Yet Another Value Podcast - Yet Another Value's 2025 Idea of the Year: Full House Resorts $FLL

Episode Date: January 2, 2025

In today's episode of the Yet Another Value Podcast, Host, Andrew Walker, shares his thesis and presentation on the YAVB 2025 Idea of the Year: Full House Resorts $FLL, owns, leases, develops and operates gaming facilities throughout the country. For more information and to subscribe to the Yet Another Value Substack, please visit: https://www.yetanothervalueblog.com/ Disclosure: long FLL Chapters: [0:00] Introduction + Episode sponsor: Daloopa [1:35] Introduction to the Idea of the Year of 2025 [3:07] Quick overview of YAVB Idea of the Year: Full House Resorts $FLL and how to win at regional gaming case study [18:11] Why $FLL interesting/unique opportunity to Andrew [23:38] Why did $FLL invest in Chamonix [25:52] $FLL portfolio casino: American Place [28:22] Upside / what are we playing for [30:39] Why does the $FLL opportunity exist [36:06] The new markets already ramping: American Place and Chamonix [40:53] Risks: Chamonix Ramp, American Place Lawsuit [50:50] Unlocking Value in $FLL: sale leasebacks [56:47] Unlocking Value in $FLL: M&A [1:01:11] Synergies (if a strategic were to buy $FLL) [1:02:57] Final thoughts Today's sponsor: Daloopa Hey there, fundamental analysts - Are you tired of the endless grind of updating financial models, scrubbing documents, and hard coding? Let’s talk about something that could transform your workflow—Daloopa. Daloopa delivers perfect historicals for thousands of public companies. That means every KPI, operating data, financial metric, adjustment, and guidance—all at your fingertips. And here’s the best part: Daloopa updates your models in near real-time, which is especially important during earnings season, tailored to your modeling format and style. Imagine never having to update your models again. With Daloopa, you can reclaim your time and focus on what really matters—analysis and research. Want to learn more? Create a FREE account at Daloopa.com/YAV

Today's podcast is sponsored by DeLupa, who's helping analysts to prepare for 2025. With looming tariffs on Mexico and Canada that could disrupt supply chains, increased costs, and reshape industries, there are challenges for analysts who need precise data to model impacts and guide decisions, whether it's assessing supply chain risk and cost changes for GM, Ford, and Tesla, tracking commodity price shifts for ADM, Tyson Foods, and Bunge, analyzing raw material cost fluctuations for nuclear and alcoa, understanding pricing and trade dynamics for ExxonMobil and Chavron, or preparing for retail at price impacts for Walmart, P&G, and Coca-Cola.

Dulupa provides the accurate historical data sheets that you need. Set up a free account today to ensure you're ready to navigate 2025 with confidence. All right, hello, and welcome to the yet another value podcast. I'm your host, Andrew Walker. If you like this podcast, it would mean a lot if you could rate, subscribe, review, wherever you're watching or listening to it. It is Friday, December 20th. I'm getting ready to call it off for the holidays,

but today I'm excited to present something new. I guess I'll get there in a second. Let's start, same way I start every podcast. A disclaimer, remind everyone that nothing on this podcast is investing advice. That's always true, but particularly true today. Today I'm presenting what I'm calling the Yav B ID IOT. That's a mouthful I'll get to it in a second. But I am longed this stock.

I am longed stock in pretty significant size. It is a smaller cap stock, which carries extra risk, liquidity, all of that sort of stuff. So please remember, I have no idea what I'm doing. Please consults financial advisor, do your remark, do your indulgence, all that sort of stuff. Okay, so disclaimer out the way. It's time to talk into it. So this is the Yavi ID. What does that mean?

Well, I'm going to be presenting the yet another value blog, yet another value podcast, idea of the year for 2025. You know, generally I haven't really been into doing ideas of the year since I was a young little investor because I was kind of like, look, the ideas can come in April. They can come in November. they can come in September. Who knows? But I'm really enthused about this one. I thought I had a great story. I thought I've done a ton of research. And I wanted a place to share it all with everyone. So I decided to do it. I'm going to hop into the idea one second, but I will disclaim most of the

listening on this podcast is done through audio. That's great. I'm going to try to you everything on this audio. But for this particular podcast, I'm going to be doing a screen share. So if you are on audio and you're able to watch video, go to the YouTube, whatever, I think you will get a little bit more because I have prepared a substantial debt to go along with this presentation. I'm trying something new. I may never do this again. Who knows? But I think if you go and watch on YouTube and you see the presentation, I think you will get

a lot more out of this presentation. Last note before I happened to the presentation, I will just say, I tried something a little interesting, a little unique. I did not put a single image together for this presentation. Every single image with one exception, which I will talk to when we get to it, is an image that I sourced in the public domain, generally from companies, investor presentations or public filings, but also from state regulatory websites, that's our stuff.

So if you're reading and you're like, oh, you know, the fonts or the transitions or the background, it's different. It's because I didn't put any of this together. I just grabbed it from public transitions. So that said, I am going to do a screen share, and I am going to get into the YavB ID. Okay, so let's see if this works. Here we go. All right, the Yavbe ID, yet another value blogs,

2025 idea of the year. It's full house resorts. The ticker is FLL. Let's hop into it. Okay, so here we go. If you're on the YouTube, this is the disclaimer. You can read it. I started with a disclaimer.

