Full House Resorts, Inc.

Thank you, Sam, and good morning, everyone. By now you should all have access to our earnings announcements and Form 10-Q, which was filed earlier today.

These may also be found on our website at FullHouseResorts.com under the Investor Relations section.

Before we begin our formal remarks, I would like to remind everyone that part of our discussion today may include forward-looking statements. These statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them.

We refer all of you to our recent filings with the SEC, including our 2011 Form 10-K for a more detailed discussion of the risks that could impact the future operating results and financial condition of Full House Resorts.

I would now like to introduce Andre Hilliou, Chairman and CEO of Full House. Andre?

Thank you, Bill. With me today on the call is Mark Miller, our Chief Operating and Financial Officer, who will discuss our financial results for the third quarter.

Overall, we were pleased with our third quarter performance. Our earnings were $0.11 per share for the quarter.

Our Rising Star Casino performs steadily despite the new competition in Ohio and we saw strong contribution from our Northern Nevada operations.

First, our Rising Star Casino results continued to perform well in a difficult environment. For the quarter, we generated revenues of $23.3 million and adjusted EBITDA of $2.7 million, compared to revenue of $24.1 million and adjusted EBITDA of $2.6 million in the prior year quarter.

Revenue was down from the prior year period, due in part to the challenging economy, which appears to be impacting operation, as well as the rest of the industry and the new competition from Ohio.

Despite the decline in revenue, we managed to increase our EBITDA in the quarter as we continue to market effectively and to manage our cost. For the quarter, we lowered our benefit expenses as well as continued to benefit from the maritime exemption, which went into effect last October.

The entire Rising Star team continues to perform admirably in the challenging environment.

Our Northern Nevada operation once again outperformed expectation, with revenue in the quarter of $7.4 million compared to $3.3 million in the prior year quarter, thanks to the addition of the Grand Lodge Casino in September 2011 and a strong third quarter of 2012 at Grand Lodge.

Adjusted EBITDA in Northern Nevada more than quadrupled to $2.6 million in the quarter from $600,000 in the prior year. We are very pleased with the performance of the Grand Lodge since we acquired the lease over a year ago.

Earnings for the quarter, we generated adjusted EBITDA of $4.7 million compared to $6.2 million in the prior year period, although not an apples-to-apples comparison because of the addition of the Grand Lodge and the Buffalo Thunder Management Agreement. If you exclude the contribution from GEM and Delaware management agreement in the third quarter of 2011, our third quarter 2011 adjusted EBITDA would have been around $2.2 million.

And we don’t want to lose sight of the fact that we were able to monetize a GEM contract at a very favorable evaluation, which has enabled us to continue growing the company while maintaining a low cost and conservative balance sheet. Speaking of which, we were excited to have completed the acquisition of the Silver Slipper on October 1, and welcome the Silver Slipper employees to the Full House family.

The casino has 37,000 square feet of gaming space with almost a 1,000 slot and video poker machines, 26 table games, a poker room and the only live Keno game on the Gulf Coast. The property includes a fine dining restaurant, buffet, quick service restaurant and 2 casino bars.

The property is located in Hancock County, Missouri and draws heavily from the New Orleans metropolitan area and other communities in southern Louisiana and southwestern Mississippi.

We’re very pleased with the result that we are getting from the Silver Slipper management and team members led by John Ferrucci, the General Manager. The addition of the Silver Slipper continues of transition from primarily the management company to predominantly an owner operator of strong local oriented casino.

Going forward, we would continue to focus on our own and operated property who are looking to additional assets to add to our growing portfolio. We are also focused on adding hotel rooms at our Rising Star and Silver Slipper casinos and hope to have positive news to report on this in the near future.

And of course, we continue to look for management agreement opportunities that meet our criteria, and that, in an excellent way, to add high margin cash flow and earnings. We have come a long way at Full House over the past several years and we continue to execute our long term strategy and endeavor to create long term shareholder value.

I would now turn the call over to Mark to go into more details about the financial results in the quarter and then I would close with a few additional comments. Mark?

Thank you, Andre. I will review a few highlights of our third quarter 2012 financial performance and condition before we respond to questions you may have.

For the third quarter ended September 30, 2012, earnings per share was $0.11 compared to a loss of $0.06 per share in the prior-year period. Excluding of $4.9 million impairment charge and other one-time expenses in the prior year period, earnings per share in the third quarter of 2011 would also have been $0.11 per share.

As we have discussed previously, prior year period results included $6 million in management fees from GEM, which was sold in March 2012 and $1.1 million in equity and net income from our Delaware management contract, which expired in August of 2011. Third quarter 2012 and 2011 results were both based on weighted average common shares outstanding of $18.7 million.

