Good day, and welcome to the Full House Resorts First Quarter Earnings Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Lewis Fanger, Chief Financial Officer of Full House Resorts. You may now begin.

Thank you. Good afternoon, everyone. Welcome to our first quarter earnings call. As always, before we begin, let we remind you that today’s conference call may contain forward-looking statements that we’re making under the Safe Harbor provision of Federal Securities Laws. I would also like to remind you that the company’s actual results could differ materially from the anticipated results in these forward-looking statements. Please see today’s press release under the caption forward-looking statements for the discussion of risks that may affect our results. Also, we may make reference to non-GAAP measures such as adjusted EBITDA or a reconciliation of those measures, please see our website, as well as the various press releases that we issue. And lastly, we’re also broadcasting this conference call at fullhouseresorts.com, where you can find today’s earnings release, as well as all of our SEC filings. And with that said, Dan, I had few notes on the properties. Do you want me to go into those really quick? Starting over the Silver Slipper, we did have another great quarter with revenue up 17% and adjusted property EBITDA up 33%. That's despite a significant expansion that occurred in the middle of last year, and much of that boost really came from two things. One, last year we had really bad winter and if you recall last year, we had freezing temperatures which led to slippery road and highway closures on the way to our property, but just as importantly last year about this time we led an operational review, just trying to find new way to get work done. And those efficiencies from a year ago really set this quarter up well for success. At Bronco Billy, we had bad weather after long time. So if you look at March 29th as an example, we had…

I'll just expand then a few things. It's rare that everything operates like all cylinders, and that's true this time. We had a strong quarter at the Silver Slipper and kind of a weak quarter at the other three. So foreseeing Silver Slippers is most important property and it did extremely well. And I think the quarter was the best in that property's 10-year history. And so I am pretty happy with that. Part of that reflects the stuff we've built recently the oyster bar which opened a little over a year ago. The beach club was just opened a little over a year ago kind matured and they're now standard parts of property. We upgraded the economy slot system in September- October. It was pretty significant upgrade, investment over $1 million but allows us to do more marketing things. And we've always been very accretive with our marketing there. And all of this was achieved despite the fact that Island View added that a big expansion last summer. We're not done yet either. In fact this month for refurbishing the casino the first time since the property opened which is new carpeting, new wallpaper and new spot stands and so on, also almost a $1 million. So and then we continue to work in getting entitlements to eventually at another hotel tower. They're still ways off but we're working towards it. And we'll keep you posted on that. At just Rising Sun next, like Lewis said, better weather, one of the things we're finding with this ferry is the number of cars that show up to take it depends a lot on the weather. It's a little bit surprising because 2,000 feet across the river, the ferries just as fast whether it's raining or sunny, but I guess people…

Yes. We're sitting at $98 million - $97.50 million, $98.75 million of debt this tack on that you mentioned Dan will be an incremental 10 on top of that. So bill will shy [1/10]

It was kind of interim; we needed the Indiana Gaming Commission's approval as we do for almost everything. And in that discussion they said well so how levered are you? I said, well, we're a lot less lever than Caesars. They started laughing. They said but please don't use Caesars as your modicum of financial propriety. And I said, no, we don't, but we are probably less levered than other licensees in Indiana as well probably a little more levered than I would normally like to be, but I hope we can get de-levered through growth and we did this at Mirage. We did it at Pinnacle. Where you go and build something that might cause your leverage to go up in the mean time, but then when it comes on stream and does 20% cash on cash return or something then ultimately you come out of that with less leverage than you had before. So at Mirage, we were highly levered when we built Treasure Island and when we built Bellagio. And when Bellagio opened we were investment grade. So I don't think we're going to get to investment grade any day soon, but that is the goal. And I think our balance sheet is in far better shape than it was four years ago, and it will continue to get better although the leverage will go up and down as we build different things. So, yes, we're ready for questions right.

Yes. Let's take some questions, Anna.

[Operator Instructions] We take our first question from David Bain from ROTH Capital. Please go ahead.

Great. Thank you. First, I know you reviewed several one-time issues hitting the first quarter EBITDA. And I know you did quantify that the Grand Lodge hold impact I think it was $320,000. But have you done any other impact analysis by property? Maybe like a weather ad back at Bronco Billy or any big-picture adjustment for the quarter?

Well, I mean clearly if you adjusted for weather we would have been up instead of down a little bit Bronco Billy's.

It is about $600,000 and swing factor.

In revenue or --

In revenue.

And then you take out the gaming tax rates pretty low there. So most of that would fall to the bottom line. And the Rising Star, it is little tougher to quantify but because highway disruptions come and go, and it's hard to know exactly what that influences. But I think I think if the ferry had operated every day in February which it just couldn't because river was flooded. And if the main road there wasn't under construction, we probably would have been up there as well, but hard to quantify.