Here's an extra disclaimer. All right, so let's jump into it. And instead of jumping straight into the idea, what I want to do is I'm going to give you a case study. Pretend that I am the CEO of Monarch Casinos. The ticker there is MCRR. there is MCRI, they're publicly chartered. You can go look at them right now. Pretend it is 10 years ago. It is 2014. I'm the CEO of this company and you and all of my listeners are the board

of directors. And if you're watching on the YouTube, you can see I've got a screenshot of Monarch's income statement here for 2013. Monarch is a $300 million enterprise value company in the stock market. In 2013, it's their first full year of operations. They do almost $50 million in eBay. Okay? So I come to you as the CEO and say, hey, guys, this is great. We've got our company to put together. We've got Atlantis, our casino and Reno. It's doing 30 million, 35 million per year in EBITDA. We just bought Monarch Blacklock in April of 2012, one full year under our belt. It did $15, $16 million in EBITDA. We're doing $50 million in EBITDA. Let's go. This is great. So I'm the CEO. I come to you guys. I tell you all of that. And I say, hey, I want to take that $15 million

dollar per year EBITDA casino that we just bought in Black Hawk, Colorado. I want to take it and I want to invest three to four hundred million dollars into expanding it. And I realize that you and I are doing this conversation in 2024 and you know, it's all funny money. People are spending $100 billion going and building AI data centers. But $300 million is a real investment and it's particularly real for you as a board of directors when you're thinking about monarch casinos because, again, our enterprise value is $300 million. And I don't. proposing we invest 300 million plus into a huge expansion of this Black Hawk Colorado casino. So I think you out as a board.

This is a bet the company bet we're making here, right? 300 million EV, we're investing 300 million in CAPEX. If this goes poorly, it's not going to be great. So you're probably going to look at this pretty critically. So you as a board are going to start looking and I'm going to my next slide. And for those on the YouTube or for those of audio, what I have here is, Monarch Black Hawk, their casino, is located in Black Hawk, Colorado. And what I have here is pretend that we had a crystal ball, and we could see this is the

total revenue generated by gambling in all of Black Hawk. So not just our casino, all of the casinos in Black Hawk, Colorado. And what you can see is the Black Hawk markets kind of sold out at 550 million-ish in revenue per year and gambling revenue. So just to choose some numbers for those of you who are listening on audio. In 2006, the market generates $550 million in gambling revenue. In 2014, the market generates $560 million in gambling revenue. So that's flat over 10 years.

And it actually drops over that time frame. So 2007 is the highest on record. It goes up from 550 in 2006 to $580 in 2007. And it drops down to $510 million in 2008. And just an interesting aside, you might be thinking, oh, 2008, it drops by 10 to 15% because of the financial crisis. And you would be wrong. What actually happens, this is really interesting.

A lot of people, when I talk to them about regional casinos, they think, oh, regional casinos, there must be so much recession risk. And look, I'm not going to say there's no recession risk. But if you go back to 2008, across the board in the United States, the regional casinos were down low single digits. The regional casino actually, it's pretty protected. What happens in a recession is people actually, you know, instead of making the trip out to Vegas to go gamble for a weekend, the regional casinos tend to be. a much more bread and butter kind of weekend player, people on retired people, social security checks, that sort of stuff. So the Vegas casinos see a lot of recession hit. But the regional casinos actually see people who would have gone to Vegas, they trade down to the regional

casinos. So there's not much of recession hit. So what happens in 2008 that causes such a drop? Your biggest, there are two big risks if you're a regional casino. Number one, you're a regional casino in town A and town B, you know, 20 miles down the road, looks at your casino and says, dang, they take on a lot of income, they generate a lot of jobs. Why don't we build a casino? So your biggest risk is a competitive casino gets built closer by. Your second biggest risk, if you're a regional casino, smoking is allowed inside of your casino and your state banned smoking. And that's what happens in Colorado in 2008. Colorado banned smoking inside of casinos in 2008. And if you're a casino and smoking gets banned, your revenue is down 10 to 15

percent year over year in the drop of hat. So that's what happens drives that 2008 decrease. And neither here nor there, I suppose. So let's go back to where we're here. We're in 2014. You as a board are looking and saying, hey, the Black Hawk markets kind of stalled out at 550 million in revenue per year. So we need to look at if we're going to make a $300 billion investment, what would it take to generate that?

And, you know, our casino right now does about 50, 55 million in revenue per year. It's got about 10% market share. So you're saying, look, if we want to make $300 million of investment, we probably need to be looking at $200 million of incremental revenue. So we're talking about taking our market share from 10% to almost 50%. And, you know, that's ignore. That's a huge market share increase. And that ignores every other casino, you know, if 200 million of revenue gets sucked away by our casino,

every other casino, we're going to have a promo war. It's going to be insanity. Margins are going to decrease. And there's just, there's really no way we can underwrite 50%-ish market share to generate return on that, right? So you're going to say, hey, Andrew, thanks for proposing this bet the company idea. But this doesn't seem like a good idea. Like the market just isn't big enough to support this big of an investment.

And I would say, look, I understand what you're saying, board directors. But let me dive into my logic a little bit. You know, Black, Colorado is a particularly advantaged towns for regional casinos. Now, I'm not a casino expert, but I have spent a lot of time looking at casinos. I think Colorado is probably the best state in domestic state to build a casino. And there's a reason why. I mentioned earlier that your biggest risk, if you are a casino, is the town over or the state over that's in driving distance, building a competitive casino and sucking away your customers.

Because regional casinos really pull from kind of a 60, maybe 90 minute driving range. And if you are 60 minutes away and somebody builds a casino 15 minutes away, guess what? A lot of the people are going to go to that casino. So why is Colorado so you need? Gambling is not allowed. Casino gambling is banned by the Colorado State Constitution except for three towns. In the early 90s, there were three former mining towns, very small mining towns that were basically going to go extinct. And Colorado legalized gamblings in these three towns.

Those towns are Black Hawk, Colorado, about 45 minutes an hour outside of Denver, Central City, Colorado, also about an hour outside of Denver, and Cripple Creek, Colorado. That's about an hour outside of Colorado Spring. So Colorado legalizes gambling in those three towns in the early 90s. Obviously, we are in one at Blackcombe. And these are former mining towns, and when they legalized them in the early 90s, I mean, this is before, you know, Las Vegas is Las Vegas. Las Vegas is still a pretty city town.

