##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from

to
 Commission File No. 1-32583
 FULL HOUSE RESORTS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    13-3391527(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)4670 S. Fort Apache, Ste. 190
    
    89147Las Vegas, Nevada
    
    (Zip Code)(Address of principal executive offices)
 (702) 221-7800  (Registrants telephone number, including area code)
 þ o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non Accelerated Filer o
    
    Smaller reporting company þ
 Yes o No þ




---



##### 



FULL HOUSE RESORTS, INC.
INDEX
 PagePART I. Financial InformationItem 1. Condensed Consolidated Financial StatementsBalance Sheets as of September 30, 2008 (unaudited), and
December 31, 2007
    
    
    3Unaudited Statements of Operations
for the three and nine months ended September 30, 2008 and 2007
    
    
    4Unaudited Statements of Cash Flows
for the nine months ended September 30, 2008 and 2007
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    28Item 4T. Controls and Procedures
    
    
    28PART II. Other InformationItem 1. Legal Proceedings
    
    
    29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 6. Exhibits
    
    
    29Signatures
    
    
    30Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assetsCash
    
    $
    6,620,762
    
    
    $
    7,975,860Accounts receivable, net
    
    
    631,714
    
    
    
    319,865Income tax refund receivable
    
    
    248,868
    
    
    
    Prepaid expenses
    
    
    401,567
    
    
    
    351,658Deposits and other current assets
    
    
    133,604
    
    
    
    172,120Assets held for sale
    
    
    45,000
    
    
    
    6,960,7628,081,515
    
    
    
    15,780,265Property and equipment, net of accumulated depreciation of $4,689,462 and $3,848,439
    
    
    8,756,455
    
    
    
    9,227,113Long-term assets related to tribal casino projectsNotes receivable
    
    
    4,985,177
    
    
    
    12,178,481Contract rights, net of accumulated amortization of $714,019 and $670,927
    
    
    16,810,761
    
    
    
    14,761,13321,795,938
    
    
    
    26,939,614Other long-term assetsGoodwill
    
    
    10,308,520
    
    
    
    10,308,520Deposits and other
    
    
    840,850
    
    
    
    868,26511,149,370
    
    
    
    11,176,785$
    49,783,278
    
    
    $
    63,123,777LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    221,086
    
    
    $
    259,124Accounts payable
    
    
    287,153
    
    
    
    274,411Accrued expenses
    
    
    1,055,378
    
    
    
    1,364,2931,563,617
    
    
    
    1,897,828Long-term liabilitiesLong-term debt due to joint venture affiliate, including accrued interest of
$113,580 and $17,231
    
    
    2,968,070
    
    
    
    1,272,709Other long-term debt, net of current portion
    
    
    3,753,590
    
    
    
    21,693,314Deferred income tax liability
    
    
    1,041,869
    
    
    
    359,0239,327,146
    
    
    
    25,222,874Noncontrolling interest in consolidated joint venture
    
    
    4,713,515
    
    
    
    4,232,775Stockholders equityCommon stock, $.0001 par value, 25,000,000 shares authorized; 19,350,276 shares
issued and 19,230,605 shares outstanding in 2008, and 19,342,276 shares issued
and outstanding in 2007
    
    
    1,935
    
    
    
    1,934Additional paid-in capital
    
    
    42,716,771
    
    
    
    42,702,372Treasury stock, 119,671 shares in 2008
    
    
    (182,010
    )
    
    
    Deferred compensation
    
    
    (515,135
    )
    
    
    (1,145,329
    )Deficit
    
    
    (6,278,944
    )
    
    
    (7,890,849
    )35,742,617
    
    
    
    33,668,128$
    49,783,278
    
    
    $
    63,123,777
   3




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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesCasino
    
    $
    1,925,134
    
    
    $
    2,031,271
    
    
    $
    5,694,645
    
    
    $
    5,385,458Food and beverage
    
    
    498,175
    
    
    
    587,103
    
    
    
    1,633,989
    
    
    
    1,452,885Other operating income
    
    
    21,017
    
    
    
    14,223
    
    
    
    72,285
    
    
    
    333,1082,444,326
    
    
    
    2,632,597
    
    
    
    7,400,919
    
    
    
