Full House Resorts, Inc. Price & Performance (FLL)

And with that said, are you ready? To go, Dan? Okay. Louis tells me to be briefer than usual more time for questions. So but we had a lot of things going on. So American Place, I'll start with that. It had another strong quarter. The revenues were up strongly every quarter of the year. Fourth quarter revenues are up 27%. Overall, it was up 42% for the year. EBDIT was up 60%. So it just continues to mature as it has since shortly after it opened. It also more important than the numbers. Sometimes The Chicago Tribune does a survey of the best employers in the Chicago area And I'm proud to say that we were on the list and we were the only casino on the list. In Chicagoland and that's important. We have for a casino relatively low turnover. We have great employees. We're providing great service and that's the key to a great business. [indiscernible] [indiscernible] Illinois Supreme Court ruled in favor of the Gaming Commission endorsing their selection of us for the Waukegan license basically. So that puts it behind us. And so that opens the door to going and getting financing to build the permanent.

Right now, we're doing very, very well. We're one of the better performing casinos in the state despite the fact that we're essentially in a in a tent. It's like a sprung structure. It's like it's the sort of structure that your municipality uses to store salt for the winter. So it's not really a full on casino, although we've dressed it up pretty well to make it as good as we could.

And but our commitment to the state is to build a permanent one, which will cost about $325,000,000 forward and in the next phase. And the It was difficult to do that when there was a lawsuit out there questioning whether we had the license that's been resolved And so we're dealing with our bankers now on the best way To finance this, the one thing we're quite sure of is there Full be no equity involved. At these prices that would be giving it away. And so very intent on doing this without any issuance of equity whatsoever. We're also don't believe that we need to do a REIT or sell any assets. We think we can do this all in the debt markets on very favorable terms. If you look at other deals done recently in the debt market, they're being done at very favorable rates. Other casino deals and there have been some pretty big ones. The REITs are always an opportunity for us, but at the end of the day, it's pretty expensive capital that you can't unwind. Anywhere down the road. And I think some of our competition is finding that out. So we have not done any of the [indiscernible] Deals yet and we don't think we have to.

And so hope to get the financing together in the next several months. We intend to break ground later this year. We actually could start construction without the financing at least initially because in the first few months of construction, there's not a lot of money being spent It's just bulldozers moving things around. And we want to get started later this year We're allowed to operate the temporary until August of twenty twenty seven. There isn't a date by which we have to open the permanent. But as a practical matter, we have 500 employees and we have a state municipality who are relying on our tax revenues and we want to transition smoothly from the temporary into the permanent. And so we're targeting to be ready in August of twenty twenty seven. If we did need an extension, we'd probably get it We did once before. It requires going through legislature but I don't think we're going to need an extension. I think we can make that that deadline. The outlook for the permanent is actually very good. There's a very good comparable. The Hard Rock folks operate a casino in Rockford, Illinois, which is owned by an investor group.

They operated in a temporary for a couple of years and they moved into a permanent [indiscernible] down a little bit down the road from the temporary and they did that at the September and their revenue since then have been double what they were [indiscernible] And Rockford is a city of about 450,000 people. We're the only casino in Lake County, which is about 1,000,000 people And so our revenues are bigger than theirs and our temporary does more revenues than their temporary did. And I think our permanent will do more revenues than their permanent is doing. But they saw a doubling of their revenues when they went from the temporary and the permanent. And frankly, if your revenues double, you're income probably triples. There's two similar places in Virginia where temporary casino have been recently replaced with permanent and both of those are also doing very well. And so there's quite a few comparables out there that bode well for us. There's another way of looking at it that we've done. If you take the average win per slot average win per table in the state, and exclude Rivers, which is in a very demographically rich area, if you just take the average of all the other casinos and apply it to the number of slots and tables that we'll have in our permanent, If we only do the average, and there's lots of arguments why we might do more than average because have pretty good demographics around us as well.

But if we only do the average, it would be about $200,000,000 of revenue if you had normal margins on that, it'd be close to $100,000,000 in EBT IT. And that's just casino revenue. So I'm saying 30%, not 50%, if you just do it on casino revenues, it's close to 50%. So that's American Place. It's doing well and we're getting ready for the next phase there. In Colorado, we completed [indiscernible] quite completed. There's one parking lot that we need the ground to thaw before we can finish it. It's kind of an important parking lot, but otherwise the place is done.

We had a grand opening in early November which is coming right into the slowest time of the year. Despite all of that, revenues were up strongly in the year. Revenues were up very strongly in the fourth quarter as Full, more than double. But of course, the facility is much more spectacular than what we had before. Now expenses are also up quite a bit and that's not surprising because now we're operating a full on resort casino and the revenues are not yet where we expect them to be. And so income has been scant fact, it lost a little bit of money in the fourth quarter. Now going forward, expect the revenues to continue to climb.

Both because it's maturing just like American Place did The expenses should not climb, and income should be pretty good starting this year and grow from there. Now I'm still very convinced it will make $50,000,000 a year at some point. If you look at what the casinos in Black Hawk make, that's actually very reasonable. Monarch is making up north of $100,000,000 a year Ameristar is somewhere in that ballpark. The Jacobs Casino does very Full. I think he's only got about 50 rooms and he makes something $50,000,000 a year. Ileka Prem makes something like $50,000,000 a year.

