Full House Resorts, Inc. (FLL) Q2 2026 Earnings Report, Transcript and Summary

Greetings and welcome to the Full House Resorts Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Adam Campbell. You may begin.

Thank you, and good afternoon, everyone. Welcome to our second quarter earnings call. As always, before we begin, we remind you that today's conference call may contain forward-looking statements that we're making under the safe harbor provision of federal security 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 make reference to non-GAAP measures such as adjusted EBITDA. For reconciliation of those measures, please see our website as well as the various press releases that we issue. Lastly, we're also broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release as well as all of our SEC filings. And with that said, we're ready to go, Lewis.

Good afternoon, everyone. We had a strong quarter of growth led by our two newest properties, American Place and Chamonix. On a consolidated basis, revenues grew 5.6% in the second quarter and adjusted EBITDA increased 19.5%. That growth was led by American Place, which once again had its best quarter ever. I feel like a broken record when I say that since we've said it so many times, but get used to it because we expect to say it quite a few more times in the future. Revenues at American Place rose 13.4% to $34.8 million. That compares to revenues of $30.7 million in last year's second quarter. Adjusted property EBITDA at American Place rose by 13.8% to $10.1 million, up from $8.9 million in last year's second quarter. Prior to the second quarter, we had never crossed $11 million in monthly gaming revenue, much less $12 million. In May of 2026, we crossed both of those thresholds, reaching $12.7 million. Our Temporary American facility has seen consistent growth since it opened, and we fully expect that growth to continue even in the temporary facility. In the month of July, we continued to grow. While I don't believe the monthly gaming revenue reports are out quite yet, it was our second best gaming revenue month ever. Historically, the second half of the year is even better than the first half. At Chamonix, you may recall that we changed marketing agencies late in the fourth quarter and onboarded them in the first quarter. In the second quarter of 2026, with that new ad agency, we launched new, more targeted marketing strategies, made changes to the offers that we send to our guests, and revamped our overall branding, especially on social channels. Those efforts helped revenues rise almost 12% in the quarter. Adjusted property EBITDA was approximately break-even for the quarter. We augmented our casino host team recently, adding two more people to that group. And a few weeks ago, we added a new casino director with experience at higher quality casinos and having worked at Fontainebleau for two and a half years and at Wynn in Las Vegas for almost 15 years. As we continue to refine our casino host program and build our high-end business, his experience will be useful to our Colorado team. One stat that I think continues to show the available opportunity in Colorado is win per position per day. For Black Hawk as a whole, that statistic was about $330. We estimate that Monarch, the other high-quality casino in the -- the only other high-quality casino in the entire state, is maybe twice as high, or north of $600. At Chamonix, we're currently at about half the Black Hawk average. And so in the near term, our goal is to improve our win per position per day figure of about $175. If we can hit the Black Hawk average and get 70% EBITDA flow-through, that results in roughly $30 million of annual EBITDA. If we can get a 15% premium to the Black Hawk average, which would still be a massive discount to Monarch, you approach $40 million of EBITDA. We're not there yet. We don't expect to be there this year or even fully there next year, but we do expect to make massive improvement over the coming 18 months. You get there by filling the hotel, which still has significant capacity midweek, and continuing to add names to the database. As an example, we define a VIP guest as someone that generates more than $150 of gaming win in a visit. In the month of June, the strongest part of our database was that VIP group. Leading the growth for all of our rated play was our top segment that spent $750 or more on our gaming floor in a single trip. Our second best growth segment was the $350 to $749 group. And our third best performing segment in our rated database was the $150 to $349 group. We are seeing better guests visit Chamonix, and we're seeing them return, in part due to our evolving marketing efforts and expanding database, increasing awareness, and a high-quality product that we built. At our other properties, just a few quick notes. Rising Star was impacted during the quarter by a 42-hour power outage due to a downed power line. As we said last quarter, we tried to move that gaming license to the Fort Wayne area, weren't successful with those efforts, which was disappointing, but we are pretty busy anyway with the construction of our permanent casino in Waukegan. Rising Star does make several million dollars a year of EBITDA, and we will continue to operate it at its full potential. At Silver Slipper, revenues declined slightly as we continue to eliminate unprofitable business and adjusted property EBITDA slightly improved. We think there's room to improve operating profits at Silver Slipper, including related to controlling food waste at our high-volume buffet, and we're studying things like that in real time. In Lake Tahoe, our Grand Lodge Casino is located within the Hyatt Lake Tahoe. The renovation of that Hyatt continues to disrupt our casino business in the near term, but the resort should be spectacular once complete. Work on the cottages and the restaurant across the street, as well as access to the resort's beach, is expected to be complete in late 2027. Regarding our financing, we completed several important items since our last call, all of which were necessary prior to completing a new debt transaction. The first was the passage of a legislative bill allowing for temporary casinos to operate for a longer period of time. As this bill involved the state legislature, it was a once a year process that could only be done when the legislature was in session. That bill was passed in May 2026. Though the bill also required us to request and receive approval of an extension from the Gaming Board. We were granted that Gaming Board approval in June 2026. As a result, we are now permitted to operate our Temporary Facility until February of 2029. As February of 2029 is beyond the date that we expect to complete a permanent casino, there should be minimal downtime when we transition operations from our temporary to our permanent facility. With a new timeline and more refined construction plans in place, we approached the City of Waukegan for approval of an amendment to our development agreement. As one example, our original development agreement required us to tear down our Temporary Facility shortly after opening. Rather than do that, we wanted to maintain the Sprung structure for trade shows and use as an entertainment facility. It has bathrooms, bars, and an expansive footprint, so it is well-suited to the task. And so amongst other things, the approved amendment with the city lets us retain our Temporary Facility for five years to see if it makes sense to eventually add a permanent mixed-use facility to our footprint. We also adjusted the dates in our development agreement. Lastly, we know everyone is eager for us to complete the refinancing. We are obviously as well. It's a pretty complicated transaction because we are simultaneously refinancing our existing bonds, financing the construction of a permanent casino, and closing on a new revolving credit facility. While we are not completely through the legal paperwork for that financing, we moved through a large portion of it. The new revolver is more or less complete at this point with commitments from four different banks and the paperwork is largely done. All parties continue to work diligently on the balance of the rest of the documentation and we'll give you more detail once we can. We hope and believe we can get this done in the third quarter. What I missed, Dan?