The gambling product that is built in these towns matches what these towns are, right? So these are former mining towns, lower income. They build, if you imagine somebody who would drive to a casino, chain smoke, play penny slots, and maybe drink six beers for a day. That is what they are catering to, right? So my argument is, hey, Denver, Colorado, people there like to gamble as much. is the next person. But the reason Blackhawks revenue has sold out and is so low as a market is because we are delivering an inferior product to them, right? People are coming here to drink

a bunch of beers and burn time away. If you think about the person who wants to gamble and make a day of it, they want to have a spa trip, they want to have a loggia. There's none of that. You go and people, even though smoke eats been banned for six years, like you can almost still feel taste the smell of the cigarettes lingering in these casinos, right? It's just, it's kind of a dive bar, right? That's what these casinos are. So my argument is, hey, Denver is star for gambling. We're only 45 minutes drive from Denver. If we build a luxury, a really nice luxury product, the people will come, right? If you build it, they will come. We build this. We're going to see a huge expansion of the market. I'm going to show you guys a ton of evidence later. But that's my

argument to you guys. Let's build this $300 million resort. And the market's going to expand by so much, we're going to do really well. And I come to you with this argument, and there's lots of math, but I think the best argument for why we should build this casino comes from another case study. So there's Ameristar Black Hawk, which in 2004, they decide, hey, we're going to spend about $400 million growing this property. So in 2004, they spend $400 million, and they take a casino that's basically a new build, and it grows to do about $60 million in EBDA in 2012. $400 million, $430 million investment, $60 million of EBITDA. I don't think that's a screaming home run by any extent, but I'm pitching to you as a board

and I'm saying, look, they did this and they got hit with the smoking ban and the global financial crisis and they probably built a casino worth, you know, if it's doing $60 million, probably about $600 million from $430 million from investment, plus they've taken cash flow along that time frame. So I'm not saying that casino was a screening home run, but it's an example of if you build a really nice product here, the market will expand around because Denver is so sorry for a quality option. So that's the case study that I'm presenting to you as a board. And the last thing that I want to show here is why is this so unique? Earlier I mentioned, hey, if you're a casino, your biggest

risk is a competitive casino opening across the way. The reason Colorado is so great is those three towns that I mentioned, Colorado Springs, Cripple Creek, which is outside of Colorado Springs, Black Hawk and Central City are all right in the middle of Colorado. It's a five-hour drive on any direction if you want to go to another state. So, you know, I've got here, if you're watching the YouTube, I've got a map of Oklahoma. And Oklahoma, the southern border of Oklahoma touches Dallas and touches Texas. And right at the southern border of Oklahoma, there are 16 casinos. Why are there 16 casinos there?

Because Texas is banned gaming. So Oklahoma opens 16 casinos right on the edge of it and people drive an hour. 90 minutes from Dallas to that border of Oklahoma to go gamble there. That's not going to happen in Colorado, right? We are, Black Hawk is five hours dry from a new state. So if we open a casino and it's an incredible success, there's not going to be a competitive response from any neighboring cities, any neighboring towns, any neighboring states because Colorado doesn't allow it and the other states are too far away to impact any of our pool.

So if we're a success in Black Hawk and Black Hawk is land limited, it's tough to build in all of these towns. If we're a success here, we're going to have built a really unique and edgy, a unique motie casino. So this is 2014, and Monarch does make this bet, and they win it substantially. Their share of the of the Black Hawk market goes from about 10% in 2012, 2013, to in 20%, so they increased their share enormously. But more than that, the Black Hawk market expands like crazy. If you're watching on YouTube, this is a clip straight from the state government's data on the gambling revenues in all of Colorado.

And what you'll see is Black Hawk. So I'm just going to choose AGP, which is average gaming revenue. I'm just going to choose Fiscal 2024. As I mentioned, $550 million in gaining revenue. Fiscal 2020, sorry, that was fiscal 2014. Fiscal 2024, $850 million. gaming revenue. The Black Hawk market expands like crazy. And none of the other markets, Central City, if you look here, 70 million in gaming revenue in 2014, in 2013, 80 million in gaming

revenue in 2024. Cripple Creek, 130 million in 2013, 170 million in 2024. So every other market's growing 10 to 20 percent. You know, they're kind of growing at the inflation rate. Our market explodes. And if we do the math, basically all of the that explosion is being driven by Monarch Blackhawk's growth. So Monarch Blackhawk substantially expands the market. Every other casino grows kind of in line with inflation. We grow substantially and that inflates the market overall. So Monarch makes that bet.

They absolutely win that bet. And their stock follows that bet way, way higher. The stock is a five-bagger plus over 10 years when they make this bet. And this is not a great time for gaming stocks. There's COVID. It's not a great time for small cap stocks. This is a great time for Monarch. The stock is up five, five and a half X over 10 years, way more than doubles the S&P 500. The Russell is up 120%. And when I did this clip in like

late November, early December, Monarch's up 550%. So what is that? Three, four X, the return of the Russell. It's a crazy, crazy home run. Today's podcast is sponsored by DeLupa, who's helping analysts to prepare for 2025. With looming tariffs on Mexico and Canada that could disrupt supply chains, increased costs, and reshape industries, there are challenges for analysts who need precise data to model impacts and guide decisions. Whether it's assessing supply chain risk and cost changes for GM, Ford and Tesla, tracking commodity price shifts for ADM, Tyson Foods, and Bunge, analyzing raw material cost fluctuations for nuclear and alcoa, understanding pricing and trade dynamics for ExxonMobil and Chavron,

or preparing for retail at price impacts for Walmart, P&G, and Coca-Cola. DeLupa provides the accurate historical data sheets that you need. Set up a free account today to ensure you're ready to navigate 2025 with competence. So why do I mention all that? Well, that's my case study I'm on. Why do I mention all that? Well, it's the way to win that regional gaming. And what I have is a quote here from Full House's CEO who does it on the Q3-203 earnings call. The quote is, if you know the history of gaming, then you know that the business model that has worked time and again is to find an underpenetrated gaming market without any differentiated market. And then the quote goes on and you build a, you know, you build a

differentiated product in that underfunded trade market and you'll have a success. So Monarch, the case study there, illustrates this to a T. And I think Full House Resorts will be Monarch 2.0. So Full House Resorts is a microcap company, 150 million market cap. It used to be higher, but I'm doing this December 20th, 2024. For those who don't know, it's been a brutal month for value stocks this month. Full House used to be 200, 250 million. A few years ago was 400 million market It's not to $150 million. I think it's substantially undervalued, obviously, but it's $150 million market cap, $600 million EV company.