And so they're appealing to Denver, which is 4,000,000 people. We're equal distance to the South Side Of Denver as Black Hawk is and that's probably 1,000,000 people, but we are much closer to the million people who live in Colorado Springs and Pueblo. So again, it's a demographically rich area. We're head and shoulders nicer than the competition in and larger than the competition in Cripple Creek. So I expect we doubled our market share this year and I think we will grow the market and and eventually evolve into having strong market share of a growing market. Dissimilar to other places that we've opened. I remember Beau Rivage in Mississippi when we opened it was a little bit of a slow opening and then eventually caught on. And it's dominated the Mississippi Gulf Coast now for twenty odd years, more than twenty years. La Verde and Lake Charles, same thing. First several months, we had some bugs to get out of it and then it kicked in and twenty years later it's making $100,000,000 a year.

Even Pallagio didn't get to $500,000,000 a year of income in the first year, it took a few years. And so the same here now, we have also made some management changes. I came to realize that some of our management team was in perhaps a little over their heads. And so we hired Brandon Leeson from as our new GM, he starts on Monday.

He started out at the Rama Casino in Toronto. He He's originally from Canada, although he now is dual passport. And he worked at the Rama Casino, worked his way up and then he went and worked for the Ontario Lottery. [indiscernible] know saw machines very well. And then quite a few years ago came to Black Hawk ran the aisle in Blackhawk and then ran valleys in Black Hawk, the three casinos there that Balleys has. And he's had a couple of stints including recently where he worked for companies offering database management of marketing list. So he kind of knows the marketing side and the data side and casino machine sites and so on. And for example, when he was at Full worked on the Ballys has three licenses in Black Hawk the same way we have three licenses in Cripple Creek. Historically, the Gaming Commission said you can do that and it reduces your gaming taxes because it's progressive tax rate.

But the Tito tickets from one aren't good in another. And that may create confusion for customers when they go in from Chamonix into [indiscernible] [indiscernible] When all the you're now on a different color carpet basically. And well at Pali's, he worked the slot system company, now that slot system was I think IGT, if I recall. And modified it in a way that satisfied the regulators. So today Bali's doesn't have that issue. They can Tido ticket from one Bali's Casino can be used at a different one, even though some of their casinos actually across the street from their other two. And he did this two years ago. And so [indiscernible] important improvement as that It's an important improvement. Is it a huge? No, it's not huge, but it's an important improvement. And I just hold it out there as example of the sort of creative stuff he's done in the past. We're looking forward to having him work with us in analyzing this and running this [indiscernible] Also have a new HR director. We have a new hotel director. We have new IT Director. Have a new corporate VP of Advertising who is deeply involved with Chamonix.

So we're throwing a lot of new talent at the property. And I'm confident that that's going to make a big difference.

And ten, twenty and thirty years from now, this property is going to be a solid business. Indiana We're in [indiscernible] that casino first opened, it made $50,000,000 a year. It was the only casino in the entire region. And then over the last thirty years, other casinos have opened that are newer and closer to where people live. Whether it's in Shelbyville cutting off people from Indianapolis or or [indiscernible] in Ohio and Miami Valley in Ohio and now the Churchill stuff in Kentucky. So everywhere you look, we have competition. And so that property's income has trended down to where it's just $4,000,000 or $5,000,000 a year.

We went to the legislature seeking to move it. The bill did not get out of the Senate. But the Senate did pass a study bill that calls for the Gaming Commission to have an independent study on what the benefits for the state might be of allowing underperforming licenses to relocate and where they might relocate. [indiscernible] we were proposing New Haven and still are which is a suburb of Fort Wayne. And we would build pretty significant place there. But if you look at a map, the other obvious place is the city of Indianapolis, which is 2,000,000 people and has no casino. And so I suspect that that study will focus on those and maybe I'll where in the state. And what is clear is in that study committee, commission needs House approval And we think it Full probably get that in the next two weeks, like why would you not study the issue? [indiscernible] studies, so you're operating with some background We have the lowest performing license in the state at this point. By a pretty wide mark. I think the next lower casino does twice what we do. And that's the one in French Lick and they get all sorts of historic tax credits because they're in a historic hotel.

Difficult for them to move. There used to be two other casinos that were similar to us in annual revenues and that was the former Trump Casino and the Barden Casino on the water in Gary. And they had gone bankrupt at one point and they were barely in business.

And the legislature approved relocating those and one of them moved to Interstate 80 is still in Gary, but it's the Hard Rock And Gary it's now the number one producing casino in the state. So the revenues and the jobs went way up when they relocated it. And the other one ended up in Terre Haute which is the Churchill property and it's doing very well as well. Both in revenues and jobs and investment. And so there are precedents And then in Indiana, people are hesitant to have an expansion of gaming. They don't want additional licenses but there are a history of relocating licenses which is better for the state. Now the state originally put the licenses at the borders to try to draw business from Illinois and Ohio and Kentucky But now those states all have their own casinos. So the best locations have changed. And so I've said several times this might take two or three sessions before it happens. I do think it has a reasonable chance of happening. Although when you're dealing with state legislatures, I think it was Mark Twain said nobody is safe on the legislature's in session. It's hard to predict.

