Full House Resorts, Inc. (FLL) Earnings Call Transcript & Summary

Good day, and welcome to the Full House Resorts Inc. Annual Meeting of Stockholders. I would now like to turn the conference over to Mr. Brad Tirpak.

Good morning, ladies and gentlemen, and welcome to the 2020 Annual Meeting of Stockholders of Full House Resorts. I'm Brad Tirpak, Chairman of the Board. At this time, the Full House Resorts Annual Meeting of Stockholders will come to order. Before attending to the formal business at hand, I want to take this opportunity to introduce to you our current Board of Directors who are all present on the phone today. Joining me virtually are Ken Adams, Dr. Carl Braunlich, Lewis Fanger, Dan Lee and Kathy Marshall. Each of the directors has been nominated for reelection to the Board. In addition to Mr. Lee and Mr. Fanger, the other executive officer joining us on the call today is Elaine Guidroz, our Vice President and Secretary and General Counsel. Nikki Etherington and [ Alisa Guill ] of Deloitte Touche, our independent auditors, are also on the call today. Ms. Guidroz, the company's secretary, will act as the secretary of today's meeting, too. On your webcast screen, you will see or you should see a detailed agenda for today's meeting. It's our intention to conduct this meeting in accordance with this agenda. You will also see the procedural rules for governing today's meeting. Ms. Guidroz will now address the formalities of today's meeting. Elaine?

Thanks, Brad. Good morning, everyone. This meeting has been called in accordance with the provisions of Delaware General Corporation Law and the bylaws of Full House Resorts. April 14, 2020, was fixed as the record date for the determination of stockholders entitled to notice of and to vote at this meeting. Broadridge Financial Solutions has provided an affidavit to the mailing of the notice of the meeting, which affidavit states that on April 23, 2020, the notice of the meeting, together with the proxy statement and form of proxy, were mailed by Broadridge to all stockholders of record as of the record date at their respective addresses as shown on the company's record maintained by American Stock Transfer. This affidavit is available if any stockholder wishes to examine it and will be filed with the minutes of this meeting. I also have a certified true and complete list of the stockholders entitled to vote at this meeting, showing the address and number of shares registered in the name of each stockholder. This list is dated as of the record date of this meeting. The list has been kept with the company officers subject to inspection by stockholders during normal business hours for at least the past 10 days. It is also available throughout the course of this meeting via the live webcast screen for inspection by any stockholder during this meeting. As of the record date on April 14, 2020, there were 27,075,962 shares of the company's common stock outstanding and entitled to vote at this annual meeting. I, Elaine Guidroz, have been designated as the inspector of elections of this meeting. As the inspector of elections, I can confirm that a quorum is present, and I declare that this meeting is duly qualified to transact business. Three matters are scheduled to be voted on at this meeting, and the polls are now open to vote on the following proposals. The first is the election of 6 directors to hold office until their term shall expire or until their successors are duly elected and qualified. The second matter is ratification of the appointment of Deloitte & Touche as our independent auditors for 2020. The third matter is an advisory vote to approve the compensation paid to our named executive officers in 2019 as disclosed in the proxy statement. If anyone has not voted or like to change your vote, you may do so now prior to the polls closing if you are appropriately logged into our webcast with your control number. If you've already submitted your proxy card and do not wish to change your vote, you do not need to do anything at this point in time. The meeting has been called to vote on the following matters. Proposal 1. The company's Board of Directors has fixed a number of directors that will constitute this Board for the next year at 6 persons. The following persons have been nominated to the -- by the Board of Directors to serve as directors until their term shall expire or until their successors are duly elected and qualified. Kenneth R. Adams, Carl G. Braunlich, Lewis A. Fanger, Daniel R. Lee., Kathleen M. Marshall; and Bradley M. Tirpak. The Board of Directors recommends a vote for each of these persons to be elected as a director. Proposal 2. The Audit Committee of the Board of Directors has appointed Deloitte & Touche to serve as our independent auditors for 2020. The Board of Directors recommends a vote for ratifying their appointments. In addition, representatives from Deloitte available today by this webcast to discuss any questions that you might have. Proposal 3. The Board of Directors recommends an advisory vote for the 2019 compensation paid to the company's named executive officers as disclosed in the proxy statement. Please be aware that the polls will be closing. If you have not already done so, please vote via the webcast screen. [Voting]

All stockholders present...

We'll wait. Hold on one second, Elaine. We'll just give people a couple more seconds just in case they want to enter their votes.

Sure.

And if they have any possible questions on those 3 topics, they can send them in right now as well, but we'll give them a couple of seconds here. And I don't see anything. So go ahead again, Elaine.

