”)	Indiana

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 we are permitted to 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 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 at Rising Star, our recreational vehicle parks (“RV parks”) as owned at Rising Star and managed at Silver

Table of Contents

Slipper, our ferry service at Rising Star, and retail outlets and entertainment. We often provide hotel rooms, ~~and~~ food and beverages, entertainment, ferry usage, and golf privileges to customers on a complimentary basis; the value of such services are 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 accruals for certain progressive jackpots offered by the Company.

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 future periods’ results.

~~Table of Contents~~

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

COVID-19 ~~Pandemic.~~Pandemic Update. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (“COVID-19”)~~, which~~. Although COVID-19 continues to be spread throughout the U.S. and the ~~world.~~world, vaccines designed to inhibit the severity and the spread of COVID-19 are now being distributed. As a result, the number of newly-reported cases has declined in the U.S. from levels seen in late 2020 and early 2021. COVID-19 has ~~driven~~resulted in the implementation of significant, government-imposed measures to prevent or reduce its spread, including travel restrictions, business restrictions, closing of borders, ~~“shelter in place”~~“shelter-in-place” orders and business closures. ~~Pursuant~~In March 2020, pursuant to state government orders to prevent the spread of COVID-19, we temporarily closed all of our casino ~~properties in March 2020.~~ properties. As a result, we ~~have~~ experienced a material decline in our ~~revenues. While~~revenues until our ~~business performed largely as expected~~properties reopened when permitted by local authorities in ~~January, February~~May and ~~early March of 2020,~~June 2020.

During the ~~closure of~~shutdown period, we evaluated labor, marketing and other costs at our businesses so that, upon reopening, our properties could reopen with significantly lower operating costs. As a result, our operating performance since reopening in mid-2020 has been stronger than pre-pandemic levels, despite capacity restrictions throughout our casinos ~~during March 2020 resulted~~and in our ~~total operating revenues decreasing by 23.8% in the first quarter of 2020 as compared to the first quarter of 2019.~~ ~~While the length~~restaurants and ~~severity of the impact on our operating results is uncertain, we presently expect the decline in revenue to increase in the second quarter of 2020.~~certain pandemic-related costs. The extent to which our financial and operating results in future periods may be affected by COVID-19 will largely depend on future developments, which are highly uncertain and cannot be accurately ~~predicted, including~~predicted. Significant uncertainties include the ~~timing of the reopening of our casinos,~~ability to operate; new information which may emerge concerning ~~the severity~~new strains of COVID-19 and ~~the~~their severity; any additional actions imposed by governmental authorities to contain COVID-19 or ~~treat~~minimize its ~~impact, the level of customer demand upon reopening of our casinos,~~impact; increased operating costs ~~in light of social distancing requirements~~and capacity restrictions as a result of ~~COVID-19~~COVID-19; increased costs for materials due to supply chain constraints; and general economic conditions, among others. ~~We currently believe that~~

The disruptions arising from COVID-19 continued to impact us during the three months ended March 31, 2021. The duration and intensity of this global health emergency and related disruptions are uncertain. While each of our properties are currently open and operating restrictions have eased over recent weeks, the current economic and regulatory environment in each of our jurisdictions continues to evolve. The manner in which governments will ~~reopen to~~react as the ~~public according to~~global and regional impact of the ~~following schedule: by May 22, 2020 for the Silver Slipper Casino~~COVID-19 pandemic changes over time is uncertain, and ~~Hotel; late May 2020 for Stockman’s Casino and Grand Lodge Casino; early June 2020 for Bronco Billy’s Casino and Hotel; and June 14, 2020 for Rising Star Casino Resort. As COVID-19 is dynamic,~~ such ~~planned opening dates are subject to change. For a further discussion regarding the impacts of COVID-19 on~~actions could significantly alter our ~~business, see “Liquidity and Capital Resources – COVID-19 Impact on Liquidity” below.~~current operations.

~~Waiver and Amendment~~Debt Refinancing. On February 12, 2021, we issued $310 million of ~~Debt Covenants.~~ ~~In April 2020, we obtained a waiver and amendment (the “Waiver and Amendment”)~~new 2028 Notes. The proceeds were used to ~~the indenture dated as~~redeem all $106.8 million of ~~February 2, 2018 (as amended and supplemented, the “Indenture”), which governs the aggregate $110.0 million of~~our senior secured notes due 2024 ~~(collectively,~~(the “Prior Notes”) and to repurchase all outstanding warrants. Additionally, $180 million of bond proceeds were placed in a construction reserve account to fund our Chamonix project, including designing, developing, constructing, equipping and opening the ~~“Notes”). The Waiver~~project. Proceeds were also used to pay the transaction fees and ~~Amendment was executed in recognition of the impacts of COVID-19 on our business and operations. Pursuant~~expenses related to the ~~Waiver~~offering, leaving approximately $8 million added to our unrestricted cash balances.

Table of Contents

Underwritten Equity Offering. On March 29, 2021, pursuant to an underwritten public offering (the “Equity Offering”), we issued an aggregate of 6,917,250 shares of our common stock, par value $0.0001 per share (the “Common Stock”), including 902,250 shares of Common Stock sold pursuant to the Representative’s exercise of a “greenshoe” option to purchase additional shares of Common Stock to cover over-allotments. The price to the public in the Equity Offering was $6.65 per share of Common Stock. The gross proceeds to the Company were approximately $46.0 million, before deducting underwriting discounts and ~~Amendment, among other things,~~commissions and our estimated offering expenses. We intend to use the ~~noteholders agreed to delete~~net proceeds from the ~~total leverage ratio covenant~~Equity Offering for ~~the measurement period ending on~~development, working capital and general corporate purposes.

New Credit Facility. On March 31, ~~2020~~2021, we entered into a credit agreement among Full House Resorts, Inc., as borrower, the lenders party thereto, and ~~to waive the requirement to deliver~~Capital One, National Association, as administrative agent. The credit agreement provides for a ~~financial statement to each noteholder without~~$15.0 million, five-year, senior secured revolving credit facility and includes a ~~“going-concern” or like qualification or exception. In consideration~~letter of credit sub-facility, which may be used for ~~the amendment~~working capital and one-time waiver, we paid the noteholders a waiver fee of 0.35%, or $376,775. We also agreed to increase the call premium to noteholders upon optional redemption of the Notes by 15 basis points for all periods on or after February 2, 2020, as well as on any amounts outstanding at maturity. We continue to discuss the amendment of covenant levels for future quarters; however, there can be no assurance that we will be successful in our efforts to obtain such future waivers or amendments. other ongoing general purposes.

Chamonix Casino Hotel Growth Project. In 2018, we began planning and design work on Chamonix, a new and distinct luxury hotel and casino located adjacent to our existing Bronco Billy’s ~~Expansion Suspended.~~ ~~In March~~casino. Reflecting changes made to the state’s gaming laws in November 2020, including the elimination of betting limits and the approval of new table games, we increased the size of Chamonix by 67% to approximately 300 luxury guest rooms and suites, from our previously planned 180 guest rooms. Such plans were approved by the Cripple Creek Historic Preservation Commission and Cripple Creek City Council in ~~light~~January and February 2021. Construction of ~~COVID-19, we suspended construction of the Phase One parking garage at Bronco Billy’s. Whether or not we will be able to complete the parking garage~~Chamonix is currently underway, with substantial completion expected in the ~~near future will depend on the length~~fourth quarter of time that our casinos are closed, the operating results of our casinos when they reopen, and the capital markets that might be available to us at some future date. Phase Two of the Bronco Billy’s expansion project, which is expected to include a new luxury hotel tower, spa, convention and entertainment space, and two new restaurants, is contingent upon receipt of financing on acceptable terms, among other contingencies. We do not intend to commence construction of Phase Two until Phase One is completed.2022.

Sports Wagering in Colorado and Indiana. ~~In Colorado, the Colorado Limited Gaming Control Commission approved us for our three~~ Under state laws, we are permitted ~~“Sports Betting Master Licenses” in March 2020. Additionally, in April 2020, our three providers for mobile~~a total of six sports wagering ~~were approved for their “Temporary Internet Sports Betting Operator Licenses.~~“skins,” On May 1, 2020, online/mobile sports wagering in Colorado went live, though without significant sporting events and games to wager on. We currently expect that at least one of our contracted sports wagering websites will launch in Colorado in the second quarter of 2020, and that all three ~~contracted websites will have launched in Colorado by the end of the third quarter of 2020.~~

~~Table of Contents~~

~~In Indiana, one of our three contracted websites for sports wagering launched operations on December 30, 2019. The remaining two companies await licensure.~~

~~Contractually, these six sports betting agreements~~ in Colorado and ~~Indiana~~three in Indiana. As of March 31, 2021, three of our six sports wagering skins had commenced operations. The fourth and fifth skins commenced operations on April 1and April 23, 2021, respectively. We believe that the Company’s last remaining skin will commence operations in the next few months. We receive a percentage of defined revenues of each skin, subject to annual minimums. When all six skins are ~~expected to result~~ in operation, we should receive a ~~combined~~contractual minimum of $7 million per year inof sports gaming revenues ~~for us after their launch of operations,~~ with minimal ~~expected~~ related ~~costs.~~expenses.

~~Unsecured Loans Under the CARES Act.~~ On May 8, 2020, two wholly-owned subsidiaries executed promissory notes (the “Promissory Notes”) evidencing unsecured loans in the aggregate amount of $5,606,200 through programs established under the CARES Act and administered by the U.S. Small Business Administration. Such funds will be used principally to rehire several hundred employees at Rising Star and Bronco Billy’s in preparation for the reopening of these businesses. The Loans are being made through Zions Bancorporation, N.A. dba Nevada State Bank (the “Lender”), have a two-year term, bear interest at a rate of 1.00% per annum, and mature on May 3, 2022. Monthly principal and interest payments are deferred for six months. Beginning in December 2020, we are required to make monthly payments of principal and interest to the Lender. The Loans may be prepaid at any time prior to maturity with no prepayment penalties. Such Loans may be forgiven, either in whole or in part, depending on the amount of such proceeds that are used for certain eligible expenses, including primarily the payroll and health benefits of employees who would otherwise be without jobs or health benefits. The details of such potential loan forgiveness are still being developed by the Small Business Administration and there is no certainty that any or all of such Loans will be forgiven.