But we know it's a good thing for the state. And we hope that rationality prevails. And that would be a good investment opportunity for us.

Meanwhile, we continue to make good money in rising sun, not a lot of money, but some. We have a new General Manager there, Jeff Mechee, who Lewis and I worked with years ago at Pinnacle and Jeff had been involved with a much bigger tribal casino down in Arizona. But his wife and his new grandchildren live quite close to us in rising sun and they wanted to come back to the region. And so we have a guy who is very, very qualified now in charge of rising Star and frankly he'd be very qualified to help move the license if we are allowed to do so at some point. Now he replaced Angie who would run it for a few years. [indiscernible] John Ferrucci had been running rising I'm sorry, Silver Slippers since it opened twenty years ago. And he retired.

And And so she moved down there. She had worked there originally and we had promoted her to finance General Manager at Rising Star, and she did very well in a challenging market. And she's been back down and at the Silver Slipper now for several weeks. And has lots of new ideas and I'm confident that the Silver Slipper is going to see improved results in the the months ahead. And Meanwhile at Lake Tahoe where we are on a short term lease to run the casino at the Hyatt Tahoe, but it's been extended many, many times and I hope that will continue to be the case. The property is is owned by Larry Ellison and he's moving ahead with refurbishing it and the first phase of that is the stuff along the beachfront. And frankly, that stuff was built fifty years ago and didn't really make use of the special real estate that it is. It's a lot of beachfront on Lake Tahoe, which is very, very valuable. And what exists there today is a big restaurant, some meeting rooms and banquet rooms and some villa suites have gotten pretty dated. And a surface parking lot. So he has plans to to fix up that part or replace that part of the property.

Our casino is in the main building, which is across the street. And that's not being affected by the refurbishment currently. I think he has plans later to come back and refurbish that. We may be impacted some, by the refurbishment because some of our customers like to stay in those villas. But long term, this already special property will probably be much more special under him and we hope to continue to be part of it. And And so that's that's Lake Tahoe. In Fallon, Full I think you know, we sold it I'd say two part deal. The real estate of it closed several months ago. We're waiting for the buyers to get their license. They've been licensed before in Nevada. They're pretty prominent [indiscernible] and we expect them to be licensed in the next few weeks. Which point we close the rest of the deal and they take over the management of it. Full that's valid. And did I miss anything?

I got nothing left, Dan. Let's do some Q and A. Well, I got it all. Okay. We're happy to take questions.

Thank you. We will now be conducting a question and answer session. Our first question comes from Ryan Sigal with Craig Hallum Capital Group. Please proceed with your question.

Hey, good afternoon, guys.

Want to start with kind of a higher level question. I mean, given the challenges you've had at Chamini thus far, I guess, does that change your plans for American Place, whether it be the design, the gaming floor, the size, amenities or even the overall minimum guaranteed spend that you guys have committed to there?

No, not at all. The guaranteed minimum spend, if I recall correctly, and Alex is on the line and correct me, I think it's $500,000,000 of which already spent 175 And some of that is the temporary, but a big parts of it like the million dollars license fee storm sewers and parking lots and so on that are being used for the temporary are also part of the permanent and $20,000,000 of slot machines. So we're already kind of into it. Actually, it's the opposite. When you go to the heart The property that Hard Rock built in Rockford did a good job. They really did a good job. And they have the same sort of license we have, the same number of gaming positions and so on. And And they spent in the ballpark of $300,000,000 which is what our going forward spend is in the next phase. And And so I've kind of gone to town looking at that. [indiscernible] I will have a different theme [indiscernible] Lady Gaga's underwear behind plexiglass. But that's the hard rock theme and it works for them. We've also spent some time over Durango Station where I think stations did a really good job.

And and it's very successful. Now that was $700,000,000 We don't have that sort of budget. But it was funny we were over there yesterday and Lewis was freaking out because I brought with me a laser pointer that pointing it all over the place to measure parts of their casino. For our design and And if anybody noticed it, it looked like there was a sniper in the room Lewis was afraid we were going to get kicked out. But there's stuff they did there very Full. That we hope borrow recognizing that that we have a smaller budget and a smaller place than Durango. And so it's a little more of a let's say the theme of Durango and the size of the hard rock And recognize this is it's a very different place than Chamonix. Chamonix is an hour from most of our customers up in the mountains at 10,000 feet on the backside of Pikes Peak So you need a hotel, people need to stay overnight. Not everybody, but a lot of people And then you need other amenities to get them up there. So a big spa, and different restaurants and parking garage and all that.

In Waukegan, we're in the middle of a million people.

I mean, we're literally in the middle of 1,000,000 Lake County is one of the Lake County is most of that. It's 750,000, if I remember correctly. One of the wealthier counties in the country with like Lake Bluff and Lake Forest and Libertyville and so on. [indiscernible] And so in Waukegan, it's much more like Durango Station, which is a local casino. I mean, they have a little hotel there, but it's really a local casino. And that's What we're doing there whereas in in Cripple Creek, it's kind of like a half size version of of La Verche. And when we built La Verche and Lake Charles, the customers are coming from Houston that two hours away.

