Full House (FLL) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Host - Adam Campbell
• President and Chief Financial Officer - Lewis A. Fanger
• Chief Executive Officer - Daniel R. Lee

TAKEAWAYS

• Consolidated Revenue -- $81.8 million, representing a 4.9% increase driven by record performance at American Place and growth at Rising Star.
• Net Loss -- $(8.6) million, or $(0.24) per diluted common share, compared with a net loss of $(7.7) million in the previous year.
• Adjusted EBITDA -- $14.6 million, compared with $14.8 million a year ago, reflecting strong property growth offset by the lack of a prior-year gaming tax accrual adjustment.
• Midwest & South Segment EBITDA -- $13.6 million, an 18.0% increase with margin expansion of 2.2 percentage points across all three properties in the segment.
• Operating Income -- $4.4 million, a 28.6% increase resulting from improved property-level efficiencies and consolidated top-line growth.
• American Place Revenue Growth -- 9.8% increase to approximately $44.9 million, marking the property's best quarter in history and its fourth consecutive quarter of year-over-year gains.
• Permanent American Place Target -- more than $100 million in annual EBITDAR, supported by a design featuring double the square footage of the current temporary facility.
• Chamonix Cost Improvements -- $8 million in commenced initiatives, targeting more than $10 million in total bottom-line improvements in the near term.
• Chamonix 2027 EBITDA Guidance -- $10 million to $20 million, as management adjusts operations to align with current business levels rather than expected future growth.
• In-housing Efficiency Savings -- approximately $1 million in annual savings resulting from the transition of housekeeping and laundry operations from third-party providers.
• Digital Marketing Shift -- $1.5 million in annual savings, driven by a transition from broad television and radio advertising to targeted digital channels.
• Rising Star Operational Metrics -- 9% growth in gaming revenue, 24% increase in food and beverage sales, and a 5 percentage point rise in hotel occupancy.
• Silver Slipper EBITDA Performance -- 13.6% growth, aided by focused operational efficiencies and a reduction in property insurance rates.
• West Segment EBITDA -- $1.0 million, compared with $3.2 million last year, impacted by Colorado wildfires and the absence of a prior-year $2.2 million tax benefit.
• Refinancing Package -- $415 million in committed funding, including a $100 million credit facility agreed to by four banks and $315 million in construction funding.
• Liquidity Profile -- $45.7 million, comprising $30.7 million in cash and cash equivalents plus $15.0 million in available revolving credit.
• Total Indebtedness -- $475.0 million, primarily consisting of $450.0 million in senior secured notes due 2028 and $25.0 million drawn on the revolving credit facility.
• Chamonix Database Trends -- growth in high-value segments, specifically players worth $1,000 or more and those worth between $350 to $1,000.
• September Room Night Growth -- 10.4% increase at Chamonix, following a weather-impacted start to the quarter in July.
• Grand Lodge Renovation Impacts -- revenue declines resulting from extensive construction on cottage suites, restaurants, and meeting spaces scheduled for late 2027 completion.
• Contracted Sports Wagering Performance -- $1.4 million in Adjusted Segment EBITDA, compared with $1.5 million in the prior-year period.
• Planning Expenditures -- $2 million spent on architectural and design plans over the last two months to refine construction costs for the permanent American Place.
• Housekeeping Savings -- $600,000 in annual savings expected from terminating an outside service contract at Chamonix effective Nov. 23.
• Steakhouse Operational Savings -- approximately $300,000 per year, following the conclusion of a third-party consulting agreement for restaurant management.

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RISKS

• Lee stated, "I think it was the 8th largest wildfire in Colorado's history, and residents in the region were told to stay indoors. That kept visitors away for a meaningful part of the month," noting the impact on July visitation at Chamonix.
• Fanger noted that "our timing was unfortunate as the Fed raised rates just as our process was starting, and that resulted in a weakening of the single b credit markets," explaining delays in completing a full bond refinancing.

SUMMARY

Full House Resorts, Inc. (NASDAQ:FLL) reported record quarterly results at its American Place property and highlighted extensive cost-reduction initiatives at its new Chamonix resort. Management indicated that the company is focused on refining construction plans for the permanent American Place facility while navigating volatile credit markets to complete a broader refinancing. The company reported improved profitability across its properties in Mississippi and Indiana, driven by operational efficiencies and higher occupancy levels. Despite temporary disruptions from wildfires in Colorado, management stated that database trends among high-value players are improving as the Chamonix property matures.

