Q2 2024 Full House Resorts Inc Earnings Call
Ladies and gentlemen.
Operator: Greetings and welcome to the Full House Resorts second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lewis Fanger, CFO.
Speaker Change: And welcome to the full house resorts second quarter 2020 full earnings conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on the telephone keypad.
Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: It is now my pleasure to introduce your host Lewis Fango C F O b.
Please go ahead.
Lewis Fanger: Thank you and 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 are 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 in these forward-looking statements. Please see today's press release under the caption forward-looking statements for a discussion of risks that may affect our results. Also, we may make reference to non-GAAP measures such as adjusted EBITDA.
Lewis Fango: 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 do.
Lewis Fanger: For a reconciliation of those measures, please see our website as well as the various press releases that we issue. And lastly, we're broadcasting this conference call at FullHouseResorts.com, where you can find today's earnings release as well as all of our SEC filings. And with that said, I'll kick it off and let Dan fill in the gaps here. We'll start just with a quick comment.
Lewis Fango: For materially from the anticipated results in these forward looking statements. Please see today's press release under the caption forward looking statements.
Lewis Fango: For the discussion of risks that may affect our results.
Lewis Fango: Also we may make reference to non-GAAP measures such as adjusted EBITDA for a reconciliation of those measures. Please see our website as well as the various press releases that we issue and lastly, we're broadcasting this conference call of full house resorts Dot Com, where you can find today's earnings release as well as all of our SEC filings.
Lewis Fango: And with that said I'll I'll kick it off and let Dan fill in the gaps here.
Lewis Fanger: We do have some slides on the website. We recently had about 35 investors here at Chamonix in Colorado, where Dan and I are today, to show off the place. It's quite a beautiful property, as we heard from not just the investors that saw it but pretty much everyone that's walked through the door. We continued the phased opening of the property during the second quarter. 980 Prime, which is our high-end steakhouse, opened in April. The rooftop pool and portions of the spa opened in May.
Speaker Change: Well start just with a quick comment we do have some slides on the website. We recently had about 35 investors here in Chamonix in Colorado, where Dan and art and IR today.
Lewis Fanger: The balance of the spa is imminent, should be completed in the next two and a half weeks or so. And then we have a jewelry store that should open before the end of the third quarter. And with all of that done, the core Chamonix project will be complete. There's one other item that we do want to focus on, not quite yet, but there's an old restaurant, an old steakhouse that was at the old Bronco Billy's. We are eventually turning it into an Italian restaurant.
Lewis Fanger: But for the core project, we'll be essentially done here in the next quarter at the property. We did generate positive EBITDA. We certainly are looking for a lot more than what we made here in the most recent quarter. It was about $600,000 of positive EBITDA, but there are a lot of promising signs coming out of that opening. If you look back in January, we sold 2,100 rooms at Chamonix. That's ramped up pretty massively as the months have gone by, as you and we would expect. In June, we sold around 5,900 rooms, and here in July, we closed out with a little over 6,500 rooms sold. Gaming revenues at Chamonix more than doubled versus a year ago.
Speaker Change: To show off the place.
Lewis Fango: It's.
Lewis Fango: Quite a beautiful property as we heard from.
Speaker Change: Not just the investors thats, all but but pretty much everyone, let's walk through the door.
Speaker Change: We continue to face the opening of the property during the second quarter, a 90 D Prime which is our high end Steakhouse opened in April the rooftop pool and portions of the Spa opened in May the balance of the spies is imminent should be in the next two and a half weeks or so and then we have a jewelry store that should open up before the end of the third.
Lewis Fango: And with all of that done the core Chamonix project will be complete there is one other item that we do want to focus on Nox.
Speaker Change: Not quite yet, but theres, an old restaurant in old steakhouse than whats at the old Bronco Billy's.
Lewis Fango: Eventually turning that into an Italian restaurant, but but for the core product will be essentially done here in the next quarter.
Lewis Fango: At the property.
Speaker Change: We did generate positive EBITDA, we certainly are looking for a lot more than what we've made here in the most recent quarter was about $600000 of positive EBITDA.
Speaker Change: But a lot of promising signs coming out of that opening if you look back in January we sold 2100 rooms at Chamonix, that's ramped up pretty massively as the months have gone by and as you and we would expect in June we were around 5900 rooms sold in here in July we closed out with a little over 6500 rooms sold.