    7,171,451Operating costs and expensesCasino
    
    
    541,732
    
    
    
    584,205
    
    
    
    1,819,068
    
    
    
    1,664,040Food and beverage
    
    
    599,502
    
    
    
    534,368
    
    
    
    1,754,819
    
    
    
    1,407,200Project development costs
    
    
    62,392
    
    
    
    102,541
    
    
    
    133,024
    
    
    
    348,274Selling, general and administrative
    
    
    1,534,118
    
    
    
    1,446,772
    
    
    
    4,866,210
    
    
    
    5,254,049Depreciation and amortization
    
    
    306,889
    
    
    
    326,874
    
    
    
    902,123
    
    
    
    932,5683,044,633
    
    
    
    2,994,760
    
    
    
    9,475,244
    
    
    
    9,606,131Operating gains (losses)Equity in net income of unconsolidated joint
venture, and
related guaranteed payments
    
    
    1,372,168
    
    
    
    1,022,340
    
    
    
    3,566,950
    
    
    
    3,096,045Unrealized gains (losses) on notes receivable,
tribal governments
    
    
    137,356
    
    
    
    (209,106
    )
    
    
    1,974,040
    
    
    
    719,195Impairment loss, land previously held for development
    
    
    
    
    
    
    
    
    
    
    (85,000
    )
    
    
    1,509,524
    
    
    
    813,234
    
    
    
    5,455,990
    
    
    
    3,815,240Income from continuing operations before other income
(expense) and noncontrolling interest in net income
(loss) of consolidated joint venture and income taxes
    
    
    909,217
    
    
    
    451,071
    
    
    
    3,381,665
    
    
    
    1,380,560Other income (expense)Interest and other income
    
    
    33,196
    
    
    
    378,057
    
    
    
    128,873
    
    
    
    664,536Interest expense
    
    
    (122,381
    )
    
    
    (329,330
    )
    
    
    (420,767
    )
    
    
    (952,605
    )Income from continuing operations before
noncontrolling interest in net income (loss) of
consolidated joint venture and income taxes
    
    
    820,032
    
    
    
    499,798
    
    
    
    3,089,771
    
    
    
    1,092,491Noncontrolling interest in net (income) loss of
consolidated joint venture
    
    
    94,506
    
    
    
    (12,044
    )
    
    
    (480,740
    )
    
    
    (123,634
    )Income from continuing operations before income taxes
    
    
    914,538
    
    
    
    487,754
    
    
    
    2,609,031
    
    
    
    968,857Income taxes
    
    
    (374,865
    )
    
    
    33,077
    
    
    
    (1,035,268
    )
    
    
    (251,324
    )Income from continuing operations
    
    
    539,673
    
    
    
    520,831
    
    
    
    1,573,763
    
    
    
    717,533Income from discontinued operations, net of tax
    
    
    
    
    
    
    83,960
    
    
    
    38,142
    
    
    
    214,461Net income
    
    $
    539,673
    
    
    $
    604,791
    
    
    $
    1,611,905
    
    
    $
    931,994Income from continuing operations per common shareBasic and diluted
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.08
    
    
    $
    0.04Income from discontinued operations per common shareBasic and diluted
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.01Net income per common shareBasic and diluted
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.08
    
    
    $
    0.05Weighted-average number of common shares outstandingBasic and diluted
    
    
    19,332,356
    
    
    
    19,342,276
    
    
    
    19,338,969
    
    
    
    19,291,437
   4




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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine months endedSeptember 30,2008
    
    
    2007Net cash provided by operating activities
    
    $
    1,550,235
    
    
    $
    2,150,515Investing activities:Deposits and other cash costs of the Stockmans Casino
acquisition, net of cash acquired of $920,824
    
    
    
    
    
    
    (8,317,493
    )Acquisition of contract rights and other assets
    
    
    (2,092,720
    )
    
    
    (402,261
    )Purchase of property and equipment
    
    
    (379,517
    )
    
    
    (157,510
    )Advances to tribal governments, net of $2,124 and $33,277 expensed
    
    
    (86,123
    )
    
    
    (308,323
    )Proceeds from sale of assets
    
    
    6,961,020
    
    
    
