

PART I

Item 1. Business	3

3 Item 1A. Risk Factors	24

Item 1B. Unresolved Staff Comments	24

Item 2. Properties	24
		15

Item 3. Legal Proceedings	25

16 Item 4. Mine Safety Disclosures	25


PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
		17

Item 6. Selected Financial Data	26
		17

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

17 Item 7A. Quantitative and Qualitative Disclosures About Market Risk	40


Item 8. Financial Statements and Supplementary Data	41
		29

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69
		54

Item 9A. Controls and Procedures	69
		54

Item 9B. Other Information	69

54 PART III

~~PART III~~

Item 10. Directors, Executive Officers and Corporate Governance	70
		55

Item 11. Executive Compensation	70
		55

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
		55

Item 13. Certain Relationships and Related Transactions, and Director Independence	70
		55

Item 14 Principal ~~Accountants’~~Accounting Fees and Services	70
		55

Item 15. Exhibits, Financial Statement Schedules		56	71

2

In November 2004, Silver Slipper entered into a lease agreement with Cure Land Company, LLC for approximately 38 acres of land (“Land Lease”), which includes approximately 31 acres of protected marsh land as well as a seven acre casino parcel, on which the Silver Slipper was subsequently built. In December 2010, Silver Slipper entered into a lease agreement with Cure Land Company, LLC for approximately five acres of land occupied by the Silver Slipper gaming office and warehouse space. On January 31, 2012 Silver Slipper entered into a lease agreement with Chelsea Company, LLC for a small parcel of land with a building which may be occupied by a future proposed Silver Slipper welcome center. On January 11, 2013 Silver Slipper terminated a previous restaurant lease agreement with Diamondhead Country Club & Property Owners Association (“DCCPOA”) and entered into a contract to purchase services to be provided by DCCPOA related to its golf and country club.

The Land Lease includes an exclusive option to purchase the leased land (“Purchase Option”), as well as an exclusive option to purchase a four acre portion of the leased land (“4 Acre Parcel Purchase Option”), which may be exercised at any time in conjunction with a hotel development during the term of the lease for $2.0 million. On February 26, 2013, Silver Slipper entered into a third amendment to the Land Lease which amended the term and Purchase Option provisions of the Land Lease. The term of the Land Lease was extended to April 30, 2058, and the Purchase Option was extended through October 1, 2027 and may only be exercised after February 26, 2019. If there is no change in ownership, the purchase price will be $15.5 million, less $2.0 million if the 4 Acre Parcel Purchase Option has been previously exercised, plus a retained interest in Silver Slipper operations of 3% of net income. In the event that we sell or transfer substantially all of the assets of or ownership in Silver Slipper, then the purchase price will increase to $17.0 million.

In October 2011, the Rising Sun/Ohio County First, Inc. (“RSOCF”) and the Rising Sun Regional Foundation, Inc. teamed up to develop a new 104-room hotel on land adjacent to our property. On June 13, 2012, the City of Rising Sun Advisory Plan Commission (“Plan Commission”) provided a favorable recommendation to the City Council of Rising Sun, Indiana, ~~and also~~regarding a revised amendment to the plan of development, which was adopted by the City Council on July 5, 2012. On August 13, 2012, the Plan Commission approved the detailed plan of development. The parties entered into a ~~five-year~~real estate sale agreement dated May 2, 2012, for RSOCF to purchase approximately 3.0 acres of land on which the hotel will be developed for $30,000 per acre which closed in November 2012. Construction commenced in December of 2012, and the hotel is expected to open in late 2013. We believe that the added hotel room inventory in proximity to the casino facility will favorably impact revenues and visitor counts.

~~GOVERNMENT REGULATION~~Nambé

Pueblo, New Mexico

We had a note receivable related to advances made to, or on behalf of, Nambé Pueblo to fund tribal operations and development expenses related to a potential casino project. Repayment of this note was conditioned upon the development of the project, and ultimately, the successful operation of the casino. Subject to such conditions, our agreements with the Nambé Pueblo tribe provided for the reimbursement of these advances plus applicable interest, if any, either from the proceeds of any outside financing of the development and the actual operation itself. Management fully reserved the value of the note receivable from the Nambé Pueblo to $0.0 million and recognized the impairment of the note receivable during the third quarter of 2011. As of September 30, 2012, the Nambé Pueblo note receivable was written off, due to the probability that the project will not be completed and collection is unlikely.

the character of persons having any direct or indirect involvement with gaming to prevent unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity;

~~maintenance of effective control over the financial practices and financial stability of licensees, including procedures for internal controls and the safeguarding of assets and revenues;~~

~~fair operation of games; and~~

●

recordkeeping and reporting to the Nevada gaming authorities;

~~make any payment to the unsuitable person by way of principal, redemption, conversion; exchange, liquidation or similar transaction.~~

~~fails to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations;~~

~~engages in activities or enters into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees; or~~

In May 2006, we adopted a compliance plan and appointed a compliance committee which currently consists of Company directors and officers, Kenneth Adams ~~(Chair)~~(Chair and Independent Director), Carl Braunlich ~~(Director)~~(Independent Director), Kathleen Marshall ~~(Director)~~(Independent Director) and Mark J. Miller ~~(CFO~~(COO and ~~COO)~~Director), in accordance with Nevada Gaming Commission requirements. Our compliance committee meets quarterly and is responsible for implementing and monitoring our compliance with Nevada regulatory matters. This committee will also review information and reports regarding the suitability of potential key employees or other parties who may be involved in material transactions or relationships with us.

Each license entitles the licensee to own and operate one riverboat and gaming equipment as part of a gaming operation. The Indiana Act allows a person to hold up to 100% of up to two individual licenses. Each initial owner’s license runs for a period of five years. Thereafter, the license is subject to renewal on an annual basis upon a determination by the Indiana Commission that the licensee continues to be eligible for an owner’s license pursuant to the Indiana Act and the rules and regulations adopted thereunder. GEI applied for and, on March ~~17,~~15, 2011, was granted the transfer of a riverboat owner’s license.

Thereafter, GEI has renewed its license annually on September 15, 2012.

The 2012 Disparity Study showed that there were no expenditure disparities by riverboat casinos or racinos. On November 15, 2012, the Indiana Commission adopted the 2012 Disparity Study. For expenditures in all ~~other~~ areas, the Indiana Commission has taken the position that the capacity percentages set forth in the 2012 Disparity Study for MBEs and WBEs, respectively, are goals and targets for which best faith efforts of each licensee are expected. Failure to meet these goals will be scrutinized heavily by the Indiana Commission and the Indiana Act authorizes the Commission to suspend, limit or revoke an owner’s gaming license or impose a fine for failure to comply with these guidelines. However, if a determination is made that a licensee has failed to demonstrate compliance with these guidelines, the licensee has 90 days from the date of the determination to comply.

The Mississippi gaming authorities may limit, condition, suspend or revoke a license, registration, approval or finding of suitability for any cause deemed reasonable by the Mississippi Gaming Commission. If a Mississippi Gaming Commission determines that we violated gaming laws, then the approvals and licenses we hold could be limited, conditioned, suspended or revoked, and we, and the individuals involved, could be subject to substantial fines for each separate violation of the gaming laws at the discretion of the Mississippi Gaming Commission. Because of such a violation, the Mississippi Gaming Commission may attempt to appoint a supervisor to operate the casino facilities. Limitation, conditioning, or suspension of any gaming license or approval or the appointment of a supervisor could (and revocation of any gaming license or approval would) materially adversely affect us, our gaming operations and our results of operations.

● recognize any voting right by such unsuitable person in connection with such securities;

● pay the unsuitable person remuneration in any form; or

●

make any payment to the unsuitable person by way of principal, redemption, conversion; exchange, liquidation or similar transaction.

The terms and conditions of management agreements or other agreements and the operation of casinos on Indian ~~Land,~~land, are subject to the Regulatory Act, which is implemented by the NIGC. The contracts also are subject to the provisions of statutes relating to contracts with Indian tribes, which are supervised by the Department of the Interior. The Regulatory Act is interpreted by the Department of the Interior and the NIGC and may be clarified or amended by the judiciary or legislature.

● tribal access to the daily operations of the gaming enterprise, including the right to verify gross revenues and income;

● minimum guaranteed payments to the tribe, which must have priority over the retirement of development and construction costs;

● a ceiling on the repayment of such development and construction costs; and

● a contract term not exceeding five years and a management fee not exceeding 30% of ~~Net Revenues~~net revenues as defined by the agency and a determination by the chairman of the NIGC that the fee is reasonable considering the circumstances; provided that the NIGC may approve up to a seven year term and a management fee not to exceed 40% of net revenues if the NIGC is satisfied that the capital investment required or the income projections for the particular gaming activity justify the larger profit allocation and longer term.

● the management company has materially breached the terms of the management agreement, or the tribe’s gaming ordinance; or

● a trustee, exercising the skill and diligence to which a trustee is commonly held, would not approve such management agreement.

The Regulatory Act divides games that may be played on Indian ~~Land~~land into three categories. Class I Gaming includes traditional Indian games and private social games and is not regulated under the Regulatory Act. Class II Gaming includes bingo, pull tabs, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo, if those games are played at a location where bingo is played. Class III Gaming includes all other commercial forms of gaming, such as video casino games (~~e.g~~.(e.g., video slots, video blackjack), so-called “table games” (~~e.g~~.(e.g., blackjack, craps, roulette), and other commercial gaming (~~e.g~~.(e.g., sports betting and pari-mutuel wagering).

In order to have land taken into trust or otherwise be approved for use by an Indian tribe for gaming purposes by the federal Bureau of Indian Affairs (BIA), as a federal agency, the BIA is required to comply with the National Environmental Policy Act (NEPA). Likewise, in order for the NIGC to approve a management agreement for us to manage an Indian gaming casino as required by the Indian Gaming Regulatory Act, the NIGC, as a federal agency, is required to comply with NEPA. For these purposes NEPA requires a federal agency to consider the effect on the ~~human,~~ physical and natural environment of a development project as part of its approval process. Compliance with NEPA begins with conducting an environmental assessment, which considers the factors identified in NEPA, as implemented by the Council on Environmental Quality, and determines whether the development will cause a significant impact on the environment. If not, the federal agency may issue a finding of no significant impact (“FONSI”). If the federal agency determines the development project may cause a significant impact on the environment, then it will conduct a further study resulting in an environmental impact statement, which considers all impacts on the environment and what can be done to mitigate those impacts. Since this constitutes action by a federal agency, any of these determinations can be the subject of litigation.

Appropriate environmental reviews were conducted by the BIA and NIGC reviewing the impacts caused by the FireKeepers Casino project in Michigan as part of their approval process. The land was taken into trust in 2007 and the management agreement was approved in December 2007 and an amendment was approved in April 2008.

Indiana riverboat casinos are subject to regulation by the Indiana Department of Environmental Management (IDEM). That department has regulations similar to the federal Department of Environmental Protection and maintains permitting and enforcement programs in the areas of air pollution, water and wastewater pollution and hazardous waste handling. As a riverboat and land-based golf club, we are subject to the regulation of the IDEM in our operations. The IDEM has reporting requirements and can impose fines and other penalties for violations of its regulations. While there can be criminal sanctions for serious and intentional violations of the regulations, the general penalty is a fine of up to $0.03 million for each day of a violation and injunctions against continued violations and corrective orders. Rising Star Casino Resort has not been the subject of any fine or other enforcement proceeding by the IDEM.

The Rising Star is one of three riverboat casinos located on the Ohio River in southeastern Indiana. Its closest competitor is the Hollywood Casino, approximately a twenty minute drive, which is larger with 150,000 square feet of casino space, over 2,800 slot machines, 80 table games, poker room and five dining options. To the south is the Belterra Casino, approximately thirty minutes away, with 50,000 square feet of casino space, 1,350 slot machines and 47 table games. Ohio has recently authorized legalized gambling and the new Scioto Downs Racino and Hollywood Casino opened in Columbus, Ohio in June and October 2012, respectively. The Scioto Downs Racino includes over 2,100 slots and live horse racing. The Ohio Hollywood Casino includes over 3,000 slots, 70 table games and a poker room. The Horseshoe Casino Cincinnati opened on March 4, 2013 and features approximately 100,000 square feet of casino space, 2,000 slot machines, 85 table games and a poker room. There are also two proposed racinos nearby in the Cincinnati area. Each of these facilities is within the general market of Rising Star and is expected to provide competition to our Rising Star operation in 2013. While Kentucky has limited legal gaming, the cities of Lexington and Louisville are within the market of the Rising Star and there is a possibility that Kentucky will expand legalized gaming in the near future.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide the information required by this item.

Item ~~2. Properties.~~1B. Unresolved Staff Comments.

~~On August 5, 2009,~~

Not applicable.

Item 2. Properties.

The following describes our principal real estate properties. All properties listed below and substantially all other assets secure our indebtedness in connection with our First Lien Credit Agreement (“First Lien Credit Agreement”) with Capital One Bank, N.A. (“Capital One”) and our Second Lien Credit Agreement (“Second Lien Credit Agreement”) with ABC Funding, LLC, as discussed in Note 8 to the ~~FireKeepers Casino,~~consolidated financial statements set forth in Item 8. Financial Statements and Supplementary Data.

Silver Slipper Casino. We own the Silver Slipper, which ~~is managed by GEM~~leases 38 acres of land pursuant to a Lease with Option to Purchase, as amended, which expires on ~~behalf~~April 30, 2058. The leased land includes approximately 31 acres of the Michigan Tribe, commenced operations. FireKeepers Casino is located at Exit 104 directly off Interstate 94 in Battle Creek, Michigan. FireKeepers has a 106,900 square foot gaming floor with 2,801 Class III slot machines, 70 table games, a 120-seat poker room and a bingo hall. In addition, the property features five restaurants, including a 70-seat fine dining signature restaurant, a 300-seat buffet, a 150-seat 24-hour cafe and a 110-seat quick service restaurant and a grab-and-go outlet,protected marsh land as well as ~~three bar areas.~~a seven acre casino parcel. The ~~bar areas include a sports bar with high definition flat screen televisions, a 113-seat lounge with cabaret~~Silver Slipper is located in Bay St. Louis, Mississippi and live entertainment and a lounge within our fine dining area. The casino also has an approximately 4,000 square-foot multi-function room used for special events and a gift shop with branded merchandise, an attached multi-level parking garage that accommodates approximately 2,100 vehicles, surface parking for an additional 600 vehiclesincludes 37,000 square feet of gaming space and an ~~area for bus~~adjacent surface lot. We also lease approximately five acres of land occupied by the Silver Slipper gaming office and ~~recreational vehicle parking. On December 2,~~

~~2010,~~warehouse space, as well as a small parcel of land with a building which will be occupied by the ~~FireKeepers Development Authority entered into a hotel consulting services agreement with GEM, as the consultant, related~~Silver Slipper welcome center, which will offer incentives and present promotions to the FireKeepers Casino phase II development project, which includes development of a hotel, multi-purpose/ballroom facility, surface parking and related ancillary support spaces and improvements. GEM is performing hotel consulting services for a fixed fee of $0.01 million per month, continuing through to the opening of the project, provided the total fee for services do not exceed $0.2 million in total. In March 2011, the Authority announced that it plans to construct a 240 room resort style hotel on the FireKeepers Casino site. The project is under construction and is anticipated to open in fourth quarter 2012.

~~On April 1, 2011, we purchased the Grand Victoria~~guests.

We own and operate the Silver Slipper in Bay St. Louis, Mississippi, the Rising Star in Rising Sun, Indiana, Stockman’s ~~Casino~~ in Fallon, Nevada and we lease and operate the Grand Lodge in Incline Village, Nevada. We ~~also own 50% of GEM, a joint venture with RAM, where we are the primary beneficiary and, therefore, consolidate GEM in~~receive management fees from our ~~consolidated financial statements. GEM has a 7-year~~ management agreement with the ~~Nottawaseppi Huron Band~~Pueblo of ~~Potawatomi Indians~~Pojoaque for the ~~development and~~ management of the ~~FireKeepers~~Buffalo Thunder in Santa Fe, New Mexico along with the Pueblo’s Cities of Gold and Sports Bar casino facilities.

Management believes that under the circumstances, essentially three critical dates and events that impact the project specific discount rate adjustment when using CAPM are: (1) the date that management completes its feasibility assessment and decides to invest in the opportunity; (2) the date that construction financing has been obtained after all legal obstacles have been removed; and (3) the date that operations commence.

Item 8. ~~Financial Statements.~~Financial Statements and Supplementary Data.


		Page
Report of Independent Registered Public Accounting Firm			30	42
~~Consolidated Balance Sheets~~			31
Consolidated Statements of Operations			32	43
Consolidated Balance Sheets	44
Consolidated Statements of Stockholders’ Equity			33	45
Consolidated Statements of Cash Flows			34	46
Notes to Consolidated Financial Statements			35	47

41

REPORT OF ~~INDEPENDENT~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Full House Resorts, Inc.

Las Vegas, NV

We have audited the accompanying consolidated balance sheets of Full House Resorts, Inc. and Subsidiaries (collectively, the “Company”) as of December 31, ~~2011~~2012 and ~~2010,~~2011, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, ~~2011~~2012 and ~~2010,~~2011, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Piercy Bowler Taylor & Kern

Piercy Bowler Taylor & Kern

Certified Public Accountants

Las Vegas, Nevada

March ~~7, 2012~~

5, 2013

42

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

~~CONSOLIDATED BALANCE SHEETS~~

September 30, September 30,
     December 31,
2011    December 31,
2010
ASSETS

Current assets

Cash and equivalents
     $ 14,707,464       $ 13,294,496
Accounts receivable, net of allowance for doubtful accounts of $1,158,013 and $0
     4,865,195       2,276,422
Incomes taxes receivable
     —         598,886
Prepaid expenses
     2,486,975       796,858
Deferred tax asset
     750,580       101,417
Deposits and other
     404,171       106,810




     23,214,385       17,174,889




Property and equipment, net of accumulated depreciation
     38,668,283       7,372,251




Long-term assets related to tribal casino projects

Notes receivable, net of allowance of $661,600 and $0
     —         427,567
Contract rights, net of accumulated amortization of $6,492,981 and $4,120,775
     10,872,605       13,244,811




     10,872,605       13,672,378




Other assets

Goodwill
     7,455,718       10,308,520
Intangible assets, net of accumulated amortization of $425,000 and $0
     11,720,727       476,050
Long term deposits
     142,114       5,166,112
Loan fees, net of accumulated amortization of $934,491 and $96,087
     1,898,492       2,088,104
Deferred tax asset
     645,617       —
Other assets
     —         192,482




     21,862,668       18,231,268




     $ 94,617,941       $ 56,450,786




LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable
     $ 1,613,819       $ 181,604
Income taxes payable
     2,409,612       384,333
Accrued player club points and progressive jackpots
     1,750,981       40,506
Accrued payroll and related
     4,033,866       750,346
Other accrued expenses
     2,427,197       188,817
Current portion of long-term debt
     4,950,000       —




     17,185,475       1,545,606
Long-term debt, net of current portion
     21,987,422       —
Deferred tax liability
     —         2,110,333




     39,172,897       3,655,939




Stockholders’ equity

Common stock, $.0001 par value, 25,000,000 shares authorized; 20,030,276 and 19,364,276 shares issued
     2,003       1,936
Additional paid-in capital
     43,447,798       42,699,533
Treasury stock, 1,356,595 common shares
     (1,654,075 )    (1,654,075 )
Retained earnings
     8,507,926       6,164,927




     50,303,652       47,212,321
Noncontrolling interest in consolidated joint venture
     5,141,392       5,582,526




     55,445,044       52,794,847




     $ 94,617,941       $ 56,450,786

(In thousands, except per share data)

	December 31, 2012			December 31, 2011

Revenues
Casino	$	112,649		$	74,708
Food and beverage		6,223			4,517
Management fees		7,180			24,186
Other operations		2,708			2,050
		128,760			105,461
Operating costs and expenses
Casino		62,976			42,509
Food and beverage		5,973			4,469
Other operations		5,614			4,465
Project development and acquisition costs		1,861			793
Selling, general and administrative		37,003			25,429
Depreciation and amortization		6,884			7,001
		120,311			84,666
Operating gains (losses)
Gain on sale of joint venture		41,189			--
Equity in net income of unconsolidated joint venture, and related guaranteed payments		--			3,306
Impairment losses		--			(4,920	)
Unrealized losses on notes receivable, tribal governments		--			(8	)
		41,189			(1,622	)
Operating income		49,638			19,173
Other income (expense)
Interest expense		(2,731	)		(2,838	)
Gain (loss) on derivative instruments		8			(513	)
Other income (expense)		(6	)		8
Loss on extinguishment of debt		(1,719	)		--
		(4,448	)		(3,343	)
Income before income taxes		45,190			15,830
Income tax expense		15,175			3,240
Net income		30,015			12,590
Income attributable to noncontrolling interest in consolidated joint venture		(2,181	)		(10,247	)
Net income attributable to the Company	$	27,834		$	2,343

Net income attributable to the Company per common share	$	1.49		$	0.13

Weighted-average number of common shares outstanding		18,677,544			18,397,599

See notes to consolidated financial statements.