I think you did a good job. I'm going to address a couple of things because I address it a little differently than most did. You know, we used to report on each property, and a few years ago we switched to be like most casino companies where we group them together. And sometimes that masks how well results actually are. And so in this case, you'll see the Midwest segment up 4.7% and even American Place on its own was up almost 14%. But Rising Star had a storm that took down the power line. We're kind of at the end of the power grid. And it took them 42 hours to get us back up. And so Rising Star, instead of making half a million like it did last year, actually lost $100,000 in the quarter, right? And that masked how good the quarter was for American Place. And Silver Slipper, which is still our #2 property, I mean, it's really the third leg of the stool. It's a cash cow. It did $3.4 million in the same quarter of both years, but because it's in that segment and doesn't grow -- and we think we can grow it, but it's basically a cash cow -- it brings down the percentage. But, you know, the most important one is American Place. It's our #1 property. It's the one where we're building a new one, and it did really well, and a flat Silver Slipper and a down Rising Star camouflage that a little bit. A little bit of the same in the West segment. While we improved results by $1.2 million at American Place, we improved results by $1.1 million at Chamonix. Now, that was going from a loss last year of $1.2 million to just under break-even in the West segment. If we hadn't had some headhunter fees and so on, we probably would have made a little bit of money. And all the trends are positive. And so we think that will continue. Now, Grand Lodge, Lewis mentioned the renovation. It's kind of hard to recognize this hotel is a high-rise in Incline Village, which will never be repeated. The codes have changed. You wouldn't be allowed to build it today, but it had a beachfront community that had about a dozen high-end suites and a restaurant called the Lone Eagle, which was the #1 grossing restaurant in the entire Hyatt chain, or so I've been told. All that's been torn down. And Larry Ellison, who's the owner, is building something new there, which will include a big restaurant and new high-end suites and a whole new beach complex. At the moment, it's kind of a beach resort on Lake Tahoe without a beach, and without the high-end suites that our customers liked, and without the Lone Eagle restaurant, which they liked to eat at. It has other restaurants, but that was by far their biggest and best restaurant. And so we're doing okay there, but earnings are off. But all of this is supposed to be open next year. They slipped a little bit. They used to say in the first half of next year. Now it is saying the second half of next year. And knowing what Larry Ellison has built on the island of Lanai in Hawaii and what he's built in Palm Springs, even at the hotel he owns in Palo Alto, I expect it to be spectacular when it's done, and we think ultimately that'll be a positive for the casino. But at the moment, it's pretty small relative to the rest of our company, probably will remain small relative to the rest of the company. But the fact that it's off a little, and understandably, masks a little bit how well we're doing in Colorado. And we have a long ways to go in Colorado, but we are trending in the right direction. On the financing, look, we want to get this done as fast as anyone else. I think it's 1,500 pages of documents, and I have this bad habit of wanting to make sure I read every page because any sentence can screw you. And so we've been working our way through it. It's a very complex thing we're trying to do, but we've made some really good progress. We needed the extension before, because otherwise you had to make the assumption that you were going to close the temporary and then you'd either have to pay people for not working for a while or you'd have to lay them off and try to hire them back. It was going to be a real mess. So the extension was important. That took state legislature approval. These things always happen in the last day of the legislature. This year was absolutely the last day, almost the last hour, but they gave us the extension we