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

Greetings, and welcome to the Full House Reports (sic) [ Full House Resorts ] Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lewis Fanger, Chief Financial Officer. Thank you, sir. You may begin.

Thank you, and good afternoon, everyone. Welcome to our Fourth Quarter Earnings Call. As always, before we begin, we remind you that today's conference call may contain forward-looking statements that we're making under the safe harbor provision of federal security laws. I'd 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 the discussion of risks that may affect our results. 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 issued. And lastly, we're also 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, you're ready to go, Dan?

Okay. Lewis tells me to be briefer than usual because people want more time for questions. So -- but we had a lot of things going on. So American Place, I'll start with that. It had another strong quarter. The revenues were up strongly every quarter of the year. Fourth quarter revenues were up 27%. Overall, it was up 42% for the year. EBDIT was up 60%. So it just continues to mature as it has since shortly after it opened. It also, and more important than the numbers sometimes, the Chicago Tribune does a survey of the best employers in the Chicago area. And I'm proud to say that we were on the list, and we were the only casino on the list in Chicagoland, and that's important. We have, for a casino relatively low turnover. We have great employees. We're providing great service, and that's the key to a great business. Equally important, the Illinois Supreme Court ruled in favor of the Gaming Commission endorsing their selection of us for the Waukegan license basically. So that puts it behind us. They had earlier lost in federal court as well. And so that opens the door to going and getting the financing to build the permanent. Right now, we're doing very, very well. We're one of the better performing casinos in the state despite the fact that we're essentially in a tent. It's like a sprung structure. It's like -- it's the sort of structure that your municipality uses to store salt for the winter. So it's not really a full-on casino, although we've dressed it up pretty well to make it look as good as we could. And -- but our commitment to the state is to build the permanent one, which will cost about $325 million going forward in the next phase. And the -- it was difficult to do that when there was a lawsuit out there questioning whether we have the license. That's been resolved. And so we're dealing with our bankers now on the best way to finance this. The one thing we're quite sure of is there will be no equity involved at these prices that would be giving it away. And so we are very intent on doing this without any issuance of equity whatsoever. We also don't believe that we need to do a REIT or sell any assets. We think we can do this all in the debt markets on very favorable terms. If you look at other deals done recently in the debt markets, they're being done at very favorable rates. Other casino deals, and there have been some pretty big ones. The REITs are always an opportunity for us. But at the end of the day, it's pretty expensive capital that you can't unwind anywhere down the road. And I think some of our competition is finding that out. So we have not done any of the REIT, Opco, Propco deals yet, and we don't think we have to. And so we hope to get the financing together in the next several months. We intend to break ground later this year. We actually could start construction without the financing, at least initially because in the first few months of construction, there's not a lot of money being spent. It's just bulldozers moving things around. And -- but we want to get started later this year. We're allowed to operate the temporary until August of 2027. That's -- there isn't a date by which we have to open the permanent. But as a practical matter, we have 500 employees, and we have a state and municipality who are relying on our tax revenues, and we want to transition smoothly from the temporary into the permanent. And so we're targeting to be ready in August of 2027. If we did need an extension, we'd probably get it. We did once before. It requires going through the legislature. But I don't think we're going to need an extension. I think we can make that deadline. The outlook for the permanent is actually very good. There's a very good comparable. The Hard Rock folks operate a casino in Rockford, Illinois, which is owned by an investor group. They operated in a temporary for a couple of years, and they moved into a permanent facility down -- a little bit down the road from the temporary, and they did that at the beginning of September and their revenue since then have been double what they were before. And Rockford is a city of about 450,000 people. We're the only casino in Lake County, which is about 1 million people. And so our revenues are bigger than theirs. Our temporary does more revenues than their temporary did. And I think our permanent will do more revenues than their permanent is doing. But they saw a doubling of their revenues when they went from the temporary and the permanent. And frankly, if your revenues double, your income probably triples. And there's 2 similar places in Virginia where temporary casinos have been recently replaced with permanent and both of those are also doing very well. And so there's quite a few comparables out there that bode well for us. There's another way of looking at it that we've done. If you take the average win per slot and average win per table in the state and exclude Rivers, which is in a very demographically rich area, if you just take the average of all the other casinos and apply it to the number of slots and tables that we'll have in our permanent, if we only do the average, and there's lots of arguments why we might do more than average