43

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENTS~~BALANCE SHEETS

(In thousands, except shares)

December 31,
2012

December 31,
2011

ASSETS
Current assets
Cash and equivalents $ 20,603 $ 14,707
Accounts receivable, net of allowance for doubtful accounts of $959 and $1,158 2,657 4,865
Prepaid expenses 5,744 2,487
Deferred tax asset 2,110 751
Other
1,225 404
32,339 23,214
Property and equipment, net of accumulated depreciation 83,673 38,668

Long-term assets related to tribal casino projects
Notes receivable, net of allowance of $662 in 2011 -- --
Contract rights, net of accumulated amortization of $0 and $6,493 -- 10,873
-- 10,873
Other assets
Goodwill 22,127 7,456
Intangible assets, net of accumulated amortization of $1,506 and $425 18,106 11,721
Long term deposits 301 142
Loan fees, net of accumulated amortization of $496 and $934 5,159 1,898
Deferred tax asset 1,020 646
46,713 21,863
$ 162,725 $ 94,618
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 2,532 $ 1,614
Income taxes payable 7 2,410
Accrued player club points and progressive jackpots 2,378 1,751
Accrued payroll and related 4,107 4,034
Other accrued expenses 3,808 2,427
Current portion of long-term debt 2,500 4,950
15,332 17,186

Long-term debt, net of current portion 66,250 21,987
Deferred tax liability 10 --
81,592 39,173
Stockholders’ equity
Common stock, $.0001 par value, 100,000,000 shares authorized; 20,036,276 and 20,030,276 shares issued 2 2
Additional paid-in capital 44,707 43,448
Treasury stock, 1,356,595 common shares (1,654 ) (1,654 )
Retained earnings 38,078 8,508
81,133 50,304
Noncontrolling interest in consolidated joint venture -- 5,141
81,133 55,445
$ 162,725 $ 94,618

See notes to consolidated financial statements.

44

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~STOCKHOLDERS’ EQUITY

September 30, September 30,
     December 31,
2011    December 31,
2010
Revenues

Casino
     $ 74,708,091       $ 6,529,773
Food and beverage
     4,517,072       1,728,879
Hotel
     600,088       —
Management fees
     24,185,587       24,473,066
Other operations
     1,450,222       165,411




     105,461,060       32,897,129




Operating costs and expenses

Casino
     42,508,624       2,159,199
Food and beverage
     4,469,488       2,016,394
Hotel
     546,212       —
Other operations
     3,918,584       —
Project development and acquisition costs
     792,747       423,160
Selling, general and administrative
     25,428,999       6,429,845
Depreciation and amortization
     7,001,776       3,421,256




     84,666,430       14,449,854




Operating gains (losses)

Equity in net income of unconsolidated joint venture, and related guaranteed payments
     3,306,035       5,094,664
Impairment loss
     (4,919,703 )    —
Unrealized gains (loss) on notes receivable, tribal governments
     (7,864 )    (2,900 )




     (1,621,532 )    5,091,764




Operating income
     19,173,098       23,539,039
Other income (expense)

Interest expense
     (2,838,205 )    (58,368 )
Loss on derivative instruments
     (513,328 )    —
Interest and other income
     8,056       120,750




Income before income taxes
     15,829,621       23,601,421
Income taxes
     (3,239,599 )    (5,739,430 )




Net income
     12,590,022       17,861,991
Income attributable to noncontrolling interest in consolidated joint venture
     (10,247,023 )    (10,192,744 )




Net income attributable to the Company
     $ 2,342,999       $ 7,669,247




Net income attributable to the Company per common share
     $ 0.13       $ 0.43




Weighted-average number of common shares outstanding
     18,397,599       18,005,390

(In thousands)

					Additional												Total
	Common stock				paid-in		Treasury stock					Retained		Noncontrolling			Stockholders’
December 31, 2012	Shares		Dollars		capital		Shares		Dollars			Earnings		interest			Equity

Beginning balances		20,030	$	2	$	43,448		1,357	$	(1,654	)	$	8,508	$	5,141		$	55,445
Previously deferred share-based compensation recognized		--		--		1,242		--		--			--		--			1,242
Issuances of common stock		6		--		17		--		--			--		--			17

Distributions to non-controlling interest in consolidated joint venture		--		--		--		--		--			--		(3,586	)		(3,586	)

Sale of interest in joint venture		--		--		--		--		--			1,736		(3,736	)		(2,000	)

Net income		--		--		--		--		--			27,834		2,181			30,015

Ending balances		20,036	$	2	$	44,707		1,357	$	(1,654	)	$	38,078	$	--		$	81,133

					Additional												Total
	Common stock				paid-in		Treasury stock					Retained		Noncontrolling			Stockholders’
December 31, 2011	Shares		Dollars		capital		Shares		Dollars			Earnings		interest			Equity

Beginning balances		19,364	$	2	$	42,700		1,357	$	(1,654	)	$	6,165	$	5,582		$	52,795
Issuance of share based compensation		660		--		--		--		--			--		--			--

Previously deferred share-based compensation recognized		--		--		724		--		--			--		--			724
Issuances of common stock		6		--		24		--		--			--		--			24
Distributions to non-controlling interest in consolidated joint venture		--		--		--		--		--			--		(10,688	)		(10,688	)

Net income		--		--		--		--		--			2,343		10,247			12,590

Ending balances		20,030	$	2	$	43,448		1,357	$	(1,654	)	$	8,508	$	5,141		$	55,445

See notes to consolidated financial statements

45

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	2012			2011
Cash flows from operating activities:
Net income attributable to the Company	$	27,834		$	2,343
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of unconsolidated investee		--			(1,754	)
Distributions from unconsolidated investee		--			1,946
Non-controlling interest in consolidated joint venture		2,181			10,247
Gain on sale of joint venture		(41,189	)		--
Depreciation		5,270			4,205
Amortization of gaming and other rights		593			2,372
Nambé notes receivable impairment loss adjustment		--			420
Stockman’s goodwill impairment loss adjustment		--			4,500
Loss on derivative		--			513
Amortization of loan fees		2,395			838
Amortization of player loyalty program, land lease and water rights		1,021			425
Other		90			57
Deferred and share-based compensation		1,259			748
Increases and decreases in operating assets and liabilities:
Accounts receivable, net		2,840			(702	)
Prepaid expenses		(1,460	)		(785	)
Deferred tax		(1,724	)		(1,295	)
Other assets		(442	)		52
Accounts payable and accrued expenses		(567	)		2,962
Income taxes payable		(2,402	)		2,025
Deferred tax liability		--			(2,110	)
Net cash (used in) provided by operating activities		(4,301	)		27,007
Cash flows from investing activities:
Proceeds from sale of joint venture		49,658			--
Purchase of property and equipment		(2,986	)		(3,234	)
Proceeds from sale of assets		96			10
Silver Slipper deposits and other capitalized acquisition costs		(1,286	)		--
Rising Star deposits and other capitalized acquisition costs		--			(19,514	)
Grand Lodge acquisition		--			75
Trademark		(7	)		(17	)
Other		(204	)		(45	)
Net cash provided by (used in) investing activities		45,271			(22,725	)
Cash flows from financing activities:
Repayment of long-term debt		(28,187	)		(6,600	)
Distributions to non-controlling interest in consolidated joint venture		(3,323	)		(10,688	)
Proceeds from borrowings		--			15,104
Loan fees		(3,564	)		(649	)
Deferred offering costs		--			(36	)
Net cash used in financing activities		(35,074	)		(2,869	)
Net increase in cash and equivalents		5,896			1,413
Cash and equivalents, beginning of year		14,707			13,294
Cash and equivalents, end of year	$	20,603		$	14,707

	2012		2011
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	1,877	$	2,010
Cash paid for income taxes	$	21,876	$	4,706
Purchases of property and equipment financed with prior year deposit			$	5,000
Borrowings paid directly to sellers and vendors at closing	$	70,000

See notes to consolidated financial statements.

46

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000
        Common stock
Additional
paid-in
   Treasury stock    Retained      Noncontrolling
Total
stockholders’

December 31, 2011
     Shares      Dollars      capital    Shares      Dollars    earnings      interest    equity
Beginning balances
     19,364,276         $ 1,936         $ 42,699,533       1,356,595         $ (1,654,075 )    $ 6,164,927         $ 5,582,526       $ 52,794,847
Issuance of share based compensation
     660,000         66         (66 )    —           —         —           —         —
Previously deferred share-based compensation recognized
     —           —           724,272       —           —         —           —         724,272
Issuances of common stock
     6,000         1         24,059       —           —         —           —         24,060
Distribution to non-controlling interest in consolidated joint venture
     —           —           —         —           —         —           (10,688,157 )    (10,688,157 )
Net income
     —           —           —         —           —         2,342,999         10,247,023       12,590,022
















Ending balances
     20,030,276         $ 2,003         $ 43,447,798       1,356,595         $ (1,654,075 )    $ 8,507,926         $ 5,141,392       $ 55,445,044

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY~~ 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000 0000,000,000
        Common stock
Additional
paid-in
     Treasury stock
Retained
earnings
   Noncontrolling
Total
stockholders’

December 31, 2010
     Shares      Dollars      capital      Shares      Dollars    (deficit)    interest    equity
Beginning balances
     19,358,276         $ 1,936         $ 42,665,390         1,356,595         $ (1,654,075 )    $ (1,504,320 )    $ 5,447,995       $ 44,956,926
Previously deferred share-based compensation recognized
     —           —           16,683         —           —         —         —         16,683
Issuances of common stock
     6,000         —           17,460         —           —         —         —         17,460
Distributions to non-controlling interest in consolidated joint venture
     —           —           —           —           —         —         (10,058,213 )    (10,058,213 )
Net income
     —           —           —           —           —         7,669,247       10,192,744       17,861,991
















Ending balances
     19,364,276         $ 1,936         $ 42,699,533         1,356,595         $ (1,654,075 )    $ 6,164,927       $ 5,582,526       $ 52,794,847

~~See notes to consolidated financial statements~~

~~FULL HOUSE RESORTS, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

September 30, September 30,
     2011    2010
Cash flows from operating activities:

Net income attributable to the Company
     $ 2,342,999       $ 7,669,247
Adjustments to reconcile net income to net cash provided by operating activities:

Equity in net income of unconsolidated investee
     (1,753,661 )    (3,181,139 )
Distributions from unconsolidated investee
     1,946,142       3,096,193
Non-controlling interest in consolidated joint venture
     10,247,024       10,192,744
Unrealized gain on notes receivable, tribal governments
     7,864       2,900
Gain on disposal of fixed assets
     (6,003 )    (6,101 )
Depreciation
     4,204,570       1,049,051
Amortization of gaming and other rights
     2,372,206       2,372,205
Nambé notes receivable impairment loss adjustment
     419,703       —
Stockman’s goodwill impairment loss adjustment
     4,500,000       —
Nevada gaming license write-off
     53,307       —
Loss on derivative
     513,328       —
Amortization of loan fees
     838,403       —
Amortization of player loyalty program
     425,000       —
Deferred and share-based compensation
     748,332       34,143
Increases and decreases in operating assets and liabilities:

Accounts receivable
     (701,643 )    (1,390,788 )
Prepaid expenses
     (784,979 )    (424,123 )
Deferred tax asset
     (1,294,780 )    34,709
Deposits and other current assets
     (200 )    (16,125 )
Other assets
     52,280       158,862
Accounts payable and accrued expenses
     2,962,215       10,088
Income taxes payable
     2,025,280       (1,889,444 )
Deferred tax liability
     (2,110,333 )    354,248




Net cash provided by operating activities
     27,007,054       18,066,670




Cash flows from investing activities:

Proceeds from repayment of tribal advances
     —         5,000,000
Purchase of property and equipment
     (3,233,984 )    (360,481 )
Proceeds from sale of assets
     10,480       1,200
Rising Star deposits and other capitalized acquisition costs
     (19,514,157 )    (5,122,245 )
Grand Lodge acquisition
     75,418       —
Trademark
     (17,101 )    —
Other
     (45,881 )    (15,100 )




Net cash used in investing activities
     (22,725,225 )    (496,626 )




Cash flows from financing activities:

Repayment of long-term debt
     (6,600,000 )    (1,450,087 )
Distributions to non-controlling interest in consolidated joint venture
     (10,688,158 )    (10,058,213 )
Proceeds from borrowings
     15,103,891       —
Loan fees
     (648,793 )    (1,965,647 )
Deferred offering costs
     (35,801 )    —




Net cash used in financing activities
     (2,868,861 )    (13,473,947 )




Net increase in cash and equivalents
     1,412,968       4,096,097
Cash and equivalents, beginning of year
     13,294,496       9,198,399




Cash and equivalents, end of year
     $ 14,707,464       $ 13,294,496




     2011    2010
SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest
     $ 2,009,781



Cash paid for income taxes
     $ 4,706,118       $ 8,259,760




Purchases of property and equipment financed with prior year deposit
     $ 5,000,000       $ 94,185

~~See notes to consolidated financial statements.~~

~~FULL HOUSE RESORTS, INC. AND SUBSIDIARIES~~

NOTES TO ~~CONSOLIDATED~~CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION, NATURE AND HISTORY OF OPERATIONS

Nature of operations and key ~~relationships~~. relationships. Full House Resorts, Inc. (“we,” “us,” “our,” “Full House” or the “Company”), develops, manages, operates, and/or invests in ~~and/or owns~~ gaming related enterprises. ~~The Company continues~~We continue to actively investigate, individually and with partners, new business ~~opportunities.~~opportunities, and our long-term strategy is to continue deriving revenues primarily from owned operations as well as management fees. In furtherance of that strategy we made significant acquisitions of the Rising Star Casino Resort (“Rising Star”) in 2011 and the Silver Slipper Casino (“Silver Slipper”) in 2012. With the sale of the management agreement for the FireKeepers Casino in Michigan also in 2012, we have transitioned the primary source of our revenues to owned entities.

We currently own three properties, the Rising Star located in Rising Sun, Indiana, the Silver Slipper located in Bay St. Louis, Mississippi and Stockman’s Casino (“Stockman’s”) located in Fallon, Nevada. We lease one property, the Grand Lodge Casino (“Grand Lodge”) at the Hyatt Regency Lake Tahoe Resort, Spa and Casino located in Incline Village, Nevada on the North Shore of Lake Tahoe. We manage the Buffalo Thunder Casino and Resort (“Buffalo Thunder”) and the Cities of Gold and Sports Bar casino facilities, both located in Santa Fe, New Mexico, for the Pueblo of Pojoaque pursuant to an agreement with a three year term expiring May 2014.

Previously we managed, through a 50% joint venture, the FireKeepers Casino near Battle Creek, Michigan for the Nottawaseppi Huron Band of Potawatomi (“the Michigan Tribe”) pursuant to a 7-year management agreement with the Michigan Tribe. On March 30, 2012, the joint venture sold the equity of the joint venture and the management agreement to the FireKeepers Development Authority (“FDA”), a tribal entity formed by the Michigan Tribe, for $97.5 million.

On October 1, 2012, we acquired all of the outstanding membership interest of the entity operating the Silver Slipper for $69.3 million, exclusive of net working capital balances, fees and expenses. The sale of the equity interests of the joint venture managing FireKeepers Casino and the related management agreement to the FDA and the subsequent purchase of the Silver Slipper in 2012 significantly transitioned us from an operating company that principally managed gaming properties to an operating company that principally derives revenues from owned operations.

Silver Slipper. The Silver Slipper is on the far west end of the Mississippi Gulf Coast (22 miles west of Gulfport, 34 miles from Biloxi) in Bay St. Louis, Mississippi and is approximately one hour (56 miles) from New Orleans, Louisiana. The property has over 37,000 square feet of gaming space containing approximately 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 two casino bars. The property draws heavily from the New Orleans metropolitan area and other communities in southern Louisiana and southwestern Mississippi.

We acquired all of the outstanding membership interests in Silver Slipper Casino Venture LLC, the owner of the Silver Slipper, on October 1, 2012, for $69.3 million, exclusive of net working capital balances, fees and expenses.

47

Rising Star.On April 1, 2011, we acquired all of the operating assets of Grand Victoria Casino & Resort, L.P. through Gaming Entertainment (Indiana) LLC, our wholly-owned subsidiary. ~~In August 2011,~~We renamed the property ~~which~~as the Rising Star Casino Resort in August 2011. The property has 40,000 square feet of casino space and includes over 1,300 slot and video poker machines, 37 table games, a ~~201-room~~190-room hotel, five dining outlets and an 18-hole Scottish links golf ~~course, was renamed Rising Star Casino Resort (“Rising Star”).~~course.

Grand Lodge. On September 1, 2011, we purchased the operating assets of the Grand Lodge~~. On June 28, 2011, the Company, through a wholly owned subsidiary,~~ and entered into a ~~five-year~~5-year lease ~~agreement~~ with Hyatt Equities LLC for the ~~Grand Lodge Casino (“Grand Lodge”) at~~casino space in the Hyatt Regency ~~Lake Tahoe~~ Resort, Spa and Casino in Incline Village, Nevada on the north shore of Lake Tahoe. The ~~Company will pay a fixed monthly rent of $0.1 million over the initial term of the lease. On September 1, 2011, the Company acquired the operating assets and certain liabilities related~~lease has an option, subject to ~~the Grand Lodge Casino~~mutual agreement, to renew for ~~purchase price of approximately $0.7 million, exclusive of operating cash and working capital.~~an additional 5-year term. The Grand Lodge ~~Casino features~~has 18,900 square feet of casino space featuring approximately ~~258~~257 slot machines, 2116 table games and 4 poker ~~tables~~tables.

Stockman’s. We acquired Stockman’s Casino in Fallon, Nevada (“Stockman’s”) on January 31, 2007. Stockman’s has approximately 8,400 square feet of gaming space with approximately 265 slot machines, four table games and keno. The facility also has a bar, a fine dining restaurant and a coffee shop.

