Full House Resorts: A Chancy Bet Among Regional Gaming Stocks
Full House Resorts (FLL) is a casino operator with a reputation for being one of the riskier wagers among regional gaming stocks. This label has endured due to the underperformance of its latest development, Chamonix, in terms of revenue and profitability.
The Struggling Chamonix Development
Located in Colorado, Chamonix was expected to be a game-changer for Full House Resorts. However, the property has failed to meet revenue projections since its opening in 2019. The casino’s lackluster performance can be attributed to several factors, including intense competition from established casinos in the area and the ongoing impact of the COVID-19 pandemic on the gaming industry.
Despite Challenges, Potential for FLL Stock to Double
Despite Chamonix’s underwhelming performance, there is still a viable path for FLL stock to at least double in price. This potential upside stems from several factors:
- Strategic Acquisitions: Full House Resorts has a history of making strategic acquisitions that have resulted in significant growth. For instance, the company’s acquisition of Rising Star Casino Resort in Indiana in 2015 helped to boost its revenue and earnings.
- Debt Reduction: Full House Resorts has been actively working to reduce its debt load. In 2020, the company announced that it had paid off $52.5 million in debt, which could lead to improved financial flexibility and increased investor confidence.
- Expansion Plans: Full House Resorts has several expansion projects in the pipeline, including the development of a new casino in Indiana and the potential acquisition of the Tropicana Lodge and Casino in Nevada. These projects could provide significant growth opportunities for the company.
Impact on Individual Investors
For individual investors, the underperformance of Chamonix and the overall volatility of FLL stock may present both risks and opportunities. Those with a high risk tolerance and a long-term investment horizon may see potential upside in the company’s strategic acquisitions, debt reduction efforts, and expansion plans. However, investors should be aware of the risks associated with the gaming industry, including competition, regulatory challenges, and economic downturns.
Impact on the World
The underperformance of Full House Resorts and its Chamonix development may have broader implications for the gaming industry as a whole. If Chamonix continues to struggle, it could signal broader challenges for other regional gaming operators looking to expand into competitive markets. Additionally, the ongoing impact of the COVID-19 pandemic on the gaming industry could lead to further volatility and uncertainty for investors.
Conclusion
In conclusion, Full House Resorts’ reputation as a risky bet among regional gaming stocks is well-deserved, given the underperformance of its Chamonix development. However, despite these challenges, there are several factors that could drive significant growth for the company and potentially lead to a doubling of its stock price. These factors include strategic acquisitions, debt reduction efforts, and expansion projects. For individual investors, the risks and opportunities associated with FLL stock should be carefully weighed, taking into account the challenges facing the gaming industry as a whole.
As always, it is important to conduct thorough research and consult with a financial advisor before making any investment decisions. The gaming industry remains a volatile sector, with numerous challenges and opportunities, and it is essential to approach investments with a well-informed and strategic mindset.