Net income attributable to Full House was approximately $2.1 million compared to a net loss of $1.1 million in the third quarter of last year. Excluding the aforementioned unusual items in the prior year quarter, net income would have been in $2 million in the prior year period.

In the third quarter of 2012, we saw Rising Star generate revenue of $22.3 million compared to $24.1 million in the prior year period, primarily due to new competition from Ohio and a weakening consumer spending environment. Recent reports across the industry indicate that we have seen a substantial softening of revenue results during Q3.

Adjusted EBITDA for the third quarter of 2012 was $2.7 million compared to adjusted EBITDA of $2.6 million in the prior year period, primarily due to lower benefit expenses and maritime operating cost as well as an overall focus on cost control by the property management team. Adjusted EBITDA margin in quarter improved by 140 basis points to 12.2% versus 10.8% in the prior year period.

For Buffalo Thunder, we saw base management fees in the third quarter of $300,000. This brings total management fees for the first year of the contract for $2.1 million.

We’ve recognized no success fees during the quarter as EBITDA performance of the property did not exceed the establish targets, again mostly the result of a much softer revenue environment during Q3.

Our Northern Nevada operation consisting of Stockman’s and Grand Lodge casinos contributed approximately $7.4 million in revenue and adjusted EBITDA of $2.6 million for the 3 months period ended September 30, 2012 versus revenue of $3.3 million and adjusted EBITDA of $600,000 in the prior year period due to the addition of the Grand Lodge in September of last year. The property generated EBITDA well ahead of our internal forecast in prior year performance, due to both improved casino revenue and a much lower cost structure.

As we’ve mentioned before, the majority of Grand Lodge’s EBITDA has historically been earned in the latter part of Q2 and in Q3. Thus, due to seasonality, we can expect EBITDA from the property in our fourth quarter to be close to breakeven, consistent with prior year.

SG&A expenses of $7.9 million in the third quarter of 2012 were down from $8.2 million. Corporate SG&A was down approximately $100,000, primarily as the result of lower benefit and employee related expenses.

Stock compensation expenses for both the third quarter of 2012 and the prior year period was $300,000. As a reminder, the stock compensation is vesting over 3 years, with the bulk vesting in June of 2013.

For the third quarter, we had $72,000 in interest expense, primarily commitment fees related to our new debt facility, compared to $900,000 in the third quarter of 2011 as we extinguished our debt and the related interest rates swap at the end of the first quarter 2012. We expect to have a significant increase in interest expense in the fourth quarter as we completed the acquisition of the Silver Slipper at the beginning of October and funded $70 million of our $75 million financing facilities.

We expect the effective interest rate on our debt exclusive of financing cost amortization to be approximately 8%.

Our effective income tax rate for the third quarter of 2012 was just under 30% versus a benefit effectively rate of 205% in the prior year quarter. Last year's tax rate was substantially impacted by the previously discussed unusual items, and I would refer you to 10-Q for a more complete discussion about tax rates.

We currently expect our annualized effective income tax rate to be approximately 40% for 2012, reflecting a higher expected rate in our fourth quarter.

Adjusted EBITDA came in at approximately $4.7 million versus $6.2 million in the third quarter of last year. Excluding contributions from GEM and Delaware, adjusted EBITDA in the third quarter of 2011 would have been approximately $2.2 million.

As of September 30th, we had $21.5 million of cash and no outstanding debt on our balance sheet. We added $70 million of debt to our balance sheet with the October 1st close of the Silver Slipper acquisition and currently have cash on hand of approximately $24 million, of which we estimate approximately $15 million is committed to daily operations and about $3 million is earmarked to satisfy our remaining tax obligations associated with the sale of GEM.

Please note that our new debt facility imposes significant restrictions on the use of our excess cash and we would refer you again to our 10-Q and the file’s credit agreements for a more complete discussion of these debt facilities.

Capital expenditures for the quarter were approximately $500,000 and we have spent a little under $2 million through September 30, 2012. We currently expect to spend an additional approximately $1.5 million through the end of the year.

Finally, our joint effort with the City of Rising Sun and foundation for the development of a 104-room hotel is now moving forward as we are in the process of selling 3 acres of land to the foundation for the development of the third-party hotel. We are hopeful construction will begin very shortly and expect to be able to say something positive regarding this in the very near future.

With that I would turn it back over to Andre for a few final comments before we open it up questions.

Thank you, Mark. We continue to achieve solid results of our properties and are proud to be welcoming to the Silver Slipper our latest acquisition into the Full House family.

The transformation of this company into an owner operator of casinos is nearly complete. And we will continue to actively pursue management contract and acquisition to further grow the company.

Thank you and I would now open the calls for questions.

