Full House Resorts Inc Q2 FY2025 Earnings Call

Greetings, and welcome to the Full House Resorts Second Quarter 2025 Earnings Call. This conference is being recorded. I would now like to turn the conference over to your host, Lewis Fanger, President of Full House. You may begin.

Actually, go ahead and kick it off, Adam. Sorry.

Thank you. 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 captions Forward-Looking Statements for the discussion of risks that may affect our results. Also, we make reference to non-GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our website as well as various press releases that we issue. Lastly, we also are broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release as well as our SEC filings. And with that, back to you, Lewis.

Good afternoon, everyone. I know it's a busy day for many of you today, so we'll keep our prepared remarks on the brief side, and then we'll head quickly into questions. We're actually sitting here at American Place today, so we'll start there. We're very pleased with how our temporary American Place facility has ramped up. In the second quarter, we had record revenue. It was $30.7 million, up about 13%. And we also had record adjusted property EBITDA of $8.9 million, which was up 17%. I don't think the July gaming figures are out quite yet in Illinois, but rest assured, we had another very solid month of growth in the month of July. That growth is not by accident. Part of our continued growth is due to customer awareness, which continues to improve by the day. After all, we are still a relatively new casino and building awareness is a natural part of any casino ramp. One encouraging sign is the number of new sign-ups into our database, which recently crossed 107,000 people. And new sign-ups into the database continue at the same pace that we saw several quarters ago, which is a great sign for us. We also continue to grow because we continue to fine-tune the amenities that we have here at American Place. As an example, one of our restaurants that we opened originally had way too many seats. And so we put up some curtains, turned half of it into a comedy club, started bringing in comedians like Kevin Nealon, and it's helped increase our visibility as well as our overall operations. Similarly, we've had customer inquiries for the longest time about why we don't have a poker room. Fast forward to today, when we took an underperforming corner of the casino and transformed it into a small poker room. We just concluded an operations play day for the new poker room, which went well, and we're prepared to open it as soon as we get the green light from regulators. If you think about EBITDA growth at American Place, we earned a little over $29 million in all of 2024. And so for 2025, we are expecting to have something like 20% growth for the full year. Switching over to Chamonix. There are three major points that I want to make about Chamonix. First, our own gaming revenue continues to grow, and we have done that while having negligible impact on gaming revenues for the rest of the city. That's a very important point because it tells you that our gaming market continues to be undersaturated. Otherwise, our competitors as a whole would be down 20% or 30% or some big number, but they're not. What that in turn should tell you is that our gaming revenues at Chamonix are nowhere near done growing. This is a market that has been starving for high-quality gaming product. We are the first and only high-quality product in Cripple Creek, and so we need to build awareness, which takes time. It is happening in real time. And as awareness continues to grow, we will be the beneficiaries. Second, at this point, our cost structure is pretty much fully baked. That means as those revenues continue to grow, we will see meaningful flow-through down to EBITDA. And third, although preliminary, given that we haven't closed the books yet, it does appear that we will be EBITDA positive in July at Chamonix. With that said, let's talk specifically about Chamonix's second quarter. Very late in the first quarter, we hired a new General Manager, followed by a new Chief Marketing Officer halfway into the current second quarter. Given the long lead time for the team to analyze the marketing database and to send out marketing mailers, there wasn't much impact that our new team could make here in the second quarter. We are seeing their effects in the third quarter with gaming revenue continuing to grow in July. From a cost perspective, though, our new GM could and did have an immediate effect. If you compare sequential quarters, so comparing the second quarter of 2025 to the first quarter of 2025, what you'll see is revenue was virtually flat at $11.6 million. If you look at operating expenses, you'll see massive improvement. Operating expenses were $1.2 million lower versus the first quarter of 2025, implying nearly $5 million of annual cost synergies. It's made up of a collection of small things that don't impact the customer experience like new labor controls to improve scheduling and limit unnecessary overtime. We don't think we're done with those cost savings yet. Perhaps more importantly, though, we are not yet done growing revenues. Those two items in concert are what will propel Chamonix to the profitability levels that we believe it can achieve. Our other properties are less important than the two that I just mentioned, but they're still important and they are holding their own. Silver Slipper is the lion's share of the remaining properties. Revenue there was down $1.6 million as we reined in some over-comping levels. Adjusted property EBITDA would have been flat except for a one-time noncash accounting item. We also had a parking garage issue that briefly closed our garage heading into a key holiday weekend. Stockman's Casino was sold on April 1, so that dropped out of our consolidated financials in this year's second quarter. And we also have a new General Manager at Grand Lodge up in Lake Tahoe. He came to us from a large Native American casino near Sacramento. His work experience has been focused on player development and casino operations, and we think he's going to be a great addition up there. Maybe a quick comment on the potential for us to refinance our existing debt, and then I'll turn it over to Dan. But we do continue to believe that the debt markets are the appropriate place for our financing of the permanent American Place facility. Accordingly, we, like probably many of you, watch the debt markets extremely closely. The debt markets hit a temporary blip when the tariff noise happened in April. Since then, we've been pleased to watch the high-yield markets rebound somewhat swiftly. The high-yield markets have become increasingly accommodative, though obviously, we have not yet launched publicly launched a deal. That's all I had. Dan, do you want to take some clean-up there?