    900Proceeds from repayment of tribal advances
    
    
    9,253,467
    
    
    
    Other
    
    
    (700
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    13,655,427
    
    
    
    (9,184,687
    )Financing activities:Payments on long-term debt
    
    
    (17,977,762
    )
    
    
    (4,721,790
    )Proceeds from borrowings from joint venture affiliate
    
    
    1,599,012
    
    
    
    Purchase of treasury stock
    
    
    (182,010
    )
    
    
    Dividends paid
    
    
    
    
    
    
    (3,042,084
    )Net cash used in financing activities
    
    
    (16,560,760
    )
    
    
    (7,763,874
    )Net decrease in cash
    
    
    (1,355,098
    )
    
    
    (14,798,046
    )Cash, beginning of period
    
    
    7,975,860
    
    
    
    22,117,482Cash, end of period
    
    $
    6,620,762
    
    
    $
    7,319,436
   5




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##### Table of Contents



FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1.
    
    BASIS OF PRESENTATION
   Consolidation of
Variable Interest Entities
 2.
    
    SHARE-BASED COMPENSATION
 share-based
 3.
    
    INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
   6




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Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Management fee
revenues
    
    $
    1,891,311
    
    
    $
    2,177,901
    
    
    $
    6,072,794
    
    
    $
    6,561,511Net income
    
    
    1,796,144
    
    
    
    2,044,678
    
    
    
    5,770,416
    
    
    
    6,192,088
 4.
    
    FAIR VALUE MEASUREMENTS
 , Fair Value Measurements Determining the Fair Value of Financial
Asset when the market for that asset is not active
 The Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FAS 115,
   i.e. etc.
   7




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##### Table of Contents




    
    S&P 500, average benchmark investment returns (medium-term horizon risk
premiums);
    
    Risk free investment return equal to the trailing 10-year average for 90-day
treasury bills;
    
    Investment beta factor equal to the average of a peer group of similar entities
in the hotel and gaming industry;
    
    Project-specific adjustments based on the status of the project (i.e.,
litigation, regulatory approvals, tribal politics, etc.), and typical size premiums
for micro-cap and low-cap companies.
  5.
    
    NOTES RECEIVABLE, TRIBAL GOVERNMENTS
   September 30,
    
    
    December 31,2008
    
    
    2007 *Contractual (stated) amount (including interest)FireKeepers
DevelopmentAuthority
    
    $
    5,000,000
    
    
    $
    14,250,815Other
    
    
    1,281,329
    
    
    
    1,308,859$
    6,281,329
    
    
    $
    15,559,674Estimated fair value of notes
receivable related to tribal
casino projects:FireKeepers
DevelopmentAuthority
    
    $
    3,931,389
    
    
    $
    11,189,359Other
    
    
    1,053,788
    
    
    
    989,122$
    4,985,177
    
    
    $
    12,178,481
 
 *
    
    Presentation of contractual amounts as of December 31, 2007, has been revised to conform
to the current year presentation, and now include accrued interest of $1,475,574. The
inclusion of interest in the 2007 period was solely for comparability and did not change
previously reported net income, since the related receivables, including accrued interest,
are presented at their estimated fair values.  8




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##### Table of Contents



FireKeepersDevelopmentTotal
    
    
    Authority
    
    
    Other tribesBalances, January 1, 2008
    
    $
    12,178,481
    
    
    $
    11,189,359
    
    
    $
    989,122Total advances
    
    
    108,029
    
    
    
    
    
    
    
    108,029Advances allocated to contract rights
    
    
    (24,030
    )
    
    
    
    
    
    
    (24,030
    )Advances expensed as period costs
    
    
    2,124
    
    
    
    2,124
    
    
    
    Repayment of notes receivable
    
    
    (9,253,467
    )
    
    
    (9,253,467
    )
    
    
    Unrealized gains (losses) included
in earnings
    
    
    1,974,040
    
    
    
    1,993,373
    
    
    
    (19,333
    )Balances, September 30, 2008
    
    $
    4,985,177
    
    
    $
    3,931,389
    
    
    $
    1,053,788
 6.
    
