Q4 2019 Earnings Call
[music].
[noise] everyone welcome to the full house resorts fourth quarter earnings call. Today's conference is being recorded at this time I'd like to turn things over to Mr. listing or Chief Financial Officer, a full house resorts. Please go ahead Sir.
Thank you and good afternoon, everyone welcome to our fourth quarter earnings call as always before we begin we remind you that todays conference call may contain forward looking statements that we're making under the safe Harbor provision the federal security laws.
I would also like to remind you that.
Actual results could differ materially from anticipated results in sport.
Please see today's press release under the caption.
Payments for the discussion of risks that may affect our results, but also we may make reference to non-GAAP measures such as adjusted EBITDA work reconciliation of those measures PCR website as well as to their precedents, we've gotten the issue.
Oh, we're also blackouts in this conference call in full house resorts Dot Com, we combine todays fine jewelry as well [noise].
Oh.
Good.
Flights as well that we've got good uploading website.
No.
As you put your though.
Well there to get the kids.
Good morning, everybody all kinda. They are they will always remember I'm sure I'm, sorry, I was just telling people I remember the cash and making it he said and then become 'cause it was acquiring caesars.
Oh, it's important features at that time I because at the margin calls.
And yet you spent the afternoon wonder whether anything has worked.
And well, it's a little bit nominations recognized for a long time, they said casinos yourself.
Thats reminiscences, there's other service, telling us or work inside of their away. When you sit there wondering what cool wonder if it's really going to village and what it's going to do and well you can do which is really get ready for.
I will tell you the so called.
Sure yesterday, we have no discernible impact from feels the wireless or the stock market. Our volumes are about the saves a number of people not places you're about to strain.
I'm not showing but don't expect it himself, but so far we've got another path.
No no no cases or doing anything properties.
Of course trying to do what we can to make sure our customers are employees a shape.
Including the casino floor in the older properties, we have.
And you're getting there, especially such and tested at least twice a day every machine.
Well the yesterday this ticket revenue mix that basically maybe the first and then shouldn't give us where are those employees come to work. The security guard ends up being probably I'm trade shows you kept your guns are similar to what the news and then airports in Asia now and that Chuck stays in place temperature and if somebody is mortgage.
[music].
Yes, there are not there.
After just a whole mobs okay.
[noise] helps because [laughter].
Okay. No I was just trying to store we are disinfecting everything so so far we've had no impact but we are.
Especially cleaning things and Oh disinfecting every slot machine at least twice a day well youre, taking the unique stuff I think we maybe the first company, but I'm sure. This will follow up Oh, taking each employees temperature as they come to work, we become that yesterday morning, and if anybody has a temperature exceeding 100 degree.
Yes.
Which is what Harvard Medical School Medical school catches up as a fever.
And one of these early signs of the current a virus it's a fever.
Adam Corey is sent home told to contact their usual health care provider, but I will tell you little bit surprising to me, we had not one employee show up yesterday, where the trees are sent home.
I think it's kind of a deterrent because if somebody is feeling feverish you wouldn't try to come to work I think our customers.
Almost shelf police because if you're not feeling if you're feeling favorite should be about feeling well.
You're not like couldn't get in your car and tried to a casino, but employees for a myriad regions like come to work when there bill and and I actually expected us to find some employees like what the coupled with the flu. This is flu season, a lot of people at the school.
No, but we have not one employee well show up then.
That kind of fees.
I'd be cycle.
Oh also point out not surprisingly.
A lot of leading to conventions are been council that they were supposed to be at the wealth costs next Monday.
That's a prominent investment conference in Southern California, and we've been told that it smells and be done online.
I guess, that's a natural response.
For the situation Oh properties has very little old meeting in conducting business almost not.
So I think that fall off is probably affected in some casino companies, but not us and I'm very very few of our customers why are today without casinos. All good news reports show that there are bookings are off sharply and you know, it's pretty easy to come down because.
Also in a car or because she was after crowded it's actually pretty easy to find your own slot machines and all in place. So I'm not sure people are gonna be that reassured by that's as I say home anyway, but if you really want to have your own little space in any of our casino stuff that hard to do.
The other thing is.
ER online sports Wagering is just ramping up in Indiana, and Colorado, It's not wrapping up as fast as we had hoped.
