Full House Resorts Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: In Q2, American Place posted record revenue of $30.7 million (up 13%) and record adjusted property EBITDA of $8.9 million (up 17%), with July gaming growth remaining strong.
  • Positive Sentiment: Customer awareness at American Place continues to grow, with over 107,000 database sign-ups, and amenities like a new comedy club and poker room are driving engagement.
  • Positive Sentiment: At Chamonix, gaming revenue rose with negligible cannibalization of the Cripple Creek market, and cost controls delivered $1.2 million in quarterly savings (≈$5 million annual run rate), leading to EBITDA-positive results in July.
  • Positive Sentiment: The company plans to finance its permanent American Place facility via the high-yield bond market, targeting construction start by year-end to meet the August 2027 operating deadline, with fallback financing options in place.
  • Negative Sentiment: Silver Slipper saw a $1.6 million revenue decline due to reduced over-comping and a parking garage closure over a key holiday weekend, though adjusted EBITDA was flat excluding a one-time charge.
AI Generated. May Contain Errors.
Earnings Conference Call
Full House Resorts Q2 2025
00:00 / 00:00

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Operator

Greetings, and welcome to the Full House Resorts Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Louis Fanger, President of Full House. You may begin.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Actually, ahead and kick it off, Adam.

Adam Campbell
Adam Campbell
Corporate Controller at Full House Resorts

Sorry. Thank you. Good afternoon, everyone. Welcome to our second quarter earnings call. As always, before we begin, we remind you that today's conference call may contain forward looking statements that we're making under the Safe Harbor provision of federal security laws.

Adam Campbell
Adam Campbell
Corporate Controller at Full House Resorts

I would also like to remind you that the company's actual results could differ materially from the anticipated results in these forward looking statements. Please see today's press release under the captions Forward Looking Statements for the discussions of risks that may affect our results. Also, we make reference to non GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our website as well as various press releases that we issue. Lastly, we also are broadcasting this conference call at fullhouseresorts dot com, where you can find today's earnings release as well as our SEC filings. And with that, back to you, Lois.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Good afternoon, everyone. I know it's a busy day for many of you today, so we'll keep our prepared remarks on the brief side and then we'll head quickly into questions. We're actually sitting here at American Place today, so we'll start there. We're very pleased with how our temporary American Place facility has ramped up. In the second quarter, we had record revenue.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

It was $30,700,000 up about 13%. And we also had record adjusted property EBITDA of $8,900,000 which was up 17%. I don't think the July gaming figures are out quite yet in Illinois, but rest assured we had another very solid month of growth in the month of July. That growth is not by accident. Part of our continued growth is due to customer awareness, which continues to improve by the day.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

After all, we are still a relatively new casino and building awareness is a natural part of any casino ramp. One encouraging sign is the number of new sign ups into our database, which recently crossed 107,000 people And new sign ups into the database continue at the same pace that we saw several quarters ago, which is a great sign for us. We also continue to grow because we continue to fine tune the amenities that we have here at American Place. As an example, one of our restaurants that we opened with originally had way too many seats. And so we put up some curtains, turned half of it into a comedy club, started bringing in comedians like Kevin Nealon, and it's helped increase our visibility as well as our overall operations.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Similarly, we've had customer inquiries for the longest time about why we don't have a poker room. Fast forward to today when we took an underperforming corner of the casino and transformed it into a small poker room. We just concluded an operations play day for the new poker room, which went well, and we're prepared to open it as soon as we get the green light from regulators. If you think about EBITDA growth at American Place, we earned a little over $29,000,000 in all of 2024. And so for 2025, we are expecting to have something like 20% growth for the full year.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Switching over to American I'm sorry, switching over to Chamonix. There are three major points that I want to make about Chamonix. First, our own gaming revenue continues to grow, and we have done that while having negligible impact on gaming revenues for the rest of the city. That's a very important point because it tells you that our gaming market continues to be undersaturated. Otherwise, our competitors as a whole would be down 20% or 30% or some big number, but they're not.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