needed. Well, technically that had to be signed by the governor. He doesn't do that immediately, so that took a little while, and technically it authorized the Gaming Board to approve the extension so we had to request that and then the Gaming Board quite promptly gave it to us. And so that was important. Well, that was one of the factors we had to change in the city and the development agreement we have with the city where it had certain dates in it we had to get the permanent done by. And we needed those dates to mirror the state dates. Well, you kind of needed to fix the state first, then we went to the city and there's a list of things. And Lewis mentioned probably the most important commercially is trying to use the temporary casino as an event center. We think we can do that in very creative ways. And because it's a temporary building, the city, under the building code, can't just approve it to be there forever, but they changed the requirement from, we were supposed to tear it down when the permanent opened. Now they've said we can keep it open for five years after the permanent opens. And that gives us plenty of time to see if we can put things into it that will drive business to the property. Then none of that's been in any of our projections. It was kind of a late minute thought of, wait a minute. And it was really Bill Richardson, who's developed a lot of casinos, who said to me, why are you tearing this down? What a great place for a boat show or all sorts of concerts and everything. And he's right. So it's not attached to our casino, but it's maybe 100, 150 feet away. And so we will use it and see if we can make it work as a profit center and as a source of business driving to the casino. And the city accommodated that by extending it for five years. I'll bet if we make it a successful part of the community, it's by far the biggest event center like this anywhere between Chicago and Milwaukee. It might even be bigger than anything in Milwaukee. It's bigger than a football field inside. And so there's a lot of things we can do in this area. But of course, it only makes sense if you find the right things to put in it. And so we will spend a couple of years while we're building to see what we can put in it. Then we'll have five years to show that it's successful. And my guess is if we need a further extension, we could ask the city and we'd probably get it. Or we decide that gives us the confidence to build a permanent exhibit center that's attached to our casino. So, you know, getting the state extension was important, getting the city development agreement to be in accord with that state extension was important. That only happened a few weeks ago. Those were very important steps. When you do this sort of financing, one of the things that happens is a bunch of lawyers pore over everything and make sure the T's are crossed and the I's are dotted, and now they are. And I think you mentioned the credit agreement. We have commitments from four banks to provide a significant credit agreement going forward. We are working diligently on the source of capital to build out the American Place. And then there'll be a third component, which is the refinancing of the existing bonds. And we intend for that to all happen simultaneously, which sounds complicated and it is legally complicated, but in a business sense, it's kind of not. You know, the source of capital, any source of capital for building the permanent is going to want to know that the bonds don't mature in the middle of construction. And, of course, people refinancing the bonds want to know that you have the money to build the permanent. Everybody wants to make sure we have adequate liquidity and so the credit facility, which is one that we anticipate not actually having to use, but it's an important source of liquidity if needed in cases, god knows, another pandemic or something. And so in some sense, that's sometimes the most complicated piece. And yet we have the commitments for that at this point. And that's all documented. It's just kind of waiting for the other two pieces, and we expect to get it all done this quarter. And I realize I just repeated a lot of what Lewis said, but it's a lot of stuff. Sometimes you have to hear it twice. So on that, we can take questions.

