Leadership of Full House Resorts was in a celebratory mood on their first-quarter earnings call. Although nothing concrete was announced regarding the permanent American Place casino in Waukegan, Illinois, an imminent disclosure was hinted.
President Lewis Fanger said Full House has permanent financing lined up to the tune of $300 million. He said he hoped to disclose more in a few weeks, when construction on the long-term American Place is actually anticipated to begin.
Dan Lee, CEO, said of the financing, “We’re not borrowing money at five percent, but we’re not borrowing it at 15.” Interjected Fanger, “Knock wood, you’re not going to have to wait too much longer” for definitive news.
“We had a solid first quarter,” began Fanger. “We had growth at almost all of our properties,” except for Tahoe Grand Lodge, which was still feeling the effects of surrounding renovations.
In Waukegan, “Our temporary casino continues to show significant growth,” despite lower table-game hold. Fanger said April revenue was up six percent.
Asked if the permanent American Place could indeed do its projected $90 million in annual cash flow, Lee replied that the temporary’s run rate was “in the ballpark” of $40 million. The permanent casino will be twice the size. Full House executives said they expected commensurately bigger business, citing the examples of nearby Hollywood Joliet and Hard Rock Rockford. “Five years from now, it’s doing $100 million,” Lee predicted.
Lee professed no concern about a possible Ho-Chunk Tribe casino in Kenosha, Wisconsin, noting that American Place’s business “tilts toward the south.” Any Kenosha impact would be felt in Milwaukee instead, but noted that “they’ve been working on this for 20 years. It won’t have much impact on us.
“My guess is they never get there, because what they’re trying to do isn’t easy,” Lee continued. “This is reservation shopping.” Fanger added that many legal hurdles still lay ahead of the Ho-Chunk.
Revenue at Chamonix dipped, due to multiple factors. A Bronco Billy’s makeover was cited, as was warm weather that kept customers away from Cripple Creek, Colorado, adversely affecting visitation to the city.
“Awareness and penetration into Colorado Springs remain extremely low,” disclosed Fanger, reporting a negative return on investment at Chamonix of $1.3 million for the quarter. He elaborated that Black Hawk, an $875 million a year gambling market, was doing proportionally better: Chamonix had only one-fourth the slot revenue of Monarch Black Hawk and 16 percent as much table win.
Fanger said Chamonix was looking to do 45 percent of Monarch’s business, including elevating occupancy beyond 41 percent. He added that Full House was targeting the Denver suburbs, where penetration is as low as eight percent and “can meaningfully move the needle.”
Lee revealed that Full House was still tinkering with the Chamonix operational formula. For instance, outsourced maid service (“They clean about nine rooms a day”) was going to be insourced by hiring 30 housekeepers.
Also, as Chamonix’s business was said to be slanted toward weekends, Full House is offering $5-an-hour premiums to workers who will work predominantly weekend hours. “It didn’t happen overnight, but it’s happening,” he said of Chamonix progress. “We’re controlling the costs, but ultimately it’s about growing the revenue.”
Toward that end, Chamonix has a four-person sales force tasked solely for meeting and convention business, which Lee thought would bear fruit in 2027. He said Full House had also deployed a new ad agency, a new marketing director, and third-party market research.
“We’re getting a lot more sophisticated in our targeting,” Lee elaborated. “We have a base to build on,” having only lost a small amount of money during the toughest stretch of the year. “This little town [Cripple Creek] has the potential of being a pretty significant destination.”
Improvements in business at Mississippi’s Silver Slipper were attributed to an emphasis on the operational-expense side of the business. Fanger said the property had a new general manager who was looking at more efficient means of doing familiar things. He cited the example of a discontinued 99-cent buffet that was being frequented by local seniors who didn’t gamble much.