• Chief Executive Officer Lee stated, "Since its opening in February 2023, revenues and profits at American Place have increased in every quarter when compared to the prior-year period."
• Management indicated that the permanent American Place facility is expected to open approximately two years from the call date.
• The company has transitioned housekeeping services in-house at Chamonix to improve efficiency, with laundry operations expected to follow in the first half of 2027.
• Fanger noted that the company is shifting from broad media advertising to "more targeted digital spend" to optimize marketing at its Colorado operations.
• The company is exploring partnerships with major national hotel chains to drive midweek occupancy at Chamonix through loyalty program integrations.
• Management reported that renovations at Grand Lodge Casino, including cottage suites and meeting spaces, are expected to conclude in late 2027.

INDUSTRY GLOSSARY

• EBITDAR: Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.
• Adjusted EBITDA: A non-GAAP financial measure representing earnings before interest, taxes, depreciation, and amortization, further adjusted for specific items like project development costs.
• Adjusted Segment EBITDA: The measure of profitability used by management to assess the performance of individual reportable segments.
• Skins: Digital interfaces or websites that allow third-party operators to offer sports wagering under a casino's master license.
• PBX: Private Branch Exchange, a telephone system within an enterprise that switches calls between users on local lines.
• Porte-cochère: A porch-like structure at a building entrance through which vehicles may pass.

Full Conference Call Transcript

Operator: Ladies and gentlemen, we thank you for your patience. Please continue to stand by. The event will begin shortly. Again, we thank you for your patience. Please continue to standby. The event will begin shortly. Greetings, and welcome to the Full House Resorts Third Quarter 26 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn the conference over to your host, Adam Campbell. Please go ahead.

Adam Campbell: Thank you, and 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 are making under the safe harbor provision of federal securities 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 reference non-GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our website as well as the various press releases that we issue.

Lastly, we are also broadcasting this conference call at bullhouseresorts.com where you can find today's earnings release as well as all of our SEC filings. And with that said, we are ready to go.

Lewis A. Fanger: Thank you. Good afternoon, everyone. Thanks for joining us to discuss our third quarter results and I know there is another call going on at the same time, so we will be on the briefer side with you today. I will start with the headlines. American Place had the best quarter in its history. Rising Star had its best third quarter in 3 years. Silver Slipper grew its adjusted EBITDA by 13.6%. And at Chamonix, already started on more than $7 million of cost improvements, and are targeting more than $10 million of total bottom line improvements in the near term. On a consolidated basis, revenue grew 4.9% to $81.8 million, compared with $78 million in the prior year period.

Adjusted EBITDA was $14.6 million versus $14.8 million a year ago. Last year's third quarter included the benefit of a gaming tax accrual or-- gaming tax accrual adjustment at our, Colorado operations. Our Midwest and South segment grew adjusted segment EBITDA by 18% to $13.6 million with all 3 properties improving and its margin expanded by 2.2 percentage points. Operating income rose 28.6% to $4.4 million so let me walk through the properties really quick. Starting with American Place, as I mentioned, the third quarter was the best quarter it is ever had.

Since opening, American Place has increased both revenue and adjusted property EBITDA in every single quarter compared with the prior-year period since opening. that is a consistent record and that is as 2 casinos moved from riverboats into land based facilities. Wind Creek opened, Valleys in Downtown Chicago opened. The Potawatomi Casino in Milwaukee expanded, and the Hard Rock and Rockford opened its permanent casino. In real time, American Place's revenues and adjusted property EBITDA continue to grow while our overall penetration into the Northern Chicagoland market remains low.

More than ever, we believe that our permanent casino which is designed to have roughly twice the square footage of our current temporary facility, can generate more than $100 million a year of EBITDAR. that is before we pay any rent, under our current existing lease with the city. At Rising Star, gaming revenue was up 9%, hotel revenue was up 6% in part due to occupancy being 5 percentage points higher, and food and beverage revenue was up 24%. All of that helped us deliver our best third quarter in 3 years. At Silver Slipper, property EBITDA increased 13.6% versus the prior year period.

A focus on efficiencies throughout its operations helped, as did a reduction in property insurance rates. At Chamonix, the most important trend this quarter is growth at the top of our database. We saw gains in our 2 highest value segments. that is players worth $1 thousand or more and players worth between $350 and $1 thousand. These are the guests who matter most to a property like Chamonix, and they are coming more often. In July of this year, a large wildfire burned near a few of our feeder market cities. I think it was the 8th largest wildfire in Colorado's history, and residents in the region were told to stay indoors.

That kept visitors away for a meaningful part of the month, and also led to the quarter getting off to a slower than expected start. The quarter was helped by a strong September, when room nights sold were up 10.4% year over year. While revenues have grown at Chamonix and at Bronco Billy's, we expect them to continue to grow also. But as revenues have grown, we have adjusted operations. Rather than operate the business for the revenues that we expect to have in the coming years, we are operating it for the business levels that we have today.