Speaker Change: Gaming revenues at so many more than doubled versus a year ago and maybe an interesting to look the thing to look at it is if you look at the city of Cripple Creek revenues. There grew by about $4 $5 million, we grew by about $5 $6 million and so we made up all of the city's growth and then some if you look at the states revenue.
Lewis Fanger: Maybe an interesting thing to look at is if you look at the city of Cripple Creek, revenues there grew by about $4.5 million. We grew by about $5.6 million, and so we made up all of the city's growth and then some. If you look at the state's revenue growth, it grew by $9.6 million. Again, we made up a significant majority of the whole state's revenue growth during the quarter. At Grand Lodge, we did extend our lease that was due to expire at the end of this year. We're pushing that out 10 years to December 31st, 2034. And I think that's really all that I had, Dan, so feel free to fill in some gaps there.
Speaker Change: Growth.
Speaker Change: They grew by $9 $6 million and so again, we made up of a mass.
Speaker Change: A significant majority of the whole states revenue growth during the quarter.
Speaker Change: Our market share in Cripple Creek has climbed from about 21% in July.
Speaker Change: I'm sorry in January to almost 26% in June the database continues to expand a year ago. We were collecting about 1000, sometimes 1500 sign ups every month in June that number was up to 4000 in July it's up to over 5000, new sign ups into the into the database.
Speaker Change: And that's important as we continue to try to just get worried out on the property one of the more promising things that we've seen here. So far is 21% of our sign ups are coming from the Denver market.
Speaker Change: We've long talked about how Colorado Springs will be the bread and butter for our business here and so because of that we've always talked about 1 million people that are that are in Colorado Springs Canyon City play blow Woodland Park, all those cities that are right around what.
Speaker Change: What we haven't really talked about is is Denver, especially those southern suburbs of Denver, which with Denver traffic a lot of those those southern suburbs are closer to us than they are to black Hawk and so that area is really gravy for us as we think about.
Speaker Change: The longer term potential for this property and the fact that that theyre, making up 21% of our new registrations into the database as a pretty promising start.
Speaker Change: On the opportunity side table games continues to be an area that we target for improvement year to date gaming revenues.
Speaker Change: So far the table game side have been about 5% to 6% of total gaming revenues that should be 20% or higher and part of that quite frankly as we've been in a town that for the past 25 or 30 years has been seen as a casino destination with nothing inspiring and what we have.
Speaker Change: For the first time as true luxury product, what we think is the nicest casino in the state beautiful rooms, a phenomenal restaurant, but we still have to overcome 25 years of branding and so we're still in the early innings of a chasing that.
Speaker Change: <unk> that mentality.
Speaker Change: American place in the second quarter, we had some summer seasonality that if you look back several years youll see at year end year out.
Speaker Change: June July August it is there.
Speaker Change: Revenues for us in the quarter were up about 34% EBITDA was up 84% and so.
Speaker Change: We've got a relatively fixed expense line there and so as revenues continue to climb you should see an outsized.
Speaker Change: Our bottom line impact.
Speaker Change: Our sports skins I'll just highlight for you really quick we had a little bit of activity. There. We did lose one skin during the quarter here in Colorado, and so we did have the acceleration of some market access fees.
Speaker Change: In the second quarter. We also had a two skins that previously were post paying their annual minimums.
Speaker Change: And I had had a we had not received payment for those annual minimums and so for the last several quarters. What we had been doing was effectively creating a credit reserve against the against the receivables balance. There are we settled that here in the third quarter as a part of that settlement, we will receive a $2.05 million payment.
Speaker Change: During the third quarter, we also agreed to reduce the annual payment amount.
Speaker Change: But we also are now getting that amount prepaid versus postpaid.
Speaker Change: At Grand Lodge, we did extend our lease that was due to expire at the end of this year, we're pushing that out 10 years to December 31 2034.
Speaker Change: And I think that's really all that I had to answer feel free to filling some gaps there yeah.
Speaker Change: I don't want to be repetitive with what Louis said, but but.
Speaker Change: But I would characterize it a little differently first of all what I want to make clear when Louis as we sold that many rooms, he means room nights.