because we have pretty good demographics around us as well. But if we only do the average, it would be about $200 million in revenue. And if you had normal margins on that, it would be close to $100 million in EBDIT. And that's just casino revenue. So I'm saying EBDIT into casino revenue would be a pretty high margin. If you include like food and beverage revenue, the revenues will be higher, but there's not much margin in food and beverage and sometimes a loss. So that's why you see overall margins on a casino in the region are usually more like 30%, not 50%. But if you just do it on casino revenues, it's close to 50% -- so that's American Place. It's doing well, and we're getting ready for the next phase there. In Colorado, we completed Chamonix finally, in October, actually not quite completed. There's one parking lot that we need the ground to thaw before we can finish it. It's kind of an important parking lot. But otherwise, the place is done. We had a grand opening in early November, which is coming right in the slowest time of the year. And despite all of that, revenues were up strongly in the year. Revenues were up very strongly in the fourth quarter as well, more than double. But of course, the facility is much more spectacular than what we had before. Now expenses are also up quite a bit, and that's not surprising because now we're operating a full-on resort casino and the revenues are not yet where we expect them to be. And so income has been scant. In fact, it lost a little bit of money in the fourth quarter. Now going forward, I expect the revenues to continue to climb, both because it's maturing, just like American Place did. The expenses should not climb and income should be pretty good starting this year and grow from there. Now I'm still very convinced it will make $50 million a year at some point. If you look at what the casinos in Black Hawk make, that's actually very reasonable. Monarch is making north of $100 million a year. Ameristar is somewhere in that ballpark. The Jacobs Casino does very well. I think he's only got about 50 rooms, and he makes something like $50 million a year. Isle of Capri makes something like $50 million a year. And so they're appealing to Denver, which is 4 million people. We're equal distance to the south side of Denver as Black Hawk is, and that's probably 1 million people, but we are much closer to the 1 million people who live in Colorado Springs and Pueblo. So again, it's a demographically rich area. We're head and shoulders nicer than the competition and larger than the competition in Cripple Creek. So I expect -- we doubled our market share this year, and I think we will grow the market and eventually evolve into having a strong market share of a growing market. This is not dissimilar to other places we've opened. I remember Beau Rivage in Mississippi, when we opened, it was a little bit of a slow opening and then eventually caught on, and it's dominated the Mississippi Gulf Coast now for 20-odd years, more than 20 years. L'Auberge in Lake Charles, same thing. First several months, we had some bugs to get out of it and then it kicked in. And 20 years later, it's making $100 million a year. Even Bellagio didn't get to $500 million a year of income in the first year. It took a few years. And so the same here now we have also made some management changes. I came to realize that some of our management team was perhaps a little over their heads. And so we hired Brandon Lenssen from -- as our new GM. He starts on Monday. He started out at the Rama Casino in Toronto. He's originally from Canada, although he now has dual passport. And he worked at the Rama Casino, worked his way up, and then he went and worked for the Ontario lottery regulating slot machines in Ontario. So he knows slot machines very well. And then quite a few years ago, came to Black Hawk, ran the Isle in Black Hawk, and then ran Bally's in Black Hawk, the 3 casinos there that Bally's has. And he's had a couple of stint, including recently where he worked for companies offering database management of marketing lists. So he kind of knows the marketing side and the data side and the casino machine side and so on. And for example, when he was at Bally's, he worked on the -- Bally's has 3 licenses in Black Hawk, the same way we have 3 licenses in Cripple Creek. Historically, the Gaming Commission said you can do that and it reduces your gaming taxes because it's progressive tax rate. But the TITO tickets from one aren't good in another. And that creates confusion for customers when they go in from Chamonix into Bronco Billy, their TITO ticket doesn't work when all the -- you're now on a different color carpet basically. And well, at Bally's, he worked with the slot system company. Now that slot system was, I think, IGT, if I recall, and modified it in a way that satisfied the regulators. So today, Bally's doesn't have that issue. They can -- TITO ticket from one Bally's casino can be used at a different one, even though some of -- one of their casinos actually across the street from their other 2. And he did this 2 years ago. And so we were like this should make an important improvement. I understand. It's not -- it's an important improvement. Is it huge? No, it's not huge, but it's an important improvement. And I just hold it out there as an example of the sort of creative stuff he's done in the past that we're looking forward to having him work with us in analyzing this and running this better. We also have a new HR Director. We have a new Hotel Director. We have a new IT Director. We have a new Corporate VP of Advertising, who is deeply involved with Chamonix. So we're throwing a lot of new talent at the property, and I'm confident that, that's going to make a big difference. And 10, 20 and 30 years from now, this property is going to be a solid business. In Indiana, we're -- in Rising Sun, Indiana. When that casino first opened, it made $50 million a year. It was the only casino in the entire