We had to have stuff to get people there And so we built a hotel that initially had 700 rooms later got expanded to 1,000 rooms and a golf course and all that stuff. So it was more of a a smallest destination resort a small version of what Las Vegas is really.

And that's what Chamenie is. So it's a different market and requires a different place. And so when you look at what you build in Waukegan, there's one other one I'd [indiscernible] on the South Side Of Chicago, which is a much more saturated market than the North Side Of Chicago. And the Wind Creek Casino opened and they have a hotel. If you back out their hotel, they also spend about $300,000,000 And so we think that's kind of the sweet spot. And again, the same number of gaming positions as we have, They've grown the market pretty nicely. Now because it's more saturated they have had some impact on the casinos in Northern Indiana and also a little bit of an impact on Joliet and maybe a little bit on Bally's Downtown. Because the South Side gaming per capita is quite a bit higher than on the North Side. So we're a less saturated [indiscernible] much impact and we haven't had much impact on Rivers or Potawatomi are our competitors on the North Side. And But it's a it's a good example if you build a good product in a market you'll grow the market. And frankly, in a place like Waukegan, you build a place and people drive by and say, Full, look at that.

In a place like Cripple Creek, nobody drives by and says, hey, look, at that. You have to tell people that you're there. And that takes a marketing campaign And we had some coming up to the grand opening, which was on November '4, ad rates were very expensive because of the national political campaign. So we actually were not on the air in the month of October And then we're on the air for a little while and then you run into Christmas and it's like not really a good use of money to be advertising during the Christmas season. And so we kind of backed off again. And now we're up again. So our task is to tell people we exist, they're not going to see it from driving by. And so it's a little slower ramp up than you would get in a market like Waukegan. But it will get there. I mean, it's the same sort of thing when Mirage opened in Las Vegas. They had to tell everybody in LA. There was a new hotel in Las Vegas and it wasn't like the other ones. And that's our task. It's actually been pretty encouraging as well because when we look at maps of where customers are coming from, we've been doing heat maps of Denver and I will tell you Denver is a lit pretty nicely.

We always talk about the roughly million people that are in [indiscernible] between Colorado Springs and some of those surrounding cities the Southern Suburbs Of Denver were always meant to be gravy for us and to help further supplement the plan. But what is looking pretty bright for us is that market is quite excited to go and visit the property. Colorado Springs still has to Dan's point, we didn't have a big awareness campaign throughout almost all of 2024 for us. And so we managed to get a 160% increase in revenues year over year, despite the fact that we weren't running ads. And so when you think about what is the next [indiscernible] going to bring a lot of good. I mean, Dan and I were talking yesterday at Durango, but talking about Chameni and how we feel better than ever for this property and its chances for success. So it'll be fine.

The only other point I wanted to make on Waukegan is Rockford as well as it's doing, just don't forget that within a thirty minute drive, we've got some 900,000 people our thirty minute drive ring they've got about 400,000 people. So we have more than twice the population. But then when you look at median household income, we're like 52% higher than their median household income in that same driving. And so so they are doing quite, quite Full.

We know we will do quite well too.

Very good. And you look at that heat map, it goes all the way out to Minneapolis, a couple of times.

I will ask you a very short second question and then turn it over to the others. Your skins for your online sports betting license looks like you're down to one now just circa Is that correct? $5,000,000 run rate as we look to the next several years?

Yes. There's a little bit of volatility in 2Q and 3Q because The existing skins that we had there that we got the that's going to be discontinued. They're still around one in December. So So there's a little volatility I would tell you as kind of on a normal ongoing basis, if you include the amortization of the upfront market access fee for Illinois, just Illinois is $5,600,000 And so if you're looking at 2026 and beyond, $5,600,000 is the right number to use. And Sherco, seems pretty determined to hang in there. I mean, in other markets, DraftKings and FanDuel just so dominate and BetMGM, I guess, third.

And so they've squeezed other people out, even including Wynn who was our partner at one time in Churchill Downs.

But CERC has always operated a little differently and they're sports book here in Las Vegas does very well and [indiscernible] and of course Illinois is a pretty big market. So it's not a small market for them. It's a a big market.

But I think our likelihood of finding other people to ride on our license is is not high at this point. [indiscernible] DraftKings and FanDuel so dominate the market, it's hard for anyone else to break in.

Yes. Thanks guys and agree with the Vegas, Cirque is the best sports book there. Hopefully they can replicate that in Illinois going forward. Thanks. Good luck guys.

Our next question comes from Jordan Bender with Citizens. Please proceed with your question.

Good afternoon, everyone. This situation seems to be a moving target on an hourly basis here, but on the idea of tariffs, as you start to look at construction for the permanent in Illinois, are you starting to see any changes in prices for Magellan material? And is there any way to kind of hedge yourself given that you're going to be starting construction here in the next couple of months?