[Operator Instructions] Our first question comes from the line of Jordan Bender with Citizens Bank. Please go ahead.

Lewis, Dan, it's obviously been a number of years since you kind of unveiled what the permanent casino will actually look like in terms of size and scope. And I guess my question is, you know, over the years of operating the temporary and just kind of understanding the market, has your thinking at all changed around what you want to offer there? I guess the size, the scope, I mean, you have a tent now for a couple of years, does that change the dynamic of what ultimately goes into the permanent casino?

It's refined it. The size is somewhat dictated by the law. We're anticipating opening with a little less than the total number of gaming units that we're allowed to have, but we have a way to expand the casino if it's needed. I mean, the machines don't gamble, people gamble. So we looked at what we expect the revenues to be and how many machines we need for those revenues. And if it's higher than that, we can add machines later. Yes, it affected what restaurants we have and the type of restaurants. But frankly, the Temporary has done very much what we expected it to do. And notice, you know, we're doing $12 million a month of revenues roughly, and we've had very little, if any, competitive impact on Rivers, on the Potawatomi Casino up in Milwaukee, or even on the VGTs in Lake County, which are pretty significant competitors, all approximately flat. And so we've increased the gambling per capita by people who live in our area, which is what we expected. And so, you know, are there little refinements? Of course there are. Little things like we found quite a few people don't want to have to go through the casino to get to the restaurants. They might have people under 21 with them. So we've designed into it ways for people to go to some of our restaurants in what I'd call a family dining room where you can go with people under 21, enjoy the food, and not be in the casino environment. And so we've done that a little bit. I think it's as much of looking around and probably Durango Station had a bigger impact on this design than anything else because Stations did a very good job with it. They did a wonderful food court and we didn't have a food court in the project in the first place. Substituted one of the restaurants is now a food court and the city approved that change in the development agreement. And food hall, food hall, yes, not food court. It's a food fall, it's slightly different. A food court has Burger King and McDonald's in it, a food hall doesn't. Ours is, we're not as big as Durango Station. They were much bigger than we're allowed to build in Colorado or in Illinois. Nor do we have their budget, but the quality would be very similar to them. They have a very compact back of house. The Sysco truck has to make several stops to get to their restaurants. And that's pretty common to a lot of shopping malls. But in the casino business, that it evolved into, and I was part of that at Bellagio, evolved into these massive back of houses that are underneath the casino and tunnels everywhere. So you can get everywhere without crossing the casino and it's like, you know what, make Sysco make a couple of stops, just have a couple different loading docks and you can save a lot of money in construction. And that was a learning from Durango Station that we copied, the food hall we copied. We think they have a great sportsbook, and ours is somewhat similar. I don't want to say we copied, they'll sue me for trademark copying or whatever that would be, because they probably have a trademark on their plans. We didn't exactly copy it, but we learned from it. It's legal to learn from it. And then there have been four places built in Northern Illinois in the last three or four years. And we've walked through all of them, studied all of them. The first was the Hard Rock in Rockford. They shifted from a temporary into the permanent and their revenues doubled. We did a good job and we went and looked at it very carefully. They don't have a hotel, they don't have a parking garage, but they do have an event center. And part of our thinking of, well, maybe we should have a place to have events is drawn from that. And they do quite well. They were, I think it was $350 million. We will be similar in size, similar in quality without the event center, and our number is $302 million. Then there was the Wind Creek, a new tribal casino on the south side of Chicago. They have a hotel, a high-rise hotel. They have a big parking garage, and they did not have a temporary casino. So their budget was like $500 million, but that includes about $50 million in upfront fees to the gaming commission, which we paid that as part of the Temporary. And so if you adjust their budget for the upfront fees, the hotel and the parking garage, you also get to about $300 million. And they've done quite well. I've heard from the bankers that they were a little disappointed in their results, but they are dead on with what we had in our econometric model for what they would do at that location. And I think ultimately they'll be pleased with their results and they're doing pretty well. There is a lot of competition in south of Chicago, much less competition where we are in north of Chicago.

I think they ramped a little slow, but they're doing just fine now.

Yes, they're doing just fine. And you had -- PENN did two projects. They had these old riverboats that were not near the freeways and getting pretty tired, and they replaced both of them in the last year. The one in Joliet they replaced several months ago now, and it's doing much better than it was on the boat. I joked with the guy who oversaw that, actually both of the guys who oversaw it used to work for us. And I joked to them, they value-engineered out the porte-cochere, which I think is kind of stupid in a place where it rains. But otherwise, they did a pretty good job. And it also has a parking garage. If you have enough land, we have 40 acres, so we don't have to build a parking garage. It's much cheaper to have surface parking. Even if you have a shuttle bus running around the surface parking to help people get to the facility, it's much cheaper than building a garage. And in a lot of markets, including here, people prefer to be in the surface lot. The garage fills last, not first, unless it's a snowstorm or something. And so anyway, they were a little less than $300 million, but they value-engineered a lot of stuff out. Then the most recent one is Hollywood Aurora. They did a good job there. They have a nice food hall. Actually, they do in Joliet too. They have a 229-room hotel. They have a 1,300-car parking garage. If you adjust for that, they're right about $300 million and did a good job. And the numbers are pretty early, but I think we're going to see a pretty big lift from what they were doing in the old riverboat there as well. So, you know, we've obviously -- in fact the people who work for me joke with me that I'm going to get in trouble because I walk through their back of the house and take pictures of it and everything. I know some of these places better than the CEOs of their own companies because we go to town learning what we can do and what's smart, what they did right, what they did wrong. And so, yes, does it evolve? The basic project is the same, but there's a lot of evolution in small ways.

