Q2 2021 Full House Resorts Inc Earnings Call
And plan to be on re shortly we appreciate your patience and please remain on the line.
[music].
Yes.
Ladies and gentlemen, and good day and welcome to the full house resorts second quarter earnings call. Today's conference is being recorded and this time I would like to turn the conference over to Luis Pena, Chief Financial Officer of full House resorts you may begin.
Thank you and good afternoon, everyone welcome to our second 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 of federal security laws I would also like to remind you that the company's actual results could.
Differ materially from the anticipated results and these forward looking statements. Please see today's press release under the caption forward looking statements for the discussion of risks that may affect our results and I'll also we may make reference to non-GAAP measures such as adjusted EBITDA.
A reconciliation of those measures. Please see our website as well as the various press releases that we issue and lastly, we're also broadcasting this conference call. It full house resorts Dot Com, where you can find today's earnings release as well as all of our SEC filings.
And with that said I'll I'll be really brief and then turn it over to Dan but.
And this was another very strong quarter and a great first half of the year adjusted EBITDA for the second quarter was $14.9 million and this.
This is now our fourth straight quarter of very strong results the reasons behind it and you've heard over the last several calls and they haven't changed but the short story is we've revamped our cost structure and part by investing in new slot marketing systems and other technology and we continue to think that these changes are sustainable and the long run.
And so when you look at adjusted EBITDA for the first half of 2020, 1 that number sits a little north of $25 million and if you look at the last 4 quarters were just shy of $48 million of annual or annualized I should say adjusted EBITDA.
The 1 segment that is a little slower and and rebounding from the Covid shutdowns last year was our Nevada segment. It feels like we crossed that bridge and the second quarter with guests returning to the Hyatt complex that houses our Grand Lodge Casino and visitation to balance Naval Air station also starting to return.
With regards to our sports skins, and we had 2 more launch during the second quarter that brings us up to 5 skins that are now lives out of a total of 6 those 5 skins represent $6 million of annualized contractual revenue. The last remaining sports skin is what's markets and it feels like they should be launching very soon and Indiana. The gaming Commission of course.
That's a thoroughly that any company before it can watch and the state, but it does feel like we're on the home stretch there when that laskin launches it will add another $1 million of annualized contractual revenue, giving us a total of $7 million per year from our sports skins and.
And then I'll ask 1 and I just wanted to make was on our cash position that continues to be and very good shape sitting here and real time, we have about $283 million of cash and restricted cash a little more than a $176 million of that is reserved for the construction of <unk> of course, we will start to use some of that cash balance as construction on Germany can you continue.
To wrap up but do remember also that outside of that project Capex, our business generate some pretty meaningful cash flow.
I know Dan is going to have a lot more bigger points for you. So I'll turn it over to you Dan.
Well. This is just this was 1 of those quarters, where.
The accounting profession likes to confuse things because they they kind of force us to do all these comparisons of the second.
Second quarter of 2021, and the second quarter of 2020 and of course, we were closed for most of 2020. So it's a completely bullshit comparison.
Which is why we are earn their ire buddy.
Including the 2019 numbers in the supplemental information, which is kind of halfway through the press release, because we think that's a far more interest and comparison because everything was open for the full quarter and 2019.
And if you look at that and Mississippi, We had adjusted EBITDA of almost $9 million.
That's the best second quarter, I think and the Properties' history 2019, It was $3.6 million sows twice, what we did before COVID-19 came around.
And when you closer to the mic.
And in Indiana.
And we did the $2.7 million of adjusted EBITDA.
Before the pandemic because second quarter and 2019 was 600000, a $2.7 million as the best second quarter, there for quite some time and <unk>.
<unk>, we did a million 8 versus 876002 thousand 19 again.
A very strong quarter may have been the strongest second quarter and the 20 year history of broker abilities and 25 year history.
And then and northern Nevada, which had kind of lagged and prior quarters, but we had a really good second quarter. There was a $1.4 of adjusted EBITDA.
For 2000 and of course, we have the contracted sports wagering.
Income of a $1.5 which we didn't have any of that back in 2019, and so the adjusted segment EBITDA and 16.4.