What that in turn should tell you is that our gaming revenues at Chamonix are nowhere near done growing. This is a market that has been starving for high quality gaming product. We are the first and only high quality product in Cripple Creek, and so we need to build awareness, which takes time. It is happening in real time. As awareness continues to grow, we will be the beneficiary. Second, at this point, our cost structure is pretty much fully baked. That means as those revenues continue to grow, we will see meaningful flow through down to EBITDA. And third, although preliminary given that we haven't closed the books yet, it does appear that we will be EBITDA positive in July at Chamois. With that said, let's talk specifically about Chamois' second quarter. Very late in the first quarter, we hired a new General Manager followed by a new Chief Marketing Officer halfway into the current second quarter.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Given the long lead time for the team to analyze the marketing database and to send out marketing mailers, there wasn't much impact that our new team could make here in the second quarter. We are seeing their effects in the third quarter with gaming revenue continuing to grow in July. From a cost perspective though, our new GM could and did have an immediate effect. If you compare sequential quarters, so comparing the 2025 to the 2025, what you'll see is revenue was virtually flat at $11,600,000 If you look at operating expenses, you'll see massive improvement. Operating expenses were $1,200,000 lower versus the 2025, implying nearly $5,000,000 of annual cost synergies.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

It's made up of a collection of small things that don't impact the customer experience like new labor controls to improve scheduling and limit unnecessary overtime. We don't think we're done with those cost savings yet. Perhaps more importantly though, we are not yet done growing revenues. Those two items in concert are what will propel Chamomni to the profitability levels that we believe it can achieve. Our other properties are less important than the two that I just mentioned, but they're still important and they are holding their own.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Silver Slipper is the lion's share of the remaining properties. Revenue there was down $1,600,000 as we reined in some over comping levels. Adjusted property EBITDA would have been flat except for a onetime noncash accounting item. We also had a parking garage issue that briefly closed our garage heading into a key holiday weekend. Stockman's Casino was sold on April 1, so that dropped out of our consolidated financials in this year's second quarter.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And we also have a new General Manager at Grand Lodge up in Lake Tahoe. He came to us from a large Native American casino near Sacramento. His work experience has been focused on player development and casino operations, and we think he's going to be a great addition up there. Maybe a quick comment on the potential for us to refinance our existing debt, and then I'll turn it over to Dan. But we do continue to believe that the debt markets are the appropriate place for our financing of the permanent American Place facility.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Accordingly, we, like probably many of you, watch the debt markets extremely closely. The debt markets hit a temporary blip when the tariff noise happened in April. Since then, we've been pleased to watch the high yield markets rebound somewhat swiftly. The high yield markets have become increasingly accommodative, though, obviously, we have not yet publicly launched a deal. That's all I had, Dan. You want to take some cleanup there?

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We want to publicly or privately.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Or privately. Very true.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Very We watching for an opportunity and I think that will come. As a practical matter, we're allowed to operate the temporary casino here at American Place until August 2027. As long as we get underway with construction sometime this year, we can make that deadline. I think it's a practical matter if the bond market didn't cooperate and we had to delay that, we can probably get an extension of the period of time to operate the temporary. After all, we pay about $25,000,000 a year in tax revenue and employ over 500 people. And we had to do that before with the Potawatomi lawsuit. I'm confident we could do it again. First choice is for the bond market to cooperate and allow us to get the financing done and get going with construction that would be best for all worlds. But the high yield market tends to have windows that open and close. At the moment, it's open somewhat of a crack, a little more than a crack.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

A little more than a crack, a lot more than a crack actually.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But it's kind of the summer doldrum, so we're looking for an opportunity. But if we don't get it done, it's not the end of the world, we'll just be a little bit later. And I think Lewis did a pretty good job on that. So I'm happy to go to questions. Yeah, I think you mentioned July being strong.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

You did mention we expect to be up about 20% this year at American Place. July alone, I think is probably up about 30%. So we're doing pretty well. And then in Colorado, you mentioned that it's cash flow positive in July, pretty clear to probably be cash flow positive for the third quarter. And the goal is to keep cash flow positive thereafter, although it obviously gets more challenging as you went into the off season.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But I think with the changes we've made, management changes, we really at that property, it's a little different than American Place because it has a hotel and American Place doesn't. And the hotel fills on weekends, but it doesn't fill during the week. And in fact, sometimes during the week, the occupancy gets pretty low and we end up losing money operating all these amenities in a hotel when it's not occupancy is low. The normal fix to that is to have a sales force that works for years in advance and helps fill it midweek with meetings and conventions and so on. Quite honestly, we've just hired that sales force.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We had a sales person who with hindsight was pretty ineffective hiring people now and there's a lead time on that. And we'll eventually get there just like almost any casino hotel. You fill midweek with meetings and groups and conventions and then the weekends are busy with gamblers.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