Awesome. I appreciate that answer. And just to follow up, I know it's small, but will you get any business interruption insurance or proceeds from the downed power lines during the quarter?

No, and the way business interruption works is you only get it if you have a property damage claim. And we were not damaged at all. There was a tornado some distance away, took out the power line to the whole town of Rising Sun, and it took them quite a while to get it back up. Must have been a pretty high-powered power line. And you know, you only get business interruption insurance if you have a property claim and we don't.

Perfect. Thank you, guys.

Your next question comes from the line of Ryan Sigdahl with Craig-Hallum.

Hey, good afternoon. This is Will on for Ryan. First, I wanted to ask on the financing. I know I think it was last call you guys were still sort of working through the legal paperwork and it sounds like that's still going on. Curious, you were talking about the foundation as well, perhaps laying that, maybe doing other little bits of construction. I guess what we'd like to know is what's your confidence in getting this done within the next quarter or so?

Well, we are doing some stuff. We've been testing the dirt because, you know, there used to be a mall on this site. You don't want to start moving the dirt around and then find out that you took a pile of bad dirt and spread it all over the property, now you've got a real problem. So the guys have been out there testing the dirt. We think it's all clean, but we want to verify that before we start moving it to fix up the fence around it. But the biggest thing is not what you see. We authorized the architects to go ahead and complete a big chunk of the plans so we will have full schematic drawings. We were at 75% before. That's like $1.3 million. And we can afford to do some stuff before we have the financing in place. And that was one of the things we went ahead on. We've also approved the civil drawings. And that's all to allow us to move ahead more quickly once we have the full financing. And so things are happening. Most of it behind the scenes. But, you know, some pretty significant numbers. Between those two, it's probably $1.5 million, and that'll be spent in the next two months or three months. The civil stuff takes a little longer. Now, listen, all the paperwork, like nobody is saying this can't get done. Everybody wants to get it done. It's just complicated. You have inter-creditor issues between the three issues that all has to be worked out and you know, sometimes lawyers like to play ping-pong and it goes back and forth and back and forth until either Lewis or I say, hey, cut it out, just let's put the ball in the middle and let's move on. And that's been kind of the process. We have one analyst who wrote me kind of an email complaining about how long this was taking. When we're done, I want to send them a set of the documents in paper because it's like eight inches deep. And it's like when you're done reading this, you'll appreciate what this takes. And you find things in there that you look at and say, well, that doesn't look right. And in fact, one of these things, I found something, doesn't affect anything currently, but affects stuff way down the road. And when the people on the other side of the transaction, I said, you know, it probably isn't material and it's way down the road, it's intellectually wrong and they said yes, we think we might agree with you on that but you're the first company out of 30 who's brought that up. And maybe we're too careful. And frankly, we were trying to get everything done before August because we know a lot of Wall Street goes away on vacation over August. And once it was obvious we probably missed that, it was like, okay, well, let's work through August on the details and be ready to go in September. So.

So, you know, some of the, when you have a revolver, those details, when you, if they're slightly off, you can always go back and fix those later. When you have a longer piece of the paper, like five-year bonds or something, changing that is not easy at all. And so to Dan's point, there are a lot of potential conflicts that we're just trying to make sure all, everything's in agreement between the three different sets of docs. It's, and as Dan mentioned, this is thousands of pages. It's not like you're reading through 50.

And to be quite honest, I mean, we have a track that we're on that we've been working on for a while. But we get phone calls all the time from other people saying, hey, you know, we take a look at this and we're kind of like, I think the car has left the garage here and we're moving down the way and we're 95% sure we're going to get there. But if we ran into a big pothole, we do have other people standing by.

That's fair. Let's hope for no potholes. Chamonix, wanted to switch over to there. I know you were talking about last quarter, Dan, about doing a bit of blocking and tackling in terms of Bronco Billy's. Maybe just talk about the improvements at both of those properties, given, you know, profit improved sequentially throughout the quarter?

