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<SEC-DOCUMENT>0001362310-09-004814.txt : 20090618
<SEC-HEADER>0001362310-09-004814.hdr.sgml : 20090617
<ACCEPTANCE-DATETIME>20090402215149
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001362310-09-004814
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FULL HOUSE RESORTS INC
		CENTRAL INDEX KEY:			0000891482
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
		IRS NUMBER:				133391527
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		4670 S. FORT APACHE ROAD
		STREET 2:		SUITE 190
		CITY:			LAS VEGAS
		STATE:			NV
		ZIP:			89147
		BUSINESS PHONE:		7022217800

	MAIL ADDRESS:	
		STREET 1:		4670 S. FORT APACHE ROAD
		STREET 2:		SUITE 190
		CITY:			LAS VEGAS
		STATE:			NV
		ZIP:			89147
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>SEC Letter</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">April&nbsp;2, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Heather Clark<BR>
Division of Corporation Finance<BR>
U.S. Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>RE:</B></TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>Comments on Form&nbsp;10-Q for the quarter ended September&nbsp;30, 2008<br>
File No.&nbsp;001-32583</B></DIV></TD>
</TR>
</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Dear Ms.&nbsp;Heather Clark:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">We have reproduced your comment set forth in the Comment Letter before the response below.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U><B>Income Taxes page 22</B></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>1. We note your response to our prior comment 11 but do not believe you have been fully
responsive to our comment. As previously requested, please tell us in further detail the
specific nature and timing of the changes in facts or circumstances that resulted in the
$380,516 adjustment to reduce income tax expense during the third quarter of 2007. We note
from your response that the changes were made as a result of switching tax preparers during
2007. Please indicate if your tax amounts (including provisions, deferred taxes and taxes
receivable and/or payable) were in error in your prior financial statements and tell us the
amounts that required adjustment. Furthermore, to the extent these adjustments represented
the correction of an error, please provide us with your assessment of materiality of these
adjustments. We may have further comment upon receipt of your response.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">RESPONSE:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">We originally responded to your initial comment letter in the belief that the $380,516 adjustment
as we discussed in the MD&#038;A of our quarterly report on Form 10-Q for the quarter ended September
30, 2008, was solely the effect of a change in estimate, which you have asked us in your letter of
February&nbsp;19, 2009, to explain further. Upon careful re-examination of the facts and circumstances
described below, we have concluded that the $380,516 adjustment was incorrectly disclosed and was
actually offset by other adjustments to the income tax provision during the quarter. The net
adjustment was approximately $310,000 and is comprised of two items, the first being a $167,000
effect of a change in the estimated annual effective tax rate during the third quarter of 2007, and
the remainder being a $143,000 error, which we viewed, upon discovery, and continue to view as immaterial, both quantitatively and qualitatively, for reasons also set
forth below.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Securities and Exchange Commission<BR>
Attention: Heather Clark<BR>
Page 2

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Nature and timing of facts and circumstances. </B>Our taxable income for Delaware state income tax
purposes is routinely much higher than our taxable income for federal purposes. Based largely upon
the expected operating results in Delaware for the first two quarters of 2007, we estimated our
annual effective tax rate to be approximately 52% using the best information available to us at
that time. By the time our third quarter financial statements were prepared, we had enough
information to more precisely estimate taxable income and to predict that our actual effective tax
rate for the year would approximate 39%. Accordingly, we believe that $167,000 of the $310,000
adjustment was properly recorded in the third quarter of 2007, as a change in the estimated
effective annual tax rate, pursuant to FASB Interpretation No.&nbsp;18 (As Amended), <I>Accounting for
Income Taxes in Interim Periods &#151; An interpretation of APB Opinion No.&nbsp;28</I>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">However, when the income tax return for 2006 was filed during the third quarter of 2007, $143,000
of the resultant reduction of income taxes actually payable was erroneously reported in our
financial statements as a reduction of the income tax provision for the third quarter of 2007,
instead of crediting the appropriate deferred tax account in the balance sheet. The effect of this
error was to report an approximate estimated effective tax rate for the nine months of 28%, instead
of 39%. Since, as discussed in the paragraphs below, we believe the $143,000 error in the third
quarter of 2007 was not material, the correcting adjustment was recorded in the fourth quarter of
2007. For the year ended December&nbsp;31, 2006, the income tax provision was accurate in total, but
there was an inconsequential misclassification between current and deferred expense.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Materiality assessment. </B>The $143,000 correction to increase the effective tax rate from 28% to 39%
is approximately 0.26% of total assets, 0.42% of stockholders&#146; equity, and only $0.01 per share as
of and for the three and nine months ended September&nbsp;30, 2007. Furthermore, had our estimated
annual effective tax rate through the six months ended June&nbsp;30, 2007 been 39% as opposed to 52%,
the tax provision would have been approximately $86,000 less for the six month period.
Accordingly, we believe that the misstatement in the third quarter of 2007 is not quantitatively
material.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">In addition, the following qualitative factors from SAB 99 were considered and support our
conclusion that the $143,000 misstatement is not qualitatively material:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not have an impact on the Company&#146;s reported earnings trends.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not hide a failure to meet analyst expectations. In fact, we
observed that the Nollenberger Capital Partners analyst report dated October&nbsp;5, 2007,
states, &#147;...we believe the stock does not trade solely on the Company&#146;s current
fundamentals.&#148; The key points of the analyst report that supported their estimated value
of the Company&#146;s stock were (1)&nbsp;the pending sale of the Holiday Inn Express and (2)&nbsp;the
expected approval of the management contract and financing for the Michigan project. (Of
the analyst&#146;s estimated $5.00 per share value of the Company&#146;s stock at the time, $2.74
related to the Michigan project.) Neither is affected by the third quarter misstatement.</DIV></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Securities and Exchange Commission<BR>
Attention: Heather Clark<BR>
Page 3

</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not change net income to loss (or <I>vice versa</I>) for either the
three or nine month periods ended September&nbsp;30, 2007.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not concern any specific segment of the Company&#146;s operations
identified as playing a significant role in our operations or profitability.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not affect the Company&#146;s compliance with any regulatory
requirements.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not affect the Company&#146;s compliance with its loan covenants.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not have any effect on the Company&#146;s incentive compensation
arrangements with its employees.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The misstatement does not involve any unlawful transactions or activity.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">********
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">By: <U>/s/ MARK MILLER&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Mark Miller<BR>
Chief Financial Officer

</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">cc:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Full House Resorts, Inc.<br>
Piercy Bowler Taylor &#038; Kern<br>
KKBR&#038;F</DIV></TD>
</TR>
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




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