Full House Resorts, Inc.

Greetings. Welcome to Full House Resorts third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Adam Campbell, corporate controller. Thank you. You may begin.

Thank you. Good afternoon, everyone. Welcome to our third 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 would also like to remind you that the company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption forward-looking statements for the discussion of risks that may affect our results. Also, we may make reference to non-GAAP measures such as adjusted EBITDA. For reconciliation of these measures, please see our website, as well as the various press releases that we issue. Lastly, we are also broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release, as well as all of our SEC filings. That said, we're ready to go, Lewis.

Thank you, Adam. We had a very strong quarter. Revenues rose to $78 million from $75.7 million in last year's third quarter. Keep in mind that last year's financials include $1.5 million of revenue from Stockman's, which was sold in April of this year, so revenue growth on an apples-to-apples basis was 5%. Adjusted EBITDA rose 26% to $14.8 million. That number would have been closer to $15.2 million, except for several unusual items. Our strong growth in the quarter was led by American Place in Illinois. and Chamonix in Colorado, both of which are still in the ramp-up phases and should continue to see their profits grow. Specifically at American Place, our temporary casino continues to fire on all cylinders. We had record revenue and record profitability at American Place. Revenues there increased by 14% to $32 million in the third quarter. Adjusted property EBITDA rose 16% to $9 million. We continue to have large numbers of guests discover American Place for the first time, and that's helped our database grow to more than 115,000 people. The pace of new database signups really hasn't slowed down in recent memory, which is great to see. That broadening awareness should continue to propel our temporary American Place facility to new levels of profitability in 2026 and 2027. We have long said that the temporary American Place should be able to achieve $50 million of run rate EBITDA and that it's much larger permanent facility to earn double that amount or $100 million. Our conviction in those figures remains as high as ever. Regarding the permanent American Place facility, we continue to make progress. We recently received unanimous site approval from the Waukegan City Council. Behind the scenes, we also continue to refine the project, resulting in a reduction of the project's total budget. down from $325 million to $302 million, excluding capitalized interest. Our permanent casino project is an exciting one with total square footage more than doubling, the number of slots increasing by about 40%, and the number of table games increasing by about 90%. It's the closest casino to more than 1 million people, sandwiched between two of the major north-south traffic arteries in northern Chicagoland. To put that in perspective, the equivalent would be like if the Las Vegas locals market only had two casinos, and think about how much those two casinos would earn. Within Lake County alone, American Place will be the only full-service casino to more than 700,000 people, and Lake County is one of the wealthiest counties in the entire country, so we have great demographics. permanent American Place project is a phenomenal opportunity that should earn a very high ROI and so we look forward to when we can begin its construction. Tangentially related, we've seen some uninformed opinions recently about the potential for a new casino in Kenosha, Wisconsin. To be clear, these efforts go back some 30 years to the 1990s. The principal opponent is the large Native American casino in downtown Milwaukee and which would be much closer to it than us. That project is far from certain with several hurdles. It still requires federal approval as well as state approval, and we believe there will likely be lengthy legal challenges to the project along the way. Beyond that, the project, which has gotten significantly smaller over the years, and at this point we believe is sized for the local Kenosha market, still needs to be built. Even assuming full approvals today, the project still has several years before it would ever open. The reality is, assuming it ever receives all of the necessary approvals, it is likely many years down the line. More importantly, the vast, vast majority of our guests at American Place aren't coming from Wisconsin. They're coming from immediately around our site. Our target markets follow the population density around us. That's to the south, going towards O'Hare Airport, to the east, going towards the lake, and certainly going to the west where there is no nearby full-service casino. As you head up north to the Wisconsin population density thins out until you hit Milwaukee. And so as a result, most of our guests aren't coming from the Wisconsin area. They're typically coming from locations that would require passing by our casino before they ever reach Kenosha. Our geography in a very wealthy county is an extremely large benefit. When you have proximity and quality on your side, as we will with our permanent American Place Casino, You win that competitive battle nearly every time. Turning to Chamonix, we made great strides under our still new management team, which began arriving in April. Revenues rose by more than 7%. Adjusted property EBITDA rose by $2.8 million from last year's third quarter, rising to positive $2.1 million from negative $0.7 million last year. Our table games business is starting to thrive. Table game revenues were up 53% versus last year's third quarter and up 296% versus the third quarter of 2023. Helping drive that growth is our highest tier of rated players. Slot revenues were up 6% and 161% over those same time periods. Our marketing programs also continue to improve as we use more targeted ways to advertise and improve the way we test various promotions for their effectiveness. We also have a large ballroom that we can use for entertainment, a new amenity to Cripple Creek, and we continue to discover what types of entertainment works best in attracting our ideal guest. Those efforts are helping us achieve new property records, including a new property record that we hit in September for slot coin in in a single day. Our high frequency guests are coming more often. In the month of September, the number of visits from high frequency guests were up more than 33% from the prior year. Slot revenues from those high-frequency guests more than doubled. Rated slot play as a whole was up 4.5%. The database, also showing decent growth. In a typical month, we're adding about 3,000 new customers into our database. Chamonix is a property that Colorado players are slowly discovering and are returning to enjoy. Regarding our group business, that's starting to pick up steam, too. We have a verbal agreement for a group in the state. We're in the process of inking it now, so we won't give you the name of it quite yet. They hold an annual event every year around this time, and so this would be for next year's conference. In their ideal scenario, that group would take up 1,200 room nights over three days, where every single room in our hotel plus spillover into the rest of the city. Their guarantee will be for a smaller figure than that, but it's still a very important group for us to host. The group is made up of important political and business leaders from throughout the region, We're of course thrilled to welcome them in a year. Our ideal group size is smaller than that, between 100 and 150 attendees. Within 500 miles of us, we estimate there are up to 4,000 conferences that fit that profile. We are starting small with our expectations, targeting 25 events of that size next year. Over the next three years, we think we can have a pretty full group business of about 55 events per year, or about one per week. On the cost side, we meaningfully improved efficiency in the building. We reduced the average number of FTEs from 373 in the first quarter of this year to 325 during the third quarter. That's a reduction of 13% despite being in the busier summer season in the third quarter. We have targeted additional areas for efficiency and expect to see those benefits in the upcoming winter season. Ultimately, our greatest opportunity remains under-penetrated Colorado Springs market. We estimate that between 12% and 15% of Colorado Springs residents visited us or any casino at all in Cripple Creek in the last year. That is an extremely low number. In the last year we had about 51,000 unique guests at our own property. That is a number that can easily double. A pleasant surprise to us is the number of guests coming from the Denver market. 30% of our guests in the last year are coming from the Denver area. When we originally underwrote the investment in Chamonix, we focused largely on the 1 million people that live in Colorado Springs, Pueblo, and Canyon City. We viewed Denver largely as gravy. The reality is that Douglas County in South Denver is as close or closer to us than Black Hawk. It's one of the fastest growing counties in the state. It's quite wealthy with median household incomes of about $145,000. and it has 400,000 people. With Douglas County, our feeder market is effectively 40% larger than what we underwrote to. 15% of our guests aren't coming from Colorado Springs or Denver at all. They're coming from places like Texas, which has nonstop flights and is viewed as a Texas heat. Chamonix is the 13th project that we've worked on in our careers, and every single one has exceeded the run rate EBIT does that we promised investors. Casino ramps are always difficult to predict. Casino run rates tend to not be. We believe that Chamonix will continue our streak of successful projects. It's only been fully open for about a year and we're beginning to make great strides. The green shoots are pretty abundant. Looking at the other properties, Rising Star and Silver Slipper were essentially flat on a combined basis. Grand Lodge, which is a pretty small part of the company at this point, was affected by renovation disruption at the Hyatt Lake Tahoe that houses our casino. And then on the balance sheet side, we had about $40 million of liquidity at the end of the quarter. At this point, there's extremely little CapEx for us until we start construction on our permanent American Place casino. Our Illinois operations alone pay for the interest expense and our current debt. And of course, those Illinois operations continue to ramp. I went through a lot, Dan. You want to? Anything else there? I think you covered it pretty well. Let's take questions. All right, let's do Q&A.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from David Bain with Texas Capital Securities. Please proceed.