As a result, we have already commenced on approximately $8 million of cost improvements at Chamonix. that is in addition to our focus on growing our midweek group business and continuing to grow revenues overall. We do not expect these changes to meaningfully affect customer service levels. A few examples. We eliminated little used services like room service, which was rarely used, and is not offered at any other casino in the state. We staff 3 casino cages because we operate under 3 casino licenses, which gives us a lower average gaming tax rate. Some of these cages see very little activity midweek, so PBX calls will now roll into the cages instead of a separate operator team.

This should, this actually should improve customer service as our cages are staffed 24 hours a day whereas our PBX operations were not. We are bringing housekeeping and laundry operations in-house, started to phase out our outsourced housekeeping company last month, and the transition is expected to be largely complete by the end of this month. Laundry is not expected to be in-house until the first half of next year. Combined, those in housing efforts are expected to save us about $1 million per year, and that is net of costs to lease the laundry equipment.

With marketing, we are shifting from broad TV and radio advertising to more targeted digital spend, which we expect to save about $1.5 million per year. And then over at the steakhouse, we ended the consulting agreement, for its operations. That will save about $300 thousand per year, and it makes it easier and more efficient for us to use that space for dining periods beyond dinner. that is just a sampling of some of the changes that I have either already been enacted or are expected to be enacted soon. Taken together, these steps lower Chamonix's cost base as we keep building the top line. It sets Chamonix up to generate meaningful positive cash flow in 2027.

Those were the big points that I had, Daniel. I do not know if you had anything else to add.

Daniel R. Lee: No. I think you covered it pretty well, and in the interest of time, let's just go to Q&A.

Lewis A. Fanger: Alright.

Operator: Thank you. We will now be conducting a question and answer session. And our first question will come from Jordan Bender with Citizens.

Jordan Bender: Just to start with the whole financing in Illinois conversation here. Yeah. there is probably not much for you guys to say, but obviously open if you are you know, willing to kind of talk about that process to the extent that you can. But I do not think the CapEx bill in 2026 was all that large. I know you would have started process of building that out in 2026. I mean, have you started. Or have you. Sorry. Have you stopped any work at the site or just kind of how do you explain what is going on currently there? Thank you.

Daniel R. Lee: Well, I will address the site. Very little work at the site, but there is work going on behind the scenes. The. We have been working with the architects and the designers on refining the plans. The more refined the plans, the more certain you are on the cost and so on. And so we have spent $2 million in the last couple months on that. And, and that is ongoing. The next chunk of work at the site is, like, a $5 million thing. And frankly, we. Well, we have $5 million. We and at some point, we might do that. I mean, as the press release shows, we have a decent liquidity.

We would really like to have all the financing in place before we really launch things because it is expensive to start and stop. And, I will let Lewis address the financing.

Lewis A. Fanger: Not a whole lot, to your point, Jordan, that we can say, but let me try to get a little bit out there for you. You know, as we outlined in our recent 8-K, the envisioned refinancing has 3 parts. First, there was a new $100 million credit facility which we expect to stay largely undrawn and which would give us plenty of liquidity. 4 banks have agreed to that. Second, we had $315 million of funding from a third party to build the permanent American Place Casino. Importantly, that funding, would be on a delayed draw basis with no ticking fee, which meaningfully reduces the amount of capital needed to be raised.

Both of those agreements are essentially final and ready for signature. The third piece is a new bond to replace our existing notes slightly larger in size primarily to accommodate legal and banking fees and the pay down of our existing revolver. You know, our timing was unfortunate as the Fed raised rates just as our process was starting, and that resulted in a weakening of the single b credit markets. And the triple c market largely shutting down. We think we fall in between a single b and triple c rating. And we expect to grow back into a b rating as our American Place and Chamonix operations continue to improve.

You know, we have spoken to a handful of our largest bondholders and some potential new bondholders about our refinancing. And we remain an active, constructive, I should say, dialogue with them about completing that refinancing. So that is-- yeah.

Daniel R. Lee: I mean, listen. We are eager to get going. The permanent will make a lot more money than the temporary. So it is kind of a win. But if you were to graph triple c credits, know, they took a big spike in late September in yield and they do that on occasion. But they usually only do it for a few weeks at a time. But about every 5 years, there is a spike. And it has not been this highest spike in about 5 years. And the 1 before that was about 5 years before that. 1 before that was 2008.