Large deal publicly or privately.

Very true.

We keep watching for an opportunity, and I think that will come. As a practical matter, we're allowed to operate the temporary casino here at American Place until August of 2027. As long as we get underway with construction sometime this year, we can make that deadline. I think it's a practical matter if the bond market didn't cooperate and we had to delay that, we can probably get an extension of the period of time to operate the temporary. After all, we pay about $25 million a year in tax revenue and employ over 500 people. And we had to do that before with the Potawatomi lawsuit. I'm confident we could do it again. First choice is for the bond market to cooperate and allow us to get the financing done and get going with construction. That would be the best for all worlds. But the high-yield market tends to have windows that open and close. And at the moment, it's open somewhat of a crack, a little more than a crack.

A little more than a crack, a lot more than a crack, actually.

It's a bit of a summer lull, so we're looking for opportunities. If we don't achieve our goals, it won't be disastrous; we'll just be a bit delayed. Lewis has handled that situation pretty well. I'm open to questions. You mentioned that July has been strong, and we expect American Place to see about a 20% increase this year. July alone is likely seeing an increase of around 30%, so we're performing well. In Colorado, you pointed out that we were cash flow positive in July, and it looks like we'll be cash flow positive for the third quarter. Our aim is to maintain positive cash flow afterward, though it will be more difficult as we enter the off-season. The changes we've implemented and management adjustments make a difference. The Colorado property operates differently than American Place because it includes a hotel. The hotel is busy on weekends, but occupancy drops during the week, which sometimes leads to losses from operating the amenities. Typically, you would have a sales force to fill midweek bookings with meetings and conventions. We recently hired a new sales team after realizing our previous salesperson was not effective, and we're in the process of building that capability. Eventually, we will fill midweek vacancies with events and groups, while weekends will attract gamblers.

That sales job, though, did get a lot easier. It's not easy to try and sell space or rooms before you ever open, before people can see what you've built. And I will say that at this point, it did get a lot easier.