That sales job though did get a lot easier. It's not easy to try and sell space or rooms before you ever open, before people can see what you've built. And I will say that at this point, did get a lot easier.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And frankly, the icon I always look at is Monarch who does very well on Blackhawk, which is a very similar market. And they do a very good job and they have a nice property. I think our casino itself is actually nicer than theirs. And I think our hotel is pretty equivalent to theirs. They're bigger than us, but we're 60% their size.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And they're a public company. They only have two casinos, that one and the one in Reno. They don't break it out. But the one in Reno has been around for a long time. So you can look back and see approximately what they make in Reno.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And the bottom line is they make somewhere north of $100,000,000 a year in Blackhawk. And it's like, wow, we're two thirds their size. We're eventually going to be pretty profitable. In terms of meeting room space, we actually have far better meeting room space than they do. They're in a very constrained site.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

They don't have much meeting room space. They really don't have a venue to have entertainment, we do. And so I think we will do much better, but we've had some growing pains out of the box and we're fixing That's, I guess, it. I mean, the Silver Slipper is doing well in a lot of ways, but Lewis mentioned the parking garage. We had a ramp in the parking garage that had developed a structural problem and we had to close the parking garage through a key weekend while we fixed it.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And most of the parking at that property is in the parking garage. So we were scrambling a bit to have valet parkers and everything, but we got through the weekend fine and otherwise the property is doing pretty well. In Tahoe, we're off a little bit. The Tahoe property, we're in the main tower on one side of the street and there was a bunch of meeting room space, a restaurant and some high end suites that were along the beach on the other side. The hotel was bought by Larry Ellison who is in the process of upgrading the hotel significantly.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And one of the first things he did was tear down the stuff all along the lake and it's being replaced with much nicer stuff. That stuff won't be completed for another almost two years. And in the meantime, there's a lot less wedding business, meeting business, less high end suites at the property. And that has an impact on the casino. Given that, we're actually doing pretty well.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And I think when it's all done, the Ellison Group is going to make it into one of the leading resort hotels in the whole country. And we hope to be part of that. We're on kind of a short term lease there, but it's been renewed many times. And in the past, we've actually operated that casino for about twelve or thirteen years and we hope to continue to do so as Mr. Ellison improves the property.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We continue to work on the possibility of relocating the license in Indiana. As we mentioned, I think on the last call, the state legislature approved a bill that funded a study commission that's being undertaken now by the Casino Control Commission to determine the benefits to the state from legalizing new license or allowing one to move. We would be the logical one to move and where it might be best to move it and what the benefits of the state would be. We're pretty confident that that study will show that there would be significant benefits and we'll see where it goes from there.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Let's go into some Q and A.

Operator

Thank you. We will now be conducting a question and answer session. You. Our first question comes from the line of Jordan Bender from Citizens JMP. You may begin with your question.

Eric Ross
Equity Research Associate at Citizens Capital Markets and Advisory

Hey. This is Eric Ross. I'm on for Jordan. Thanks for taking our questions. I was wondering what are some of the early factors we should be looking at to determine success and earnings ramp at the property in Colorado?

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Well, we're already started by having the expense structure reduced. Some of that was pretty easy, just not really easy, but putting constraints on overtime. And we actually changed the pay week so that when we figure out that if you had the pay week ending on, say, a Sunday, well, the time where all of a sudden you need to pull people in to staff is on a weekend and that's when you're busy. And we shifted it, I believe, to Thursday. And the idea is that if you pull somebody in on a Saturday or Sunday and it's the end of the pay week, you end up paying overtime.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

If the pay week ends on Thursday and you end up having somebody work on a Saturday or Sunday, you can tell them to take Tuesday and Wednesday off so you don't end up in overtime. So it's just a simple example. We did that. We've doing better with our laundry contract, doing better with staffing, our housekeeping contract. Those are both done by outside parties and we're saving quite a bit of money there.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And so the cost reductions, as Louis mentioned, are already running $5,000,000 a year. In fact, had we put those in place a year ago, we would be profitable on a trailing twelve month basis. And so the cost savings has begun and is already showing benefits. And there is some expenses of some of the people we've replaced get severance pay and that's dragging us a little bit. Obviously, that ends at some point.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And then now it's getting the marketing up. And just like at American Place where we've built a mailing list and we target it properly and we work on it, it's a slow process. But it's a steady process. It is an underserved market. There's a lot of business out there to get.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We just have to go out and get it. And so we have actually about five people now. We have a corporate chief marketing officer. We have a corporate director of advertising. And both of them are doing some of the role that we had an outside advertising agency do before.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And so some of their cost is actually offset by the advertising agency stuff. But then at the property, we have a new Director of Marketing who we hired has a long history of being in that role at a number of successful properties. He joined us from the Hollywood and Toledo. And he used to work in Blackhawk and he and his wife wanted to get back to Colorado and we were happy to facilitate that, a lot of experience. We have a new director of sales just starting.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