And so and so that makes it a little complicated because nobody wants to price a new bond that trades down. We all want a bond that trades well. And so we are we are trying to figure out that conundrum But the good news is these windows do not usually close for very long. Know, I think if we have an improved market, the double. The single b market is not as bad as the triple c. But it also backed up some. And so, so, you know, we are we are optimistic we will get there. it is in everybody's best interest to get there. You know, It will make more money. We will be a better credit.

Of course, the state and the city wanna see the thing get built as quickly as possible. Everybody wants this thing as quickly as possible. And we have the overall financing, I would say, is mostly done, but we have 1 very important key thing left, and that is refinancing the existing bonds. Yep. So Perfect.

Lewis A. Fanger: Thank you.

Jordan Bender: And then switching gears, maybe Chamonix and just kind of following up on some of the cost saving initiatives that are going on there. You are obviously heading to the seasonally slower period of the year. Maybe that the results there will start to show up more in the spring and summer of next year. But as we get to that point, I guess, like, what is the updated view on where you think you can get margins to with kind of the ongoing process of addressing some of these cost issues around the property?

Daniel R. Lee: Well, our revenues have been growing, and we have been gaining market share. But we are still a long way shy of where we think the revenues could be. But we were operating this in a lot of ways as a you know, the property we hoped it to be. And we finally said, wait a minute. This we need to make money. And there are 2 other casinos in town whose revenues are not much different than ours. And they are both comfortably profitable. Like, $10 million to $20 million of EBITDA. We can do that as well. When we started comparing, you know, what do we have to do?

And you realize stuff like room service, you know, hardly ever gets used. Even Monarch does not offer room service. We said, why are we the only casino in the state offering room service?' And there were shifts where people would come in and work and very few orders were given or were taken. Lewis mentioned the cages We benefit from having 3 licenses. it is a little bit of a historic anomaly. And we have to operate 3 different cages. The principal purpose of a cage these days is to redeem the gaming chips, and we only have 1 table game pit, and so that cage sees most of the action.

The other 2 cages, we have to keep open. It saves us on the tax rate. So we save like $4 million a year on gaming taxes. We probably spend $800 thousand or $900 thousand of it of funding having these other cages.

Lewis A. Fanger: And, you know, as we were looking for all sorts of ways to get more efficient, it suddenly occurred to us that people who worked at our PBX desk was kind of hidden in the bowels of the building. These are the people who take phone calls for room reservations and stuff. They have gaming licenses because they have to access the gaming system to see if somebody qualifies for a comp, for example. And there is no reason they cannot be sitting in the cage. And so we redid our phone system so that it rings in the least busy cage.

Daniel R. Lee: And if that line happens to be busy, it goes to the second cage. And if that happens to be busy, it goes to the third cage. And if all 3 are busy, then it goes to voice mail. But rarely are all 3 busy. And, and so we. We are not closing a cage, but we have figured out how to keep the people sitting in the cage gainfully employed, and we no longer have to operate a separate PBX. So that was a complete win, and we had a little rockiness at first. We had to train people right, you had to get the technology right, but it is pretty smooth now.

I have been calling every morning pretending I am a customer, and it goes smoothly. And it saves us significant amount of money. Housekeeping, we had an outside company doing it who primarily does hospitals. We kept trying to get them to be more efficient. And we finally gave up on them. We operate, obviously, our own housekeeping at Rising Sun and then Silver Slipper. And so we gave them notice, discontinued them. We have been hiring housekeepers and training them. We have a director of housekeeping. And that contract ends November 23rd. And saves us about $600 thousand a year. Our laundry goes down to Colorado Springs. And goes to commercial laundry there.

We operate our own laundry at Rising Sun. Which is a similar sized hotel. And we do it at less than half of what we are paying in Colorado Springs. So we have a space in Cripple Creek where we can put laundry equipment, operate our own laundry. it is gonna take us about 6 months to get that in place. Laundry equipment can be leased. And even net of the rent of the laundry equipment probably saves us $400 thousand a year.

Our restaurant operating hours, which Lewis did not mention, we have reduced back. there is no reason to operate 3 restaurants in the middle of the week when there is not enough customers to keep them all profitable. So that the high end restaurant which is quite successful, makes money on weekends, would lose it midweek, and we decided there is no reason to operate in midweek. So we have cut back on that. We had a consulting arrangement with a very good chef and restaurant manager in Las Vegas that was kind of expensive. But they were very helpful. They trained the staff and did the menus and all of this stuff.

And the value they brought was primarily when it first opened. Right? Because it helped establish it And I think the food and beverage team we had at that time would have stumbled over that restaurant. Now the restaurant is well established. The people working there are well trained. And we have a food and beverage manager who is shown that he is very competent at it. And there was just no reason to be paying a consulting fee to the guys in Las Vegas, and we were allowed to cancel the contract and did. That ends in a week, I think.

