Illinois is set to welcome Circa Sports in the upcoming few months, as announced by a full house.
NASDAQ's Full House Resorts (FLL) recently reported its fourth-quarter results, shedding light on the planned launch of its temporary gaming venue in Waukegan, Illinois. Notably, this includes updates on the anticipated launch of Circa Sports in the state.
Back in May, Circa announced its intent to establish a presence in Illinois through a deal with Full House. This agreement grants Circa the rights to operate a retail sportsbook at Full House's upcoming American Place casino hotel in Waukegan and offer mobile sports betting statewide. The Illinois launch of Circa Sports is eagerly awaited by both the operator and enthusiastic bettors alike.
Lewis Fanger, Full House's CFO, commented during a conference call that, assuming normal gaming approvals are secured, Circa Sports could go live in Illinois in the "next few months." Derek Stevens, Circa's founder and owner, previously expressed optimism about the company's Illinois operation, but could not provide an exact timeline. If Fanger's prediction holds true, it suggests that Circa will start taking bets in Illinois before the 2023 football season.
American Place Poised to Bolster Full House Shares
Despite some initial hurdles with the temporary gaming venue in Waukegan, analysts anticipate that the permanent version of American Place will be a substantial catalyst for Full House shares, potentially enhancing earnings before interest, taxes, depreciation, and amortization (EBITDA) and gross gaming revenue (GGR).
Management expressed confidence that margins might increase faster than forecast due to the fixed cost structure of the temporary facility, and they projected long-term EBITDA margins of 40%, exceeding the current estimate of 37%. Preliminary checks suggest that Waukegan GGR has quickened over the past week to a run-rate of over $105M in GGR.
According to B. Riley analyst David Bain, American Place will be larger than the present combination of Full House properties. The expected launch of the company's Chamonix casino hotel in Cripple Creek, Colorado, later this year is also anticipated to contribute significantly to the operator's financials.
Bain reiterated a "buy" rating and a $14 price target on the stock, suggesting potential upside of around 40% from the March 7 close.
**The upcoming American Place will trump the current total size of the company. The anticipated launch of Full House's Chamonix casino hotel in Cripple Creek, Colorado, later this year is also projected to be a significant contributor to the operator's revenue and profits.
Bain further noted, "FLL’s growth rate and valuation multiple are at polar opposites, leaving us bullish on Chamonix’s near-term impact on FLL’s share price.”
In addition to American Place and Chamonix, Full House manages gaming properties in Nevada, Indiana, Bronco Billy’s in Cripple Creek, and the Silver Slipper in Mississippi.
Full House Updates on Sports Betting Skins
For some time, Full House has pursued sports wagering skins as a significant revenue source.
To clarify, once Circa goes live, the total annualized minimum revenue from all six of Full House's sports skin agreements will amount to $10 million. Half of this revenue comes from the agreement with Circa, which is particularly valuable due to Illinois' large population and limited sports skins in the state.
Fanger added that Full House still has a remaining skin in Indiana it could offer to a third party or retain for itself. Circa was not mentioned in connection with Full House's Indiana skin. As Circa expands, Indiana could be an attractive market for the company.
