Having recently subsumed Affinity Gaming, the eyes of Z Capital Partners have turned toward Full House Resorts. However, Z’s opening bid is so low that it looks like a typo: 
$1.79/share. That’s $132.5 million for five casinos. CEO Dan Lee (left), in tandem with board chairman Brad Tirpak, wrote eloquently that the ultra-lowball bid “reflects a stark and fundamental disconnect from our board’s understanding of the company’s value, as well as that of third-party investors and analysts.” FLL is trading at $2.70 at this very moment, so Z’s offer wasn’t just cheap, it was an insult to shareholders. “Your letter indicates a price without specifying a transaction structure or providing evidence of financing,” zinged Tirpak and Lee. (In all fairness to Z Capital, a standard 7X multiple of Full House’s 2017 cash flow would result in an offer of $115.5 million.)
While the Z overture coincides with Anthony Rodio‘s arrival as CEO of Affinity, it would be a colossal stretch to suggest any linkage between the two events, other than it gives shareholders a dilemma of whose leadership they would trust: Lee’s or Rodio’s. In dueling letters Lee warned of “significant execution risks,” while Zenni talked of unlocking “unrealized potential for Full House stockholders.” Roth Capital Partners analyst David Bain chimed in with a report that declared, “We believe the offer lacks credibility and is somewhat irregular.” (If I hold Full House at $2.70, why would I take $1.79?) An uncredited analyst was quoted as saying, “We find Z Capital’s offer a head-scratcher unless it was intended to impact share prices for negotiations below FLL’s current trading value.” Lee explained away a September meeting at Z offices as being a fishing expedition to possibly acquire certain Affinity properties. It looks like we’re in the early innings of a battle of the low-rollers. How it will end is anybody’s guess.
* Tilman Fertitta‘s reverse-merger offer for Caesars Entertainment may be the most exciting deal in gaming that never happened, but it is said to have stirred up at least one “me too” offer. Now MGM Resorts International is rumored to be kicking the tires on a Caesars buyout. Aside from the ensuing debut, monopolistic concerns would arise, although we don’t foresee the Trump administration blocking such a mega-deal.
* Global Gaming Expo was a hit, with attendance up from 2017. Significant stat: key buyers were 16% more in evidence this year and 27% of those were newbies to G2E. However you slice it, that’s good news for the gaming industry. You can read more of the facts and figures here.
* As Filipino strongman and FOD (friend of Donald) Rodrigo Duterte continues to crack down on the gambling industry, five casinos on the island of Boracay have been ordered to close. Others in development, including one by Melco Crown Entertainment will be scrapped, a costly setback for everybody involved.
* Raving Consultant President Deana Scott advances the argument that “casinos are the safest places for seniors.” And if they’re not, she offers a multi-point checklist of things that can be done or done better. Our condolences to Ms. Scott on the death of her mother — on a casino floor, no less.
* Sheldon Adelson gets called out, at length, by Sasha Abramsky, for enabling the wave of hate speech (and worse) currently afflicting our country. The irony of Adelson’s political affiliation is that it puts him in bed with those oppressing the very minorities — gays, lesbians, pregnant women — whose rights he claims to support. Gaining access to power is definitely something of a Faustian bargain chez Adelson.
* As you know, four Jacksonville Jaguars players spent time in a London jail for their role in a bar fight. Cincinnati Bengals, look to thy laurels!