They have six casinos. One of the casinos is Silver Slipper in Mississippi. It holds a place near and dear to me because it's my grandma and moms. It's their favorite place to go. My grandma, not funnily enough, terrible story, no fault of Silver Slipper, but she actually broke her hip in the Silver Slipper about six months ago. You know, she's 86. She's alive kick in, sharp as attack, but she fell, broke her.

hip, it was terrible, but silver slippers. So they love it there. They still love it there, but it obviously holds a place in my heart. But anyway, they have six casinos. There are two that you really need to pay attention to. There are two that are going to drive all the equity returns here. And those two casinos are in Cripple Creek, Colorado. So I think this is going to be like literally Black Hawk Monarch 2.0, Criple Creek, Colorado. They have the Chamonet Casino. This is a new build that they built. It just came online at the very end of December. December, 2003, so very new. French luxury resort. They put about $250 million into it. And the other one that you need to pay attention to is the American place in, I'm going to butcher

the name. It's just out, it's to the north of Chicago, about an hour drive north of Chicago in the northern Chicago suburbs. The casino there is American place. These are the two, only two casinos I'm going to talk about because time is limited in this podcast, and they're really going to be the two return stories here. But there is value in the other casinos, particularly the silver slipper is probably worth, again, this is a 600 million EV company. The silver slipper is probably worth $150 million on its own. Maybe it's $120 million, maybe it's $180 million, but there is value in these other casinos. But what's going to drive the returns here are Shaminee and American Place. So those are the two casinos I'm going to focus on. These are the two

trophy properties. So why don't we start off by talking about Chamonay? This is the casino that originally attracted me to the full house story. And it's the casino I should start with because the parallels to monarch black hawk are so so obvious again monarch black hawk was built in black hawk about an hour outside of colorado cripple creek uh shameney is built in cripple creek about an hour drive outside of colorado springs uh they are just trying to copy the black hawk model to a tier t here uh shamanay is a french luxury casino they took uh what happened is in about 2015 uh full house bought Bronco Billies, which was probably the biggest casino in Cripple Creek, and they bought them in 2015, and through a long, an arduous process, they built Chamonet.

So they took Bronco Billies, took a big piece of the land, took some neighboring land, and they built Chamonet. Bronco Billis is actually still functioning. They're connected to each other. But so they built Chamonay. It came online December 27th, 2023, $250 million investment. And look, they're trying to do the exact same thing that Black Hawk did. Cripple Creek, you know, across, to give you an idea of the town, across the street from

Bronco Billy's and Chamonet, there's a row of casinos. These Chamonay and Cripple Creek are on the main street of Cripple Creek, and there's probably like eight casinos there. And across the street from Chamonay, one of the casinos is called the Brassassassass, and the food place at the Brassassassass is Dynamite Dix. So that should give you a really good idea of the type of place that this was, right? that gamblers are attracted, all that type of stuff. Humorously enough, I was talking to an insider at one of the companies, and they were talking about

them, and they were like, oh, brass ass and dynamite dicks. You know, the name sticks so well. It's probably the most memorable name in all of the casinos in Colorado. And they're probably right. So anyway, Chamonet, they build it in Cripple Creek, and they're trying to do what Blackhawk did. They're trying to say, hey, look, if you want to have a luxury experience, if you want to go away, You know, they built a about nine-story hotel. If you want to go away, if you want to hit a spa, if you want to make a weekend of it,

if you want to gamble in style, you can come here versus, you know, previously there were, you would take buses or a day trip and, you know, it was drinking. So they're trying to expand the market with Chamonet, open December 27, 2020, and that was a very soft opening. You know, they got it open. They got gambling in. But I went over the summer, the spa still wasn't open, right? There were a lot of amenities that were still coming online.

They actually had what they're calling their grant. opening and it was either the last weekend of October 24 or first weekend of November, but Jay Leno was out there. So they had their grand grand opening. Everything's up and coming, but everything's up now, but it took a while. So why did Full House invest in Chamonet? I mean, the simple answer is they think it's going to monitor, it's going to mirror Black Hawk. But if you want to dive into the stories, this, I have a chart here for people who are listening. If you're watching on YouTube, you can see the chart. The average gaming revenues in the United States is $65 billion.

There's $323 million people in the United States. So win per capita, you know, industry metric, is about $200. And this is from 2019, by the way. So it's about $200. In Colorado Springs, gaming revenues in 2019 are $133 million. There's about a million people there. So win per capita is under $150. So you would say, hey, Colorado Springs is substantially below the national average.

And this is despite the fact that the national average includes a lot of places where you can't gamble. So I mentioned Texas earlier. There's no gambling in Texas. You know, Houston, Dallas, Dallas, you can drive to Oklahoma, but Houston, awesome. These are huge population centers where there is zero gambling revenue. Utah. State Constitution, no gambling in Utah. Mormons don't like the gambling.