Waukegan ~~Proposal.~~Proposal (American Place). ~~While we remain focused on conserving capital and reopening our operations, we~~ We continue to be one of three bidders for the opportunity to build a new casino in Waukegan, Illinois, midway between Chicago and ~~Milwaukee.~~Milwaukee, an area with high population density and no existing casino. If ~~chosen,~~awarded the license by the Illinois Gaming Board (“IGB”), we ~~anticipate developing this~~intend to develop and operate a temporary casino on that site while a permanent casino (named “American Place”) is being constructed. American Place is expected to include a world-class casino with a state-of-the-art sportsbook; a premium boutique hotel comprised of twenty luxurious villas, each ranging from 1,500 to 2,500 square feet with full butler service; a 1,500-seat live entertainment venue; and various food and beverage outlets. American Place was one of three proposals certified by the Waukegan City Council in late 2019. At that time, the city’s consultant ranked American Place as the top proposal amongst the various submissions on numerous different criteria.

According to the IGB, the process for it to choose the preferred developer has been slowed by the COVID-19 pandemic. In December 2020, the IGB issued a ~~joint venture, employing project financing. There is~~request for proposals (“RFP”) for an investment bank or similar consultant to advise the IGB in assessing the various proposals. In April 2021, the IGB indicated that it received at least one response to its RFP. The IGB Administrator has indicated that he believes the IGB can make a preliminary suitability determination within six months of hiring an appropriate financial consultant. We can provide no assurances as to the timing or certainty that weour project will be chosen ~~to develop such a casino, that we will find a suitable partner, or that project financing will be available.~~by the Illinois Gaming Board for the available gaming license in Waukegan.

Key Performance Indicators

We use several key performance indicators to evaluate the operations of our properties. These key performance indicators include the following:

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.

Table of Contents

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 ~~at the tables~~ 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.

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 gratuitously furnished to customers, are included in the calculation of the hotel occupancy rate.

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

Management uses Adjusted EBITDA as a measure of our performance. For a description of Adjusted EBITDA, see “Non-GAAP Financial Measure.” We utilize Adjusted ~~Property~~Segment EBITDA, a financial measure in accordance with generally accepted accounting principles in the United States of America (“GAAP”), as the measure of segment profit in assessing performance and allocating resources at the reportable segment level. For information regarding our operating segments, see Note 11 of our Condensed Notes to Consolidated Financial Statements included in this quarterly report. In addition, we use Adjusted ~~Property~~Segment EBITDA Margin, which is calculated by dividing Adjusted ~~Property~~Segment EBITDA by the property’s ~~net~~total revenues.

~~Table of Contents~~

Results of Operations

Consolidated operating results

The following tables summarize our consolidated operating results for the three-months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


	Three Months Ended

							Three Months Ended
(In thousands)	March 31,				Percent		March 31,				Percent
	2020		2019		Change
Net revenues	$	30,853	$	40,494	(23.8)	%
							2021		2020		Change
Revenues							$	42,208	$	30,853	36.8	%
Operating expenses		34,281		39,226	(12.6)	%		33,514		34,281	(2.2)	%
Operating (loss) income		(3,428)		1,268	(370.3)	%
Operating income (loss)								8,694		(3,428)	(353.6)	%
Interest and other non-operating expenses, net		835		2,743	(69.6)	%		11,937		835	1,329.6	%
Income tax provision		95		142	(33.1)	%		202		95	112.6	%
Net loss	$	(4,358)	$	(1,617)	169.5	%	$	(3,445)	$	(4,358)	(20.9)	%


	Three Months Ended

							Three Months Ended
(In thousands)	March 31,				Percent		March 31,				Percent
	2020		2019		Change
							2021		2020		Change
Casino revenues
Slots	$	17,359	$	23,473	(26.0)	%	$	27,060	$	17,359	55.9	%
Table games		2,751		4,120	(33.2)	%		3,868		2,751	40.6	%
Other		641		705	(9.1)	%		1,136		641	77.2	%
		20,751		28,298	(26.7)	%

								32,064		20,751	54.5	%

Non-casino revenues, net
Food and beverage		6,990		8,658	(19.3)	%		6,101		6,990	(12.7)	%
Hotel		1,974		2,715	(27.3)	%		2,211		1,974	12.0	%
Other		1,138		823	38.3	%		1,832		1,138	61.0	%
		10,102		12,196	(17.2)	%
Total net revenues	$	30,853	$	40,494	(23.8)	%
								10,144		10,102	0.4	%
Total revenues							$	42,208	$	30,853	36.8	%

Table of Contents

The following discussion is based on our consolidated financial statements for the three-months ended March 31, ~~2020~~2021 and ~~2019.~~

~~Revenues.~~ ~~Consolidated net revenues~~2020. Because all of the Company’s operations were temporarily closed, the comparisons for the three-month period ~~decreased primarily~~are not particularly meaningful. The periods of closure were:

●

Silver Slipper Casino and Hotel ― closed from March 16, 2020 until May 21, 2020

●

Grand Lodge Casino and Stockman’s Casino ― closed from March 17, 2020 until June 4, 2020

●

Bronco Billy’s Casino and Hotel ― closed from March 17, 2020 until June 15, 2020

●

Rising Star Casino Resort ― closed from March 16, 2020 until June 15, 2020.

Revenues. Consolidated total revenues for the three-months ended March 31, 2021 were constrained by requirements to maintain “social distancing” during the ongoing COVID-19 pandemic, including reductions in the number of slot machines we are permitted to operate, the number of people that we can accommodate at each table game, the seating capacity of our bars and restaurants, and restrictions on the types of food service we can offer. Despite these constraints, total revenues increased due largely to ~~suspended operations~~approximately two weeks of property closures in the 2020 period, as noted above, as well as improved spending levels per guest at ~~all properties as mandated by state government orders~~Silver Slipper. Food and beverage revenues declined in ~~mid-March 2020, in response to COVID-19. This resulted in our revenues reflecting activities for approximately two-thirds of~~ the first quarter of 2021, due to pandemic-related operating constraints and fewer food-related marketing offers. Hotel revenue improved, as ~~compared~~our hotels were generally permitted to operate in the ~~prior-year~~2021 period ~~which reflects a full period of operations.~~without operating restrictions. Of note, “Other Non-casino Revenues” includes ~~$0.4~~$1.0 million of revenue related to our mobile sports ~~operations. The first quarter of 2020 includes a full~~operations for the three-month period ~~of one of our six sports wagering websites, or “skins,”~~ended March 31, 2021. See “Operating Results – Reportable Segments” below for which we contracted third parties to conduct operations in exchange for minimum annual revenue guarantees. This first sports wagering website commenced operations in Indiana on December 30, 2019. We currently expect at least one additional website to launch in the second quarter of 2020, and for all of our six contracted websites to have commenced operations by the end of the third quarter of 2020.details.

See further information within our reportable segments described below.

~~Table of Contents~~

Operating Expenses. Consolidated operating expenses ~~for~~in the ~~three-month period likewise~~first quarter of 2021 decreased primarily due to improved labor efficiencies upon the ~~temporary closures discussed above. A majority~~reopening of ~~this decrease, particularly~~our casino properties, as well as reductions in ~~casino~~operating hours at our property’s food and beverage and table games departments. This affected payroll and related expenses ~~can be attributed~~across all departments at the Company, as well as numerous volume-related costs, such as our cost of the food and beverages served to guests. Note that payroll and related expenses during the 2020 period included a brief period of continuing payroll, health care, and related costs for most of our employees as severance, despite the closure of all of the Company’s properties in mid-March 2020. We also opted to significantly reduce our marketing expenses upon reopening, benefiting from analytics provided by new marketing systems installed in late 2019.

We chose to reopen our casinos, when permitted to do so, very cautiously, with limited hours of operation of many amenities and minimal staffing, as we were unsure as to the ~~lower gaming-related~~customer response. As the capacity of our restaurants was limited in order to ensure social distancing, we chose to eliminate certain promotions, like “2-for-1” buffets and a “$0.49 breakfast,” which were loss leaders that could not be easily accommodated with our reduced restaurant capacity. We reduced the number of slot machines we operate, again to assure social distancing and, in some cases, as required to do so by the gaming authorities. This resulted in reductions in certain taxes based on the number of machines, as well as the amounts we pay for certain leased games. Until recently, we were limited in terms of the numbers of people who can participate at each table game, again to ensure social distancing, and we offset this by increasing the minimum wagers on our table games so as to afford to pay the dealers and other required personnel with fewer people playing each game. Meanwhile, we expanded the number of stadium gaming and similar machines in the vicinity of our table games, to accommodate customers who may not want to play at higher table game minimums. We also used the closure period to revamp much of our marketing programs, particularly at Rising Star and ~~Silver Slipper as a result~~Bronco Billy’s, which had recently installed new, state-of-the-art slot machine systems and therefore had much better marketing data than was available previously. The improved marketing data allowed us to focus our attention and benefits on our most important customers, while we were also able to identify groups of ~~decreased volume. Similarly, decreased volume corresponded to lower food and beverage expenses as there~~customers who had historically been receiving benefits that were ~~fewer buffet guests and restaurant covers. The decrease in hotel expenses was due to the scaling back~~not justified by their levels of our workforce and overhead costs, after a brief period of continued wages and health benefits beyond the casino closures. To a lesser extent, decreases in the gaming-related variable rent at Silver Slipper and marketing expenditures for the overall quarter attributed to the decrease in consolidated operating expenses.play.

See further information within our reportable segments described below.

Table of Contents

Interest and Other Non-Operating Expenses.

Interest Expense

Interest expense consists of the following:



(In thousands)	March 31,				Three Months Ended
	2020		2019
					March 31,
					2021		2020
Interest cost (excluding loan fee amortization)	$	2,486	$	2,491	$	4,431	$	2,486
Amortization of debt issuance costs and discount		225		190		284		225
Change in fair value of interest rate cap agreement		—		69
Capitalized interest		(220)		(47)		(259)		(220)
	$	2,491	$	2,703
					$	4,456	$	2,491

The ~~decrease~~increase in interest expense for the three-month period iswas primarily due to ~~the~~an increase in ~~capitalized~~our debt levels. In February 2021, we refinanced approximately $106.8 million of the Prior Notes with $310.0 million of new 2028 Notes as discussed under “Recent Developments.” Note that the interest ~~for~~rate on the Prior Notes was LIBOR plus 7 percentage points, with a 1% LIBOR floor, resulting in a floating rate of interest that was near the fixed rate coupon on the new debt of 8.25%. The new debt also has a significantly longer term than the Prior Notes. The additional proceeds are being used to, among other things, fund our ~~expansion project at Bronco Billy’s, which we suspended in March 2020 due to COVID-19.~~Chamonix project.

