Full House Resorts, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights:

• American Place: The temporary casino had record revenue and profitability. The permanent project benefits from being in a wealthy county with high population density, and progress continues with budget reduction and site approval.
• Chamonix: New management team since April has driven growth. Table games are thriving, marketing programs improved, and new amenities like a ballroom are used. Cost efficiency improved with reduced FTEs. Focus on growing the day trip business from Colorado Springs and developing convention business.
• Kenosha Casino: Mentioned as a long-standing project with many hurdles and little impact on Full House in the near term.
• Indiana Casino: Study on moving casino to more populated areas, Full House's casino could benefit the state by relocating to a higher revenue location.
• Table Games at Chamonix: Growing share, with new games introduced, and efforts to improve the customer experience through better driving routes and marketing.

Segment Performance:

• American Place (Illinois): Revenues increased by 14% to $32 million in the third quarter, with adjusted property EBITDA rising 16% to $9 million. The database grew to over 115,000 people. The permanent project received unanimous site approval from the Waukegan City Council and saw its budget reduced from $325 million to $302 million (excluding capitalized interest).
• Chamonix (Colorado): Revenues rose by more than 7%, and adjusted property EBITDA improved from negative $0.7 million to positive $2.1 million. Table games revenues were up 53% Y/Y and 296% vs Q3 2023; slot revenues up 6% and 161% over same periods. Marketing programs improved, and new entertainment amenities like a large ballroom were utilized. High-frequency guests visited more often, and the database grew by about 3,000 new customers monthly.
• Rising Star and Silver Slipper: Combined were essentially flat.
• Grand Lodge: Affected by renovation disruption at the Hyatt Lake Tahoe housing the casino.

Guidance:

• American Place permanent casino expected to reach $50 million run rate EBITDA for the temporary facility and $100 million for the permanent one.
• Chamonix expected to continue growing revenues and improving profitability, with focus on cost control and revenue growth.
• Future quarters show improvement from prior year's weak quarters, with expectations of better earnings in 2026.

Risks:

• Kenosha Casino Project: Long-standing project with many legal and political hurdles, unlikely to impact Full House significantly in the near term.
• Bond Trading and Analyst Sentiment: Shorting of bonds and negative analyst coverage mentioned, though not materially impacting Full House.
• Chamonix Ramp Challenges: Casino ramps are difficult, but progress is being made.
• Indiana Casino Relocation: Uncertainties around state laws and community reactions to moving the casino.

Question and Answer: Q: David Bain asked about the 15% of Colorado households visiting Cripple Creek last year and flow-through of additional revenue.

A: Daniel Lee responded discussing gaming per capita, flow-through of revenue with considerations like gaming taxes and marketing reinvestment, and that expense structure is improving with cost control.

Q: Jordan Bender asked about financing the permanent American Place casino, including REITs and land leases.

A: Daniel Lee mentioned considering various financing options, including REITs and land leases, with focus on cost-effective financing and no immediate pressure to close.

Q: Ryan Sigdahl asked about operational improvements at Chamonix, specifically conference business.

A: Daniel Lee discussed improving the drive to Chamonix, changing road signs, and focusing on day trip business from Colorado Springs, as well as developing convention and meeting space.

Q: Chad Beynon asked about Indiana casino market and moving the Full House casino.

A: Daniel Lee discussed the Indiana gaming study, potential relocation of Full House's casino to more populated areas, and community support for relocation.

Q: Colin Mansfield asked about table games strategy at Chamonix.

A: Daniel Lee and Lewis Fanger discussed growing table games business, introducing new games, and gaining market share due to competitors' softness.

Q: John DeCree asked about Silver Slipper and Rising Star.

A: Daniel Lee provided updates on Silver Slipper making progress with cost-cutting in marketing, and Rising Star being more challenged but making progress.

Q: Luis Chinchilla asked about seasonality impact on Chamonix and Kenosha casino approval.

A: Daniel Lee and Lewis Fanger discussed seasonality effects and uncertainty around Kenosha casino approval, stating it's unlikely to impact Full House significantly in the near term