We were told bikes markets and when that they thought they'd be opened back superbowl. They werent now, they're saying it might be may or June Churchill downs is up and running them, Indiana only with their website not but there.
But but that does a trigger the payments to us when all of those six different agreements are up and running a we get chevron has a minimum of southern half million year.
Seven a year.
And and they paid US 6 million upfront, which we've already got.
And then the six months not credit it gets set them and that's quite a pretty significant chunk of the income of this company is coming from mobile gaming its possible that mobile gaming benefits from that people have told to stay at home and not trouble you can stay at home as like that's online all day long and so we have a sick.
It's a good portion of their future earnings at this company.
That would be at nearly two to something like this so you know I I think we're doing what we can preparing for the storm that seems to be.
Around us, but at least so far.
Not writing here, we're doing okay.
The Oh sportswear, then update I kind of mentioned already.
One is up and running it started in December Thirtyth said, it was very little income imports coming in the fourth quarter, but there will be income in the first quarter summit and then the other scans are expected to come on in the second quarter and so at the significant chunk of our income in the second half of your also point out the.
Debt covenants, we have an error nodes.
We're we're set up before Oh, we have those sports agreements and so as those sports agreements come on line it creates a quite a bit as.
Well no debt covenants.
We are watching the first quarter I think we're gonna be okay.
And there after I think the sports agreements.
Will help us with that.
Well no debt agreements or with the.
Three funds in the large debt some companies with good relationships with them and she's done envision any difficulty there whatsoever.
And we're sitting on 30 million the cash.
No, Colorado voters did ratified a sports wagering in November election.
We met with the color regulators last week and they expect to start a mobile sports wagering amazed and all three of the companies that we have agreements with hoping to be there when it first starts.
And so that's where that has the.
No getting to our traditional operations are most important properties the silver slipper.
And.
Just had a very good year, not such a great fourth quarter, but a very good year.
I think it was the best year almost 13 your history.
You know revenues in the fourth quarter were off a little book for the year.
It did 73 million versus 69 million and frankly, the middle and do you.
Year over year decline was really when percentage for the fourth quarter.
And maybe VIP basis.
Talking about 10 to sharpen the fourth quarter, but.
But up above 10% for you and so.
Our most important property continues do well it actually had a very good February.
Last year was the first quarter I think was its best quarter in its history.
And at least today, it looks like who got to be very close to last years numbers, maybe a little behind it very close.
No no.
Three weeks to go yet in March so.
Again this could change if it's a little work in Texas, but at least so far.
Since becoming quite well.
Rising star or we had some challenges in the second half a year, there's been some increasing competition.
The Oh, there's a Churchill downs now has a casino in downtown Louisville, which offers historical racing machines and the Caesars property near Louisville, built a $100 million and casino replace them their vote and then the race tracks been in.
The net flows have table games as of January 1st.
No our fourth quarter was soft.
It has a year was soft.
But I don't think is part of that was the new competition of course.
But a good chunk of that was we started doing to mass marketing that wasn't very effective we actually changed the structure of marketing after that.
And ER and part of that as we made a decision to put in a new slots system that allows it's very data driven and be much more thoughtful about what we're getting to customers who were giving it to.
Our slots system here Whats your we're at rising star start today, a lot of swaps system hit was over 20 years old one was very far from the state of the art and now we have to state the art and we're still isn't going to use it in installing that.
It was kind of a rough process.
And we have to amid the.
Well, some Indiana, we had to reset slot machine that is zero and reinstall the software and you had to do it with a game agent.
There in person.
A lot of our slot machines are older and we had difficulty getting in to start up again that would be like taken a computer on your guess is rolling it out and reinstalling everything getting up to run again.
And imagine if it was an old computer how complicated that would be and.
For a couple of weeks in November we had about almost half our slot machines out of service.
We have 800 slot machines and the place and lose seldom have more than five inch people.
It was never a lack of slot machines, but when you walked into it because you know were 40% on machines are out of service it feels pretty good and.
And so we ended up but it's pretty good fourth quarter, that's behind US now older machines are up and running.
We have is wonderful new tools were trying to figure out how to use them and use them on the smart way.
And so you know are absolutely the other the Corona virus stuff, we're talking about I'm optimistic about rising star for the year, Yeah listen we're still struggling a little bit during the first quarter, but I think for the year or it would have a pretty good year, that's before the sports book income.