Lewis A. Fanger: Yeah. It ends in November and saves us between $250 thousand and $300 thousand a year.

Daniel R. Lee: And I think we will speed. In fact, it is almost the opposite. The only ramification of doing that is we have to alter the menu some, so we are not using their the recipes and stuff that are tied to them. But, frankly, it was time to make some changes in the menu anyway. And so our food and beverage team was very good. Well, now come up with their own spins on different things. And that gives us a marketing opportunity to invite people into the new menus. So there is a lot of just blocking and tackling that we are doing that will make sure this place is profitable next year. Comfortably profitable next year.

We should be able to make between $10 million and $20 million in 2027. and grow from there. And now, you know, you know, it is disappointing because we are in it $300 million. You know? And then people have asked us, would you sell it? Yeah. We would sell it. And if somebody offered us the right price, it would probably be at a loss of the $300 million investment we have. But given how expensive our debt is, it would probably make sense to do that at some point. But you wanna get it trending profitably and go in the right direction. And evaluate it at the time. But that is kinda where it is.

So I think the only real other.

Lewis A. Fanger: Feather, just to be clear, because I know employees listening on this it is not for sale.

Daniel R. Lee: Do not anybody panic. it is just people ask that question, would you sell it? Listen, we are a public company. Anything's always for sale. That does not mean we are active trying to sell it. But the question came up from investors, would you sell it? Of course, we would under the right circumstances, and that would be true of any asset we have. We have a financial obligation to our shareholders to do that. But at the same time, I do not want our customers or employees to panic. We are not there is no sale imminently contemplated.

Lewis A. Fanger: The only other thing I had to add there was, you know, a lot of the things that Daniel described are actively moving. So either implemented in October or about to launch, in November or very shortly thereafter. You know, from a. You know, Daniel walked through the cage savings and restaurant hour changes and that sort of stuff. You know, when you when you look at that piece, that efficiency piece, I did not really quantify it for you, but that is about when all is said and done, about $4.5 million of savings. At this point, we are maybe about $2 million into that $4.5 million.

The other pieces that Daniel described are largely in place for savings some time in the fourth quarter, except for that laundry piece, which is, which, as Daniel mentioned, is probably 6 months away. The only. The last piece we did not really talk about was trying to push continuing to try and push a group business a little further. If you look at where the group business sat, last year, it was 1 percentage point of occupancy, and, you know, that number will, of course, trend higher The stretch goal is something like 10% of. 10 percentage points of occupancy in the coming year, but, you know, that is that is kind of the stretch. Real.

Realistically, can you be somewhere kind of mid to high single digits? I think the answer is probably yes.

Daniel R. Lee: Well, in some of this, like, like, getting rid of the out outside housekeeping, and bringing it in house, will probably hurt us a little bit in November, not a lot, but a little bit. Because we are training housekeepers to replace the outside company. So for have a little bit of a cost associated with that. There should be pretty significant savings going forward. And another 1 that is a good example of a win. We have a we have a pretty good sales team now in sales and marketing, 7 people. When the property opened, there was only 1. And they are putting stuff on the books for future years.

And the head of that mentioned to me that they would really like to have an additional breakout room. They. You know, we have very good meeting room space. I thought we had plenty of meeting room space And she said, no. Actually, we could use more. And we were thinking about what do we do? What do we do? And literally right across the elevator lobby from the convention area, there was a reception area for the spa. And it had a kind of a retail venue and all this stuff. And very seldom is there anybody hanging out that reception area, and the retail sales of spa goods with minimal. And it makes a perfect breakout room.

And all we have to do is remove the retail stands that are in it and buy some folding chairs. And we have an additional breakout room that is bigger than any of the 3 breakout rooms we have now, And the spa does not miss a beat because people go to the spa to get a massage, to use the exercise room, to get to the pool, all of which can be accessed through different routes and from the building. So we are changing the signage to tell people, well, if you get a massage, this is where you go. Wanna use the exercise room, this is where you go.

If you need the locker room, this is where you go. And we can take the lobby of the spa and redeploy it as meeting room space. Think the only CapEx is some folding chairs. I mean, it is nothing. And, and it actually saves us money because we have historically had a receptionist there. Who got paid, and there really is not a reason to have a receptionist there. And so we are looking for ways like that. And on the marketing, we are also. And it is a big focus is to try to do more with less.

