Full House Resorts (NASDAQ: FLL ) is rapidly emerging in the Illinois casino market, which is billed as one of the largest in the U.S. outside of Nevada.
The operator set up a temporary version of AmericanPlace in Waukegan, Illinois, which quickly became the third most popular gaming venue in the state. It ranks sixth in monthly adjusted gaming revenue, according to data provided by the Illinois Gaming Commission (IGB).
The Waukegan casino draws an average of 70,107 visitors per month, 321 more than Hollywood’s Aurora and 1,812 more than Queen’s DraftKings at St. Louis East casino, according to Steve Sadin of the Chicago Tribune. Both casinos opened in 1993.
Des Plaines-based Rivers Casino is the Illinois leader based on attendance and monthly adjusted gross gaming revenue. IGB noted that TheTemporary averaged $7.5 million in monthly gross receipts, showing the quick start of Full House’s newest property. The gaming assets of the temporary venue will be transferred to the permanent venue after the permanent venue opens. The Plaza America in Lake County, Illinois, will be the only casino in the county, which is home to more than 700,000 residents.
American Place Critical
With football season just around the corner, CircaSports plans to roll it out in Illinois and partner with FullHouse to do it. Therefore, attendance at TheTemporary is likely to increase in the short term.
Circa will operate a retail sports betting operation at the Plaza America upon completion, bringing one of the biggest names in Las Vegas sports betting to the state of Illinois. Circa’s arrival could add to the strength of the venue, and leveraging its strengths, FullHouse could bring in more revenue from Circa than the other properties in its portfolio combined.
According to one analyst, once visitors are in The Temporary, they’re more likely to visit America’s Plaza before coming to the venue.
Therefore, we believe FLL may increase marketing spending to drive foot traffic, according to B. Riley analyst David Bain in a recently released note. Once customers arrive, we believe the property will continue to attract repeat and regular guests who are spending above the industry average (we remain bullish on Waukegan, just stretched to the ceiling). Although after the change, FLL’s growth rate is still at a relatively high level in the industry, its valuation shows a price-to-earnings ratio close to the industry’s lowest level.
Bain rates FullHouse a “buy” and has a $13 price target. That said it expects shares to rise more than 100%, above Thursday’s closing price of $6.31.
The Temporary Providing Economic Benefits
One of the main reasons Illinois signed on to the gaming expansion was the state’s dire need for funding. We are actively promoting the payment of temporary wages.
The FullHouse venue has brought in $3.5 million in new revenue for the state since it opened, as well as $1.5 million in new revenue for North Chicago, Park City and Waukegan, according to the Tribune.
Those numbers are likely to keep rising in the near term as Circa sportsbooks and new restaurants are added. The expansion of American Square will provide a huge boost to this growth, allowing those numbers to climb significantly.