The early on.
I'm, sorry, I think the fourth quarter is little bit of an anomaly or we're getting smarter about how we do things here are we trying to rightsize the payroll as well and Oh. For example, we have recently cut the buffet from operating a lunch and dinner every day as a weekly known we operated three days a week because.
It's a lot more efficient.
To serve I guess, maybe at a restaurant that we have rather than in the extension to say and.
So what we're doing things to make was probably more efficient and using the new tools, we have to do more data driven.
Oh Bronco Billy's are also was was a little softer in the quarter and balance of year here. It's it's quite a difference like the Columbus installed here what is quite smoothly, Colorado has a little different process. We didn't have to zero up that you problems on the machines and so what we were able to install can omni quick.
Easily with David of disruption.
But here, we we had to assemble the land to build a hotel cure and still hope to do so.
[noise], they're going to serve coffee still hope to do so although you know your watch all those turmoil and those things seem.
To be on the back filling and while you figure out how does how to prepare for the hurricane.
But enough something that we ended up acquiring a building that was on a corner that's kind of a key corner in town and we leased it was an option to buy.
And it had done a casino wants so we thought well well put some decor and then the open there.
And.
We've had this theory in Colorado Springs night, and and I think it's still appropriate that Cripple Creek has too many slot machines and not enough hotel rooms.
And then because we owned and empty casino he said well, what's riocan that super can make some money and we basically proved their theory that this call nobody says to me its options not know hotel rooms.
On the revenues did not it went up something like 7.5%, but it wasn't enough to offset the cost of operating this other katrina and it cost us almost $2 million firmly certain running through all the numbers of what a good to our taxes in our lease payments.
This is released and everything.
It was like Okay, we made a mistake.
There's no reason the casino capacity in this town until there's more hotels and so we're now planning.
A couple of the regulators on how to do it to close the Christmas Casino.
And and doing some of that activity back into Bronco, Billy's reduce or operating costs. The legal still control that building are we talking with the landlord about possibility of us converting it into a Christmas stores, which would be pretty easily but we can't do it at present, that's in the client base.
If they can get some rapidly for diabetic better price, let controlling it into a fish and stood at least still has us all controlling the begging for maybe get half actually ever gearing have to figure this out.
But we've made the decision to consolidate the giving back in the dark abilities.
Which on a pro forma basis, we would have been pretty close to flat last year had we not done the Christmas casino and particularly can have a pretty rapid recovery there.
And then with the economic system. There also getting smarter at marketing in how we do it and data driven and so on so again I think delco Billy I can have a pretty good year.
This regulatory work that has to be done for us to make that moves so won't happen.
Tomorrow, but it will happen probably within the next of four to eight weeks.
Close the Christmas Casino consolidated back at the Taco Bell is it was kind of like we tried something it didn't work or that'd be a mistake to keep doing it.
The parking garage is under construction.
Still that fairly early in their construction.
And but its ongoing.
I can see pictures of Anatomies.
The website.
In the northern Nevada.
It was that.
Relatively flat year, we ended with 3.2 person 3.44th quarter had some challenges because.
The naval base, that's near stock Winston shouldn't have any activity at all and one that doesn't have activity we fall off.
Also as GAAP integrate ski season at the.
Oh, Oh, that's where we're doing okay moving about [noise].
American place, we have a proposal with it.
When you have stuff like this virus in the stock market crashing it seems like a long ways off, but but we didn't make a proposal or more keegan, Illinois.
That's the the bulk of the what you see in project development cost and boats in the quarter. What is the 300000 dollar nominal fundable application fee, we'd have to make in Illinois.
We are warming three proposals that was advanced by the city block either to the state Gaming Commission by law. The sticking Commission has to pick somebody does he ended October.
We've been having discussions about how we projects and that's that with the different partners and lenders, obviously with what's going on in the past week a lot of those are probably a little out of date.
But we'll see what happens we have several months we've mentioned before beginning commission takes up Waukegan and if were chosen we would have some period of time to figure out how to pull that together.
And.
But at the moment, we're just sitting waiting for the gaming Commission to tell us what to do it there there's not really spending any money on that.
Finally, our outstanding debt at year end was 108 million, we have the 30 million of cash and equivalents are probably about 10 of that is used in operations regularly.