Zero gambling revenue in Utah. Now, obviously, these people might fly to Vegas. But, you know, you'd have to imagine that a state where, gambling is outlaw, the city we're gambling outlaw, the national average is going to be a lot lower. So Colorado Springs is lower than the national average, despite the fact that an hour away, they have a drivable gaming product. And if you look at this right above Colorado Springs on this chart is actually Denver, and this is 2019. Denver was at 174. So again, Denver was well below the national average, despite the fact an hour away, they had Black Hawk. They could go drive to a gaming

product. Again, I think this is a sign that these markets are way under-penetrated, not because people don't want a game. Well, I think people are the same across the board, but because the product, they were underserved by a quality product. That's what they were seeing. And then that's what Black Hawk, Monarch, Black Hawk saw in Denver. They built a new product, and, you know, the market exploded. Colorado Springs, that's what I think full houses are seen. They've built a new product, and I think this market will explode. Okay, so that's Chamonet, let's turn to the other piece of the story. And this is actually going to be, I think shamanay is the most interesting. I think it's going to be one of the most unique. I think it's

going to be one of the highest multiple casinos in the entire country, once it fully ramps and people come to appreciate it. But the other piece of the full house story is American Place. American Place an hour north of Chicago. This is going to be the most valuable property in Full House's portfolio. So American Place, you can see on the chart here, it's about an hour up north of Chicago. And the question is, hey, Chicago is pretty well served by casinos. They went the license in 2021. Baileys is opening a casino in downtown Chicago that's built. There's Rivers Casino, 45-minute, 30-minute drive south of American Place.

There's casinos all around Chicago, an hour north of where American Place is. There's the Pottawami tribe has a casino. It's just across the state border. It's in Milwaukee, but the Pottawanan tribe has a casino. So you'd say, hey, this is a pretty penetrated market, right? I think you're wrong. This is a slide, again, from Full House's presentations. And it shows basically the same thing I was talking about with Cripple Creek, Colorado.

The Chicago land market is substantially underpenetrated on an average gaining basis. Again, this is before American Place is open. We'll talk about American Place and everything. they had a temporary casino that has opened, is open, is operating that opened in February to 2023, so this is before that. But Chicago Lane is substantially underpenetrated. And how they showed it was this. The average per capita gaming revenue in Chicago Land is $200.

So if you think previously, that's about in line with the national average, but that is well below what a city with easily accessible gaining product should do. And they show four cities here. Detroit and St. Louis, they show they're both doing above, Detroit's doing $383 in gaming per capita. St. Louis is doing 364, Baltimore, Kansas City, 326 and 349, respectively. And Chicago is on the higher end of per capita income versus all these, right? So you're saying, hey, Chicago is way bigger, wealthier than these towns, and it's doing

much, much less in gaming revenue. If that doesn't scream this is an underpenetrated market on gaming, then I don't know what is. So those are the two big projects here. think both are going to be screaming successes. I think we've got indications already that both are screaming successes. And I'll talk about that in a second. But I'm going to go here to a new slide. This is the upside slash what are we playing for. And this was the hardest slide for me to put together, if I'm being honest with you, because, again, I did not want to put a single

thing that I had produced into this deck because I am lazy. I used to be a consultant. I used to be at a big consulting firm. I don't like modeling anymore. I mean, I do models for myself, but I don't like public modeling, right? I have my own formats. I don't want to format. I don't want to spend any time doing that. So I didn't want to put anything together and I wanted to stick to this, hey, everything I do is from the public domain. So I spent a lot of time saying, hey, Andrew, how are you going to frame the upside here? And what I finally decided on is this. What I have on the screen, and I will read part of it for the people who are doing audio, is a quote from Full House's Q4-2021 earnings call. This is a quote from the CEO, and he basically says,

look, we are going to get, if you, we think we're going to do 50 million e-beda-cham-a, we think when we have the American permanent place up, we're going to do $100 million of EBDA. We've got about 50 million from the other casinos. They've got some online gambling license stuff. Put it all together and we think we're going to be a $200 million dollar EBDA company, right? You look at $200 million in EBDA. You look at precedent transactions. We think we would be worth 10 times EBDA. We'll own all our property. That's going to be a big thing. I'll come back to that a second. But we think we're going to be worth about 10 times EBITO. 10 times 200 million is $2 billion. Subtract 650 million of debt. They're at

$4.50 now, they'll be at about $6.50 when they get American Place up and running. We'll talk about that. But subtracts $650 million of debt. That's $1.35 billion, $37 million shares outstanding. That's something north of $30 per share. He goes on to say, that's a quadruple of our stock price. He said this in early 2022. The stock was seven or eight then. The stock is four now. So, you know, he thought it was a quadruple. I actually agreed with all of his math. I agree with his upside. I think everything he said stands there, except the stock's been cut in half for a bunch of different reasons. So, you know, if you thought it was a crucial then, well, you can do the math and figure it out now. But I wanted to pause there now that you know

what Chamonet and American Place are, now that you've got the case of everything. I just wanted to pause there, show this slide, give that quote, to talk about this is the upside. This is what I think you're playing for over the next three to five years as these casinos come fully online and ramp. This is why I'm so excited about this stock. This is why I think the stock is so timely, and this is why it's my idea for 2025. So let's dive in. First question. If you're a frequent listener of this podcast. First question I ask every guess, the market is a competitive place. Why does this opportunity exist? I'm going to ask that of myself now. Why does this opportunity exist? And I think the answer is simple. There's a bunch of reasons, right? This is a small cap company.