Other Non-Operating Expenses, Net

For the three-month period ended March 31, ~~2020,~~2021, we had approximately ~~$1.7~~$7.5 million of other non-operating ~~income from~~expenses, consisting of $6.1 million related to the extinguishment of our Prior Notes and $1.3 million for the fair value adjustment to our outstanding warrants, which iswere repurchased in February 2021. The fair value was determined based on the repurchase price of $4.0 million. The fair value adjustment reflected an increase in the warrant expense from $2.7 million at December 31, 2020, when the Company’s stock traded at lower prices, to the actual repurchase price of $4.0 million. For the prior-year period, we had a non-cash ~~item related to changes in our stock price. Decreases~~benefit of $1.7 million for the fair value adjustment of the warrants, reflecting a decline in our share price ~~result in decreases in the value of the warrants, causing a non-cash gain. Conversely, increases in our share price result in increases in the value of the warrants, causing a non-cash loss.~~during that quarter.

Income Tax Expense.We recognized income tax expense for the three-months ended March 31, ~~2020~~2021 and ~~2019,~~2020, which resulted in effective income tax rates of ~~(2.2%)~~(6.2)% and ~~(9.6%)~~(2.2)%, respectively. We recorded a liability of approximately $237,000 during the quarter ended March 31, 2021 as shown below. This expense relates to the required adoption of ASU 2019-12 (see Note 2 of our Condensed Notes to Consolidated Financial Statements included in this quarterly report).


(In thousands)
	Three Months Ended
Components of Income Tax	March 31, 2021
Income tax benefit	$	(35)
Income tax expense		237
Income tax expense, net	$	202

We do not expect to pay any federal income taxes or receive any federal tax refunds related to our ~~2020~~2021 results. Tax losses incurred in ~~2020~~2021 may offset taxable income in future years and we have significant tax loss carryforwards from prior years. However, because of the level of uncertainty regarding sufficient prospective income, we currently maintain a valuation allowance against our remaining deferred tax assets.

Operating Results – Reportable Segments

We manage our casinos based primarily on geographic regions within the United ~~States. Accordingly, Stockman’s~~States and ~~Grand Lodge Casino comprise~~type of income. For more information, please refer to our Northern Nevada business segment, while Silver Slipper, Bronco Billy’s and Rising Star are distinct segments. Our Rising Star segment includes ferry boat operations between Indiana and Kentucky, and our Bronco Billy’s segment includes the Christmas Casino & Inn, near Bronco Billy’s in Cripple Creek, Colorado.earlier discussion within “Executive Overview” above.

Table of Contents

The following table presents detail by segment of our consolidated ~~net revenue~~revenues and Adjusted EBITDA; see “Non-GAAP Financial Measure” for additional information. Additionally, management uses Adjusted ~~Property~~Segment EBITDA as the measure of segment profit in accordance with GAAP.

	��
(In thousands)	Three Months Ended
	March 31,				Percent
	2021		2020		Change
Revenues
Mississippi	$	22,356	$	15,092	48.1	%
Indiana		8,590		7,247	18.5	%
Colorado		5,905		4,982	18.5	%
Nevada		4,368		3,108	40.5	%
Contracted Sports Wagering		989		424	133.3	%
	$	42,208	$	30,853	36.8	%
Adjusted Segment EBITDA and Adjusted EBITDA
Mississippi	$	7,630	$	1,831	316.7	%
Indiana		1,134		(1,490)	176.1	%
Colorado		1,710		(471)	463.1	%
Nevada		1,224		(390)	413.8	%
Contracted Sports Wagering		976		390	150.3	%
Adjusted Segment EBITDA		12,674		(130)	9,849	%
Corporate		(1,905)		(1,119)	70.2	%
Adjusted EBITDA	$	10,769	$	(1,249)	962.2	%

26Mississippi

~~Table~~Our Mississippi segment consists of ~~Contents~~

(In thousands)

Three Months Ended

March 31,

Percent


2020

2019

Change
Net revenues







Silver Slipper Casino and Hotel

$
15,092

$
19,281

(21.7)
%
Rising Star Casino Resort(1)

7,671

10,868

(29.4)
%
Bronco Billy's Casino and Hotel

4,982

6,440

(22.6)
%
Northern Nevada Casinos

3,108

3,905

(20.4)
%

$
30,853

$
40,494

(23.8)
%
Adjusted Property EBITDA and Adjusted EBITDA







Silver Slipper Casino and Hotel

$
1,831

$
3,845

(52.4)
%
Rising Star Casino Resort(1)

(1,093)

404

(370.5)
%
Bronco Billy's Casino and Hotel

(478)

615

(177.7)
%
Northern Nevada Casinos

(390)

(9)

4,233.3
%
Adjusted Property EBITDA

(130)

4,855

(102.7)
%
Corporate

(1,119)

(1,278)

(12.4)
%
Adjusted EBITDA

$
(1,249)

$
3,577

(134.9)
%

~~(1) Includes amounts related to~~ the ~~property’s sports revenue guarantees in 2020.~~

Silver Slipper Casino and ~~Hotel~~

Net revenues during the quarter decreased by 21.7%, primarily due to impacts of COVID-19. On March 11, 2020, the state gaming commission officially declared a pandemic, which called for an emergency order of closure for all casinos operating in Mississippi by midnight on March 16, 2020. March is typically one of the strongest months of the year for guest counts, gross gaming revenue, and restaurant covers, due in part to out-of-town guests who come to the Gulf Coast hoping to escape the cold winter season in other parts of the country. The first 15 days of March in 2020 were no exception, until the state issuance for mandatory closures halted operations.

~~Casino revenue decreased by 26.7% for the quarter, with a strong performance through February 2020 being offset by the casino closure in March.~~

Non-casino revenue decreased by 12.8% for the quarter. Food and beverage revenues, which comprise the majority of our non-casino revenue, decreased by 12.9% during the quarter. Hotel revenues decreased 15.2%, despite a higher average daily room rate, with occupancy through the date of closure of 82.2%. In last year’s quarter, hotel occupancy was 88.0%.

~~Adjusted Property EBITDA for the quarter decreased by 52.4% due to the reasons described above. Adjusted Property EBITDA Margin decreased to 12.1% for the quarter from 19.9% in the prior-year period.~~

We currently expect Silver Slipper to reopen to the public by May 22, 2020, in time for the important Memorial Day holiday weekend, potentially with gaming restrictions and limited amenities for the initial opening period.

~~Rising Star Casino Resort~~

~~Net revenues during the quarter (excluding $0.4 million related to the property’s sports revenue guarantees)~~ ~~decreased to $7.3 million from $10.9 million. This decrease was due to lower business volumes, primarily due to the impacts of COVID-19, as well as an increase in competition.~~Hotel. Pursuant to an order from the state gaming commission, we temporarily suspended operations on March 16, 2020. AWe were permitted to reopen on May 21, 2020.

For the three-months ended March 31, 2021, revenues increased by 48.1%, primarily due to improvements in casino ~~near Louisville opened~~revenues, which increased by 76.8%. Slot revenue rose 74.6% due to increased coin-in and a ~~large new~~slight increase in hold percentage. Table games revenue rose by 93.0% due to increased drop and an 8.9 percentage point increase in the table games hold percentage. Other casino revenues increased by $484,000, primarily reflecting higher volumes from our sports book operations.

Non-casino revenue increased by 4.9% for the three-month period ended March 31, 2021, principally due to growth in ~~mid-December, replacing its original~~our hotel operations. Hotel revenues increased 20.6% for the three-months ended March 31, 2021. Total occupied room-nights increased by 32.2% to 10,437 room-nights for the first quarter of 2021, due to the closure period in the prior-year’s quarter.

Adjusted Segment EBITDA for the three-month period ended March 31, 2021 increased by 316.7% driven by a combination of increases in casino ~~boat. Additionally,~~revenues, which was affected last year by the property’s closure in March 2020, and our focus on ~~January 1,~~controlling labor and marketing costs upon the property’s reopening.

Indiana

Our Indiana segment consists of Rising Star Casino Resort. Pursuant to an order from the state gaming commission, we temporarily suspended operations on March 16, 2020 ~~racetrack casinos near Indianapolis began offering live table games.~~ until we were permitted to reopen on June 15, 2020.

For the quarter ended March 31, 2021, total revenues increased by 18.5%, or $1.3 million. This increase was due to increased volumes and a higher slot hold percentage, along with approximately two weeks of closure in March 2020. Casino revenue ~~decreased~~increased by ~~31.5%.~~33.6% for the three-months ended March 31, 2021. Food and beverage revenues decreased ~~36.4%~~by 35.1%, as reduced operating hours, social distancing requirements and ~~hotel revenues also decreased for~~revised marketing strategies reduced the ~~quarter, with lower occupancy offset by a higher average daily room rate and the implementation~~number of ~~the daily resort fee.~~

covers in our

Table of Contents

~~Adjusted Property EBITDA~~restaurants. Hotel revenues, increased for the ~~quarter (excluding $0.4 million related~~three-month period by 7.1% due to the ~~property’s sports revenue guarantees) decreased by approximately $1.9 million due primarily~~closure period in the prior-year’s quarter. Total occupied room-nights increased 7.4% to ~~the property closure as mandated by the state gaming commission. Including the sports revenue guarantees, revenues and Adjusted Property EBITDA~~11,592 for the first quarter of ~~2020 were $7.7~~2021.

Adjusted Segment EBITDA increased by $2.6 million for the quarter ended March 31, 2021. The increase was due to increased volumes and ~~$(1.1) million, respectively.~~

~~We currently expect Rising Star to reopen~~a focus on labor efficiencies throughout the property, with operating hours for table games and food and beverage outlets more appropriately matched to the ~~public on~~demand for such services, as well as the launch of an improved loyalty program in June ~~14, 2020, potentially with gaming restrictions and limited amenities for~~2020.

In 2019, the initial opening period. We expect that our two remaining online/mobile sports wagering websites will commence operations in the third quarter of 2020, subject to the receipt of customary regulatory approvals.

During the fourth quarter of 2019, we installed a new slot system. This new system should improve both the customer experience and the effectiveness and efficiency of our marketing efforts. During this temporary casino closure, we have also prepared new marketing plans that we intend to implement upon the casino’s reopening, which we believe will benefit the property’s expense structure in the longer-term.