Corporates $1, 5 and that left us with $14.9.
And back in 2019, it was $5.5 million and corporate was 1 million to.
Much of the increase and corporate is.
As we have a bonus plan.
And different compensation plans that are based on income and so on the income improves as much we have to take accruals on the <unk>.
Assumption that there will be on those bonuses at year end and.
And so.
So that's the story of the quarter it was great.
And we earned.
But as much from the quarter as we did and the full year of 2019 so.
We intend to keep this going.
Part of that is the slot system, which Lewis mentioned, though the economic system, we have put into Colorado and the erosion zone.
2 years ago now almost.
We're going to be putting that into northern Nevada, and the fourth quarter and at that point, we will have the state of the art slot system throughout the company.
And that allows us to do things that are.
On a better experience for the customer, but we also get a much greater marketing data.
It allows us to be more efficient on our marketing and that's been part of the reason for our success.
And Colorado, Chamonix start and it takes shape.
Cans are available at Chamonix, Seo Dot Com Xiaomi, Colorado Dot com.
And we're rocking and rolling and put a big tower Crane, that's 230 feet tall.
With the 200 foot arm on it so it can reach everywhere at this kind of extended property we're doing.
And the foundations are going and pilings are in the year.
And where the elevators go or is where the share.
Share wells were on the elevators are all going in.
It's still very early and it.
It's a topsy turvy world to try to build something as you can imagine Lee price of lumber shop way up and then it crashed way down and it's unclear.
What the tariffs are going to be with the stuff from China and so on so.
We're we're on.
<unk> $180 million.
Plan and to be opened and the fourth quarter of 2022.
And I get it right.
There are some challenges on that.
And we think we're pushing a little bit on that fourth quarter will know better and the months ahead.
It could slip into the first quarter of 2023, but.
We are striving for the fourth quarter of 2022.
180, if I were to guess at this point, because we've put out to bid a pretty small part of the project at this point, but the bids have come back a little higher than we thought so theres some pressure there.
And we will know again better as we put more of it out to bid, but it's probably pushing 200 or somewhere in there.
We are evaluating.
Not only trying to get a better number because we are putting a bid packages. So we get smarter just about every week.
But.
It looks like the 1 of your competitors opened a 100 room hotel seems to be pretty booked up.
Pretty good.
On a a motel 5 hotel.
But nevertheless is doing pretty well and and the bigger new hotel up with Blackrock that monarch built seems to be doing pretty well I went and visited and.
They did a nice job, they're constrained by their footprint, which was long and narrow.
Nevertheless, they seem to be doing well.
But I think there are a number of ways, where we will have the best casino and the state because we don't have some of the constraints with the places have and Blackhawk.
And so we are evaluating whether to add another 70 rooms and suites to it.
And we had always had this idea that we could add another leg at some future date and.
And.
And we are evaluating whether to do it now and part of that is to get a firmer grasp on on.
And where we are versus that $180 million don't want to increase the scope of it if we're.
Not having the cost contained but we also.
We would need approval.
The city's historical preservation commodity and city Council and order to increase the project too.
370 rooms.
Now monarch, I think is 500 rooms and.
And <unk> and Blackhawk, because 534 rooms, if I remember correctly, so as we go up and size.
Can't go tall, because we're in a historical.
Area.
So we're kind of sprawling out Fortunately, we have quite a few acres. So we can roll out.
Not too long ago, just checking out and probably a nice hotels and the state has stayed at the St Regis and Aspen, which is very nice hotel and Aspen.
It gets really high room rate and everything else. It's brought you can't go <unk> and Aspen, either and yet it feels it feels very nice so we can and.
And frankly, thats roughly comparable to the size of what we're building. So if you were on it.
Fuel what it feels like.
And on the St Regis and Aspen is similar to what we're kind of building in terms of.
Guestroom wings that stretch out that are 45% and 6 floors tall.
And.
So we will make a decision and the next couple of months on.
Whether they go to city council and get those approvals and get a.
Board approval and so on but pretty good chance, we'll try to.