We are spending quite a bit on marketing We are trying to make sure that we can reduce our marketing spend but continue the pretty steady growth it is had in revenues. And even accelerate the growth in revenues because eventually, when people experience it, when they are there, they come back. We had a very big meeting of-- I forget the exact name, but they are business execs from throughout Colorado that filled the town, but principally us; we are the major hotel in town. For the third week of September. And most of whom had not been to Cripple Creek before. 90% had not been to Cripple Creek.

And this is the sort of thing you bring them up there because they are meeting planners, who may come back. And that week went very nicely, and we got a lot of nice comments. that is the sort of thing you do to build the business in the future. So Great. Thank you very much.

Lewis A. Fanger: You got it. Thanks, Jordan.

Operator: And our next question will come from Ryan Sigdahl with Craig Hallum Capital Group.

Lewis A. Fanger: Hi, Ryan.

Ryan Sigdahl: Hey, good afternoon, Daniel Lewis. I do not think I caught. I am gonna ask both my questions upfront here, and I will turn it over to the others. But did you quantify the weather impact in the quarter? Or can you? And then secondly, you have tried several different marketing strategies at Chamonix. A targeted digital strategy certainly seems obvious from where I sit, but I guess why have not you tried that earlier? What gives you confidence this will work, and work better than the prior approaches? Thanks. Good luck, guys.

Lewis A. Fanger: Do not disappear yet, Ryan. The, so first question, you said weather impact. We did have a hurricane event in Mississippi in October. Which may be what you are referring to.

Daniel R. Lee: But otherwise, what we referred to were wildfires in Colorado. The early part of the third quarter. We did not quantify that impact for what it is worth. But it was it was not small. Our revenues are running up 10 to 12% in the months leading into July, and July was down a little bit or flat. And so you can guesstimate it from there. And but then September went back to the growth trend. So, and the hurricane in Mississippi in October did not impact us.

Lewis A. Fanger: It did not hit us and did not create any damage.

Daniel R. Lee: Our road coming in got flooded for a short while, so there was a day or 2 where we had very little business. But there was no property damage to the property whatsoever. Yeah.

Lewis A. Fanger: Yeah. You always get an impact as people prepare for the event and then an impact after the event as people clean up. And so we had an impact on both sides, but, otherwise, no damage. And it was not that serious.

Daniel R. Lee: Yeah. October might be a little weak compared to October last year, but it is okay.

Lewis A. Fanger: And apologies, Ryan. Your second question just run that by us 1 more time.

Ryan Sigdahl: Yeah. And I was talking about the wildfires that you guys called out specifically, in the quarter. Helpful on the hurricane. Just on the marketing strategy moving to a targeted digital strategy. I guess you guys have tried buying different databases tried different marketing teams. There have been several different iterations of the strategy at Chamonix. I guess, why did you wait until now to do a digital, more efficient strategy? Does that logically make sense to me? But then what gives you confidence this will work better than the previous approaches?

Daniel R. Lee: We have been moving that way steadily. We are getting more and more that way. You know, we also had hired a new VP of marketing a year and a half ago or 15 months ago. And opted to retire. And so we are now in the market for a new director of marketing, which I think is not ready for us. We do have a corporate marketing person, which we hired a year and a half ago, spending a lot of his time there.

We have asked the team from American Place who have been in regional casinos for a long time, and the number 2 person at American Place is 1 of the sharpest marketing guys in the in the business, in my opinion. And they are both helping out to try to figure out the Rubik's cube of Colorado, I guess, is the word I am looking for. But what is a little mystifying is, you know, people will argue well, they do not like to drive up into the mountains. And it is like, well, they certainly do to go to Breckenridge or to go to Vail. They drive right by us to get to Breckenridge.

And lots of people do that, both winter and summer. And it is not an easy drive to Blackhawk either. And so, and by the way, people drive. Lots of people from Los Angeles drive all the way across the Mojave Desert to get to Las Vegas. So I do not think it is that. I get mystified that our market share is not higher. We are by far the best casino in Cripple Creek, and we have by far the biggest hotel we should be having a bigger market share. And so that leads us to think, you know, we are spending more on advertising than anyone else.

And we do not have a commanding market share. there is something there. And so we are looking at it and saying, obviously, we are not being very effective on marketing. Let's figure out why. And so we are-- we have actually we have actually already cut our marketing back 20%, and we are not having an impact on our revenues. Okay? And. Because our revenues are growing as much as they were last spring. And so we are we are trying to make that more efficient Ultimately, I mean, it is easy. it is much easier to cut cost than to grow revenues. Ultimately, we need to do both or want to do both.

And, to get to where this what this place should be able to earn, we need to do both.