region. And then over the last 30 years, other casinos have opened that are newer and closer to where people live, whether it's in Shelbyville, cutting off people from Indianapolis or downtown Cincinnati in Ohio and Miami Valley in Ohio and now the Churchill stuff in Kentucky. So everywhere you look, we have competition. And so that property's income has trended down to where it's just $4 million or $5 million a year. We went to the legislature seeking to move it. The bill did not get out of the Senate, but the Senate did pass a study bill that calls for the Gaming Commission to have an independent study on what the benefits for the state might be of allowing underperforming licenses to relocate and where they might relocate. Now the -- we were proposing New Haven and still are, which is a suburb of Fort Wayne, and we would build a pretty significant place there. But if you look at the map, the other obvious place is the city of Indianapolis, which is 2 million people and has no casino. And so I suspect that, that study will focus on those and maybe elsewhere in the state. And what is clear is -- and that study committee -- commission needs a house approval, and we think it will probably get that in the next 2 weeks. Like why would you not study the issue? It doesn't mean it's going to happen, but at least you have studies. So you're operating with some background. And there are some precedents. We are the lowest performing license in the state at this point by a pretty wide mark. I think the next lower casino does twice what we do, and that's the one in French Lick, and they get all sorts of historic tax credits because they're in a historic hotel, difficult for them to move. There used to be 2 other casinos that were similar to us in annual revenues, and that was the former Trump casino and the Barden casino on the water in Gary. And they had gone bankrupt at one point, and they were barely in business. And the legislature approved relocating those. And one of them moved to Interstate 80 still in Gary, but it's the Hard Rock in Gary, and it's now the #1 producing casino in the state. So the revenues and the jobs went way up when they relocated it. And the other one ended up in Terre Haute, which is the Churchill property, and it's doing very well as well, both in revenues and jobs and investment. And so there are precedents. And then in Indiana, people are hesitant to have an expansion of gaming. They don't want additional licenses, if you will. But there are a history of relocating licenses, which is better for the state. Now the state have originally put the licenses at the borders to try to draw business from Illinois and Ohio and Kentucky. But now those states all have their own casinos. So the best locations have changed. And so I've said several times, this might take 2 or 3 legislative sessions before it happens. I do think it has a reasonable chance of happening, although when you're dealing with state legislatures, I think it was Mark Twain said nobody is safe when the legislature is in session. So it's hard to predict. But we know it's a good thing for the state, and we hope that rationality prevails, and that would be a good investment opportunity for us. Meanwhile, we continue to make good money in Rising Sun, not a lot of money, but some. We have a new General Manager there, Jeff Mitchey, who Lewis and I worked with years ago at Pinnacle. And Jeff had been involved with a much bigger tribal casino down in Arizona. And -- but his wife and his new grandchildren live quite close to us in Rising Sun, and he wanted to come back to the region. And so we have a guy who's very, very qualified now in charge of Rising Star. And frankly, he'd be very qualified to help move the license if we are allowed to do so at some point. Now he replaced Angie, who had run it for a few years. And John Ferrucci had been running Rising -- I'm sorry, Silver Slipper since it opened 20 years ago, and he retired. And so she moved down there. She had worked there originally, and we had promoted her to Finance Director at Rising Star and then General Manager at Rising Star, and she did very well in a challenging market. And she's been back down at the Silver Slipper now for several weeks and has lots of new ideas, and I'm confident that the Silver Slipper is going to see improved results in the months ahead. And meanwhile, at Lake Tahoe, where we are on a short-term lease to run the casino at the Hyatt Tahoe, but it's been extended many, many times, and I hope that will continue to be the case. The property is owned by Larry Ellison, and he's moving ahead with refurbishing it. And the first phase of that is the stuff along the beachfront. And frankly, that stuff was built 50 years ago and didn't really make use of the special real estate that it is. It's a lot of beachfront on Lake Tahoe, which is very, very valuable. And what exists there today is a big restaurant and some meeting rooms and banquet rooms and some villa suites that have gotten pretty dated and a surface parking lot. So he has plans to fix up that part or replace that part of the property. Our casino is in the main building, which is across the street, and that's not being affected by the refurbishment currently. I think he has plans later to come back and refurbish that. And we may be impacted some by the refurbishment because some of our customers like to stay in those villas. But long term, this already special property will probably be much more special under him, and we hope to continue to be part of it. And so that's Lake Tahoe. In Fallon, as I think you know, we sold it. It's a 2-part deal. The real estate of it closed several months ago. We're waiting for the buyers to get their license. They've been licensed before in Nevada. They're pretty prominent people, and we expect them to be licensed in the next few weeks, at which point we close the rest of the deal and they take over the management of it. So that's Fallon. And did I miss anything?