Upsized the scope of this because the market seems to be there for it and and.
And so and we have the money frankly, we have more than enough money even for the expanded project.
Yeah.
Down at the silver Slipper, we also achieve something pretty.
Remarkable.
Silver slipper is on a pretty constrained little piece of land and.
And what we've been trying to figure out how do we add another hotel tower some day.
And finally concluded the best way to do it was to build out over the water out over the Gulf of Mexico everything is built on pilings down there anyway, because it's true multi Mississippi. If you don't put it on piling and thats going to sink. So if you build out over the water. The pilot drivers on a barge instead of on a truck that's conceptually conceptually the same thing.
You still have to have the livable space something like 25 feet above sea level for storm surges from Hurricanes and all that sort of thing.
On the.
Bottom on the Gulf of Mexico belongs to the state of Mississippi for the first X miles going offshore and.
So to.
To build out over the water we needed to.
To reach an agreement to lease land from the state of Mississippi, They won't sell it.
Leasing it.
And so we have an option to lease.
If we exercise that option, we can lease it for up to 60 years.
And once it's opened the rents about $100000 a year.
And the option payments before that are pretty minor and obviously the state of Mississippi, we'd like to see us do this.
And they get gaming tax revenue and our casino if we have more rooms will have mark casino revenue.
More jobs more development and all of that.
And so the governor signed that.
Within the last month, and <unk> and <unk>.
So we now have.
Firm option to lease and half acre of the bottom of the Gulf of Mexico is at least that sounds.
To allow us to build a hotel tower that would be ideally located vis vis our casino, we still require some environmental approvals.
And do have an option on.
Some land that we think is environmentally sensitive so we can do a swap so that we can fill.
Fill in some of the marshland Thats next to us to create parking that would be needed by.
On a more hotel rooms.
And and so we still have to work that out.
And Meanwhile, we're looking over our shoulders.
The casino being proposed and Slidell.
It's gotten.
Perhaps too much vis vis visibility versus our company.
Yes.
They have and we were a little surprised that the cash through the legislature. They just barely got to legislature and they did it with the there was 1 committee, where a guy who's going to obtain any changes vote to vote for it.
Wife was 1 of the 19 lobbyists that the casino proponent had hired so that's pretty questionable but.
They go to a local referendum on November 13th.
We've been doing polls the polling that we have done and it's not push pulling its on its Paul.
<unk> loses.
On a pretty wide margin. This is a very conservative region.
And heavily Republican.
And people move there from New Orleans to get rid of it get away from urban issues and so they don't want things like casinos.
But even if and and better and the sheriff.
And head of police and the mayors and the 2 biggest tangible and come out against it.
Even if it wins.
What is being proposed is relatively minor compared to all the casinos that are around and casinos like us and Mississippi have a tax rate that's half of what it is in.
Louisiana and so.
It's reminiscent of when peninsula built the casino and Rochester, New York and kind of ignoring the existing competition that had a lower tax rate and that property ran into trouble immediately or the other 1 I'd point out is the M resort that was built on the south side of Las Vegas. They go and we're going to catch people before they get to the <unk>.
Strip, but it wasn't big enough and important enough to get people to stop before they get to the strip and and so people continue to drive further.
To better places and of course, the M resort fail shortly after it opened.
We compete already with a number of casinos, probably our most vibrant competitors at a place called the island view its private company out of Gulfport and they've got over 1000, Guestrooms and the laser reversal and pool and a couple of casinos and and Brexit. So nice place and you have to drive past us to get to it.
And they do quite well and we managed to do well as well.
Hollywood Casino is quite close to us they have 3 times the guestrooms that we have.
And they do well, we do well.
We compete with the places and Biloxi and though.
10 of them over there we compete with the fairgrounds, which if you leave slidell and had to US you did not go buy the new proposed casino site.
But if youre going from Slidell to New Orleans, the closest casino and the Slidell was actually fairgrounds, which is owned by Churchill Downs and and you do pass.
That casino site go into New Orleans and.
So we compete with fairgrounds, we compete with New Orleans.