~~The new~~ Indiana ~~gaming legislation passed in 2019~~legislature approved a reduction in certain gaming taxes ~~for casino operators in the state, including~~that benefits Rising Star, beginning on July 1, 2021. Based on activity levels in recent years, we estimate that the new gaming tax schedule will save us approximately $2.5 million per year.

Colorado

Our Colorado segment includes Bronco Billy’s Casino and Hotel

~~Net revenues for~~ and the ~~quarter decreased by 22.6%, which was also due to the impacts of COVID-19.~~Chamonix development project. Pursuant to state government orders, we temporarily closed Bronco Billy’s on March 17, 2020 until we were permitted by governing authorities to reopen on June 15, 2020. ~~This resulted~~

For the three-months ended March 31, 2021, total revenues increased by 18.5%, or $0.9 million, due largely to an increase in ~~a decrease of~~ casino ~~revenues~~revenue, as last year’s period included the temporary government-mandated shutdown. Casino revenue in the first quarter of ~~23.6% compared~~2021 increased by 31.4%. Table games revenue decreased 77.2% as, unlike our slot operations, table games operations were not permitted to ~~the prior-year’s quarter, reflecting the adverse effect of the casino closure on gaming volumes.~~reopen until February 2021. Food and beverage revenues decreased ~~during~~by 46.1% for the ~~quarter~~three-months ended March 31, 2021 due to limitations on seating, reduced operating hours, and fewer food-based marketing offers. Hotel revenues decreased by 17.1%, reflecting limited hotel room availability, as many of the ~~closure, as did~~property’s hotel ~~revenues by 1.0%.~~rooms were closed to facilitate construction of Chamonix.

Adjusted ~~Property~~Segment EBITDA increased by 463.1% to $1.7 million for the first quarter ~~decreased by $1.1 million~~of 2021 due to increased gaming revenue, improved labor controls, more efficient marketing due to improved analytics from Bronco Billy’s new slot marketing system, and decreases in food costs and device fees/taxes. The property was also closed for approximately two weeks of the ~~state-mandated closure.~~prior-year’s quarter and paid severance and benefits to many of its employees during that period, despite being closed.

The market in Cripple Creek is seasonal, favoring the summer months.

~~We currently expect Bronco Billy’s~~Nevada

The Nevada segment consists of the Grand Lodge and Stockman’s casinos and is historically the smallest of the Company’s segments. Pursuant to state government orders, we temporarily closed both Grand Lodge Casino and Stockman’s Casino from March 17, 2020 until we were permitted to reopen ~~to the public in early~~on June ~~2020, likely with gaming restrictions and limited amenities for the initial opening period.~~

Similar to Rising Star, during the fourth quarter of 2019, we installed a new slot system. This new system should improve both the customer experience and the effectiveness and efficiency of our marketing efforts. During this temporary casino closure, we have also prepared new marketing plans to implement upon the casino’s reopening, which we believe will benefit the property’s expense structure in the longer-term.

In April 2020, each of the three providers for our three permitted online/mobile sports wagering websites received their Colorado gaming licenses. We expect that at least one of these three websites will commence operations in the second quarter of 2020, and that all three websites will be operational before the end of the third quarter of4, 2020.

~~Northern Nevada~~

Our Northern 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 ~~also frequently have a positive or negative effect.~~can often affect operations, as Grand Lodge Casino is located near several major ski ~~resorts, including Alpine Meadows, Northstar and Squaw Valley. Normally, we~~resorts. We typically benefit from a “good” snow year, resulting in extended periods of operation at the nearby ski areas. However, pandemic-related restrictions at the nearby ski resorts in late 2020 and early 2021 affected our business in the first quarter of 2021. The 2020 period was affected by the mandated closure of our casinos.

~~Pursuant to state government orders on~~For the three-months ended March ~~17, 2020, we temporarily closed both Grand Lodge~~31, 2021, total revenues increased by 40.5%. An increase in this year’s hold percentage helped with the improvement over last year’s first quarter, which also included the shutdown in mid-March. Casino ~~and Stockman’s Casino. As a result, net~~ revenues increased by 52.8% for the ~~quarter decreased by 20.4%. Casino revenues decreased by 20.5%. Food and beverage revenue~~three-month period ended March 31, 2021. While table games at Stockman’s ~~Casino decreased~~have not yet reopened, table games revenue improved overall by ~~$0.1 million as compared~~38.2% due to increased hold at Grand Lodge. Slot revenue improved by 57.3%, due to increases in both slot handle and the ~~prior-year quarter.~~hold percentage.

Adjusted ~~Property~~Segment EBITDA for the ~~quarter decreased~~three-month period ended March 31, 2021 increased by ~~$0.4~~about $1.6 million.

The impact of higher casino revenues and continued cost controls, specifically regarding labor and marketing expenses, have

Table of Contents

produced an improvement in Adjusted Segment EBITDA. As restrictions have eased in Northern Nevada, both properties have improved revenues while continuing to maintain control of expenses.

Contracted Sports Wagering

The Contracted Sports Wagering segment consists of our on-site and online sports wagering skins in Colorado and Indiana. Revenues and Adjusted Segment EBITDA were both approximately $1.0 million in the first quarter of 2021, reflecting a full quarter of operations of three of our six permitted sports wagering skins. For the first quarter of 2020, when only one sports wagering skin was live, such amounts were both approximately $0.4 million.

On April 1 and April 23, 2021, respectively, our fourth and fifth sports wagering skins commenced operations. We ~~currently expect both Grand Lodge Casino and Stockman’s Casino~~believe that our last remaining skin will commence operations in the next few months. We receive a percentage of defined revenues of each skin, subject to ~~reopen to the public~~annual minimums. When all six skins are in ~~late May 2020, likely~~operation, we should receive a contractual minimum of $7 million on an annualized basis, with ~~gaming restrictions and limited amenities for the initial opening period.~~minimal related expenses.

Corporate

Corporate expenses for the ~~quarter decreased 12.4%, or $0.2 million, primarily~~three-month period ended March 31, 2021 increased in part due to an increase in accrued bonuses related to the Company’s improved operating results, as well as an adjustment to franchise taxes. These increases were slightly offset by the allocation of corporate service costs to the casino properties in the first quarter of 2021.

In April 2020, we began allocating certain costs to the properties, consistent with the practice of most public casino companies. Previously, such costs were carried at the corporate level. In the first quarter of 2021, a ~~decrease in professional fees,~~total of $405,000 was allocated, consisting of $128,000 of additional costs at Silver Slipper, $112,000 at Bronco Billy’s, $92,000 at Rising Star and $73,000 for Northern Nevada. Management believes that such allocations are appropriate and that they make our financial results more comparable to ~~a lesser extent, a reduction in travel and related expenses.~~other casino companies.

Non-GAAP Financial Measure

“Adjusted EBITDA” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, pre-opening expenses, impairment charges, asset write-offs, recoveries, gain (loss) from asset 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 EBITDA) is utilized in the covenants within our indenture, 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 the Company’s operating performance or liquidity.

Table of Contents

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



(In thousands)	Three Months Ended				Three Months Ended
	March 31,
	2020		2019
					March 31,
					2021		2020
Net loss	$	(4,358)	$	(1,617)	$	(3,445)	$	(4,358)
Income tax provision		95		142		202		95
Interest expense, net of amounts capitalized		2,491		2,703		4,456		2,491
Loss on extinguishment of debt						6,134		—
Adjustment to fair value of warrants		(1,656)		40		1,347		(1,656)
Operating (loss) income		(3,428)		1,268
Operating income (loss)						8,694		(3,428)
Project development costs		56		133		47		56
Depreciation and amortization		2,040		2,091		1,800		2,040
Gain on disposal of assets, net		—		(1)
Loss on disposal of assets, net						104		—
Stock-based compensation		83		86		124		83
Adjusted EBITDA	$	(1,249)	$	3,577	$	10,769	$	(1,249)

~~Table of Contents~~

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

Three Months Ended March 31, 2020
(In thousands)

Adjusted

Property

Operating

Depreciation

Project

EBITDA and

Income

and

Development

Stock-Based

Adjusted


(Loss)

Amortization

Costs

Compensation

EBITDA
Casino properties










Silver Slipper Casino and Hotel

$
988

$
843

$
—

$
—

$
1,831
Rising Star Casino Resort

(1,715)

622

—

—

(1,093)
Bronco Billy's Casino and Hotel

(865)

387

—

—

(478)
Northern Nevada Casinos

(540)

150

—

—

(390)

(2,132)

2,002

—

—

(130)
Other operations










Corporate

(1,296)

38

56

83

(1,119)

$
(3,428)

$
2,040

$
56

$
83

$
(1,249)


Three Months Ended March 31, 2021
(In thousands)

											Adjusted
											Segment
	Operating		Depreciation		Loss on		Project		Stock-		EBITDA and
	Income		and		Disposal		Development		Based		Adjusted
	(Loss)		Amortization		of Assets		Costs		Compensation		EBITDA
Reporting segments
Mississippi	$	6,948	$	660	$	22	$	—	$	—	$	7,630
Indiana		518		616		—		—		—		1,134
Colorado		1,281		347		82		—		—		1,710
Nevada		1,085		139		—		—		—		1,224
Contracted Sports Wagering		976		—		—		—		—		976
		10,808		1,762		104		—		—		12,674
Other operations
Corporate		(2,114)		38		—		47		124		(1,905)
	$	8,694	$	1,800	$	104	$	47	$	124	$	10,769

Three Months Ended March 31, 2019
(In thousands)

Adjusted

Property

Operating

Depreciation

Gain on

Project

EBITDA and

Income

and

Disposal of

Development

Stock-Based

Adjusted

(Loss)

Amortization

Assets

Costs

Compensation

EBITDA
Casino properties












Silver Slipper Casino and Hotel

$
2,999

$
847

$
(1)

$
—

$
—

$
3,845
Rising Star Casino Resort

(202)

606

—

—

—

404
Bronco Billy's Casino and Hotel

168

447

—

—

—

615
Northern Nevada Casinos

(162)

153

—

—

—

(9)

2,803

2,053

(1)

—

—

4,855
Other operations












Corporate

(1,535)

38

—

133

86

(1,278)

$
1,268

$
2,091

$
(1)

$
133

$
86

$
3,577

Table of Contents


Three Months Ended March 31, 2020
(In thousands)
									Adjusted
									Segment
	Operating		Depreciation		Project		Stock-		EBITDA and
	Income		and		Development		Based		Adjusted
	(Loss)		Amortization		Costs		Compensation		EBITDA
Reporting segments
Mississippi	$	988	$	843	$	—	$	—	$	1,831
Indiana		(2,112)		622		—		—		(1,490)
Colorado		(858)		387		—		—		(471)
Nevada		(540)		150		—		—		(390)
Contracted Sports Wagering		390		—		—		—		390
		(2,132)		2,002		—		—		(130)
Other operations
Corporate		(1,296)		38		56		83		(1,119)
	$	(3,428)	$	2,040	$	56	$	83	$	(1,249)

Operating expenses deducted to arrive at operating income (loss) in the above tables for the three-month period ended March 31, ~~2020~~2021 and ~~2019~~2020 included facility rents related to: (i) ~~Silver Slipper~~Mississippi of $0.6 million during 2021 and $0.4 million during 2020, ~~and $0.5 million for during 2019,~~ (ii) ~~Northern~~ Nevada of ~~$0.5��~~$0.5 million for both periods, and (iii) ~~Bronco Billy’s~~Colorado of $0.2 million for both periods.