Okay.

Quite obviously it is rarely in a quarter does every property operates -- occasionally we get a quarter where everything works but there are almost always pluses and minuses and if you're going to have a quarter with one property does well and three just do math, you want the one property to be Silver Slipper so.

Okay. And then I was trying to better encapsulate your chances in Terre Haute and my understanding at least is that first Spectacle entertainment would need to close one of its casinos likely and Gary and then voters need to approve in the county which obviously seems likely. But I guess the question is if the other competitor does close one of their casinos allowing for the additional license does that imply any sort of consideration from the Gaming Board or just put them on equal footing with other bidders? I know that there the game works I know like tax contributor, so they want more tax right to them but the media seems to make it seem like they'd be frontrunners their competitor. I am just trying capsulate that.

This has been all over the place during the legislative session. And so for a while there it was designed that Spectacle got it, just got it handed to him for a while there. And then it was Spectacle would have some advantage in going for it. In the end Spectacle did-- does come out of it, if it becomes law with a pretty significant win in that they have two licenses and Gary that --it's the old truck boat which was run about as well as he's running federal government. And the majestic star and they're out across the way from each other went through bankruptcy ended up controlled by Wayzata and then Wayzata was a high-yield distress debtor, sold it to Spectacle. And Spectacle gets to combine those two licenses and relocate it from-- right now to get to it, it's in this strange little Harbor that is behind a bunch of abandoned steel factories. And then once you park you have to go over railroad lines, levee, it's a very, very complicated convoluted property. And it is coming from Chicago, not only does Chicago have its own casinos of course in the suburbs of Chicago, but then you pass Haman and then you pass the Penn facility and that in Chicago and then you get to Gary. Well, they get to relocate and build a casino right up interstate 80 still on Gary but a far, far better location and I believe they have to pay $50 million up front and consolidate their licenses. Don't holds me to that, David, you can look up the bill, but that's a pretty big win for them because that would be a great location. Chicago is still an underserved market. And they walk away with that. They ended up without…

I'll do my real-time fact check $20 million is what he paid not $50 million.

$20 million, okay. So Spectacle come out of this with a pretty big win in the northern part of the state, but you're right through a lot of -- some of those press articles reflected the state of the bill as it worked, it's worth, as it worked its way through the legislature, it finally went to a joint committee and what came out of the committee actually doesn't give them any advantage in Terre Haute. And I know Alex was on the line. Did I say anything incorrect, Alex?

No, that's right, Daniel. It's $20 million and they do have to surrender that second license as soon as they apply for the relocation within Gary. That's the second license that's [Indiscernible] to sign Terre Haute and they give tax credit in exchange for surrendering that second license but yet the decisions made by the Gaming Commission.

Yes. So we don't have to like if we were to get Terre Haute, we don't have to close Rising Sun to do it. We're not moving a license. It's a totally license.

We take our next question from Chad Beynon from Macquarie. Please go ahead.

Hi. Good morning. Thanks for taking my question. Dan, you finished your prepared remarks or before Q&A remarks related to leverage. You also talked about a lot of good updates here and organic growth and some good opportunities. It does sound like there are some assets for sale in kind of this sub $30 million to $40 million EBITDA range. They are just too small for some of the bigger companies that have all consolidated here. So what's your appetite for potential more M&A? I know you've done a couple small tuck-ins over the last couple years, but should we think about the near-term vision as head down and kind of focus on everything that you've talked about, or if one of these assets came along at the right price and you can get the financing with either a partner on your balance sheet that this could be something to kind of bolt-on to your current business. Thanks.

Lewis just reminded me that we signed an NDA around here about twice a month. So there are a lot of acquisition opportunities. We look at Bronco Billy's is after all is an acquisition that we did and so we will do an acquisition if it makes sense. A lot of times the stuff that the bigger companies are trying to shed are declining properties, and you end up looking at them and trying to figure what the hell you do with them. And there's a few that we've gone and looked at, and said, oh my god, this would be a quagmire. And so but yes if we see something that makes sense where we think we can add value to it and do something with it, where we think the Arcade is one with potential like Colorado, sure would look at acquisitions. We look at them all the time, but I --but we're pretty selective and we got a pretty sharp pencil. So I wouldn't buy the stock because you think we're going to do brilliant acquisitions, but we will do them when we see them.

The stack is as tall at me, Chad.

Okay, thank you, perfect. And then, okay, so related to Colorado. At what point will we have more details on the Phase two budget? I think you said you would start construction at the end of phase one which should be about a year from now. So what point do you kind of finalize the budget go forward and announce it to the street where we can put more pen to paper on what type of returns are, EBITDA generation you can get from this?