Speaker Change: And if you do the math, we're running in July like 65% occupancy, which is built on weekends in Nashville during the week and we have a big push now to try to make sure. We fill every night of the week and we will eventually get there.
Speaker Change: It's typical of a new casino.
Speaker Change: But if you went back and looked a year ago.
Speaker Change: We were talking about American place, having opened in February and we were gradually extending the hours of operations that took as well to get approval to run higher table minimums, we were finishing elements like the race and sports book opened later, the Steakhouse didn't actually open until February of this year.
Speaker Change: Sure.
Speaker Change: We built building employee base and our customer list.
Speaker Change: <unk>.
Speaker Change: And since we lapped to February of last year, the revenues have been running up 30% to 40% above the prior year expenses don't rise nearly as much and so the income is up significantly and that's really the story of the second quarter. It was American place.
Speaker Change: <unk> made really good money in the second quarter. Its now one of the more profitable casinos in Illinois.
Speaker Change: And we think that will just continue to be the case and we have until.
Speaker Change: August of 2027 that we can operate to temporary casino, we intend to have the permanent casino done before that which means breaking ground roughly a year from now.
Speaker Change: And we have at least a year, probably more like 18 months to put the financing in place and we're confident we'll be able to do that.
Speaker Change: But I think if you think of where we were a year ago at American place, that's kind of where we are now in Colorado and so we are still opening things like Louis said, despite and he gets the things open and like we now have formal seuss's, they're very busy when we have them, we need about eight or 10. So we're.
Speaker Change: Trying to hire people we are hiring casino hosts we've hired somebody went on hire more sales and marketing reps, we have a new head of table games, who we hired from Fontainebleau, who had a long history with erez and he's terrific.
Speaker Change: We're hiring salon people. So there's all this stuff as we build and stabilize our employees.
Speaker Change: Base, but Russell building, the mailing list and all of that and so a year from now hopefully we're saying the same things that the revenues here are up 30% to 40% and then expenses are not up as much and we're making pretty good money and that would be the normal maturation of our casino and <unk> and.
Speaker Change: We're doing well.
Speaker Change: Silver slipper by the way had a rough first quarter, but a much better second quarter.
Speaker Change: We mentioned that John Ferrucci is retiring who's done it really since inception, and a and that's a well earned retirement and we adopted to promote energy from rising Sun to go back to put to the silver slipper, where she started but she has now been rising rents rising sun for quite some time.
Speaker Change: And that will be a nice smooth transition, there's always some benefit of having a new set of eyes.
Speaker Change: So well she.
Speaker Change: John is her mentor really.
Speaker Change: But bringing new energy and a new set of eyes.
Speaker Change: We think the silver slipper will continue to do well it used to be it was our dominant earnings contributor and it will continue to be a significant earnings contributor contributor but at this point. It's just one leg in a three legged stool and and so we will have Colorado missed.
Speaker Change: Mississippi, and Illinois as being the bulk of this company.
Speaker Change: And then of course, we make decent money at Grand Lodge with very little investment.
Speaker Change: And then we have Fallon in rising Sun are hanging in there and then the sports stuff.
Speaker Change:
Speaker Change: Liquidity wise, we're in good shape.
Speaker Change: Gradually using up the restricted.
Lewis Fango: Restricted cash to complete the last things here at <unk> in Colorado, We're almost done Lewis mentioned, a few things the parking lots are still temporary page we will finish that this this fall.
Speaker Change: And otherwise Louis covered it all.
Speaker Change: And I guess, that's it I think we're in good shape. The earnings are good were producing quite a bit of cash and AR and we're watching for an opportunity not immediately but somewhere out there when the bonds the.
Speaker Change: The bonds become callable in I think one or two in February they're callable at a higher premium today and somewhere between February of 2025, and maybe February of 2026 is when we would look to perhaps issue a new bond to pay off the old bond and end user.
Speaker Change: Some incremental money to go build the permanent American place, which we anticipate to cost about $325 million.
Speaker Change: There's other ways, we could finance it but it is our guests that that will be the least expensive way to do it we can always turn to the REIT since some of our competition have.
Speaker Change: But ultimately that's very expensive capital that you can't repay and so we still own.