Liquidity and Capital Resources

Cash Flows

As of March 31, ~~2020,~~2021, we had ~~$24.3~~$277.9 million of ~~unrestricted~~ cash and equivalents, ~~and we~~including $179.9 million of restricted cash dedicated to the construction of Chamonix. We estimate that ~~our cash burn rate while operations are closed is~~between approximately $3$7 million ~~per month, including interest~~ and ~~debt principal payments. Historically, we have utilized approximately $10 million to $12~~$9 million of cash is used in our current day-to-day operations, including for on-site cash in our slot machines, change and redemption kiosks, and cages. ~~The balance of our cash was earmarked for completion~~

~~Table of Contents~~

of our parking garage in Colorado, which was under construction when operations were required to close. Whether or not we will be able to complete the parking garage in the near future will depend on the length of time that our casinos are closed, the operating results of our casinos when they reopen, and the capital markets that might be available to us at some future date. Subsequent to the end of the first quarter, as discussed above, we received approximately $5.6 million of loan proceeds under the CARES Act.

Our casinos are our primary sources of income and operating cash flows and they are all currently closed as a result of COVID-19. There can be no assurance that our business will generate sufficient cash flow from operations once our casinos have reopened or that future borrowings will be available in amounts sufficient to enable us to pay our indebtedness or fund our other liquidity needs. In this section, we have described actions with respect to our liquidity that we have taken as a result of COVID-19.

Cash flows – operating activities. On a consolidated basis, cash ~~used in~~provided by operations during the three months ended March 31, ~~2020~~2021 was ~~$4.2~~$8.3 million, compared to cash used inby operations of ~~$0.7~~$4.2 million in the prior-year period. Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but are also affected by changes in working capital. Comparing the ~~2020~~2021 and ~~2019~~2020 periods, our operating cash flows ~~decreased~~increased primarily due to strong performances at each segment and the ~~unforeseen business interruption from the COVID-19 pandemic.~~temporary closure of our properties in March 2020.

Cash flows – investing activities. On a consolidated basis, cash used in investing activities during the three months ended March 31, ~~2020~~2021 was $1$3.4 million, which primarily related to the ~~Phase One expansion at Bronco Billy’s that was suspended in March 2020 amidst the COVID-19 pandemic.~~purchase of Carr Manor and other land parcels related to our Chamonix project. Cash used in investing activities during the prior-year period was ~~$1.3~~$1.0 million, which primarily related to capital expenditures for ~~maintenance and certain growth-related projects, including the Phase One expansion at Bronco Billy’s and the remodeling of the Silver Slipper casino.~~Chamonix.

Cash flows – financing activities. On a consolidated basis, cash ~~used in~~provided by financing activities during the three months ended March 31, ~~2020~~2021 was ~~$0.4~~$235.4 million, compared to cash used in financing activities of ~~$0.3~~$0.4 million in the prior-year period. ~~Both amounts primarily~~In February and March 2021, respectively, we received $310.0 million of gross proceeds from the issuance of our 2028 Notes and gross proceeds of $46.0 million through our underwritten equity offering. These cash inflows in 2021 were offset by the payoff of the Prior Notes along with related prepayment premiums, as well as expenses related to ~~payments for~~ the issuance of our 2028 Notes, our March 2021 equity offering, and ~~the finance lease at Rising Star (see Note 3). Comparing the 2020 and 2019 periods, the higher Notes payment reflects the additional $10~~our new $15.0 million revolving credit facility.

Table of ~~incremental debt sold in May 2019, while the lower finance lease payment at Rising Star in 2020 reflects a month of loan deferment in our efforts to preserve cash during the COVID-19 pandemic.~~Contents

Other Factors Affecting Liquidity

We have significant outstanding debt and contractual obligations, in addition to ~~potential future~~planned capital ~~expenditures.~~expenditures related to the construction of Chamonix. Our principal debt matures in February ~~2024 and we anticipate needing to refinance our debt prior to its maturity, as we are unlikely to generate sufficient cash flow in the interim to completely repay these obligations.~~2028. Certain planned capital expenditures designed to grow the Company, such as the potential expansion of Silver Slipper and our American Place proposal, if pursued, ~~would likely~~may require additional financing ~~including perhaps~~and/or temporarily reduce the ~~issuance of additional debt and potentially some form of equity financing, if available at such time.~~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. If we are unable to generate sufficient operating cash flow and/or access the capital markets, including as a result of COVID-19, we could be required to adopt one or more alternatives, such as reducing, delaying, or eliminating certain planned capital expenditures, selling assets, obtaining additional equity financing, or borrowing at higher costs of capital. See “Bronco Billy’s Expansion Suspended” for measures that have been implemented as a result of COVID-19.

Debt

Long-term Debt. As discussed above in the “Executive Overview,” we executed the Waiver and Amendment in April 2020 to amend the Indenture governing the Notes, which included an amendment to delete our total leverage covenant requirement for the period endedAt March 31, 2020, ~~among other items.~~we had $310.0 million of principal indebtedness outstanding under the 2028 Notes. Additionally, in the midst of the pandemic when all operations were suspended, we obtained the CARES Act Loans totaling $5.6 million. We also owe $3.7 million related to our finance lease of a hotel at Rising Star.

8.25% Senior Secured Notes due 2028.On February ~~2, 2018,~~12, 2021, we ~~issued $100~~refinanced all of our outstanding Prior Notes through the issuance of $310 million of ~~Notes and on May 10, 2019, we issued an additional $10 million of Notes.~~new senior secured notes due 2028. The 2028 Notes are ~~collateralized~~secured by liens on substantially all of our assets and are guaranteed by all of our ~~material~~restricted subsidiaries. ~~The total $110~~We placed $180 million of the debt proceeds into a construction reserve account dedicated to the construction of Chamonix.

The 2028 Notes bear interest at ~~the greater of the three-month LIBOR or 1.0%, plus~~ a ~~margin~~fixed rate of ~~7.0%. The Indenture governing~~8.25% per year and mature on February 15, 2028. There is no mandatory debt amortization prior to the ~~Notes provides for a 50 basis point interest premium if Mr. Lee reduces his equity interests by 50% or more while serving as our CEO. Mr. Lee has no current intention to sell any shares.~~maturity date. Interest on the 2028 Notes is payable ~~quarterly in arrears,~~ on February 15 and August 15 of each year.

Senior Secured Revolving Credit Facility due 2026. On March 31, ~~June 30, September 30~~2021, we entered into a credit agreement for a $15.0 million senior secured five-year revolving credit facility and ~~December 31~~includes a letter of ~~each year until~~credit sub-facility. The credit facility may be used for working capital and other ongoing general purposes, excluding project costs for Chamonix, which was separately funded. The credit facility is equally and ratably secured by the same assets securing the 2028 Notes, ~~mature on February 2, 2024. On~~

~~Table of Contents~~

~~each interest payment date (as amended), we are required to make principal payments of $275,000 with a balloon payment for~~and borrowings under the remaining $103.5 million due upon maturity. The Waiver and Amendment also increased the amount due upon prepayment or maturity by 15 basis points, applied to the aggregate principal amount of the Notes repaid. As of March 31, 2020, the total balance of the Notes was $107.7 million, accruing interest at a rate of 8.45%. Mandatory prepayments of the Notescredit facility will be required upon the occurrence of certain events, including sales of certain assets. We may redeem the Notes, in whole or in part, at any time at the applicable redemption price plus accrued and unpaid interest. The redemption price (as amended) is currently 101.65% through February 1, 2021, 100.65% through February 1, 2022, and 100.15% thereafter.

The Indenture governing the Notes contains customary representations and warranties, events of default, and positive and negative covenants. We are required to maintain financial covenants, including a total leverage ratio, which measures Consolidated EBITDA (as defined in the Indenture) against outstanding debt. The total leverage ratio maximum is 5.75x through September 30, 2020 and 5.50x from October 1, 2020 through December 31, 2020. As discussed above, we amended the Indenture to delete the total leverage covenant as of March 31, 2020, and waived certain other covenants under the Indenture. We are currently in discussions to amend the total leverage covenant for future quarters, reflecting the effects of the temporary closureguaranteed by all of our properties, but there is no guarantee that we will be successful in such efforts, in which case we may not be able to comply with such covenants in future periods. See Note 5 to the accompanying consolidated financial statements for more information aboutassets and guarantees by all of our ~~Indenture governing the Notes.~~subsidiaries.

Unsecured Loans Under the CARES Act. On May 8, 2020, ~~through~~ two of our wholly-owned subsidiaries ~~we executed promissory notes (the “Promissory Notes”) evidencing unsecured loans~~obtained the CARES Act Loans in the aggregate amount of ~~$5,606,200 through programs established under the CARES Act and administered by the U.S. Small Business Administration.~~$5.6 million. Such funds ~~will be~~were principally used ~~principally~~ to rehire several hundred employees at Rising Star and Bronco Billy’s in ~~preparation for~~advance of, and subsequent to, their reopenings in mid-June 2020 from the reopening of these businesses. The Loans were made through Zions Bancorporation, N.A. dba Nevada State Bank (the “Lender”), have a two-year term, bear interest at a rate of 1.00% per annum, and mature on May 3, 2022. Monthly principal and interest payments are deferred for six months. Beginning in December 2020, we are required to make monthly payments of principal and interest to the Lender. The Loans may be prepaid at any time prior to maturity with no prepayment penalties.mandated closures. Such ~~Loans~~unsecured loans may be forgiven, either in whole or in part, depending on the amount of such proceeds that are used for certain eligible expenses over a 24-week period, including primarily the payroll and health benefits of employees who ~~would~~might otherwise behave been without jobs or health benefits. ~~The details~~We intend to seek forgiveness of ~~such potential loan forgiveness are still being developed~~these loans, as permitted by the ~~Small Business Administration and~~legislation, but there is no certainty that any or all of such ~~Loans~~loans will be forgiven.