Well, with the $15 million being done now that would leave about a $115 million with the bigger reserve maybe $120 million to go on Phase two. That's a soft budget; you can use that number just for your own math. When we're done we end up with about 200 guest rooms all in and a casino with about a 1,000 slot machines in the heart of Cripple Creek. And I will tell you a part of what appeals to me as I look at Blackhawk, and I look at the gaming per capita in other places like people don't realize the gaming per capita in California is now about $300 million per person. The tribal casinos in California do about $8 billion a year. And California accounts for about a $1.5 billion of Southern Nevada and $0.5 billion in Northern Nevada. And then the card clubs in California do about a $1 billion year. That's about $300 per capita for the 40 million people in California. In Colorado, it's less than half that and in the southern part of the Front Range, it's a third of that. And there's no inherent reason why people in Colorado wouldn't gamble the same amount per capita as those in California. When you think of where those tribal casinos are in California, they're not in Santa Monica. They are --people have to drive an hour to get to them for the most part. 85% of the people in California live in Los Angeles, San Francisco, Sacramento and San Diego. And in every case, you're going to drive at least a half an hour and in most cases closer to two hours to get to the nearest casino. And of course a $1.5 billion that's in Nevada which is a four or five hour…

Hey, Chad. I'm going to post script on the other side. So on the financing side, if you look at this capital market, and down markets in particular, you've got companies running around issuing senior unsecured bonds for 6.75% and the argument for us to make to those guys is why you would not want a little more yield although you would have to fund some construction right. And on the flip side you've got guys that are financing brand-new greenfield construction deals with no EBITDA on native American land, and we could say to them, look, why would you not want a little more -- take a little-- have something that's a little less risky and fund our operations, where we have existing operating cash flow and so we'll see where we shakeout on the funding side, but there are a bunch of conversations that are happening behind the scenes, and we'll get to the right place.

Yes. And we think there's some middle ground on that, and we've dealt with both at Pinnacle, we built the [Indiscernible] we built all the other stuff in St. Louis and we did it with high-yield debt on balance sheet and then when we had the separate entity to build the second casino in Lake Charles, it was all project financing. And we did have that all pulled together as it was expensive and complicated, but we had $500 million on $10 million of equity. And we had it pulled together $12 million of equity. We had to pull together and then Ameristar offered us a really good price and we took it. So we never pulled it down although with hindsight that property's doing real well, I kind of wish we hadn't sold it. But it showed that our underwriting was correct to begin with. And so I think here it's kind of a hybrid. Where a small company taking on a project that's kind of big relative to the company, but we're - a lot less risk than a lot of project finance deals, but maybe a little more risk than some of these guys borrowing money at 6%.

Okay, great. Thanks guys. One last one just a point of clarification in the Indiana sports betting, part of that bill if that is passed this week. Does that include mobile wagering off the site location? And if so, would you look to potentially monetize that to someone who's looking for market access? I know there were some different types of sports betting proposals. And I wasn't sure what the final one was. If it was just retailer if that included mobile, if you could just help me out on that and that's all for me. Thanks.

Hey, Chad. This is Alex. Yes, he is correct. They're allowed free scans for mobile sports betting in Indiana and importantly for us, it allows for remote registration. So somebody does not have to take and just register from their phone wherever they, even if they sit in Indianapolis report way and they don't have to come in to our property to register. And we are looking to monetize those with market access deals as we speak.

We are unlikely to do it on our own. It's a lot of software knowledge that a number of companies have that we don't have. So we're probably going to joint venture on that stuff.

We take our next question from Brian McGill from Telsey Advisory Group. Please go ahead.

Good afternoon, Dan and Lewis. I want to touch on a couple of the properties, but I wanted to start Indiana with the ferry and maybe thinking post road construction here. So you had said in the release there were 6,000 cars in April which is obviously great. Now you had previously put out numbers for 25 or 50 cars a day, and if I'm doing the math right, it looks like that's about 200 cars a day. So are we going to begin to see a real benefit from it that you're kind of alluding to or some of the cars obviously that are going across not going to the property obviously.

Yes, listen, I hope so. We're scratching our own heads wondering how we get more of those cars to go to the property. We're not really running this ferry to collect $5 a car. And in fact, we're just announcing that for the month of May we're not going to charge at all. And let's see what that does to it. It's kind of a little bit of an experiment, but while the roads under construction we're just going to say, hey, come on down and try the free ferry, and let's see what it does. And then so we're playing with lots of different tools to try to figure out how to do it. I mean the good news is caring a couple hundred cars a day is a good number. That's a great thing. Now that's both ways. And so that's 100 cars coming in our direction each day. And if you work backwards a ferry run 14 hours a day and takes four trips an hour, so it's far from that capacity, it can carry quite a few more cars. But, yes, we are -- look, the good news is there's people there we're just trying to figure out how to have it help the casino more because when you look at the casino revenues, they've been kind of weak for a while now. And so we're doing a lot of things to try to figure out how to improve the casino revenues. And the fact that the ferry is there and is carrying cars is certainly good. And hopefully we could figure out how to translate that into an increase in casino win.