Well, it's a little bit on all counts. I mean, we're holding the line on expenses. We're growing revenues. We're trying to grow our revenues in an efficient way, so we're also making the marketing more efficient. You know, it's one of the nice things we did this quarter, we have a new food and beverage manager, the only person in the management team from before, he was our pastry chef, and he's a very well-known pastry chef. He's written some books and won a bunch of awards. And I went to him and basically said, we need a food and beverage manager. We can't afford you as a pastry chef. And he was hesitant, I don't know, you know, and I said, you're smart, you clearly know how to cook, you clearly know -- you clearly care. And he said, well, would I be allowed to get rid of some dead wood around here? I said, absolutely, that's why I want you to take the job. He took the job. And we had a Mexican restaurant that wasn't very good. And in fact, it had effectively closed last winter. We weren't even using it. Food was so bad, Lewis and I would joke about how bad it was when we went up there. And I sent this guy two cookbooks I got from Amazon of great Mexican cooking. And damned if he didn't cook his way through both books. He showed me the books. They're just dog-eared and Post-it and worked his way through it. And he introduced a new menu with new recipes. We came up with a new name. It's Don Juan's now. It's in the same place. And it's very popular. And it's small. It's big if you go there on a Friday night, you're going to wait more than an hour to get in. And now the food is really good. I'd be willing to say it's probably the best Mexican restaurant in the state of Colorado. And watch out for the margaritas, they're pretty damn good too. And so, that's the blocking and tackling. Taking a Mexican restaurant with very little CapEx and giving it a new menu, new recipes, new name, new staff. And in fact, you can tell when you're there, you can tell this guy cares. We make all the salsas ourselves. There's nothing from Sysco. We make our own nachos. We make our own tortillas. Everything's done homemade, if you will. And the staff who works there is very proud of the quality of what they're producing. And, you know, as a CEO, you look around and say, okay, promoting this guy to food and beverage manager was the right move because now we've taken a restaurant that wasn't doing much and now you can't get in. And that's great. And so we need to do more of that. And that was kind of a first little trial. We have a basic coffee shop we need to upgrade as well. We're making some changes in 980 Prime that I think will be better. We're now looking to use it as a brunch lunch on weekends. So that's just the food service. Little things you wake up to, we have a little speakeasy that is only open on Fridays and Saturday evenings. And it's got a bunch of slot machines in the bar tops. We're looking at it and say, wait a minute, we pay a fee to the city on a monthly basis for every slot machine we have. Why does it make sense for us to have slot machines in this bar top? A bar that's only open two nights a week. It doesn't make sense. And when you run the math, it really doesn't make sense. And so we're taking those slot machines out and run it as an interesting bar. It is a very interesting bar, but it's stupid for us to have slot machines in it. It's one of those things like, why do we do this? And then once you understand, you know, somebody pointed it out to me. I'm like, wow, yes, that really was dumb. We shouldn't have done that. And so we're fixing that. Oh, probably the biggest thing. We have a sales and marketing team. When I say sales and marketing, this is different than the casino hosts and sales and marketing. We have a team of people whose job it is to fill the hotel. It's about meetings and conventions. And we have seven people there now. And they are attending meetings. There are conventions and meeting planners. There are associations. There are cold calls. And they're all working their butts off to bring in business. And we're starting to put, you know, significant business on the books. But that stuff is booked way in advance. So that's to help us in 2027 and 2028. If somebody's getting ready to get married, they're not booking their wedding tomorrow. And so we now have an active sales team who will see the dividends in the years ahead. Now, along those same lines, when -- we had a very competent director of casino operations, and we also had a very competent fellow down in Mississippi. And the guy in Mississippi retired. He was retirement age, and he'd been with us a long time. We were sorry to see him go, but he was younger than me. I told him he couldn't leave, but he went anyway. And so the guy from Colorado wanted to move down there. He had worked with [ Angie ] before. It was okay, that's fine. Then I thought, he was pretty good, but let's see if we can find somebody who really knows the high end, who has experience at high-end gamblers. We do have experience with the high end in Illinois. Illinois will let people gamble $25,000 a hand in Illinois. In fact, the quarter's results were achieved despite one guy beating us for $1 million one night. Some of that back. So, you know, we do get high-end play in our sprung structure in Illinois. But in Colorado, we built a high-end property and we don't have that much high-end play. And so we reached out to all the people we knew and found a guy, got a little lucky. His in-laws live in Cañon City, which is right near Cripple Creek. And his wife wanted to get back closer to her parents. And so he has moved from Las Vegas. He joined us just a couple weeks ago. And he knows how to deal with that high end. He knows how to hire hosts and cater to people who are going to come in and gamble large numbers per hand. Whereas if you look at all of our other people, all these people we've hired, they're all very competent people, but they came from Ameristar, they came from Isle of Capri or Bally's, and those are all fine companies, and they're all fine companies in the regional market, but none of them are really catering to the high end. And so, I wanted to add somebody to the team who has that high-end experience. He had been at Wynn for a long time. That's always great background that Wynn is great at training people. And then he was at Fontainebleau, which is also an educational experience, perhaps in a different way. And so we were fortunate to get him, and I think that's going to pay off in the long term because that's one of the things. If you compare us with Monarch, one of the biggest differences is that high end. They are very good at dealing to the high end, and to date we have not been.