~~Interest Rate Cap Agreement.~~ ~~We maintain an interest rate cap (“Interest Rate Cap”) with Capital One, N.A. to minimize the effect of interest rate increases on roughly half~~See Note 5 of our outstanding borrowings with a notional amount of $50 million and strike rate of 3.00%, which resets every three months at the end of March, June, September, and December. The Interest Rate Cap expires on March 31, 2021 and is presented accordinglyCondensed Notes to Consolidated Financial Statements included in this quarterly report for details on our ~~consolidated balance sheet under “Deposits and other” as a non-current asset (see Note 5).~~debt obligations.

~~Common Stock Warrants.~~ In connection with the former Second Lien Credit Facility, we have warrants outstanding, representing rights to purchase approximately 1.0 million shares of our common stock. The warrants include redemption rights which allow the warrant-holders, at their option, to require us to repurchase all or a portion of the warrants upon the occurrence of certain triggering events. The refinancing of the Second Lien Credit Facility qualified as a triggering event. Accordingly, we have reclassified the obligation to current. As of the date of this filing, the Second Lien Lenders have not exercised such redemption rights. If they do exercise their redemption rights, we have the option of paying them in cash or with a four-year note on terms stipulated in the warrant agreement, or by registering and selling the shares related to the warrants through a public offering. See Note 6 to the accompanying consolidated financial statements for further information about these warrants which could affect our liquidity and capital resources.Other

~~Hyatt Option to Purchase our Leasehold Interest and Related Assets.~~ Our lease with Hyatt to operate the Grand Lodge Casino contains an option for Hyatt, which began on January 1, 2019, to purchase our leasehold interest and related casino operating assets. See Note 3 to the accompanying consolidated financial statements for further information about this option and related rental commitments that could affect our liquidity and capital resources, as well as our expanded lease disclosures in accordance with ASC 842 that was adopted on January 1, 2019.

~~Table of Contents~~

Capital Investments. In addition to normal maintenance capital expenditures, we ~~made~~intend to make significant capital investments through March 31, 2020, but have curtailed making any significant additional capital investments during the remainder of 2020 until we have a better understanding of our financial position in the midst of the COVID-19 pandemic, which halted our business operations in March 2020.

~~Bronco Billy’s.~~ As discussed above in the “Executive Overview,” we began Phase One of the two-phase expansion of our Bronco Billy’s property with our purchase of the Imperial Hotel in June 2018, along with other nearby parcels of land, and our lease of the Imperial Casino in August 2018. The remainder of Phase One includesrelated to the construction of ~~a 319-space parking garage and connector building. In March 2020,~~our Chamonix growth project in ~~light of~~Cripple Creek, Colorado, which is currently underway. We currently expect to invest approximately $50 million into the ~~COVID-19 pandemic, we suspended~~ construction of ~~the parking garage. We estimate that the remaining cost for Phase One’s parking garage is approximately $16 million. Whether or not we will~~Chamonix in 2021 and an additional $130 million in 2022, with its opening expected to be ~~able to complete the parking garage~~ in the ~~near future will depend on the length~~fourth quarter of ~~time that our casinos are closed, the operating results of our casinos when they reopen, and whether the capital markets are available to us at such future date.~~2022.

Other Capital Expenditures. Additionally, we may fund various other capital expenditure projects, depending on our financial ~~resources and subject to the impacts of the COVID-19 pandemic described herein.~~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.

Table of Contents

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.

~~COVID-19 Impact on Liquidity.~~ ~~As described in Notes 2~~Hyatt Option to Purchase our Leasehold Interest and ~~12, in March 2020, in their efforts~~Related Assets. Our lease with Hyatt to ~~control~~operate the ~~spread of COVID-19, various state governments temporarily closed each of~~Grand Lodge Casino contains an option for Hyatt to purchase our ~~casinos, which are currently expected to re-open in the schedule discussed above, subject to future developments.~~

We currently believe that, through our current cash balances, we have the liquidity necessary to sustain closure beyond the currently-mandated closure periods. To preserve liquidity, upon the temporary closure of our properties in March 2020, we significantly reduced staffing levels at each of our propertiesleasehold interest and at our corporate office from approximately 1,600 to approximately 30, in addition to a small number of surveillance and security personnel. We also elected to suspend construction of the Phase One parking garage at Bronco Billy’s, allowing us to use the cash designated for such construction to provide us with additional liquidity until our casinos are permitted to reopen. We also elected to defer one-third of management salaries until at least four of our casinos, including Silver Slipper Casino and Hotel, have reopened. In addition, to allow us to rehire several hundred employees at Rising Star and Bronco Billy’s in preparation for the reopening of these businesses, we obtained the Loans pursuant to programs established under the CARES Act, as discussed above. We cannot assure you that, should therelated casino closures extend for a prolonged period and require us to seek additional liquidity, we will be able to successfully raise additional funds. We will work diligently to reopen our casinos as soon as we are permitted to do so, with all of our casinos expected to have reopened by June 14, 2020. In connection with reopening our casinos, we anticipate that implementation of measures as a result of social distancing requirements will result in additional expenditures.

Because of the length of the look-forward period and the substantial items that are outside of its control, and despite its intent and best efforts to overcome the challenges in the current environment, management concluded that there is substantial doubt as to our ability to continue as a going concern. We are attempting to mitigate the impacts of COVID-19 on us through the plans described above.

~~Concessions Obtained for Certain Leases.~~ In our efforts to preserve cash, we were able to obtain rent concessions in the form of deferments and abatements totaling approximately $0.3 million. The $155,000 in rent forgiveness for the casino land lease at Silver Slipper and the $109,000 in deferrals for the finance lease at Rising Star would improve our liquidity through May 2020, while the remaining rent deferrals at Bronco Billy’s would not be due until December 1, 2021.operating assets. See ~~Notes~~Note 3 ~~and 12~~ to the accompanying consolidated financial statements for ~~details.~~

~~Table of Contents~~

further information.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

Critical Accounting Estimates and Policies

We describe our critical accounting estimates and policies in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Form ~~10‑K~~10-K for the year ended December 31, ~~2019.~~2020. We also discuss our critical accounting estimates and policies in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form ~~10‑K~~10-K for the year ended December 31, ~~2019.~~2020. There has been no significant change in our estimation methods since the end of ~~2019.~~

~~Accounting Election for Lease Deferments under COVID-19 Pandemic.~~ As a result of COVID-19, the Financial Accounting Standards Board (“FASB”), which governs U.S. GAAP, has offered companies the accounting election to apply guidance relief relating to lease concessions for business interruptions brought on by government-mandated closures. Companies can choose on a reasonable basis to either: (1) apply the modification framework for these concessions in accordance with the applicable codification to calculate lease remeasurements, or (2) forgo such remeasurements and account for the concessions as if they were made under the enforceable rights included in the original agreement.

In summary, we have elected to apply guidance relief as granted by FASB for certain rent deferments, as these concessions affect only the timing of payments. However, we will remeasure material leases in which we have been granted rent forgiveness, as these abatements reflect an actual reduction in amounts paid over the remaining term from our original lease measurement. See Notes 3 and 12 to the accompanying consolidated financial statements for details.2020.

Forward-Looking Statements

This Quarterly Report on Form ~~10‑Q~~10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. These forward-looking statements ~~include, but are not limited to, statements about our plans, objectives, representations and intentions. They are not historical facts and are typically~~can be identified by ~~the~~ use of terms such as “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “future,” “possible,” “seeks,” “may,” “could,” “should,” “will,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” ~~“there can be no assurance,~~“we cannot assure you,” “although no assurance can be given,” or “there is no way to anticipate with certainty.” ~~Specifically, this Quarterly Report on Form 10‑Q contains~~Examples of forward-looking statements ~~relating to (i)~~include, among others, statements we make regarding our plans, beliefs or expectations regarding our growth strategies; ~~(ii)~~ the impact of the COVID-19 pandemic and our expectations regarding timing of reopening of casinos in the respective states; (iii) our expectations regarding Loans obtained pursuant to programs established under the CARES Act, including our intended use of such Loans; (iv)coronavirus (COVID-19) pandemic; our development and expansion plans, including ~~a planned expansion of Bronco Billy’s, our budget~~the estimated commencement, completion and ~~ability to obtain financing~~opening timeline for ~~such expansion and~~ the ~~timing for commencement (or recommencement in the case of Phase One) or completion of each phase of such expansion; (v)~~new Chamonix casino hotel; our investments in capital improvements and other ~~projects; (vi)~~projects, including the amounts of such investments, the timing of commencement or completion of such capital improvements and projects and the resulting impact on our financial results; our sports ~~wagering~~revenue agreements with third-party providers, including the expected revenues and expenses ~~duration of terms~~ and the expected timing for the launch ~~and commencement~~ of the sports betting ~~operations in~~“skins” related thereto; the ~~respective locations; (vii)~~Waukegan proposal, including our ability to obtain the casino license and, if we are awarded such license, to obtain financing; management’s expectation to exercise its buyout option on the Silver Slipper Casino and Hotel; the adequacy of our financial resources to fund operating requirements and planned capital expenditures and to meet our debt and contractual obligations; our expectations regarding the ~~Waukegan proposal; (viii)~~refinancing of our ~~expectations regarding~~principal debt; our anticipated capital expenditures; our intentions to ~~implement new marketing plans upon certain casino reopenings and~~seek forgiveness of the CARES Act Loans; our beliefs regarding compliance with our liquidity and financial covenants; our intentions regarding the ~~benefit of such plans to the properties’ long-term expense structure; (ix) our estimated operating requirements, including as a result~~use of the ~~impact of COVID-19; (x)~~net proceeds from the Equity Offering; the anticipated or potential legislative actions; our ~~belief~~beliefs in connection with our marketing efforts; the factors that ~~through our current cash balances, we have~~affect the liquidity necessary to sustain closure beyond the currently-mandated closure periods; (xi) our expectations regarding improvements as a result of the new slot systems at Rising Star and Bronco Billy’s; (xii) our intention to focus on improving our operating margins; (xiii) anticipated expenditures as a result of COVID-19 upon reopeningfinancial performance of our ~~casinos ; (xiv) our belief regarding our CEO’s current intention not to sell his shares; (xv) our beliefs regarding~~properties; the adequacy of our insurance; ~~(xvi)~~the competitive outlook; our expectations regarding the outcome of legal ~~matters and~~matters; the impact of ~~recently-issued~~recently issued accounting standards; ~~and (xvii)~~ our estimates regarding the cash used in our day-to-day operations; and ~~expectations~~our estimates regarding certain accounting and tax matters, ~~including estimated savings as a result of the new gaming tax schedule,~~ among others.