Awesome. Thanks, guys. Good quarter. Hi. And I know you mentioned, Louis, and in the press release, you all mentioned 15% of the Colorado households that visited Kripal Creek last year. Kind of wondering what the number should be in a normal scenario as the primary feeder and given the distance, what that math would look like if you were to get there. I mean... If we go to 30%, you know, looking at the mix that Lewis mentioned, is that like, you know, they're 60% up in revenue? Or is there anything that you can give us there? I know there's a lot of variables, but trying to big picture that comment.

Yeah, well, there's a lot of things. I mean, we know the gaming per capita, which is another way to get to it, is about half of what it should be for that sort of market. So that would suggest it should be 30%. But even that is on the low side. Harris used to provide an annual data book every year that had a lot of data. And in there, they said about a third of Americans aren't interested in gambling because they were math majors in high school or something, right? But two-thirds do view gaming as a normal entertainment venue. So if you take that as the outside number, that maybe two-thirds of people would visit once a year, certainly half is a possibility. I mean, if I look at Las Vegas and say, what percentage of the people here walk through a casino over the course of a year, it's got to be 95%. But it's interesting. I know that that number is low. I'm going to do some work and try to back into what it is at the Silver Slipper, for example, like what percentage of Slidell visits we could probably get there. We get to that number because... Yeah, we're a significant chunk of the market. We know how many unique people we have. We know how many times they come per year. And using that as a proxy for the market, we end up with actually less than 15%. You get about 12% or 13% of the adults in Colorado Springs are visiting Cripple Creek over the course of a year. Now, some people are going to Blackhawk. Some people are flying to Las Vegas. So when you say what percentage of adults are actually gambling, it's probably in the high teens.

Right, and just as a quick follow-up to that one, the flow-through on additional revenue at this point, how do we look at that?

Everything is open. We don't have any amenities not yet opened. In fact, we're going the opposite way. We've sharply curtailed overtime, which is – Lewis forgot to mention, but overtime is down pretty dramatically from what it used to be. And so we're focusing on ways to be more efficient with the payroll and try to right-size the payroll for the revenues we have, not the revenues we think we will have. But at the same time, we're growing revenues. So I think our Our expense structure is going down going into the off-season, and I think it'll continue. And our revenues are continuing to grow, but we're trying to size the payroll for what we have and then continue to grow the revenues. And, you know, those two factors will result in improvements in profitability, obviously. And, frankly, we have very easy comparisons in the fourth and first quarters. But I think... You almost don't even want to look at the historic numbers. I want to get to, you know, comfortable profitability in 2026 and then build from there.

Yeah, and you probably know this, David, but when you think about the flow through, there's obviously gaming taxes. It's a graduated tax rate there. So, you know, figure low to mid-teens. And then, you know, there's some marketing reinvestment into players, but maybe some incremental labor, depending on whether it's slots or tables. But outside of that, it's... it's pretty meaningful flow through. I mean, you're talking, you could easily be talking 70, 80%.