Okay. All present -- excuse me, all stockholders present virtually or by proxy have now had the chance to vote, and the polls are now declared closed. As inspector of elections, I report that the stockholders have voted in favor of all the items on the agenda for today's meeting. Mr. Chairman, I hereby certify the following results of the voting of stockholders of Full House Resorts. So the following persons have been elected as directors of the company to serve until their term shall expire or until their successors are duly elected and qualified. Kenneth R. Adams, Carl G. Braunlich, Lewis A. Fanger, Daniel R. Lee, Kathleen M. Marshall and Bradley M. Tirpak. The firm of Deloitte & Touche has been approved to serve as our independent auditors for 2020. And with respect to the advisory vote, the stockholders voted in favor of the 2019 compensation paid to the company's named executive officers as disclosed in the proxy statement.

Thank you, Elaine.

Mr. Tirpak, I'll turn it back over to you.

Thank you, Elaine. Just to clarify for the people listening, the gentleman who jumped on and was waiting for the vote to be extended a little bit was Lewis Fanger, our CFO. For those of you who don't know him, that was who was speaking. If there's no further business to come before the meeting, I now declare the formal part of the Annual Meeting of the Stockholders of Full House Resorts to be closed. At this time, I'd like to provide you the opportunity to ask any questions you may have. Prior to taking questions, Ms. Guidroz will begin with the required legal and procedural announcements. Elaine?

Thank you. The statements which follow are not an offering of securities nor a solicitation for the sale of purchase of securities, which can only be made by formal prospective. The following statements made for the Board and company officers are made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. We may make certain statements that are forward-looking, such as statements regarding Full House's future results and plans and anticipated trends in industries and economies in which Full House operates. These forward-looking statements are the company's current expectations, and the company will make no effort to update these expectations based on subsequent events or knowledge. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including that our revenues may differ from that projected; economic trends and conditions may change; that governmental and court approvals may not be forthcoming or may be delayed; our growth strategies may not be realized; our development, construction and/or potential acquisition of new facilities may not occur; and trends in the gaming industry may be negative. We may not have access to capital, including the ability to finance future business operations or potential acquisitions. There may be adverse changes to federal, state and local laws and regulations including tax, environmental and gaming license, legislation and regulations and other risks detailed in our documents filed with the SEC. Should one or more of these risks or uncertainties materialize or should our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in any forward-looking statements made by the company in these communications. As mentioned before, on our webcast is a summary of the procedures that we will follow. We have established these procedures to provide everyone an opportunity to ask questions in an orderly fashion. If you wish to ask a question, you may do so via the webcast screen. Only shareholders as of the record date that are logged into the webcast with their control numbers are permitted to ask questions. Please make your questions brief. And if you have additional questions that cannot be addressed during this question-and-answer period, company representatives will be happy to talk to you by telephone. I will now turn it over to Mr. Lee, our President and CEO, to respond to any questions. Dan?

Well, I'm hearing, I mean, the obvious question. We're open in Mississippi, and we're doing quite well. We did have a tropical storm for 2 days, but some graphic video you can find online of waves going -- crashing against our pool and going under our building. But the damage we had was actually quite minor, and the casino never closed. We obviously had a couple of days where revenues weren't great. But apart for those 2 days, results have been quite good. And we've now been opened 5 or 6 days in Northern Nevada. Results are not as strong as they are in Mississippi, but they're not bad. And now these are very early periods on both. Our 2 remaining casinos both open next week in Colorado and Indiana. Colorado is the 15th, and Indiana is the 14th, if I recall.

No, no. Both 15.

Both on the 15.

On Monday, yes.

Okay. Both on the 15th and the morning. So we're rushing around getting ready for that. At which point, we'll be fully open. On the sports betting, we have 6 contracts, and we start earning fees, and the fees are a percentage of revenue, subject to a minimum amount, and the sum of the minimum amounts is $7 million a year. And one of those 6 contracts started in December. The second one started last week in Colorado, and that's the Smarkets folks. And we believe all 4 of the others are working hard to try to be up in the next several weeks. And it's kind of obvious why they should be once the NBA announced that their way of ending up their season starting July 31 with games being broadcast out of Orlando and having kind of a special season for them that goes from end of July until November. And then now you have the NHL, the Major League Baseball. Football is saying they're going to do their regular season. So it's going to be a very exciting second half of the year for professional sports. A lot of that will be done with empty stadiums, but you'll be able to watch it on TV, and you'll be able to bet. And it's interesting. In Colorado, the first month of sports betting, they allowed it beginning in early May. And for the month, there was $25 million bet on sports betting in Colorado, the very first month. That's a big number. I'm not sure what they were betting on, like Ping Pong in Ukraine or something. But without a lot to bet, Colorado is off to a good start, and so I think all the players are trying to get up and running as quickly as they can. And that $7 million is pretty material to us. Recognize there's no maintenance CapEx on that. So that -- very few expenses. So that pretty much drops to our bottom line. And if you look at the rest of the company, we do have maintenance CapEx. So the sports bets come pretty close to doubling our free cash flow, and they're coming online. So we still have our challenges. I think some of what we've been dealing with has been pent-up demand. Question is where does it stabilize in a world where the national unemployment rate, is somewhere around 15%? You kind of expect that to bite at some point. Just anecdotally, it seems like a lot of our older clientele are staying home, which is not surprising because they're the most vulnerable to the virus, and the virus is still out there. On the other hand, our younger clientele are, in many cases, unemployed and getting well paid with stimulus funds and unemployment money. And so we seem to be doing pretty well so far. We'll see how it progresses as the summer goes on. So we have been very careful to control our costs. We are operating with significantly less payroll than we had before the pandemic. And so I think if anything, the revenues we've had to date, it's a very short period, have been higher than we forecast, and our payroll is below what it was historically. So for this very short period of time, at least in Mississippi, I think we're more profitable than we were before. And in Northern Nevada, June is an off-season period anyway. So -- and it's pretty early to say whether we're more profitable than we were before or not. But Mississippi is our most important property, and it's doing well. So -- and next week, we're happy to get the others up and running and most of our employees back. And company -- I kind of feel like that the horse that's getting up off the ground and he's on 3 feet yet, and he's on -- he's got one more foot to go, and then we can go trodding on down the road. So any questions?

