Full House Resorts (FLL) risk factors, FY2025 10-K

Risks Related to our Business and Operations

1. 01We face significant competition from other gaming and entertainment operations
2. 02We may face revenue declines if discretionary consumer spending drops, including due to an economic downturn
3. 03Our Illinois casino operations and Mississippi casino hotel currently generate a significant percentage of our revenues and Adjusted EBITDA. Our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of those properties67% rewritten
4. 04We derive our revenues and operating income from our properties located in Mississippi, Colorado, Indiana, Nevada and Illinois, and are especially subject to certain risks, including economic and competitive risks, associated with the conditions in those areas and in the states from which we draw patrons
5. 05A prolonged closure of our casinos would negatively impact our ability to service our debt
6. 06Adverse weather conditions, road construction, gasoline shortages and other factors affecting our facilities and the areas in which we operate could make it more difficult for potential customers to travel to our properties and deter customers from visiting our properties
7. 07Several of our properties, including Silver Slipper, our Chamonix/Bronco Billy’s complex and Rising Star, are accessed by our customers via routes that have few alternatives
8. 08Marine transportation is inherently risky, and insurance may be insufficient to cover losses that may occur to our assets or result from our ferry boat operations
9. 09We may incur property and other losses that are not adequately covered by insurance, including adequate levels of weather catastrophe occurrence/named windstorm, flood and earthquake insurance coverage for our properties
10. 10We depend on our key personnel and our ability to attract and retain employees
11. 11Higher wage and benefit costs could adversely affect our business
12. 12Rising operating costs at our gaming properties could have a negative impact on our business
13. 13We face the risk of fraud and cheating
14. 14Win rates for our gaming operations depend on a variety of factors, some beyond our control
15. 15The concentration and evolution of the slot machine manufacturing industry could impose additional costs on us
16. 16Our business may be adversely affected by legislation prohibiting tobacco smoking38% rewritten
17. 17We rely on, among other things, trademarks, licenses, confidentiality procedures, and contractual provisions to protect our intellectual property rights and we may be unable to protect or may not be successful in protecting our intellectual property rights
18. 18Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others and any such infringements, including those that are inadvertent, may have a material adverse effect on our business
19. 19We are subject to risks related to corporate social responsibility and reputation

Risks Related to Development and Growth Opportunities

1. 20We have begun the design work for the construction of the permanent American Place facility in Waukegan, Illinois, located adjacent to its current temporary facility
2. 21The construction costs for our growth projects may exceed budgeted amounts plus contingencies. This may result in insufficient funds to complete these projects or the need to raise additional capital
3. 22There is no assurance that any growth projects will not be subject to additional regulatory restrictions, delays, or challenges
4. 23There is no assurance that our growth projects will be successful
5. 24We face a number of challenges prior to opening new or upgraded facilities
6. 25We may face disruption and other difficulties in integrating and managing facilities we have recently developed or acquired, or may develop or acquire in the future
7. 26The construction of the permanent American Place facility may inconvenience customers and disrupt business activity at our adjacent temporary casino facility
8. 27The permanent American Place facility, additional growth projects or potential enhancements at our properties may require us to raise additional capital
9. 28The casino, hotel and resort industry is capital intensive, and we may not be able to finance expansion and renovation projects, which could put us at a competitive disadvantage
10. 29We may face risks related to our ability to receive regulatory approvals required to complete certain acquisitions, mergers, joint ventures, and other developments, as well as other potential delays in completing certain transactions
11. 30If we fail to obtain necessary government approvals in a timely manner, or at all, it can adversely impact our various expansion, development, investment and renovation projects
12. 31Insufficient or lower-than-expected results generated from our new developments and acquired properties may negatively affect our operating results and financial condition

Risks Related to our Indebtedness

1. 32Our significant indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations
2. 33The indenture governing the Notes and the Credit Facility impose restrictive covenants and limitations that could significantly affect our ability to operate our business and lead to events of default if we do not comply with the covenants
3. 34Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures and expansion efforts, will depend upon our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors
4. 35We may not be able to generate sufficient cash flows to service all of our indebtedness and fund our operating expenses, working capital needs and capital expenditures, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
5. 36We depend on our subsidiaries for certain dividends, distributions and repayment of our indebtedness, including the Notes and any borrowings under the Credit Facility
6. 37Our ability to obtain additional financing on commercially reasonable terms may be limited
7. 38We and our subsidiaries may still be able to incur substantially more debt, including subordinated debt, which could further exacerbate the risks described above

Risks Related to our Legal and Regulatory Environment

1. 39We face extensive regulation from gaming and other regulatory authorities and the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations
2. 40Regulations governing the conduct of gaming activities and the obligations of gaming companies in any jurisdiction in which we have or in the future may have gaming operations are subject to change and could impose additional operating, financial, competitive or other burdens on the way we conduct our business
3. 41Our operations in Illinois have certain restrictions as to their operations and requirements for additional investmentNew
4. 42Stockholders may be required to dispose of their shares of our common stock if they are found unsuitable by gaming authorities
5. 43We are subject to environmental laws and potential exposure to environmental liabilities
6. 44We are subject to litigation which, if adversely determined, could cause us to incur substantial losses
7. 45Our ferry boat service is highly regulated, which can adversely affect our operations

Risks Related to Technology

1. 46Our gaming operations rely heavily on technology services and an uninterrupted supply of electrical power. If we experience damage or service interruptions, we may have to cease some or all of our operations, which will result in a decrease in revenue
2. 47Our information technology and other systems are subject to cybersecurity risk, misappropriation of customer information, other breaches of information security, and evolving state and federal privacy laws and regulations

General Risks

1. 48Our ability to utilize our net operating loss, or NOL, carryforwards and certain other tax attributes may be limited
2. 49The market price for our common stock may be volatile, and investors may not be able to sell our stock at a favorable price or at all
3. 50The exercise of outstanding options to purchase common stock may result in substantial dilution and may depress the trading price of our common stock