Stockman’s is ~~integrated~~located on the west side of Fallon on Highway 50, approximately 60 miles east of Reno, Nevada. It is the largest of several casinos in the Churchill County area. Churchill County’s population is approximately 25,000, and includes a nearby naval air base which has a significant economic impact on our business. Of the nine casinos currently operating in the Fallon, Nevada market, our major competitors are three other casinos that are smaller than Stockman’s both in size and in number of gaming machines.

Buffalo Thunder. In May 2011, we entered into ~~Hyatt Regency Lake Tahoe~~a three-year agreement with the Pueblo of Pojoaque, which has been approved by the National Indian Gaming Commission (“NIGC”) as a management contract, to advise on the operations of the Buffalo Thunder Casino and Resort ~~Spa~~(“Buffalo Thunder”) in Santa Fe, New Mexico along with the Pueblo’s Cities of Gold and ~~Casino.~~

~~GED.~~Sports Bar casino facilities. We ~~until~~receive a base consulting fee of $0.1 million per month plus quarterly success fee based on achieving certain financial targets and incur only minimal incremental operating costs related to the contract. Our management and related agreements with the Buffalo Thunder became effective on September 23, 2011. The Buffalo Thunder features approximately 1,200 slot machines, 18 table games and a poker room and the property’s gaming space covers approximately 61,000 square feet. The Cities of Gold and Sports Bar casino facilities include a simulcast area.

GEM. Until March 30, 2012, we owned 50% of Gaming Entertainment (Michigan), LLC (“GEM”), a joint venture with RAM Entertainment, LLC, a privately-held investment company. GEM had the exclusive right to provide casino management services at the FireKeepers Casino for the Michigan Tribe for seven years commencing on August 5, 2009. On December 2, 2010, the FDA entered into a hotel consulting services agreement with GEM, as the consultant, related to the FireKeepers Casino phase II development project, which included development of a hotel, multi-purpose/ballroom facility, surface parking and related ancillary support spaces and improvements. GEM was to perform hotel consulting services for a fixed fee of $12,500 per month, continuing through to the opening of the project, provided the total fee for services did not exceed, in the aggregate, $0.2 million. On May 22, 2012, we signed an amendment to the hotel consulting services agreement extending the terms of the agreement through November 2012.

In addition to the $97.5 million sale price, the FDA paid RAM and us $1.2 million each, equal to the management fee that would have been earned under the management agreement for April 2012.

GED. Until August 31, 2011, we were a noncontrolling 50% investor in Gaming Entertainment (Delaware), LLC (“GED”), a joint venture with Harrington Raceway, Inc. (“HRI”). GED had a 15 year management contract through August 2011 with Harrington Casino at the Delaware State Fairgrounds in Harrington, Delaware.

Under the terms of the joint venture agreement, as restructured in 2007, the Company received the greater of 50% of GED’s member distribution as currently prescribed under the joint venture agreement, or a 5% growth rate in its 50% share of GED’s prior year member distribution through the expiration of the GED management contract in August 2011 (Note 3).

~~GEM.~~ We own 50% of Gaming Entertainment Michigan, LLC (“GEM”), a joint venture with RAM Entertainment, LLC (“RAM”), where the Company is the primary beneficiary and, therefore, we consolidated GEM in our consolidated financial statements. RAM is a privately-held investment company. GEM has a 7-year management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the development and management of the FireKeepers Casino near Battle Creek, Michigan. More specifically, the joint venture has the exclusive right to provide casino management services to the Michigan tribe in exchange for a management fee, after certain other distributions are paid to the Tribe, of 26% of net revenues (defined effectively as net income before management fees) for seven years which commenced upon the opening of the FireKeepers Casino on August 5, 2009.

On August 5, 2009, the FireKeepers Casino commenced operations. FireKeepers Casino is located at Exit 104 directly off Interstate 94 in Battle Creek, Michigan. FireKeepers Casino has a 106,900 square foot gaming floor with 2,801 Class III slot machines, 70 table games, a 120-seat poker room and a bingo hall. In addition, the property features five restaurants, including a 70-seat fine dining signature restaurant, a 300-seat buffet, a 150-seat 24-hour cafe and a 110-seat quick service restaurant and a grab-and-go outlet, as well as three bar areas. The bar areas include a sports bar with high definition flat screen televisions, a 113-seat lounge with cabaret and live entertainment and a lounge within our fine dining area. The casino also has an approximately 4,000 square-foot multi-function room used for special events and a gift shop with branded merchandise, an attached multi-level parking garage that accommodates approximately 2,100 vehicles, surface parking for an additional 600 vehicles and an area for bus and recreational vehicle parking.

On December 2, 2010, the FireKeepers Development Authority entered into a hotel consulting services agreement with GEM, as the consultant, related to the FireKeepers Casino phase II development project, which includes development of a hotel, multi-purpose/ballroom facility, surface parking and related ancillary support spaces and improvements. GEM is performing hotel consulting services for a fixed fee of $0.01 million per month, continuing

through to the opening of the project, provided the total fee for services do not exceed $0.2 million in total. Construction of the hotel and events center development commenced in May 2011 and will include a larger bingo facility, an entertainment venue and dining options, and a 242-room hotel that will include an indoor pool, exercise facility, full-service restaurant, and multi-purpose event center. The Project is anticipated to open in the fall of 2012.

~~Stockman’s~~. We acquired 100% of the stock of Stockman’s Casino in Fallon, Nevada (“Stockman’s”) on January 31, 2007. Stockman’s Casino has approximately 8,400 square feet of gaming space with approximately 265 slot machines, four table games and keno. The facility also has a bar, a fine dining restaurant and a coffee shop.

~~Other.~~ In May 2011, the Company entered into a three-year agreement with the Pueblo of Pojoaque to advise on the operations of the Buffalo Thunder Casino and Resort in Santa Fe, New Mexico along with the Pueblo’s Cities of Gold and Sports Bar casino facilities. The Company receives a base fee of $0.1 million per month plus a success fee based on achieving certain financial targets and expects to incur only minimal incremental operating costs related to the contract. The Company’s agreements were submitted to the National Indian Gaming Commission (NIGC) and were approved as a management contract on September 2, 2011. During its review, the NIGC determined that the relationship of the Company to the casino facilities was a management relationship and the agreement is treated as a management contract for purposes of the NIGC review and approval. Effective on September 23, 2011, the Pueblo issued a Notice to Commence and the Company began management of the casino facilities.

48

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and accounting.The consolidated financial statements include our accounts and the accounts of ~~the Company and its~~our wholly-owned subsidiaries, including ~~Gaming Entertainment (Indiana) LLC (“~~the Silver Slipper, Rising ~~Star”), Gaming Entertainment (Nevada) LLC (“~~Star, Grand ~~Lodge”)~~Lodge and ~~Stockman’s Casino (“Stockman’s”). Gaming Entertainment (Michigan), LLC (“GEM”),~~Stockman’s. GEM, a 50%-owned investee ~~of the Company~~ that is was jointly owned by RAM Entertainment, LLC (“RAM”), ~~has been~~until March 30, 2012, was consolidated pursuant to the relevant portions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ (”(“ASC”) Topic 810, “Consolidation.” ~~The Company accounts~~We accounted for ~~its~~our investment in ~~Gaming Entertainment (Delaware), LLC (“GED”)~~GED (Note 3) using the equity method of accounting. All material intercompany accounts and transactions have been eliminated.

~~The Company has not~~

We have elected to not adopt the option available under ASC Topic 825, ~~“Financial~~”Financial Instruments”, to measure any of ~~its~~our eligible financial instruments or other items. Accordingly, except where carried at estimated fair value under other generally accepted accounting principles and disclosed herein (Note 4), ~~the Company continues~~we continue to measure all of ~~its~~our assets and liabilities on the historical cost basis of accounting.

Use of estimates.The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts. Certain of the accounting policies, including the determination of player loyalty program liability, the estimated useful lives assigned to assets, asset impairment, collectability of receivables, valuation of derivative instruments, purchase price allocations made in connection with acquisitions and the calculation of income tax liabilities, require application of significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Judgments are based on ~~the Company’s~~our historical experience, terms of existing contracts, observance of trends in the gaming industry and information available from other outside sources. There can be no assurance that actual results will not differ from our estimates.

The significant accounting estimates inherent in the preparation of our financial statements primarily include management’s ~~evaluation of the recoverability of our investments in contract rights and licenses,~~ valuation of Stockman’s and Rising Star’s goodwill and ~~estimates used~~purchase price allocations made in ~~assumptions for reporting the gains or losses from the derivative instrument related to~~connection with our ~~swap agreement with Wells Fargo.~~acquisitions. Other accounting estimates include management’s opinion of collectability of receivables and fair value estimates related to valuation of receivables, as well as estimates related to lives of depreciable and amortizable assets and proper calculation of payroll liabilities such as paid time off, medical benefits, bonus accruals and other liabilities including slot club points and tax liabilities. Various assumptions, principally affecting the timing and other factors, underlie the determination of some of these significant estimates. The process of determining significant estimates is fact-and project-specific and takes into account factors such as historical experience and current and expected legal, regulatory and economic conditions. Estimates and assumptions are regularly evaluated, particularly in areas, if any, where changes in such

estimates and assumptions could have a material impact on the results of operations, financial position and, generally to a lesser extent, cash flows. Where recoverability of these assets or planned investments are contingent upon the successful development and management of a project, the following items are evaluated: likelihood that the project will be completed, prospective market dynamics and how the proposed facilities should compete in that setting in order to forecast future cash flows necessary to recover the recorded value of the assets or planned investment. Conclusions are reviewed as warranted by changing conditions.

Cash equivalents.Cash in excess of daily requirements is invested in highly liquid short-term investments with initial maturities of three months or less when purchased and are reported as cash equivalents in the consolidated financial statements.

49

Fair value of financial instruments.The carrying value of ~~the Company’s~~our cash and equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of those instruments. The estimated fair values of ~~the Company’s~~our debt ~~approximate~~approximates their recorded values as of the balance sheet dates presented, based on level 2 inputs consisting of interest rates offered to ~~the Company~~us for loans of the same or similar remaining maturities and bearing similar risks.

Concentrations and economic risks and uncertainties.The United States and the world has experienced a widespread and severe ~~recession~~economic slowdown accompanied by, among other things, weakness in consumer spending including gaming activity and reduced credit and capital financing availability, ~~and is also engaged in war,~~ all of which have far-reaching effects on economic conditions in the country for an indeterminate period. Our operations are currently concentrated in the Gulf Coast, Indiana, northern Nevada, and New ~~Mexico and Michigan.~~Mexico. Accordingly, future operations could be affected by adverse economic conditions and increased competition particularly in those areas and their key feeder markets in neighboring states. ~~Prior to September 1, 2011, our operations included the Harrington Casino in Delaware.~~ The effects and duration of these conditions and related risks and uncertainties on our future operations and cash flows, including our access to capital or credit financing, cannot be estimated at this time, but may be significant. For the year ended December 31, 2011 and December 31, 2010, the Company’s revenues from its 50% interest in GED were $3.3 million and 5.1 million, respectively, which represent 3% and 16% of the Company’s total annual revenues for the respective years. Since the acquisition of the Grand Victoria Casino & Resort, which occurred as of April 1, 2011, the Grand Lodge Casino, which occurred as of September 1, 2011, and the Buffalo Thunder management contract in May 2011, the impact of the lost revenues from GED has been diminished.

~~Except as discussed in the following paragraph, the Company’s credit risk (or market risk) is concentrated in derivative instruments (Note 9).~~

Accounts receivable are uncollateralized and carried, net of an appropriate allowance, at their estimated collectible value based on customers’ past credit history and current financial condition and on current general economic conditions. Since credit is extended on a short-term basis, accounts receivables do not normally bear interest. The allowances for doubtful accounts are estimated by management for accounts that are partially or entirely uncollectible. ~~The Company records~~We record uncollectible allowances over 90 days old as a charge to selling, general and administrative expenses. Accounts receivable consists primarily of returned checks and markers. ~~The Company reviews~~We review the receivables and related aging to estimate a factor for estimating the allowance for our receivables.

Property and equipment.Property and equipment (Note 7) is stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the capitalized lease, whichever is less. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. Estimates and assumptions are made when accounting for capital expenditures. Whether an expenditure is considered a maintenance expense or a capital asset is a matter of judgment. Depreciation expense is highly dependent on the assumptions made about our ~~assets'~~assets’ estimated useful lives. The estimated useful lives are determined based on experience with similar assets and estimate of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, the change is accounted for prospectively. Property and equipment and other long-lived assets are evaluated for impairment in accordance with the accounting guidance in the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360-10.

Intangible Assets.Our finite-lived intangible assets include customer relationship player loyalty programs, land leases, water rights and ~~management contract intangibles.~~bank loan fees. Finite-lived intangible assets are amortized over their estimated useful lives, and we periodically evaluate the remaining useful lives of these intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. We review our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

The player loyalty programs represent the value of repeat business associated with Silver Slipper’s and Rising Star’s loyalty programs. The value of the loyalty programs were determined using a multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to the asset being valued, based on cash flows attributable to the player loyalty program. The valuation analysis for the active rated player was based on projected revenues and attrition rates.

50

Costs incurred in obtaining long-term financing are included in loan fees, net of amortization over the life of the related debt. As of December 31, 2011, ~~the Company~~we had incurred $2.6 million in loan fees related to ~~the~~a Credit Agreement with Wells Fargo (the “Wells Fargo Credit ~~Agreement,~~Agreement”), and amortization was begun using the effective interest method beginning March 31, 2011, when the debt was drawn. Upon the early $24.8 million repayment and termination of our existing long term debt on March 30, 2012, we recorded a non-cash charge to expense, loss on extinguishment of debt, for the remaining unamortized loan fees of $1.7 million and loan administrative fees. As of December 31, 2012, we had incurred $5.7 million in loan fees related to the First and Second Lien Credit Agreements, and amortization began using the effective interest method on October 1, 2012, when the debt was drawn.

The amount of expected amortization over each of the next five years will be approximately ~~$0.8 million in 2012, $0.6~~$4.5 million in 2013, ~~$0.4~~$4.0 million in 2014, ~~$0.2~~$2.8 million in 2015, ~~and $0.0~~$0.3 million in ~~2016.~~

2016 and $0.1 million in 2017.

Indefinite-lived intangible assets include goodwill, trademarks and certain license rights. ~~The fair~~Gaming licenses represent the value of the license to conduct gaming in certain jurisdictions, which ~~is estimated~~are subject to highly extensive regulatory oversight and, in some cases, a limitation on the number of licenses available for issuance. The value of the Rising Star gaming license was determined using a ~~derivation~~multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to ~~valuation.~~the asset being valued, based on cash flows attributable to the gaming license. The other gaming license values are based on actual costs. Indefinite-lived intangible assets are not amortized unless it is determined that their useful life is no longer indefinite. We periodically review our indefinite-lived assets to determine whether events and circumstances continue to support an indefinite useful life. If it is determined that an indefinite-lived intangible asset has a finite useful life, then the asset is tested for impairment and is subsequently accounted for as a finite-lived intangible asset.

Amortizations of contract rights are on a straight-line basis over the contractual lives of the assets. The contractual lives may include, or not begin until after, a development period and/or the term of the subsequent management agreement. Prior to 2007, the Company acquired an interest in contract rights, related to three joint venture projects for $1.8 million, of which $1.1 million was allocated to the Michigan project for control of the development processes. Accordingly, amortization of these rights commenced immediately with revisions to the development/amortization period accounted for prospectively as changes in estimates. Effective August, 2009, the remaining contract rights have been amortized on a straight-line basis over the seven year term of the GEM management contract. The FireKeepers Casino opened on August 5, 2009, and as a result, the $17.4 million of contract rights associated with the FireKeepers project began being amortized on August 5, 2009 on a straight-line basis over the seven year term of the GEM management agreement.

Goodwill.Goodwill represents the excess of the purchase price over fair market value of net assets acquired in connection with the ~~Stockman’s Casino and~~Silver Slipper, Rising Star ~~Casino Resort~~and Stockman’s operations. ~~The Company performs~~We perform a quarterly review of goodwill and whenever there might be an impairment “triggering” event as described in ASC Topic 360.

The review of goodwill as of September 30, 2011, resulted in a $4.5 million goodwill impairment for Stockman’s ~~Casino~~ and the related assets using a market approach (Note 6). The calculation, which is subject to change as a result of future economic uncertainty, contemplates changes for both current year and future year estimates in earnings and the impact of these changes to the fair value of Stockman’s, although there is always some uncertainty in key assumptions including projected future earnings growth.

51

Revenue recognition and promotional allowances.Casino revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs (commonly called “casino front money”) and for chips and tokens in the customers’ possession (outstanding chip and token liability). Hotel, food and beverage, entertainment and other operating revenues are recognized as services are performed, net of revenue-based taxes. Advance ticket sales are recorded as deferred revenue until services are provided to the customer. Revenues are recognized net of certain sales incentives, and accordingly, cash incentives to customers for gambling activity, including the cash value of points redeemed by Players Club members, totaling ~~$5.0~~$6.7 million and ~~$0.09~~$5.0 million have been recognized as a direct reduction of casino revenue in ~~2011~~2012 and ~~2010,~~2011, respectively, as noted in the table below. Sales and similar revenue-linked taxes collected from customers are excluded from revenue and recorded as a liability payable to the appropriate taxing authority and included in accrued expenses. Revenue also does not include the retail value of accommodations, food and beverage, and other services gratuitously furnished to customers totaling $15.4 million in 2012 and $9.8 million in ~~2011 and $0.3 million in 2010.~~2011. The estimated cost of providing room, food and beverage and other incentives is included primarily in casino expenses, as noted in the table ~~below:~~below (in thousands):

September 30, September 30,
     2011      2010
Rooms
     $ 2,387,644         $ —
Food and beverage
     5,477,355         275,824
Other incentives
     863,180         1,145




     $ 8,728,179         $ 276,969

GEM receives a management fee of 26% of net profits from FireKeepers Casino and beginning on December 2, 2010, also receives a consulting fee related to the FireKeepers Casino phase II development project, which includes development of a hotel, multi-purpose/ballroom facility, surface parking and related ancillary support spaces and improvements for a fixed fee of $0.01 million per month, continuing through to the opening of the project, provided the total fee for services do not exceed $0.2 million in total. Both contracts are recorded monthly as earned on an accrual basis. Typically, the payment is received in the following month.

	2012		2011

Rooms	$	3,588	$	2,388
Food and beverage		9,249		5,478
Other incentives		1,120		863
	$	13,957	$	8,729

Derivative instruments and hedging activities.~~The Company has~~We had adopted the accounting guidance for derivative instruments and hedging activities (ASC Topic 815, “Derivatives and Hedging”), as amended, to account for our interest rate ~~swap.~~swap (“Swap”), until the pay-off of the related debt on March 30, 2012. The accounting guidance ~~requires~~required us to recognize our derivative instruments as either assets or liabilities in our consolidated balance sheet at fair value. The accounting for changes in fair value (i.e. gains or losses) of a derivative instrument agreement depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. The derivative instrument iswas not designated as a hedge for accounting purposes. The change in fair value iswas recorded in the consolidated statement of operations in the period of change. Additionally, the difference between amounts received and paid under such agreements, as well as any costs or fees, iswere recorded as a reduction of, or an addition to, interest expense as incurred over the life of the agreement. Fluctuations in interest rates ~~can cause~~caused the fair value of our derivative instrument to change each reporting period. While we attempt to predict such movements in interest rates and the impact on derivative instruments, such estimates are subject to a large degree of variability which could have a significant impact on our consolidated financial statements.

