Full House Resorts’s underperforming Chamonix Casino Resort in Colorado was the overriding focus of the third-quarter conference call. An $8 million cost-savings initiative was announced for the property.
Company President Lewis Fanger disclosed that room service had been eliminated and housekeeping and laundry services would be insourced soon. In addition, a consulting relationship with a Las Vegas-based firm governing the Chamonix steakhouse would be severed.
Chamonix marketing will henceforth be primarily digital, Fanger said and PBX lines were now rolling over the Chamonix’s three casino cages, one for each of the property’s trio of gaming licenses. “It sets Chamonix up to offer positive, meaningful, cash flow in 2027,” Fanger predicted.
CEO Dan Lee explained that revenue and market share for Chamonix were headed higher, but were a long way from where Full House wanted them. He said they’d been trying to operate Chamonix for the business they desired, rather than the business that they had.
For the first time, Lee floated the idea of selling the massive Cripple Creek resort. “It would probably make sense to do that at some point,” he said. “It’s not for sale. Don’t anybody panic,” Lee added, predicting a $10 million to $20 million Chamonix profit in 2027.
The CEO elaborated that he wasn’t actively trying to peddle Chamonix, but had a fiscal responsibility to entertain offers. He would sell it, he said, for “the right price,” although that would probably entail a $300 million loss.
Returning to the subject of economies, Lee said that, while Chamonix was obligated to run three casino cages, there wasn’t enough table-game traffic to justify it. Thus, they’ll double as PBX desks. “There’s no reason they can’t be sitting in the cage. That was a complete win.”
Lee added that he calls Chamonix’s revamped PBX line every morning, pretending to be a customer “and it goes smoothly.” The projected cage savings was as much as $900,000 a year.
Another $600,000 would be saved from bringing laundry in-house. Lee said the previous vendor mainly did hospital linens and “we gave up on them.”
A reception area for the Chamonix spa had been cannibalized to create a breakout room for meeting business. “The only capex is some folding chairs,” Lee shrugged. “It’s nothing.”
Chamonix also reduced hours at its three restaurants. The high-end eatery was losing money mid-week, Lee said, so it was cut back to weekends.
Yet another $300,000 would be conserved by terminating the consultancy covering the steakhouse. “The value they brought was primarily when it opened,” Lee remarked. And Chamonix’s new food-and-beverage manager, he elaborated, made the consultants redundant. “Frankly, it was time to make some changes in the menu anyway.”
Fanger interjected that group business needed to be elevated from its current one percent of room nights, preferably closer to 10 percent. Could it be raised to five percent or more next year? “The answer’s probably yes,” he said.
Chamonix’s marketing was reported to be in flux, the vice president of marketing having just retired and not yet replaced. American Place marketers, Lee said, were pitching in, as Full House tried to do more with less.
Lee confessed to some bafflement with Cripple Creek or, as he put it, “trying to figure out the Rubik’s Cube of Colorado.” He was puzzled by why consumers would drive every weekend to Breckenridge or Vail, but not to Cripple Creek. “I get mystified why our market share isn’t higher. We have by far the best hotel in Cripple Creek.”
Lee said Full House should have been more focused on Chamonix’s midweek business when it opened, but was doing so now. He cited the recent tie-up between Boyd Gaming and Sonesta as an example of what was needed. Full House was in talks with major hotel chains, Lee disclosed, but had nothing to report yet.
The CEO was also dismissive of Colorado Gov. Jared Polis’s proposed tax hike on casinos. It was, he said, a long way from being a done deal. Besides, with Chamonix’s revenue split between its three licenses, its current tax rate was between 12 percent and 20 percent.
On a happier note, Fanger highlighted what he said was the best quarter to date of The Temporary at American Place. The Waukegan casino had raised its revenue and cash flow every quarter since opening.
As for the temporary facility’s permanent successor, Lee explained, “There’s very little work at the site, but work is going on behind the scenes. We’d like to have all the financing in place, because it’s really expensive to start and stop.”
Fanger elaborated that American Place had $315 million in third-party financing, a $100 million line of credit, and a new bond that will supersede Full House’s existing one. He lamented a recent Federal Reserve rate hike, which had impaired Full House’s credit rating.
“We’re eager to get going,” Lee resumed. “The permanent [casino] will make a lot more money than the temporary, so it’s a win-win. It’s in everybody’s interest to get there.”
He added that Full House was currently focused on American Place and Chamonix “and not interested in taking on anything else in the near future.”
Queried about the midterm elections, Lee said that outcome in Indiana, where a trio of pro-casino initiatives were voted down, was exactly what he thought would happen. Full House had coveted the Fort Wayne market, only to see the Hoosier State legislature throw it open to the whole industry.
“A few people in the legislature were not our friends,” Lee said, “and they lost their elections. So that’s nice.”