Speaker Change: Either all of our real estate or where we have leases in every significant case, we have the right to buy out the lease and and so we have kind of a more traditional balance sheet than a lot of our competition does.
Speaker Change: Yeah happy to take questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.
Speaker Change: If you would like to ask a question. Please press star and one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star and two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before but I think the stock east.
Speaker Change: Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Speaker Change: Okay.
Speaker Change: Our first question is from the line of Ryan Macdonald with Craig Hallum Capital Group. Please go ahead.
Ryan Macdonald: Hey, good afternoon, Dan Lewis, Thanks for hosting US last month as well Yeah, you got it.
Speaker Change: And based on what whether they actually player not me invite them back and so there's kind of a cycling through people to try to help build a mailing list of known gamblers.
Louis: Louis mentioned, we have.
Louis: Fighting a little.
Louis: Image.
Speaker Change: And we hear it all the time Cripple Creek had become known as a downscale slot grind operation place.
Speaker Change: People walk in here and I heard it this morning, where I was showing the board of directors round and a woman from nowhere said Holy Cow would have terrific place. We had no idea. This was up here. The board accused me of planting here, but I didn't and.
Louis: And we hear that all the time and it's a little frustrating because like how many ads do I have to run in Denver, and Colorado Springs to say Theres, a new place up here, but fact is every new casino says that they're the best thing since sliced bread and most of them aren't and ours really is and so it takes time to kind of.
Louis: Overcome those prejudices and for people to realize that this is really a sliver of Las Vegas Plunked down in our historic gold mining town in Colorado.
Speaker Change: Animals don't even want to say the word cripple Creek, because where there's this negative connotation of Cripple Creek.
Speaker Change: And by the way that the Mirage had the same issue in 1989, no new casino would open in Las Vegas in decades, and it was all about cheap buffets and sleazy Entertainment and Steve Wynn reinvented the town with the Mirage I always thought of it.
Speaker Change: We have a database of customers that are accustomed to going to a product that's one star and quality rate. That's what this town has historically been and over the coming months, we continued to build that database.
Speaker Change: To fill those rooms, a year from now will be kind of lifting that database tied up if you will and so.
Speaker Change: Better players will start to get into those rooms weekends and then as time goes on from there will start getting better players and mid week.
Speaker Change: If you look at July as an example, we had a new revenue gaming revenue record in July I think we probably as I look over at Baxter I think we had a record.
Louis: Record in June right and so as every month goes by the revenues get better and better Jewel July was was right around 15 plus percent better than what we did in June on the gaming front and so look everything that we see is everything that we wanted to see in this building. It is beautiful it is unparalleled by any.
Louis: <unk> else in this city I would argue its unparalleled by anything else in this state.
Louis: And in the response.
Speaker Change: Number of times today and yesterday that people have said this is my new place.
Speaker Change: I've I've lost count is this casino is going to be doing everything that we expected to do you want to put it up most of the costs of running it we're already incurred so.
Dan Lewis: Thank you, yes, that's assuming they don't find any new partners, yes, yes, very good point Dan.
Speaker Change: Thank you our.
Speaker Change: Next question is from the line of Jordan Bender.
Speaker Change: It doesn't JMP. Please go ahead.
Jordan Bender: Great. Thanks for taking my question, maybe to just follow on the prior conversation good good to hear on the room nights.
Jordan Bender: On the weekend in Colorado, what are you seeing in terms of group and convention mix.
Speaker Change: Get those mid week rooms filled as well.
Speaker Change: Honestly, we're a <unk>.
Speaker Change: Little behind on where we should be we hired one woman.
Speaker Change: Two months ago I guess.
Speaker Change: One person sales force, we just hired a second the woman who was in charge of doing corporate meetings and the resort community Investees Park, just joined US a couple of weeks ago, we need four or five of these people. The broad more has 900 rooms and does a very large meeting and convention business and we understand they have 18.
Speaker Change: People in their sales and marketing office, we should have four or five so we're in the hunt to find more and that is.
Speaker Change: One of the secrets of fill in the midweek business now we do have some midweek business. We had a view of the state VFW Convention was here about a month ago and it was really kind of nice to have the place very energized during the week.
Speaker Change: I'm going to pick Las Vegas over San Diego every single time, it gets it hits us budget less.
