Full House Resorts, Inc. (NASDAQ:FLL) Q3 2025 Earnings Call Transcript

Full House Resorts, Inc. (NASDAQ:FLL) Q3 2025 Earnings Call Transcript November 6, 2025

Full House Resorts, Inc. misses on earnings expectations. Reported EPS is $-0.21 EPS, expectations were $-0.2038.

Operator: Greetings. Welcome to Full House Resorts Third Quarter 2025 Earnings Call. Please note this conference is being recorded. I will now turn the conference over to Adam Campbell, Corporate Controller. Thank you. You may begin.

Adam Campbell: 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 a 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.

Lewis Fanger: 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 their 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 — 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 sign-ups 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. We have long said that the temporary American Place should be able to achieve $50 million of run rate EBITDA and that its 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 2 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 2 casinos and think about how much those 2 casinos would earn.

Within Lake County alone, American Place will be the only full-service casino to more than 700,000 people. Lake County is one of the wealthiest counties in the entire country, so we have great demographics. Our 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, 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 have Milwaukee, 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 guests. 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 is 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.

This would be for next year’s conference. In their ideal scenario, that group would take up 1,200 room nights over 3 days or 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, and 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 3 years, we think we can have a pretty full group business of about 55 events per year or about 1 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 underpenetrated 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 view 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 the Texas heat.

Chamonix is the 13th project that we’ve worked on in our careers, and every single one has exceeded the run rate EBITDA 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 been — 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. 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 on our current debt. Of course, those Illinois operations continue to ramp. I went through a lot. Dan, do you want to add anything else there?

Daniel Lee: I think you covered it pretty well. Let’s take questions.

Lewis Fanger: All right. Let’s do Q&A.

Q&A Session

Operator: [Operator Instructions] Our first question is from David Bain with Texas Capital Securities.

David Bain: I know you mentioned, Lewis, and in the press release, you all mentioned 15% of the Colorado households visited Cripple 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 get a 30%, looking at the mix that Lewis mentioned, is that like 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.

Daniel Lee: Yes. 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. That would suggest it should be 30%, but even that is on the low side. Harrah’s used to provide an annual data book every year that had a lot of data. In there, they said about 1/3 of Americans aren’t interested in gambling because they were math majors in high school or something, right? But 2/3 do view gaming as a normal entertainment venue. If you take that as the outside number that maybe 2/3 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%, right?

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 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. 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 the year. Now some people are going to Black Hawk, some people are flying to Las Vegas. When you say what percentage of adults are actually gambling, it’s probably in the high teens.

David Bain: Just as a quick follow-up to that one. The flow-through on additional revenue at this point.

Daniel Lee: Everything is open. We don’t have any amenities not yet opened. In fact, we’re going the opposite way. We’ve sharply curtailed unemployment — not unemployment, overtime, which is Lewis forgot to mention, but overtime is down pretty dramatically from what it used to be. We’re focusing on ways to be more efficient and with the payroll and try to rightsize the payroll for the revenues we have, not the revenues we think we will have. At the same time, we’re growing revenues. I think our expense structure is going down going into the off-season, and I think it will continue. Our revenues are continuing to grow. We’re trying to size the payroll for what we have and then continue to grow the revenues. Those 2 factors will result in improvements in profitability, obviously.

Frankly, we have very easy comparisons in the fourth and first quarters. I think I almost don’t even want to look at the historic numbers. I want to get to comfortable profitability in 2026 and then build from there.

Lewis Fanger: Yes. You probably know this, David. When you think about the flow-through, there’s obviously gaming taxes. It’s a graduated tax rate there, so figure low to mid-teens. Then there’s some marketing reinvestment in the players, but maybe some incremental labor depending on whether it’s slots or tables. Outside of that, it’s pretty meaningful flow-through. I mean you’re talking — you’re easily — you could easily be talking 70%, 80%.

Daniel Lee: I will say this is — in this industry, you tend to have pretty high turnover. In that market, it’s higher than normal because it’s such an isolated town in the mountains. 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 way, 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.

David Bain: Then my final question on — in order to stay on track for the August ’27 American Place permanent, I believe you alluded to you’d like to complete financing by 1Q of next year at the latest. Does that timing change the phasing versus closing something this quarter? If you end up needing an extension for Illinois, I think most at least would agree that you’ll get it. How does that process technically work and get message back to investors?