The Harrah's property and New Orleans caused $900 million. When it was built 20 years ago, they are and the process of putting another $500 million into it.
The 700 pound gorilla in the region and Theyre not going away and then we compete with the casinos and.
Baton Rouge.
Including La bears who share.
And on earlier LIFO.
And and and it's a good property on the south side, a bit Rouge, and Theres 2 other properties and Baton Rouge, plus the tribal casino on the northwest side of patent risk, so, adding 1 more casino to that mix.
Is is it a plus and I was not a plus but it's not a very big negative to us and.
And I think we'll do just fine.
And of course, we'll know pretty.
Certainly here and a couple of months, whether whether it's going to happen at all.
Meanwhile, in Waukegan and the gaming Commission.
And who the law I actually said that we're supposed to choose somebody buy.
Late last year.
But they have and out because of Covid and so they didn't.
Now they've hired a consultant to help them and experienced.
And the casino industry on this stuff and and.
And the head of the Illinois Gaming Board and indicated that once they had a consultant they thought they would be 6 months from a decision and so.
That would imply that and somewhat perhaps in the fourth quarter and the other 2 proposals for waukegan.
Get to make a presentation to the Illinois Gaming Commission and <unk>.
Illinois Gaming Board I guess on this and hopefully they come to a decision and thereafter.
And the way. This normally works is you then negotiated development agreement.
The.
The gaming Board and you have certain timelines that you have to meet and.
And certain milestones and then you're off to the races, and you build that as quickly as possible.
We were deemed by the city's consultant as having the best proposal.
Sure.
We simply had the smallest balance sheet relative to what we were proposing and liquid.
We fix that over the past year, and we're now sitting and.
Pretty good shape for what we have proposed.
Obviously, we'd have to arrange financing, but I don't think theres any question that we could we also have a private equity firm that has signed up to step in although frankly.
Bonds are trading might be cheaper to do it directly.
And we've been working on our proposal and.
And.
And in terms of the details of the city process was very quick.
And you had to put something together very fast, which we did and and now we're kind of enhancing that bore to put a little more meat on those bonds. So that when we showed you and Illinois gaming Board.
It will be the <unk>.
Most thought out most thoughtful proposal they've seen and I believe.
Meanwhile, in Indiana.
About 3 or 4 years ago, we had proposed building and casino and Terre Haute.
And area with about 150000 people it is.
About an hour from Indianapolis on the West side of Indianapolis, which is the city of 2 million people. There are 2 casinos that catered Indianapolis or.
Both east of Indianapolis So.
And then there outside of town a little bit so.
And so pretty good market, we think Terre Haute itself, plus you can probably draw some from.
Indianapolis and Theres, a whole bunch of talents and that region that are 100 to 200000 people Champaign, Urbana Lafayette, Indiana, and so on that don't have casinos and might also be.
Attracted took place and.
Terre Haute.
The.
Indiana Gaming Commission had selected.
A partnership.
On.
To develop and Terre Haute it wasn't us, but as I mentioned before you end up with milestones and timelines and that developer did not meet those milestones and so they didn't renew is approval and instead, they've now put out a request for proposals.
And for other people too.
Potentially develop and Terre Haute and we're looking very carefully at that deadline is middle of September and and we'll see where that goes.
Yeah.
And Thats It Lewis did I Miss anything.
I think we're good Dan thank.
And do some questions.
And I didn't tell him a better proposal to acquire win but we'll leave that.
And Thats a joke.
20 times our size.
Let's take some questions maybe 50 times.
Yeah.
Thank you, ladies and gentlemen, if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad. If you are using a speaker phone. Please make sure you're on mute function is churn of 2 and obviously going on to reach our equipment. Once again. Please press star 1 to ask a question.
Pause for just a moment to allow everyone an opportunity to signal.
We'll take our first question from Brian <unk> from Craig Hallum Capital Group. Your line is open. Please state your question.
Good afternoon, Dan Lewis Congrats on the record results.
Thank you. Thank you.
Curious trends into July both revenue as well as margins and just kind of visibility and expectations I guess on what youre seeing.
On the casino side.
Well I'll tell you generally we continue to be pretty pleased with the business. So.