Speaker Change: And so the growth of Las Vegas has come at the extent of the traditional hotel business in other markets. The same thing is true in the regional markets and so people don't quite recognize it but if you're like the Colorado Department of Court, Colorado Association of quartz Stenographers, who I ran into.
Speaker Change: Some time ago at Amira star they.
Speaker Change: They have an annual convention and if theyre thinking of having it at the Gaylord hotel by the Denver Airport or up in Black Hawk or here in Cripple Creek were going to undercut that Gaylord hotel everyday of the week because they don't have slot machines and so it takes us a while to get there, but we have a big competitive against adverse.
Speaker Change: Vintage against the traditional hotel business and we will get there eventually.
Speaker Change: Awesome. Thank you and then just my next question here for American place, it's running high 20% margin is really the trailing 12 months you know in the quarter flow through of 50%.
Speaker Change: Are there still cost levers to pull at that property to get the margin.
Speaker Change: Over 30%.
Speaker Change: Aye.
Speaker Change: What our leverage is as as American place matures as this place matures Chamonix.
Speaker Change: We will be one of the less Levered casino companies and then it's pretty easy for us to refinance our bonds, which mature in 2028 anyway, it's not like they have a long time to go and so you go refinance those bonds with enough extra money to fill in the gap and.
Speaker Change: And I think we've done quite well for bondholders both at this company and in our prior lives and so I think we have a good reputation and a bondholder community and I am confident that we can do that in pretty good terms I'll also point out that even the new bonds, probably on outstanding all that lumpy because of the.
Speaker Change: American place casino should make quite a bit more than a temporary and so even the new bonds are probably only out there until we refinance those at their first possible call date, and and bondholders loved that they get called out of the one bond and they get a new bond at a little bit discount to Tan we will negotiate over interest rate of course, we.
Speaker Change: But.
Speaker Change: Whatever that interest rate is we're not we don't anticipate paying it for very long.
Speaker Change: We.
Speaker Change: I'm trying to think of what I can add there in.
Unknown Executive: And then we open in August of 2027. Two-thirds of that $325 million would be spent in the second half of that two-year construction phase. So you can do a little spreadsheet to try to figure out how that falls in calendar quarters, but that's approximately how it works.
Speaker Change: Six months.
Speaker Change: So it's extremely back out some of it is post opening.
Absolutely right just just like here, we're still spending some money we've been open six months.
Speaker Change: Great. Thank you so much for taking my question.
Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from the line of John three at Seabee Rd. Our teeth is go ahead.
Speaker Change: Hi, This is Matt Marsh on for John.
Matt Marsh: San Louis Thanks, again for hosting us at Xiaomi in American place and thanks for taking my questions.
Speaker Change: Switching over to your same store performance trends from one Q have continued into Q2.
Spike your callout that silver slipper is showing improvement would be helpful to get your view on high level causes there if there's any property or market specific conditions or maybe something more broad base.
Speaker Change: Oh I don't know.
Speaker Change: Kind of anticipated somebody would say if we have a recession, how does that affect you and it's kind of like.
Speaker Change: Where regional Casino company, we generally regional casinos do pretty well in recessions.
Speaker Change: And the issues, we're dealing with are more like how come we can't get the tunnel machines to work properly in the spot because complaint.
Speaker Change: And so it's hard to think about what a recession means.
Speaker Change: I don't think a recession would affect us much.
Speaker Change: That's kind of what's behind your question.
Unknown Executive: Great, great. Thanks for that, guys. And as a quick follow-up, to the extent that some of the legacy portfolio has been made relatively less core with those new properties, as you put it, the three-legged stool, are you looking at potentially monetizing any of those less core assets for financing of the permanent?
Unknown Executive: If you just buy a billboard along the highway between Colorado Springs and Denver, a third of the people driving by are not old enough to gamble, and another third probably wouldn't choose to gamble. And so you're paying for a lot of eyeballs that aren't likely to be customers. So we're trying to focus in on people who are likely customers, maybe based on what magazines they subscribe to, what places they use ATMs, and how big the ATMs are.
Unknown Executive: There's a lot of sophistication these days in how you can target people and how you approach them. And if you turn your computer on in certain neighborhoods, suddenly there might be an ad. If your last name is Lee, like mine, the ad might be in Chinese, which would be a mistake, but it's something you do.