3433

Table of Contents

~~Various matters may affect~~Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the ~~operation, performance, development and results~~future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause ~~future outcomes~~our actual results and financial condition to ~~change significantly~~differ materially from those ~~set forth~~indicated in ~~our~~the forward-looking statements ~~including the following risks, uncertainties~~include, among others:

Risks Related to our Business and ~~other factors:~~Operations

●

The outbreak of COVID-19 (coronavirus), which has significantly impacted the global economy, including the gaming industry.

●

A prolonged closure of our casinos would negatively impact our ability to ~~repay~~service our ~~substantial indebtedness;~~

debt.

●

~~the adverse impact of the COVID-19 pandemic on our business, constructions projects, financial condition~~Significant competition from other gaming and ~~operating results, including on our ability to continue as a going concern;~~

entertainment operations.

●

~~actions by government officials at the federal, state or local level with respect~~Revenue declines if discretionary consumer spending drops due to ~~steps to be taken, including, without limitation, temporary shutdowns, travel restrictions, social distancing and shelter-in place orders, in connection with the COVID-19 pandemic;~~

an economic downturn.

●

~~our ability to effectively manage and control expenses during temporary or extended shutdown periods;~~

~~the impact of temporary or extended shutdowns on our ability to maintain compliance with the terms and conditions~~The inability of our ~~indenture and other material contracts;~~

~~our ability to maintain strong relationships with our regulators, employees, lenders, suppliers, customers, insurance carriers, and other stakeholders;~~

~~our ability to successfully implement social distancing and other safety measures and to protect our workforce and guests upon~~contracted sports betting parties, through the ~~reopening~~use of our ~~casinos;~~

~~changes by the~~ ~~SBA~~ ~~or other governmental authorities regarding the CARES Act, loan programs established under the CARES Act, or related administrative matters;~~

~~our ability~~permitted website “skins,” to ~~comply with the terms of the Loans and the CARES Act~~ ~~and to use the Loans in a manner that results in forgiveness of some or all of the Loans~~;

~~the availability of forgiveness of the Loans in whole or in part;~~

~~the impact of any uninsured losses;~~

~~disruptions in our supply chain;~~

~~disruptions or shortages in our labor supply;~~

~~the adverse impact of cancellations~~compete effectively, their inability and/or ~~postponements of hotel stays, live entertainment events and small meeting groups on our business, market position, growth, financial condition and operating results.~~

~~changes in guest visitation or spending patterns due to health or other concerns;~~

~~substantial dilution related to our outstanding stock warrants and options;~~

~~implementation of our growth strategies, including the Bronco Billy’s expansion, capital investments and potential acquisitions;~~

risks related to development and construction activities (including disputes with and defaults by contractors and subcontractors; construction, equipment or staffing problems; shortages of materials or skilled labor; environment, health and safety issues; and unanticipated cost increases);

~~Table of Contents~~

risks related to entering into sports betting operations, including our ability to establish and maintain relationships with key partners or vendors, the ability and/or willingness of our sports wagering providersunwillingness to sustain sports betting operations should they experience an extended period of unprofitability, and ~~the ability~~our inability to replace existing partners or vendors on similar terms as our existing revenue ~~guarantees;~~

guarantees.

●

Marine transportation is inherently risky, and insurance may be insufficient to cover losses that may occur to our assets or result from our ferry boat operations.

●

We derive our ~~ability~~revenues and operating income from our casino resort properties located in Mississippi, Colorado, Indiana and Nevada, and are especially subject to ~~successfully implement our sports betting operations~~certain risks, including economic and competitive risks, associated with the conditions in those areas and in the ~~anticipated time frame~~states from which we draw patrons.

●

If the lessor of Grand Lodge Casino exercises its buyout rights or if we default on this or on certain other leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino.

●

Adverse weather conditions, road construction, gasoline shortages and other factors affecting our facilities and the areas in which we operate could make it more difficult for potential customers to ~~accurately forecast its impact~~travel to our properties and deter customers from visiting our properties.

●

The occurrence of natural disasters, such as hurricanes, pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus pandemic, or other catastrophic events, including war, terrorism and gun violence.

●

Several of our properties, including Silver Slipper, Bronco Billy’s and Rising Star, are accessed by our customers via routes that have few alternatives.

●

We may incur property and other losses that are not adequately covered by insurance.

●

We depend on our ~~cash flows;~~

key personnel.

●

~~delays~~Higher wage and benefit costs, including a potential increase in ~~timing for Colorado regulators to begin allowing sports betting;~~

the federal minimum wage.

●

Rising operating costs at our gaming properties.

●

We face the risk of fraud and cheating.

●

Win rates for our gaming operations depend on a variety of factors, some beyond our control.

●

The concentration and evolution of the slot machine manufacturing industry could impose additional costs on us.

●

Our business may be adversely affected by legislation prohibiting tobacco smoking.

●

We are subject to risks related to ~~entering into the sports wagering agreements,~~corporate social responsibility and reputation.

Risks Related to Development and Growth Opportunities

●

We are often involved in one or more construction and development projects, including the ~~ability of~~new Cripple Creek casino hotel, and many factors could prevent us from completing them as planned.

●

The construction costs for the ~~parties~~new Cripple Creek casino hotel may exceed budgeted amounts plus contingencies, which may result in insufficient funds in the construction reserve account to ~~perform their obligations under~~complete the ~~respective agreements;~~

project and may result in the Company accessing its unrestricted cash or other resources to complete the project. There is no certainty that such resources will be available.

●

There is no assurance that new Cripple Creek casino hotel will not be subject to additional regulatory restrictions, delays, or challenges.

~~the impact that any discontinuance, modification or other reform of LIBOR, or the establishment of alternative reference rates, may have on~~ ~~our LIBOR-based debt instruments such as our senior secured notes;~~

~~commerciality of our ferry boat service and risks associated with ferry boat operations;~~

~~our ability to successfully integrate acquisitions;~~

~~our ability to continue to comply with the covenants and terms of our debt instruments;~~

~~the development and success of our expansion projects and the financial performance of completed projects;~~

~~our ability to continue to comply with covenants and the terms of our debt instruments;~~

~~some of our casinos being on leased property;~~

~~changes to anticipated trends in the gaming industries;~~

~~changes in patron demographics;~~

~~general market and economic conditions including, but not limited to, the effects of housing and energy conditions on the economy in general and on the gaming and lodging industries in particular;~~

~~our ability to access capital and credit upon reasonable terms, including our ability to finance future business requirements and to repay or refinance debt as it matures;~~

~~our dependence on key personnel;~~

~~our ability and the cost to hire, motivate and retain employees, given low unemployment rates and, in some jurisdictions, increases in minimum wages;~~

~~availability of adequate levels of insurance;~~

~~changes to federal, state, and local taxation and tax rates, and gaming, health and safety and environmental laws, regulations and legislation;~~

~~any violations of the anti-money laundering laws;~~

~~cyber-security risks, including misappropriation of customer information or other breaches of information security;~~

3634

Table of Contents

●

There is no assurance that the new Cripple Creek casino hotel will be successful.

●

Failure to comply with the terms of our disbursement agreement could limit our access to funds.

●

We face a number of challenges prior to opening new or upgraded facilities.

●

We may face disruption and other difficulties in integrating and managing facilities we have recently developed or acquired, or may develop or acquire in the future.

●

The construction of the new Cripple Creek casino hotel may inconvenience customers and disrupt business activity at the adjoining Bronco Billy’s casino.

●

Additional growth projects or potential enhancements at our properties may require us to raise additional capital.

●

The casino, hotel and resort industry is capital intensive and we may not be able to finance expansion and renovation projects, which could put us at a competitive disadvantage.

●

Our ability to receive regulatory approvals required to complete certain acquisitions, mergers, joint ventures, and other developments, as well as other potential delays in completing certain transactions.

●

Failure to obtain necessary government approvals in a timely manner, or at all.

●

Insufficient or lower-than-expected results generated from our new developments and acquired properties.

Risks Related to our Indebtedness

●

Our significant indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations.

●

Restrictive covenants and limitations in our debt facilities that could significantly affect our ability to borrow additional funds and/or operate our business and could lead to events of default if we do not comply with the covenants.

●

Our inability to generate sufficient cash flow to service our indebtedness and fund our operating expenses, working capital needs and capital expenditures.

●

We depend on our subsidiaries for certain dividends, distributions and repayment of our indebtedness.

●

Our ability to obtain additional financing on commercially reasonable terms may be limited.

●

The obligations under the 2028 Notes are collateralized by a security interest in substantially all of our assets, so if we default on those obligations, the holders of the 2028 Notes could foreclose on our assets.

●

Our loans under the CARES Act may be subject to regulatory review.

●

We and ~~maintain~~our subsidiaries may still be able to incur substantially more debt.

Risks Related to our Legal and Regulatory Environment

●

We face extensive regulation from gaming and other ~~licenses,~~regulatory authorities and ~~obtain entitlements~~the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations.

●

Changes in legislation and regulation of our business.

●

Stockholders may be required to dispose of their shares of our common stock if they are found unsuitable by gaming authorities.

●

We are subject to environmental laws and potential exposure to environmental liabilities.

●

We are subject to litigation which, if adversely determined, could cause us to incur substantial losses.

●

Our ferry boat service is highly regulated, which can adversely affect our operations.

Risks Related to Technology

●

Our gaming operations rely heavily on technology services and an uninterrupted supply of electrical power, and if we experience damage or service interruptions, we may have to cease some or all of our operations.

●

Our information technology and other ~~regulatory approvals~~systems are subject to cyber-security risk, misappropriation of customer information and other breaches of information security.

General Risks

●

Our ability to utilize our net operating loss, or NOL, carryforwards and certain other tax attributes may be limited.

●

The market price for ~~projects;~~

our common stock may be volatile, and investors may not be able to sell our stock at favorable prices or at all.