And frankly, the icon I always look at is Monarch, who does very well in Black Hawk, which is a very similar market. And they do a very good job, and they have a nice property. I think our casino itself is actually nicer than theirs, and I think our hotel is pretty equivalent to theirs. They're bigger than us, but we're 60% their size. And they're a public company. They only have 2 casinos, that one and the one in Reno. They don't break it out, but the one in Reno has been around for a long time. So you can look back and see approximately what they make in Reno. And the bottom line is they make somewhere north of $100 million a year in Black Hawk. And it's like, wow, we're two-thirds their size. We're eventually going to be pretty profitable. In terms of meeting room space, we actually have far better meeting room space than they do. They're in a very constrained site. They don't have much meeting room space. They really don't have a venue to have entertainment. We do. And so I think we will do much better, but we've had some growing pains out of the box, and we're fixing that. That's, I guess it. I mean the Silver Slipper is doing well in a lot of ways, but Lewis mentioned the parking garage. We had a ramp in the parking garage that had developed a structural problem, and we had to close the parking garage to a key weekend while we fixed it. And most of the parking at that property is in the parking garage. So we were scrambling a bit to have valet parkers and everything. But we got through the weekend fine, and otherwise, the property is doing pretty well. In Tahoe, we're experiencing a slight decline, but the property involves the main tower on one side of the street, along with a significant amount of meeting room space, a restaurant, and some upscale suites located by the beach on the opposite side. Larry Ellison acquired the hotel and is currently upgrading it significantly. One of his initial actions was to demolish the structures along the lake, which will be replaced with more appealing options, though that renovation will not be finished for nearly two years. During this period, there's been a decrease in wedding and meeting business, as well as a reduction in high-end suites available at the property, which affects the casino. However, despite these challenges, we are performing quite well. Once the upgrades are complete, we believe that the Ellison Group will transform it into one of the top resort hotels in the country, and we intend to be part of that transformation. We're currently on a short-term lease, which has been renewed several times over the past 12 or 13 years, and we hope to continue our operations as Mr. Ellison enhances the property. We are also exploring the potential for relocating our license in Indiana. As noted in the previous call, the state legislature passed a bill that funds a study commission now being conducted by the Casino Control Commission to assess the advantages of legalizing a new license or permitting an existing one to move. We are the most logical candidate for relocation, and it's important to identify the most beneficial location and the state's advantages. We are optimistic that this study will demonstrate substantial benefits, and we will see where this initiative leads us.

Let's go into some Q&A.

Our first question comes from Jordan Bender from Citizens JMP.

This is Eric Ross. I'm on for Jordan. I was wondering what are some of the early factors we should be looking at to determine success and earnings ramp at the property in Colorado?

We have already started to reduce our expense structure, which has been somewhat straightforward. For instance, we placed restrictions on overtime and changed the pay week from Sunday to Thursday to better manage staffing. This shift means that if we bring someone in on the weekend, we can avoid paying overtime by allowing time off during the week. This is just one example of our cost-saving measures. We’ve improved our laundry and housekeeping contracts with outside vendors, leading to significant savings. Currently, these cost reductions amount to approximately $5 million a year. If we had implemented these changes a year earlier, we would have been profitable for the last 12 months. The benefits of these savings are already visible. Although some expenses like severance pay for replaced employees are affecting us slightly, that will eventually come to an end. We are also focused on enhancing our marketing efforts. Similar to what we've done at American Place, where we built a targeted mailing list, we recognize there’s a substantial opportunity in this underserved market. We currently have five people in our marketing team, including a Corporate Chief Marketing Officer and a Corporate Director of Advertising, who are taking on roles previously handled by an external agency, allowing us to offset some of those costs. Additionally, we've hired a new Director of Marketing with a strong track record in several successful properties, and he comes to us from Toledo. We are pleased to help him return to Colorado, where he and his wife wish to be. Also, we have a new Director of Sales starting soon, with marketing covering a broader scope while sales will concentrate on securing meetings and conventions. Recently, Lewis and I had dinner with your bankers at Citizens at the Durango Station, and the General Manager mentioned that they only have 200 rooms. We were curious about their occupancy since we couldn't get a room that night; they were fully booked. The GM shared that they were doing exceptionally well due to the Nevada Society of Tax Accountants. It was surprising to learn that they chose Durango Station for their event. The room rate that night was $800, largely because many tax accountants wanted to stay there, which drove up the price. The GM also mentioned he had taken rooms out of the casino block because the tax accountants were paying so much. I asked how many people they had in sales and marketing, and he contemplated for a moment before answering that it was four plus an assistant. I mentioned that we were trying to hire our first marketing person despite having 300 rooms, and we currently have a couple now. This highlights a gap we should have addressed three years ago. We are now working to catch up, which will yield long-term benefits. We are exploring various marketing strategies, including different AI programs to enhance our marketing approach. We have access to a large database due to our property's 25 years of operation, though many entries are outdated. We need to analyze this data to identify potential summer customers or those we haven't reached in a while, and strategize how to engage them. Our focus is shifting toward spending less on network TV advertisements and more on targeted internet banner ads, among other initiatives aimed at refining our marketing approach. We are fully capturing growth in Cripple Creek, and the town's revenues are on the rise. While we aren't dominating the market entirely, we do believe we can grow it further over time, and we are committed to making that happen. If you look at Colorado as a whole, we account for all the growth in the state over the past six months, possibly the past twelve months, and I believe this trend will continue. There are no new constructions underway anywhere in Colorado, and there is nothing on the horizon in Cripple Creek. This means we don’t have new competition to concern ourselves with. Our location in the center of the state makes developments in New Mexico, Kansas, or Wyoming irrelevant. The economies of Denver and Colorado Springs are strong, and both towns are expanding. We are in a growing market. While it is disappointing that our earnings are not higher than they have been, we have a strong foundation. I believe we will increase our revenues and keep our costs manageable, leading to a successful property in the long run. I shared a story over dinner last night about my experience with Steve Wynn when we opened Beau Rivage in Mississippi. Initially, we viewed it as a setback since it struggled at first, but now, 25 years later, it remains the leading casino in Mississippi, generating $100 million a year with a construction cost of $670 million. The first couple of years were tough, and we even considered acquiring an airline to support travel programs. However, if you create a quality product, it eventually gains traction and grows as customers recognize it, and I am confident we will achieve the same success in Colorado.