Unknown Executive: And so you were trying to get more and more focused because, listen, we have three major expenses. Payroll, right? And that's a matter of hiring the right people, and you want to pay them appropriately and treat them well, and turnover is expensive, so you want to try to reduce turnover. Second, there are gaming taxes, and that's baked in, and it's largely variable, but it's baked in. And the third is marketing, and marketing broadly defined, like are you buying them dinner at the 980 Steakhouse, are you advertising on TV, are you paying casino hosts, that's a type of marketing, and so on and so forth. And when you start looking at how do you get your operation to be more efficient...
Speaker Change: <unk> used it to some of our employees, it's like pulling up to Lake Geneva, and you want to go fishing and you have never been there before and you have no idea how deep the lake is or what type of fish. There are where they are what they eat or what sort of abate and you have to go out there and spend days, just casting around and trying a worm and trying and minto.
Speaker Change: Triangle spinner and in different parts of Lake and you're gradually figure out that there are walleye pike over in this little Bay I don't know why but that's where they are and it's kind of the same thing we gradually figure out that the people who live in Zion, Illinois for some reason like to Gamble and they come to our place and we need to fish, there a little more than that.
Speaker Change: What it's like to open a new casino.
Speaker Change: So I heard maybe a different question and there are two Aaron.
Speaker Change: So just like we're trying to change the mentality of what Cripple Creek is.
There it still.
Speaker Change: There's a similar.
Speaker Change: And that'll watchwords.
Speaker Change: Typically when people come to this town they they don't stay for more than one night and so one of the challenges. We found is is people are coming in on a Friday and checking out on a Saturday and then they are not checking out on a Sunday and so just as we're looking to upgrade the database and get more people into it here's off an active push to turn what would typically be a one.
<unk> stay into a two night stay where a three night stay.
Speaker Change: This is all stuff that happens just as time goes by so it's just the normal gives and takes but its out look this market historically it didn't have a room for you to state overnight at all and that's a big part of one of those branding things that we're still trying to get over.
Speaker Change: Understood. Thank you I appreciate the color on that it's.
Speaker Change: As a quick follow up.
Speaker Change: What is the competitive environment look like in Cripple Creek, and I know there really isn't any competition on your level. So maybe the answer is that none of this really matters, but have you seen any competitors, making adjustments to their strategies in response to you and how do you expect.
Speaker Change: Do you expect any changes as we move through the summer.
Speaker Change: I will tell you historically.
Speaker Change: Our principal competitor and I would.
Speaker Change: Characterized as Emma says friendly competitor because it's professionally run as a private company across the street called Triple Crown and.
Speaker Change: And so the two of us would kind of dictate the town of what should happen.
Speaker Change: The two most successful casinos in town.
Speaker Change: And Triple Crown is still quite successful there directly across the street and they are professionally run and in fact, we've heard we don't until we have that Italian restaurant opened that Louis referenced earlier, we often don't have enough food beverage capacity when our hotel was built and so we use one of our meeting room spaces as kind of a temporary buffet.
Speaker Change: We've heard one of our hotel is filled they have long lines at their restaurants across the street, which theyre happy to ads and and that's fine and so they had have had plans for a hotel that.
Speaker Change: They talked about but they don't seem to be actually building. It we think they should and we'd welcome it if they would.
Speaker Change: But there doesn't seem to be anything happening on it.
Speaker Change: Also across the street from US as the original century Casino and I think century is one of those companies might have been off a little more than they could chew. They had plans for a hotel at 1.2 and nothing seems to be happening at all.
Speaker Change: The other significant casino in town used to be called Wildwood and Tilman Fertitta bought it.
Speaker Change: Year, and a half ago.
Speaker Change: And change due to the Golden Nugget.
Speaker Change: And it's now one of the more successful ones in town.
Speaker Change: It was always like third or fourth and today it's.
Speaker Change: Advice for second after us and.
Speaker Change: Tillman is a good operator and he hasn't done much other than converted one of the restaurants into his salt grass steakhouse.
Speaker Change: But I expect he will improve it and I welcome them and.
Speaker Change: There are professional outfit, two and and will help grow the market. The real opportunity here is the gaming per capita out of Colorado Springs is about half of what it should be and so.