Full, there are ways to hedge, but we haven't done it. I mean, you can go buy steel futures and stuff, but but I don't think it's pretty unknown what tariffs are going to be out there. And I think we've somewhat dealt with that in Chamonix. The Chamonix was my twelfth or thirteenth casino and I will tell you the other ones, most of them either the steel came from China or the glass came from China or the possibility of buying the steel or the glass from China held down prices from domestic manufacturers. [indiscernible] people forget there are already pretty significant tariffs plus the pandemic supply change issues as we were starting construction in Chamonix we got through it. I mean, it wasn't wasn't fun, but we got through it. So we're actually kind of assuming the worst as we design this place to build it for $325,000,000 In other words, we're assuming that that stuff will be expensive. And he just built it into it. But you have to kind of go ahead and take a guess, otherwise you would just freeze and not do anything. [indiscernible] and we're trying to be smart as well in the design.

So we're going out of our way to make [indiscernible] we don't put air conditioned air conditioner or handling units where you might expand the casino later on as an example. So we're trying to be thoughtful think we're going to have different ways to help mitigate that issue should have popped up, but But to Dan's point, we're also putting in some pretty extensive Costa assumptions in this model as well. Thanks, Louis.

And then just on the second one here, there's some reports out there suggesting that you were looking to buy in asset. Outside of your mention there, are you actively looking for other M and A opportunities? And what are the guardrails we should be thinking about if you do go down that path?

I know it's hard as most of you know, I had your job at one time.

And always judged and focused by one quarter, one year and looking And when you're in my position, I tend to look further out. And I'll get calls from my mom who's 95 years old and seems like all her mahjong playing partners own our stock and she'll call me and say, your stock was down $0.1 today, why was that? And I'm like, well, mom, I didn't even know that and I'm focused on where the stock Full be in 02/1930. And over the holidays, I sat and just played with a rough model myself, which I like do sometimes now. And so I just played with the model and said, okay, pretty sure we're going to get $50,000,000 a year in Chamonix by 02/1930. Can be 2025, but give us until 02/1930, I think we can get there. And by then, we will have operated the permanent American place for two point five years and it could be 100,000,000. I plugged that in. And I said, well, let's suppose Angie gets the Silver Slipper from $13,000,000 to like $20,000,000 which is what it did two years ago. And I think that's entirely possible. And then I said, okay, and if we get to move to New Haven, with Rising Sun, and we invest in the first phase, I think it's $350,000,000 in the first phase, the whole investment is like $500,000,000 eventually.

But the later phases Full be built out cash flow. And let's say it's getting reasonable return on investment.

And then I worked into, okay, we produce a lot of cash flow.

And let's assume we borrowed the rest and I threw in I think a 9% interest rate to be kind of conservative. And then I said, we get out there and and you got to have an exit to a model like this, right? And the easiest thing is to assume you sell the company at year end 02/1939.

That's doesn't say we Full, But at some point, by then, maybe somebody else is running the company and I'm retired or something. But when you model it, you have to kind of assume something like that. And I said, well, let's assume the company sold for like nine times cash flow. Which would not be high multiple. The casinos have been sold recently sold to north of ten, especially when you consider that we still own our real estate. And when I put that whole model together, divided it by shares outstanding, got $45 a share.

And you guys run your own models and this is but I thought there's got to be a mistake and I sent it to Lewis and couldn't find a mistake and then there isn't a mistake in right? It's just a highly levered company growing and executing. And so then Full, how much of this is Fort Wayne? And Fort Wayne was like $6 or $7 a share of it.

So I backed out that. Let's suppose the legislature never allows that to happen. And And so we just continue with rising sun doesn't earn a whole lot. Now you say that's only $60 or $7 a share. That means Fort Wayne alone more than what our stock is trading at. Right? And so then I said, let's do something. Let's knock all those numbers down and be very, very, very conservative. And I went to the bottom range of what I would be very disappointed on what each of these would do. And I still got $20 a share.

And it's like that's fourfold from where our stock is. And it's like, so then bankers will call us up and say, hey, we have a casino we want you to look at. Bump fuck Arkansas. And I'm like, no, I do not want to mess up what we have. I mean, we will look and we listen, sometimes you learn something from it. It would have to be a really good deal Because there are so many bad deals out there and they are so easy to do. And we're going to have a great stock if we just execute on what we have. Now we do have guys like Alex running around looking for other deals and sometimes he shows up at one, right? I mean, he showed up at American Place. And so we may may very well have other deals between now and 02/1930, but we're very cautious about it. Because we know if we just execute on what we have, will have one of the best performing casino stocks in the industry. Next five years.

Just to be very clear, Jordan, we are not actively looking at any acquisition, just so you know.

And I'll remind everybody what Laura said earlier in the Full, there may be some forecast statements that we may not achieve or something. It was a safe harbor thing. Safe harbor. But that's the math we look at and that's what we're focused on. [indiscernible] Thank you. I'm hoping this all works out and you can be playing Mahjong by 02/1930. Our next question comes from John DeCree with CBRE. Please proceed with your question.

Hi, Dan. Hi, Louis. Thanks for taking my questions. Maybe two on Chameni. The first, you're curious if you could give us a little color on kind of what you're seeing on the casino floor. We look at the the state reports, the same ones. Everyone else gets and it looks like we could see the spot market growing nicely in Chamonix, but less so on the table side. So curious what you're seeing and what your expectations are for table volumes, slot volumes for the upcoming spring season?

