Full House Resorts, Inc. (NASDAQ:FLL) is seeing its bets in Colorado pay off. Shares of the regional gaming company are soaring today after voters in the state narrowly approved sports wagering.
Proposition DD, the ballot initiative put to voters in Tuesday’s election, was narrowly approved. Politicians pushing the plan said legalizing sports wagering could generate revenue to help Colorado plug gaps in its annual water budget. That closer-than-expected vote was not declared in favor of Prop DD supporters until late Wednesday afternoon.
Colorado’s sports betting plan didn’t pass as easily as expected, but that’s not stopping investors from bidding shares of Full House higher. In early trading Thursday, the stock is up 3.39 percent, extending a run that has seen the operator of five casinos in four states jump almost 20 percent over just the past week.
With the legislative and voter approval processes complete, the Colorado Division of Gaming can commence the rulemaking process and develop the regulatory framework that will govern sports wagering,” according to a statement issued by Full House. “The Company believes that sports wagering could begin at its Bronco Billy’s Casino & Hotel and its Christmas Casino & Inn – as well as throughout the state via mobile sports wagering – in mid-2020.”
Bronco Billy’s, Full House’s Centennial State property, is located in Cripple Creek, about an hour’s drive from Colorado Springs, the state’s second-largest city.
Prepared For Passage
Last month, Full House announced sports betting partnerships with Wynn Resorts Ltd. (NASDAQ:WYNN) in Colorado and Indiana. In September, the gaming company said it’s working with UK-based Smarkets on mobile and online sports wagering platforms on those platforms.
Colorado, which is expected to have sports betting running by May 1 at the earliest, is expected to allow operators to offer online platforms soon after licenses for retail sportsbooks are approved.
“We have remained on the sidelines, given low free cash flow and elevated leverage. But we would get more constructive if the company were able to realize several catalysts, which include organic growth, Colorado expansion, margin improvement, and new development, as well as Indiana legislation and sports betting over the longer term,” said Macquarie analyst Chad Beynon in a recent note on Full House.
Beynon points out that Full House thinks it can generate $30 million of earnings before interest, taxes, depreciation and amortization (EBITDA) once renovations at Bronco Billy’s are complete.
Full House’s Rising Star Casino Resort in Rising Sun, Ind. has been one of the company’s stronger venues, a status that could be enhanced as it joins the Hoosier State’s sports betting fray.
“The company received regulatory approval to commence on-site sportsbook operations at its Rising Star Casino Resort beginning today,” according to the statement.
Full House said the sportsbook there will officially open on Nov. 11, and that it “expects that the three mobile sports wagering companies that it is working with will be operational in Indiana in the coming months, pending customary regulatory approvals.”
Full House stock has nearly doubled off its 52-week low hit in July.