And I will say this is, in this industry, you tend to have pretty high turnover, and in that market, it's higher than normal because it's such an isolated town in the mountains. In a situation like this, that's actually helpful. because we don't necessarily have to lay off people who are relying on the job. Now, if somebody isn't pulling their weight, of course we'll lay them off, but we're able to reduce the payroll by just not replacing people who leave, and that's a lot of what we've been doing.

Awesome. And then my final question, in order to stay on track for the August 27th American Place Permanent, I believe you alluded to you'd like to complete financing by 1Q next year at the latest. Does that timing change the phasing versus closing something this quarter? And if you end up needing an extension for Illinois, I think most at least would agree that you'll get it. But how does that process technically work and get message back to investors?

Well, I mean, we've been talking with our principal bondholders and other potential investors and sources of capital to try to figure out the best way to do it. And obviously, you know, legally, ethically and otherwise, we represent the shareholders and we want to figure out the most effective way to finance it. to the benefit of the shareholders. Of course, we also want to be fair to bondholders and everyone else. But to be clear, there is not a deadline of having this open by August of 2027. The deadline is how long we can operate the temporary. And so we're not going to run into pay usurious rates in order to meet that deadline if you If you had to, you'll end up paying the employees for a month or two without working. But you won't have to. We pay over $25 million a year in state gaming taxes. We employ over 500 people. We already did get an extension once. The process to get an extension is it has to go through the legislature. We could do that in the first quarter. We could do that a year from now in the first quarter. The reason they have that Law there the way they structured it is a I call it the Jacks Cleveland Where they had proposed a big Permanent and the temporary was in an old department store and 15 20 years later the temporary is still in an old department store So they want to hold their feet to the fire to make sure we're actually going to build the permanent and we fully intend to build the permanent in fact a last week I went to Wind Creek and I went to the New Hollywood and And we're a notch better than either of those. And they're nice, by the way, and they're both doing quite well. But we have a very fanciful building. We committed to invest a total of $500 million. We've put $170 into the temporary. And with the $302 million cost of the permanent plus capitalized interest, we've satisfied the $500 million requirement. But, you know, so... We fully intend to build the permanent. Be nice if we could be open by August of 2027, but if we're not, it's okay. We will get an extension, and we will be open when we're open. You're right about it. If we can get the money in the next few months, we can be open by August. There's no high-rise. There's no base. While it's a complex building, it's not that. But if the financial markets aren't cooperating, we might be a little late, and it's not the end of the world.

Very helpful. Well, nice quarter again. Thank you.

Thank you, David. Our next question is from Jordan Bender with Citizens. Please proceed.

Hey, everyone. Thanks for the question. And maybe to just continue on the prior conversation. You know, if I look at your bonds and kind of how they're trading right now, it's telling us something. Have you kind of thought any differently or can you maybe just update us? You're thinking in terms of if you had to go look for financing, you know, potentially using a REIT. There's been a couple of transactions in the last couple of weeks. Just, you know, those look any more favorable than they have historically or. I think maybe land leases could be on the table or historically have been on the table as well. Is there any change to how you're thinking about potentially financing the permanent at all?

Well, two issues. In terms of the bonds, we're pretty sure somebody shorted the bonds. We know there's at least one analyst who is bad-mouthing us every chance he gets, and that was the reason for Lewis focusing on Kenosha. And that Kenosha deal has been around for decades, and it's not getting any more traction now than it was then. Those two Indian tribes are from central Wisconsin. They've been fighting for centuries, and that's far from done. But it has very little impact on us. But a sell-side analyst talking about it has an impact on the bonds in the short term, and it's kind of ridiculous. And when you really look at the trading price of the bonds it's on a fairly small volume so I'm not sure that that is representative of anything but yet we would rather the bonds be trading better that would make this whole thing better and now at the same time you know we have we have and are looking at land leases we have and are looking at REITs something that we found in the last months and years is The competition amongst the REITs is making them more competitive than it was before. It's still our preference to go to the bond market. We tend to keep things pretty simple, and that keeps it pretty simple. But we do look at everything, and it's getting more attractive. I looked at the Blake Sartini thing this morning, and I'm a little bit jealous. I wouldn't be having this earnings call if we take the company private, right? That was pretty brilliant. I'm looking forward to seeing what the details are. But in effect, he's one of the few companies that still owns the real estate, as are we, and he's selling the real estate to REIT, becoming an opco, and then he's got a financial commitment from a big bank to pay a cash part, and then he goes private. Boy, that sounds nice. I don't know if we can get there, but boy, that sounds nice. So we look at everything, and by the way, we have no active... look at going private. I don't want to unnerve everybody. But when I saw the news this morning, preparing for this earnings call with all of you and all the tough questions you're going to ask about Kenosha, I thought, I'm a little jealous of Blake Sartini at the moment. So anyway, we look at everything.

Yeah, look, I think there's certainly an eagerness from some of the sources that you mentioned, Jordan. And I think those are two of several options that are in front of us. And so stay tuned. Ultimately want to do something that's cost effective. But we've got a pretty big menu of potential items in front of us.