I got nothing left, Dan. Let's do some Q&A.

I got it all. Okay. We're happy to take questions.

[Operator Instructions] Our first question comes from Ryan Sigdahl with Craig-Hallum Capital Group.

I want to start with kind of a higher-level question. I mean, given the challenges you've had at Chamonix thus far, I guess, does that change your plans for American Place, whether it be the design, the gaming floor, the size, amenities or even the overall minimum guaranteed spend that you guys have committed to there?

No, not at all. I mean the guaranteed minimum spend, if I recall correctly, and Alex is on the line and correct me, I think it's $500 million of which we've already spent $175 million. And some of that is the temporary, but big parts of it, like the $50 million license fee, the storm sewers and parking lots and so on that are being used for the temporary are also part of the permanent and $20 million of slot machines. So we're already kind of into it. Actually, it's the opposite. When you go to the property that Hard Rock built in Rockford, they did a good job. They really did a good job. And they have the same sort of license we have, the same number of gaming positions and so on. And they spend in the ballpark of $300 million, which is what our going-forward spend is in the next phase. And so I've kind of gone to town looking at that. Now I will have a different theme than showing Lady Gaga's underwear behind Plexiglass. But that's the Hard Rock theme and it works for them. We've also spent some time over at Durango Station, where I think Stations did a really good job, and it's very successful. Now that was $700 million. We don't have that sort of budget. But it was funny we were over there yesterday, and Lewis was freaking out because I brought with me a laser pointer that I'm pointing it all over the place to measure different parts of their casino for our design. And if anybody noticed it, it looked like there was a sniper in the room and Lewis was afraid we were going to get kicked out. But there's stuff they did there very well that we hope to borrow, recognizing that we have a smaller budget and a smaller place than Durango. And so it's a little more of a, let's say, the theme of Durango and the size of the Hard Rock. And then -- and recognize this is -- it's a very different place than Chamonix. Chamonix is an hour from most of our customers up in the mountains at 10,000 feet on the backside of Pikes Peak. So you need a hotel, people need to stay overnight, not everybody, but a lot of people. And then you need other amenities to get them up there. So a big spa and different restaurants and parking garage and all that. In Waukegan, we're in the middle of 1 million people. I mean, literally in the middle of 1 million people. Lake County is one of the -- Lake County is most of that. It's 750,000, if I remember correctly, one of the wealthier counties in the country with like Lake Bluff and Lake Forest and Libertyville and so on. And so in Waukegan, it's much more like Durango Station, which is a local's casino. I mean they have a little hotel there, but it's really a local's casino. And that's what we're doing there, whereas in Cripple Creek, it's kind of like a half-size version of L'Auberge. When we built L'Auberge in Lake Charles, the customers are coming from Houston that's 2 hours away. So we had to have stuff to get people there. And so we built a hotel that initially had 700 rooms, later got expanded to 1,000 rooms and a golf course and all that stuff. So it was more of a smallish destination resort, a small version of what Las Vegas is really. And that's what Chamonix is. So it's a different market and requires a different place. And so when you look at what you build in Waukegan -- there's one other one I'd mention on the south side of Chicago, which is a much more saturated market than the north side of Chicago. And the Wind Creek Casino opened, and they have a hotel. If you back out their hotel, they also spent about $300 million. And so we think that's kind of the sweet spot. And again, the same number of gaming positions as we have. They've grown the market pretty nicely. Now because it's more saturated, they have had some impact on the casinos in Northern Indiana and also a little bit of an impact on Joliette and maybe a little bit on Bally's downtown because the south side gaming per capita is quite a bit higher than on the north side. So we're a less saturated market. I don't think we have much impact, and we haven't had much impact on Rivers or Potawatomi who are our competitors on the north side. And -- but it's a good example. If you build a good product in a market, you'll grow the market. And frankly, in a place like Waukegan, you build a place and people drive by and say, "Wow, look at that." In a place like Cripple Creek, nobody drives by and say, "Hey, look at that." You have to tell people that you're there and that takes a marketing campaign. And we had some -- coming up to the grand opening, which was on November 3 or 4, ad rates were very expensive because of the national political campaign. So we actually were not on the air in the month of October. And then we're on the air for a little while and then you run into Christmas and it's like not really a good use of money to be advertising during the Christmas season. And so we kind of backed off again, and now we're up again. So our task is to tell people we exist. They're not going to see it from driving by. And so it's a little slower ramp-up than you would get in a market like Waukegan, but it will get there. I mean same sort of thing when the Mirage opened in Las Vegas. They had to tell everybody in L.A. There was a new hotel in Las Vegas, and it wasn't like the other ones, and that's our task.

It's actually been pretty encouraging as well because when we look at maps of where customers are coming from, we've been doing heat maps of Denver. And I will tell you, Denver has lit up pretty nicely. We always talk about the roughly 1 million people that are in the feeder market between Colorado Springs and some of those surrounding cities. The southern suburbs of Denver were always meant to be gravy for us and to help further supplement the plan. But what is looking pretty bright for us is that market is quite excited to go and visit the property. Colorado Springs still has -- to Dan's point, we didn't have a big awareness campaign throughout almost all of 2024 for us. And so we managed to get 160% increase in revenues year-over-year despite the fact that we weren't running ads. And so when you think about what does the next year bring, it's going to bring a lot of good. I mean, Dan and I were talking yesterday at Durango, but talking about Chamonix and how we feel better than ever for this property and its chances for success. So it will be fine. The only other point I wanted to make on Waukegan is Rockford as well as it's doing, just don't forget that within a 30-minute drive, we've got some 900,000 people in our 30-minute drive ring, they've got about 400,000 people. So we have more than twice the population. But then when you look at median household income, we're like 52% higher than their median household income in that same drive ring. And so they are doing quite, quite well. We know we will do quite well, too.

Very good. And when you look at that heat map, it goes all the way out to Minneapolis. A couple.

You may be the only one in Minneapolis, man.

I'll probably be the one in Minneapolis I will ask a very short second question and then turn it over to the others. Your skins for your online sports betting license looks like you're down to 1, now just Circa. Is that correct, $5 million the right run rate as we look to the next several years?

Yes. There's a little bit of volatility in 2Q and 3Q because the existing skins that we had there that we got the that's going to be discontinued. They're still around one until June and the other until, is it September?

December.

December, December. So there's a little volatility. But I would tell you, as a kind of on a normal ongoing basis, it's -- if you include the amortization of the upfront market access fee for Illinois, just Illinois is $5.6 million. And so if you're looking at 2026 and beyond, $5.6 million is the right number to use.

And Circa seems pretty determined to hang in there. I mean, in other markets, DraftKings and FanDuel just so dominate and BetMGM, I guess, third. And so they've kind of squeezed other people out, even including Wynn, who was our partner at onetime in Churchill Downs. But Circa has always operated a little differently and their sports book here in Las Vegas does very well in downtown Las Vegas. And of course, Illinois is a pretty big market. So it's not a small market for them. It's a big market. And -- but I think our likelihood of finding other people to ride on our license is not high at this point because DraftKings and FanDuel so dominate the market, it's hard for anyone else to break in.

And I agree with the Vegas. Circa has the best sports book there. So hopefully, they can replicate that in Illinois going forward.

Our next question comes from Jordan Bender with Citizens.

This situation seems to be a moving target on an hourly basis here. But on the idea of tariffs, as you start to look at construction for the permanent in Illinois, are you starting to see any changes in prices for material? And is there any way to kind of hedge yourself given that you're going to be starting construction here in the next couple of months?