Yes. It reminds me of Brian is and Dan reminded me this the other day, but if you go back to when we're at Pinnacle, we had a road that went across the Markland Dam on the way from Cincinnati to Belterra. And I remember when that road first opened, Dan and I went a month after it opened, and we were like why isn't anyone using this road. And then a year later everyone was using the road and it took some time before you saw the road usage, and then saw as well the impact on Belterra's results and these things take a little bit of time. It's nice to see as Dan said, the car is coming across. Dan is right. Those are two way numbers that we gave not one-way numbers. But the promising part is people are using it, and so now we've got to work on a part two which is getting those guys actually in the casino as well.

Right. It seemed like the sports betting could certainly help it even further if people traveling across the river to do it right.

Although as Alex just mentioned, you can actually sign up online and gamble then going forward without ever entering the casino. It's a little different than it is in Mississippi. But, yes, the sports betting are definitely a plus. And we're trying to figure out it, it might make sense for us to actually put a race and sports book in the property just as an additional amenity, and we've got a couple places we could put that. So we're exploiting that.

You have to do that.

By the way, I don't think -- go ahead.

I was going to say you have to do it on the ferry or can it be just on the property. Did you have a lot of space there?

Well, it's one of the things we're trying to figure out and might I think we can put it. I think we could put it on land. Can we not, Alex?

It's not to find the gaining commissioners going to set the reg for that over the next few months, so it's not the final legislation, but we believe it will allow being on land based part.

We have a lot of space in either one. I mean I'd rather put it on the land-based sides, but we also have lots of space on our boat we could put it on if we had to. And these with the drop in the price of large screen TVs, I can remember when we built Bellagio, the cost the race and sports book was a huge number because these very expensive large screens. And today you can put one together for a lot less money so.

Yes. The only thing I was going to add Brian and I know you love the sports betting side, but you're probably well aware of Colorado and that was approved. And so it now goes into the hands of voters, but stay tuned you may get sports betting here in Colorado in the near term.

Is it bit of polling on that at all? Have you seen or anything at this point? I didn't see that if it would.

So but it seems likely it'll pass. It's got the back, it's got the backing of the industry and the place that legalized pot is now looking at legalizing mushrooms, it's hard to imagine they turned down sports betting.

They have turned down gambling and other gambling enough but this little bit different. Then maybe last one for me. How about on Mississippi with your sportsbook there? How's the experience and where does Louisiana stand right now? Are they getting closer to trying to get something done or how long you are going to benefit from that traffic?

There's a bill in the Louisiana Legislature, it still has a few weeks to go. It had some controversy around it. I suspect it will pass, but it's -- there's a chance it won't. We're doing pretty well with our sportsbook and that's it. It's not much more than a simple little desk. It's actually doing well enough that I am scratching my head wondering if we should build a real race sportsbook in Mississippi. That property doesn't have a lot of extra room to do it in, but if we build the hotel expansion it would, and so we're contemplating that. But I would-- we're making $0.5 million a year there maybe?

$300,000 in the quarter. So maybe it's not but that was the quarter with a Super Bowl in it. So and March Madness, so I wouldn't forecast a $1.2 million of income. It certainly been a plus to us, but it's not probably not the biggest driver in our results. And if Louisiana legalizes, we probably give up some of that, but recognize we've made no investment. The investment was done by our partner and we get 60% of the revenue. But then we have to pay for the employees who are sitting there. And so we're making several hundred thousand a year and maybe that drops to slightly less than several hundred thousand a year if Louisiana legalizes. While it's easy to say with the closest place to make a bet from New Orleans or from Baton Rouge, the fact is most of the people in the line of that cage are from the north shore of Lake Pontchartrain and in Hancock County.

Yes. It's a business for us, Brian, where we have as Dan mentioned three writers standing at a computer, the kiosk we really have been waiting forever for those to be approved and to roll out. So it's essentially a three-man operation there right now, and doing okay so. End of Q&A

Thank you. That does conclude today's question-answer-session. I would like to turn the conference back to our host for any additional or closing remark.

I don't have anything. We're just continuing to move along. I think the trailing 12-month CBD I see is now $18.2 million. And I think if we had a sum of these unusual things in the quarter. We actually had a quite a few unusual negatives in the quarter and still pulled out a pretty good quarter. So I think, yes, growing number probably a little better than that actually. So, okay, thank you very much, everybody.

Thank you, everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.