Most of the rest is there for the parking garage I will tell you. If you got west by Hurricane and we were really scrambling, we could delay that parts congrats.
We would rather not and we hope we don't have to build as an alternative for us.
And and so it will.
But hopefully.
Hopefully this will be like.
That's very reminiscent actually with 911 when everybody for a week. After 911 tough year loans were all going to go out of business and nobody would ever visited casino or a hotel and those trucks just absolutely too.
And then again, when Lehman brothers, and bear Stearns folded and the credit markets when a straight and that was run MGM went down to a dollar and a half a share from $100 a share.
Las Vegas Sands went down to $2 a share and that's kind of what it feels like it's like people with indiscriminately taken all these stocks down.
And we intend to be a survivor, we're going to come out of this just fine.
As a company working just fine and then hopefully are stuck or well then recover but right now we're focused on making sure we're keeping our customers say for their employees safe and that we're ready to weather the storm, so I'm not I'm happy to take any questions.
Thank you at this time, if you do have a question that will be star one again start one for questions. We'll hear first today from Chad.
Sorry.
Yes.
Sorry.
Right.
Wanted to continue on that and it's it's great to hear everything is okay, which with your employers and stuff that you guys have taken.
Positive.
Investors just continue to ask about.
Any additional details in terms of daily customer volumes or cash burn.
Is there anything and understanding that it's so research and every day is done incrementally worse with immediate news presidential announcement in stock Gyrations can you can you help us think about just what you've seen as your properties in the past couple of days and would you.
Youre expecting maybe through through the rest of the month.
No that's probably about cancer, yeah I.
Honestly I honestly don't know what you expected. It is kind of look a hurricane bearing down on you and you don't know whether it's going to be the storm surge of the wins or just lack of customers what your biggest challenge, but and at least so far no customer count seem to be unchanged. It's logical that even just a decline in the stock.
Mark would cause a recession than we would see a fall off the bench.
Regional gaming, usually more resources to resistant to recessions than say Las Vegas casinos, because the cost more to go to Las Vegas and.
Companies cut back on mediums and convention.
They allow their customer that they allow their employees to go to its kind of easy to cut the travel budget when you're going into recession, we get very few people in expense accounts that are places. So I think in terms of recession I think we'll be fine.
You May know may or may not be aware, there's a tribal casino in northeast, Oregon balloon Wildhorse they've had one of their back of house employees, a test positively for the virus and they have to close the casino for two days, probably disinfected, it and reopened and I'm guessing that.
Their businesses recovered but slowly.
And so that was I looked at that and said well, okay. We should try to make sure. The our employees are coming to work healthy.
After that if they stay home.
Well well you know the understanding that there even if we have to replace some of those can pay I would rather they stay at home and so that's why we started taking people's temperatures that come to work is very simple procedure, just as a kind of the plastic gotten that you're quite somebody's forehead, they're available on Amazon for $20, that's not where you had to do.
While the airlines not being there for every customer getting on the airplane to be honest and ER.
We have aren't doing it with the customers because this is customer it doesn't feel we're probably stays home anyway. So what we could do it with the customers and I saw word encore and Boston is saying that they will test the customers temperature if he looks for either so I don't want to be making medical decisions, whether somebody looks feverish.
Doctors and so it perhaps it's very cut and dry to see unemployed coming to work and new registering wasn't 100 degrees on that on the temperature gun that the guns are known to be not always accurate. So we actually have one of those European Ramadan looks like they have that you're.
Doctors office and if you're welcome to John would give you the choice of put them in your ear and if that passes but so what you come to work, but so far we haven't had to use that when even once so so well.
No.
I will take a step further lets you look at what's going on in Italy, where they're closing museums and now the MD eightys cancers and everything.
When the quick math here yesterday.
If we have to close rising sun for two weeks I think it would cost us about $400000. Okay.
Yeah. This is also covers it doesn't make less money. So the four Guam encompassing the issue, it's like operating without revenue, but still having some costs.
About 400000 for it to the period, if it was the silver slipper.
It would be probably a similar costs that you would also have the loss at some income and it makes more than a million a month and so it it would appear to close that for two weeks it would cost $2 million, let's say or if you had to close basically property for two weeks, which seems unlikely, but if you did.