Let's hold on one second, Dan, while we look.

The question is, are we going to add any directors to the Board? As many people know, we had one director who resigned, and we have another director who has chosen to retire as of this meeting. And so we have a nominating governance committee that's been studying it. We have several good candidates, and that'll be a discussion that we'll have at our Board meeting after this. But the ideal size Board is probably 7, 8, potentially 9. Six is a little bit skinny, especially when 2 of the 6 are insiders. But we're at the -- the proxy advisory services kind of look askance if more than 1/3 of the Board is insider. So if we were to lose one of the 6 and it not be Lewis or I, then we'd probably get smitten by Glass Lewis or ISS. We got a very high rating from ISS, and we'd like to keep it that way. So I think my personal preference would be to add 1 or 2 directors, but that'll be something the Board will discuss at our Board meeting later today. Second question. From a capital allocation and strategic standpoint and thinking about the path forward, how was the company and Board thinking about the competitive environment and use of capital? Specifically, the company spent the last 5 years trying to rehabilitate the balance sheet so the casino and hotel project in Cripple Creek can move forward. Efforts in various states where RFPs for new licenses never materialized for a variety of reasons. But those situations are seeing well-financed competitors in entrenched positions, which seems the same situation in Illinois. Moreover, other competitors financed through private equity or partnerships are engaged in more acquisitions to fuel growth. How do you think about the Cripple Creek project and Waukegan opportunity from a capital allocation perspective versus looking at the growth situations that might not be as expensive or prohibitive with respect to costs? Boy, there's a lot in that question. But this is a very different world. I mean we came out of -- you're moving along on a certain strategy, and all of a sudden, every state requires you to close. We're -- being in this business and having a casino along the Mississippi Gulf Coast, we're familiar with hurricanes. And every now and then, you'll have a hurricane. You're forced to close, 1 place out of 5. And then another year, maybe we don't have a hurricane, but the Ohio River floods, and we're forced to close for 2 weeks in Indiana. Never have we been forced to close all 5 at once. I mean in my entire business career, I've never seen a casino company or a restaurant company or so forth where everything is closed all at once. And suddenly, you have to start thinking differently. And you think, well, okay, I still have to pay my interest expense. I still pay utility costs. I still have to pay real estate taxes. And you need a core set of employees, and you need security guards or people will break into your casinos and so on. And so we very quickly changed mode into survival, to be honest. And imagine you're hiking across the Sierra Nevada mountains or something, and everything is going well. And you got a goal in mind, and you're going to climb Mt. Whitney or something. And then all of a sudden, freak snowstorm comes in. And you got -- and by the way, it's happened to me once. And you have 18 inches of snow around you, and you don't have the right gear. And you're not -- you're no longer thinking about climbing Mt. Whitney. You're thinking about how the f*** do I stay alive. Sorry, my language. But it's like your survival, and that's what we've gone through. And I think we're at the point where the snow has melted and we're drying off and we're trying to figure it out. And -- but this has happened, and you look around and say, "There are opportunities. There are companies that haven't weathered this as well as we have. Is there somebody out there that might be an opportunity for us?" That's first question. It may not be, but it's a question. Second, do the customers come back? That's probably the most important thing. Do the customers come back? Third, what do the capital markets do? Do those come back? It's interesting that some deals have gotten done. There were a few weeks where no deals were getting done, understandably. But if you're a lender, you look at this industry a little different now because as a lender, you never before saw an entire industry shut down. You'd have individual casinos and so on. Now all of a sudden, there's a risk factor you hadn't really thought of, so you could end up having the whole place closed down because of a pandemic. Does that affect lenders' willingness to make loans to this industry, where all of a sudden -- whereas something like supermarkets -- well, you can have a terrible pandemic, and 100,000 people can die. But the supermarkets keep rolling right along. So we need to see what the capital markets are. I don't know. But -- and obviously, when you look at that hotel, we canceled the parking garage in order to conserve cash to make sure we can survive. Now it happened to be in a good spot. We had already moved all the utilities. We had mostly created the site. In fact, we're pondering now for a modest sum of money, like literally $100,000. If we can get city approval, we could put crushed gravel on that site and have a very convenient surface parking lot for this summer. And it might be worthwhile to do that for this summer, and that would not impede us in any way from resuming building the parking garage. But we were building the parking garage as step one to build the hotel. We had not yet raised the money for the hotel. And so it's kind of like we would still like to build it if it makes sense, but it may be some time before we know whether it makes sense or not, and there might be better opportunities somewhere else. I mean, frankly, when our stock was briefly at $0.50 a share, I was sitting there thinking, boy, I wish I didn't have debt covenants that blocked us from buying in stock because at $0.50 a share, I would have wanted to. And so the -- so there's a lot of different things we're looking at. Now Waukegan is quite a different thing. The state of Illinois had created a new license, and they were going with that. And it created a bunch of new licenses, and we studied it and determined that Waukegan was the best location. And it was an RFP process, and so they're looking for who could do the best deal for them. And it was a pretty accelerated process, and so we got involved. And it was similar to New Mexico, what, 2 years before that had done something in the last license in New Mexico. So as an industry, this is kind of a maturing industry. It's not so easy, like back in the 1990s when we built stuff in Las Vegas, everything worked. Well, nothing's worked in Las Vegas since 2004. Why? Because there's 65 travel casinos in California that do $8 billion a year in revenue. And so this is -- Las Vegas is a very much maturing market. Doesn't mean you can't find ways to make money here. Like the Blackstone folks bought Cosmopolitan at a very good price, improved the management of it. And I think they'll end up making very good money. But that was