Although Full House Resorts’s new Colorado casino, Chamonix, opened at Christmas time to well-publicized difficulties, there was little sign of it during the company’s fourth-quarter earnings call. CEO Dan Lee and CFO Lewis Fanger made frequent jokes and appeared in to be in a good mood as they sparred with Wall Street analysts.
Still, the Full House brain trust seemed frustrated with queries about the early fiscal performance of Chamonix and of The Temporary at American Place, in Waukegan, Illinois. Lee finally remarked that there was too much fixation on quarter-by-quarter performance. “I sometimes think the analyst community is focused on, ‘What’s this quarter’s earnings?’ I’m trying to get the steakhouse open. I’ll get back to you.”
Added Fanger, “People tend to forget that these casinos, their best months are not their first 12 months of operation.” Lee returned to the topic later, saying, “Bellagio didn’t make $500 million in its first year or its second or its third. These aren’t short-term assets.”
Full House posted a loss in the fourth quarter of $12.5 million on revenues of $60 million, a 66.4 percent revenue increase from the fourth quarter of 2022. Some negative cash flow was explained away by Fanger as the consequence of business impairments at Bronco Billy’s, next door to Chamonix. The company’s other casinos were mentioned only in passing, if at all.
“We’re at a transition point,” Fanger said at the call’s outset. He explained Full House’s legacy properties tended to generate $30 million to $35 million in annual cash flow and that he expected significant augmentation of that from the two newer casinos. Lee added that his prophecy of tripling Full House in size “is in the process of doing.”
Full House’s license at The Temporary has been extended to August 2027, with no major spending on its permanent successor planned before late 2026. The timeline is in part a reflection of ongoing litigation from the Potawatomi Band of Indians in Wisconsin, which wants the casino-selection process for Waukegan redone. Lee and Fanger don’t expect resolution of that lawsuit for another year.
“The independent consultant ruled their proposal last of the five” submitted to Waukegan, Lee said of a rival Potawatomi project. He added that there were “certain legal rights we could pursue” if Full House lost the lawsuit.
Fanger explained that Full House wasn’t looking to pursue financing for the permanent American Place for a few years. “We consider the markets to be our friend,” he said, particularly as interest rates come down. Most of the capital for Waukegan has already been arranged, so Full House would be looking for only another $150 million.
Lee said that American Place would be financed out of cash flow in addition to debt. “Our free cash flow per share is about a dollar, headed for two dollars. Once the permanent American Place is open, we’re going to be paying down debt very, very fast.”
The temporary casino, analysts were told, did $8.2 million of revenue in January, while February would bring in more than $9 million. An anniversary party saw double the coin-in that the casino’s opening had taken.
Chamonix was described as withstanding harsh weather conditions in Cripple Creek and filling hotel rooms on weekends to 80 percent or 90 percent of capacity. Barry Dakake’s 980 Prime steakhouse is expected to open later this month and Chamonix will ramp up its marketing heading into summer.
“We’re very focused on getting Colorado open,” Lee said. “Getting [Chamonix] completed in a small town on the back of Pike’s Peak has been a challenge.” One of those challenges was a loss of cable-TV service in the hotel after ice fell off the roof and “pancaked” a satellite dish. “We had little annoyances like that,” Lee fumed. “They annoy me too.”
The CEO also criticized Chamonix’s architect for using glass window panels that often block views from hotel rooms. Until they can be replaced in warmer weather, Chamonix is posting signs that read, “Sorry we blocked your view. Our architect screwed up.” These also include the offer of a $20 room credit or casino free play.
“You have to appreciate,” Lee continued, “that this is one of the largest buildings ever built in rural Colorado” and Full House had encountered many of the same issues previously experienced by Monarch Casino Resorts and Ameristar Casinos, including a paucity of labor.
“It’s every bit the quality that Wynn [Las Vegas] and Bellagio are and it’s going to be a long-term asset,” Lee predicted of Chamonix. He even regaled analysts with tales of heating and flooding mishaps that had been successfully kept quiet.
Fanger added that Full House had deliberately opened Chamonix in a slow period of the year, predicting, “The patrons who were inconvenienced will have a very good experience when they come back.”
Lee contextualized the problems by citing those experienced at Bellagio and L’Auberge du Lac when he opened the two, including a gaggle of opening-night Bellagio guests getting drenched when Steve Wynn turned on the fountains at full blast. He also blamed Yelp and Tripadvisor for spreading dissatisfaction with the property, saying that happy guests were also less inclined to write online reviews.
In Illinois, Full House was described as still refining its marketing. “We ran a TV ad and it didn’t lift our revenues,” Lee recalled. Then the company pulled the ad — and revenue spiked. Hiring is also a vicissitude. “Even a dishwasher has to be reviewed by the Gaming Commission and that’s an ominous 25-page form.”
Even so, Lee and Fanger professed unconcern about Bally’s Casino in downtown Chicago, with Lee saying that The Temporary had lost some employees to Bally’s and had gotten most of them right back. He also noted that Bally’s is an hour away and on the other side of first-place Rivers Des Plaines, further minimizing its impact.
Rivers, he said, “has a great location, but they don’t have curb appeal.” He elaborated that Rivers does $300 million a year in cash flow and the Potawatomi casino in Milwaukee makes $200 million, “and I think the permanent [American Place] may be able to do that.”
Some of the permanent’s costs, including slot machines, parking lots, employee training, and marketing, have already been paid for, the executives said. “The Temporary will pay for itself and then generate cash toward the permanent. Any way you look at it, it’s pretty good,” Lee said.
He added that, with so much lead time, he was planning to crib ideas for American Place from Station Casinos’s popular Durango Resort, which he drives by every day (“I tend to drool”), albeit on a smaller scale. “We can be the same quality, not as big.”
Continued Fanger, “We have customers that have already spent five, six figures in our casino” and yet many other wealthy people are put off by The Temporary’s plain structure. He expects that they will turn out for the permanent casino when it opens.