Daniel Lee: Well, I mean, the — 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. Obviously, I mean, 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 for your bondholders and everyone else. To be clear, there is not a deadline of having this open by August of 2027. The deadline is how long you can operate the temporary. We’re not going to run into pay user rates in order to meet that deadline. If you had to, you’ll end up paying the employees for a month or 2 without working or — 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 I call it, the Jack 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. They want to hold their feet to the fire to make sure we’re actually going to build the permanent. We fully intend to build the permanent. In fact, last week, I went to Wyn Creek, and I went to the new Hollywood and a notch better than either of those.

They’re nice, by the way, and they’re both doing quite well. We have a very fansful building. We committed to invest a total of $500 million. We’ve put $170 million into the temporary. With the $302 million cost of the permanent plus capitalized interest, we will satisfy the $500 million requirement. We fully intend to build the permanent. It’d 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 ‘27. There’s no high rise. There’s no base. It’s — while it’s a complex building, it’s not that — and — but if the financial markets aren’t cooperating, we might be a little late, and it’s not the end of the world.

Operator: Our next question is from Jordan Bender with Citizens.

Jordan Bender: Maybe to just continue on the prior conversation. 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 your thinking in terms of if you had to go look for financing, potentially using a REIT. There’s been a couple of transactions in the last couple of weeks. Just if 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?

Daniel Lee: Well, 2 issues. In terms of bonds, we’re pretty sure somebody shorted the bonds. We know there’s at least one analyst who is bad mouthing us every chance it gets. That was the reason for Lewis focusing on Kenosha. That Kenosha deal has been around for decades, and it’s not getting any more traction now than it was then. Those 2 Indian tribes are from Central Wisconsin. They’ve been fighting for centuries, and that’s far from done. It has very little impact on us. A sell-side analyst talking about it has an impact on the bonds in the short term, and it’s kind of ridiculous. When you really look at the trading price of the bonds, it’s on a fairly small volume. I’m not sure that, that is representative of anything. Yes, we would rather the bonds be trading better that would make this whole thing better.

Now at the same time, 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’s pretty brilliant. I’m looking forward to seeing what the details are. In effect, he’s got a — he’s one of the few companies that still owns the real estate as are we, and he’s selling the real estate to a 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. We look at everything. By the way, we have no active look at going private. I don’t want to nerve everybody. 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. Anyway, we look at everything.

Lewis Fanger: Yes. Look, I think there’s certainly an eagerness from some of the sources that you mentioned, Jordan. I think those are 2 of several options that are in front of us. 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.

Daniel Lee: 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? What’s the 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 on lock and key and so on. 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. 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. That changes the leverage profile quite a bit. Although, it’s a little. People look at it and say, well, on a trailing 12-month basis compared to the amount of debt you’re going to have, 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. The conversation gets easier when you have better earnings, and we’re pretty happy with the earnings we just reported.

Jordan Bender: Lewis, I just want to follow-up. You said there was maybe several one-time unusual items in the quarter. Is there anything major to call out there? I guess, are those just truly one-time and won’t kind of happen again looking forward?

Lewis Fanger: Well, the biggest part of it is — we highlighted the last call as well as we changed over the Chamonix management team pretty meaningfully. Between headhunters, bringing in new people, relocation, that sort of stuff, that was probably half of the number that I — half of the delta on the call. Then we had some and severance fee, yes. We had some additional smaller stuff at the properties. The big thing is really kind of change in leadership at Chamonix. Like our new Marketing Director there, I think, is 2 months into the job, so still relatively new. There’s still a lot of good to come there.

Operator: Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.

Ryan Sigdahl: I want to stay on Chamonix. New general manager, a lot of new personnel you just mentioned. It seems like a lot of the focus has been on, call it, operational improvements, cost efficiencies, the cost side of the business. 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?

Daniel Lee: Actually, the focus is on both controlling costs and building revenues, but the building of revenues takes time, right? To build the revenues, it’s like hire smart marketing people. We’re changing advertising agency, for example, modify how you’re approaching people, do more digital, less and so be more focused. That will pay off over time, but we’ve done a lot of that. We’ve hired more casino hosts. We’ve gone — our sales and marketing team has gone from half a person to 3 people. They will bring in benefits in future quarters, whereas rightsizing the payroll is something that you can do very quickly. I don’t want you to be left with them — 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.

Ryan Sigdahl: Just maybe on the marketing, etc., but you mentioned conference pipeline, you mentioned one potentially next year kind of building that. 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? 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?