I'll, let that be I'll, let you read into that however, you will laugh.
There was obviously, a very very strong year as we reopened.
And.
And look it continues to be good as maybe the best thing to tell you.
That's a very short way of answering your butt.
No that's good.
Got it.
Be aware that we were fully opened and the third quarter last year. So the percentage increases will not be nearly as big as they were second quarter and second quarter.
Absolutely true.
Fair enough.
And curious on the tax side, you mentioned rolling out the slot system, and Nevada, any opportunity or thoughts around rolling that across the whole portfolio.
<unk>.
Net.
We've actually done that we've had it and Mississippi for years, So we're pretty familiar with it.
Although konami every year or 2 as an upgrade and it makes it better and better day.
Even have down the road.
Sure.
The ability for that machine and almost like your iPhone to recognize your face and so you won't need a card anymore. You could just sit on a machine and and play and then if you go somewhere else your points and credits will go to the other machine. So thats not rolled out yet, but it's pretty interesting some of the stuff they are working on.
And so we had and in Mississippi.
It was a pretty big investment for us to install it and.
Indiana, and Colorado, which we did.
Year, and a half ago and that we had just put it in and when the.
Covid forced us to close everything will that actually gave us an opportunity to really get up to speed on what the system was.
And how to use it and that's been part of.
The uptick and those 2 properties, so and now the only part of the company and that doesn't have it as northern Nevada, and put that and in the fourth quarter.
Helpful I knew the Indiana, and Colorado I want them to wear the same system was on.
And also on Mississippi.
Okay.
And it's a big deal you've got to open every single slot machine and change a circuit board inside of it tied into a server or some sort of its not it sounds easy to say well, we're going to put up those slot system and it's not it's a.
Big process.
Yes, what about cashless technology.
And rolling out.
Theres, some casinos resorts world et cetera that are kind of taken on accelerated approach to it any thoughts there.
I'm rooting for them.
I've been down to resorts world and some of the stuff. They have it takes a while for consumers to really link onto it.
And I remember when when MGM opened back on the 19 nineties. They had a section of their casino with the slot machines did not take coins it was paperless and and it failed and then a few years later IGT came out with with the ticket and take it out which is basically the same system or another variation.
On the same system and now and nobody is claiming customers are accustomed to that and so on.
And I think it will eventually will be cash.
Cash lists.
And resorts World is kind of the beta site for some of that and.
And how wonderful would it be if we could get rid of chips because there is a very expensive process of counting the chips and doing all that stuff and.
And if you could when youre done gambling at a table. If we can give you a tito ticket.
And you go away from the table with the Tito ticket.
Can redeem it.
Any of the normal redemption machines or sticking on a slot machine, whereas if you walk away today with chips from a gaming table and headed to the Cage you can't put those on the slot machines. So.
A lot of this stuff has come.
Coming down the road eventually.
And we will adapt it.
Pretty quickly once it's kind of a proven technology.
Dan and I go over the pros and cons of these systems all the time and.
Looking at our resorts 1 world 1 in particular the table game side I think is the more interesting side. When you start looking at the slot side, there's certainly benefits and you get from not having to drop all the slot machines on a <unk>.
Twice, a week or whatever it is that you do and reducing the amount of cash and you have just kind of sitting idle on the floor is there's certainly a benefit and that but if youre on a go to that resorts, where all the kind of now it's actually and want to play a slot machine is unfortunately still easier to put your cash and the slot machine and then to load up your.
<unk> E credits, and then think your phone and the slot machine and go through all of that jazz so.
We're kind of watching our sides of it and watching it very very closely table games is certainly very interesting would love to get the full casino on board, but.
But it's still early and that whole process, we're not quite there I mean at resorts World you have to open accounts and transfer money to it and then its cashless rate, but I think pretty soon.
And you'll be able to walk up to and machine and just venmo the money from your from your phone into the machine and when Youre done it and credit back into your bank account and that's.
That's not a technological hurdle.
As a regulatory hurdles that the regulator has to be on board with that and then.
Some of the fees that are.