Share-based ~~compensation~~. compensation. On June 1, 2011, ~~the Company’s~~our compensation committee approved the issuance of 660,000 shares of restricted stock, then valued at the closing price of ~~the Company’s~~our stock ($3.88), with no discount. For ~~2011~~2012 and ~~2010,~~2011, share-based compensation expense of approximately ~~$0.07~~$1.2 million and ~~$0.02~~$0.07 million respectively, from stock awards (Note ~~13)~~12) is included in general and administrative expense. Unvested stock grants made in connection with ~~the Company’s~~our incentive compensation plan were viewed as a series of individual awards and the related share-based compensation expense was deferred and recorded as unearned stock-based compensation, shown as a reduction of stockholders’ equity, and will be amortized into operations as compensation expense as services ~~were~~are provided on a straight-line basis over the vesting period. The value of the restricted stock at the date of grant is amortized through expense over the requisite service period using the straight-line method. ~~The Company grants~~We grant shares of restricted stock, rather than options, to key members of management and the ~~Board~~board of ~~Directors.~~directors. There have been no forfeitures of such restricted shares granted and there are currently ~~660,000~~639,999 shares of unvested stock grants. The majority of the shares (600,000) will fully vest on June 1, 2013. The remaining shares ~~will vest over~~have a three ~~years,~~year vesting schedule as follows: 20,001 on June 1, 2012, 20,001 on June 1, 2013, and 19,998 on June 1, 2014. Vesting is contingent upon certain conditions, including continuous service of the individual recipients.

Legal defense costs.~~The Company does~~We do not accrue for estimated future legal and related defense costs, if any, to be incurred in connection with outstanding or threatened litigation and other disputed matters but rather, ~~records~~record such as period costs when the related services are rendered.

Income taxes.Income tax-related interest and penalties, if any, are treated as part of income tax expense.

52

Income per common share.Basic income or earnings per share (“EPS”) is computed based upon the weighted-average number of common shares outstanding during the year. Diluted EPS is computed based upon the weighted average number of common and common equivalent shares if their effect upon exercise would have been dilutive using the treasury stock method. As of December 31, ~~2011~~2012 and ~~2010,~~2011, there were no common equivalent shares that would have been dilutive and, therefore, the calculations for basic and diluted EPS are equal.

Reclassifications.Certain minor reclassifications in prior year balances have been made to conform to the current presentation, which had no effect on previously reported net income.

Recently Issued Accounting Pronouncements

In September 2011, FASB, issued Accounting Standards Update (“ASU”) 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The new guidance will allow entities to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount. If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any. Under the new guidance, we would not be required to calculate the fair value of a reporting unit unless we determine, based on the qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The new guidance includes a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The new guidance is effective, for us, beginning with annual and interim impairment tests performed in 2012. Early adoption is permitted, including for our 2011 annual impairment test which was performed in the fourth quarter of 2011. We are currently evaluating the new guidance.

~~In May 2011, the FASB issued ASU 2011-04,~~~~Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.~~The new guidance is intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with accounting principles generally accepted in the United States of America and those prepared in accordance with International Financial Reporting Standards. While the new guidance is largely consistent with existing fair value measurement principles, it expands existing disclosure requirements for fair value measurements and makes other amendments which could change how existing fair value measurement guidance is applied. ASU 2011-04 is effective for the first interim or annual reporting period beginning after December 15, 2011. We are currently evaluating the new guidance.

None.

3. VARIABLE INTEREST ENTITIES

GED.

~~GED.~~~~The Company’s~~Our investment in unconsolidated joint venture iswas comprised of a 50% ownership interest in GED, a joint venture between ~~the Company~~us and HRI. GED had a management agreement ~~thru~~through August 31, 2011 with HRI for the management of Harrington Raceway and Casino (“Harrington”) (formerly known as Midway Slots and Simulcast), which is located in Harrington, Delaware. Under the terms of the joint venture agreement, as restructured in 2007, ~~the Company~~we received the greater of 50% of GED’s member distribution as prescribed under the joint venture agreement, or a 5% growth rate in its 50% share of GED’s prior year member distribution through the expiration of the GED management contract on August 31, 2011. GED was a variable interest entity due to the fact that ~~the Company~~we had limited exposure to risk of loss. Therefore, ~~the Company~~we did not consolidate, but accounted for its investment using the equity method.

As of the balance sheet dates presented, the Company’s assets and liabilities related to its investment in GED consisted of $0 as of December 31, 2011, and an accounts receivable of $0.7 million as of December 31, 2010 as part of the Management Reorganization Agreement’s guaranteed payments for the year ended December 31, 2011. The GED management contract expired in August 2011. The Company

We sold ~~its~~our interest in GED to HRI during the fourth quarter of 2011 and ~~our~~we therefore had no investment in GED ~~was $0~~ as of December 31, ~~2011, and $0.2 million as of December 31, 2010, included in other assets.~~

2011.

GED had no non-operating income or expenses, iswas treated as a partnership for income tax reporting purposes and consequently ~~recognizes~~recognized no federal or state income tax provision. As a result, income from operations for GED is equal to its net income for each period presented, and there ~~are~~were no material differences between GED’s income for financial and tax reporting purposes. ~~An unaudited summary for GED’s operations follows:~~

~~GED CONDENSED BALANCE SHEET INFORMATION~~

September 30, September 30,
     December 31,
2011      December 31,
2010
Total assets
     $ —           $ 426,449
Total liabilities
     —           41,487
Members’ capital
     —           384,962

GED CONDENSED STATEMENT OF INCOME INFORMATION

(In thousands)

	Twelve Months Ended:
	December 31, 2012		December 31, 2011
Revenues	$	--	$	21,292
Net income		--		3,507

GEM.

September 30, September 30,
     Twelve Months Ended:
     December 31,
2011      December 31,
2010
Revenues
     $ 21,291,578         $ 29,807,625
Net income
     3,507,322         6,392,279

~~GEM.~~~~The Company directs~~We directed the ~~day to day~~day-to-day operational activities of GEM ~~that~~which significantly ~~impact~~impacted GEM’s economic performance, prior to the sale of our interest on March 30, 2012, and therefore, iswe were the primary beneficiary pursuant to the relevant portions of FASB ASC Topic 810 “Consolidation” [ASC 810-10-25 Recognition of Variable Interest Entities, paragraphs 38-39]. As such, the joint venture iswas a variable interest entity that iswas consolidated in our financial statements.

~~Management believes the maximum exposure to loss from the Company’s investment in GEM is $8.1 million (before tax impact), which is composed~~

53

As of ~~the Company’s share of contract rights and the Company’s equity investment that is eliminated in consolidation. GEM has no debt or long-term liabilities.~~December 31, 2011 GEM’s current assets ~~include~~were $2.5 million and included the FireKeepers management fee ~~receivable for both dates presented. Long-term assets include $7.9 million and $9.6 million in contract rights as of December 31, 2011 and December 31, 2010, respectively.~~

receivable.

An unaudited summary of GEM’s operations ~~follows:~~

follows (In thousands):

GEM CONDENSED BALANCE SHEET INFORMATION

September 30, September 30,
     December 31,
2011      December 31,
2010
Current assets
     $ 2,457,133         $ 1,985,419
Long-term assets
     7,915,754         9,626,458
Current liabilities
     90,104         446,825

	December 31, 2012		December 31, 2011
Current assets	$	--	$	2,457
Long-term assets		--		7,916
Current liabilities		--		90

GEM CONDENSED STATEMENT OF INCOME INFORMATION

September 30, September 30,
     Twelve Months Ended:
     December 31,
2011      December 30,
2010
Revenues
     $ 23,255,587         $ 24,473,066
Net income
     20,494,045         20,385,489

	Twelve Months Ended:
	December 31, 2012		December 30, 2011
Revenues	$	5,340	$	23,256
Net income		4,362		20,494

4. NOTES RECEIVABLE, TRIBAL GOVERNMENTS

~~The Company has notes~~

We had a note receivable related to advances made to, or on behalf of, Nambé Pueblo to fund tribal operations and development expenses related to a potential casino project. Repayment of this note iswas conditioned upon the development of the project, and ultimately, the successful operation of athe casino. Subject to such condition, ~~the Company’s~~our agreements with the Nambé Pueblo tribe ~~provide~~provided for the reimbursement of these advances plus applicable interest, if any, either from the proceeds of any outside financing of the development and the actual operation itself.

~~As of December 31, 2011 and 2010, note receivable from tribal governments were as follows:~~

September 30, September 30,
     2011      2010
Contractual (stated) amount of Nambé Pueblo note receivable
     $ 661,600         $ 661,600




Estimated value of Nambé Pueblo note receivable
     $ —           $ 427,567

In the first quarter of 2008, the Company received notice that the Nambé Pueblo tribal council had effectively terminated the business relationship with Full House. The development agreement between the Company and the Nambé Pueblo provides that the Company is entitled to recoup its advances from future gaming revenues, even if the Company does not ultimately develop the project. The Company is in discussions with the Nambé Pueblo and the developer to determine the method and timing of the reimbursement of our advances to date of $0.7 million.

Management is currently engaged in assisting the Nambé Pueblo in the process of obtaining financing to develop a small casino or slot parlor addition to their existing travel center. The financing process has proceeded more slowly than expected and in light of current economic conditions and credit market weaknesses, there can be no assurance that a facility will ever open or that the Company will receive all, or any, payment on the note receivable. With due consideration to the foregoing factors, management fully reserved the value of the note receivable from the Nambé Pueblo to $0$0.0 million and recognized the impairment of the note receivable during the third quarter of 2011.

~~The following table summarizes changes in~~ As of September 30, 2012, the ~~estimated fair value of notes~~Nambé Pueblo note receivable ~~from tribal governments, determined using level 3 estimated fair value inputs, from January 1, 2011 to December 31, 2011:~~

September 30,
     Nambé Pueblo
Balances, January 1, 2011
     $ 427,567
Impairment loss
     (419,703 )
Unrealized losses
     (7,864 )


Balances, December 31, 2011
     $ —

~~The FireKeepers Casino opened on August 5, 2009. Although certain distributions (including a minimum guaranteed monthly payments~~was written off, due to the Tribe of $0.05 million, a preferred payment to the Tribe of $0.2 million and repayment of loan principal to be paid out of the Tribe’s share of net revenues) will be paid from net revenue prior to the payment to the Company of the management fee, the Company believes the property will generate sufficient revenues to pay the management fee equal to 26% of net revenues monthly.

The recent economic recession and resulting impact on credit availability has significantly decreased the likelihood that financing could be obtained on favorable terms if at all for the Montana project in the foreseeable future. As a result, we believeprobability that the project ~~assets are impaired~~will not be completed and ~~collectability~~collection is doubtful and the fair value of the notes receivable originally valued at $0.6 million and contract rights originally valued at $0.1 million related to the project were written down to zero value as of December 2009, which resulted in a $0.7 million impairment loss. As of December 31, 2010 the project assets were written-off.

~~The following table summarizes the changes in the estimated fair value of notes receivable from tribal governments, based on level 3 inputs, from January 1, 2011, to December 31, 2011:~~

September 30, September 30, September 30,
     2011
     Total    FireKeepers
Development
Authority      Other
tribes
Balances, January 1, 2011
     $ 427,567       $ —           $ 427,567
Unrealized gains
     (7,864 )    —           (7,864 )
Impairment Losses
     (419,703 )    —           (419,703 )






Balances, December 31, 2011
     $ —         $ —           $ —

September 30, September 30, September 30,
     2010
     Total    FireKeepers
Development
Authority    Other
tribes
Balances, January 1, 2010
     $ 5,112,887       $ 4,682,420       $ 430,467
Unrealized gains
     314,680       317,580       (2,900 )
Repayment of notes receivable
     (5,000,000 )    (5,000,000 )    —






Balances, December 31, 2010
     $ 427,567       $ —         $ 427,567

~~5. CONTRACT RIGHTS~~

unlikely.

54

5. CONTRACT RIGHTS

Contract rights ~~are~~were comprised of the following as of December 31, 2012 and December 31, 2011 ~~and 2010:~~

September 30, September 30, September 30,
2011
     Cost      Accumulated
amortization    Net
FireKeepers project, initial cost
     $ 4,155,213         $ (1,434,539 )    $ 2,720,674
Firekeepers project, additional
     13,210,373         (5,058,442 )    8,151,931






     $ 17,365,586         $ (6,492,981 )    $ 10,872,605

September 30, September 30, September 30,
2010
     Cost      Accumulated
amortization    Net
Firekeepers project, initial cost
     $ 4,155,213         $ (840,936 )    $ 3,314,277
Firekeepers project, additional
     13,210,373         (3,279,839 )    9,930,534






     $ 17,365,586         $ (4,120,775 )    $ 13,244,811

(in thousands):

2012	Cost		Accumulated Amortization			Disposal			Net
FireKeepers project, initial cost	$	4,155	$	(1,583	)	$	(2,572	)	$	--
FireKeepers project, additional		13,210		(5,503	)		(7,707	)		--
	$	17,365	$	(7,086	)	$	(10,279	)	$	--

2011	Cost		Accumulated amortization			Disposal		Net
FireKeepers project, initial cost	$	4,155	$	(1,434	)	$	--	$	2,721
FireKeepers project, additional		13,210		(5,058	)		--		8,152
	$	17,365	$	(6,492	)	$	--	$	10,873

Amortization over the management contract period (seven years) commenced on ~~these~~the additional contract rights at the opening date of the FireKeepers Casino ~~over~~on August 5, 2009. Of the ~~management contract period (seven years). The estimated amortization expense of~~remaining contract rights, ~~for each of~~$7.5 million were sold with our interest in GEM, to the ~~next five years is expected to be $2.4~~FDA on March 30, 2012, and the remaining $2.8 million ~~per year in the first four years and $1.4 million in the fifth year.~~

were expensed.

6. GOODWILL & OTHER INTANGIBLES

Goodwill represents the excess of the purchase price over fair market value of net assets acquired in connection with ~~the Stockman’s Casino operation and the~~Silver Slipper, Rising Star ~~Casino Resort.~~and Stockman’s operations. Goodwill ~~is $5.8~~was $14.7 million ~~and~~for Silver Slipper, $1.6 million for ~~Stockman’s~~Rising Star and ~~Rising Star~~$5.8 million for Stockman’s as of December 31, ~~2011, respectively. The Company’s review of goodwill associated with the purchase of~~2012. Goodwill was $1.6 million for Rising Star and $5.8 million for Stockman’s as of ~~September 30, 2011, resulted in a $4.5 million impairment~~December 31, 2011. Our review of Stockman’s ~~goodwill~~ and ~~related assets using a market approach considering an earnings multiple of 6.25 times. The Company’s review of~~Rising Star goodwill as of December 31, ~~2011,~~2012, resulted in approximately a ~~1.0%~~1% and 19% excess, respectively, of estimated fair value over the carrying value of ~~Stockman’s~~ goodwill and related assets using ana market approach considering an earnings multiple of 6.25 times. These calculations, which are subject to change as a result of future economic uncertainty, contemplate changes for both current year and future year estimates in earnings and the impact of these changes to the fair value of Stockman’s and the Rising Star, although there is always some uncertainty in key assumptions including projected future earnings growth. ~~The Company~~

We acquired the Rising Star on April 1, 2011 for approximately ~~$19.0 million in cash and $33.0 million drawn from the Company’s Credit Agreement with Wells Fargo (as discussed in Note 8).~~$52.0 million. The goodwill of $1.6 million is the excess purchase price over the assets ~~purchased (Note 14).~~

September 30, September 30, September 30,
     Year ended December 31, 2011
     Balance at
beginning of
the year      Changes
during
the year    Balance at
end of the
year
Stockman’s Goodwill
     $ 10,308,520         $ (4,500,000 )    $ 5,808,520
Rising Star Goodwill
     —           1,647,198       1,647,198





Goodwill, net of accumulated impairment losses
     $ 10,308,520         $ (2,852,802 )    $ 7,455,718

September 30, September 30, September 30,
     Year ended December 31, 2010
     Balance at
beginning of
the year      Changes
during
the year      Balance at
end of the
year
Stockman’s Goodwill
     $ 10,308,520         $ —           $ 10,308,520

purchased. We acquired the Silver Slipper on October 1, 2012 for approximately $69.3 million, exclusive of cash and working capital in the amount $6.7 million and $2.9 million, respectively. The goodwill of $14.7 million is the excess purchase price over the assets purchased.

Year ended December 31, 2012
(in thousands)

Balance at
beginning of
the year

Changes
during
the year

Balance at
end of the
year

Stockman’s Goodwill $ 5,809 $ -- $ 5,809
Rising Star Goodwill 1,647 -- 1,647
Silver Slipper Goodwill -- 14,671 14,671
Goodwill, net of accumulated impairment losses $ 7,456 $ 14,671 $ 22,127

55

Year ended December 31, 2011
(in thousands)

Balance at
beginning of
the year

Changes
during
the year

Balance at
end of the
year

Stockman’s Goodwill $ 10,309 $ (4,500 ) $ 5,809
Rising Star Goodwill -- 1,647 1,647
Goodwill, net of accumulated impairment losses $ 10,309 $ (2,853 ) $ 7,456

Other Intangible Assets:

Other intangible assets, net consist of the ~~following:~~

September 30, September 30, September 30, September 30, September 30,
     December 31, 2011
     Estimated
Life
(years)      Gross
Carrying
Value      Accumulated
Amortization    (Expense) /
(Disposals) or
Additions      Intangible
Asset, Net
Amortizing Intangibles assets:

Player Loyalty Program-Rising Star
     3      $ 1,700,000         $ (425,000 )    $ —           $ 1,275,000
Nevada State Bank Loan Fees
     15      218,545         (218,545 )    —           —
Wells Fargo Bank Loan Fees
     5      2,614,438         (715,946 )    —           1,898,492
Non-amortizing intangible assets:

Gaming License-Rising Star
     Indefinite      9,900,000         —         —           9,900,000
Gaming Licensing Costs
     Indefinite      484,676         —         32,131         516,807
Trademarks
     Indefinite      26,889         —         2,031         28,920








          $ 14,944,548         $ (1,359,491 )    $ 34,162         $ 13,619,219

September 30, September 30, September 30, September 30, September 30,
     December 31, 2010
     Estimated
Life
(years)      Gross
Carrying
Value      Accumulated
Amortization    Expense /
(Disposals) or
Additions      Intangible
Asset, Net
Amortizing Intangibles assets:

Nevada State Bank Loan Fees
     15      $ 218,545         $ (96,087 )    $ —           $ 122,458
Wells Fargo Bank Loan Fees
     5      1,965,646         —         —           1,965,646
Non-amortizing intangible assets:

Gaming Licensing Costs
     Indefinite      464,232         —         —           464,232
Trademarks
     Indefinite      11,818         —         —           11,818








          $ 2,660,241         $ (96,087 )    $ —           $ 2,564,154

following (in thousands):

December 31, 2012

Estimated
Life
(years)
Gross
Carrying
Value Accumulated Amortization Cumulative
Expense /
(Disposals) Intangible
Asset, Net
Amortizing Intangible assets:
Player Loyalty Program - Rising Star 3 $ 1,700 $ (992 ) $ -- $ 708
Player Loyalty Program - Silver Slipper 3 5,900 (492 ) -- 5,408
Land Lease and Water Rights - Silver Slipper 46 1,420 (23 ) -- 1,397
Wells Fargo Bank Loan Fees 5 2,614 (924 ) (1,690 ) -
Capital One Bank Loan Fees 3 4,671 (434 ) -- 4,237
ABC Funding, LLC Loan Fees 4 984 (62 ) -- 922

Non-amortizing intangible assets:
Gaming License-Indiana Indefinite 9,900 -- -- 9,900
Gaming License-Mississippi Indefinite 115 -- -- 115
Gaming License-Nevada Indefinite 542 -- -- 542
Trademarks Indefinite 36 -- -- 36

$ 27,882 $ (2,927 ) $ (1,690 ) $ 23,265

56

December 31, 2011
Estimated
Life
(years) Gross
Carrying
Value Accumulated Amortization
Cumulative
Expense /
(Disposals)
Intangible
Asset, Net
Amortizing Intangible assets:
Player Loyalty Program-Rising Star 3 $ 1,700 $ (425 ) $ -- $ 1,275
Nevada State Bank Loan Fees 15 219 (219 ) -- --
Wells Fargo Bank Loan Fees 5 2,614 (716 ) -- 1,898

Non-amortizing intangible assets:
Gaming License-Indiana Indefinite 9,900 -- -- 9,900
Gaming License- Nevada Indefinite 485 - - 32 517
Trademarks Indefinite 27 -- 2 29
$ 14,945 $ (1,360 ) $ 34 $ 13,619

Player Loyalty Program

The player loyalty ~~program represents~~programs represent the value of repeat business associated with Silver Slipper’s and Rising Star’s loyalty ~~program.~~programs. The value of $5.9 million and $1.7 million of the Silver Slipper and Rising Star player loyalty ~~program was~~programs, respectively, were determined using a multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to the asset being valued, based on cash flows attributable to the player loyalty program. The valuation analysis for the active rated player was based on projected revenues and attrition rates. Silver Slipper and Rising Star ~~maintains~~maintain historical information for the proportion of revenues attributable to the rated players for gross gaming revenue.