The difference between marketing encompasses everything. Sales is really focused on getting meetings, conventions and so on in place. In fact, not long ago, Lewis and I were having dinner with actually, think it was your bankers at Citizens at Durango Station. And the GM at Durango Station came by, and they only have 200 rooms. And we asked how they were doing.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We couldn't get a room that night. It's fully booked. And he said, yeah, they were doing very well with the Nevada Society of Tax Accountants. I was like, who knew that they'd go to Durango Station for their thing? And the room rate was $800 that night because there were enough tax accounts who wanted to stay there.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

They had driven up the room rate and the GM at Durango Station told us he had actually removed the rooms from the casino block because the tax accounts were paying so much money. And I said, well, how many people do you have in sales and marketing? And he stopped and he thought for a moment. And he says, four plus an assistant. And I said, well, we're trying to hire our first one.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And we have 300 rooms. And so now we have a couple, but that shows you where that's something honestly we should have done three years ago. And now we're trying to play catch up and that will pay dividends over the long term. And so we're there. And in the normal marketing, we're looking at stuff.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

There's different AI programs that we can use to improve our marketing where you go to the AI consultants who come in and say, okay, here we have this database. It's a very large database there because properties operated twenty five years, but a lot of people in that database are dead. And it's like, look through this database. Look who might we haven't seen for a while, but it's probably still around. And what do we go and tell them and what do we do with them and so on.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Spending less money on network TV buys and more money on targeted internet banner ads and so on, all sorts of stuff that we're trying to get more sophisticated. We're trying to be better and that will pay off over the long term. So I think what you'll see, we're already we are 100% of the growth in Cripple Creek. Cripple Creek as a town, the revenues are growing. We're all of that.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Now we're not 200%. In other words, with the other guys netting us out are not down. And that's what we always thought. We thought we would grow the market and we are growing the market. We would need to grow the market more and we need to continue growing it for some period of time.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

I think we will. And in fact, if you look at the state of Colorado as a whole, we are 100% of the growth in the state of Colorado over the past six months, maybe the last past And twelve I think that will continue to be the case. There is nothing new being built anywhere in Colorado, right? And there's nothing anywhere in the horizon being new built in Cripple Creek. So we have no new competition to worry about.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We're in the center of the state. So anything that happens in New Mexico or Kansas or Wyoming is irrelevant. The economies of both Denver and Colorado Springs are robust. The towns are growing. We're in a market with rising tide.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And yeah, out of the box, it's disappointing to me that we're not making more money than we have been, but we have a solid base. And I think going forward, we will grow revenues and we will keep costs down and it will ultimately be a very successful property. In fact, I was telling somebody we had dinner with last night. When we opened, when I worked with Steve Wynn and we opened Beau Rivage in Mississippi, at first, we considered it kind of a disappointment because it struggled a little bit out of the box. And now, twenty five years later, it's still the leading casino in Mississippi, makes $100,000,000 a year, costs $670,000,000 to build.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But boy, the first year or two, we struggled. We even almost bought an airline to run airline programs and so on. But eventually, if you build a quality product, it catches on and it grows and customers learn it's there and it'll be fine. And we will be fine in Colorado.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

I've said this maybe a few times in the past, but I think what people forget is we've been in Cripple Creek, not we, sorry, residents of Colorado Springs have looked at Cripple Creek for the last twenty plus years and they've seen it as a market where there's just really bad product. Not simple products, maybe the right thing to say. There hasn't been elevated product ever. And so part of what we've been going against is we need to change twenty plus years of what I would call negative branding, and we need to get people to realize, oh, wait a minute. This is a brand new Cripple Creek.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And that is happening. I will tell you, when we look at our database, we, of course, look at all these different segments. The segment we're doing the best is the $750 and higher average daily theoretical win. That's our top tier player. That player has embraced and continues to embrace the property.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