Well, we are we're actually 100% more than 100% sometimes the growth in the entire state but the growth should be more than it is. And tables has been one of our weak points. And so we have a new director of table games. We have a new Director of Casino Operations, I forgot to mention actually. We had a Director of Casino Ops in in Rising Sun who did a great job. And earlier in his career, he had been in Colorado. So we relocated him and been there two months. And there's stuff like we have not offered Baccarat. In fact, nobody in Cripple Creek offers Baccarat. And as I speak, we two Baccarat tables sitting on our loading dock and dealers going through dealer school learn how to deal it Baccarat is a pretty significant game in Black Hawk. We also our table limits are lower than they are at our competition in Black Hawk. I'm willing to let the table limits go up, but I want to make sure that we have experienced supervision and experienced dealers and that that we're doing so intelligently. And so we're trying to buttress that. We are trying to hire more dealers.

We don't have enough dealers. We running our own dealer school at the moment. And so there's a lot of stuff focusing on tables. And part of the reason we made the management changes we made was to help focus more on tables because that our table game should be maybe 20% of our revenues and it's less than 10.

And so that's a strong area of growth for us. We are about to put in new carpet and handicap ramps within Bronco Billy's Right now, it's pretty jarring when you go from Chameni into Bracobili's and Bracobili's has probably half our slot machines, maybe at least half. And so we're trying to improve that transition. There are quite a few customers who actually prefer the brick walls and kind of Western theme of Bronco Billy's but of course the slot machines in Chameni do much better. So we're trying to pull that down. We're improving our food and beverage offerings changing the menus, changing the marketing, We had a kind of a temporary restaurant when we opened, we didn't have the high end restaurant done yet. So we turned the small meeting room space into what was supposed to be a temporary restaurant. Then we couldn't get enough waiters So I said they could run it as a buffet. Well, they ran it as a buffet all year. And small volume buffets lose a lot of money. We lost $1,500,000 in that buffet.

And when I finally figured out how ridiculous it was was part of the reason for all these changes. And we were charging $45 and the cost of the crab alone was $11 a cover. Primarily, it was $10 a cover, the pastries were $9 a cover. The linens were being leased from a wedding supply linen company that was $10 a cover. Before you bought the salmon and the chicken and paid for the payroll, we were upside down. We were spending $100 of cover and charging $45 a covering. That's just stupid. And we won't do stupid things like that anymore. And I'm sure Brandon was very analytical [indiscernible] mid-40s, experienced man, And he'll he'll make sure that we put a number around this. And when you operate one too many restaurants, it affects every restaurant. And so on a Saturday that would do 150 covers. By eliminating that little buffet. First off, it frees up our small meeting room space to help put meetings. And second, we may lose 20 or 30 covers to the casinos across the street, which are doing well because of us and that's fine.

Nine eighty Prime and our Home Cafe and our Mexican restaurant. And then there's an Italian restaurant that we hope to finish up this year in Brancopillies. And by moving those covers into the other restaurants, the other restaurants will have better profit numbers. So There's a lot of low hanging fruit like that for for Brandon and the rest of us wake up to. We were so focused on getting open that there was some stuff like that that fell through the cracks.

One other point I want to make there, John, the when if you look at market share, our market share in the fourth quarter was 26.9%. So we more than doubled our gaming market share year over year And I don't maybe we don't stress this point enough, but usually what happens when you go and open brand new big casino like this is everyone in the market is down 20%, 30% as they absorb the capacity. And the reality is no one was hit. And we completely we went from effectively 13% market share to 27% market share without hitting anyone in the market. And a big part of that obviously was certainly on the slot side. We still have room to grow on the table game side, but we still more than tripled our gaming table or table games win per day for what it's worth. So kind of baby steps in year one, I think we're going to have bigger steps in year two as that as this marketing campaign goes out and takes full effect and we are starting to get wealthier customers in the door. We have players in the door now that will gamble $500,000 in a in a weekend.

We never would have had any play like that in that whole market ever historically. And so this market is on the move. It's taking a little bit longer than what I think Dan and I would have hoped, but it is absolutely going to do quite well.

Great. Thanks, Lois. Thanks, Dan. I think you answered my follow-up in there. So pass it off to the next one. Thanks, gentlemen. Thanks, John. Our next question comes from Chad Beynon with Macquarie Asset Management.

Please proceed with your question.

Hi, Dan and Lewis. Thanks for taking my question.

Wanted to ask about the American Place margins. Good to see that the revenue is ramping and congrats on all the awards that you've received. For service levels. It looks like revenues at this point in line or maybe even ahead of expectations compared to what we thought the property would be well over 100,000,000 I believe you guys talked about potentially 30% margins kind of moving even higher. So it's not at that level at this point. But can you talk about maybe where the expenses are here and if the revenues increase from these levels in '25, if a lot of that will push down to the bottom line. And meet some of the margin targets? Thank you.

Yes, I think it will. I mean, if you're looking at the results for this past year compared to the prior year, a little distorted because we opened the high end restaurant in February of last year, And that was pretty important at driving the casino revenue higher and helping the EBT higher. But most rest restaurants operate at much lower margins. So the revenue of that restaurant and its income actually hurt margins a little bit but helped income.