Great. Thank you. One of the other things I'd add is I think our second quarter, which wasn't a good quarter, we weren't happy with it either, unnerved a lot of people and it caused us to really start blocking and tackling on just simple things like what's the payroll, what's the cost of goods sold, little, little things like our cost of goods sold in Colorado was inordinately high. We created a warehouse space where the more expensive alcohol and so on are kept under lock and key and so on. So there's a lot of stuff we're doing that is really just blocking and tackling casino operating management. And you're seeing those results in this quarter, and you'll continue to see it in future quarters. And I think that will get people more comfortable. Like, on a trailing 12-month basis, Colorado lost money. On a prospective 12-month basis, Colorado will make money. And that changes the leverage profile quite a bit. And although it's a little... You know, people look at it and say, well, you know, on a trailing 12-month basis compared to the amount of debt you're going to have. And I say, guys, we are somewhat of a development company. You really have to look at what we will be when we open American Place, because otherwise you're ignoring the use of proceeds of the new debt. But the conversation gets easier when you have better earnings, and we're pretty happy with the earnings we just reported.

Great. Thank you. Lewis, I just want to follow up. You said there is maybe several one-time unusual items in the quarter. Is there anything major that call out there, or I guess are those just truly one-time and will it kind of happen again looking forward?

Well, you know, the biggest part of it is, you know, we highlighted the last call as well, is we changed over the Chamonix management team pretty meaningfully. And so, between headhunters, bringing in new people, relocation, that sort of stuff. That was probably half of the number, half of the delta on the call, and then we had some... And severance pay, yeah. And we had some additional smaller stuff at the properties. But the big thing is really kind of change in leadership at Chamonix. Like our new marketing director there, I think, is two months into the job, so still relatively new. There's still a lot of good to come there.

Great, thank you very much.

Our next question is from Ryan Sigdall with Craig Hallam Capital Group. Please proceed.

Hey, good afternoon. I want to say on Chamonix, so new general manager, a lot of new personnel you just mentioned. It seems like a lot of the focus has been on operational improvements, cost efficiencies, the cost side of the business. I'm curious how you feel about the people, the infrastructure, just where things are at from the fixed cost side of the business, where the focus can potentially shift more to revenue growth initiatives there?

Actually, the focus is on both controlling costs and building revenues, but the building of revenues takes time, right? So to build the revenues, it's like hire smart marketing people who are changing advertising agency, for example, you know, modify revenue, how you're approaching people, do more digital, less and so on, be more focused. And that will pay off over time. But we've done a lot of that. We've hired more casino hosts. Our sales and marketing team has gone from half a person to three people. And so they will bring in benefits in future quarters, whereas right size and the payroll is something that you can do very quickly. I don't want you to be left with the – but we will not get to where we expect to get to with Chamonix just cutting costs. We know we have to grow revenues. We are focused on both. It's just the cost cutting has more immediate benefits.

And just maybe on the marketing, et cetera, but you mentioned conference pipeline. You mentioned one potentially next year kind of building that. But do you have the personnel infrastructure? I guess what really goes into building a conference business as you look forward? Is it the people? Is it relationships? Is it just boots on the ground takes time? But can you walk through exactly what you guys are doing and why you have confidence you can grow that besides just kind of putting a radius around with the number of conferences?

Yeah, there are a lot of different levers. The most important one is getting more day trip people from Colorado Springs. I mean, the market's a little bit like Atlantic City where every casino in Lenox City has a hotel because they have to by regulations and they do their best to fill those hotels and they do a pretty good job of it but the day trip people from Philadelphia always outnumber it and so the day trip business is the vast majority of their revenue and the same will be true with us we have a million people at the foot of the hill and that's important and for example there's a very Simple little thing, but it could be important when we do, and we've been doing focus groups, and people say, you know, well, the drive isn't that long. It's a little bit scary because you're along this road that has a cliff on it. Well, there's a back door that we've always known about, and a little stretch of it had not been paved until about a year or two ago, and now it's paved. And you drive up to Divide, and instead of turning left at Divide, you go straight a mile and a half, and you go left. And it's a wide, nicely paved, two-lane road that goes up a valley and comes in the back door of Cripple Creek. Not the back door, it's the other, right? And whereas the way that kind of follows an overpass is carved into the side of the hill, so it weaves in and out of the hill. And when you're driving away from Cripple Creek, you're hugging the hill, not so bad. When you're driving towards Cripple Creek, the road drops off on the right side, and it's a little bit, I suppose. And I'm used to driving in the mountains, so it's never bothered me much, but by comparison, Lewis is not. And when I showed him the other way, he now goes up the back way, and then he'll come down the other way. If you Google it, they're almost exactly the same time and the same miles. And so we're getting the road signs changed. You also have better self-service if you take the fluorescent valley route uh... and and and and and so it's they're both roots very pretty uh... but there's a little detail uh... the golden nugget property their whole strategy seems to have been to be the first one as you come into town and they're kind of uh... removed from everyone else and they're up on a hill and as you come down you see them first then you drive three blocks by them to get to everyone else And, you know, sometimes that strategy works, sometimes it doesn't. I mean, the Emery's already had that same strategy in Las Vegas, get people before they get to the Strip. Well, guess what? People still want to go to the Strip. And you have a little bit of that in Cripple Creek. But, boy, if you come in the other way, we're the first casino you come to, not the Golden Nugget. They're the last one you get to, right? And it's like, wow. So we're actually changing it on our website to say, hey, Take the more pleasant back road, especially if the weather's not good. It's a much more pleasant drive. And it's even kind of interesting. One evening I was driving on it and I almost hit a llama. I thought it was a deer at first. Then I realized, oh, there's a llama farm. And so one of the llamas had gotten out of the llama farm. So in terms of building that day trip business from Colorado Springs, it's a lot of that. It's saying, hey, this is a nice, pleasant drive. It's a nice place to go. Come up and see it, experience it. That's the most important lever to push. Now, the convention of meeting space lever is also because that helps fill midweek. I mean, we fill up on weekends. It's midweek we need to fill up. And we built very nice meeting room space, the nicest of any casino in the state. Ameristar has pretty good meeting room space. Monarch does not. And nobody else in Crevel Creek has anything anywhere close to what we have. And so we've hired... Three people are experienced in this and they are reaching out and they know how to do it and but but meetings are booked Months and years in advance. So like right now we're inking this deal Lewis referenced for a year from now and And it's actually kind of a citywide Convention, but we're most of the rooms. So it's really us and some spillover and But there's a lot of these. And they are already starting to put stuff on the books. But this takes time. And honestly, we should have been doing this three years ago. But we're doing it now, and better late than never. And it will build over time. But if you look at, say, Monarch, who is a milepost we look at, because I think we've built a pretty similar place. And they're a little bigger than us. They have 500 rooms. We have 300 rooms. but the casinos are about the same size and so on. And they're doing north of $300 million a year in revenue, which is six times what we're doing, five times what we're doing. But if you assume that all 500 of their rooms are filled every night and they get $500 in the casino in each occupied room, then their revenue is still 75% from day trip business. And I think the same will be true with us. So it's important to fill the rooms. It's important to fill the rooms midweek. It's one of the important levers. The day trip business is an important lever. The high-end business, very important lever, figure out who the high rollers are from different places. And, you know, some blocking and tackling. Like 15% of our play is coming from the town of Pueblo, which is about 200,000 people. And it's kind of like, huh, that's kind of interesting. It's south of Colorado Springs. It's a pretty good penetration. So now we're looking to have a host who's dedicated to Pueblo, and we will host cocktail parties in Pueblo for our customers to find out who their friends are, because often friends of high rollers are also high rollers. So you find these little nuggets that just takes time. The Colorado State Fair is in Pueblo. Well, next year at the Colorado State Fair, we will have a booth passing out hats and free play, whatever it is, to try to get people to come up and visit us. So it's learning and modifying and blocking and tackling. And if we can keep expenses flat to down and revenues growing 5% to 10% a quarter, we will get to be pretty significantly profitable pretty quickly.