because they bought a place for $1.5 billion that had $4.3 billion into it. If you look at Deutsche Bank's position, they didn't do well. And yet when you look around, the people in California are gambling $375 per capita. People in Washington -- in the state of Washington are similarly gambling $375 per capital. And in Colorado, the number is less than half of that. And that's why there is an opportunity there to do something. We've assembled the land and the entitlements and so on, and we can build something in Colorado that would be very successful because that is not a mature market. It is still very much has a lot of growth potential. No, we're not double parked. I mean we're not going to go borrow money at 25% to build it because that wouldn't make any sense for our shareholders. But if we can find a way to do it on terms that make sense -- and there's lots of ways you can do it. You can do it with partners, you can do it in project financing or you can just do it later when the company is a little bigger. So -- but it is an opportunity that belongs to us. Now in the case of Waukegan, the state said they're going to give away a winning lottery ticket. Whoever gets the right to build that casino in Waukegan, that's a valuable right, and they're not charging you for it. I mean you got to pay a bunch of taxes and everything else. But even taking into consideration of those taxes, they're giving away a lottery ticket that we know to be a winning lottery ticket. Why would we not raise our hands and ask for it? And frankly, this management team has built about a dozen casinos all of whom have been successful. We know how to do it. We know how to analyze the market and so on. So when that came along, we raised our hand. And there was a city RFP process. We designed a place. We made a presentation. The city's consultants said we were the best proposal in every feature, except that we're a small company and it's a big project. And that was our only downfall. And so we are 1 of 3. I think we have the best proposal for them. Now the question comes up, how do you pay for this? Well, we were already looking for partners. We were dealing with 3 partners before the pandemic hit. One is a financial party. The other 2 are other casino companies. A potential fourth partner called me yesterday. And I think we can partner this with somebody who brings heft and some experience and do it in a project finance way. Frankly, that's what we did for the Borgata in Atlantic City when I worked with Steve Wynn and also for what is today Park MGM. Those were project finance deals where Mirage put up a sum of money and the partner put up a sum of money, and all the rest of it was project financed. And that allows you to build a significant project with a modest investment, and I believe that's what we will have to do and what we will want to do in Waukegan. And it's a good enough opportunity. Nobody can show up now. The deadline has passed. It's down to three parties, and ours is kind of the cleanest proposal. Now if we can find the right partner so we can put to rest the -- how do you pay for it issue, then I think we're in a pretty good shape there. And I think we can make money for our shareholders without putting the company at risk. And just some of you may not know, but before I joined Full House, Lewis and I had a private company, and it was similar. The state of Louisiana, it was -- had an RFP process for the last license in Louisiana. We went and obtained the license. We made the best proposal. We beat Penn National and some other group, and they chose us because we had the most creative proposal. We didn't have a damn thing. The company was capitalized with $100, and they chose us because it's hard not to go for the biggest dream. And I thought, okay, they just chose the $100 company. Now we got to figure this out. We had to win a referendum. We had to tie up the land. We had to fight off some lawsuits. And we got everything ready to go, and we had arranged $500 million through Jefferies and Morgan Stanley to go build this thing. And Ameristar called us up and offered us $32.5 million. We were in at $12 million. And we considered, do we borrow $500 million and swing for the fences? Or do we declare victory and pocket $32 million or $20 million after repaying the $12 million? And we debated it. And ultimately, we decided to declare victory with just the risk/reward relationship was such that, that was the right thing to do. Now with hindsight, that property, we were forecasting it would do about $80 million of cash flow. It's doing $115 million. So 2020 hindsight, we shouldn't have sold it. But nevertheless, I've done both. And so when a state is doing an RFP process to allow a casino to be built and we run the math and say that's a good opportunity, let's raise our hand and see if we can get it, and then we'll figure out how to make money off it later. We'll do that, and we'll continue to do that. And because I think it's good for shareholders. So that's a long-winded answer. This is a different world. And the capital -- like deals are getting done, but they're really expensive. I mean companies that previously borrowed money at 4% and 5% are paying 7% and 8%. And so I think if we went to market today, it would be pretty expensive. But those markets are firming up pretty fast. And so our debt -- before the pandemic, we were studying the possibility of refinancing our debt, and we thought we could save some interest on it. Obviously, today, I don't think we could refinance our debt cheaper. But it's possible that a few months from now, that will change, especially as the sports books come on, as our business recovers and so on. One way to think of this pandemic, which is worth thinking. I mean we've basically been closed for 3 months from the middle of May to the middle of June. The first month cost us $5 million, about half of which is severance for the 1,600 employees we let go. We paid most of them 2 weeks' pay basically. And then from there, it's about $3 million a month to pay our interest expense, real estate taxes and so on. So about $11 million. That's what it costs to be closed. And we probably -- this is not a busy time of year for us in the spring, where summer is seasonal with several of our markets. But it probably cost us the $3 million or $4 million of foregone income. So the whole pandemic is like a $15 million hit to shareholder value. The PPP loan, which we qualified for, is a government subsidy, really, a grant of $5.6 million against that. Because as long as we apply that to pay our employees, to bring our employees back to work, and we are applying it, and they've now extended the period of time for the measurement period at which you can use it, a large chunk of that will probably be forgiven, if not all of it. So in effect, the government mandating us to close cost us $15 million, and maybe 1/3 of that comes back through the PPP system. So $10 million is $0.30 or $0.40 a share. Our stock was $3.50 a share. Maybe the whole pandemic cost us $0.40 a share or something, and that's my view of it. Now we got to get back to where we were, and we're trying to do that. So there you go.