●

The exercise of outstanding options to purchase common stock may result in substantial dilution and may depress the trading price of our common stock.

Table of Contents

~~the impact of severe weather;~~

●

~~lack~~The other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of ~~alternative routes to certain~~Financial Condition and Results of Operations” of our ~~properties;~~

Annual Report on Form 10-K for the ~~competitive environment, including increased competition~~year ended December 31, 2020. In addition, you should consult other disclosures made by us (such as in our ~~target market areas;~~

~~substantial dilution related~~other filings with the SEC or in company press releases) for other factors that may cause actual results to ~~our outstanding stock warrants~~differ materially from those projected by us. You should read this Form 10-Q, and ~~options;~~

the ~~outcome of litigation matters;~~

~~marine transportation risks, including disasters, accidents, damage, injury, death~~documents that we reference in this Form 10-Q and ~~spills;~~

~~our ability to successfully estimate~~have filed with the ~~impact of certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements;~~

the timing and effectiveness of the introduction of sports wagering in Indiana and Colorado, as well as the scale, speed and effectiveness that the parties with which we have contracted will introduce and market their respective sports wagering services;

the potential for any of the parties with which we have contracted for sports wagering to terminate their agreements prior to the expiration of their term (such as through bankruptcy, sustained unprofitability of their online/mobile operations, a court ruling that overturns the legality of sports wagering in Indiana or Colorado, or their purchase of a physical casino in Indiana or Colorado with a competing online/mobile sports wagering application, subject to an extended non-compete period),SEC, and our ~~ability to replace such party~~Annual Report on Form 10-K for the year ended December 31, 2020, with ~~another third-party on similar financial terms~~the understanding that our actual future results, levels of activity, performance, and ~~in a timely manner;~~events and

circumstances may be materially different from what we expect.

~~other factors described from time to time in this and our other SEC filings and reports.~~

We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events or conditions, except as required by law. New risks emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures — As of March 31, ~~2020,~~2021, we completed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rule ~~13a‑15(e)~~13a-15(e) and ~~15d‑15(e)~~15d-15(e)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, ~~2020,~~2021, our disclosure controls and procedures are effective at a reasonable assurance level in timely alerting them to material information relating to us, which is required to be included in our periodic SEC filings.

We have established controls and procedures designed at the reasonable assurance level to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated

~~Table of Contents~~

and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting — There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions and other matters arising in the normal course of business. We do not believe that the final outcome of these matters will have a material adverse effect on our consolidated financial position or results of operations. We maintain what we believe is adequate insurance coverage to further mitigate the risks of such proceedings.

Item 1A. Risk Factors

~~In addition to~~There were no material changes from the risk factors ~~previously disclosed in~~set forth under Part I, Item 1A “Risk Factors” section of our Annual Report on Form ~~10‑~~10 K for the year ended December 31, ~~2019, the following risk factor was identified:~~2020.

~~Our loans under the CARES Act may be subject to regulatory review.~~

On May 8, 2020, two wholly-owned subsidiaries, each of which has less than 500 employees, executed promissory notes, each with a two-year term, evidencing unsecured loans in the aggregate amount of $5,606,200 through programs established under the CARES Act and administered by the U.S. Small Business Administration. Such program was established for companies like ours, which have been heavily impacted by the pandemic, and encourages us to retain or rehire employees who would otherwise be unemployed, which we are doing. The application for the unsecured loans required us to certify, among other things, that the current economic uncertainty made the loan requests necessary to support our ongoing operations. We made this certification in good faith after analyzing, among other things, our financial situation (including our relatively small size and high leverage) and our lack of access to alternative forms of capital in light of the required closure of all of our operations, the uncertain dates at which we can open, and the uncertainty of business levels that will be obtained after we reopen. We believe that we satisfied all eligibility criteria for the loans. However, the certification required in the CARES Act application includes subjective criteria and is subject to interpretation. Others may interpret the criteria differently. If we are subsequently found to have been ineligible to receive the loans, we may be required to repay the loans prior to their maturity. We may also be subject to certain penalties with respect to the loans. In the event that we seek forgiveness of all or a portion of the loans, we will also be required to make certain certifications which will be subject to audit and review by governmental entities. The rules regarding such potential forgiveness are not yet clear and there is no certainty that any or all of the loans will be forgiven. Any of these events could harm our business, results of operations and financial condition.

3836

Table of Contents

~~Item 5. Other Information~~

~~Item 1.01 Entry into a Material Definitive Agreement.~~

On May 8, 2020, Gaming Entertainment (Indiana) LLC and FHR-Colorado LLC (“Borrowers”), subsidiaries of the Company, each executed a promissory note (collectively, the “Promissory Notes”) evidencing unsecured loans in the aggregate amount of $5,606,200 through programs established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). Each of those subsidiaries had fewer than 500 employees on average over the 12 month period prior to shutdown and has an NAICS code beginning with 72. A provision of the CARES Act allows certain businesses with an NAICS code of 72 to qualify for SBA loans even if those businesses, when combined with their affiliates, have more than 500 employees. The Loans were made through Zions Bancorporation, N.A. dba Nevada State Bank (the “Lender”) and were funded on May 8, 2020.

The Loans have a two-year term and bear interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred for six months. Beginning in December 2020, the Borrower is required to make monthly payments of principal and interest to the Lender. The Loans may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Notes mature on May 3, 2022.

The Promissory Notes contain customary events of default relating to, among other things, payment defaults, making materially false and misleading representations to the SBA or Lender, or breaching the terms of the Loan documents. Upon an event of default, the Lender may require immediate payment of all amounts owing under the respective Promissory Notes, collect all amounts owing from the respective Borrowers, or file suit and obtain judgment.

Under the terms of the CARES Act, all or a portion of these loans may be forgiven. Such forgiveness will be determined, subject to certain limitations, based on the use of loan proceeds for payment of certain eligible expenses, including primarily the payroll and health benefits of employees who would otherwise be without jobs or health benefits, as well as payments of mortgage interest, rent, and utilities. Such limitations include reductions in forgivable amounts if the Borrowers reduce the number of employees or certain wages, as well as the limitation that no more than 25% of the amount forgiven can be attributable to non-payroll costs. We will be obligated to repay any portion of the principal amount of the Loans that are not forgiven, together with accrued interest. We intend to use the Loans for qualifying expenses, and will continue to assess whether to apply for forgiveness of the Loans in accordance with the terms of the CARES Act. However, we cannot assure you that we will be eligible for forgiveness of all or any portion of the Loans.

The foregoing description of the Promissory Notes does not purport to be complete and is qualified in its entirety by reference to the copy of the Promissory Notes attached as Exhibit 10.2 and Exhibit 10.3 to this Quarterly Report on Form 10-Q, which are incorporated herein by reference.

~~Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.~~

~~The information set forth under Item 1.01 and Exhibit 10.2 and Exhibit 10.3 are incorporated herein by reference.~~

~~Table of Contents~~

Item 6. Exhibits


Exhibit Number		Description
4.1		~~Waiver and Third Amendment to~~ Indenture (including form of Notes), dated as of ~~April 28, 2020, by~~February 12, 2021, among the Company, the guarantors party thereto and ~~among Full House Resorts, Inc.,~~ Wilmington Trust, National Association, ~~and the Guarantors (as named therein)~~as trustee (incorporated by ~~reference~~referenced to Exhibit 4.1 to the Company’s Current Report on Form 8-K (SEC File No. 1-32583) filed on ~~April 29, 2020).~~February 12, 2021.
10.1*10.1		~~Fourth Amendment to Lease~~Credit Agreement, ~~with Option to Purchase~~ dated as of March ~~20, 2020,~~31, 2021, among the Company, as borrower, the subsidiary guarantors party thereto, the lender parties thereto, and Capital One, National Association, as administrative agent (incorporated by ~~and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.~~
10.2*		~~Promissory Note, dated as of May 8, 2020, by Gaming Entertainment (Indiana) LLC in favor of Zions Bancorporation, N.A. dba Nevada State Bank.~~
10.3*		~~Promissory Note, dated as of May 8, 2020, by FHR-Colorado LLC in favor of Zions Bancorporation, N.A. dba Nevada State Bank.~~referenced to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 1-32583) filed on March 31, 2021).
31.1*		Certification of principal executive officer pursuant to Exchange Act Rule ~~13a‑14(a)~~13a-14(a)/15(d)~~‑14(a)~~-14(a), as adopted pursuant to ~~Secti~~onSection 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of principal financial officer pursuant to Exchange Act Rule ~~13a‑14(a)~~13a-14(a)/15(d)~~‑14(a)~~-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of principal executive officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of principal financial officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation
101.DEF*		XBRL Taxonomy Extension Definition
101.LAB*		XBRL Taxonomy Extension Labels
101.PRE*		XBRL Taxonomy Extension Presentation

* Filed herewith.

** Furnished herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FULL HOUSE RESORTS, INC.

Date: May ~~13, 2020~~11, 2021	By:	/s/ DANIEL R. LEE
		Daniel R. Lee Chief Executive Officer (on behalf of the Registrant and as principal executive officer)


Date: May ~~13, 2020~~11, 2021	By:	/s/ LEWIS A. FANGER
		Lewis A. Fanger Chief Financial Officer (on behalf of the Registrant and as principal financial officer and as principal accounting officer)

4038


		Page
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Changes in Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Condensed Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2221
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3736
Item 4.	Controls and Procedures	3736

PART II OTHER INFORMATION
Item 1.	Legal Proceedings	3836
Item 1A.	Risk Factors	38
~~Item 5.~~	~~Other Information~~	3936
Item 6.	Exhibits	4037


Signatures		4038


Three Months Ended March 31, 2020
(In thousands)

									Adjusted
									Property
	Operating		Depreciation		Project				EBITDA and
	Income		and		Development		Stock-Based		Adjusted
	(Loss)		Amortization		Costs		Compensation		EBITDA
Casino properties
Silver Slipper Casino and Hotel	$	988	$	843	$	—	$	—	$	1,831
Rising Star Casino Resort		(1,715)		622		—		—		(1,093)
Bronco Billy's Casino and Hotel		(865)		387		—		—		(478)
Northern Nevada Casinos		(540)		150		—		—		(390)
		(2,132)		2,002		—		—		(130)
Other operations
Corporate		(1,296)		38		56		83		(1,119)
	$	(3,428)	$	2,040	$	56	$	83	$	(1,249)