I've mentioned this a few times before, but it's important to recognize that for over 20 years, residents of Colorado Springs have viewed Cripple Creek as a market with very poor offerings, not necessarily simple ones, but definitely lacking quality. There has never been a premium product available. Therefore, part of our challenge is to change more than two decades of negative perception and help people understand that Cripple Creek is transforming. This shift is already occurring. Looking at our data, our top performance is in the $750 and higher average daily theoretical win segment, which represents our high-end players. They have embraced our property. Recently, we've conducted several focus groups, and instead of the usual complaints, we've received positive feedback. Participants have noted that our offers are competitive with those from Black Hawk and praised our rooms and property. However, some mentioned they haven't had a dedicated player host reaching out to them regularly. Thus, it's essential for us to nurture relationships with high-end players. The good news is that they are visiting and enjoying our venue; we just need to engage more actively with this audience. As our brand continues to gain visibility, we will make progress.

Actually, the other comparison I just thought of is when I was part of the group that put together the Borgata in Atlantic City. And when it opened, the Atlantic City product at that time had gotten pretty dated and not particularly good. The Borgata was a completely different type of product. It took a little while for people to recognize that the Borgata was better than the product that had previously existed. And now 20 years later, the Borgata has been very successful. So sorry, long-winded answer to your question.

No, great. And just another follow-up on Colorado, if you guys could provide any color around convention mix or bookings and what the Chamonix is looking like heading into the summer, that would be great.

Summer for us really tends not to be the group business time. It's really heading into the winter months. I think Dan mentioned we just hired a brand-new group director, literally, I think today. So stay tuned. But look, the facility itself now is open. It's beautiful. People that are booking groups are not worried about if the place will be open on time. All this stuff, all the problems you have before opening have largely gone away. There's still some lead time because some of these groups will plan a year in advance or six months in advance. And so it doesn't necessarily happen overnight. But I will say we have people now in that group department that we're happy with, and I think they're going to do a very good job. So probably a better question to ask us in another quarter.

Yes. The summer, we're doing much better occupancy, but it is the summer in the mountains of Colorado. But back in the first and second quarter, there were some midweek days where occupancy was very anemic, and we're hoping to not have that as we go into the off-season this fall.