Good.
Yeah, My cost as a couple of million Bucks. If you had to close it for a month my cost is 5 million Bucks I might have to.
[noise] drag out the construction of the PUC congressional little bit or talked about lenders to say you're going to come up.
Extra million dollars or something that's a good we'd be okay.
If we had to close everything for two months well just put up given the PUC likely be okay, but I can't imagine that's having a close everything for two months, even rules on China, where they close stuff where the tourist attraction. There have we hope that they were closed for like a month. So I, that's the worst case scenario.
And and but I think it's appropriate for us to think about the worst case scenario and and make sure we're ready for it and hopefully not have to use it.
So probably bottomed out I know we ended the slides with the fact that we are for any amount of cash sitting on the balance sheet. So no.
Indeed extreme scenario, we still have the cash a third of our almost.
20% of our status.
Sitting in cash.
Well.
Yeah, I mean, I honestly I think you don't want to have to close because we don't have crowded environments. Here people are coming in sitting you know trees, but Joe and copper Trump or something.
And I think if we end up closing, it's almost more of a political thing, but not really help concern.
But but then and then and I'd be very concerned about our employees because what we can't afford the payer employees for closed and and that creates a tremendous hardship on the employees and so.
Hi. This is the same thing like these airlines are parking their claims enough and Princess cruise lines as park in the whole fleet.
The impact on the employees is is a terrible.
And the right of ways.
To try to keep people safe and Latin environment. Like this there is an article I think in Yesterdays Wall Street Journal about phase.
A couple of Chino far in Italy, where the pleased with made them put lines on the sidewalks or the people standing in line with these six feet apart.
So that actually works you know if you've got a line up for something in your six feet. Apart you. All your your fair enough. The part do you have that social business.
And you know if we had to say please don't sit.
Next if somebody had a slot machine leave a vacant slot machine and between it's even must be.
Canceling all flights to Europe loans that really necessary or what have you said, we're not going to rest the middle seats anymore, we're going to lead the middle seats empty and everyone asked where face mask, we're going to take everyone's temperature before you get on it off you know would be more thoughtful than just canceling everything but we're in an environment where people are taking radical measures.
And so.
I personally don't think you have to close just like some of these conferences what country. If you had a conference with about 200 people moved into a much bigger world, where everybody gets it 10 feet apart.
But anyway, but if if if if people will be so concerned that they're not going to show up or if the health authorities or regulators baskets to close of course will close.
And deal with it and we're prepared to do that if we have to but I'm, hoping we don't have to I'm going to annualize positive no deanna.
We ended the day to go back to the answer earlier point, we don't have customers that are final claims to get towards parent in Brooklyn, they're in a car one or two other people they get to our property where things are relatively spaced out and.
And to the extent that you are canceling trips to Vegas or canceling vacation.
What we saw at least after 911 when that happened with people still want to together she will have some sort of local escape and.
And I hopefully, what we have the prophecies and that facility to.
Continued to entertain well and I'm going to bring up the old sell side analysts and they'd like many of you know I was just sell side analysts before.
Turning to the operating side.
Yeah. This is this is an epic buying opportunity really just like 911 was just like 2008 was.
2007 was where all the stuff and taken down.
The world will come back to normal at some point.
For a couple it's a catching a falling knife.
And you want a nice to fall in the floor and stuff bouncing around before you reach for it because you you could get killed in the meantime.
And you want to make sure that that's if you're buying something that it's just survive you don't want end up with the company that but can't survive and so we're very determined to be a survivor and.
And I would just.
Well not this property and ethic opportunity for people.
For the already question [laughter], Yeah. That's that's very helpful on all fronts and you're right balance sheets are.
Are paramount getting hopefully after this is done.
Your customers appreciate where the gas prices are because I know that was always a big correlation with.
We don't get me revenues.
That's good for wanted to move on to Colorado, I know, there's [noise]. There's some additional legislation that's being discussed that could potentially with the.
The 100 dollar singled that limit, which you know given what you guys are thinking for phase two that could actually improve the returns that that you've been kind of flying and then probably help.
Bridge to some of the the spend per adult numbers that you quoted in other markets. Obviously, if the cutting limit is higher.
So a couple questions about one.