We've run, quite a few focus groups just over the last few months and what we've heard overwhelmingly from people, and usually you run these focus groups and people are quick to give you their complaints. It's been a little bit of the opposite for us where we run these focus groups and the feedback has been, yeah, the offers you're giving me are as good as the offers I'm getting for Blackhawk. Your rooms are great. Your property is great. I just haven't had a good player host that reaches out to me on a regular basis or whatever it is.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And so part of our challenge is we need to make sure that we're cultivating that higher end player. But the ultimate good news for us is they have been coming. They like the place. We just need to do a little more fishing in that world. And so we'll get there as the brand continues to become more out there.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Actually, the other comparison I just thought of is when I was part of the group that put together the Vergata in Atlantic City. And when it opened, the Atlantic City product at that time had gotten pretty dated and not particularly good. The Vergata was a completely different type of product. It took a little while for people to recognize that the Brugada was better than the product that it had previously existed. And now twenty years later, the Brugada has been very successful. Sorry, long winded answer to your question.

Eric Ross
Equity Research Associate at Citizens Capital Markets and Advisory

No, it's good. Thanks. And just another follow-up on Colorado. If you guys could provide any color around convention mix or bookings and what the Charmaine is looking like heading to the summer, that'd be great. Thank you.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Well, summer for us really tends not to be the group business time. It's really heading into the winter months. I think Dan mentioned we just hired a brand new Group Director literally, think today. So stay tuned. But look, the facility itself now is open.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

It's beautiful. People that are booking groups are not worried about if the place will be open on time. All the problems you have before opening have largely gone away. There's still some lead time because some of these groups will plan a year in advance or six months in advance. And so it doesn't necessarily happen overnight.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

But I will say we have people now in that group department that we're happy with. And I think they're going to do a very good job. So probably a better question to ask us in another quarter.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Yes. The summer, we're doing much better occupancy, but it is the summer in the mountains of Colorado. But back in the first and second quarter, there were some mid weekdays where occupancy was very anemic, and we're hoping to not have that as we go into the off season this fall.

Operator

Thank you. Our next question comes from the line of Connor Parks with CBRE. You may proceed with your question.

Connor Parks
Connor Parks
Vice President at CBRE Group

Hey, everyone. Thanks taking my questions. I guess, first popular discussion this earnings season has been around the Big Beautiful Bill and the impact to gaming and around regional gaming. I guess, just provide an update or maybe thoughts overall on the potential impact to your customers in any market, any database, whether it be no tax on tips or senior impacts, that would be great. Thank you.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

I think to the extent that any of our customers have more money in their pockets, it's always a good thing. And so to the extent you have reduced taxes, whether it be on tips or tax rates that don't go up or whatever it is that's ultimately beneficial around our seats. The one thing you might not be thinking of is we do have NOLs, net operating losses that we continue to build up on, we'll just try to continue to build, I should say. And part of the changes in that bill actually benefit us. You would have asked me six months ago when we expect to work through all of our NOLs, I would have told you maybe by the 2029.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And these days, I think it's probably not until the 2030. So I think we have the ability to accumulate NOLs, even more NOLs than we would have under the old tax plan and fewer limitations on their use. And I should bet you we get on a tax basis, we get accelerated depreciation on these new properties which is part of what builds the NOLs.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

So it's a non cash charge that results in cash savings on taxes is kind of what it really is. And that's a good thing. And the other thing is no tax on tips. To the extent a lot of our employees receive tips. It probably will put less pressure on us when people are seeking raises.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And it's like, well, your income after taxes is up quite a bit. I think if people are feeling more money in their pocket, they're less likely. I say this, I'm sure I have employees listening, but hardly a day goes by I don't have somebody asking for a raise. And now I have something to push back on.

Connor Parks
Connor Parks
Vice President at CBRE Group

Helpful. Thank you. Shifting gears to Waukegan and the plan there, helpful color on how you're thinking about the timeline and the update on financing. I guess working backwards from August 2027, I guess at what point must you go into the regulators for a request for an extension? What point might you start thinking about that more seriously should the debt capital markets not be receptive over the next couple months?