Yes. I think the only other thing to add to that, Dan, would be, as we kind of sit here looking forward, 2020, obviously had a blip here with the shutdowns. We're beyond excited for Monday to come by because Monday is going to be the day that all 5 of our casinos will have reopened. And from there and then looking into 2021, I'll tell you, 2021 really could be not that far off from what we would have thought pre-closure, to be quite frank. We'll see how it all shakes out. But the nice thing is with all 6 of those sports betting contracts coming online, what people forget sometimes is there is a stability to those contracts that you don't -- or more stability to those contracts than you would get from kind of normal day-to-day operations because we have these contractual minimums within them all. And so it's an interesting time. It's a good time, but there's still growth even with that -- with the blip of the closure as we look out a year or 2 beyond.

Yes. The other thing that is actually positive out of this, obviously, this is creating financial stress in a lot of state budgets. And I think that's going to open up some opportunities, and it's twofold. I think you'll have some states legalized that don't have casinos currently. And I know like Virginia is looking at it. Georgia is looking at it. And there'll be a few new opportunities to win the new states, and we will look at that. And the other thing is if you look at Atlantic City, which is pretty interesting, they have had online wagering, where you can literally play slot machines on an iPad. They've had it now 3 or 4 years. And then they've had about 2 years of online sports betting. And they have grown to be significant businesses. I think in 2019, the online wagering was something like $450 million, and the online sports betting was another $250 million, if memory serves me correctly. And the casinos in Atlantic City have grown their revenues over that same time frame. Not very much, but they have shown growth. And so the overall gaming market has grown a lot. And I think there's a really good chance that states like Indiana and Colorado and maybe even Mississippi will allow online wagering or online sports -- well, we already have online sports betting in Indiana and Colorado, but not Mississippi. I think you're going to have that open up. And in almost every -- well, in all but one case in this country, it has to be tied to the brick and mortar. Those are the companies that are already licensed, the companies that employ a lot of people. And so when a state looks to consider it, it ends up being -- you can have online wagering, but it has to be tied to a brick-and-mortar facility. The one exception is the state of Tennessee, which has mobile sports betting and no online -- they do not have any brick and mortar. So they were the exception. And so I think that could be a really good opportunity for us in the not-too-distant future, as well as potential legalization in other places. And so that's -- I guess that's my thoughts.

There's actually a question that's kind of partly on that and is a little more full, Dan.