Yes, you got it. Probably have time for two more questions, Dan.

Sorry, that was a long question -- long answer. Simple question.

Your next question comes from the line of Chad Beynon with Macquarie. Please go ahead.

Congrats and good luck on the progress and the final stages of the financing. I'm sure within that stack of legal documents, there's probably some language around M&A but I wanted to ask about it as well. It seems like there's a lot of chatter around single properties and, you know, multi-properties that could hit the market here. Just wanted to test your temperature on your appetite for those. Thanks.

Well, we're a small company. We're pretty busy. I mean, we're trying to fix Colorado and build American Place permanent, so it's not high on our list to go take on a third challenge at the same time. Now, if something were offered to us that was very cheap, you'd try to figure it out, but then you look at the other side and say, okay, how are we going to pay for this? We're pretty heavily levered. You're right, and the financing would probably limit us and our existing debt limits us as to additional debt. Our new debt would also limit us as to additional debt. And, you know, we certainly don't want to issue equity at these prices. We think our equity will ultimately be worth much more than it is today. So either organizationally or financially, I don't know. I'm not sure how we could do an acquisition. You know, you could always merge with somebody, but you're effectively using your equity again, and again, our equity is cheap. So never say never. If something was given to us that was just so cheap, you'd try to find, you know, a REIT to buy it, and we get the operating company or something. You know, you'd try to find some creative way if it were really cheap, but a lot of times when stuff is being offered, it's got hair on it. Right. And I was told that there was a lawyer we worked with for a long time at Pinnacle who's retired now, who told me we'd probably never make an acquisition. I said, why do you say that? He says, because you guys read the documents and you run the numbers and you look at the tax ramifications and everything. He says, the buyers are almost always the dumbest buyer willing to pay the highest price. And you're not the dumbest buyer. And he's not wrong. In our career, with very little things we've bought. On occasion, we look at a lot of stuff. When you look down the list of what we bought, it's a pretty small list. And that goes from way back when I worked with Steve Wynn to Pinnacle to here. And so we look at things, you always learn something. I mean, somebody did show me something the other day we could acquire without any capital, any equity, without any debt, just kind of assume some of the debt that's on it and not even guarantee that debt. And it's had me scratch my head, but then you get into organizationally, is that really what we want to do? So...

If this conversation were three years later, Chad, I think it'd be a different answer from us. Yes, three years from now. Pro forma for the opening of the permanent casino, the leverage profile is going to be on the lighter side. And, you know, that's okay. And if now is not the time, I'm sure there will be things for sale in three years too. That may or may not make sense.

Yep, makes a lot of sense, thank you. And then on American Place, the strong, just kind of looking at the strong May results that you talked about with gross gaming revenue close to $13 million and July the second best, how should we think about flow-through or margin opportunity if the property continues to grow at GGR levels, you know, certainly well above GDP maybe not at these current levels, but yes, just help us think about flow-through in general. Thanks.

I think July was similar, if not stronger.

July was not as good as May. We're pretty similar.

If you go back and look at every month since we opened, just about every month showed growth over the same month of the previous year. And if it didn't, it was probably because some guy beat us for $1 million like I mentioned a minute ago. It's shown very, very steady growth. Now, it can't do that forever. At some point, you're so busy on a Saturday night, people can't find a slot machine. And that is part of why you have to build the permanent. The permanent casino has much more capacity than the temporary. Remember the numbers up here? It was 35% more slot machines and 60% more tables, if I remember correctly.

Yes, something like that.

And so that at some point you kind of need the permanent to continue to show the growth. But we're not capped out yet. It continues to grow. In terms of the margin expansion, we're running 29% plus margins pretty consistently, which is a good thing, is pretty decent in a market with a pretty high tax rate. And that is after paying rent to the City of $3 million a year, a little north of $3 million a year. And we also rent the kitchens and the office space. The office space is in construction trailers, essentially. And the kitchens are from a company called Kitchens To Go. And between those two, it's almost $1.5 million a year. And so really, if you adjust for that, our margins are in the low 30s. Now, as the revenues grow, one of the issues here is you keep ending up in a higher tax tier. So to grow the revenues and keep margins flat is actually an accomplishment. And so I don't expect our margins to get to 40%. You only get to 40% if you're an Indian tribe not paying much in taxes generally. But I think we can do...

Mid-30s in the permanent.

Mid-30s in the permanent, in the permanent, we won't have rented kitchens. We won't have rented construction trailers, etc. And we have the right to buy out the lease from the city and part of our financing involves taking that out at some point. And so you won't have rent at which point the EBIT margins are probably in the mid-30s.