Our next question comes from the line of Connor Parks with CBRE.

I guess, first, popular discussion this earnings season has been around the Big Beautiful Bill and the impact to gaming and around regional gaming. I guess can you provide an update or maybe thoughts overall on the potential impact to your customers in any market, any database, whether it be no tax on tips or senior impacts, that would be great.

I believe that if our customers have more disposable income, it's always positive. Any reductions in taxes, whether related to tips or stable tax rates, are beneficial for our business. One aspect that might not be immediately evident is that we are accumulating net operating losses, which we aim to continue building. Certain changes in the recent legislation actually work in our favor. Six months ago, I would have estimated that we could manage through our net operating losses by the end of 2029, but now I think it might be closer to the end of 2030. This means we can accumulate even more net operating losses than we could under the previous tax plan, with fewer restrictions on how we can use them.

I should mention that we benefit from accelerated depreciation on these new properties for tax purposes, which contributes to the accumulation of net operating losses. This results in a noncash charge that translates to cash savings on taxes, which is advantageous. Additionally, since many of our employees receive tips, there will likely be less pressure for salary increases as their after-tax income increases. If employees feel they have more money available, they may be less inclined to request raises. I say this knowing that I often receive requests for raises, but now I have something to refer to when considering those requests.

Helpful. Shifting gears to Waukegan and the plan there. Helpful color on how you're thinking about the time line and the update on financing. I guess working backwards from August 2027, I guess at what point must you go into the regulators for a request for an extension? Or what point might you start thinking about that more seriously? Should the debt capital markets not be receptive over the next couple of months?

I believe that if we can start construction by the end of the year, the initial phase won't require significant funding. We recently submitted our foundation plans for a building permit to the city, just a couple of days ago. With that submitted, we can begin with the early phase, which involves just moving dirt around with a bulldozer and a few workers laying the foundations. While it doesn't cost much, it does require time. As long as we begin this phase in the latter half of the year, even if we aren't quite finished with the bond issue, we could still initiate construction to buy some time. Eventually, we need to consider that the bond call premium will expire in February, and I hope to have everything resolved before then to avoid a premium. However, if we end up delayed into next year, particularly if we need to halt operations in August due to state regulations, we might opt to pay the workforce to keep them intact while we prepare to open in September or October. This approach, similar to what Wynn did during the pandemic, does incur costs, but so does dismantling and rebuilding a workforce. I don't expect it will come to that because I believe if we demonstrate to the state that we wish to keep our employees and continue paying taxes, they will be amenable. If there's just a small gap, it makes sense to retain our staff because we have an excellent team here, and we have received numerous awards as one of the top employers in Chicago. Ultimately, we aim to be the only casino on that list. Yes, we are the only casino on the list, and we want to keep everything together. I'm not particularly concerned about it. However, in our 10-K, we need to disclose that our permission to operate temporarily is valid only until August 2027. Previously, we sought and received approval to extend that date by two years. Currently, the bond market appears favorable for us, though we are in a slow period in August. If market conditions remain stable for a few weeks, we should be able to proceed. We were almost ready to move forward last March, but discussions about tariffs and Liberation Day caused the bond market to shift away from us for a time. It has mostly returned to its previous state, though it isn't quite where it was back then.

Not quite, but it has pulled back extremely quickly. It's rebounded pretty quickly. I would say that.

It doesn't have to be the bond market for financing. We have several options available. For instance, Bally's utilized GLPI to fund their casino, which remains a possibility for us as well. We also have a backup financing arrangement with a private equity firm, although it's quite costly. While we hope not to rely on it, it's an option we possess. Nevertheless, we believe that the best approach is to pursue the bond market.

Our next question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.

This is Will on for Ryan. I wanted to hop back to Chamonix. You talked a lot about the cost savings kind of that you found and started to implement through the new GM and CMO. Obviously, it's pretty early. Curious what changes you're making to the marketing strategy and how you think about maybe balancing the current client base in Chamonix versus the one you're trying to attract?