Could you just talked about you know the likelihood of that happening secondly, what gets would mean for your for your phase two and Cripple Creek and then third just from a support or financing standpoint, or there are a lot of cost that we should expect Ralph.
A year, if you're supporting this bill, but you just might need to help write the check [laughter].
Obviously when favor the bill.
I think bill probably pass who said that the people in Colorado.
Pretty accustomed to the industry now and life I think that past every referendum related to because you know so far but the ones. They voted down were slots at the tracks.
Which would have taken business away from the Goldman concept.
Have casino so the people of Colorado has generally supported continued expansion of gaming and the places where it is on no. Our Bronco Billy's place, we only have a handful of hotel rooms, and they're they're kinda to start rooms anyway, so that that high roller you're talking about which is somebody.
Who might otherwise be fine to Las Vegas.
You know.
Doesn't go to Bronco Billy's, so bronco Billy's as it exists, it's probably not that big a plus but you're exactly right when they build phase two.
That would be.
A significant advantage because we're planning to have a luxury hotel there. It seems almost odd to talk about that under today's circumstances, but that is kind of the long term plan and that's definitely a plus now that the principal guys driving that referendum a bit.
Companies out of backlog core much bigger than us and.
Already have much bigger facilities than us and they've asked for our sport and I've said honestly.
We're in favor of it or if and when they pulled together the money to build the second.
I'll tell you we're happy to be supportive.
But I have not made a commitment of any note is a modest one was just five grams a tonne did they wanted to be able to say that everybody supported so I think they didnt 10 day 1005 that.
So we're in a five Brett and what kind of said when we have the money to build phase two we might be happy to be a better supported but we haven't given the firm commitment.
Legally or otherwise so.
But obviously went taker.
Okay and.
And then lastly from me Louis just out of the 30 million of cash at the ended the quarter how much of the be upfront sports betting payments are included in that number and then for the 7 million of annual guarantees.
How does how does that work mechanically does that start when the properties are open up and running and in many or just you know when should that start to flow into the probably the last statement.
Oh the.
So so the one class. These are all all in the fourth quarter numbers didn't quite get about 2 million in our third quarter on the other for 90, we got into fourth quarter. So that's all sitting in that you may notice there was a small very small restricted cash balances totaling about another one Bob and for what it's worth I'm expecting that restrict.
Cash to be normal cash here in the next month. So so that that restriction will go away relatively quickly.
Oh, no way that those guarantees or from your side is as as our mobile operators or take off.
That's when you should expect to see those guarantees the life and so here in the fourth quarter, we at Churchill Downs. The live on December 30, if that's what kicked off their guaranteed.
As market and adds when role on in Indiana, and you'll see each of those guarantees kick in the separately.
And then at Colorado goes live against each of those mobile operations start.
Colorado work to each of those guarantees kick in one by one channel does that does that take you there.
Yep, that's perfect okay.
No 6 million a cash that we received is totally nonrefundable and is actually income, but the accountants and their wisdom have us capitalize it amortize it over the life of contracts that doesn't doesn't add much to income currently get spread over.
So I guess part of that somewhere light or the contracts are that the six nine well will come in has been comments around the world EBITDA for her over over the 10 years at each of those contractor okay.
Okay. Thank you, but very much Philadelphia appreciate it.
Well that's from Steven brands that are what Alan.
Good morning, gentlemen, Bronco Billy's when you first acquired it started out you know the EBITDA significantly higher than where it is today I'm not you know excluding the online.
A revenue.
What would it take to get it back to where it was.
Well basically close in the Christmas casino consolidating a back into Bronco Billy's.
Almost all of the decline is related to that Christmas casino.
And.
We didn't get the lifting revenue we were hoping to get.
And ER and it and we can actually trace it now with economic system, and we know that over 85% of the play at the Christmas Casino is customers, who are regular customers and Bronco Billy's warehouse splitting the play between the two and two we have the additional operating costs of upgrading a facility.
It's not contiguous with what we have ER and that's a few hundred thousand dollars a year and then there's the lease of the building there's the lease of the slot machines because most of the machines Senator leaves.
And then there's a tax in efficiency.
We upgrade under three licenses, there's a highly progressive tax credits in Colorado.
Ideally you once you revenue split a third a third a third and then you'll have a lower tax rate love. The Christmas Casino is only 120 out of our 805 machines and only does about a 12 or 13% of the revenues and so it's it's taking us quite a bit away from the.