Daniel Lee: Yes. There are a lot of different levers. The most important one is getting more day trip people from Colorado Springs. I mean, the market is a little bit like Atlantic City, where every casino in Atlantic 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. The day trip people from Philadelphia always outnumber it. The day trip business is the vast majority of their revenue. The same will be true with us. We have 1 million people at the foot of the hill, and that’s important. 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, while 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. A little stretch of it had not been paved until about a year or 2 ago, and now it’s paved. You drive up to Divide and instead of turning left to Divide, you go straight 1.5 miles and you go left, and it’s a wide, nicely paved 2-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? Whereas the way that kind of follows an is carved into the side of the hill, so it weaves in and out of the hill. When you’re driving away from Cripple Creek, you’re hug in 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. I’m used to driving in the mountain, so it’s never bothered me much.

By comparison, Lewis is not. He made — 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. We’re getting the road signs changed. You also have better self-service if you take the fluorescent Valley route. They’re both routes very pretty. There’s a little detail 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 removed from everyone else and they’re up on the hill. As you come down, you see them first, then you drive 3 blocks by them to get to everyone else. Sometimes that strategy works, sometimes it doesn’t. The E Resort 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. 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? 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 is not good. It’s a much more pleasant drive. It’s even kind of interesting. One evening, I was driving on and I almost hit a Lama. I thought it was a dear it first, and I realize, oh, there’s a Lama farm and so one of the Lama has gotten out of the Lama farm. In terms of building that day trip business from Colorado Springs, it’s a lot of that and 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 and meeting space lever is also especially because that helps fill midweek. I mean we fill up on weekends. It’s midweek, we need to fill up. 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. Nobody else in Cripple Creek has anything anywhere close to what we have. We’ve hired 3 people who are experienced in this, and they are reaching out and they know how to do it, but meetings are booked months and years in advance. Like right now, we’re inking this deal Lewis referenced for a year from now. It’s actually kind of a citywide convention, but we’re most of the room, so it’s really us and some spillover.

There’s a lot of these, and they are already starting to put stuff on the books, but this takes time. Honestly, we should have been doing this 3 years ago. We’re doing it now and better late than ever, and it will build over time. If you look at, say, Monarch, who is a milepost we look at because I think we’ve built a pretty similar place. 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. They’re doing about — they’re doing north of $300 million a year in revenue, which is 6x what we’re doing, 5x what we’re doing. 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.

I think the same will be true with us. 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. Some blocking and tackling, like 15% of our play is coming from the town of Pueblo, which is about 200,000 people. It’s kind of, that’s kind of interesting. It’s south of Colorado Springs. It’s a pretty good penetration. 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. You find these little nuggets that just takes time.

The Colorado State Fairs in Pueblo. Well, next year at the Colorado State Fair, we will have a booth, passing out and free play, whatever it is to try to get people to come and visit us. It’s learning and modifying and blocking and tackling. 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.

Operator: Our next question is from Chad Beynon with Macquarie.

Chad Beynon: 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. I know you’ve always talked about improving the value of that asset. Can you talk about if the parties that be on the other side are maybe a little bit more receptive at this time to potentially moving an asset to a higher population area and if you guys could still potentially have exposure to that opportunity.

Daniel Lee: Yes. Well, it takes a state laws. You have to go through the legislature and get the governor 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. Illinois, Ohio and Kentucky now all have their own casinos. The original locations are not the best locations in terms of maximizing the jobs or the tax revenues for the state. They do have that precedent. They allowed 2 riverboats on Lake Michigan to relocate. One went as the Hard Rock Casino just off the freeway in Gary, and it’s the #1 casino in the state now, doing $25 million, $30 million a month. The second one is in Terre Haute, and it’s doing very, very well in Southwestern Indiana.

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 2 locations, one of the 2 best locations. Not surprisingly, #1 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 Terra Haute is 50 miles to the west of it. A casino in Indianapolis would have some impact on those, but the state still comes out way ahead. Then the other location I noticed is Fort Wayne and kind of specifically Northwest of Fort Wayne.

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. You might have some impact on the tribal casino in Battle Creek that ironically, this company created 12 years ago. 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. That study is out, and it’s available. We have the lowest revenue-producing casino in the state by [Widemark]. There is actually a special tax tier for low-revenue casinos. I think we’re the only casino in it at the moment. 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.

Ironically, we actually have the support of the community we’re in because we pay, as I recall, about $1 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. 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 1 year’s severance. 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.

Chad Beynon: Great, Dan. Very comprehensive. Then Lewis, you talked about the 16% growth in the quarter at the temp. That puts trailing 12-month EBITDA for the property a little over $32 million. You talked about growing this to $50 million run rate. Is that just 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?

Lewis Fanger: Yes. 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. 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, we continue to grow revenues pretty meaningfully. September was a little bit of an anomaly, but I fully expect us to see a very good and continuing growth as we go out from here.