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

In vague terms, I think if we can get a shovel in the ground by year end, the very early stages don't take a whole lot of money. We actually just submitted to the city for a building permit of our foundations, literally two days ago, I think. And so we've given them the foundation plan, try to get the permit. So we have that out of the way. And the initial stage is literally a guy driving a bulldozer pushing dirt around.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And then following him, have a handful of people putting the foundations in. Not a lot of money, but it does take time. And as long as we can get that started somewhere in the second half of this year, even if we didn't quite have the bond issue done, you might start that just so you buy some time. At some point, you start looking at the bonds have a call premium that goes away in February. Now, I hope we get this done well before that and we'll end up paying a premium.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But if you slipped into next year before you could get going, if you had a gap, let's say you had to close the temporary in August because the state didn't let you operate past August, but you're ready to open in September or October, you might just choose to pay everybody to keep the workforce together. And just like Wynn paid everybody during the pandemic. And you can figure out the cost of that. That costs us some money, it also costs money to disband a workforce and start a new one. I don't think it gets to that because if you go to the state and say, look, we don't want to have to lay everybody off and we want to continue to pay taxes.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Is that Okay with you? And I think the state's going to say yes. So I'm not really worried about whether we had it. Now if you had a very modest gap, you'd probably just pay people and keep it together. Because we have a great workforce here.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

In fact, we've won all sorts of awards as being one of the top employers in Chicago. We'd like to

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

be The very only casino on that list.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Yeah, the only casino on the list and of course we want to keep it all together. So I'm not actually worried about it. But obviously in the 10 ks, we have to disclose that our permission to operate the temporary only goes until August 2027. Did once before seek approval and received it to have that extended by two years. If the no, we're saying all this.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

The bond market as of today looks like we can get this done. It just happens to be the August doldrums. And so if the bond market holds together several weeks, we can probably go get this done. We were pretty much ready to go get it done last March. And then all the discussions of tariffs and liberation day, the bond market went away from us for a while.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

It's pretty much back to where it was. Not quite back to where it was then, but pretty close.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Not quite, but it has pulled back extremely quickly. It's rebounded pretty quickly, I wouldn't say that.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

By the way, it doesn't have to be the bond market. We have multiple ways to finance this. You notice Bally's went and used GLPI to finance their casino. That's always an option for us. We actually still have in place a backup financing with a private equity firm that's pretty expensive.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

So we hope not to use it, but we do have it. So we have other ways to do this, but we think the best route is bond market.

Connor Parks
Connor Parks
Vice President at CBRE Group

Makes sense. Thank you.

Operator

Thank Our next question comes from the line of Ryan Sigdahl with Craig Hallum Capital Group. Please proceed with your question.

Analyst

Hey guys, good afternoon. This is Will on for Ryan. Wanted to hop back to Shamini. You talked a lot about the cost savings kind of that you found and started to implement through the new GM and CMO. Obviously, it's pretty early.

Analyst

Curious what changes you're making to the marketing strategy and how you think about maybe balancing the current client base in Shammany versus the one you're trying to attract?

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Well, I mean, there's a lot of things. And frankly, the marketing director at the property just started work a couple of days ago, right? So he's still trying to drink from a fire hose. But I'll give you one simple example is a big thick mailer every month. It was pretty expensive to print, pretty expensive to mail and had not done a very good job of getting emails of its customers.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We've been avidly trying to get emails. And to put that in perspective here at American Place, we stopped sending physical mail a year ago, Jeff, and we only send email. It's way cheaper to only send email. And then put that in perspective, if you're sending out a mailing piece with some promotion in it that costs you, let's say a dollar to print it and mail it, and that would be a pretty low number with the plaster posters these days. If you get a five percent take up rate, which would be pretty normal for something like that, then it's costing you $20 for a customer to take up your offer.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

If you do it in email, it costs you nothing, okay? And frankly, what we found at American Place is the The open rate. The open rate and response on email is just as good as it is with physical mail. And so making that transition and the person who was running the property was very old school. He would write a letter from him about the whole thing.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And even though we said several times, we should get emails, we should migrate to emails, he really hadn't done it. We are now doing it. So that's just one example. I am confident that the new marketing team we hire, which has frankly, amongst the group, a lot of experience. I mean, they're all new, but we have a stronger marketing team than any other casino company our size at this point.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

They're all new, give them time. With time, we will do very well. In fact, a number of them came out of the early Harrah's days where Gary Loveman ran the property. He was a professor of marketing at Harvard Business School before he became CEO of Harrah's and really created the state of the art marketing programs that Harrah's had. And the whole industry has been learning from that ever since.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And so we're getting up to speed, but it doesn't happen overnight.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