Land Lease and Water Rights

In November 2004, Silver Slipper entered into a lease agreement with Cure Land Company, LLC for approximately 38 acres of land (“Land Lease”), which includes approximately 31 acres of protected marsh land as well as a seven acre casino parcel, on which the Silver Slipper was subsequently built, as discussed in Note 11. The $1.0 million land lease represents the excess fair value of the land over the estimated net present value of the land lease payments. The $0.4 million of water rights represents the fair value of the water rights based upon the current market rate in Hancock County, Mississippi.

Loan Fees

Loan fees incurred and paid as a result of debt instruments ~~are~~were accumulated and amortized over the term of the related debt, based on an effective interest method. Loan fees incurred for Nevada State Bank ~~in the amount of $0.2 million~~ resulted from the credit facility to purchase Stockman’s ~~Casino~~ in 2007. In March 2011, the credit facility with Nevada State Bank was terminated and the amortization of the loan fees was accelerated. ~~The Company~~We recognized amortization expense of ~~$0.1~~$0.2 million during the first quarter of 2011 as a result of the termination. On October 29, 2010 ~~the Company~~we entered into ~~a Credit Agreement with~~the Wells Fargo ~~Bank.~~Credit Agreement. In December 2010, ~~the Company~~we entered into a Commitment Increase Agreement to increase the funds available under the Wells Fargo Credit Agreement. Loan fees related to the Wells Fargo ~~Bank~~ debt were $2.6 million and ~~are being~~were to be amortized over the five-year term of the loan. We paid off the remaining $25.3 million in debt, which consisted of $24.8 million of our existing long term debt and $0.5 million due on the interest rate swap agreement related to the Wells Fargo Credit Agreement as of March 30, 2012 and therefore expensed the net remaining loan fees of $1.7 million, after the necessary amortization expense in the first quarter of 2012. We incurred $4.7 million related to obtaining the First Lien Credit Agreement with Capital One, as administrative agent and $1.0 million related to obtaining the Second Lien Credit Agreement with ABC Funding, LLC as administrative agent as discussed in Note 8, which are being amortized over the terms of the agreements beginning October, 2012. The aggregate amortization ~~expense~~ was $0.7 million and ~~$0.1~~$0.8 million for the twelve months ended December 31, ~~2011~~2012 and December 31, ~~2010,~~2011, respectively.

57

Gaming Licenses

Gaming ~~license rights~~licenses represent the value of the license to conduct gaming in certain jurisdictions, which isare subject to highly extensive regulatory oversight and, in some cases, a limitation on the number of licenses available for issuance. The value of $9.9 million of the Rising Star gaming license iswas determined using a multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to the asset being valued, based on cash flows attributable to the gaming license. The other gaming license values are based on actual costs. Gaming licenses are not subject to amortization as they have indefinite useful lives and are evaluated for potential impairment on an annual basis unless events or changes in circumstances indicate the carrying amount of the gaming licenses may not be recoverable. ~~The Company~~We reviewed existing gaming licenses as of December 31, 2011 and recognized ~~an expense~~a write down of $0.03 million related to gaming licensing costs pertaining to a former director, who is no longer affiliated with the organization and $0.02 million related to ~~other~~ costs for a new license to be obtained.

We incurred $0.1 million in costs related to obtaining a Mississippi gaming license for the purchase of all of the outstanding membership interest of Silver Slipper Casino Venture LLC which owns and operates the Silver Slipper.

Trademark

Trademarks are based on the legal fees and recording fees related to the trademark of the “Rising Star Casino Resort” name, and variations of such name. Trademarks are not subject to amortization, as they have an indefinite useful life and are evaluated for potential impairment on an annual basis unless events or changes in circumstances indicate the carrying amount of the trademark may not be recoverable.

Current & Future Amortization

~~The Company amortizes its~~

We amortize our definite-lived intangible assets, including ~~its~~our player loyalty ~~program~~programs, loan fees, land leases and ~~loan fees,~~water rights over their estimated useful lives. The aggregate amortization expense was ~~$1.4~~$1.7 million and ~~$0.1~~$1.3 million for the twelve months ended December 31, ~~2011~~2012 and December 31, ~~2010,~~2011, respectively.

Total amortization expense for intangible assets for the years ending December ~~30, 2012,~~31, 2013, 2014, 2015, 2016 and ~~2016~~2017 is anticipated to be approximately ~~$1.3~~$4.5 million, ~~$1.1~~$4.0 million, ~~$0.5~~$2.8 million, ~~$0.2~~$0.3 million, and ~~$0.0~~$0.1 million, respectively.

58

7. PROPERTY AND EQUIPMENT

At December 31, ~~2011~~2012 and ~~2010,~~2011, property and equipment consists of the ~~following:~~

September 30, September 30, September 30,
     Estimated
useful
lives      2011    2010
Land
          $ 9,959,400       $ 1,885,400
Buildings and improvements
     10-39      26,413,673       5,580,045
Furniture and equipment
     5-7      13,375,769       6,795,764




          49,748,842       14,261,209
Less accumulated depreciation
          (11,080,559 )    (6,888,958 )




          $ 38,668,283       $ 7,372,251

following (in thousands):

	2012			2011
Land and improvements	$	9,907		$	10,568
Buildings and improvements		70,401			25,805
Furniture and equipment		19,649			13,376
		99,957			49,749
Less accumulated depreciation		(16,284	)		(11,081	)
	$	83,673		$	38,668

8. LONG-TERM DEBT

At December 31, ~~2011~~2012 and ~~2010,~~2011, long-term debt consists of the ~~following:~~

September 30, September 30,
     2011    2010
Long-term debt, net of current portion:

Term loan agreement, $33.0 million on October 29, 2010, maturing June 30, 2016, interest greater of 1 month LIBOR, or 1.5%, plus margin [4.5%-5.5%], LIBOR rates and margins are adjusted quarterly. (7.0% during the quarter and year ended December 31, 2011)
     $ 26,400,000       $ —
Swap agreement, $20.0 million on January 7, 2011, effective April 1, 2011, maturing April 1, 2016, interest received based on 1 month LIBOR, and paid at a fixed rate of 1.9% through August 31, 2011. The swap was re-designated in September 2011 with interest to be received at the greater of 1.5% or 1 month LIBOR, and paid at a fixed rate of 3.06% until maturity. (average net settlement rates during the quarter and year ended December 31, 2011 were 1.56% and 1.62%, respectively)
     537,422       —
Less current portion
     (4,950,000 )    —




     $ 21,987,422       $ —

following (in thousands):

	2012			2011
Long-term debt, net of current portion:
Term loan agreement, $50.0 million on June 29, 2012, funding on October 1, 2012, maturing October 1, 2015, interest greater of elected LIBOR, or 1.0%, plus margin [4.00%-4.75%], LIBOR rate elections can be made based on a 30 day, 60 day, 90 day or six-month LIBOR and margins are adjusted quarterly. (4.75% during the quarter and year ended December 31, 2012)	$	48,750		$	--
Term loan agreement, $20.0 million on October 1, 2012, maturing October 1, 2016, interest rate is fixed at 13.25% per annum. (13.25% during the quarter and year ended December 31, 2012)		20,000			--
Term loan agreement, $33.0 million on October 29, 2010, scheduled maturity June 30, 2016, interest greater of 1 month LIBOR, or 1.5%, plus margin [4.5%-5.5%], LIBOR rates and margins are adjusted quarterly. (7.0% during the quarter and year ended December 31, 2011)		--			26,400
Swap agreement, $20.0 million on January 7, 2011, effective April 1, 2011, scheduled maturity April 1, 2016, interest received based on 1 month LIBOR, and paid at a fixed rate of 1.9% through August 31, 2011. The Swap was re-designated in September 2011 with interest to be received at the greater of 1.5% or 1 month LIBOR, and paid at a fixed rate of 3.06% until maturity. (average net settlement rates during the quarter and year ended December 31, 2011 were 1.56% and 1.62%, respectively)		--			537
Less current portion		( 2,500	)		( 4,950	)
	$	66,250		$	21,987

Credit Agreement with Wells Fargo. In 2010, ~~the Company,~~we, as borrower, entered into athe Wells Fargo Credit Agreement ~~as amended, (the “Credit Agreement”)~~ with the financial institutions listed therein (the “Lenders”) and Wells Fargo Bank, National Association as administrative agent for the Lenders, as collateral agent for the Secured Parties (as defined in the Wells Fargo Credit Agreement), as security trustee for the Lenders, as Letters of Credit Issuer and as Swing Line Lender. The funds available under the original Wells Fargo Credit Agreement as of March 31, 2011 were $38.0 million, consisting of a $33.0 million term loan and a revolving line of credit of $5.0 million.

59

The initial funding date of the Wells Fargo Credit Agreement occurred March 31, 2011, when ~~the Company~~we borrowed $33.0 million on the term loan which was used to fund ~~the Company’s~~our acquisition of Grand Victoria Casino & Resort in Rising Sun, Indiana on April 1, 2011. In August 2011, the property was renamed the Rising Star Casino ~~Resort (“Rising Star”).~~Resort. On March 30, 2012, we used a portion of the proceeds from the sale of our interest in GEM to pay off our remaining outstanding debt of $25.3 million, which consisted of $24.8 million of our existing long term debt and $0.5 million due on the Swap, and to extinguish the credit facility and related interest-rate hedge.

Loss on Extinguishment of Wells Fargo Debt. Upon the early $24.8 million repayment and termination of our existing long term debt on March 30, 2012, we recorded a non-cash charge to expense for the remaining unamortized loan fees of $1.7 million and loan administrative fees.

First and Second Lien Credit Agreements. On June 29, 2012, we entered into the First Lien Credit Agreement with Capital One, which provides for a term loan in an amount up to $50.0 million and a revolving loan in an amount up to $5.0 million. On October 1, 2012, we entered into a Second Lien Credit Agreement with ABC Funding, LLC as administrative agent which provides for a term loan in an amount up to $20.0 million. We funded the purchase of Silver Slipper with the full amount of the $50.0 million term loan under the First Lien Credit Agreement and the full amount of the Second Lien Credit Agreement. The ~~final maturity~~$5.0 million revolving loan under the First Lien Credit Agreement remains undrawn and available. The First and Second Lien Credit Agreements are secured by substantially all of our assets and therefore, our wholly-owned subsidiaries guarantee our obligation under the agreements. The Second Lien Credit Agreement is ~~June 30, 2016.~~

~~The revolving line of credit has no outstanding balance of as of December 31, 2011 and therefore,~~subject to the ~~Company had $4.3 million available for future use. The availability~~lien of the ~~line decreases every three months by $0.3 million until maturity~~First Lien Credit Agreement.

We have elected to pay interest on ~~June 30, 2016.~~

~~The Company pays interest under~~ the First Lien Credit Agreement ~~at either the Base Rate or the LIBOR Rate set forth in the Credit Agreement which calculates a rate and then applies an applicable margin~~ based on a leverage ratio. The leverage ratio is defined as the ratio of total funded debt as of such date to adjusted EBITDA for the four consecutive fiscal quarter periods most recently ended for which Financial Statements are available. The Base Rate means, on any day, the greatest of (a) Wells Fargo’s primeLIBOR rate in effect on such day, (b) the Federal Funds Rate in effect on the business day prior to such day plus one and one half percent (1.50%) and (c) the One Month LIBOR Rate for such day (determined on a daily basis as set forth in the ~~Credit Agreement) plus one and one-half percent (1.50%).~~agreement. LIBOR rate elections can be made based on 30 day, 60 day, 90 day or six-month LIBOR. The ~~applicable margin on the Base Rate calculation ranges from 3.5% to 4.5%.~~ LIBOR ~~Rate means~~rate is a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/16 of one percent) of (a) the greater of (1) ~~1.50%~~1.00% and (2) the rate per annum ~~referred~~referenced to as the BBA (British Bankers Association) LIBOR ~~RATE~~ divided by (b) one minus the reserve requirement set forth in the First Lien Credit Agreement for such loan in effect from time to time. ~~The applicable margin~~We will pay interest on the ~~LIBOR Rate calculation ranges from 4.5% to 5.5%. The Company has elected to use the LIBOR rate and for the three and twelve months ended December 31, 2011,~~Second Lien Credit Agreement at the rate ~~charged was 7.0%.~~

of 13.25% per annum.

The ~~Company is also required to pay a commitment fee on the last business day of each March, June, September~~First and December. This is calculated as a percentage of all indebtedness of or attributable to the Company which ranges from 0.5% to 0.75% based on the leverage ratio. At December 31, 2011, the rate charged was 0.75%. TheSecond Lien Credit Agreement is secured by substantially all of the Company’s assets. The Company’s wholly-owned subsidiaries, including Stockman’s Casino, Rising Star Casino Resort and Grand Lodge Casino, guarantee the obligations of the Company under the Credit Agreement.

~~The Credit Agreement contains~~Agreements contain customary negative covenants for transactions of this type, including, but not limited to, restrictions on ~~the Company’s~~our and ~~its~~our subsidiaries’ ability to: incur ~~indebtedness,~~indebtedness; grant ~~liens,~~liens; pay dividends and make other restricted ~~payments, buy-back stock,~~payments; make ~~investments,~~investments; make fundamental ~~changes,~~changes; dispose of ~~assets,~~assets; and change the nature of their business. The ~~negative covenants are subject to certain exceptions as specified in the~~First and Second Lien Credit ~~Agreement. The Credit Agreement requires~~Agreements require that ~~the Company~~we maintain specified financial covenants, including a total leverage ratio, a first lien leverage ratio, a fixed charge coverage ratio and a ~~minimum adjusted EBITDA.~~capital expenditures ratio each as set forth in the agreements. We measure compliance with our covenants on a quarterly basis and we are currently in compliance, however, there can be no assurances that we will remain in compliance with all covenants in the future, particularly in light of the current difficult economic conditions and related uncertainties. The First and Second Lien Credit ~~Agreement~~Agreements also ~~includes~~include customary events of default, including, among other things: ~~non-payment,~~non-payment; breach of ~~covenant,~~covenant; breach of representation or ~~warranty,~~warranty; cross-default under certain other indebtedness or ~~guarantees,~~guarantees; commencement of insolvency ~~proceedings,~~proceedings; inability to pay ~~debts,~~debts; entry of certain material judgments against ~~the Company~~us or ~~its subsidiaries,~~our subsidiaries; occurrence of certain ERISA ~~events~~events; re-purchase of our own stock and certain changes of control.

~~The Company has~~

60

As of December 31, 2012, we elected, at our discretion, to prepay the ~~ability~~principal payment of $1.3 million due April 1, 2013 on the First Lien Credit Agreement, in order to reduce interest costs. We are required to make ~~optional~~ prepayments under the ~~term loan but may not re-borrow~~First Lien Credit Agreement, under certain conditions defined in the agreement, in addition to the scheduled principal installments for any fiscal year ending December 31, 2012 and thereafter. We are required to pay the entire outstanding principal on the First and Second Lien Credit Agreements, together with all accrued and unpaid interest thereon, on the respective maturity dates. Prepayment penalties will be assessed in the event that prepayments are made on the Second Lien Credit Agreement prior to the discharge of the term loan after payment. The Company prepaid its December 31, 2011 scheduled principal payment of $1.7 million on October 21, 2011, and prepaid its March 31, 2012 scheduled payment of $1.7 million on December 22, 2011, reducing the outstanding balance to $26.4 million. The Company made a $1.7 million payment to Wells Fargo Bank on January 30, 2012 and the next payment is due September 30, 2012. The Company is also required to make mandatory prepayments under theFirst Lien Credit ~~Agreement if certain events occur. These include: GEM receives any buy-out, termination fee or similar payment related to FireKeepers; or the Company sells or otherwise disposes of certain~~

prohibited assets in any single transaction or series of related transactions and the net proceeds of such sale or other disposition which exceed $0.1 million; the Company issues or incurs any indebtedness for borrowed money, including indebtedness evidenced by notes, bonds, debentures or other similar instruments, issues or sells any equity securities or receives any capital contribution from any other source; or the Company receives any net insurance proceeds or net condemnation proceeds which exceed $0.3 million. The mandatory repayments are subject to certain exceptions as specified in the Credit Agreement.

Scheduled maturities of long-term debt as of the most recent balance sheet presented are as follows, for the annual periods ended December ~~31:~~

September 30,
2012
     $ 4,950,000
2013
     6,600,000
2014
     6,600,000
2015
     6,600,000
2016
     1,650,000

31 (in thousands):


2013	$	2,500
2014		5,000
2015		41,250
2016		20,000
	$	68,750

9. DERIVATIVE INSTRUMENTS

~~The Company is~~

We were subject to interest rate risk to the extent we ~~borrow~~borrowed against credit facilities with variable interest rates as described above. ~~The Company has~~We had potential interest rate exposure with respect to the $33.0 million original outstanding balance on our variable rate term ~~loan.~~loan under the Wells Fargo Credit Agreement. During January 2011, ~~the Company~~we reduced ~~its~~our exposure to changes in interest rates by entering into ~~an interest rate swap agreement (“Swap”)~~the Swap with Wells Fargo Bank, N.A., which became effective on April 1, 2011. The Swap ~~contract exchanges~~exchanged a floating rate for fixed interest payments periodically over the life of the Swap without exchange of the underlying $20.0 million notional amount. The interest payments under the Swap ~~are~~were settled on a net basis. ~~The notional amount of~~

Effective March 30, 2012 the Swap ~~is used to measure interest to be~~was terminated and $0.5 million was paid, ~~or received and does not represent~~which reflected the amount of exposure to credit loss. Our credit risk related to the Swap is considered low because the agreement is with a creditworthy financial institution. The Company does not hold or issue derivative financial instruments for trading purposes.