Well, there are ways to hedge, but we haven't done it. I mean you can go buy steel futures and stuff, but I don't -- I think it's pretty unknown what tariffs are going to be out there. And I think we've somewhat dealt with that in Chamonix. The Chamonix was my 12th to 13th casino. And I will tell you, the other ones, most of them either the steel came from China or the glass came from China or the possibility of buying the steel or the glass from China held down prices from domestic manufacturers. And people forget there are already pretty significant tariffs plus the pandemic supply chain issues as we were starting construction in Chamonix. And we got through it. I mean it wasn't fun, but we got through it. So we're actually kind of assuming the worst as we design this place to build it for $325 million. In other words, we're assuming that, that stuff will be expensive and you just build it into it. And -- but -- but you have to kind of go ahead and take a guess. Otherwise, you would just freeze and not do anything. And...

Well, and we're trying to be smart as well in the design. So we're going out of our way to make sure that we don't put air conditioner handling units where you might expand the casino later on as an example. So we're trying to be thoughtful. I think we're going to have different ways to help mitigate that issue should it pop up. But to Dan's point, we're also putting in some pretty extensive cost assumptions in this model as well.

And then just on the second one here, there are some reports out there suggesting that you were looking to buy an asset outside of your mention there, are you actively looking for other M&A opportunities? And what are the guardrails we should be thinking about if you do go down that path?

I know it's hard as most of you know, I had your job at onetime. And you're always judged and focused by 1 quarter, 1 year and looking -- and when you're in my position, I tend to look further out. And I'll get calls from my mom who's 95 years old, and it seems like all her Mahjong playing partners own our stock. And she'll call me and say, "You know, your stock was down $0.10 today. Why was that?" And I'm like, "Well, mom, I didn't even know that, and I'm focused on where the stock will be in 2030." And over the holidays, I sat and just played with a rough model myself, which I like to do sometimes now. And so I just played with the model and said, "Okay, I'm pretty sure we're going to get to $50 million a year in Chamonix by 2030. Not going to be 2025, but give us until 2030, I think we can get there." And then I said, "And by then, we will have operated the permanent American Place for 2.5 years, and it could be $100 million." I plugged that in. And I said, "Well, let's suppose Angie gets the Silver Slipper from $13 million to like $20 million, which is what it did 2 years ago." And I think that's entirely possible. And then I said, "Okay, and if we get to move to New Haven with Rising Sun, and we invest in the first phase", I think it's $350 million in the first phase, the whole investment is like $500 million eventually. But the later phases we built out of cash flow. And let's say it gets a reasonable return on investment. And then I worked into, "Okay, we produce a lot of cash flow. And let's assume we borrow the rest" and I threw in, I think, a 9% interest rate to be kind of conservative. And then I said, "We get out there" and you got to have an exit to a model like this, right? And the easiest thing is to assume you sell the company at year-end 2030. Now that doesn't say we will. But at some point, by then, maybe somebody else is running the company and I'm retired or something. But when you model it, you have to kind of assume something like that. And I said, "Well, let's assume the company is sold for like 9x cash flow", which would not be a high multiple. The casinos that have been sold recently have sold to north of 10, especially when you consider that we still own our real estate. And when I put that whole model together and divided it by shares outstanding, I got $45 a share. And you guys run your own models, and this is -- but I thought there's got to be a mistake, and I sent it to Lewis and he couldn't find a mistake. And -- and there isn't a mistake in it, right? It's just a highly levered company growing and executing. And so then I said, "Well, how much of this is Fort Wayne?" And Fort Wayne was like $6 or $7 a share of it. And so I backed out that, let's suppose the legislature never allows that to happen. And so we just continue with Rising Sun, which doesn't earn a whole lot. And -- now you say that's only $6 or $7 a share. That means Fort Wayne alone is more than what our stock is trading at, right? And so then I said, "Let's do something -- let's knock all those numbers down and be very, very, very conservative." And I went to the bottom range of what I would be very disappointed on what each of these would do. And I still got $20 a share. And it's like that's up fourfold from where our stock is. And it's like -- so then bankers will call us up and say, "Hey, we have a casino we want you to look at in Bumfuck, Arkansas". And I'm like, "No, I do not want to mess up what we have." I mean we will look and we listen and sometimes you learn something from it, but it would have to be a really good deal because there are so many bad deals out there and they are so easy to do. And we're going to have a great stock if we just execute on what we have. Now we do have guys like Alex running around looking for other deals and sometimes he shows up with one, right? I mean he showed up with American Place. And so we may very well have other deals between now and 2030, but we're very cautious about it because we know if we just execute on what we have, we will have one of the best-performing casino stocks in the next 5 years.

Just to be very clear, Jordan, we are not actively looking at any acquisition, just so you know.

And I'll remind everybody what we said earlier in the call, there may be some forecast statements that we may not achieve or something, right? Is that a safe harbor thing?

Safe harbor, yes.

But that's the math we look at, and that's what we're focused on, so.

I'm hoping this all works out and you can be playing Mahjong by 2030.

Our next question comes from John DeCree with CBRE.

Maybe 2 on Chamonix. The first, curious if you could give us a little color on kind of what you're seeing on the casino floor. We look at the state reports, the same ones that everyone else gets. And it looks like we could see the spot market growing nicely at Chamonix, but less so on the table side. So curious what you're seeing and what your expectations are for table volumes, slot volumes for the upcoming spring season?