And now going forward, I think we'll able to keep expenses under control. Hopefully continue to grow revenues and so margins will show very gradual improvement. Now we're also getting smarter with our marketing For example, we have not sent out any physical mail since May of last year. And transition it all to email. [indiscernible] And you save a lot of money on postage and printing. If you can get the emails of your customers. And percentage of Americans who have [indiscernible] an email address is now about 95%. Very few people do not have an email address. And so And we're finding that the response rate to email is actually a little bit better than the response rate to physical mail. And so American Place kind of made that transition. Other casinos are doing it as well. And so now we're back at all of our other casinos saying, okay, you got to to do special promotions to get people's email we're going to get out of the physical mail business because it's a it's expensive. I mean, if you if you send a flyer out an ad in it, come up and stay for a night for on us and you send it out if it's a pretty basic flyer the time you print and mail it, it's $2 a person.

And the sort of response rate you get is about 5%. And so you're spending $60 to get somebody to your doorstep before they any money in a saw machine. And if you can do it through email, you're spending zero. So And so it's that sort of nuts and bolts that just are looking for that eventually results in better margins, better income.

Yes. And keep in mind too, Chad, gaming revenues obviously aren't done growing. The January numbers are public. I know you saw those and we were up 34% year over year in the month of January, not a surprise that that that's not a bad thing overall for margins. I think as we get that number higher, the push is to try and get that number in the mid 10s per month. A year ago, we were in the mid 7s in a typical month, right? So for us to be pretty reliably over $9,000,000 these days is a nice move and eventually we'll get that over 10,500,000.0. And as you do get it over $10,500,000 I think that's when you approach that $40,000,000 plus of EBITDA. If that helps you. I like the guys at Valley's including Su Kim, He's a pretty brilliant guy.

But I like our position in Chicago better.

Because Our revenues are pretty much the same as theirs. Actually beat them a little bit in January. Generally, they've been a little bit ahead of us temporary casino in Downtown.

But they have a higher tax rate The downtown license had a significantly higher tax rate than the other licenses. And then their reinvestment obligation for their permanent is measured in billions and ours is 300,000,000. And so I like our position better than theirs. Now I wish them Full. But I wish that's better.

Thank you. Okay. And then from a housekeeping standpoint, I don't know if this was called out on the press release, but Louis, the the lower corporate expense for the quarter, could you flush that out? And then how should that look for 25%? Should that revert to $5,000,000 or so million dollars $5,000,000 to $6,000,000 a year?

I think if you look at the annual run rate of corporate in twenty twenty five twenty twenty four, it's like $66,000,000.

There was some over accruals that got reversed in the fourth quarter. So that fourth quarter looked unusual.

Perfect.

You're hired as CFO. Hey, Dan, we had time for maybe one or two questions depending on how quickly you get through these. So let's take at least one more. Our next question comes from Riccardo Chinchilla with Deutsche Bank. Please proceed with your question.

Hey, guys. Thank you so much for taking my question. I was hoping we could dig a little bit more on the ramp up here at Chamouny, So can you guys provide a little bit of color on January I know that it stopped because of the water. And I know that you guys have been playing a little bit to modeling. So maybe you guys can help me out a little bit. I have you guys increasing your OpEx slightly on the fourth quarter based on my math. Can you give us like an idea of of with your proposed savings and now that you guys have a new manager that's going to focus on cost savings, Like what's the right OpEx per day the to run that property? Perhaps a little bit more of gaming volumes Look, it's hard to look at it on a month's effects and different things are affecting even on a quarterly basis, but like if your target is $50,000,000 in 02/1930, we ought to be able to get to $10,000,000 or $15,000,000 of EBT IT And now it's summer seasonal, so a lot of that will be the third quarter. And then from there it goes $20.30, 40.

The next few years and that's how you get to 50.

And That's as good a guess as anybody. Now there's that we there's some areas where we probably have too many employees and there's other areas where we have too few.

We don't have enough dealers, I already alluded to. We don't have enough masseuses.

And we have seven treatment rooms and two other rooms we can use, so really nine treatment rooms. We have two masseuses. And on weekends they're totally filled. We could fill probably seven masseuses on weekends. It's a popular thing. And we charge $130 or $150 for a treatment in the massage therapist gets $20 or $30 and so it's a nice profit center. We need more Mississauga's. We're trying to find them. We have a salon where people can get manicures, pedicures, their haircut or colored and so on. It's a beautiful salon, and we have one or two salon therapists We probably need a dozen. And we are trying to find them. And that also is center, but it's also a marketing tool.

Because if if a woman can use her slot points to get her haircut, and she likes her haircut. She's going to come back every month to get her haircut. Using her slot points. So that's the marketing tool. And so there are there are a lot of tasks for Brandon and the rest of us to to refine this place. And it pains me to go back there and see our salon ready for action and we don't have employees in it yet. We can't find we will find those employees even if people who cut hair, they work on kind of a different sort of commission basis. I'm willing to give them much better commissions than they get in Woodland Park or Colorado Springs. And we need to do that. I'm even willing to guarantee them pay Because if we guarantee that they're going to have six women getting their haircut a day to pick a number. Then we turn around and the marketing people say, okay, we just bought six haircuts today, so go find some of your best customers and offer them a haircut. And that's how you jump start that business. And so the management team we're putting together is going to be doing a lot of stuff like that.