I don't remember the stat Dan, you may. The current ad campaign I believe will touch 80% of Colorado Springs on average four times.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Something like that. Yeah.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Don't quote me on those exact numbers, but they're pretty much in that ballpark.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

It's, I mean, keep in mind, I think a lot of people forget this. We weren't fully open. So effectively, we've only been open since October. We've effectively only been open for whatever that is, ten months or whatever it is.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

So, And frankly, part of the issue we had going through the winter was when you say fully open, we have a spa that's open every day. We have a jewelry store that's open every day that wasn't a year ago at this time. And when your hotels very low occupancy midweek, you're losing money on that, okay? So as you improve occupancy, everything, so like the lowest point in income was this past winter when you had all the expenses of operating all that stuff and not enough revenues. And now we're getting smarter about it in many ways.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But it doesn't happen overnight, but it is happening. The cost savings started right away and is getting better. We're actually in the market for a new finance director to help get better handle of our own results so we can focus in better on even more cost savings. The cost savings are kind of easier to figure out. To improve the marketing and get results takes longer.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

We've got one other benefit. It's almost maybe a little fuzzier. But over the years, we've accumulated these different casinos in Colorado. And they're all adjoining and you never walk outside. But we have three different casino licenses throughout Chamonix and Bronco Billy's.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And what we've been focused on for the last several months is effective where it's a customer hindrance is if you cash out in one of the licenses and then take that ticket up to another license, you can't use it. And we have people that do that. They think the machine is broken because the Tito ticket won't work from one machine up the stairs into another machine. The other piece that where we don't benefit is because we have three different licenses, we have to have three different cages open. And so what we're expecting sometime in the fourth quarter hopefully, at one point we thought it was going be mid October.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

I don't know if we'll quite get all the approvals by then, but we do expect to be in beta testing here relatively shortly to effectively unify that Tito system where you can use that Tito ticket in any of our three licenses. We'll only have to have one casino cage open. And if you think about cost savings all over again by having one cage instead of three cages open twenty four hours a day, it's something like $700,000 a year in savings on top of a much, much better customer experience. Think about it, if you're a high end customer especially, little hindrances like that are just a pain in the butt.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

By the way, this is something our new GM, Brandon, had put the Tito tickets being a bit usable in all three licenses. He at one point ran the Valley's properties in Blackhawk and he was able to get the regulators to approve that at their property. Now, they use a different slot system than we do. We have the Konami system. But Brandon earlier in his career had actually been a regulator with Ontario Lotteries dealing with slot machines.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

So he knew how to talk regulatories, if you will. And so he's working with Konami to get the system changes in place to satisfy. They're very focused on making sure the taxes are paid appropriately. Well, if you modify the systems right, you can make them comfortable about the taxes. The consolidating into one cage hasn't been done before.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We think we can get there, but that's less certain than the tickets. Tito tickets are a big thing for the customers though. And so the other thing I would tell you is anybody on the call, if you haven't been to Cripple Creek, you really should go and see it. It makes you feel a lot more comfortable when you see the property. But those who have been there and met with the new management, some of them had been there with the old management and they get it.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

It's like, okay, this new management is pretty smart and they're working the right way and so on. So not to overplay it, but if you go and visit the property and we're happy to set it up for anybody, you'll understand better why we have confidence that this will be successful.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Hey, Dan. Sorry, didn't mean if you have another question, feel free. I was going to say, Dan, we have time for maybe one more after you. But feel free if you have something else there.

Analyst

I was just going to ask on the legacy properties. I think Rising Star, at least according to the state gaming data, had its first, I think, year over year growth in a little while. So curious if there's anything to note there on the legacy properties. That's all. Thanks, guys.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

No. We have GM there who's been with us almost a year now and he's been making little improvements here and there. And yes, we did just show a little increase. And it's a challenging property because of the competition every direction from us, most recently the Churchill property in Northern Kentucky. But we have our own little niche and we're working on it.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We're never gonna make a lot of money at the property. But it does make money. If we could find a way to relocate it, it would be a much more profitable business for us. We've actually told the town we're in that we would pay them more in taxes than we pay them today, even if we relocated. And we think it'd be very positive for the state.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But it's a long process to get state approval to relocate a license. And it's never a certain process, but it's something we're working diligently on. We think it's a win win. So if everybody was rational, it should happen. But sometimes in these cases, they're not rational.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

But the property itself, I mean, it's a big footprint. It's 300 room hotel, 18 hall golf course, traditional casino riverboat, but one of the nicer ones that's out there, the boat is actually quite, has some charm to it, has a nice decor to it. And a pavilion with a restaurant and meeting room space with some big footprint. It's just geographically challenged. When it opened, it was the only casino in the region and it did very well.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And today, it's the oldest casino in the region and it's got newer competition every direction.