    CONTRACT RIGHTS
  AccumulatedSeptember 30, 2008
    
    Cost
    
    
    Amortization
    
    
    Carrying valueFireKeepers project, initial cost
    
    $
    4,155,213
    
    
    $
    
    
    
    $
    4,155,213FireKeepers project, additional
    
    
    13,210,373
    
    
    
    (714,019
    )
    
    
    12,496,354Other projects
    
    
    159,194
    
    
    
    
    
    
    
    159,194$
    17,524,780
    
    
    $
    (714,019
    )
    
    $
    16,810,761
 AccumulatedDecember 31, 2007
    
    Cost
    
    
    Amortization
    
    
    Carrying ValueFireKeepers project, initial cost
    
    $
    4,155,213
    
    
    $
    
    
    
    $
    4,155,213FireKeepers project, additional
    
    
    11,141,683
    
    
    
    (670,927
    )
    
    
    10,470,756Other projects
    
    
    135,164
    
    
    
    
    
    
    
    135,164$
    15,432,060
    
    
    $
    (670,927
    )
    
    $
    14,761,133
  9




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##### Table of Contents



7.
    
    LONG-TERM DEBT
  September 30,
    
    
    December 31,2008
    
    
    2007Long-term debt, due to joint venture affiliate:Promissory note, expected to mature in 2011,
interest at 1% above the prime rate (6.00% at
September 30, 2008 and 8.25% at December 31,
2007)
    
    $
    2,968,070
    
    
    $
    1,272,709Long-term debt, other:Reducing revolving loan, $16.0 million limit
on January 31, 2007, due January 31, 2022,
interest at 2.1% above the five year
LIBOR/Swap rate, adjusted annually (7.39% at
September 30, 2008 and December 31, 2007)
    
    $
    3,093,275
    
    
    $
    11,401,000Long-term obligation to Green Acres related to
the acquisition of additional contract rights
related to the Michigan project
    
    
    
    
    
    
    9,500,000Promissory note to Peters Family Trust, $1.25
million on January 31, 2007, due February 1,
2012, interest at a fixed annual rate of 7.44%
    
    
    881,401
    
    
    
    1,051,4383,974,676
    
    
    
    21,952,438Less current portion
    
    
    (221,086
    )
    
    
    (259,124
    )$
    3,753,590
    
    
    $
    21,693,314
 Reducing Revolving Loan (the Revolver).
   10




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##### Table of Contents



Green Acres.
 Peters Family Trust Promissory Note.
  Annual periods ending September 30,2009
    
    $
    221,0862010
    
    
    258,9622011
    
    
    3,246,9702012
    
    
    122,4542013
    
    
    Thereafter
    
    
    3,093,274$
    6,942,746
  8.
    
    INCOME TAXES
 Accounting for Uncertainty in Income Taxes
  9.
    
    SEGMENT REPORTING
   11




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##### Table of Contents



Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2008Revenues
    
    $
    2,442,926
    
    
    $
    
    
    
    $
    1,400
    
    
    $
    2,444,326Selling, general and administrative expense
    
    
    480,799
    
    
    
    135,154
    
    
    
    918,165
    
    
    
    1,534,118Depreciation and amortization
    
    
    271,413
    
    
    
    14,364
    
    
    
    21,112
    
    
    
    306,889Operating gains
    
    
    
    
    
    
    1,509,524
    
    
    
    
    
    
    
    1,509,524Income (loss) from continuing operations before
other income (expense) and noncontrolling
interest in net income (loss) of consolidated
joint venture and income taxes
    
    
    549,481
    
    
    
    1,347,814
    
    
    
    (988,078
    )
    
    
    909,217Income (loss) from continuing operations
    
    
    551,049
    
    
    
    780,256
    
    
    
    (791,632
    )
    
    
    539,6732007Revenues
    
    $
    2,632,597
    
    
    $
    
    
    
    $
    
    
    
    $
    2,632,597Selling, general and administrative expense
    
    
    490,999
    
    
    
    22,137
    
    
    
    933,636
    
    
    
    1,446,772Depreciation and amortization
    
    
    310,806
    
    
    
    14,364
    
    
    
    1,704
    
    
    
    326,874Operating gains
    
    
    
    
    
    
    813,234
    
    
    
    
    
    
    