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. That’s ultimately great news for us. If you think back to when that — when they talked about opening new casinos in that market, all the local news media focused on the downtown casino, not in Waukegan. So it’s when we opened, I think the natural assumption from a new casino when downtown finally opened. That’s okay. It means that the awareness is still kind of growing as it would do in a normal ramp.

Daniel Lee: 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. Otherwise, that property has been up in revenues and EBITDA every single quarter since it opened 2.5 years ago. Trailing 12 months might be $32 million, but the run rate today is clearly in the $35 million, $36 million. I mean it was $9 million in the quarter. It’s not a very seasonal market. I think the run rate today is higher than 32. We probably hit something with a 4 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 Lewis is saying.

Operator: Our next question is from Colin Mansfield with CBRE Group.

Colin Mansfield: I wanted to drill in a little bit on the table game strategy up at Chamonix. Maybe help us bridge a little bit the nice numbers that you gave us earlier and what you’re seeing in terms of 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 kind of what the data is telling us and what you guys are reporting. Maybe what’s working there? Maybe what’s the status on the go-forward strategy here for the table games?

Daniel Lee: Well, we have the prettiest table games pit in the state. Of course, the 300 guestrooms kind of help feed into that. So much so that Century is across the street from us has thrown in the towel and closed their table games, which also helped us. The other night, we had I guess, about 3 weeks ago, we had an entertainment event, and our table games were just bustling. I walked up the street to the Brass, which is triple crowns table games just to see if any of that was spilling over. There were a few very lonely looking players up there. I think we’ve sucked up a lot of the table game business. Then the Golden Nuggets is our principal competitor for table games, and they do a good job where they are. There’s a few things.

There’s a pretty big place called the Double Eagle privately owned, I think the second of the 2 owners has passed away, the things in probate and it’s a fair chunk of capacity and pretty dead-looking place. When you look at the market more-and-more, we’re kind of the dominant, and I think that will continue. The Golden Nugget is a good competitor, well-run property. Triple Crown is a well-run company. The other ones are pretty small and pretty — not very meaningful. 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. I think it’s a little bit masked perhaps by 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.

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 the second largest hotel in town, 158 guestrooms, I think. They’re sorely in need of refurbishment. That will happen someday in a 5-year time horizon.

Lewis Fanger: Yes. 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 at this — third quarter of last year, it was sitting around 8%. We’ve grown that table games business some. 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. I think we have the only mini box pit in town still at this point.

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

Colin Mansfield: Then maybe for my follow-up, if we can stay on Chamonix for a second. Lewis, if you can indulge me because I know you said estimating ramps is difficult, but now that you guys feel like there’s probably a good fully baked cost structure at Chamonix with a lot of the changes that Brandon and the team have enacted. 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 can expect will really probably shine during the big busier season as we get through the winter? Maybe help us think through what we should be looking for from an EBITDA trajectory there over the next few quarters?

Daniel Lee: 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 will be comfortably profitable in 2026. It’s going to take us — I think our total investment, including acquiring Bronco Billy’s is approaching $300 million. For us to get a reasonable return on that’s going to take us 3 years, 2, 3, 4 years. Then I think you don’t build these things for 3 years. I mean it will be a strong asset for the next 25 years.

Lewis Fanger: Yes. I was going to say what Dan said. Look, 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 2 months, I won’t give you a number. 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 million to plus $10 million plus $15 million, plus $20 million in the nearer term, that’s a $15 million to $25 million swing in total EBITDA. That’s not a small move. Even though — so it’s a long-winded way of saying even smaller numbers have an outsized delta effect in terms of overall growth. Keep that in mind as well. Look, we are extremely optimistic on that project, and I do think we’ll see some pretty nice numbers in 2026.

Daniel Lee: Yes. Even in given direction of 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 and grow the revenues, control the costs, and we’ll get there. Because if you say, oh, we want you to make $15 million 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 million or $40 million someday. There’s still a lot of costs we incur to try to get to a higher place. 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.

Lewis Fanger: I will say this, Colin, we had an investor that wanted to see the property on a weekend recently. We were there on a Saturday. 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 backways, like this road is easy. 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. By the way, the place is bustling. 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.

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. A year from now, we’ll be talking about even more progress, and 2 years from now, it will be even better. Stay tuned, but it is — we’re feeling very, very good about where we sit right now. We probably have time for maybe 2 questions, Dan, if we’re quick.

Operator: Our next question is from John DeCree with CBRE.

John DeCree: 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. Dan, I think I recall, you were kind of hoping for some improvements there. I think maybe hopefully EBITDA trough last year. Can you just give us an update on kind of what you’re seeing at Silver Slipper and how progress is going there?