~~The Swap became effective April 1, 2011 and continues through April 1, 2016. The Company paid interest at a fixed rate of 1.9%~~fair value on the notional amount of $20.0 million, which is reduced by $1.0 million quarterly in July, October, January and April of each year. The terms of the initial interest rate swap agreement also required Wells Fargo Bank to pay based upon the variable LIBOR rate. The net interest payments, based on the notional amount, match the timing of the related liabilities. The initial Swap was designated as a hedge for accounting purposes under ASC Topic 815, “Derivatives and Hedging.” The Companythat date, therefore, we no longer recognized the derivative as a liability on the balance sheet ~~and is included~~ in long-term ~~debt, and marked~~debt. Prior to the pay-off of the Swap, the derivative was marked to fair value ~~through~~and the ~~income statement income as a fair value~~ adjustment of the ~~derivative.~~

~~During September 2011,~~derivative was recognized as income during the ~~Company amended and restated~~first quarter of 2012.

For the initial swap agreement with Wells Fargo Bank, effective September 1, 2011. All prior terms and conditions related to the swap agreement remained the same, with the exception of the floating rate payable by Wells Fargo Bank on the swap, which has been modified to include a floor rate of 1.5%, where if the relevant rate (variable LIBOR rate defined above) is equal to or less than 1.5%, the floating rate shall be 1.5%. The newly established floor rate on the swap coincides with the minimum variable rate stated for the related hedged debt. In addition, the fixed rate payable to Wells Fargo Bank for the re-designated Swap was increased from 1.9% to 3.06% and is expected over the life of the swap to modestly reduce the overall cost of the instrument. The re-designated Swap was designated as a hedge for accounting purposes under ASC Topic 815, “Derivatives and Hedging.” The Company will continue to recognize the derivative as a liability on the balance sheet, included in long-term debt, and marked the derivative to fair value through the income statement income as a fair value adjustment of the derivative.

~~During the year~~years ended December 31, 2012 and 2011, ~~the Company~~we paid interest on the hedged portion of the debt ($18.0 million) at an average net rate of 8.56% and 8.62%, respectively and paid interest on the non-hedged portion of the debt ($13.0 million) at a rate of 7.0%. ~~The~~For the years ended December 31, 2012 and 2011, the weighted average cash interest rate paid on the debt was 8.16%, including ~~swap~~Swap interest and loan interest.

The following table presents the historical fair value of the interest rate swaps recorded in the accompanying condensed consolidated balance sheets as of December 31, 2011. The Company had no interest swap agreements during the fiscal year ended December 31, 2010.

September 30, September 30, September 30, September 30, September 30,
          Net Fair Value of Liability
Original Notional
Amount at April 1 2011
     Notional Balance at
December 31, 2011      Settlement
Rate December 31,
2011      December 31,
2010
Maturity Date
$20,000,000      $ 18,000,000         1.56 % $ 537,422         $ —         April 1, 2016

~~Fair Value~~

Fair value approximates the amount we would pay if these contracts were settled at the respective valuation dates. Fair value is recognized based on estimates provided by Wells Fargo Bank, which are based upon current, and predictions of future, interest rate levels along a yield curve, the remaining duration of the instruments and other market conditions, and therefore, is subject to significant estimation and a high degree of variability and fluctuation between periods. The fair value is adjusted, to reflect the impact of credit ratings of the counterparties or the Company, as applicable. These adjustments resulted in a reduction in the fair values as compared to their settlement values.

The net effect of our floating-to-fixed interest rate ~~swap~~Swap resulted in an increase in interest expense of ~~$0.2~~$0.7 million and $0.02 million for the ~~year~~years ended December 31, 2012 and 2011, respectively, as compared to the contractual rate of the underlying hedged debt for the period. ~~During the year ended December 31, 2011, due to the derivative not being designated as a hedging instrument, we recognized a loss on the change in the fair value of the swap of $0.5 million.~~

61

10. ~~STOCKHOLDERS’ EQUITY~~

On May 31, 2010, the Board of Directors authorized the Company to repurchase up to $1.0 million in additional common stock of the Company at a price not to exceed $3.00 per share subject to management’s discretion. This authorization expired on December 31, 2010, without any shares being repurchased and is no longer effective.

~~11.~~ INCOME TAXES

The income tax provision consists of the ~~following:~~

September 30, September 30, September 30,
          2011    2010
Current:
     Federal      $ 4,397,712       $ 3,587,094
     State      2,246,999       1,777,895




          6,644,711       5,364,989




Deferred:
     Federal      (3,131,017 )    354,076
     State      (274,095 )    20,365




          (3,405,112 )    374,441




          $ 3,239,599       $ 5,739,430

following (in thousands):

		2012			2011
Current:	Federal	$	15,390		$	4,398
	State		1,509			2,247
			16,899			6,645
Deferred:	Federal		(1,712	)		(3,131	)
	State		(12	)		(274	)
			(1,724	)		(3,405	)
		$	15,175		$	3,240

A reconciliation of the income tax provision relative to continuing operations with amounts determined by applying the statutory U.S. Federal income tax rate of ~~34%~~35% to consolidated income before income taxes is as ~~follows:~~

September 30, September 30,
     2011      2010
Tax provision at U.S. statutory rate
     $ 1,898,084         $ 4,562,113
State taxes, net of federal benefit
     1,289,667         1,310,630
Other (benefit)
     51,848         (133,313 )




     $ 3,239,599         $ 5,739,430

follows (in thousands):

	2012			2011
Tax provision at U.S. statutory rate	$	15,053		$	1,898
State taxes, net of federal benefit		1,067			1,290
Other (benefit)		(945	)		52
	$	15,175		$	3,240

At December 31, 2012 and 2011, ~~and 2010, the Company’s~~our deferred tax assets (liabilities) consist of the ~~following:~~

September 30, September 30,
     2011    2010
Deferred tax assets:

Deferred compensation
     $ 1,162,111       $ —
Depreciation of fixed assets
     886,171       —
Amortization of goodwill
     387,867       —
Acquisition fees
     283,218       —
Notes receivable
     257,504       —
Interest in partnerships
     202,752       —
Prepaid expenses and accruals
     —         101,417
Other
     28,526       —




     3,208,149       101,417




Deferred tax liabilities:

Amortization of gaming rights and unrealized gain on tribal receivables
     (936,204 )    (1,001,954 )
Prepaid expenses and accruals
     (666,534 )    —
Federal liability due to expected prepayment from amended Michigan modified business tax returns
     (152,475 )    —
Allowance for doubtful accounts
     (56,739 )    —
Interest in partnerships
     —         (70,023 )
Amortization of goodwill
     —         (929,003 )
Other
     —         (109,353 )




     (1,811,952 )    (2,110,333 )




     $ 1,396,197       $ (2,008,916 )

following (in thousands):

	2012			2011
Deferred tax assets:
Deferred compensation	$	1,713		$	1,162
Depreciation of fixed assets		595			886
Intangible assets and amortization		591			388
Acquisition fees		--			283
Notes receivable		--			258
Interest in partnerships		--			203
Accrued expenses		933			--
Chip and token liability		93			--
Allowance for doubtful accounts		150			--
Other		531			28
		4,606			3,208
Deferred tax liabilities:
Amortization of gaming rights and unrealized gain on tribal receivables		--			(936	)
Prepaid expenses		(1,310	)		(667	)
Interest in partnerships		(176	)		--
Federal liability due to expected prepayment from amended Michigan modified business tax returns		--			(152	)
Allowance for doubtful accounts		--			(56	)
		(1,486	)		(1,811	)
	$	3,120		$	1,397

62

Management has made an annual analysis of its state and federal tax returns that remain subject to examination by major authorities (presently consisting of tax years ~~2006~~2009 through ~~2010)~~2011) and concluded that ~~the Company has~~we have no recordable liability as of December 31, ~~2011~~2012 or ~~2010,~~2011, for unrecognized tax benefits as a result of uncertain tax positions taken.

In November 2010, ~~the Company was~~we were notified by the Department of Treasury’s Internal Revenue Service (IRS) of their initial conclusion regarding their audit of GEM for the 2009 tax year. Effective January 10, 2012 the IRS audit of GEM was completed and GEM received a ‘No Adjustments Letter’ from the IRS, which stated there are no proposed adjustments to the 2009 returns. As part of the IRS audit, ~~the Company has~~we amended ~~their~~our 2010 Federal tax return to reflect an amount due related to cumulative accrued interest income. The tax liability was $0.5 million, 50% of which iswas a ~~contingency~~liability of RAM. ~~The Company~~We made a payment of $0.2 million to the IRS which ~~has~~ reduced ~~the Company’s~~our deferred tax liability and had no impact on net income.

~~12.~~

11. COMMITMENTS AND CONTINGENCIES

Operating leases.~~In November 2009, the Company entered into an agreement to~~On December 1, 2012, we amended and extended our corporate office lease ~~office space as lessee~~ through ~~July 31, 2013.~~May 2018. Effective December ~~31,~~ 2010, Stockman’s entered into a lease agreement as lessee for its primary outdoor casino sign until November 2015. On June 28, 2011, Gaming Entertainment (Nevada) LLC (Grand Lodge) entered into a lease agreement with Hyatt Equities LLC for approximately 20,900 square feet of building space occupied by the Grand Lodge gaming operations, as well as associated gaming office ~~space~~space.

In November 2004, Silver Slipper entered into the Land Lease, which includes approximately 31 acres of protected marsh land as well as a seven acre casino parcel, on which the Silver Slipper was subsequently built, as discussed in Note 6. In December 2010, Silver Slipper entered into a lease agreement with Cure Land Company, LLC for approximately five acres of land occupied by the ~~Grand Lodge Casino.~~Silver Slipper gaming office and warehouse space. On January 31, 2012 Silver Slipper entered into a lease agreement with Chelsea Company, LLC for a small parcel of land with a building which may be occupied by a future proposed Silver Slipper welcome center. On January 11, 2013 Silver Slipper terminated a previous restaurant lease agreement with Diamondhead Country Club & Property Owners Association (“DCCPOA”), and entered into a contract to purchase services to be provided by DCCPOA related to its golf and country club.

Land Lease buyout. The Land Lease includes an exclusive option to purchase the leased land (“Purchase Option”), as well as an exclusive option to purchase a four acre portion of the leased land (“4 Acre Parcel Purchase Option“), which may be exercised at any time in conjunction with a hotel development during the term of the lease for $2.0 million.

On February 26, 2013, Silver Slipper entered into a third amendment to the Land Lease which amended the term and Purchase Option provisions of the Land Lease. The term of the Land Lease was extended to April 30, 2058, and the Purchase Option was extended through October 1, 2027 and may only be exercised after February 26, 2019. If there is no change in ownership, the purchase price will be $15.5 million, less $2.0 million if the 4 Acre Parcel Purchase Option has been previously exercised, plus a retained interest in Silver Slipper operations of 3% of net income. In the event that we sell or transfer substantially all of the assets of our ownership in Silver Slipper, then the purchase price will increase to $17.0 million.

63

The total rent expense for all operating leases for the years ended December 31, 2012 and 2011 was $1.9 and ~~2010 was~~ $0.7 ~~and $0.1~~ million, respectively.

Future minimum lease payments are as ~~follows:~~

September 30,
2012
     $ 1,662,826
2013
     1,641,825
2014
     1,562,856
2015
     1,543,494
2016
     1,000,000


     $ 7,411,001

follows (in thousands):

2013	$	2,814
2014		2,780
2015		2,761
2016		2,217
2017		1,217
Thereafter		37,958
	$	49,747

Employment agreements.~~The Company is~~We are obligated under employment agreements with certain key employees that provide the employee with a base salary, bonus, restricted stock grants and other customary benefits and severance in the event the employee is terminated without cause or due to a “change of control,” as defined in the agreements. The severance amounts vary with the term of the agreement and can be up to two years’ base salary and an average bonus calculated as earned in the previous three years or as a percentage of base salary. If such termination occurs within two years of a change of control, as defined in the agreements, or by ~~the Company~~us without cause, the employee will receive a lump sum payment equal to no less than six months to one year’s annual base salary, a lump sum cash payment equal to the average bonus earned in the previous ~~two~~one to three years or calculated as a percentage of base salary, and the acceleration and vesting of all unvested shares and stock-based grants awarded upon the date of change of control in some instances, along with insurance costs, 401(k) matching contributions and certain other benefits total ranging from ~~$5.4~~$3.8 million to ~~$5.7~~$4.3 million, in the aggregate.

In the event the employee’s employment terminates due to illness, incapacity or death, the severance amounts vary with the term of the agreement and can be up to two years’ base salary, an amount equal to the prior year bonus on a pro-rata basis to date of termination, reimbursement of expenses incurred prior to date of termination, and applicable insurance and other group benefit proceeds, including those due under ~~any Company~~our long-term disability plan with an expected cost ranging from ~~$0.1~~$0.3 million to ~~$2.0~~$1.8 million per employee.

In December 2012, we signed a severance agreement with our general counsel which provided for a total severance distribution payment of $0.2 million. As of December 31, 2012, we had accrued $0.2 million related to this severance agreement.

Defined Contribution Pension Plan. ~~The Company sponsors~~We sponsor a defined contribution pension plan for all eligible employees providing for voluntary contributions by eligible employees and matching contributions made by ~~the Company.~~us. Matching contributions made by ~~the Company~~us were $0.6 million and $0.4 million for 2012 and ~~$0.1 million for~~ 2011, ~~and 2010,~~ excluding nominal administrative expenses ~~assumed by the Company.~~assumed.

Legal matters. ~~The Company is involved in~~We are subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions and other matters arising in the ~~ordinary~~normal course of business. ~~Based on available information,~~We do not believe that the Company is unable to estimate the minimum losses, if any, to be incurred upon disposition of these matters; and therefore, no provision for losses has been made. However, in the opinion of management, thefinal outcome of these matters ~~is not likely to~~will have a material adverse effect on ~~the future~~our consolidated financial position or results of ~~operations or cash flows~~operations. We maintain what we believe is adequate insurance coverage to further mitigate the risks of ~~the Company.~~such proceedings.

~~13.~~

64

12. SHARE-BASED COMPENSATION PLANS

On June 1, 2011, ~~the Company’s~~our compensation committee approved the issuance of 660,000 shares of restricted stock, then valued at the closing price of ~~the Company’s~~our stock ($3.88), with no discount. The majority of the shares (600,000) will ~~fully~~ vest on June 1, 2013. The remaining shares ~~will vest over~~have a three ~~years,~~year vesting schedule as follows: 20,001 vested on June 1, 2012, 20,001 will vest on June 1, 2013 and 19,998 on June 1, 2014. Vesting is contingent upon certain conditions, including continuous service of the individual recipients. The unvested ~~grants~~shares are viewed as a series of individual awards and the related share-based compensation expense ~~was initially recorded as deferred compensation expense, reported as a reduction of stockholder’s equity, and~~ will ~~subsequently~~ be amortized into compensation expense on a straight-line basis as services are provided over the vesting period.

~~The Company~~

We recognized stock compensation expense of ~~$0.7~~$1.2 million and ~~$0.02~~$0.7 million for the twelve months ended December 31, ~~2011~~2012 and ~~2010,~~December 31, 2011, respectively. Share based compensation expense related to the amortization of the restricted stock issued is included in selling, general and administrative expense. At December 31, 2012 and 2011, ~~and 2010, the Company~~we had deferred share-based compensation of $0.6 million and $1.8 million, respectively.

The following table summarizes our restricted stock activity relative to share-based compensation for 2012 and ~~$0, respectively.~~

2011:

	2012					2011
	Shares			Weighted average grant date value (per share)		Shares		Weighted average grant date value (per share)
Unvested at beginning of year		660,000		$	3.88		--	$	--

Issued		--			--		660,000		3.88
Vested		(20,001	)		3.88		--		--
Forfeited		--			--		--		--
Unvested at end of year		639,999			3.88		660,000		3.88

In the second quarter of 2012 and 2011, ~~and 2010, the Company~~we issued 6,000 shares of unrestricted stock in conjunction with director compensation, which was valued at ~~$0.2~~$0.02 million ~~and $0.2 million~~in each year based on the closing price of ~~the Company’s~~our stock of $2.95 and $4.01, ~~and $2.91,~~respectively, with no discount. Since the shares were fully vested at the date of grant, ~~the Company~~we recognized share-based compensation expense of ~~$0.2~~$0.02 million ~~and $0.2 million~~in each year related to these grants.

~~The following table summarizes the Company’s restricted stock activity relative to share-based compensation for 2011 and 2010:~~

September 30, September 30, September 30, September 30,
     2011      2010
     Shares      Weighted
average
grant date
value (per
share)      Shares    Weighted
average
grant date
value (per
share)
Unvested at beginning of year
     —           $ —           36,667       $ 3.64
Issued
     660,000         3.88         —         —
Vested
     —           —           (36,667 )    3.64
Forfeited
     —           —           —         —





Unvested at end of year
     660,000         3.88         —         —

~~14.~~

13. ACQUISITION OF ~~RISING STAR AND GRAND LODGE CASINOS~~

SILVER SLIPPER CASINO

On ~~April~~March 30, 2012, we entered into a Membership Interest Purchase Agreement with Silver Slipper Casino Venture LLC to acquire all of the outstanding membership interest of the entity operating the Silver Slipper in Bay St. Louis, Mississippi. The purchase price was approximately $69.3 million, exclusive of estimated cash, net working capital balances, fees and expenses and other adjustments as customary, as of October 1, ~~2011,~~2012.

65

On October 1, 2012, we closed on the ~~Company purchased~~acquisition of all of the ~~Grand Victoria~~equity membership interests in Silver Slipper Casino ~~and Resort,~~Venture LLC dba Silver Slipper Casino located in ~~Rising Sun, Indiana on the Ohio River for~~Bay St. Louis, Hancock County, Mississippi. The purchase price of approximately ~~$19.0~~$69.3 million, inexclusive of cash and ~~$33.0~~working capital in the amount $6.7 million ~~drawn from~~and $2.9 million, respectively, was funded by a $50.0 million first lien term loan provided by Capital One as administrative agent and the ~~Company’s~~lenders identified in the First Lien Credit Agreement ~~with Wells Fargo. The Company entered into~~dated June 29, 2012 and a $20.0 million second lien term loan provided by ABC Funding, LLC as administrative agent and the lenders identified in the Second Lien Credit Agreement ~~with Wells Fargo on~~dated October ~~29, 2010,~~1, 2012, as discussed in Note 9,8. The $5.0 million revolving loan under the First Lien Credit Agreement remains undrawn and ~~regulatory approvals were obtained~~available. The First and Second Lien Credit Agreements are secured by substantially all of our assets and therefore, our wholly-owned subsidiaries guarantee our obligation under the agreements. The Second Lien Credit Agreement is subject to ~~accommodate a closing effective April 1, 2011. In August 2011,~~ the ~~property was renamed Rising Star Casino Resort (“Rising Star”).~~

lien of the First Lien Credit agreement.

Through December 31, ~~2011~~2012 and December 31, ~~2010, the Company~~2011, we had incurred ~~$0.5~~$1.6 million and ~~$0.2~~$0.0 million in Silver Slipper acquisition related expenses, respectively, which are included in project development and acquisition expense. In conjunction with closing on the ~~financing commitment, the Company has~~First and Second Lien Credit Agreements, we incurred ~~$2.6~~$5.7 million in financing related fees, which are located on the balance sheet ~~in other intangibles.~~

under loan fees.