Not to pick on venmo, but that sort of thing and fees that that with the amount of money and the moves in and out and a casino you can't have a significant fee.
But he has to have the same thing I remember remember when you used to go to stores and they'd say well no credit card transactions, less and $10 or something right and today you buy a cup of coffee at Starbucks for $2 and you've charged on your credit card. So so I think.
It's evolving and.
And it's a plus that look the bigger thing that's out there as you are going to have online gaming.
And I think Colorado, and Indiana, we will take it up pretty soon and we're on both of those markets and the experience and New Jersey and other markets is that.
A very big market bigger than online sports betting and so we're watching that.
And also think it will probably come to Illinois and.
And pretty quickly so.
So we're watching that.
1 more from me, Dan certainly and acquisition of when it.
It'd be fantastic, but any other M&A opportunities out there you guys have a lot of growth.
Just with shaman and a terre Haute marquee again, but anything on the M&A side.
And where you can bolt on 1 or 2 others.
We look at a lot of stuff.
And unfortunately, a lot of times when somebody is trying to sell something it's Scott.
Hair on it but.
But we did a couple of years ago growth Bronco, Billy's, which is now pretty important part of the company. So.
We look at all sorts of stuff with theirs.
Nothing.
To report today so.
And frankly.
From our point of view, if we just execute on what we have even if it's just chamonix forget about waukegan and forget about <unk>, if we just execute on Germany.
<unk> stock could be a homerun and you've run the numbers and share them with you or with your customers and.
And so we first and foremost don't want to screw it up and a lot of times. When you are looking at acquisitions, you're like well if you buy that at that price and then it turns out to be a dog.
And are screwed it up so it.
So we're pretty cautious about that stuff.
Couldnt agree more.
That's it from me good luck guys.
Okay. Thanks, Thanks, Brian.
We will take our next question from Chad Beynon from Macquarie. Your line is open. Please go ahead.
Hi, good afternoon, and thanks for taking my question.
Hey, I wanted to ask about.
And just broad returns on share many given the recent strength and the gaming industry and the overall improvement and.
Business models across the country have you changed your view in terms of what returns do you think you can generate.
The project and then also related to that with the Capex, how should we think about the cadence on when that's actually flowing through the balance sheet over the next 6 to 8 quarters.
Okay, Let me take the first yes go ahead.
And last 1 for you.
Yes.
Roughly speaking sales for this year, it's going to be somewhere in the ballpark of 50 million Bucks of span, it's probably a little.
Slightly on the lighter side of that and then youre going to get another $100 million on.
$130 million on spend.
And the year beyond that in 2022, depending on the timing of course, you can see some of that spend slip into 2023, and then you always get a weird game with the payables as we have hold backs for.
Waiting for work to be fin.
<unk> finished and.
With the gcs.
That time and can also pushed on those payments into 2023 and then.
And look based on the.
You have always different bid package as you go out and you compare with where they came in and they end up negotiating on each 1 and so on and.
And we're coming in like 10% to 15% above where we thought we'd be in that 180 number. The 180 number includes $19 million contingency, which is there and part for this but it's pretty early in the game to be drawing on contingency.
And we've also only bid out.
A small portion of the project.
But we are working furiously to kind of.
More of it out and get more of it signed up.
If I were to guess at this point.
And it's a guess because at the point, where we are more definitive we would have to.
And put more money.
And then the restricted cash.
And so on and so but my guess is it's not 1 area, it's more closer to 200.
And then if we decide to add the other rooms, we'd probably end up at something like $232.25 to 30 now on the positive side.
And we've always been very conservative on what.
What we think we can earn there.
We believe <unk> is making something like $85.90 million a year of <unk> with their 534 rooms highway and maybe north of that and the post Covid World, Yes, maybe if you look at.
The maximum bet limits.
Just went away and the last few months and the table game play and Blackhawk Rose.
50% right and Cripple Creek has less.
Decent hotel rooms, and so on but even in Cripple Creek. It was up like 35%, we have very little table game business at Bronco Billy's we don't have.
Many hotel rooms are almost none and our focus has always been slot machines, but chamonix will do table games and so it's entirely possible that this place can make.