    813,234Income (loss) from continuing operations before
other income (expense) and noncontrolling
interest in net income (loss) of consolidated
joint venture and income taxes
    
    
    712,219
    
    
    
    711,395
    
    
    
    (972,543
    )
    
    
    451,071Income (loss) from continuing operations
    
    
    768,358
    
    
    
    946,176
    
    
    
    (1,193,703
    )
    
    
    520,831
  12




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##### Table of Contents



Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2008Revenues
    
    $
    7,399,461
    
    
    $
    
    
    
    $
    1,458
    
    
    $
    7,400,919Selling, general and administrative
expense
    
    
    1,386,315
    
    
    
    316,935
    
    
    
    3,162,960
    
    
    
    4,866,210Depreciation and amortization
    
    
    810,696
    
    
    
    43,092
    
    
    
    48,335
    
    
    
    902,123Operating gains
    
    
    
    
    
    
    5,455,990
    
    
    
    
    
    
    
    5,455,990Income (loss) from continuing
operations before other income
(expense) and noncontrolling
interest in net income (loss) of
consolidated joint venture and
income taxes
    
    
    1,628,562
    
    
    
    5,014,461
    
    
    
    (3,261,358
    )
    
    
    3,381,665Income (loss) from continuing
operations
    
    
    1,658,564
    
    
    
    4,667,024
    
    
    
    (4,751,825
    )
    
    
    1,573,7632007Revenues
    
    $
    6,887,897
    
    
    $
    
    
    
    $
    283,554
    
    
    $
    7,171,451Selling, general and administrative
expense
    
    
    1,164,904
    
    
    
    137,684
    
    
    
    3,951,461
    
    
    
    5,254,049Depreciation and amortization
    
    
    879,011
    
    
    
    47,664
    
    
    
    5,893
    
    
    
    932,568Operating gains
    
    
    
    
    
    
    3,815,240
    
    
    
    
    
    
    
    3,815,240Income (loss) from continuing
operations before other
income(expense) and noncontrolling
interest in net income (loss) of
consolidated joint venture and
income taxes
    
    
    1,772,741
    
    
    
    3,321,331
    
    
    
    (3,713,512
    )
    
    
    1,380,560Income (loss) from continuing
operations
    
    
    1,911,096
    
    
    
    3,299,476
    
    
    
    (4,493,039
    )
    
    
    717,533
   Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2008Assets
    
    $
    20,578,005
    
    
    $
    22,555,490
    
    
    $
    6,649,783
    
    
    $
    49,783,278Property and equipment, net
    
    
    8,549,403
    
    
    
    1,732
    
    
    
    205,320
    
    
    
    8,756,455Goodwill
    
    
    10,308,520
    
    
    
    
    
    
    
    
    
    
    
    10,308,520Liabilities
    
    
    629,358
    
    
    
    5,338,693
    
    
    
    3,359,095
    
    
    
    9,327,1462007Assets
    
    $
    23,841,691
    
    
    $
    17,744,988
    
    
    $
    7,699,063
    
    
    $
    49,285,742Property and equipment, net
    
    
    9,758,287
    
    
    
    
    
    
    
    13,665
    
    
    
    9,771,952Goodwill
    
    
    12,041,668
    
    
    
    
    
    
    
    
    
    
    
    12,041,668Liabilities
    
    
    503,132
    
    
    
    2,292,694
    
    
    
    16,665,444
    
    
    
    19,461,270
  13




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##### Table of Contents



10.
    
    CONTINGENCIES
 Uninsured cash deposits.
 Legal
matters.
 11.
    
    STOCK REPURCHASE PLAN
   14




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##### Table of Contents



Item 2. Managements Discussion and Analysis or Plan of Operation.
 Overview
       15




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##### Table of Contents



Critical accounting estimates and policies
   Assets related to tribal casino projects
 Recognition of Interest
Income and Balance Sheet Classification of Structured Notes
    16




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##### Table of Contents




    
    the Federal Bureau of Indian Affairs (BIA) recognizes the tribe;
    
    the tribe has the right to acquire land to be used as a casino site;
    
    the Department of the Interior has put the land into trust as a casino site;
    
    the tribe has a gaming compact with the state government;
    
    the NIGC has approved a proposed management agreement; and
    
    other legal or political obstacles exist or are likely to occur.
  