Daniel Lee: 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. We’ve cut that back. It’s not showing the revenue growth, but it’s had decent trends in profitability. I think that we’re pretty happy with that. Rising Star was a little more challenged. We said the 2 were about flat. The one was carrying the other a little bit. Listen, the Silver Slipper can grow from below $15 million to about $15 million a year in EBITDA. It’s not going to suddenly jump to $30 million. 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. The fact that we are looking to relocate it makes people question it. It’s a challenged place to run, but it has a loyal clientele and it’s making progress, too. We have our niche and it does okay. Then at Tahoe, the owner, Larry Ellison, who acquired the Hyatt a couple of years ago, has started a refurbishment. The first thing they did was ripped down everything along the beach, which was about dozen or 15 high-end villas that were right along the beach and the largest restaurant in the entire Hyatt chain and their meeting room space. Now we’re in the high-rise that’s across the street. 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.

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.

Lewis Fanger: We had a good Silver Slipper October is off to — was off — we started the quarter well there. 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. Good news. It’s doing what we expect it to do.

Daniel Lee: 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. We have a new food and beverage manager who we hired from Treasure Chest, who’s very confident and doing well. It is a new team forming together and I think it will have good results in the future, but this is a cash cow for us.

Operator: Our final question is from Ricardo Chinchilla with Deutsche Bank.

Luis Chinchilla: 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 very important progress on the cost cutting side. What should we expect for the fourth quarter and maybe in the first quarter, given that the market is very seasonal?

Daniel Lee: Well, last year, we lost money in both the fourth quarter and first quarter. I 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. I would expect longer term, the third quarter would always be 40% or 50% of the earnings in the year. The year-over-year comparisons will be easy. We are cutting the cost going into the off-season. 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.

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

Daniel Lee: Yes. Look, I’m trying to make it profitable in those quarters. 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.

Luis Chinchilla: If I might squeeze one last one, and this would be. Can you just share — and I know that you guys have already talked about Kenosha, but do you guys — given your knowledge in the industry, do you guys think that an approval of the process is even likely at this point? Given that, do you anticipate that the project would even keep its original size given all the issues that the trial had with the approval of the contract? Any comment would be very appreciated.

Daniel Lee: Well, look, at any given time, there’s always somebody trying to develop a casino somewhere, right? 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. There’s a lot of hurdles. In this, you have to get the Bureau of Indian Affairs to bless the concept. The tribe is actually doesn’t live there. The tribe lives 200 miles north of there, where they have a small casino up near Green Bay. The tribe itself didn’t want to spend all the money you need on the lobbyists and so on. They got the seminals involved or the seminals involved in a lot of different places as kind of a management company. 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 travel gaming than it was under Biden. 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 less — much more difficult to do under the Trump administration. I think Trump himself is not a 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. Now they’re often the highest bidder when there’s a casino for sale. The Palms get sold to the San Manuel tribe, the Mirage gets sold to the Seminal tribe, Sand to the Porch Creek tribe — compounding wealth tax-free and often they’re willing to pay the highest price.

Now I’m looking at it and saying, well, we’re not looking to sell the company today. If we were someday, that it would be an Indian track. 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. Of course, the Pottawatomie are sitting there making $200 million a year for their casino in Milwaukee. They’re forces in the. EBITDA just. EBITDA, yes. I think they have lobbyists and lawyers and in fact, we dealt with that, they held us up by a year with lawsuits. I think what they’re likely to do to — I mean that Kenosha is almost kind of an extended suburban Milwaukee. They’re going to fight that tooth and nail.

I think it’s — I would say it’s actually unlikely to happen. If it does happen, it’s years away. If it does happen, it’s still not that meaningful to us because it’s quite a distance from us.

Lewis Fanger: 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. When somebody is 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 in Libertyville and they’ll say, Hey, Joe Blow, he was native American 35 years ago, he might get the sign. They’re not. I think it’s unlikely. There you go.

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

Lewis Fanger: Dan, you want?

Daniel Lee: No, I would like — I hate to leave it on that note because Kenosha really is insignificant to our future. We just had a good quarter. I think it’s forming a base. We have easy comparisons going forward. We’re going to have future good quarters, 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. Hopefully, that’s in the near future. If it takes a little bit longer, that’s okay, too. 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. I remember in the middle of the pandemic, our stock was down less than $1 and it turned out to be a great buying opportunity. I kind of feel like we’re going to be fine and more than fine. I’ll leave it at that.

Lewis Fanger: Thank you. Thank you, everyone.

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