Yes, if it helps you in the month of May, we did $4.4 million of EBITDA on that $12.7 million of gaming revenue. Obviously, there's other food and beverage and some other revenue on top of that. But it was a very, very good month for us all in.

Yes, one of the little nuances is we're not allowed to comp alcohol. And that's a good thing because we make a profit on our alcohol in Illinois. Most other markets, they may show a profit on the income statement because of the way accountants have some crazy ways of accounting for things, but in like Colorado and some of our other markets, most of our beverage sales are really given away. And you know, if it applies to all of the competition, I'd rather we have to charge because we can make money on it.

Thank you both very much. Appreciate it.

Thanks, Chad. I really, we only have time for one last question now, Dan.

Your last question comes from the line of John DeCree with CBRE. Please go ahead.

Dan, maybe quickly, high level, I know earlier you talked about some of the site work, soil testing, drawings happening for the permanent, but assuming the financing is ready in 3Q, how quickly do you think you guys would be ready to start hard construction and then you know, broadly speaking, what's your latest thinking for timeline? If you know, we talked 18 to 24 months in the past, but not sure if that's still kind of the right time frame until you get the permanent up and running.

Yes, it's still the right time frame. It's 18 to 24 months. It might not favor the 18 anymore. It might be more like two years. Like opening in the third quarter of 2028, probably a good guess. Now, some of this stuff, when you end up at that range, because in the construction agreements is there's a lot of work that happens before the building's enclosed and that depends on weather. And so in the subcontracts with the subcontractors, there's always something in there for expected number of rain days based on the historic weather patterns of Waukegan, Illinois. And if it rains more than you expect or rains more midweek than you expect, it takes a little longer. So -- but this is not a very complicated building. It's almost all of it's one level. There's one small part in the back of the house that's got a second level. There's no basement. There's no high-rise...

No parking garage.

No parking garage and so it can be built pretty quickly, but roughly, you know, we're in the third quarter now, so two years now is probably a good guess.

And we, I mean, the way that things are working behind the scenes, there's a lot of stuff that happens sequentially. So as Dan mentioned earlier, we've got the earth moving plans. We've got the foundation plans. And both of those things will take several months just to get done. And so as that work is getting done, then they complete work on making up another plan. But, you know, they'll be working on electrical plans. And while the electrical is going in, you've got people working on the fit out on the interior. So it's all kind of sequential, and we have enough to truly be on the ground running pretty quickly.

Look, to be honest, you know, our existing debt has limitations on additional debt until we refinance. Those limitations are there. We'd like Colorado to be making some money. So far, it's achieved break-even in the quarter. So we're watching our spending pretty carefully, but we're confident enough that we have gone ahead and are spending $1.5 million on the plans and some additional money on the site so that the date stops slipping on when we can open. I mean, you obviously need to move the plans along. We have done the foundation plans. We've done the earth moving plans. But the next step in the earth moving is a $3 million contract for the guys to actually be there. We have to move a swale and all this stuff, $3 million. We probably will not release that because it's $3 million until we have the financing tied together.

Got it. Thanks, Dan. And, Lewis, if I could sneak one more in, not sure if you'll touch this one, but not sure, cost -- all-in cost of financing where you sit today, I guess to ask as broadly as possible, is it within kind of the range you've expected to the extent you share a comment?

It is, I think, yes.

It's not 6% and it's not 12%.

It's, you know, look, I'm trying to think of what I can tell you. It's...

It's what you would expect for a leveraged company. We're a weird hybrid. We're not an Indian tribe building something from nothing, and we're not Boyd who could build the $300 million casino out of cash flow. And if you just look at other companies like us that are leveraged and doing a project, you would conclude that the cost of borrowing is in the high single digits. Some components of it might be in very low double digits, and that's a blended number is hopefully still in single digits.

Yes, I was going to say, I think it still blends to a pretty decent spot.

And there's other aspects like some of the financing -- we're looking at allows us to avoid construction period interest. That's a pretty big saver for us. If we can draw the money down as needed, then, and so that's not, there's a lot of different levers here. Look, we own a lot of the equity. It's an important part of both of our net worths. So we're trying to get the best deal we can for our shareholders.

So we appreciate all the color today, guys. Thanks.

Yes, thank you.

I think we're done.

Yes, that's it, Dan.

This now concludes our question and answer session. I would like to turn the floor back over to Lewis Fanger, President and Chief Financial Officer, for closing comments.

I'll turn it over to you, Dan.

I think we covered everything. Hopefully next time we can talk openly about having refinanced everything. So thank you for your time and your patience.

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