The ~~Rising Star~~ purchase price was allocated in the ~~second~~fourth quarter of ~~2011~~2012 as follows (in millions):

September 30,
Land and land improvements
     $ 8.1
Buildings and building improvements
     16.8
Equipment and boat related assets
     6.3
Gaming license
     9.9
Player loyalty program
     1.7
Goodwill (excess purchase price over the assets purchased)
     1.6
Working capital (deficit)
     (2.0 )


     $ 42.4

~~On June 28, 2011,~~

Building	$	42.2
Land improvements		0.5
Equipment		4.6
Intangibles		1.4
Player loyalty program		5.9
Goodwill (excess purchase price over the assets purchased)		14.7
Working capital		2.9
	$	72.2

The goodwill is the ~~Company, through a wholly-owned subsidiary, Gaming Entertainment (Nevada) LLC, entered into definitive agreements with HCC Corporation dba Grand Lodge Casino~~excess purchase price over the assets purchased and is primarily attributable to ~~acquire specific gaming related operating assets~~the assembled workforce and ~~liabilities~~the synergies expected to arise due to our acquisition of the ~~property, located in Incline Village, Nevada.~~Silver Slipper. The ~~purchase price was $0.7 million, exclusive of operating cash and~~valuation above includes a net working capital asamount of September 1, 2011. Concurrently, Gaming Entertainment (Nevada) LLC entered into a lease agreement with Hyatt Equities LLC for a five-year term to lease the casino space operating as Grand Lodge Casino for $0.1 million per month, over the initial term of the lease.

~~The Grand Lodge purchase price was allocated in the third quarter of 2011 as follows (in millions):~~

September 30,
Gaming Equipment
     $ 0.7
Working capital, including cash acquired
     0.7


     $ 1.4

$2.9 million.

The following unaudited, condensed consolidated pro forma data summarizes ~~the Company’s~~our results of operations for the periods indicated as if the acquisitions had occurred as of January 1, ~~2010.~~2011. This unaudited pro forma consolidated financial information is not necessarily indicative of what ~~the Company’s~~our actual results would have been had the acquisition been completed on that date, or of future financial results. The estimated net income attributable to the Company and the net income per share ~~has~~have been adjusted for ~~Rising Star’s~~Silver Slipper’s effective tax rate in the State of ~~Indiana.~~

September 30, September 30,
     Twelve months ended December 31,
In thousands, except for per share amounts
     2011      2010
Net revenues
     $ 142,110         $ 162,566
Depreciation and amortization
     8,938         11,591
Operating income
     20,000         21,139
Net income attributable to the Company
     2,761         3,192
Net income per share
     $ 0.15         $ 0.18

Mississippi.

	Twelve months ended December 31, (In thousands)
	2012		2011
Net revenues	$	171,495	$	162,721
Depreciation and amortization		12,647		13,795
Operating income		51,368		23,293
Net income (loss) attributable to the Company		21,999		(103	)
Net income (loss) per share	$	1.18	$	(0.01	)

66

~~15.~~ 14. SEGMENT REPORTING

The following tables reflect selected information for ~~the Company’s~~our reporting segments for the twelve months ended December 31, ~~2011~~2012 and ~~2010.~~2011. The casino ~~operations segment includes~~operation segments include the Silver Slipper’s operation in Bay St. Louis, Mississippi, Rising ~~Star Casino Resort’s~~Star’s operation in Rising Sun, Indiana, the Grand ~~Lodge Casino~~Lodge’s operation in Lake Tahoe, Nevada and Stockman’s ~~Casino~~ operation in Fallon, Nevada. The Company reviews operating results, assesses performance and makes decisions related to the allocation of resources on a property-by-property basis, and therefore management believes that each property is an operating segment that is appropriately aggregated and presented as one reportable segment. To enhance disclosure, the Company also chooses to includeWe have included regional information ~~on this segment.~~for segment reporting and aggregated casino operations in the same region. The ~~development/~~development / management segment includes costs associated with casino development and management projects, including the management agreement with the Pueblo of Pojoaque to advise on the operations of the Buffalo Thunder in Santa Fe, New Mexico, and the Michigan and Delaware joint ventures. The Corporate segment includes our general and administrative ~~expenses of the Company.~~

expenses.

Selected statement of operations data as of and for ~~2011~~2012 and ~~2010~~2011 is as ~~follows:~~

September 30, September 30, September 30, September 30, September 30,
2011
     Casino
Operations
Nevada    Casino
Operations
Mid-west      Development/
Management      Corporate    Consolidated
Revenues
     $ 12,313,161       $ 68,957,305         $ 24,185,594         $ 5,000       $ 105,461,060
Selling, general and administrative expense
     3,540,791       16,378,319         610,097         4,899,792       25,428,999
Depreciation and amortization
     1,051,176       3,550,241         2,372,446         27,913       7,001,776
Operating gains (losses)*
     (4,500,000 )    —           2,878,468         —         (1,621,532 )
Operating income (loss)
     (3,433,408 )    4,240,440         23,555,904         (5,189,838 )    19,173,098
Income (loss) attributable to Company
     (2,265,815 )    1,250,237         9,078,382         (5,719,805 )    2,342,999

*	~~Operating gains (losses) include impairment losses.~~

September 30, September 30, September 30, September 30, September 30,
2010
     Casino
Operations
Nevada      Casino
Operations
Mid-west      Development/
Management      Corporate    Consolidated
Revenues
     $ 8,338,757         $ —           $ 24,558,372         $ —         $ 32,897,129
Selling, general and administrative expense
     1,729,554         —           730,035         3,970,256       6,429,845
Depreciation and amortization
     960,675         —           2,372,781         87,800       3,421,256
Operating gains
     —           —           5,091,764         —         5,091,764
Operating income
     1,472,935         —           26,545,979         (4,479,875 )    23,539,039
Income (loss) attributable to Company
     976,664         —           9,680,712         (2,988,129 )    7,669,247

follows (in thousands):

2012	Casino Operations
	Nevada			Midwest		Gulf Coast		Development/ Management		Corporate			Consolidated
Revenues	$	22,313		$	86,291	$	12,861	$	7,295	$	--		$	128,760
Selling, general and administrative expense		6,292			19,398		4,670		136		6,507			37,003
Depreciation and amortization		909			4,163		1,211		592		9			6,884
Operating gains (losses)		--			--		--		41,189		--			41,189
Operating income (loss)		3,851			5,746		663		46,196		(6,818	)		49,638
Income (loss) attributable to Company		2,539			2,158		456		30,108		(7,427	)		27,834

2011	Casino Operations
	Nevada			Midwest		Gulf Coast		Development/ Management		Corporate			Consolidated
Revenues	$	12,313		$	68,957	$	--	$	24,186	$	5		$	105,461
Selling, general and administrative expense		3,541			16,378		--		610		4,900			25,429
Depreciation and amortization		1,051			3,550		--		2,372		28			7,001
Operating gains (losses)*		(4,500	)		--		--		2,878		--			(1,622	)
Operating income (loss)		(3,433	)		4,240		--		23,556		(5,190	)		19,173
Income (loss) attributable to Company		(2,266	)		1,250		--		9,079		(5,720	)		2,343
*Operating gains (losses) include impairment losses.

Selected balance sheet data as of December 31, ~~2011~~2012 and ~~2010~~2011 is as ~~follows:~~

September 30, September 30, September 30, September 30, September 30,
2011
     Casino
Operations
Nevada      Casino
Operations
Mid-west      Development/
Management      Corporate      Consolidated
Total assets
     $ 18,488,888         $ 54,923,492         $ 13,192,504         $ 8,013,057         $ 94,617,941
Property and equipment, net
     7,350,840         31,296,224         —           21,219         38,668,283
Goodwill
     5,808,520         1,647,198         —           —           7,455,718
Liabilities
     4,604,218         9,649,198         102,709         24,816,772         39,172,897

September 30, September 30, September 30, September 30, September 30,
2010
     Casino
Operations
Nevada      Casino
Operations
Mid-west      Development/
Management      Corporate      Consolidated
Total assets
     $ 19,949,159         —           $ 16,705,051         $ 19,796,576         $ 56,450,786
Property and equipment, net
     7,325,852         —           241         46,158         7,372,251
Goodwill
     10,308,520         —           —           —           10,308,520
Liabilities
     1,319,064         —           1,621,394         715,481         3,655,939

~~16.~~follows (in thousands):

	Casino Operations
2012	Nevada		Midwest		Gulf Coast		Development/ Management		Corporate		Consolidated
Total assets	$	16,964	$	51,054	$	72,911	$	96	$	21,700	$	162,725
Property and equipment, net		6,988		29,632		47,024		--		29		83,673
Goodwill		5,809		1,647		14,671		--		--		22,127
Liabilities		2,281		5,817		3,020		--		70,474		81,592

67

	Casino Operations
2011	Nevada		Midwest		Gulf Coast		Development/ Management		Corporate		Consolidated
Total assets	$	18,489	$	54,923	$	--	$	13,193	$	8,013	$	94,618
Property and equipment, net		7,351		31,296		--		--		21		38,668
Goodwill		5,809		1,647		--		--		--		7,456
Liabilities		4,604		9,649		--		103		24,817		39,173

15. SUBSEQUENT EVENTS

On February ~~17, 2012, GEM signed~~26, 2013, Silver Slipper entered into a ~~letter of intent with~~third amendment to the ~~FireKeepers Development Authority, (the “Authority”) to propose terms of a potential sale of GEM’s management rights~~Land Lease which amended the term and responsibilities under the current management agreement and allow the FireKeepers Casino to become self-managed by the Authority, in return for $97.5 million. If the sale occurs, this would effectively terminate the existing management agreement, which was scheduled to run through August 2016. The potential sale would be conditioned upon several requirements, which include the National Indian Gaming Commission approval, the Authority’s closing on refinancing of their $340.0 million existing indebtedness to fund the transaction, and a requirement that the closingPurchase Option provisions of the ~~purchase may occur no earlier than March~~Land Lease. The term of the Land Lease was extended to April 30, 2012 and no later than May 1, 2012. On February 28, 2012, the Company announced that GEM and RAM have agreed in principle to sell their interests in the FireKeepers management agreement to the Authority2058, and the ~~closing for~~Purchase Option was extended through October 1, 2027 and may only be exercised after February 26, 2019. If there is no change in ownership, the ~~transaction is targeted for~~purchase price will be $15.5 million, less $2.0 million if the ~~second quarter~~4 Acre Parcel Purchase Option has been previously exercised, plus a retained interest in Silver Slipper operations of ~~2012, conditioned on~~3% of net income. In the ~~requirements noted above. If the sale occurs, the Company intends to use a portion~~event that we sell or transfer substantially all of the ~~after-tax proceeds~~assets of or ownership in Silver Slipper, then the purchase price will increase to ~~pay-off the Company’s remaining outstanding debt.~~

$17.0 million.

68

Item 9. ~~Changes~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. ~~Controls~~Controls and Procedures.

Evaluation of Disclosure Controls and Procedures— As of December 31, ~~2011,~~2012, we completed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level in timely alerting them to material information relating to us which is required to be included in our periodic Securities and Exchange Commission filings.

Evaluation of Internal Control Over Financial Reporting— ~~Management of the Company~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting. ~~The Company’s~~Our internal control system was designed to provide reasonable assurance to ~~the Company’s~~our management and board of directors regarding the preparation and fair presentation of published financial statements.

Management assessed the effectiveness of ~~the Company’s~~our internal control over financial reporting (as defined in the Securities Exchange Act of 1934 Rule 13a-15(f) and 15d-15(f)) as of December 31, ~~2011.~~2012. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment we believe that, as of December 31, ~~2011, the Company’s~~2012, our internal control over financial reporting is effective based on those criteria.

Changes in Internal Control Over Financial Reporting— On ~~April~~October 1, ~~2011, FHR acquired Rising Star Casino Resort and on September 1 2011, FHR~~2012, we acquired the ~~operational assets of Grand Lodge Casino.~~Silver Slipper. Management is currently continuing its assessment of the effectiveness of the newly acquired property’s internal controls. ~~The Company has~~We have a period of one year from the respective acquisition date to complete ~~its~~our assessment of effectiveness of the internal controls of newly acquired operations and to take the required actions to ensure that adequate internal controls and procedures are in place.

Upon completion of our assessment of the effectiveness of the internal controls, as well as implementation of certain controls and procedures, we will provide a conclusion in our ~~annual~~quarterly report on Form ~~10-K~~10-Q for the fiscal ~~year ended December 31, 2012~~quarter ending September 30, 2013 about whether or not our internal control over financial reporting related to the respective acquisitions was effective as of the corresponding reporting period, based on the criteria in theInternal Control-Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

Item 9B. ~~Other~~Other Information.

None.

69

PAR~~PART~~T III

~~Item 10. Directors, Executive Officers and Corporate Governance.~~

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item will be set forth under the captions “Proposal No. 1. Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the definitive Proxy Statement for our ~~2012~~2013 Annual Meeting of Stockholders (our “Proxy Statement”) to be filed with the Securities and Exchange Commission on or before April 30, ~~2012~~2013 and is incorporated herein by this reference.

Item 11. ~~Executive~~Executive Compensation.

The information required by this Item will be set forth under the caption “Executive Compensation” in our Proxy Statement and is incorporated herein by this reference.

~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item will be set forth under the captions “Proposal No. 1. Election of ~~Directors—~~Directors - Security Ownership of Certain Beneficial Owners and Management” and “Executive ~~Compensation—~~Compensation - Equity Compensation Plan Information” in our Proxy Statement and is incorporated herein by this reference.

Item 13. ~~Certain~~Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item will be set forth under the caption “Certain Transactions” in our Proxy Statement and is incorporated herein by this reference.

Item 14. ~~Principal Accountants’~~Principal Accounting Fees and Services.

The information required by this Item will be set forth under the caption “Independent Registered Public Accounting Firm” in our Proxy Statement and ~~will be~~is incorporated herein by this ~~reference when submitted.~~

reference.

70

Item 15. ~~Exhibits.~~

~~(a)~~Exhibits, Financial ~~statements of the Company (including related notes to consolidated financial statements) filed as part of this report are listed below:~~

Statement Schedules.

~~Report of Independent Registered Public Accounting Firm;~~

~~Consolidated Balance Sheets as of December 31, 2011 and 2010;~~

(a) Financial statements of the Company (including related notes to consolidated financial statements) filed as part of this report are listed below:

~~Consolidated Statements of Operations for the years ended December 31, 2011 and 2010;~~

~~Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2011 and 2010;~~

● Report of Independent Registered Public Accounting Firm;

~~Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2010;~~

● Consolidated Balance Sheets as of December 31, 2012 and 2011;

● Consolidated Statements of Operations for the years ended December 31, 2012 and 2011;

● Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2012 and 2011;

● Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011;

● Notes to Consolidated Financial Statements.

~~(b) Exhibits~~

(b) Exhibits

Exhibit Number		Exhibit Description

2.1		Asset Purchase Agreement by and between Grand Victoria Casino & Resort, L.P. and Full House Resorts, Inc., dated as of September 10, 2010 (Incorporated by reference to Exhibit 2.1 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 13, 2010. )

2.2		Equity Purchase Agreement dated March 30, 2012 by and among Full House Resorts, Inc.; Firekeepers Development Authority, an unincorporated instrumentality and political subdivision of the Nottawaseppi Huron Band of Potawatomi Indians; RAM Entertainment, LLC and Robert A. Mathewson. (Incorporated by reference to Exhibit 2.1 to Full House’s Quarterly Report on Form 10-Q filed on May 8, 2012)

2.3		Membership Interest Purchase Agreement by and between the Sellers named therein, Full House Resorts, Inc. and Silver Slipper Casino Venture LLC, dated as of March 30, 2012 (Incorporated by reference to Exhibit 2.01 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 5, 2012)

3.1		Amended and Restated Certificate of Incorporation as amended to date (Incorporated by reference to Exhibit 3.1 to Full House’s Quarterly Report on Form 10-Q filed on May 9, 2011)

3.2		Amended and Restated Bylaws of Full House Resorts Inc. (Incorporated by reference to Exhibit 3.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 4, 2008)

10.1	Amended and Restated Class III Management Agreement dated November 18, 1996 between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan) LLC (Incorporated by reference to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 1996)

~~10.2~~	Investor Agreement by and between Full House Resorts, Inc. and RAM Entertainment, LLC, dated February 15, 2002 (Incorporated by reference to Full House’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 2002)

~~10.3~~	Management Agreement by and between Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. dated January 31,1996 (Incorporated by reference to Full House’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002)

~~10.4~~	Amendment to Management Agreement by and between Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. dated March 18, 1998 (Incorporated by reference to Full House’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002)

~~10.5~~	Amendment to Management Agreement by and between Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. dated July 1, 1999 (Incorporated by reference to Full House’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002)

~~10.6~~	Amendment to Management Agreement by and between Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. dated February 4, 2002 (Incorporated by reference to Full House’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002)

~~10.7~~	Amendment to Investor Agreement by and between Full House Resorts, Inc. and RAM Entertainment, LLC, dated May 31, 2005 (Incorporated by reference to Exhibit 10.62 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)

~~10.8~~	Economic Development Agreement between Full House Resorts, Inc. and Northern Cheyenne Tribe dated May 24, 2005 (Incorporated by reference to Exhibit 10.63 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)

~~Exhibit~~
~~Number~~
~~Exhibit Description~~
~~10.9~~ Development Agreement by and among Pueblo of Nambé, Nambé Pueblo Gaming Enterprise Board and Gaming Entertainment (Santa Fe), LLC dated as of September 20, 2005 (Incorporated by reference to Exhibit 10.64 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)
~~10.10~~ Security and Reimbursement Agreement by and among the Nambé Pueblo Gaming Enterprise Board, Gaming Entertainment (Santa Fe), LLC and the Pueblo of Nambé dated as of September 20, 2005 (Incorporated by reference to Exhibit 10.65 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)
~~10.11~~ Class III Gaming Management Agreement between the Northern Cheyenne Tribe and Gaming Entertainment (Montana), LLC dated January 20, 2006 2005 (Incorporated by reference to Exhibit 10.67 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)
~~10.12~~ Development Agreement by and between the Northern Cheyenne Tribe and Full House Resorts, Inc. dated May 24, 2005. (Incorporated by reference to Exhibit 10.68 to Full House’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006)
~~10.13~~ Security and Reimbursement Agreement by and between the Northern Cheyenne Tribe and Full House Resorts, Inc. dated August 23, 2005. (Incorporated by reference to Exhibit 10.69 to Full House’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006)
~~10.14~~ Management Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated June 12, 2006. (Incorporated by reference to Exhibit 10.70 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 16, 2006)
~~10.15~~ Loan Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated November 3, 2002. (Incorporated by reference to Exhibit 10.71 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)
~~10.16~~ Security Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated November 3, 2002. (Incorporated by reference to Exhibit 10.72 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)
~~10.17~~ Promissory Note by the Nottawaseppi Huron Band of Potawatomi dated November 3, 2002. (Incorporated by reference to Exhibit 10.73 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)
~~10.18~~ Amended and Restated 2006 Incentive Compensation Plan (Effective as of April 26, 2011) (Incorporated by reference to Appendix A to Full House’s Definitive Proxy Statement as filed with the Securities and Exchange Commission on March 16, 2011)
~~10.19~~10.2 Form of Restricted Stock Agreement. (Incorporated by reference to Exhibit 10.75 to Full House’s Quarterly Report on Form 10-QSB as filed with the Securities and Exchange Commission on August 14, 2006)

71


~~10.20~~10.3		Consulting Agreement dated September 25, 2006 between Full House and Lee Iacocca. (Incorporated by reference to Exhibit 10.66 to Full House’s Amendment No. 1 to Registration Statement on Form SB-2 (#333-136341) filed on September 27, 2006)

~~10.21~~		Reducing Revolving Loan Agreement, dated January 31, 2007 between Full House Resorts, Inc. and Nevada State Bank. (Incorporated by reference to Exhibit 10.80 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on February 5, 2007)

~~10.22~~		Reducing Revolving Promissory Note, dated January 31, 2007 by Full House Resorts in favor of Nevada State Bank. (Incorporated by reference to Exhibit 10.81 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on February 5, 2007)