Lewis A. Fanger: Yeah. You know you know, some of it was by design too, if you think about it, Ryan. Like, you know, when you. Whenever you open a brand new property, especially when you are trying to trying to draw a market that historically had not been in Cripple Creek. You know, you purposely go out with more in advertising just generally. Right? You are trying to. You want people to be aware that you opened. it is something new and different and so you purposely go out a little broader. And then as time goes by, you would not naturally cycle that down anyway. And so there is some of that going on. there is some of the.

Just the transitioning into more targeted digital as Daniel went through. And part of that is, look. We have got very specific ZIP codes that we wanna target both in South Denver as well as in the Colorado Springs market. And you can layer on top of that people that have, historically shown an interest in gaming. And so, I ultimately, I think these efforts are gonna be quite fruitful and result in lower marketing spend. But, you know, there is there is a. there is a lot behind why it was higher at first. But, nonetheless, this.

You know, now is the time to reduce it, and we are actively reducing it and feeling good about where it is all going.

Daniel R. Lee: Yeah. I happen to have a conversation about a week ago with somebody who is affiliated with a different casino in Colorado that is pretty successful. And we were comparing notes, and he said, he figured out early on that the real key to their success was filling the hotel midweek and they were very focused on that. From the very first day. And we are very focused on that now. We should have been more focused on it when we were under construction, and we were not. But we are focused on it now.

I will also say, Boyd just announced a deal with Sonesta Hotels where you tie into their frequent player program and so on. that is the sort of thing that can help your midweek a lot. These big hotel chains have big sales organizations that keep track of where is Microsoft having their next meeting and so on and so forth. Gives your Salesforce leads to help fill midweek And in addition, you get just the exposure from people can redeem their points with you and earn points in their program and so on. Cosmopolitan was the first major hotel in Las Vegas that I recall doing it. And it was part of what turned their results around.

And then MGM acquired them, and now MGM has a big program like that with Marriott. And we are talking to the major hotel chains about doing something similar to that, for Chamonix anyway. Do not have a deal yet, but it is something we are looking at. And there is always a cost involved with those deals, but I think the benefits outweigh the cost. So Thanks, guys.

Ryan Sigdahl: Good luck.

Lewis A. Fanger: Yeah. You are welcome. Maybe time for 1 more, Daniel.

Daniel R. Lee: Okay.

Operator: Alright. And we will go next to Chad Beynon with Macquarie.

Sam: Daniel and Lewis. This is Sam on for Chad. Thanks for taking our questions. First question, last quarter, you guys discussed about 175 of wind per position per day versus 33 for the broader Blackhawk market. As you implement the cost savings how should we think about the balance between EBITDA growth coming from the expense reduction versus win per day over the next couple of years.

Daniel R. Lee: I think the expense reduction gets us to 10 to 20 million of EBITDA a year. And to go beyond that, we probably need to grow revenues. That help you?

Sam: Yeah. Fair enough.

Daniel R. Lee: Based on our based on our existing revenues, you know, with a normal margin for regional casino, we should be $10 to $20 million. And so that is what we are doing. So and so, you know, that you know, we.

Lewis A. Fanger: Before we were doing some stuff to. We were incurring operating expenses to help build the revenues. You know, for example, we had valet parking and bell service. You know, pretty much 24 hours a day. 7 days a week. And if you were there midweek and looked in the valet parking lot, there might be 6 cars there. And I was like, wait a minute. Nobody's using our valet parking midweek. Why are we paying a valet parking to stand there and park your car? Let's just cut it back to in the afternoon, and people are arriving and maybe midweek, if the anticipated occupancy that night is low, Maybe you only need 1 person.

If somebody shows up, in a car and they wanna valet park and have help with their bags, well, you can park their car in the porte-cochère. You are not busy. To help with their bags and then go park in a valet parking. So we are you know, looking at every single thing and trying to do it in ways that we still provide good service to our customers that they do not really realize it. And so, for example, I mentioned, you do not have to go to the spa to the receptionist to go to the exercise room. that is actually better service. You could go right to the exercise room.

Do not have to go through the spa and through the locker room. And as it happens, the geography of the building, there is a public corridor that is quite pleasant that leads right to the exercise room. And so it is finding ways where we do not diminish the guest experience. Would we run room service when nobody orders it? Right. And now we may eventually try to figure out a way that if somebody wants room service, we can do it out of 1 of our restaurants. So we do not have to staff a separate room service area.

And that might be important, for example, to get into 1 of these, hotel-- you are trying to join on a national high end hotel affiliation, they will have a set of things on it, and it might be that you have to offer room service at least at the breakfast hours. Well, if it is midweek, I do not wanna staff a room service kitchen. But you know, you could call down to room service. It goes to the casino cage where we already have a person sitting at a PBX phone. You do not know they went to the casino cage, but the person answers and says room service.