Guys, would you -- the Rising Sun, would you consider the top line results expected giving competition more benign or maybe a bit worse? And then looking forward, does this help your analysis of the Horseshoe opening at all?

Well, I think, David, that the top line was a little more disappointing than we originally expected. I think that the economic weakness that we are seeing and have seen across a lot of jurisdictions is not what we were originally hoping for.

From a competitive impact of Sioda [ph] Downs, I don’t think we are too far off than what we originally expected and what we are seeing in the early part of October and November with the opening of Hollywood over in Columbus as well. But I do think that the economic weakness has been more pronounced than we had hoped for or had expected.

Okay, and then Andre, in the comments you mentioned optimization at the Slipper. Can you elaborate on any changes that you plan for that property?

And then you also mentioned some CapEx for the remainder of the year; it looks like it kicks up a little bit. Is that specifically for the Slipper or somewhere else that we should think about?

It does -- I will do the CapEx one first and then I will let Andre to the one. But the CapEx does include a CapEx allocation for the Silver Slipper in the fourth quarter, and that probably accounts for a little less than 1/3 of that $1.5 million.

So we’re going to spend a little bit of money on CapEx as Rising Star here as we approach -- or Silver Slipper, as we approach at the end of the year. But otherwise everything is right on plan in terms of the CapEx spending.

What we are doing there at the Silver Slipper is what we do is what we do with all of our properties. We work with the local management there up to bring in their expertise on focusing on the customers.

And there is a good marketing team in place there and whatever we have done towards properties that we have acquired and managed, we bring that to the Silver Slipper as well. So hopefully with the management team in place there and our expertise, we should do quite well.

I will just add, David. We don’t think there is a lot of reorganization to be done there.

But it’s been a single property and we are bringing it into the Full House program. So we expect that there will some synergies related to employee benefit programs -- for instance, purchasing -- some of those kinds of things.

But there are not huge.

Okay. So, on the margin we are looking at some profitability refinements though that will show some impact?

That’s right. But Mark…

We are going to bring usual focus to operations.

As far as the Slipper’s -- I mean, you’ve been in there for a little over a month now. Have there have been any surprises that you’ve seen, good or bad, now that you’ve taken the reins?

No. Usually when we do homework before we buy a property, we really do in-depth look at the property, and in that one it was a quite, quite long in-depth.

So no, there was really no surprises whatsoever. We got there with open eyes and knew what we were looking for and knew what we found.

So no surprises whatsoever.

All right, good. And thanks for the update on the Rising Star hotel progress there.

And again, I know you’ve been in the Slipper for a little over a month now, but any thoughts you can give us or any news on potential hotel going up there?

Surely, we do. We realized that eventually, for the property to grow, the coast needs to be rebuilt and it's in the process of finalizing that.

And we will need a hotel; we know the customer -- we know in the casino business that people do like to spend the night there. So hotel in that particular property is really in our radar and our gun sights.

So, so we are looking at working with the management team, what size of the hotel and when we can build it.

I would just say, Justin, that we’ve started our work the management team, but there is nothing really we can report at this point beyond what we’ve said before.

Got you. Okay and then I guess just a housekeeping thing.

In the EBITDA table, I see corporate expenses only $626,000, a lot lower than what I was looking for and what you guys have posted in the past. Can you explain that a little bit to us, and if that’s a good run rate, for get going forward?

I think it's a little lower than normal. I think there is some timing differences in there, Justin.

And I would look really to what our run rate has been over the 9 months as the ongoing run rate. There have been no real structural changes in our corporate cost structure, and I think we’re just looking at some timing differences.

So that would be my guidance on that.

Okay, and maybe just kind of an overview of just the economy in general and specific to your properties. You talked about a little bit more economic weakness at the Rising Star then you had anticipated by.

What about across your portfolio? How was consumer spending, looking at, specifically, at the players to your properties?

Well, I think Justin, it’s been weakening. And I think we saw some of this in the latter of the Q2 and it’s continued in the Q3.

And I don’t think we’re seeing anything dramatically different than what you’re seeing in generally across jurisdictions. I think the economic environment we had originally hoped would be modestly improving by this point.

And it appears that it is not, and in fact, it is getting a little bit weaker. So I think that’s mostly at Rising Star and in that marketplace, Northern Nevada has been weak and continues to be weak and we really haven’t seen any change there at all.

So I think that’s what we are seeing.

Justin, we are seeing what everybody else is seeing. We are managing a marketing program and by managing our cost.

And that’s what you could do when the economy really on -- in really uncertain times.

Right. And the fact that you guys are still executing in this top line environment shows, I think, how you guys can run the properties efficiently.