Analyst

Great. Thank you both.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

I think is our doing a good job in tough circumstances to keep it going.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Probably time for just one last question, Dan.

Operator

Okay. Our last question comes from the line of Ricardo Chinchilla with Deutsche Bank. Please go ahead with your question.

Luis Ricardo Chinchilla
Luis Ricardo Chinchilla
Director at Deutsche Bank

Hey, guys. Thank you. Hey, guys. Thank you so much for squeezing me in. I was hoping if you could comment a little bit on the cadence of the quarter in terms of, you know, revenues and, you know, when thinking about July, in terms of like sequential improvement, just give us like some sense of how business has been evolving.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Well, I mean, at American Place, it's just been rock solid up every single month for two years now in both revenue and EBDIT. And that's continued into July, as we said earlier. At Cripple Creek, we've been very focused on pulling together a new management team and helping them get going and cost savings initially, hiring people, still a couple of positions we need to fill and now focusing on building revenues because ultimately we need to build the revenues to get a return on our investment there that would be acceptable.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

And just to be very clear, in July improved from what we saw in the second quarter, just to be very clear.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Yes.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And then as we mentioned at the Silver Slipper, we've had a new GM there too also for seven or eight months. And she is very experienced from our Indiana property. And she said that there were a number of people who were basically being overcompped and we weren't making money on them. So we expected revenues to be off and EBDIT would have been flat except for a non cash accounting charge we had to take. But it's doing well.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

I think it'll end up the year comfortably up. Think last year, EBI T was like 12, but it'll probably end up around 15 this year. And that's taken into consideration how we did in the first half. And if it's not quite 15, it'd be close. And then we talked about the Hyatt, we're actually doing pretty well considering how much of the property has been closed for its refurbishment.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

And will, I think, do fine. And then the new GM we have there is very much kind of a player development sort of personality. And that's quite a bit different than the management team we've had in the past who had their own strengths. But I expect Tony to be the sort of guy who goes out and finds high end customers who will want to come to Lake Tahoe and rather than just somebody checks into the hotel who might want to gamble. In other words, being a little more proactive to build their list.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

He's that sort of person. And I'm optimistic that that will show results again, not immediately but over time. Think that addresses So all of listen, not a great quarter. We're working hard. Actually, great quarter for American Place, which is the most important one.

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

Records quarter, Dan.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

Yeah. But that's the one where we're going to build the permanent next door. And of course, that's at this point the biggest part of the company. Cripple Creek is a turnaround at this point. We're working on it.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

We'll get it turned around. We know how to do it. We have a team to do it. And the rest of the company overall is stable to I mean, I think we're gonna continue to have our challenges at Tahoe because of what's closed, but it's pretty small in the grand scheme of things. And the silver slipper is actually trending up in general.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

This quarter didn't look that way because of the accounting charge, but in general, it's on a positive track as well. And nobody asked whether we'd rather buy Maverick or Century. And the answer is we're pretty busy these days. Sorry, I just wanted to wake Lewis up there. But we're pretty busy with what we do.

Daniel Lee
Daniel Lee
Director & CEO at Full House Resorts

If we just accomplish what we're doing, we'll be fine. Thank you.

Operator

Thank you. This now concludes our question and answer session. I would like to turn the floor back over to Lewis Fanger for closing comments.

Adam Campbell
Adam Campbell
Corporate Controller at Full House Resorts

That was

Lewis Fanger
Lewis Fanger
President, CFO, Treasurer & Director at Full House Resorts

well, Dan just said it. So thank you, everyone. We're excited to talk to you next quarter with some more progress and hopefully more record quarters here at American Place.

Operator

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Executives
    • Lewis Fanger
      Lewis Fanger
      President, CFO, Treasurer & Director
    • Adam Campbell
      Adam Campbell
      Corporate Controller
    • Daniel Lee
      Daniel Lee
      Director & CEO
Analysts
    • Eric Ross
      Equity Research Associate at Citizens Capital Markets and Advisory
    • Connor Parks
      Vice President at CBRE Group
    • Analyst
    • Luis Ricardo Chinchilla
      Director at Deutsche Bank
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