There are many factors to consider. The Marketing Director at the property just started a few days ago, so he's still adjusting. One clear example is a monthly mailer that was quite costly to produce and send, and it wasn't effective at collecting customer emails. We have been actively working to gather more emails. For comparison, at American Place, we stopped sending physical mail a year ago and now only use email, which is much cheaper. To illustrate, if you send a promotional mail piece that costs around $1 to print and send, you might achieve a typical 5% response rate. This means it effectively costs you $20 to acquire a customer through that method. In contrast, with email, there are no costs, and we've found that the open and response rates for emails are just as good as those for physical mail.

The open rate.

The open rate and response on email is comparable to that of physical mail. Transitioning to email was a challenge because the previous manager preferred traditional methods, often writing personal letters. Despite our suggestions to switch to email, we had not made significant progress until now. Currently, we are implementing this change. This is just one example of our efforts. I am optimistic about the new marketing team we are hiring, which possesses considerable experience, even though they are all new. We now have a stronger marketing team than any other casino company of our size. They will need time to establish themselves, but I believe they will succeed. Many members of the team have backgrounds from the early Harrah's days, where Gary Loveman, who was a professor of marketing at Harvard Business School, led the development of advanced marketing strategies that have influenced the industry. We are making progress, but it is a gradual process.

I don't remember the stat Dan, you may. The current ad campaign, I believe, will touch 80% of Colorado Springs on average four times?

Something like that.

Don't quote me on those exact numbers, but they're pretty much in that range. It's important to remember that we weren't fully operational. We've effectively only been open since October of last year, so it's been around ten months since then.

Part of the challenge we faced over the winter was that when we say we are fully open, we have a spa that operates every day and a jewelry store that is also open every day, which was not the case a year ago. When your hotels have very low occupancy during the week, it results in financial losses. Thus, the lowest income point was this past winter when we had all the operating expenses without sufficient revenue. Now, we're becoming more strategic in several aspects. While improvements don't occur overnight, they are happening. Cost savings began immediately and are improving. We are currently looking for a new Finance Director to help us gain better control of our financial outcomes, allowing us to concentrate on further cost reductions. Identifying cost-saving opportunities is relatively straightforward, but enhancing marketing efforts to achieve results takes more time.

We have an additional benefit to mention. Over the years, we've built up several casinos in Colorado that are all connected, allowing for a seamless experience without having to go outside. We hold three different casino licenses in Chamonix and Bronco Billy's. Recently, we've been focusing on an issue where customers face inconvenience when cashing out at one license and attempting to use that ticket at another. Sometimes, they think the machine is faulty when the ticket doesn't work in a different location. Additionally, having three separate licenses means we need to maintain three different cashiers, which is not efficient. We anticipate starting beta testing soon, potentially in the fourth quarter, though initial hopes of mid-October may not be met due to approval processes. This testing aims to integrate the TITO system so customers can use their tickets across all our licenses and reduce our need for multiple cashiers. This change could save us approximately $700,000 annually while significantly improving the customer experience, especially for high-end clients who may find small inconveniences frustrating.

Our new General Manager, Brandon, was instrumental in implementing the use of TITO tickets across all three licenses. He previously managed the Bally's properties in Black Hawk, where he successfully secured regulatory approval for this initiative. Although they operate a different slot system, we use the Konami system. Early in his career, Brandon was a regulator with Ontario lotteries and worked with slot machines, which gives him insight into effectively communicating with regulators. He is currently collaborating with Konami to implement the necessary system changes to ensure compliance and proper tax payments. Modifying the systems properly can reassure regulators about tax matters. The concept of consolidating into a single casino cage is new, but we believe we can achieve it, although it's less certain than the TITO tickets. TITO tickets represent a significant advantage for our customers. I encourage anyone on the call who hasn't visited Cripple Creek to do so, as it can instill confidence in our operations. Those who have met the new management team recognize their competence and dedication. Visiting the property can provide a clearer understanding of why we are optimistic about our future success.