They type the order in, and it pops up at the quick order cook in the home cafe, and they have a waiter to bring your food up to your room. And you are offering room service. And if there is only a couple orders a day, it is hardly a distraction in the home cafe. So you look for ways. But at the moment, we just eliminated room service. And. But if we needed to bring it back in some fashion in order to join the right hotel affiliation, we have ways to do it. So Appreciate the color.

I think I think the only other thing to add to your question there is, flow through should be very, very high. You know, outside of gaming taxes and a little bit of reinvestment dollars from a marketing point of view, it is extremely high.

Daniel R. Lee: So As long as Lewis mentioned gaming tax, I will. I mentioned something. There was a proposal came out or idea came out the other day of increasing the gaming tax rate at the highest tiers in Colorado. that is a long ways from done. It would take a public referendum to pass, in order to happen. But if it did happen, the impact on us would be minimal if maybe none. Because of the fact that we have 3 different licenses we are not in the. Our revenues which are growing and not as high as they should be, whatever our revenues are split 3 ways.

And now it is not equally split 3 ways because the Shaman E license does more revenue than either of the other 2 licenses. But it is spread over 3 licenses. And so we are not in the tax. The highest tax tier. In fact, I think our blended tax rate is, 12%. And the highest tax tier is 20. And so it is it is like. So I do not think that becomes like. At any given time, somebody's talking about raising gaming taxes somewhere. I think this is a long ways from happening. But even if it did happen, I do not think it would have much impact on us. Yeah. Thank you.

And then just for a quick follow-up, switching to the election results, can you discuss whether they help reduce the risk of new supply in any of your markets, particularly Indiana or Illinois. And if they potentially created opportunities for you down the road.

Sam: Well, okay. Let me address the second 1 first.

Daniel R. Lee: We are pretty focused on getting American Place the permanent American Place built. And getting Colorado fixed. And not very interested in taking on else in the foreseeable future. So we get phone calls all the time about casinos for sale. And, you know, sometimes we will we will listen just to see what we can learn. But we are very unlikely to take on anything else until we get those 2 things fixed. The in Indiana, I thought it exactly happened what I thought would happen. Somebody funded the opposition in those 3 referendums. It was probably an Indian tribe out of Michigan. And it was structured in a way that it incentivized nobody to fund the pro side.

So all 3 referendums failed solidly. Which politically means that nobody's gonna get a casino into the Fort Wayne area anytime soon. And there were a few people in the legislature that we were not our friends, they lost election. And that. that is kinda nice. And I will leave it at that. And. But at the moment, you know, we make money and Rising Sun, and it is a it is a. it is not a huge cash cow for us, but it is a consistent cash cow for us. And that will just continue to be the case.

In Wisconsin, The man who was elected governor is the democrat, and he had been on the city council, I believe, in which is where the Potawatomi Casino is. So the efforts to get a casino in Kenosha-- now Southeast Wisconsin's a very underserved market. I think of a-- if the Indian. there is a small Indian tribe that is trying to get a casino there. And they have been trying for 20 years. I do not think they are any closer than they have been at any other time. And if they ever did get it on, I think their revenue would primarily come from increased gaming by people who live in Southeast Wisconsin.

But I think the governor's race makes it less likely than ever that they are going to get a casino there. I have not talked to that governor. I do not know exactly where he stands. But I would expect somebody who comes from Milwaukee the Potawatomys are a political force, and it is very important. And he is on the Democrat side, I think I just think that puts us further off. Anywhere else? So I do not think it changes much. So Good to hear.

Sam: Good luck, guys.

Daniel R. Lee: Okay. Thanks.

Operator: And this now concludes our question and answer session. I would like to turn the floor back over to Lewis A. Fanger. President and CFO, for closing comments.

Lewis A. Fanger: I think Oh, actually, I am reflecting on that.

Daniel R. Lee: This does not affect us very much because we are not a big player in sports betting. But the Kalshi and Play Market's prop. What do you call Prediction markets. Prediction markets. I mean, those companies came out of nowhere. They are unregulated. They do not pay any taxes. And they have gotten big fast. And I think after this election, there is gonna be a lot of investigation into what they are doing. And I think they will end up being constrained. Now that is not a very big positive for us, but for some of the other casino companies out there, that could be pretty important. that is it.

Lewis A. Fanger: Okay. Well, thank you, guys. Thank you very much.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. May disconnect your lines, and have a wonderful day.

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