Thanks, guys. Good luck.

Our next question is from Chad Bainon with Macquarie. Please proceed.

Hi, good afternoon, Lewis and Dan. Thanks for taking my question. I wanted to ask about Indiana. There was a gaming market study recently, kind of going back to the age-old question that you and the team have talked about in terms of is the state of Indiana maximizing or properly offering casinos in the right locations? And I know you've always talked about you know, improving the value of that asset. So can you talk about if, you know, the parties that be on the other side are maybe a little bit more receptive at this time to potentially, you know, moving an asset to a higher population area, and if you guys could still potentially have exposure to that opportunity? Thank you.

Yeah, well, it takes a state law, so you have to go through the legislature and get the governor to sign off on it. When Indiana legalized 30 years ago, it intentionally put the casinos around the borders to try to draw revenue from Illinois, Ohio, and Kentucky. And Illinois, Ohio, and Kentucky now all have their own casinos. And so the original locations are not the best locations in terms of maximizing the jobs or the tax revenues for the state. And so they do have that precedent. They allowed two riverboats on Lake Michigan to relocate One is the Hard Rock Casino just off the freeway in Gary, and it's the number one casino in the state now, doing $25, $30 million a month. And the second one is in Terre Haute, and it's doing very, very well in southwestern Indiana. So the legislature approved a gaming study undertaken under the Gaming Commission to investigate what would be the impact on the state tax revenues as well as on the horse tracks and the existing casinos of allowing a casino to move to any two locations, one of the two best locations. Not surprisingly, number one is in Indianapolis. I mean, half the population of Indiana is in Indianapolis, which is in the middle of the state and has no casino. Now, Caesars has a racetrack 30 miles northeast of it and another one 35 miles southeast of it, and Terre Haute is 50 miles to the west of it. And so a casino in Indianapolis would have some impact on those, but the state still comes out way ahead. And then the other location I've noticed is Fort Wayne, and kind of specifically northwest of Fort Wayne. And up there you'd have... There isn't any casino in Fort Wayne. That's the second largest city in the state. The MSA is 600,000 people, if I remember correctly. And you might have some impact on the tribal casino in Battle Creek that, ironically, this company created 12 years ago. And there's another tribal casino up that way. It might have some impact on it, but most of the revenue would come from increased gambling by people in Fort Wayne. And so that study's out, and it's available. And we have the lowest revenue-producing casino in the state by a wide mark. There is actually a special tax tier for low-revenue casinos, and I think we're the only casino in it at the moment. And so in terms of who could move, we would be the most beneficial to the state because we go from a very low tax rate to a more normal tax rate in a different location. So, and ironically, we actually have the support of the community we're in because we pay, as I recall, about a million a year in taxes to Rising Sun. And we've told them that we would pay them 2x if we're allowed to relocate. And the same with our employees. We've said we would, if we're allowed to relocate and they choose not to relocate with us, we would pay them one year's severance. And so we wanted to make sure that we weren't fighting opposition from the community we're in. In fact, I think the community we're in understands the situation and would welcome it.