Speaker Change: I expect this market to grow significantly we're part of that I think tilghman will be part of that.
Speaker Change: And Triple Crown are probably be part of that of.
Speaker Change: The other one in town, there's a place called the double Eagle, it's old it's run down.
Speaker Change: The two owners the second of the two owners has just died suits and probate.
Speaker Change: And it's like gaming capacity, but there's nobody in there.
Speaker Change: And then Theres two small places.
Speaker Change: Which are now controlled by micro godson, and some partners and they they they freely admit that they want to be the place where a customer who are our employees gamble are there. They are quite small and will probably be a fine investment for them, but they're very small that's the entire market and and.
Unknown Executive: It would not be easy to assemble a piece of land to build another big project in this town. It's a bunch of small lots. It took us years to do it.
Speaker Change: It would not be easy to assemble a piece of land to build another big.
Speaker Change: Projected in this town.
Speaker Change: It's a bunch of small lots it took us years to do it.
Speaker Change: And really I think our principal competitor is really a man.
Speaker Change: Monarch, and Blackhawk, which is a very high quality casino that does a very good job and they're making as I understand it and they don't breakout Reno from they only have two places right now in Black Hawk and.
Speaker Change: The Reno one has been there forever. So you can look back at what they used to make in Reno and look at what they're making today and interpolated approximately what theyre, making in black Hawk and its at least $100 million a year.
Speaker Change: That's what items and they have 500 rooms, we have 300 rooms, and we benchmark an awful lot of what we do against what they do because.
Speaker Change: There's no sense in benchmarking against the other places in Colorado Springs that would be like.
Speaker Change: Four seasons, saying, we need to match what Hampton Inn does right. So you look down the road at the Ritz Carlton and say, we need to match the Ritz Carlton and so are our steakhouses at least as good as the one at monarch or prices are about the same as monarch. Our website, we'd look at what monarch does and we've tried to mirror monarch.
Mr. Farrar: And when I talk about hiring casino hosts I keep telling people go park yourself up monarch and don't come home until you hired two or three of their casinos and I know Mr. Farrar. He is listening and yes, I'm going to try to hire your casinos and.
Speaker Change: There we are.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: There you go.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Thanks, Dan.
Speaker Change: You got it you probably have time for one last question.
Speaker Change: Well I say I'd say, they're a joke in the Mr. Ferrara. He does a very very good job in the Denver market is also under capitalized and we.
Dan Lewis: We do have the nicer casino Dan.
Speaker Change: It's a very nice win too.
Speaker Change: Oh I'm sorry last question.
Operator: Our last question is from the line of David Hargreades with Barclays. Please go ahead. Hi, I want to echo what David said.
David Agreed: Our last question from the line of David are agreed with Barclays. Please go ahead.
David Hegreness: Hi, I wanted to Echo what everybody said, thank you for hosting in Chamonix is.
Speaker Change: Absolutely Fabulous.
David Agreed: You guys have a coupon coming up on the 15th I'm. Just wondering is the escrowed cashless 13.6 are you able to use that for the coupon and just curious is that a permitted use.
Speaker Change: I know that that that cash is a is really for the for fresh nominees purposes, but are.
Speaker Change: We feel fine, making that that August 15 payment will be made just mine.
Speaker Change: Okay. Thank you very much.
Speaker Change: Great Congratulations and good luck.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Gentlemen. This concludes our question session I would now have the conference over to Daniel Lee President and CEO for his closing comments.
Speaker Change: Yeah.
Speaker Change: I just want to thank everybody for your support and.
Speaker Change: Sorry, if I picked him Mr for out here, a little bit, but I mean, it in a nice way. He does have a nice hotel and his success has encouraged us and.
Speaker Change: And even the fact that his.
Speaker Change: His company focuses very well on two key properties.
Speaker Change: And I take that as you know if all we do is focus on three key properties. It should not hurt Arab valuation the portfolio managers can diversify on their own we don't have a need to be everywhere all the time.
Speaker Change: Just make sure we do it right and that's and he does it right and we hope to do it.
Speaker Change: Somewhat as well as he does so thank you very much everyone.
Speaker Change: Thank you.
Speaker Change: That's helpful Health Rethought that has now concluded. Thank you for your participation you may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.