I mean, do you think that that's sustainable, there is nothing that you’ve done that you think you’re going to have to add back to, say, promotions or some sort of cost that you cut maybe a little too deep? Or you feel at these levels it's sustainable and we should be able to see margins, at least stay where they are?

Perhaps even maybe expand slightly if you get the cost, continue to stay under control?

Well, I think we feel good about where we are from a cost perspective, Justin. I think we’re going to continue to refine and we’re going to continue to make adjustments where necessary.

But we’ve not done anything that we think we need to dramatically, reverse the direction that we’ve taken from a cost structure perspective. And I do think that we -- not only us but I think the rest of the industry have done a lot of work on the cost structures.

And when and if we see revenue improvement, I think we will see good flow through the bottom line.

I know you said previously that you’re still kind of open to doing some additional management contracts. Just wondering if you have actually been out looking for those, or found any that would potentially be interest into you?

We are always out looking for acquisition and new management contract. We are -- when we find one, I guess, we will let you know.

But we look at them and it’s -- you have to make sure that there is a good synergy between us and folks who want to managed, so we are always in the market for that.

And then maybe if you could just go on to a little more detail on Buffalo Thunder and why you didn’t get the suss [ph] fees there and what exactly was going hurt you there, if you could?

Well, what we’ve said in the past, Matt, is that our contract -- the EBITDA threshold that drives the success fee are not public at the request of the tribe. And those thresholds have to be exceeded.

And in this quarter, we did not exceed them. The EBITDA performance did not exceed the established thresholds for triggering success fees.

Buffalo Thunder, we did get our base management fee of $100,000 a month for $300,000 for the quarter. But we’ve seen revenue weakness at that property as well.

Again, I think, primarily due to just general weakness in the marketplace, our market share there has been very strong and actually been improving, but the overall revenue environment has been weak and we just were not able to exceed the established thresholds during this quarter.

This is going to sound like a bit off the back of Mr. Sebastiano’s, but specifically to the Gulf, we’ve seen a little bit of a revisitation of development down there, the Rotate Black guys and few other people was hoping smaller properties.

I’m just wondering if you’re seeing anything that sort of, you think maybe encouraging that form of development and anything if you could talk about in that horizon would be interesting?

Well, Rotate Black is -- that property is going to get built in Gulfport, we believe. We think it’s positive that the gaming commission required that they expand the property and have more hotel rooms there.

We think the coast does need hotel rooms. We are actively pursuing that.

And so I think from that perspective, we think it's healthy. But the revenue environment for that market has not been robust either.

And so I think development has to proceed at a pace and in a way that helps that market develop more fully at the destination.

Is it in lockstep with drilling activity, or is it something else that maybe we are needing?

Well, I do think that drilling activity and the general strength of that industry is -- appears to be improving a little bit. But I think it’s -- that market is a destination market, in particular, Biloxi.

Not so much us; we’re drawing from Louisiana. But I think that it will benefit as well some improvement in just overall national economic improvement if and when that comes.

I believe there was at least one additional facility slated for development on the West Mississippi coast. Do you have any updates on what’s happening competitively?

Are you talking about the one that’s in Diamondhead?

I believe so, yes.

No.

Yes, I don’t think there’s been any real change in that situation. There’s been some talk about it, but I don’t think there has been any real significant change.

And that project has been talked about for the last 5-10 years, so we really have nothing new on that project.

The Kentucky governor has been talking about trying to get some sort of a referendum on the ballot for next year. Could you talk a little bit about what you think the outlook is for gaming in Kentucky?

One thing that we have learned is really not to try to predict gaming in the political environment or arena. But as you know, if you look at the Rising Star, we really are full integrated resort.

So people have to drive a little bit to get to our place, but we are not what would we call the average casino; we are really a resort casino. So what’s the impact would be of Kentucky, I really don’t know.

But when we have hotel there, 300 rooms to offer, I think it would really do better for our resorts. So that’s all we could say but Kentucky right now.

Okay, and then last question. Turning the Buffalo Thunder, you guys have end up some new amenities in that area.

I’m just wondering how they’re being received?

You are talking about the reconfiguration on casino floor and I think, on a customer perspectives, the reports have been very positive so far. And that project is pretty much complete.

So I think we are pleased with it, it came out on budget and on time. And I think customers like it.

We haven’t really seen the economic benefits yet of it in the numbers that we’ve released, but we are expecting to see some improvement from it as we move forward.

We have a very good market share in that particular -- we have a good market share there, so eventually we hope that market share would be translating to a better bottom line.

It’s a beautiful project. I would love to see the pictures of those new public spaces if you get a chance, Mark.

Well, we would like to thank everyone for being with us today. And that we would end the call and wish all of you a great rest of the week.

And thank you.