Great, Dan. Thank you. Very comprehensive. And then, Louis, you talked about the 16% growth in the quarter at the temp. So that puts trailing 12-month EBITDA for the property down. A little over $32 million, you talked about growing this to $50 million run rate. Is that just, you know, kind of running the revenue at the same rate you're running right now, getting the flow through, or are there any other strategies that you'd be willing to share in terms of getting closer to that $50 million run rate? Thanks.

Yeah, no, no, you're thinking of it the right way. It's just the continued natural ramp. We're not going to hit $50 million. Well, maybe we will. I'm not expecting us to hit 50 million in 2026 for what it's worth, but I do think we have a good shot to be in the 40s next year. And I think by the time you get ready to open the permanent casino, the expectation is hopefully on a looking forward basis in the tent, we can be run rating somewhere close to that 50 million mark. So That's the thinking. If you look at, look, the database growth hasn't slowed down, as I mentioned. Revenue growth, you know, we continue to grow revenues pretty meaningfully. September was a little bit of anomaly, but I fully expect us to see very good and continuing growth as we go out from here. And the sheer fact is, when we run around that market locally, people still don't know that there is a casino in Waukegan. And the number of people that discover that casino on a daily basis is very high. And that's ultimately great news for us. If you think back to when they talked about opening new casinos in that market, all the local news media focused on the downtown casino, not in Waukegan. And so when we opened, I think the natural assumption from a local new casino in downtown finally opened. And that's okay. But it means that the awareness is still kind of growing as it would do in a normal ramp.

We also added a poker room in August. Lewis mentioned that September was a bit of an anomaly. Recognize September this year did not have Labor Day weekend, whereas last year it had a good chunk of the weekend. But otherwise, that property has been up in revenues and EBITDA. every single quarter since it opened two and a half years ago. And, you know, trailing 12 months might be 32, but the run rate today is clearly in the 35, 36. I mean, it was 9 million in the quarter. It's not a very seasonal market. And so I think the run rate today is higher than 32. And we probably hit something with a four on the front of it in 2026, and we'll be at a run rate of 50 by the time we get to August of 2027, I guess is what Louis is saying.

Thank you both. Appreciate it, guys.

Our next question is from Colin Mansfield with CBRE Group. Please proceed.

Hey guys, thanks for taking my questions. Wanted to drill in a little bit on the table game strategy up at Chamonix, you know, and maybe help us bridge a little bit, you know, the nice numbers that you gave us earlier and what you're seeing in terms of, you know, table revenue growth with sort of what the state data is telling us, because it seems like you guys are growing share just based on, you know, kind of what the data is telling us and what you guys, you know, are reporting. So, Maybe what's working there and, you know, maybe what's the status on the go-forward strategy here for the table games?

Well, we have the prettiest table games pit in the state. And, of course, the 300 guest rooms kind of help feed into that. And so much so that Century, who's across the street from us, has thrown in the towel and closed their table games, which also helped us. The other night we had a... I guess about three weeks ago, we had an entertainment event, and our table games were just bustling. And I walked up the street to the Brass Ass, which is Triple Crown's table games, just to see if any of that was spilling over. And there were a few very lonely-looking players up there, so I think we've sucked up a lot of the table game business. And then the Golden Nuggets is our principal competitor for table games, and they do a good job where they are. You know, there's a few things. There's a pretty big place called the Double Eagle, privately owned. I think the second of the two owners passed away. The thing's in probate, and it's a fair chunk of capacity and pretty dead-looking place. And so when you look at the market more and more, we're kind of the dominant, and I think that will continue. And the Golden Nugget is a good competitor, well-run property. And Triple Crown is a well-run company. And the other ones are pretty small and not very meaningful. And so I think we will continue to gain share, and I think we will grow the market. I mean, the Cripple Creek is most of the growth in the state's revenues this year, and we're most of that. But I think it's a little bit masked, perhaps, Double Eagle being soft, if you will. In other words, it's kind of, they're, I don't know quite where they're going, but they're not doing much marketing or much of anything, and so that is causing us to gain share. Eventually, Double Eagle probably gets bought by somebody who fixes it up, and that would actually be good for the market and good for us. I mean, they have 170 guest rooms, but they're They're the second largest hotel in town, 158 guest rooms, I think. But they're sorely in need of refurbishment, and that will happen someday in a five-year time horizon.

Yeah, we've got, I mean, if you look at the table games business for us, it's still only about 11% of total gaming revenues. A year ago, third quarter of last year, it was sitting around 8%. So we've grown that table games business I think that table games business can be double what it is today for what it's worth. I think part of it is we're putting in new games, so I think we have the only mini-Bach pit in town still at this point.

We introduced Bach to the first Bach red table in town, and we're the only ones with it. We did just put in one of the electronic... It used to be a rosé, and now it's owned by Interblock. We put it in just a few weeks ago. And it looks and feels like a crap table, but I think legally it's a slot machine, so that might destroy the numbers a little. But it allows you to run a crap game with just one person, or even no person. And it's a pretty popular game. You see it in the stations, casinos here in Las Vegas. And We also added table games in Bronco Billy's that's only open on weekends, but with a little lower table limits. So we have quite a bit of table capacity now. And I think we'll continue to grow that. I mean, recognize our table game business is still a fraction of what they do at Monarch or Star or The Lodge. So we have a lot of growth to go.