Sorry, I didn’t mean to interrupt. If you have another question, feel free to ask. I was going to say, Dan, we can take one more question after yours, but you can go ahead if you have something else to add.

I was just going to ask on the legacy properties. I think Rising Star, at least according to the state gaming data, had its first, I think, year-over-year growth in a little while. So curious if there's anything to note there on the legacy properties. That's all.

No, we have a general manager who has been with us for almost a year, and he's making small improvements. We did see a slight increase, but it's challenging due to the competition from various directions, especially from the Churchill property in Northern Kentucky. However, we have our own niche and are working on it. While we won't make a lot of money at this property, it does generate some profit. If we could find a way to relocate it, it would be much more profitable for us. We have even informed the town that we would pay more in taxes if we relocated, which we believe would be beneficial for the state. The process to get state approval for relocating a license is lengthy and uncertain, but we are diligently working on it, and we believe it could be a win-win situation. Ideally, it should happen if everyone acts rationally, but that is not always the case. The property itself is substantial, with a 300-room hotel, an 18-hole golf course, and a traditional riverboat casino, which is one of the nicer ones around, featuring charming decor and a pavilion with a restaurant and meeting space. While it has a large footprint, its geographical position is problematic. When it opened, it was the only casino in the region and performed well, but now it is the oldest in the area and faces newer competition from every direction. I believe our team is doing a commendable job in difficult circumstances to keep it operating.

Probably time for just one last question, Dan.

Yes.

Okay. Our last question comes from the line of Ricardo Chinchilla with Deutsche Bank.

I was hoping if you could comment a little bit on the cadence of the quarter in terms of revenues. And when thinking about July in terms of like sequential improvement, just give us like some sense of how business has been evolving.

Well, I mean, at American Place, it's just been rock solid up every single month for two years now in both revenue and EBITDA. And that's continued into July, as we said earlier. At Cripple Creek, we've been very focused on pulling together a new management team and helping them get going and cost savings initially, hiring people, still a couple of positions we need to fill and now focusing on building revenues because ultimately, we need to build the revenues to get a return on our investment there that would be acceptable.

And just to be very clear, and July improved from what we saw in the second quarter, just to be very clear at Cripple Creek.

Yes. As we mentioned at the Silver Slipper, we have a new general manager there, who has been with us for seven or eight months. She has significant experience from our Indiana property and noted that several individuals were being over-compensated, which was affecting our profitability. Therefore, we anticipated a decline in revenues, and our EBITDA would have remained flat if it weren't for a noncash accounting charge we had to record. However, the property is performing well, and I believe we will finish the year with a comfortable increase. Last year, our EBITDA was around 12%, and it is likely to reach about 15% this year, considering our performance in the first half. Even if it falls short of 15%, it will be close. Regarding the Hyatt, we are doing reasonably well, despite a significant portion of the property being closed for renovations. The new GM there has a strong focus on player development, unlike the previous management team, who had their own strengths. I expect Tony to actively seek high-end customers interested in visiting Lake Tahoe rather than just accommodating anyone who checks into the hotel. He is proactive about building a clientele, and I am optimistic that this approach will yield results in the long run. To summarize, this quarter wasn't great, but we are putting in the effort. On a positive note, American Place had a great quarter, which is our top priority.

Record quarter, Dan.

Yes, we are planning to build the permanent location next door, which is currently the largest part of our company. Cripple Creek is in the process of being turned around, and we have the expertise and team to make it happen. Overall, the company remains stable, although we do expect ongoing challenges at Tahoe due to closures, but those issues are relatively minor in the grand scheme. The Silver Slipper is showing positive trends, even if this quarter appeared disappointing due to an accounting charge. No one asked, but we're currently busy with our existing projects and if we focus on accomplishing our goals, we will be fine. Thank you.

This now concludes our question-and-answer session. I would like to turn the floor back over to Lewis Fanger for closing comments.

Well, Dan just said it. So thank you, everyone. We're excited to talk to you next quarter with some more progress and hopefully, more record quarters here at American Place.

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