Well, the -- yes, what are your thoughts regarding online casinos being legalized versus just online sports betting? Why would you partner with online sports betting partners? Do you need to do so for online casinos? Do you think online casinos with slots will happen faster because of this pandemic? I think I already answered your last question, which is yes, I think it will have it faster. And I think the mobile sports betting, people get used to this that, hey, this isn't so bad. It's not so bad that people are making bets on their phone. The sky didn't fall. So -- and I used to think -- I couldn't understand why anybody would play a slot machine on an iPad, but I realize they do. And now that I think about it, like if your grandmother is in a nursing home or an assisted living facility but she likes to play slot machines, well, she can do it on her iPad. And so you see people doing it. My own mom is 90 years old, and she plays Sudoku all day long on her iPad. So if she were a slot player, she'd be costing me a lot of money probably. But -- and then why did we partner? Well, they're slightly different businesses. In the sports betting, what's a little disconcerting is you have really a -- the bets are concentrated in a relatively small number of events. The NFL is probably half of all sports betting at least. Might be as much as 2/3. And the Super Bowl alone is probably the single biggest event of the year, right? And so for example, we are in Colorado, so we can have mobile sports betting throughout Colorado. You don't ever have to even be in our casino. You can live in Denver, sign up on our website and make bets. If the Denver Broncos get into the Super Bowl, our customers are all going to want to bet. And if it's the Broncos, say, versus the Patriots, we don't have a casino in New England. I don't have anybody making bets on the Patriots. Now you can offset that. You move the line, and then you'll attract bets from the other side. But then we would be offering worse odds for people living in Denver than our competition is. And that's not a good situation, right? And so we don't want to have an unbalanced book, and we don't want to offer worse odds than our competition. So we chose to partner with people who are in that business. It's a little bit of a complex business, and there are a dozen companies who are already in it and do a good job. And some better than others, and there are some who are getting in now, who I think are going to do well. And so we chose from that risk factor. And just to give you a simple example. As we made that decision, it wasn't easy because there's some people in this company who were arguing that we could take that risk. The -- we have a small sports book in Mississippi that's in the casino. And literally, it's like 200 square feet. But we are the closest place to New Orleans and Baton Rouge for people to make sports bets. It's not yet legal in Louisiana. We're an hour and a half away from Baton Rouge, where the LSU University is. And they won the NCAA Football Championship, and we lost, I think, $180,000 that afternoon. Because all of our customers bet on LSU, and we didn't have enough people from Alabama betting on the other side, right? And $180,000 is -- I mean we're a small company, but we can deal with $180,000. But it gave me some insight of the risk if you had mobile betting throughout Colorado and the Broncos were in the Super Bowl and won. I mean, ironically, I'd be sitting there hoping that our hometown team loses. And so on that, just because of a risk factor, it's very hard for a small company to do it on their own. Now online wagering, completely different. This is somebody sitting in home playing a slot machine on an iPad. You can license those games from Konami and Scientific Games and so on. They'll give you the software. And there's other companies that give you the software that works with that to allow the betting. Literally within a week, we could have a website up that allows you to play slot machines and bet on. Now there's some special expertise of how do you market to people to get them to do that, how do you find them, websites, banner ads, all that stuff. You can hire that expertise. There's quite a few people out there now with some experience in that, and we'd have to hire some people and staff up and do it. But you're looking at an activity that has a large number of independent statistical events, which, therefore, has a very predictable outcome. Well, that's the business we're in already, and so I don't have any problem doing that one on our own. Now if an existing online casino company made us a really good deal, and we looked at it and said we can let them do all the work and make just as much money, obviously, we'd have to think about that. But the -- our reason for licensing sports betting doesn't apply to licensing online wagering. It's a different calculation. Okay. Next question. What are our thoughts on acquisitions at this point? 90% of my thinking at this point is getting these 2 casinos opened next week. So let us get these open and kind of stabilize. And I'm sure like -- I get at least a few calls a week from different investment bankers talking about different casinos to buy, and I have not been taking those calls because we're focused on getting our own stuff open. At some point, when stuff has normalized and we're back on our feet, we're looking. But frankly, we look at an awful lot of deals. I mean in the 5 years we've been here, we probably looked at 30 deals. And we did one, okay? Because at the end of the day, we only want to do something that is good for our shareholders. Can casinos go cashless? Yes, and I would love to go cashless, honestly, for lots of reasons. And I think the pandemic might actually help because regulators have opposed it because they're afraid that if somebody can step up to a machine and it's also an ATM, it'd be very easy to build the ATM capability into a machine. And you could go to the machine and say, "Take $1,000 out of my checking account, I want to gamble", that's simple technology. Already exists actually. The regulators don't want it because they think people will then gamble too much and just drain their bank accounts. The slot companies are already experimenting at travel casinos with kind of hybrids of that, like you'll be able to Venmo money into a slot machine and step up to it, use your thing and use Venmo, who gets a small fee, and it dumps into your slot machine. And at the end of the day, I'd love to -- when you're done gambling, I'd love to send the cash back to your bank. You're done. You want it back into your bank account? Fine. Sign it back to your bank account. That would save us a lot of hassle of the TITO redemption machines that take the cash in to the back room, count the cash, tally it all up. I mean it's a pain in the ass, to be honest. And millions of dollars that we have had as we're reopening these casinos -- I mean we get in arguments with our properties, but there is a point where a Brink's truck with between $1 million and $2 million of cash is rolling down the road so we can reopen our casino because we have to put hundreds of thousands of dollars into those redemption machines that are on the floor and other hundreds of thousands of dollars into the ATMs that are on the floor. And then as people start playing, there's bills piling up in the machines that twice a week, we have to go through this very complicated process to take them out. Well, money is dirty. All of that stuff could be transmitting the virus, right? And so at this point, I don't know -- I think like most people, I've gotten pretty adept during the pandemic of using Apple Pay because I don't have to transfer money to somebody, and you just take out your cellphone and pay for it. And I think that is a valid discussion to have with the regulators to say, "We'd like to try to reduce the money being transferred around the casino." I, frankly, would like to get rid of the chips. And there is a technology. Scientific Games has it. They use it in Spain. We went over and saw it after our last call and said, "If you can get these things reconfigured to take dollars instead of euros, we'd like to have some of them." It's a blackjack table with iPads kind of built into the table. And when you step up and give the dealer your money, your credit show up on the iPad, and your decisions of whether to hit or stand around the iPad. The dealer is dealing, but he's taken the cards out of what they call a smart shoe. It has a reader in it so it sees what the cards are. So the computer kind of knows what's going on, on the table, but the dealer is not taking chips back and giving chips out. That speeds up the play by about 1/3 and because the dealer isn't actually doing those transactions. The computer is doing it, and there's no mistakes. It's a smart shoe. The computer is doing it. Dealers sometimes make mistakes, right? And when the customer is all done playing, they get a TITO ticket. And whereas normally, today, you get chips. And on your way to the cage to cash those chips out, you walk by 500 slot machines that don't take the chips. I'd much rather give you a TITO ticket. You're much more likely to stop at a slot machine and use the TITO ticket, right? And I think Scientific Games is a little hesitant whether these would be popular in the U.S. And I told them, I said, "If you can get us a few of these, we'll put them in our casinos and give it a shot." Just the TITO aspect, the accuracy and the speed of play might allow us to have $5 games. Whereas today, especially with the limitation of people sitting there, we can't make money in a $5 game. So we're not offering it, right? And now, I actually think our table games in Mississippi, we don't have the final numbers yet, but because we're doing $25 minimums and $10 minimums, we may be making money now, and we weren't before. Because we have fewer dealers, the ratio of revenues to dealers is higher. But you say, "Well, if we had a game like this, where it could be faster and more accurate and using TITO tickets, we'll offer $5 games." And if people get used to it, eventually, you won't have chips on the floor. The same way we don't have coins on the floor anymore. And if we can get rid of bills, that'd be awesome. And -- but one step at a time. Pandemic certainly helps. And we seem to be doing well in our casinos. They're half the slots.