Great. Yeah, I appreciate the color on that. Thanks. Thanks, guys. And then, you know, maybe for my follow up, if we can stay on Chamonix for a second, you know, and Lewis, if you can indulge me, because I know you said, you know, estimating ramps is difficult. But, you know, now that you guys, you know, feel like there's probably a good fully baked cost structure in it at Chamonix with a lot of the changes that Brandon and the team have enacted, you know, what should we expect in terms of EBITDA over the next few quarters knowing that we are kind of going into the seasonally slower period and a lot of the good flow through that you guys you know can expect will really probably shine you know during the big busier season as we get through the through the winter but you know maybe help us think through you know what we should be looking for from an EBITDA trajectory there over the next few quarters.

Strong year over year growth and Better results, but I'm hesitant to put a number on it. We're doing the best we can to grow revenues and control costs and confident that it'll be comfortably profitable in 2026. But it's going to take us, you know, I think our total investment, including acquiring Bronco Billies, is approaching $300 million. And for us to get a reasonable return on that's going to take us three years, two, three, four years. But then I think, you know, you don't build these things for, three years. It will be a strong asset for the next 25 years.

I was going to say what Dan said. Given how difficult those ramps are and given that we still have a new team there that continues to season by the day, including a bunch of new hires in the last two months, I won't give you a number. But to be extreme, well, I'll flip it around on you a different way. On a trailing 12-month basis in the building, EBITDA was negative $4.8 million. I think what's lost on people sometimes is that if you can flip that negative 4.8 to plus 10, plus 15, plus $20 million in the nearer term, that's a $15 to $25 million swing in total EBITDA. That's not a small move. And so even though, it's a long-winded way of saying even smaller numbers have an outsized delta effect in terms of overall growth. So keep that in mind as well. But look, we are extremely optimistic on that project and I do think we'll see some pretty nice numbers in 2026.

Yeah, even in giving direction to the property, we don't go to them and say, look, this is the number we need you to meet. It's like, we need you to make progress grow the revenues, control the costs, and we'll get there. Because if you say, oh, we want you to make $15 or $20 million right away, you probably could by closing valet parking, by closing the spa, and just clamping down on all costs. but you'd be giving up the opportunity to get it to making $30 or $40 million someday. There's still a lot of costs we incur to try to get to a higher place. And so the strategy is to keep making progress. And exactly what that falls out to, as long as we are up year over year comfortably, we're making progress.

I will say this, Colin. We had an investor that wanted to see the property on a weekend recently, and so we were there on a Saturday. And he walked in the door and he said, I've heard all sorts of things like, oh my gosh, the road is difficult. He took the back way. He's like, this road is easy. But then he walked in the door and he said, I've heard that you built a place that's too nice. You can't get a good customer in here. And he said, this is exactly the kind of customer you want in here. And by the way, the place is bustling. And I think what people forget sometimes is what happens when these casinos ramp is you start by building the business for that Friday, Saturday. You slowly expand that into Sunday. You expand it into the Thursdays. And eventually, you have the database to effectively fill that whole week. We have not yet filled the whole week. But man, oh, man, we've made great progress in getting there. And a year from now, we'll be talking about even more progress. And two years from now, it'll be even better. Stay tuned, but we're feeling very, very good about where we sit right now.

Awesome. Thanks for all the color, guys. Appreciate it.

We probably have time for maybe two questions, Dan, if we're quick.

Our next question is from John Decree with CBRE. Please proceed.

Hey, guys. Just one for me. Talked a lot about Chamonix and Waukegan, but you've made some management changes not that long ago at Silver Slipper. And Dan, I think I recall, you know, you were kind of hoping for some improvements there. I think maybe hopefully you got dropped last year. So can you just give us an update on kind of what you're seeing at Silver Slipper and how progress is going there?

Silver Slipper is making progress. I mean, the numbers get a little distorted because there was some inefficient marketing. We were giving away buffets and rooms to people who don't gamble enough. So we've cut that back. So the it does not show in the revenue growth, but it's had decent trends and profitability and And and I think that you know, we're pretty happy with that Rising star was a little more challenged. We said the two were about flat the one was carrying the other a little bit and But you know listen it The silver slipper, you know can grow from you know below $15 million to above $15 million a year in EBIT. It's not going to suddenly jump to $30. But again, blocking and tackling and doing basic stuff. Rising sun is more complicated. It's a difficult market, very competitive. We have a big footprint there. And the fact that we are looking to relocate it makes people question it. So it's a, it's a challenged place to run, but it has a loyal clientele and it's making progress too. And, um, and, uh, you know, we have, we have our, we have our niche and it does, it does okay. Um, and then, uh, at, uh, Tahoe, um, the owner, uh, Larry Ellison, who acquired the Hyatt a couple of years ago, uh, has started a refurbishment. And the first thing they did was rip down everything along the beach, which was about, uh, dozen or 15 high-end villas that were right along the beach and the largest restaurant in the entire high-end chain and their meeting room space. And now we're in the high-rise that's across the street, but without easy beach access and without those villa suites, there were gamblers who we would normally invite up in the summer and would want to stay in those suites, and they're not as prone to come when those suites aren't available. And so that affected us a bit in the quarter. It's not a very meaningful part of the company at this point, but he is replacing them with new suites and a new restaurant, and I think it's going to be way nicer than it even was. It was already nice, but the location is spectacular. Now there's going to be a spectacular building mirroring the location, and that should be good for us in the long term.

Thanks, Dan.

We had a good silver slipper October. We started the quarter well there, so we'll see if it continues. But to Dan's point, I'm expecting, knock on wood, some EBITDA growth there in the fourth quarter. So good news. It's doing what we expect it to do.

We've hired some good new members of the team. We have a new head of table games who's introducing some things that are creative and good, and We have a new food and beverage manager who we hired from Treasure Chest who's very competent and doing well. So, you know, it is a new team forming together, and I think it'll have good results in the future. But this is a cash cow for us.