I think people got really excited about it. And they, you know, you build a CMA day, December of 2023 and January of 2024 comes. And people say, hey, why isn't this a $50 million equity already? So I think there's a little boredom. There's some risks and everything. But I think a big reason is what I'm showing you here. This is the company's income statement for Q3 of 24. And you can just look at it. Q3 of 24. First nine months, they lose $30 million. This is a company that's, as you and I are speaking, run rating probably $50 million in total of EBITDA right now. Interest expense alone is run rating about let's just round it up to $50 million. It's more like $45, but it's run rating $50.000. million. So I think people, if you think about want screeners, value metrics, all this or stuff, this screens absolutely terribly. I mean, just horrifically. Now, there's a really good reason for that. Chamonais is a $250 million casino, right? That's $250 million of CAPEX that is in the ground that they spent, they had to raise the debt for. It opened in December of 2023. So if you're looking on a trailing basis, it's not in the numbers. It's probably

negative in the numbers because pre-opening expenses, they do add that back and even out. But, you know, a casino the first month, so not super profitable. Chamonais is break even right now. American place, as I'll discuss, it's in a tent right now. It's not at its full run rate. So if you look at it historically, the numbers look terrible. And I think that's one of the big reasons this exists. Why does this exist?

Reason two. So I am now on a new slide. And if you are following on YouTube, this is a picture of what is called the temporary. The temporary, I've mentioned American Place, the casino outside of Chicago a few times. They are going to build a full casino, all in that full casino will cost $500 million. They will show your drawings. It looks absolutely beautiful. But that casino has not been built, and we'll talk about some of the risks to it getting

built on a second. But in February of 2023, they opened what they're calling the temporary. The temporary is a giant tent, right? It's a tent. They've got a bunch of slot machines in it. And how does that relate to risks here? First, the temporary is run rating LTM. It's a 30 million in EBITDA.

I think it's run rating in the mid-30s right now. I expect it'll be over 40 run rate inside of the next 12 months as it continues to seize it. But it impacts them in two ways. Number one, when you look historically, you're looking at what the tent is generating. I'm excited about America Police that I think is going to do $100 million in EBIT. Yes, they have cap-fax left to spend there. We're going to talk about them a second. But people might look at it and say, hey, I thought this was going to be $100 million property.

it's only doing $30,000. Yeah, because it's in a tent. Number two, the second big risk is KAPX related. They have this big tent, and they are going to have to spend $325 million to turn this tent into a permanent casino. I am hoping that they will start turning it into a permanent casino in late 2025. We'll talk about the timing in a second, but people are terrified how they're going to finance this $325 million of spend. Again, this is a company that has $400,000. $50,500 million of debt. They've got $50 million in EBIT. And I think people look at this and say, oh my God, this is a small cap company? The stock has been decimated. How is the company going to finance this big build? And I'll talk about that in a while. I can't say I'm not

nervous about it. But the one thing I want to say is the CEO who owns a lot of stock and the CFO who also owns a lot of stock. They've been very clear. They said this when the stock was at five. The stock's at four. So I think it holds then now. They've been very clear that they think this is financeable, they have plenty of options, and they've been very clear that they're not going to use equity to finance this year. So I'm going to talk about all of the options they have in a second. But I will tell you, when I talk to people, there are three concerns they have, and we're going to talk about all the concerns. But the number one concern people have with Full House is how are they going to finance the building of the temporary to the

permanent? I think it's doable. The company thinks it's doable. I actually think it's a lot easier than the market does. But that's the number one concern. The second risk with Full House relates to a lawsuit. Full House, you might remember that I mentioned an hour north of Full House, the Pottawami tribe has a casino just on the other side of the state court. And the Pottawami tribe sued when Full House won the, when Full House won the casino license here, they sued the state and the city and said, you improperly awarded this license to Full House. And that suit had, Full House was supposed to start building the permanent, I believe, with an opening date of 2025, they have not started building the permanent because they cannot start until this lawsuit plays on.

So the second big risk is what happens if this lawsuit goes the wrong way? And I'm going to talk about that. But those are your two big risks. A, spending here, B, what happens to the lawsuit goes the wrong way? And then three, the other risk, which we'll talk about as well, is ramp up risk, both at the temporary and chimney. What if they don't ramp up? So let's start with that last one, actually. let's talk about ramp-up risk. I am much less concerned than the market and the people I talk to

are about ramp-up risk. I actually think if you talk American Place, I think the ramp-up risk has been settled at this point. So if you're watching on YouTube, what I have here is a clip from Full House's Q-324 earnings call. They show, hey, American Place adjusted EBITDA by quarter. And, you know, it opens in February of 2023. It's doing three to four million per year in EBITDA last year. This year, it ramps up. It's doing $7.5 million and it continues to grow and gain momentum. So right now it's doing $7.5 million per quarter. You analyze that's $30 million. It's starting to breach above that. So I think as we're speaking right now, I think they're in the mid-30s and I think they'll be in the 40s plus as we kind of round

to the back of 2025. So I think American Place, I think the ramp there is settled. And that's important because they're in a tent right now. If the tent is run rating at 40, million. I, again, I think American Place, the company, forget me, the company said when they built America, when they started building America, we think it's 100 million. They're doing, they're going to be doing 40 million in EBIT in the tent. There is no way if they're doing 40 million in EBITDA in a tent. They won't be doing, 80 million would be conservative when they go to the permanent place. Why do I say that? A few reasons. A, the tent has, just think about a tent. I'm sure the tent is nice. It's nice. They have a restaurant.

in there, they have a steakhouse, they have, it doesn't have all the things that a permanent facility is going to have, right? First, it doesn't have a lot of the entertainment venues. The restaurants, I have not even known with the steakhouse and the tent, but a tent restaurant is not going to be as good as the permanent. There's going to be more restaurants at the permanent. The tent has less than a thousand slot machines. There's going to be 15 or 1,600 in the permit place. It doesn't have the entertainment venues and everything that a permit's going to have. So the permanent is just going to have a lot more things that it doesn't have the spa. It doesn't have a, the permanent is just kind of a lot more things that are going to drive foot traffic

that are going to drive people to it that are going to increase the EBIT. And so I say this, but you don't even have to take my word for it. We've got some examples. So Rockford, this is a hard rock in Illinois. They opened their permanent casino in August or September of 2024. Their temporary facility that they were doing, and you can see this on the chart if you're watching the YouTube, this is monthly revenue. Their temporary casino is doing about $6 million per month of,

Revenue, they opened the permanent. Lo and behold, the permanent instantly does $14 million in revenue. And this is up to September because this is from the full house decks. But you can go check the monthly gaming revenue from the casino board. There's October and November also up. It's doubled. The revenue has doubled at the Rockford Place. So that's a doubling.