How does that...

Yes, yes. I see that. How does that affect your thoughts regarding future slot purchases? Yes, we're a little unique on this. We are doing well with half the slots, literally the same revenues with less than half the slots. Now when I look at the days of the week, it may hurt us a little bit on Saturday. Like the peaks on Saturday aren't quite as high as the peaks last year. And that's simply because at some point, somebody walks in and they want to play a Wheel of Fortune, and we don't have one because there's -- half of them are roped off. And so they're like, well, that's my game. So I'm just going to go home. I don't want to wait for Wheel of Fortune to open up. And so I think we'd like to have more slots, but we've also reached a conclusion that maybe we don't need as many slot machines as we used to have. And in fact, there's a section of the casino in Mississippi where to help social distancing, we've removed these rows of machines and they have more like islands. Well, guess what, it's the most popular part of the casino. So maybe we should think about having more spacious casinos, right? Now we're also unique, frankly, because the company was pretty capital constrained for the past 5, 6, 7 years. We have a lot of old product, and we know that. And so when we get the opportunity to buy some new machines when we get back on our feet, we think that's a pretty high ROI, and we will look at doing that. And I think that's a little more unique to us. I think our product is older than that of most of our competition, and we will want to rectify that when we get a chance. And so I think we want to buy new machines, and we will do it when we're financially stable enough to be able to do it. But that was a recognition we came to really last fall that we needed to invest in our slot product, and so that's unique to us. And there may be some other companies in that ballpark. But if somebody has a modern slot floor recently purchased or newly open place, they're not going to buy machines for a while. So what kind of impact will the implementation of the new Konami slot systems in Colorado and Indiana make based on your experience in Mississippi? We think it's going to be great. We have much more information out of the Konami system, very helpful. We redesigned our entire VIP player system in Indiana and relaunching it with the reopening. Since we have much better data, we can do much more with it and incentivize our best customers and identify the customers we don't make money on and reduce what we're offering them. And so we think it's going to help us a lot. And we also got, frankly, lucky in Colorado. We had a cyber attack, and it didn't do anything to Konami system. Konami system is fine and some of our other systems we've been dealing with. And fortunately, it happened when we were closed. We've been able to deal with it. We'll be able to open just fine. But it was nice to see that the Konami system fended it off fine. Some of the older systems got caught up in it. We have insurance. Our deductible $75,000 total cost of dealing with it is probably a few hundred thousand, and we will end up with more modern systems because of it. So -- but it was a classic cyber attack. And fortunately, we were closed when it happened. And I'm happy to say the Konami system, not an issue at all. The Konami system is a modern system and smart enough to just say I'm not dealing with that.