Well, we're actually 100% -- more than 100% sometimes of the growth in the entire state, but the growth should be more than it is. And tables has been one of our weak points. And so we have a new Director of Table Games. We have a new Director of Casino Operations. I forgot to mention actually. We had a Director of Casino Ops in Rising Sun, who did a great job. And earlier in his career, he had been in Colorado. So we relocated him and he's been there 2 months. And there's stuff like we have not offered Baccarat. In fact, nobody in Cripple Creek offers Baccarat. And as I speak, we have 2 Baccarat tables sitting on our loading dock and dealers going through dealer school to learn how to deal it. And Baccarat is a pretty significant game in Black Hawk. We also -- our table limits are lower than they are at our competition in Black Hawk. Well, I'm willing to let the table limits go up, but I want to make sure that we have experienced supervision and experienced dealers and that we're doing so intelligently. And so we're trying to buttress that. We are trying to hire more dealers. We don't have enough dealers. We're running our own dealer school at the moment. And so there's a lot of stuff focusing on tables. And part of the reason we made the management changes we made was to help focus more on tables because that our table game should be maybe 20% of our revenues, and it's less than 10%. And so that's a strong area of growth for us. We are about to put in new carpet and handicap ramps within Bronco Billy's. Right now, it's pretty jarring when you go from Chamonix to Bronco Billy's and Bronco Billy's has probably half our slot machines, maybe at least half. And so we're trying to improve that transition. There are quite a few customers who actually prefer the brick walls and kind of Western theme of Bronco Billy's. But of course, the slot machines in Chamonix do much better. And so we're trying to pull that down. We're improving our food and beverage offerings, changing the menus, changing the marketing. We had a kind of a temporary restaurant that when we opened, we didn't have the high-end restaurant done yet. So we turned the small meeting room space into what was supposed to be a temporary restaurant. And then we couldn't get enough waiters. So I said they could run it as a buffet. Well, they ran it as a buffet all year. And small volume buffets lose a lot of money. We lost $1.5 million on that buffet. And when I finally figured out how ridiculous it was part of the reason for all these changes. And we were charging $45 and the cost of the crab alone was $11 a cover. Prime Rib was $10 a cover. The pastries were $9 a cover. The linens were being leased from a wedding supply linen company. That was $10 a cover. Before you bought the salmon and the chicken and paid for the payroll, we were upside down. We were spending $100 a cover and charging $45 a cover. And that's just stupid. And we won't do stupid things like that anymore. And I'm sure Brandon, who is a very analytical young man, I think he's mid-40s experienced man. And he'll make sure that we put a number on this. And when you operate one too many restaurants, it affects every restaurant. And so on a Saturday, that would do 150 covers. By eliminating that little buffet. First off, it frees up our small meeting room space to help book meetings. And second, we may lose 20 or 30 covers to the casinos across the street, which are doing well because of us, and that's fine. But the other 120 covers are get -- split among our 980 Prime and our Home Cafe and our Mexican restaurant. And then there's an Italian restaurant that we hope to finish out this year in Bronco Billy's. And by moving those covers into the other restaurants, the other restaurants will have better profit numbers. So there's a lot of low-hanging fruit like that for Brandon and the rest of us to wake up to. We were so focused on getting open that there was some stuff like that, that fell through the cracks.

There's one other point I want to make there, John. The -- when -- if you look at market share, our market share in the fourth quarter was 26.9%. So we more than doubled our gaming market share year-over-year. And I don't -- maybe we don't stress this point enough. But usually, what happens when you go and open a brand-new big casino like this is everyone in the market is down 20%, 30% as they absorb the capacity. And the reality is no one was hit. And we completely -- we went from effectively 13% market share to 27% market share without hitting anyone in the market. It's -- and a big part of that obviously was certainly on the slot side. We still have room to grow on the table game side, but we still more than tripled our gaming table or table games win per day for what it's worth. So kind of baby steps in year 1. I think we're going to have bigger steps in year 2 as this marketing campaign goes out and takes full effect. And we are starting to get wealthier customers in the door. We have players in the door now that will gamble $0.5 million in a weekend. We never would have had any play like that in that whole market ever historically. And so this market is on the move. It's taken a little bit longer than what I think Dan and I would have hoped, but it is absolutely going to do quite well.

I think you answered my follow-up in there.

Our next question comes from Chad Beynon with Macquarie Asset Management.

I wanted to ask about the American Place margins. Good to see that the revenue is ramping, and congrats on all the awards that you've received for service levels. It looks like revenues at this point are in line or maybe even ahead of expectations compared to what we thought the property would be well over $100 million. I believe you guys talked about potentially 30% margins kind of moving even higher. So it's not at that level at this point. But can you talk about maybe where the expenses are here and if the revenues increase from these levels in '25, if a lot of that will push down to the bottom line and meet some of the margin targets?