And when you say what will the earnings be in the first quarter? We're not going to make much in the first quarter. But the faster we can make some of the changes I'm detailing, the faster we can get to that. And I'm pretty sure we can get to $10,000,000 to $15,000,000 this year. Trying to think of what to add to Dan.

Look, we lost a little bit of money in 4Q there. We're likely going to lose a little bit money here in 1Q. I'll tell you February is better than January. And the big changes that we make we were making behind the scenes scenes including bringing in a bunch of people from other properties to help shore things up and with some of the analytics. On the cost side, that really happened in full force now. So it takes a little bit of time digest crunch numbers and digest things, but in terms of when do you start seeing the benefits of those I would not assume it happens right away in 1Q. But on the flip side, we're going to be going into spring and summer here relatively quickly.

And to Dan's point, we it is a tends to be a spring and a special seasonal market and we will make, I think, pretty decent money in those months.

Yes. And I don't mind telling you, those of you who have known me for a long time, I don't make management changes like this lightly. Pretty aggressively changed management of this property in the last several weeks.

And I think that reflects the fact that as a as we got into it after everything was open, And it's like, why are we not doing better? And you found stupid things like the buffet I cited. And it's like stop doing stupid things. And so now I've hired and brought in a bunch of smart people hopefully we'll start doing smart things. The sooner we do some things, Full be happy If I may follow-up with one really quick one. Can you remind us your CapEx plans for the year? Well, other than American Place, it's like seven. Five of which is maintenance and then I mentioned the Italian restaurant, it might be two. [indiscernible] American Place is not a big number because we'll just be starting [indiscernible] do you remember what it is in the second half of the year?

Well, it's going to be dependent on the financing obviously, but it's it's not a big number. Not a big number.

Hesitant to give one.

Well, The architectural fees are probably going to be $10,000,000 and that's largely this year. And a couple of guys driving bulldozers around. So maybe 20 Second Half Of This Year. On American Place, but most of that $325,000,000 will end up being in the second half of twenty twenty six and the first half [indiscernible] and then some spills over even after you open. Because construction bills are paid in arrears.

That's right. Appreciate it. Thank you so much. Best of luck, guys.

Thank you, ladies. Gideon, we're going to take one last question and then we're going to let's be quick and we'll round it out. [indiscernible] Okay. Our last question comes from Andrew Walker with Rangeley Capital. Please proceed with your question.

Hey guys, thanks for the question. And just wanted to say how much I enjoyed and agreed with the conversation on the valuation and opportunity costs on acquisitions up. Just real quick, I think you mentioned the February results for Colorado. What did the February results for American Place look like?

You will we always hesitate to give them because the numbers that I always get behind the scenes differ from what actually gets reported.

That's because look at the numbers with free play in The States we put it different ways. There's always a little difference in the state numbers. But listen, it's been very consistent rising Since it opened, right? And now I don't think it's going to continue to be up. 25%, 30% over the prior year.

Going forward, at some point, the growth will slow. But it's been pretty consistently up 20% over the prior year. Now the the comparisons get more difficult in the February because we opened the high end restaurant. February. So without even looking at the month, looking out the year, I'd expect us to be running up 15%, 20% and then gradually maybe later this year we're only up 10%.

In revenue.

But then bottom line would be up more than that because if you're up 10% of revenue, you might be up 20% And you did have some there are little pockets of weather depending on where you look, Andrew. So I'll tell you this, outside of the weather pockets, the customer is actually still pretty robust, if if maybe that's the other angle of your question. It does especially in Colorado and especially in Waukegan, we're seeing a very good robust customer. But I would tell you we would expect that as well because those are two underpenetrated markets. And so And so expect them to be a little more robust anyway. There are two little things we're doing that help the numbers. Our larger restaurant or one of our large restaurants was somewhat underutilized And we're now we've set it up and are using it for entertainment events. So bring in comedians and inexpensive entertainment be in front of 300 people. And that's worked pretty well at driving business when we do it. And we'll probably do more of that. We're also adding a small poker room Now in poker, you get a break. So it's not a lot of [indiscernible] But it was a pretty slow corner of the casino.

So we said, well, let's put in a poker room. So we have one. Our competition has poker. Coming soon.

Yes. Yes. And so that Full be open in the next [indiscernible] [indiscernible] Awesome. And then just the bookings for Colorado over the next couple of months, I don't think you'd really talked about them. How are the hotel rooms looking so far? [indiscernible] don't know it off the top of my head, but I was going to say it is a short booking window. It's not like Vegas. In Vegas, you tend to get pretty advanced bookings. In our cases, we'll drop a mailer actually the mailer is going out now for the month of March for example, but those mailers will have the room offers for the current month. And so our lead time isn't months and months and months. It tends to be days or weeks. I mean, we do fill on weekends. When you're looking at occupancy, it's all about And that's one of the other areas. We need to hire more sales and marketing people to help use the meeting room space to fill mid week.

So we're working on that.

Okay.

Well, hey, most of my other questions have been answered. Again, I love how you all touched out the opportunity cost and excited to get some equity financing done.

We're not doing equity. I think We agree, Andrew. We agree.

Want to just wrap it up real quick? No, I think we've covered it. So thank everybody for your support.

And hang in there with us. And this is going to have a great five years here.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.