A third a third a third into our effective tax rate a significantly higher.
And that cost us a few hundred thousand waters everything you add all of that cost together.
Impacted us by about a million seven last year.
And if you add a million seven the last year's results you could very close to that 5 million.
Per year VIP that it was getting away clarity.
Very good.
You had some I guess road construction issues in Indiana, and those all behind Us now.
Yes.
Yeah, I just drove that wrote say as yes.
And.
You know that the I didn't see issues here.
Economic system as the screw up and frankly, we had hired a marketing guy.
Who we thought was going to be terrific and he just did he was hell bent to try to attract a younger clientele. They changed a lot of the marketing it gets very expensive things and they did not work and some of these stuff he did had commitments.
Extended forward and we weren't fully aware of and stuff like you know hiring these groups to appear at the property, who weren't really appropriate for our clientele and when we figured it out we started a change things and then when we figured out the forward commitments were fired up and ER and we're trying to work our way out of that now.
And and and that was part of the impetus to say, okay. We can't just spitball stuff up against the wall.
It's a very competitive market in a very mature place.
And and we have to be I'm.
Rifle shot at our marketing, we didnt have the systems to do that so we went to putting economic and as we said that the the installation of Konami was also screw up another screw up just the way more complicated than we expected.
We got to that and so I think we're getting it back under control here, it's still probably that could have a great first quarter, but I think we'll have a pretty good 2020, so absent the other hurricane and that's on the horizon. So.
No not system. It is having data for first time, and and and really understanding what to do it that data and I will say there have been some experiments here and there were really feeling the the boost that we expected out of this is Tom. So you know it's kind of that were in the early.
Staffs of taking that that new found data and really putting it out there.
And a good way.
For example, the ferry boat we operate we just started charging again $5 a car unless you have a players card I'd almost rather they have a players part because then I know the name and address or the person rather than the parent we didn't know what before and and interestingly enough. The ridership is holding up and we're actually collecting.
So I go to kind of what's your cars so.
That's very classes like 700000, a year to operate and I don't think its benefited the casino.
As much as it can but part of that is marketing to people in Boone County.
For home, but the Uh huh.
Very is is a convenient.
I want to see Kentucky's has very tough sign larger it's very hard pressed to get billboards to say take the various this direction and so the sinas is awful and so we have a whole digital campaign to try to be people to email through banner ads and so on about the ferry here. It is here's how you do it and.
But its $5 a car unless you're a customer the casino and minutes for it and so we're doing a lot more of that but the economic system.
You know a lot of casinos are we as many regional operators give free play so based on how much your gamble.
We give you additional dollars that you couldn't gamble better free free play.
And they use the yet to go stand in line up the players desk to get your Ficos very complicated system with can I mean, we love them submission. So you walk into adult picture cadence and if he plays there Tom mentioned already that's a huge customer convenience and and makes it much more likely that person uses the free play.
Because they can also get cash instead of the free play where most people prefer to get throughput and leave it to further that frequent because that is where most of the back and so I.
I think if somebody five goes in cash and the ticket home. It's Doug if we given free play we generally indefinite 75 cents you get back 75 cents on the dollar backing out of pocket. So we would much rather that people use pretty quiet frankly, they get it gets replaced and now we have a system that makes that much easier for them to do.
And much more data and then they're very fast that we can look at it and say, okay. We know that most of the revenue in the Christmas Casino is coming from regular customers that profitability. So closing the Christmas casino and getting those people back at the possibilities. We don't think they lose them to a competitor.
We didnt have systems that would help us figure that out before and we do now so.
How's it going what's getting people from Kentucky into the casino.
Not as well as a true but that is by point and I think that's a function of.
Informing that frankly that very exists.
It's a very convenient way to cross river, but actually the closest casino to their house and tracking that no. Yeah. If if we ultimately determine that running the ferry doesn't make any sense, it's not paying for itself.
Okay. So yeah.
Folks in roads ramps down into the river.
And so I'm now, it's very hard for us to know what they would the old systems.
There's a fairly is paying for itself or not I know our revenue Didnt increase we felt this very we met ourselves much more convenient to a lot of people and the revenues did not go up.
But you also wonder we had some new competition or whatever revenue is up and down much more if the very did not exist, we really have nowhere knowing that.