Yes, I think it will. I mean if you're looking at the results for this past year compared to the prior year, it's a little distorted because we opened the high-end restaurant in February of last year. And that was pretty important at driving the casino revenue higher and helping the EBDIT higher. But that -- but most restaurants operate at much lower margins. So the revenue of that restaurant and its income actually hurt margins a little bit, but helped income. And now going forward, I think we'll be able to keep expenses under control and hopefully continue to grow revenues. And so margins will show very gradual improvement. We're also getting smarter with our marketing. For example, we have not sent out any physical mail since May of last year and transitioned it all to e-mail. And it's -- and you save a lot of money on postage and printing if you can get the e-mails of your customers. And the percentage of Americans who have e-mail and e-mail address is now about 95%. Very few people do not have an e-mail address. And so -- and we're finding that the response rate to e-mail is actually a little bit better than the response rate to physical mail. And so American Place kind of made that transition. Other casinos are doing it as well. And so now we're back at all of our other casinos saying, "Okay, you got to do special promotions to get people's e-mail, and we're going to get out of the physical mail business because it's expensive." I mean if you send a flyer out with an ad in it, come up and stay for a night for free -- on us and you send it out, if it's a pretty basic flyer, by the time you print it and mail it, it's $2 a person. And the sort of response rate you get is about 5%. And so you're spending $60 to get somebody to your doorstep before they put any money in a slot machine. And if you can do it through e-mail, you're spending 0. And so it's that sort of nuts and bolts that you start looking for that eventually results in better margins and better income.

Yes. And keep in mind, too, Chad, gaming revenues obviously aren't done growing. The January numbers are public. I know you saw those, and we were up 34% year-over-year in the month of January, not a surprise that's not a bad thing overall for margins. I think as we get that number higher, the push is to try and get that number in the mid-10s per month. A year ago, we were in the mid-7s in a typical month, right? So for us to be pretty reliably over $9 million these days is a nice move. And eventually, we'll get that over $10.5 million. And as you do get it over $10.5 million, I think that's when you approach that $40 million plus of EBITDA, if that helps you.

I like the guys at Bally's, including Soo Kim, who's a pretty brilliant guy. But I like our position in Chicago better because our revenues are pretty much the same as theirs. So we actually beat them a little bit in January. Generally, they've been a little bit ahead of us at their temporary casino in downtown. But they have a higher tax rate. The downtown license had a significantly higher tax rate than the other licenses. And then their reinvestment obligation for their permanent is measured in billions and ours is $300 million. And so I like our position better than theirs. Now I wish them well, but I wish us better.

Okay. And then from a housekeeping standpoint, I don't know if this was called out on the press release, but Lewis, the lower corporate expense for the quarter, could you flesh that out? And then how should that look for '25? Should that revert to $5-or-so million -- $5 million to $6 million a year?

I think if you look at the annual run rate of corporate in 2025, [ it is pretty ] similar to 2024. It's like $6 million. There was some over accruals that got reversed in the fourth quarter. So that fourth quarter looked unusual.

CFO, Dan. You're hired as CFO. Hey Dan, we have time for maybe 1 or 2 questions depending on how quickly you get through these. So -- let's take at least one more.

Our next question comes from Ricardo Chinchilla with Deutsche Bank.

I was hoping we could dig a little bit more on the ramp-up here at Chamonix. So can you guys provide a little bit of color on January? I know that it's tough because of the weather. And I know that you guys have been playing a little bit to modeling, so maybe you guys can help me out a little bit. I have you guys increasing your OpEx slightly on the fourth quarter based on my math. Can you give us like an idea of with your proposed savings and now that you guys have a new manager that's going to focus on cost savings, like what's the right OpEx per day to run that property perhaps a little bit more of gaming volumes?

Look, it's hard to look at it on a month-to-month [indiscernible] and different things are affecting or even on a quarterly basis. But [indiscernible] to do -- like if your target is $50 million in 2030, we ought to be able to get to $10 million or $15 million of EBDIT this year. And now it's summer seasonal. So a lot of that will be the third quarter. And then from there, it goes $20 million, $30 million, $40 million in the next few years, and that's how you get to $50 million. And that's as good a guess as anybody. Now there are some areas where we probably have too many employees, and there's other areas where we have too few. Like we don't have enough dealers as I already alluded to. We don't have enough masseuses. We have 7 treatment rooms and 2 other rooms we can use so really 9 treatment rooms. We have 2 masseuses. And on weekends, they're totally filled. We could fill probably 7 masseuses on weekends. It's a popular thing. And we charge $130 or $150 for a treatment and the massage therapist gets $20 or $30. And so it's a nice profit center. We need more masseuses. We're trying to find them. We have a salon where people can get manicures, pedicures and get their hair cut or colored and so on. It's a beautiful salon. And we have 1 or 2 salon therapists. We probably need a dozen, and we are trying to find them. And that also is a profit center, but it's also a marketing tool because if a woman can use her slot points to get her hair cut, and she likes her haircut, she's going to come back every month to get her haircut using her slot points. So that's the marketing tool. And so there are a lot of tasks for Brandon and the rest of us to refine this place. And it pains me to go back there and see our salon ready for action, and we don't have employees in it yet. We can't find -- we will find those employees even if people who cut hair, they work in kind of a different sort of commission basis. I'm willing to give them much better commissions than they get in Woodland Park or Colorado Springs. And we need to do that, I'm even willing to guarantee them pay because if we guarantee that they're going to have 6 women getting their haircut a day to pick a number. Well, then we turn around to the marketing people and say, "Okay, we just bought 6 haircuts today. So go find some of your best customers and offer them a haircut." And that's how you jump start that business. And so the management team we're putting together is going to be doing a lot of stuff like that. And when you say what will the earnings be in the first quarter, we're not going to make much in the first quarter. But the faster we can make some of the changes I'm detailing, the faster we can get to that. And I'm pretty sure we can get to $10 million to $15 million this year.