Our final question is from Ricardo Tintillet with Deutsche Bank. Please proceed.

Hey, guys. Thank you so much for taking my question. I was hoping if you could give us a little bit of a sense of how the seasonality of the market is going to impact the ramp-up. I know that you guys have made, you know, very important progress on the cost-cutting side. So, you know, what should we expect for the fourth quarter and maybe in the first quarter given, you know, that the market is very seasonal?

Well, last year, we lost money in both the fourth quarter and first quarter. My hope is to not lose money in those quarters this year. Now, the third quarter is always going to be the seasonally strongest quarter. We made $2.1 million in this quarter. But next summer, it should be much stronger than that. And I would expect longer term, the third quarter would always be 40% or 50% of the earnings in the year. And the year-over-year comparisons would be easy. We are cutting the cost going into the off-season. You know, our revenues in November will not be what they were in July, and so our costs can't be either, nor do they need to be. I mean, you staff your restaurants and your table games in particular based on the amounts of play, and so there is a natural tendency to have less people in the winter than there is in the summer.

in case it helps you. The fourth quarter of last year, which is an extremely easy comp, EBITDA was minus 3.4 million bucks. You should look for meaningful improvement off of that. The first quarter of 2025, EBITDA was minus 2.3. That was under the old management team, and you should expect improvement from that as well.

Yeah, and look, I'm trying to make it profitable in those quarters. And I don't think it's going to make a lot of money in those quarters, but we'd like it to stay in the black. And that sets a foundation for a good 2026.

Perfect. Thank you so much. If I might squeeze one last one. It'll be the very last one. The very last one. I apologize. Can you just share, and I know that you guys already talked about Kenosha, but do you guys, you know, given your knowledge in the industry, do you guys think that, you know, an approval of the process is even likely at this point? And given that, you know, do you anticipate that the project would even keep its original size, given all the issues that the tribe had with, you know, the approval of the contract? Any comments? I would be very appreciative. Thank you.

Look, at any given time, there's always somebody trying to develop a casino somewhere, right? And, you know, if you just look at, and it seems like everybody who ever had a Native American in their family historically is trying to put a casino somewhere. Most of those don't happen. You know, there's a lot of hurdles. In this, you have to get the Bureau of Indian Affairs, to bless the concept. The tribe actually doesn't live there. The tribe lives 200 miles north of there, where they have a small casino up near Green Bay. And the tribe itself didn't want to spend all the money you need on the lobbyists and so on. So they got the Seminoles involved. Well, the Seminoles involved are in a lot of different places as kind of a management company. And so they're trying to figure out how to get through the Bureau of Indian Affairs. Under the Trump administration, the Bureau of Indian Affairs has been much less friendly towards tribal gaming than it was under Biden. And I think under Biden, the Secretary of the Interior was a member of an Indian tribe in New Mexico. And they approved all sorts of things. And much more difficult to do under the Trump administration. I think Trump himself is not very fond of tribal casinos. He had to compete with them. I used to hate the fact that we had to compete with them because they pay less in taxes. But now they're often the highest bidder when there's a casino for sale. So the Palms gets sold to the San Manuel tribe. The Mirage gets sold to the Seminole tribe. The Sands gets sold to the Porch Creek tribe. compounding wealth tax-free, and often they're willing to pay the highest price. So now I'm looking at it and saying, well, you know, we're not looking to sell the company today, but if we were someday, the highest bidder would be an Indian truck. So it's a little bit mixed. But on this, I think it's very difficult to get through Bureau of Indian Affairs. Then they have to go to the governor's office, get the governor to sign off on it. It's not at all clear that he would. And, of course, the Potawatomi's are sitting there making $200 million a year for their casino business. in Milwaukee, so they're forces in the state. And so I think they have lobbyists and lawyers, and in fact, we dealt with that. They held us up by a year with lawsuits. And I think what they're likely to do, I mean, Kenosha is almost kind of an extended suburb of Milwaukee, and so they're going to fight that tooth and nail. And so I think it's I would say it's actually unlikely to happen. If it does happen, it's years away. And if it does happen, it's still not that meaningful to us because it's quite a distance from us.

I'm going to take it a step further. I think inflation between now and the time that casino happens, if it were to happen, is more than overshadows what we would lose to that casino.

But, you know, when somebody's looking to short the stock or short the bonds and create a negative story, they'll go find out that Joe Blow wants to put a casino on Libertyville, and they'll say, hey, Joe Blow, he was Native American 35 years ago. He might get this on. And they're not, and I think it's unlikely. And so there you go.

That will conclude our question and answer session. I would like to turn the floor back over to Lewis for closing remarks.

Dan, you want?

No, I would like, I hate to leave it on that note because Kenosha really is insignificant to our future. You know, we just had a good quarter. I think it's forming a base that we have easy comparisons going forward. We're going to have future good quarters and and we're building a base and we continue to look for the right ways to finance the permanent casino but our backs are not to the wall when we can find the stars that align in a way that makes sense then we will move ahead and and hopefully that's in the near future but if it if it takes a little bit longer that's okay too and at the end of the day we're here trying to build long-term shareholder value. It's astounding to me that our stock is as low as it is, but this too will pass. And I remember in the middle of the pandemic, our stock was down in less than a dollar and turned out to be a great buying opportunity. So I kind of feel like we're going to be fine and more than fine. And I'll leave it at that.

Thank you. Thank you, everyone.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.