    
    a certain minimum monthly priority payment to the tribe;
    
    repayment of various senior debt associated with construction and equipping of the
casino with interest accrued thereon;
    
    repayment of various debt with interest accrued thereon due to us;
    
    management fee to us;
    
    other obligations; and
    
    the remaining funds distributed to the tribe.
 Notes
receivable.
 Fair Value Measurements Determining the Fair
Value of Financial Asset when the market for that asset is not active
   17




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##### Table of Contents



September 30, 2008
    
    
    December 31, 2007*Aggregate face amount of the
notes receivable (including
interest)
    
    $
    6,281,329
    
    
    $
    15,559,674Estimated years until opening
of casino:FireKeepers
    
    
    1.00
    
    
    
    1.50Montana
    
    
    1.75
    
    
    
    1.75Discount rate:FireKeepers
    
    
    17.0
    %
    
    
    17.5
    %Montana
    
    
    23.5
    %
    
    
    22.5
    %Estimated probability of the
casino opening as expected:FireKeepers
    
    
    96
    %
    
    
    96
    %Montana
    
    
    70
    %
    
    
    80
    %
 
 *
    
    Presentation of contractual amounts as of December 31, 2007, has been revised to conform
to the current year presentation, and now include accrued interest of $1,475,574. The
inclusion of interest in the 2007 period was solely for comparability and did not change
previously reported net income, since the related receivables are presented, including
accrued interest, at their estimated fair values.   
    
    S&P 500, 10 and 15-year average benchmark investment returns (medium-term horizon risk
premiums);
    
    Risk-free investment return equal to the trailing 10-year average for 90-day Treasury
Bills;
    
    Investment beta factor equal to the unlevered five-year average for the hotel/gaming
industry; and
    
    Project-specific adjustments based on typical size premiums for micro-cap and
low-cap companies using 10 and 15-year averages, and the status of outstanding required
regulatory approvals and/or litigation, if any.
   18




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##### Table of Contents



Accounting by Creditors for Impairment of a
Loan
 Contract
rights.
  Summary of assets related to tribal casino projects
  September 30,
    
    
    December 31,2008
    
    
    2007Michigan project:Notes receivable, tribal governments
    
    $
    3,931,389
    
    
    $
    11,189,359Contract rights, net
    
    
    16,651,567
    
    
    
    14,625,96920,582,956
    
    
    
    25,815,328Other projects:Notes receivable, tribal governments
    
    
    1,053,788
    
    
    
    989,122Contract rights, net
    
    
    159,194
    
    
    
    135,1641,212,982
    
    
    
    1,124,286$
    21,795,938
    
    
    $
    26,939,614
  19




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##### Table of Contents




    
    the tribe is federally recognized;
    
    adequate land for the proposed casino resort has been placed in trust;
    
    the tribe has a valid gaming compact with the State of Michigan;
    
    the NIGC approved the management agreement;
    
    the BIA issued a record of decision approving the final environmental impact statement
in September 2006;
    
    project financing was obtained in May 2008;
    
    construction commenced, with an anticipated construction period of approximately 15
months; and
    
    construction to date has
progressed on schedule.
  September 30, 2008
    
    
    December 31, 2007
    
    
    Discount rate increases 2.5%
    
    $
    (117,164
    )
    
    $
    (347,790
    )
    
    
    Discount rate decreases 2.5%
    
    
    123,594
    
    
    
    366,793
    
    
    Forecasted opening date delayed one quarter
    
    
    (144,467
    )
    
    
    (442,085
    )
    
    
    Forecasted opening date accelerated one quarter
    
    
    150,251
    
    
    
    460,273
    20




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##### Table of Contents



September 30, 2008
    
    FireKeepers
    
    
    New Mexico
    
    
    Montana
    
    
    TotalNotes receivable
    
    $
    3,931,389
    
    
    $
    484,875
    
    
    $
    568,913
    
    
    $
    4,985,177Contract rights
    
    
    16,651,567
    
    
    
    
    
    
    
    159,194
    
    
    