Hey Dan, the shareholder meeting, people laugh when I say this, but because everyone is doing a virtual meeting, we're tight and only have time for this one last question despite there being more in the queue.

I don't think I will hop on a plane anytime soon. Others are probably the same way. Do you think that benefits your business? It might. Nobody flies to our places, right? I mean, and so we're an easy drive from our customers, and that may benefit us. I do think people will get back on planes eventually. But I'm reminded after 9/11 when we were all terrified by watching two 757s just fly into these World Trade Centers, realizing that several hundred people just died in front of your eyes. And everybody was nervous about flying again until Southwest Airlines offered a $29 discount, and then we found out what our lives are really worth. And we all went out, got tickets and started flying again. And so yes, am I nervous? Yes, a little bit. But I know some of the airlines are saying that they will not sell middle seats. Okay. If I could not -- if I knew I wasn't going to have somebody sitting next to me and if I wear a mask and all that stuff -- or we had lunch yesterday with a money manager who had the virus and recovered, and so he has the antibodies. And I know I don't have the antibodies. But if I have the antibodies, I'd be more prone to fly. So I think people will eventually fly again. It's not going to be immediate. It's going to take time, and that's one of the hurdles that Las Vegas will have to deal with or any other destination resort like Disney or something. And for us, it's certainly not a negative, it might even be a positive.

And actually, we should add, too, we've gone out of our way in our own places to make sure they're cleaner and safer than ever. And when you run around our places, it's a bit different than a casino in -- like when you run around casinos in Chicago that are very, very busy. We'll be at 30%, 40% full at peak periods. And so if you're kind of going there normally midweek, it's a bit of a different experience than what you have during March Madness in Las Vegas.

I will tell you a funny story. The other night I had dinner with a friend of mine who owns a casino in Mesquite, personally. And of course, we're opening our casinos. And over dinner, we're comparing notes of all the things we did. Plexiglass at the cashier windows, plexiglass at the player development windows, turning off every other slot machine. Actually, it's more than that. We turn off machines so you're 6 feet between. So if you have 5 machines in a row, #1 and #4 are on; 2, 3 and 5 are off. And hand sanitizer everywhere. Staffs of people policing whether people are staying 6 feet apart, disinfecting the machine afterwards, Giant plexiglass devices on the blackjack tables to separate people up and all the stuff. We're doing all these things to make it as safe as we possibly can. And after dinner, we walked into one of the other significant locals casinos here in town, I'm not going to say the name. And we were both aghast because they had done almost none of it. And it was just like holy cow. And they have all these signs up saying we care about our customers. And we're like, the hell you care about your customers. You didn't -- like we have masks that we give away free. You need a mask? Here's a mask. The dealers have masks. You need a mask? Here's a mask. We make our employees wear masks and so on. Here, they had a sign of we care about our customers. If you want a mask, go to the security podium. and I was like, yes, try to find the security podium on a big casino, right? And just aghast. So we are trying to do the right thing. I think our customers know that. I think they appreciate it, and we're trying to do it as safely as we can. So...

We -- before we go, because we've run out of time here, we don't get anything on our side. We don't -- like if you submitted a question, we don't get your name, we don't get your e-mail address. We don't get anything other than the question itself. And so we just had a long list of questions today, which we appreciate. But if we didn't have time to get to your question, we apologize. And you can always reach out to us here separately, and we'll try to get the answers to that. So we do apologize. And I don't know who you are, unfortunately, so I can't reach out on my own. But...

E-mail?

Oh, the main e-mail is probably the best one. It's F-H-R-I. It stands for Full House Resorts, Inc. So [email protected].

Yes, if you send an e-mail to that, Suzanne will make sure it gets to the right party.

Yes. Do you want to close it out, Brad or Dan? You want to just say...

Well...

We got a minute.

It's been a rough year, and I thank everybody for their support, and we're doing the best we can. I think we're starting to come out of a tough period here and hang with us. We're going to try to have a better 2021.

Thank you, guys, and we'll talk to you next year.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.