Yes. I'm trying to think of what to add to Dan's. The -- look, we lost a little bit of money in 4Q there. We're likely going to lose a little bit of money here in 1Q. I'll tell you, February is better than January. And the big changes that we were making behind the scenes, including bringing in a bunch of people from other properties to help shore things up and with some of the analytics on the cost side, that really happened in full force now. So it takes a little bit of time to digest crunch numbers and digest things. But in terms of when do you start seeing the benefits of those actions, I would not assume it happens right away in 1Q. But on the flip side, we're going to be going into spring and summer here relatively quickly. And to Dan's point, we -- it is a -- tends to be a spring and especially summer seasonal market, and we will make, I think, pretty decent money in those months.

Yes. And I don't mind telling you, those of you who have known me for a long time, I don't make management changes like this lightly. And we pretty aggressively changed the management of this property in the last several weeks. And I think that reflects the fact that as I -- as we got into it after everything was open, it's like why are we not doing better? And you found stupid things like the buffet I cited. And it's like stop doing stupid things. And so now I've hired and brought in a bunch of smart people, and hopefully, we'll start doing smart things. The sooner we do smart things. I'll be happy.

If I may follow up with one really quick one. Can you remind us your CapEx plans for the year?

Well, other than American Place, it's like $7 million; $5 million of which is maintenance, and then I mentioned the Italian restaurant, it might be $2 million. And American Place is not a big number because we'll just be starting. So of the -- do you remember what it is in the second half of the year?

Well, it's going to be dependent on the financing, obviously, but it's not a big number.

Not a big number.

I'm hesitant to give one.

Well, the architectural fees are probably going to be $10 million, and that's largely this year and a couple of guys driving bulldozers around. So maybe $20 million in the second half of this year on American Place. But most of that $325 million will end up being in the second half of 2026 and the first half of 2027. And then some spills over even after you open because construction bills are paid in arrears.

Yes. That's right. We're going to take one last question, and then we're going to -- let's be quick and we'll round it out.

Okay. Our last question comes from Andrew Walker with Rangeley Capital.

I just wanted to say how much I enjoyed and agreed with the conversation on the valuation and opportunity costs on acquisitions. Just real quick, I think you mentioned the February results for Colorado. What did the February results for American Place look like?

You will -- we always hesitate to give them because the numbers that I always get behind the scenes differ from what actually gets reported.

That's because that we look at the numbers with free play and the states report it different ways. So there's always a little difference in the state numbers. But listen, it's been very consistently rising for -- since it opened. And now I don't think it's going to continue to be up 25%, 30% over the prior year going forward. At some point, the growth will slow, but it's been pretty consistently up 20% over the prior year. Now the comparisons get more difficult in the middle of February because we opened the high-end restaurant middle of February last year. And so without even looking at the month, looking out the year, I'd expect us to be running up 15%, 20%. And then gradually, maybe later this year, we're only up 10% in revenue. But then the bottom line would be up more than that because if you're up 10% of revenue, you might be up 20% income.

The -- and you did have some -- there are little pockets of weather depending on where you look, Andrew. So I'll tell you this. Outside of the weather pockets, the customer is actually still pretty robust, if maybe that's the other angle of your question. It does -- especially in Colorado and especially in Waukegan, we're seeing a very good robust customer. But I would tell you, we would expect that as well because those are 2 underpenetrated markets. And so we expect them to be a little more robust anyway.

There are 2 little things we're doing that help the numbers. Our larger restaurant was -- or one of our large restaurants was somewhat underutilized -- and we're now -- we've set it up and are using it for entertainment events. So we bring in comedians and inexpensive entertainment to be in front of 300 people. And that's worked pretty well at driving business when we do it, and we'll probably do more of that. And we're also adding a small poker room. Now in poker, you get a break. So it's not a lot of money, but it was a pretty slow corner of the casino. And so we said, "Well, let's put in a poker room." So we have one. Our competition has poker.

Coming soon.

Yes. And so that will be open in the next few months.

Awesome. And then just the bookings for Colorado over the next couple of months? I don't think you've really talked about them. How are kind of the hotel rooms booking so far?

I honestly don't know it off the top of my head, but...

Well, I was going to say it is a short booking window. It's not like Vegas. In Vegas, you tend to get pretty advanced bookings. In our cases we'll drop a mailer. Actually, the mailer is going out now for the month of March, for example, but those mailers will have the room offers for the current month. And so our lead time isn't months and months and months. It tends to be days or weeks.

I mean we do fill on weekends. So when you're looking at occupancy, it's all about [ what's the ] midweek. And that's one of the other areas. We need to hire more sales and marketing people to help use the meeting room space to fill midweek. So we're working on that.

Yes.

Perfect. Well, most of my other questions have been answered. Again, I loved how you all talked about the opportunity cost and excited to get some new equity financing done.

We're not doing equity.

I think you said no equity. No, I think you said no. You didn't say no equity. No, you didn't say no equity, Dan. No equity.

Okay. I said no equity. I missed the word equity. That's a bad word around here.

No equity. We agree, Andrew. We agree. Thank you, Andrew.

Yes. [ That equity ] we'll purchase from Mahjong.

Hey Dan, do you want to just wrap it up real quick?

No, I think we've covered it. So thank you, everybody, for your support and hang in there with us, and this is -- we're going to have a great 5 years here.

All right. Thank you, guys.

Okay. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.