$50 million to $60 million, a year on an investment of $230 million and.
And that's what's driving us to think well.
It's never the most efficient way to add the extra wing is to do it right now and you have the contracted there and everything and it's kind of easier to say to your electrical subcontractor and what youre already driving up on the hill putting in.
Wiring for this hotel were going to add this other wing so let's figure out what it would cost now and.
So it's something we're studying pretty carefully and I wanted to mention it because.
If we decide to go ahead, and if our board approves it.
We would be in front of the historical preservation Committee and in front of City Council I think they would look at it favorably but of course, there's never certainty on that so.
I wanted to make sure we kind of broadly said hey, we're looking at this so we don't end up and a situation where it ends up on a local newspaper and.
And our phones start ringing off the hook and what the holders.
No.
And we.
We've worked on and I guess to and specifically has worked on a lot of these products more than me, but.
And this number 10 and 11 day on how many have we done on that and I will tell you on the list of projects. This has always been the 1 where we look at it and beat down the numbers and.
And and still get a good return and when we look at this project. We have long said to ourselves internally, we like the upside from our numbers a lot.
We've always thought there was way more upside potential than downside risk on.
The return profile for this project so we.
We feel we feel quite quite good that has only been made better by watching what appears to be a very very good showing out of monarch and Blackhawk a very good showing out of Wildwood ex match and hotel and and I think what a lot of people forget sometimes as is black Hawk is what cripple Creek like Chris.
Cripple Creek today, as what Black Hawk was pre and Aerostar opening right. We don't have any 4 or 5 star product and so and when you run around that town and the potential for us to open with a very very nice product for what is a very good customer base and Colorado Springs.
And it's almost outsized we will stay on our part and a very big way is maybe the right thing to say actually the other data point to be aware of is that $1.8 million and <unk> and.
And the second quarter at Bronco, Billy's, we did that without any parking.
Construction has taken up the parking and so we're running valet parking at the curb on Bennett Avenue in front of us and part from the cars 3 blocks away waiver.
A self park lot as Youre coming into town and we're running a shuttle bus from it.
And.
And the customers are still coming and.
And Bronco Billy's is not exactly philosophy.
And this comfortable little place, but it's.
Xiaomi will be far nicer and significantly bigger and we've.
And we renovate bronco, billy's as well, but but it's pretty amazing the amount of business that gets done in Cripple Creek when you consider the poor quality of what's there.
So yes.
Great. Thanks.
And then at rising Star you guys posted record I believe record quarterly revenue and our I'm sorry record.
Yes.
Record quarterly EBITDA, and probably record margins at 25% so.
Looks like the team is doing good job there I believe the tax change still hadn't gone into effect can you just confirm that and then 1 that does go into effect, how should that flow through to margins.
And the back half.
Yes.
We always have to be careful when we address.
Record numbers at rising star because when it first opened back from the mid 19 nineties. Early 19.9 is the only casino and the region and it made huge numbers.
But this was certainly the best quarter in many years.
At the property or several years anyway and.
The lower tax rate just started right.
It started on July 1 but.
Because the accounting is always fun and what you have to do is you look at you and what you expect your <unk>.
Blended rate will be for the full year and.
And so you've already effectively seen that tax that average tax rate and the first and second quarters, So and on a cash basis. It just started but on on accounting basis.
On January 1st quarter, that's right that's right.
Great. Thanks.
Okay I'll pass the line thanks, very much guys.
Yes, Thanks, Jeff.
Ladies and gentlemen, once again, please press star 1 to ask a question that is star 1 on your time from Keybanc.
And we'll get that day.
A question.
Please go ahead Lee.
Great quarter.
Just to say it was a great quarter and our whole team deserves credit for it because there has been working hard.
And it's kind of a new attitude.
This is the new normal and trying to maintain this sort of trend.
And while we build out the Gemini and look at these other opportunities to grow the company further so.
And I'd like to thank everybody for your support and.
And we will continue to work hard on your behalf.
Thank you.
That concludes today's conference call. Thank you everyone for your participation you may now disconnect.
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