And I would guess it continues to grow as the seasons because, again, it takes a while for like a restaurant, like a resource concept, like anything, you don't hit your full run rate day one. It generally takes about three years for you to season, and we'll talk about some the reasons why. So this is going to grow. But they've already more than doubled their monthly revenue. And I would just point out, I mentioned the lawsuit that American Place is engaged in. Obviously, I've read all of it. If you read through it, this is referring to Rockford, but they said, hey, they were actually projecting that permanent casino operations with Rockford would be three times higher than what the temporary was doing. So it's already doubled.

look, they are projector rating, projecting the gaming boards and everything are projecting, it's going to be 3x higher. So, you know, this 2x, 3x, if it's run rating at 40 million, if it's 3x higher, it's going to get a lot more, 40 million EBITO, it's going to be a lot more than 100 million EBITO, but I say 100 million. So that's American Place. That's why I think the ramp there, I think that everything, it is settled based on the numbers we've seen.

And that's one of the reasons I think the stock is so interesting today. If I was pitching this stock in 2003 as my 2024 idea, I wouldn't know Chamonet would have opened two days ago, right? American Place hadn't started really ramping yet. So I wouldn't have been able to,

I would have thought, hey, these are great projects, these are interesting bets, but I couldn't tell you. But I'm pitching it now because I've got the data, right? We've got the data.

American Place, I think that's settled. And Chamonet, which is my next thing, I think it's ramping really, really nicely. And I think this is a market that actually is likely to season harder over time. We'll talk about that.

But so what you're looking at is Bronco Billies was open before Chamonet opened, right? They built Chamonet right next to Bronco Billies. Bronco Billis continues to operate. It was doing about a million and a half per month in revenue. Chamonet opens in December, and you can see the ramp. January, they do high $2 million per month in revenue. By April, they're breaching three, and over the summer months, they're getting to the mid-fours, right? So I think Chamonet is ramping quite nicely.

would I like it to be faster and shorter? Sure. But I think it's ramping. And so I think we've got the evidence that it's ramping as well. So those are, that's the ramp question. Let's turn to the big risks here. So I think there are risks at both casino. Let's start with the risk at Chaminet. Look, I think it's ramping very nicely, but there is risks. And if you're watching the YouTube, I mentioned that, hey, I'm going to do everything I have is from the public domain with one exception. If you're watching the YouTube, this is the one exception. And what it is is a picture of a donkey walking across the street. And this is not the start of some joke punchline or anything. This is a picture I took when I visited Chamonay in, I think it was early

August. Absolutely beautiful. Weather was perfect, loved it. I was driving around. I was like, we got to move to Colorado Springs. So I was visiting. And as I was leaving, I pulled out, I rented a car because you've got to drive, right? I pulled out of the garage and a donkey was walking across the street. And I had to follow this donkey for two blocks. And it was just walking down the street. And it was kind of funny. I was following the donkey. But you know, it's going two miles per hour and I had to make a flight and everything. And how does that relate to Cheyenne Risk? Look, Cripple Creek is small. It is really small. And people worry about the ramp up. You know, people have to drive out from Colorado Springs. I think more pertinent is staffing,

right? It's going to be harder to get people to come work at these jobs. It's way out of the way. They have to drive an hour from Colorado Springs or wherever they live to come work there. I get that. Those are risks. But all I would say is every risk that I described basically applies to Black Hawk too. And Black Hawk was a screaming smash success. Now, there are some counters that. Like Black Hawk, I do think it's a little bit more on the way to, if you're driving to go skiing or hiking, I think Black Hawk, Denver to some of those places is a little bit more on the way than. I think Cripple Creek kind of is outside of the way from Colorado Springs if you're going to driving. So, yeah, on the margin, maybe it's a little more difficult. But, again, I think we've already got the data from Chamonay that it's ramping up. It's starting to ramp up nicely.

And I think the Blackhawk example just completely plays here. So that's your Chamonay risk. Let's talk about the American place risk. There are a lot of risks at American place, right? Again, I think the ramp up has started. I think that's settled math at this point. But there's your two big risks here are the full casino hasn't been built. So you could have construction overruns, all that type of stuff.

And I'll talk about that a little bit. But the biggest risk is that the Potawatomi tribe lost this casino license ensued and said the process was flawed. And your risk is that the casino tribe wins that lawsuit somehow. However, so that is a risk. It is a huge, huge tail risk. But let's address it. The fact is that the Potawatwama tribe is a 50-minute drive from American Place, right? And I think, I know the company thinks, I think even, I'll talk about the federal case in a second.

But I think most people think the lawsuit is not about them actually thinking that this process was flawed or anything. This is about them throwing as much sand into the system as they can because when American Place full opens, it's going to steal share from their casino, right? So if they can delay, their casino is doing, oh, man, I should have looked up the numbers. I've got the number somewhere. I believe it's well over 100 million revenue. This is a huge casino. And every month that they can delay American Place opening is every month they delay is another million, $2 million, $5 million of extra earnings that the Potomama tribe gets because the American

Place hasn't started taking their customers away, right? So I think this is a delay tactic lawsuit, not a lawsuit that has any. chance of winning on its merits. But it could be wrong. If there's one thing I've learned in court, you could be wrong at all times. I don't think I'm wrong. I'll just jump to one of the punchlines. The Potawatomi tribe sued in federal court and state court. The federal case has already been settled. And the judge, I think this is the next quote. Yeah, this is a quote from the judge's decision there. He said, he tossed the suit out and he said no reasonable jury could find that the plaintiff, the Pottawama tribe, was similarly situated to the other casino license applicants.