~~10.23~~		Purchase and Sale Agreement, dated May 15, 2007, between Gaming Entertainment (Michigan), LLC and Green Acres Casino Management, Inc. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 31, 2007)

~~Exhibit~~
~~Number~~
~~Exhibit Description~~
~~10.24~~ Management Reorganization Agreement, dated June 18, 2007 by Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 21, 2007)
~~10.25~~ Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc. and Andre Hilliou. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 20, 2007) +
~~10.26~~10.4 Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc. and Mark J. Miller. (Incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 20, 2007) +
~~10.27~~ ~~Employment~~
10.5 Letter Agreement dated ~~April 10, 2007,~~November 12, 2012, between Full House Resorts, Inc. and ~~Wes~~T. Wesley Elam (Incorporated by reference to Exhibit ~~10.3~~10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on ~~April 26, 2007)~~November 15, 2012) +
~~10.28~~ ~~Amendment to Reducing Revolving Loan~~
10.6 Employment Agreement, dated ~~as of the 25th day of June, 2009, by and~~December 7, 2012, between ~~the Company and Nevada State Bank. (Incorporated by reference to Exhibit 10.1 to Full House's Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 1, 2009)~~
~~10.29~~ Amendment to Reducing Revolving Promissory Note dated as of the 25th day of June, 2009, by and between the Company and Nevada State Bank. (Incorporated by reference to Exhibit 10.2 to Full House's Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 1, 2009)
~~10.30~~ ~~Credit Agreement dated October 29, 2010 by and among~~ Full House Resorts, Inc.~~, the financial institutions from time to time listed therein (the “Lenders”)~~ and Wells Fargo Bank, National Association as administrative agent for the Lenders, collateral agent for the Secured Parties (as defined in the Credit Agreement), security trustee for the Lenders, Letters of Credit Issuer and Swing Line Lender (incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2010).Deborah J. Pierce. +*
~~10.31~~ Commitment Increase Agreement dated December 17, 2010 by and among the Company, Bank of Nevada and Wells Fargo (incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).
~~10.32~~10.7 Assignment Agreement dated December 17, 2010 by and among the Company, Bank of Nevada and Wells Fargo (incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).
~~10.33~~ Assignment Agreement dated December 17, 2010 by and among the Company, Bank of Nevada, Capital One, N.A. and Wells Fargo (incorporated by reference to Exhibit 10.3 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).
~~10.34~~ Casino Operations Lease dated June 28, 2011 by and between Hyatt Equities, L.L.C. and Gaming Entertainment (Nevada) LLC. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-k filed with the Securities and Exchange Commission on June 30, 2011.)
~~10.35~~10.8 Asset Purchase and Transition Agreement dated June 28, 2011 by and between HCC Corporation, doing business as Grand Lodge Casino, and Gaming Entertainment (Nevada) LLC. (Incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2011.)
10.9 First Lien Credit Agreement dated as of June 29th, 2012, by and among Full House Resorts, Inc. as borrower, the Lenders named therein and Capital One, National Association as Administrative Agent. (Incorporated by reference to Exhibit 10.1 to Full House’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on August 8, 2012)
10.10 Second Lien Credit Agreement dated as of October 1, 2012, by and among Full House Resorts, Inc. as borrower, the Lenders named therein and ABC Funding, LLC as Administrative Agent. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K/A as filed with the Securities and Exchange Commission on October 5, 2012)
10.11 Lease Agreement with Option to Purchase dated as of November 17, 2004, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*
10.12 First Amendment to Lease Agreement with Option to Purchase dated as of March 13, 2009, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*
10.13 Second Amendment to Lease Agreement with Option to Purchase dated as of September 26, 2012, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*
10.14 Third Amendment to Lease Agreement with Option to Purchase dated as of February 26, 2013, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*
21 List of Subsidiaries of Full House Resorts, Inc. *
23 Consent of Piercy Bowler Taylor & Kern Certified Public Accountants*
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 *

~~Exhibit~~
~~Number~~

~~Exhibit Description~~
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 *
31.3 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 *
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 *
32.3 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 *

72

101.INS			XBRL Instance*

101.SCH			XBRL Taxonomy Extension Schema*

101.CAL			XBRL Taxonomy Extension Calculation*

101.DEF			XBRL Taxonomy Extension Definition*

101.LAB			XBRL Taxonomy Extension Labels*

101.PRE			XBRL Taxonomy Extension Presentation*

*	Filed herewith.

+	Executive compensation plan or arrangement

��

59

XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is otherwise not subject to liability under these sections.

73

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


		FULL HOUSE RESORTS, INC.

Date: March ~~7, 2012~~	5, 2013	By:	/s/ ANDRE M. HILLIOU
			Andre M. Hilliou, Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Name and Capacity	Date
		~~Date~~

/s/ ANDRE M. HILLIOU			March ~~7, 2012~~5, 2013
Andre M. Hilliou, Chief Executive Officer
~~Executive Officer~~ and
~~Director~~ Chairman of the Board
(Principal Executive Officer)

/s/ DEBORAH J. PIERCE	March 5, 2013
Deborah J. Pierce, Chief Financial Officer
(Principal Financial Officer)

/s/ LEE A. IACOCCA			March ~~7, 2012~~5, 2013
Lee A. Iacocca, Director


/s/ KENNETH R. ADAMS			~~March7, 2012~~March 5, 2013
Ken Adams, Director


/s/ CARL G. BRAUNLICH			March ~~7, 2012~~5, 2013
Carl G. Braunlich, Director


/s/ KATHLEEN MARSHALL			March ~~7, 2012~~5, 2013
Kathleen Marshall,
Director


/s/ MARK J. MILLER			March ~~7, 2012~~5, 2013
Mark J. Miller, Director and Chief Operating Officer
~~Financial Officer and COO~~
~~(Principal Financial and~~
~~Accounting Officer)~~

60

74

Delaware		13-3391527
~~Delaware~~		~~13-3391527~~
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)		~~(I.R.S. Employer~~ Identification No.)


Common Stock, $.0001 per Share		~~NYSE Amex (formerly American~~The NASDAQ Stock ~~Exchange)~~ Market LLC
(Title of Each Class)		(Name of Each Exchange on Which Registered)

Gross proceeds, before $0.3 million wind-up fee and holdback receivable	$	48.8
Plus: April 2012 ‘Wind up’ fee received, net of $0.03 million wind-up fee and holdback receivable		0.9
		49.7
Less: Net basis of contract rights expensed		(2.8	)
Less: Our interest in joint venture		(5.7	)
Gain on sale of joint venture	$	41.2

		September 30,		September 30,
	High		Low
Year Ended December 31, 2011
First Quarter	$	5.00	$	3.29
Second Quarter		4.28		2.85
Third Quarter		3.45		2.25
Fourth Quarter		3.10		2.51

Year Ended December 31, 2010
First Quarter	$	3.65	$	2.25
Second Quarter		3.40		2.66
Third Quarter		3.30		2.82
Fourth Quarter		3.77		2.86

¨	For the fiscal year ended: December 31, 2012
o	Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

	High		Low
Year Ended December 31, 2012
First Quarter	$	3.59	$	2.45
Second Quarter		3.15		2.76
Third Quarter		4.00		2.60
Fourth Quarter		3.82		2.73

Year Ended December 31, 2011
First Quarter	$	5.00	$	3.29
Second Quarter		4.28		2.85
Third Quarter		3.45		2.25
Fourth Quarter		3.10		2.51

	2012		2011
FireKeepers Casino:
Contract rights, net	$	--	$	10,873

Nambé project:
Notes receivable, tribal governments		--		--
	$	--	$	10,873

	December 31, 2012			December 31, 2011

ASSETS
Current assets
Cash and equivalents	$	20,603		$	14,707
Accounts receivable, net of allowance for doubtful accounts of $959 and $1,158		2,657			4,865
Prepaid expenses		5,744			2,487
Deferred tax asset		2,110			751
Other		1,225			404
		32,339			23,214
Property and equipment, net of accumulated depreciation		83,673			38,668

Long-term assets related to tribal casino projects
Notes receivable, net of allowance of $662 in 2011		--			--
Contract rights, net of accumulated amortization of $0 and $6,493		--			10,873
		--			10,873
Other assets
Goodwill		22,127			7,456
Intangible assets, net of accumulated amortization of $1,506 and $425		18,106			11,721
Long term deposits		301			142
Loan fees, net of accumulated amortization of $496 and $934		5,159			1,898
Deferred tax asset		1,020			646
		46,713			21,863
	$	162,725		$	94,618
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,532		$	1,614
Income taxes payable		7			2,410
Accrued player club points and progressive jackpots		2,378			1,751
Accrued payroll and related		4,107			4,034
Other accrued expenses		3,808			2,427
Current portion of long-term debt		2,500			4,950
		15,332			17,186

Long-term debt, net of current portion		66,250			21,987
Deferred tax liability		10			--
		81,592			39,173
Stockholders’ equity
Common stock, $.0001 par value, 100,000,000 shares authorized; 20,036,276 and 20,030,276 shares issued		2			2
Additional paid-in capital		44,707			43,448
Treasury stock, 1,356,595 common shares		(1,654	)		(1,654	)
Retained earnings		38,078			8,508
		81,133			50,304
Noncontrolling interest in consolidated joint venture		--			5,141
		81,133			55,445
	$	162,725		$	94,618

		0000,000,000		0000,000,000		0000,000,000			0000,000,000		0000,000,000			0000,000,000		0000,000,000			0000,000,000
	Common stock				Additional paid-in			Treasury stock					Retained		Noncontrolling			Total stockholders’
December 31, 2011	Shares		Dollars		capital			Shares		Dollars			earnings		interest			equity

Beginning balances		19,364,276	$	1,936	$	42,699,533			1,356,595	$	(1,654,075	)	$	6,164,927	$	5,582,526		$	52,794,847
Issuance of share based compensation		660,000		66		(66	)		—		—			—		—			—

Previously deferred share-based compensation recognized		—		—		724,272			—		—			—		—			724,272
Issuances of common stock		6,000		1		24,059			—		—			—		—			24,060
Distribution to non-controlling interest in consolidated joint venture		—		—		—			—		—			—		(10,688,157	)		(10,688,157	)

Net income		—		—		—			—		—			2,342,999		10,247,023			12,590,022


Ending balances		20,030,276	$	2,003	$	43,447,798			1,356,595	$	(1,654,075	)	$	8,507,926	$	5,141,392		$	55,445,044

		September 30,
	Nambé Pueblo

Balances, January 1, 2011	$	427,567
Impairment loss		(419,703	)
Unrealized losses		(7,864	)

Balances, December 31, 2011	$	—


	Year ended December 31, 2012 (in thousands)
	Balance at beginning of the year		Changes during the year		Balance at end of the year
Stockman’s Goodwill	$	5,809	$	--	$	5,809
Rising Star Goodwill		1,647		--		1,647
Silver Slipper Goodwill		--		14,671		14,671
Goodwill, net of accumulated impairment losses	$	7,456	$	14,671	$	22,127

	December 31, 2012
	Estimated Life (years)	Gross Carrying Value		Accumulated Amortization			Cumulative Expense / (Disposals)			Intangible Asset, Net
Amortizing Intangible assets:
Player Loyalty Program - Rising Star	3	$	1,700	$	(992	)	$	--		$	708
Player Loyalty Program - Silver Slipper	3		5,900		(492	)		--			5,408
Land Lease and Water Rights - Silver Slipper	46		1,420		(23	)		--			1,397
Wells Fargo Bank Loan Fees	5		2,614		(924	)		(1,690	)		-
Capital One Bank Loan Fees	3		4,671		(434	)		--			4,237
ABC Funding, LLC Loan Fees	4		984		(62	)		--			922

Non-amortizing intangible assets:
Gaming License-Indiana	Indefinite		9,900		--			--			9,900
Gaming License-Mississippi	Indefinite		115		--			--			115
Gaming License-Nevada	Indefinite		542		--			--			542
Trademarks	Indefinite		36		--			--			36
		$	27,882	$	(2,927	)	$	(1,690	)	$	23,265

		September 30,
2012	$	4,950,000
2013		6,600,000
2014		6,600,000
2015		6,600,000
2016		1,650,000

		September 30,
2012	$	1,662,826
2013		1,641,825
2014		1,562,856
2015		1,543,494
2016		1,000,000

	$	7,411,001

		September 30,
Land and land improvements	$	8.1
Buildings and building improvements		16.8
Equipment and boat related assets		6.3
Gaming license		9.9
Player loyalty program		1.7
Goodwill (excess purchase price over the assets purchased)		1.6
Working capital (deficit)		(2.0	)

	$	42.4

		September 30,
Gaming Equipment	$	0.7
Working capital, including cash acquired		0.7

	$	1.4

		September 30,		September 30,
	Twelve months ended December 31,
In thousands, except for per share amounts	2011		2010
Net revenues	$	142,110	$	162,566
Depreciation and amortization		8,938		11,591
Operating income		20,000		21,139
Net income attributable to the Company		2,761		3,192
Net income per share	$	0.15	$	0.18


~~Exhibit~~ ~~Number~~	~~Exhibit Description~~

~~10.9~~	Development Agreement by and among Pueblo of Nambé, Nambé Pueblo Gaming Enterprise Board and Gaming Entertainment (Santa Fe), LLC dated as of September 20, 2005 (Incorporated by reference to Exhibit 10.64 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)

~~10.10~~	Security and Reimbursement Agreement by and among the Nambé Pueblo Gaming Enterprise Board, Gaming Entertainment (Santa Fe), LLC and the Pueblo of Nambé dated as of September 20, 2005 (Incorporated by reference to Exhibit 10.65 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)

~~10.11~~	Class III Gaming Management Agreement between the Northern Cheyenne Tribe and Gaming Entertainment (Montana), LLC dated January 20, 2006 2005 (Incorporated by reference to Exhibit 10.67 to Full House’s Annual Report on Form 10-KSB for the fiscal ended December 31, 2005)

~~10.12~~	Development Agreement by and between the Northern Cheyenne Tribe and Full House Resorts, Inc. dated May 24, 2005. (Incorporated by reference to Exhibit 10.68 to Full House’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006)

~~10.13~~	Security and Reimbursement Agreement by and between the Northern Cheyenne Tribe and Full House Resorts, Inc. dated August 23, 2005. (Incorporated by reference to Exhibit 10.69 to Full House’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006)

~~10.14~~	Management Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated June 12, 2006. (Incorporated by reference to Exhibit 10.70 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 16, 2006)

~~10.15~~	Loan Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated November 3, 2002. (Incorporated by reference to Exhibit 10.71 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)

~~10.16~~	Security Agreement between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment (Michigan), LLC dated November 3, 2002. (Incorporated by reference to Exhibit 10.72 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)

~~10.17~~	Promissory Note by the Nottawaseppi Huron Band of Potawatomi dated November 3, 2002. (Incorporated by reference to Exhibit 10.73 to Full House’s Registration Statement on Form SB-2 (#333-136341) filed on August 4, 2006)

~~10.18~~	Amended and Restated 2006 Incentive Compensation Plan (Effective as of April 26, 2011) (Incorporated by reference to Appendix A to Full House’s Definitive Proxy Statement as filed with the Securities and Exchange Commission on March 16, 2011)

~~10.19~~10.2		Form of Restricted Stock Agreement. (Incorporated by reference to Exhibit 10.75 to Full House’s Quarterly Report on Form 10-QSB as filed with the Securities and Exchange Commission on August 14, 2006)


~~Exhibit~~ ~~Number~~	~~Exhibit Description~~

~~10.24~~	Management Reorganization Agreement, dated June 18, 2007 by Gaming Entertainment (Delaware), LLC and Harrington Raceway, Inc. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 21, 2007)

~~10.25~~	Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc. and Andre Hilliou. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 20, 2007) +

~~10.26~~10.4		Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc. and Mark J. Miller. (Incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 20, 2007) +

~~10.27~~	~~Employment~~
10.5		Letter Agreement dated ~~April 10, 2007,~~November 12, 2012, between Full House Resorts, Inc. and ~~Wes~~T. Wesley Elam (Incorporated by reference to Exhibit ~~10.3~~10.1 to Full House’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on ~~April 26, 2007)~~November 15, 2012) +

~~10.28~~	~~Amendment to Reducing Revolving Loan~~
10.6		Employment Agreement, dated ~~as of the 25th day of June, 2009, by and~~December 7, 2012, between ~~the Company and Nevada State Bank. (Incorporated by reference to Exhibit 10.1 to Full House's Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 1, 2009)~~

~~10.29~~	Amendment to Reducing Revolving Promissory Note dated as of the 25th day of June, 2009, by and between the Company and Nevada State Bank. (Incorporated by reference to Exhibit 10.2 to Full House's Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 1, 2009)

~~10.30~~	~~Credit Agreement dated October 29, 2010 by and among~~ Full House Resorts, Inc.~~, the financial institutions from time to time listed therein (the “Lenders”)~~ and Wells Fargo Bank, National Association as administrative agent for the Lenders, collateral agent for the Secured Parties (as defined in the Credit Agreement), security trustee for the Lenders, Letters of Credit Issuer and Swing Line Lender (incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2010).Deborah J. Pierce. +*

~~10.31~~	Commitment Increase Agreement dated December 17, 2010 by and among the Company, Bank of Nevada and Wells Fargo (incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).

~~10.32~~10.7	Assignment Agreement dated December 17, 2010 by and among the Company, Bank of Nevada and Wells Fargo (incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).

~~10.33~~	Assignment Agreement dated December 17, 2010 by and among the Company, Bank of Nevada, Capital One, N.A. and Wells Fargo (incorporated by reference to Exhibit 10.3 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2010).

~~10.34~~	Casino Operations Lease dated June 28, 2011 by and between Hyatt Equities, L.L.C. and Gaming Entertainment (Nevada) LLC. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-k filed with the Securities and Exchange Commission on June 30, 2011.)

~~10.35~~10.8		Asset Purchase and Transition Agreement dated June 28, 2011 by and between HCC Corporation, doing business as Grand Lodge Casino, and Gaming Entertainment (Nevada) LLC. (Incorporated by reference to Exhibit 10.2 to Full House’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2011.)

10.9		First Lien Credit Agreement dated as of June 29th, 2012, by and among Full House Resorts, Inc. as borrower, the Lenders named therein and Capital One, National Association as Administrative Agent. (Incorporated by reference to Exhibit 10.1 to Full House’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on August 8, 2012)

10.10		Second Lien Credit Agreement dated as of October 1, 2012, by and among Full House Resorts, Inc. as borrower, the Lenders named therein and ABC Funding, LLC as Administrative Agent. (Incorporated by reference to Exhibit 10.1 to Full House’s Current Report on Form 8-K/A as filed with the Securities and Exchange Commission on October 5, 2012)

10.11		Lease Agreement with Option to Purchase dated as of November 17, 2004, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*

10.12		First Amendment to Lease Agreement with Option to Purchase dated as of March 13, 2009, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*

10.13		Second Amendment to Lease Agreement with Option to Purchase dated as of September 26, 2012, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*

10.14		Third Amendment to Lease Agreement with Option to Purchase dated as of February 26, 2013, by and between Cure Land Company, LLC, as landlord, and Silver Slipper Casino Venture LLC, as tenant.*

21		List of Subsidiaries of Full House Resorts, Inc. *

23		Consent of Piercy Bowler Taylor & Kern Certified Public Accountants*

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 *


~~Exhibit~~ ~~Number~~	~~Exhibit Description~~

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 *

31.3		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 *

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 *

32.3		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 *

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