    16,810,761Total
    
    $
    20,582,956
    
    
    $
    484,875
    
    
    $
    728,107
    
    
    $
    21,795,938
  Consolidation of Variable Interest Entities
 Recently issued accounting pronouncements
 Fair Value Measurements The Fair
Value Option for Financial Assets and Financial Liabilities  including an amendment of FAS 115
(SFAS No. 159).
 Determining the Fair Value of
Financial Asset when the market for that asset is not active
 Non-controlling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51 (SFAS No. 160),
  21




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##### Table of Contents



Business Combinations
(SFAS No. 141R)
 Results of continuing operations
 Three Months Ended September 30, 2008, Compared to Three Months Ended September 30, 2007
 Operating revenues.
 Operating costs and expenses.
 Project development costs.
 Selling, general and administrative expense.
 Operating gains.
 Other income (expense).
 Income taxes.
  22




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##### Table of Contents



Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
 Operating revenues.
 Operating costs and expenses.
 Project development costs.
 Selling, general and administrative expense.
 Operating gains.
 Other income (expense).
 Income taxes.
  23




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##### Table of Contents



Liquidity and capital resources
        24




---



##### Table of Contents



FireKeepers project
     25




---



##### Table of Contents



Other projects
        26




---



##### Table of Contents



Safe harbor provision
   
    
    our growth strategies;
    
    our development and potential acquisition of new facilities;
    
    risks related to development and construction activities;
    
    anticipated trends in the gaming industries;
    
    patron demographics;
    
    general market and economic conditions;
    
    access to capital and credit, including our ability to finance future business
requirements;
    
    the availability of adequate levels of insurance;
    
    changes in federal, state, and local laws and regulations, including
environmental and gaming license legislation and regulations;
    
    regulatory approvals;
    
    competitive environment;
    
    risks, uncertainties and other factors described from time to time in this and
our other SEC filings and reports.
  Seasonality
  Regulation and taxes
   27




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##### Table of Contents



Off-balance sheet arrangements
  
 Item 3. Quantitative and qualitative disclosures about market risk
    
 Item 4(T). Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting
  28




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2 Unregistered sales of equity securities and use of proceeds
 Approximate dollarTotal number of shares
    
    
    value of shares thatTotal number
    
    
    Weighted-
    
    
    purchased as part of
    
    
    may yet be purchasedof shares
    
    
    average price
    
    
    publicly announced plan
    
    
    under the plans orPeriod
    
    purchased
    
    
    paid per share
    
    
    (1)
    
    
    programs07/01/2008
 07/31/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,000,00008/01/2008  08/31/2008
    
    
    8,600
    
    
    $
    1.64
    
    
    
    8,600
    
    
    $
    985,87209/01/2008  09/30/2008
    
    
    111,071
    
    
    
    1.48
    
    
    
    111,071
    
    
    $
    821,637Total
    
    
    119,671
    
    
    $
    1.49
    
    
    
    119,671
 (1)
    
    On July 7, 2008, the Company announced a stock repurchase plan (the
Repurchase Plan). Under the Repurchase Plan, the Companys board of directors
authorized the repurchase of up to $1,000,000 worth of shares of our common stock in
the open market or in privately negotiated transactions from time to time, in
compliance with Rule 10b-18 of the Securities and Exchange Act of 1934, subject to
market conditions, applicable legal requirements and other factors. The Repurchase
Plan does not obligate the Company to acquire any particular amount of common stock
and the plan may be suspended at any time at managements discretion. On October 14,
2008, the Companys board of directors authorized the repurchase of up to an
additional $1,000,000 worth of shares of the Companys common stock and extended the
expiration of the Repurchase Plan until April 30, 2009. 
 Item 6. Exhibits
 31.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*31.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*32.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith  29




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##### Table of Contents



SIGNATURES
  FULL HOUSE RESORTS, INC.Date:  November 12, 2008
    By:
    /s/ MARK MILLERMark MillerChief Financial Officer
(on behalf of the Registrant and
as principal financial officer)  30




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    
    Certification of principal executive officer pursuant to 18
U.S.C. section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*31.2
    
    
    Certification of principal financial officer pursuant to 18
U.S.C. section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*32.1
    
    
    Certification of principal executive officer pursuant to 18
U.S.C. section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of principal financial officer pursuant to 18
U.S.C. section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith  31