But now we can start tracking whether people who write the Terry because we're ready if we had when we say it's fair to forget what can we actually swipe. Your part so we have a database of whose right in the third. This just started in March 1st and so we'll be up the track whether the people writing a theory a gambling in the casino.
And so then we can make a an informed decision or whether it makes sense to continue to run the Terry indefinitely.
But frankly, a first we need to market it better and get people didn't know what and try to use that Terry and the data system to use it.
The next logical step as pick it back and say well you're not only have to have a card the check to use it and.
Yes, we might at some point say well if you want to right like it varies pretty busy on the weekend lot of ride the very on the weekend they have to be at least a tier two customer because.
We're not a charity, we're actually trying to make money here so.
I'm, assuming this corner virus burns off here probably by June side.
Are there any opportunities to refinance the debt.
Oh, absolutely that's hard to I believe it would have gone down that road before a best but it you couldn't do today for sure.
I would probably not now all of these opportunities to refinance the debt on that.
One thing to keep in mind is is the pro forma.
Results for this company for sports Bang they get it gets a lot easier for pro forma that end as as you sports betting deals all actually kick into gear on the guaranteed start asking you don't like goes along kind of got them to sign up but the good news is where I think were within the month of having everything on sports betting actually up or not.
And in the meantime.
Well the operating results should look better from both capabilities and here.
And I think the silver slipper, another Nevada will be stable.
So.
And just one last question I guess, it's with all the sports betting starting sometime in.
Second quarter should have a substantial bump from the year before it's not that the plant.
Well, yes, well, yes, no like the sports betting started in Indiana in the fourth quarter, but it was still two days can you ended the quarter. So I think our income or something like $9000. So exactly when it starts from the second quarter is when the bump and be additive, but let's say some first quarter in third quarter, yes should be a six.
Okay.
Alright, Thanks, gentlemen.
Thank you.
Okay.
No we don't we don't actually.
We don't actually control when it starts and in some cases smart cuts in wind and Churchill's don't actually control it either with the regulators.
And.
The regulators have to license each of those companies.
And then they give you the wrap my test their apps and make sure that is working and that can be a pretty complicated process and it has taken longer than we expected in Indiana.
Than many expected in Indiana.
But it's kind of our impression that Colorado is moving faster I think they have the benefit of the experience from Indiana and as it's quite possible that markets and Warner up and running in Colorado faster than they are in India. So.
<unk>.
And our next question will be for me Gary Ribe with.
Wow.
Hi, Dan.
I guess.
You do not expect to have any issues with <unk> first quarter.
That said again.
I think Mike.
Yeah.
It's it's the it's the one we worry about the frankly, the first quarter, because we don't have a lot of sports betting income yet.
And it all depends on March one other partly in the March March is an important lumped seasonally.
But they've been talking with their lenders and I think if we needed a little bit of the updated them I think they've been a tough, but I'm, hoping that we don't need it we may see could even though we don't need it just to make sure we're okay.
I I will tell you we talk to airline there's all the time and any good market. My trust. So what we've experienced very recently and so as an example, I was on whether I wondered yesterday three days ago two weeks ago. So.
So the dialogue to clean up and then.
They always are happening and the relationship that we have over a longer than they are extremely good and by the fixed trade lenders.
And the large one as pimco.
Just after one and put together as you guys is ledge Canadian company and they are bond funds not traditional banks and frankly under these circumstances I'm very glad to be there because when the world falls apart like this or traditional banks have regulators prison down there.
Next follow the sudden they have.
Non performing well and they get all nervous and help them and at least it's been our experience that pimco and cigar there's great lenders.
Good to work with and I'm sure. If we went to them and said Hey, we're gonna be you know.
Close on this first quarter you know you guys doing the work with us antibodies that absolutely in fact, they called US. So we put them on that and I think they then do care from us, but we think there's going to be okay. We're watching it carefully might have been the best discussions. They had all day of the casino company, because I think some of the other.
Casino companies and far worse shape than we are and.
And so I I think we'll be fine.
[noise] okay. Thanks.
And we have no other questions [laughter] [noise].
[noise], that's very much but [noise].
[noise] and that will conclude today's conference again, thank you all for joining us.
[noise].
[noise] and.
[noise].