There were plenty of sufficient rational basis for the city's decision not certified the plaintiff. So the federal suit has already been tossed out. Your only remaining risk here is the state suit. The state suit is, it was decided on summary judgment and tossed out originally, but then the Pottawham tribe appealed, and the appeals court reinstated the suit, and it's now at the Supreme Court. The Supreme Court heard from the state and the city in, I want to say, September, and they're going to make a ruling, you know, it's December 20th. I doubt they're going to rule during Christmas, so probably sometime in January we'll hear a ruling from them. Let's talk about the ruling.

So what's at the state, what's at the Supreme Court level is not, can this casino go forward yes or no. It is just does the Pottawami tribe have standing to sue to block this suit? So I personally, I hope I'm wrong. There's a chance that the Potawang tribe does not have standing and the suits tossed out. And if that happens, it's all systems go. Our license is not in question. We'll be able to build. But I think it could be wrong, probably in the like 70, 30 range.

I think they will have standing. But let's say they have standing. They'll probably be a case. Why am I so confident? Because this is a big terrorist, right? If American Place is off the table, I think American Place is going to be $100 million casino, multiply that by 10. billion dollars. This is a 600 million EV company. Yes, there's CapEx to spend to get it to

to get it to the full thing, but America Place alone will cover the entire enterprise value of the company, in my opinion, if and when it gets built. Why am I so dismissing? The Potomami tribe is basically, and I've read all the cases, there's a lot of arguments there, but what they're basically arguing is, hey, they're trying to stand up on process, right? I'm doing this for memory, but they say, look, the city, when they did the RFQ, they didn't check a couple of boxes, right? And because of that, when they recommended it to the board, their recommendation was improper, and the gaming board, when they negotiated and awarded the license of the house, the recommendation was improper and it should have never happened, right?

That's their argument. Why do I think that argument is going to fail? A few reasons, but let me start with equitable. Pottawanma tried to put up a $25,000 license to apply here. They were rejected. As I mentioned in the federal case, and you can go read the federal case, You can read the state cases. They rejected summarily. They didn't meet. There were many things. I think people were basically saying this was a rush process.

No one liked their proposal, right? They were rejected. $25,000 license rejected. Full House has spent $175 million getting the temporary online. That's on the tent. That's on the slot machines. That's a $50 million gaming license. All of that.

$175 million. This project is going to create hundreds of jobs and millions of tax revenues that are desperately needed for the state and for the district. If you think about equitable remedies, the pot of Wyoming tribe is saying, hey, a few boxes weren't checked. So this process should be put on hold indefinitely because of our $25,000 check versus $175 million in the ground, millions of tax revenues, hundreds of jobs. The law system should try for equitable remedies. An equitable remedy or misclicking a box or two is not delaying hundreds and hundreds of millions of dollars. It's already been delayed, but it's not canceling hundreds and hundreds and hundreds

of millions of millions of millions of dollars investment. So that's why I'm so confident. There's other things too, right? Like I'm part of bond in charge. Basically what they're trying to argue is that there are some, in my opinion, it's a lot of laws and regulations around making sure that there's not grift, right? Like, hey, if we put out an RFP saying who wants to supply our city meals to schools, right? And I bid 100 million and you bid 150 million. They don't want it going to you with your $150 million bid because you're best friends with the mayor or something, right? They want to go into the low-cost bidder. This was a proposal to build a casino. This was not a proposal where you could say, hey, Andrew said he'll build a casino for $20 million,

and we said we'd build a casino for $25, so you should go with us because there's $5 million extra or Andrew because there's $5 million less. There were a lot of other things that they were coming into play in this casino, right? Like, they had to decide, hey, do we want hotel? Do we want entertainment venue? Where do we want it? Like there were a lot of other things coming to play. And I think that's argued well in the briefs. I think all this argued, but the Potawatwama tribe is basically saying, hey, because they didn't check all of these boxes, we can use these anti-griff statutes to throw this up. And what everyone else is saying is, hey, the boxes, I think they're saying they were checked, and that's one of the things. But they're also saying, look, a lot of the boxes

that you're arguing in the case law you're deciding. It doesn't apply here, right? That's designed to make sure that contracts where there's kind of a commodity getting supplied are going to the lowest bidder. Here we had to think about a lot of different things and we awarded to who we thought was the best. Anyway, so that's the risk of the lawsuit. Today's podcast is sponsored by Dilupa, who's helping analysts to prepare for 2025. With looming tariffs on Mexico and Canada that could disrupt supply chains, increased costs, and reshape industries. There are challenges for analysts who need precise data to model impacts and guide decisions. Whether it's assessing supply chain risk and cost changes for GM, Ford, and Tesla, tracking commodity price shifts for

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about some path places to unlock value and some hidden value. And I think this will really help you understand why I don't think there's as big of a financing risk as the market does here. And the first thing I want to note is that you may have looked at a lot of casino companies. A lot of casino companies engage in sale leasebacks. And what that is, is, hey, I own my casino. I own the land underneath it, and I operate the casino. A very easy form of financing is to engage in a sale leaseback. There's GLPI and one other, it starts with a V, its name, it's escaping me, but who are big ones.

And basically what they do is these are REITs, and they'll say, hey, we'll buy your land and we'll buy your property. write you a big check, then you're operating, you operate the casino, and we just own the land, right? Similar to what you do, you know, you think about any triple net lease freeze, it's similar to that. Full House owns all of their properties, and I like that. I actually think if you do a sale leaseback, I think on the back end, I think there could be a lot of risks. But there is a very, very active market for sale leasebacks. And if you're watching on the YouTube, what I have here is Bally's over the summer, did a sale leaseback of a bunch of their properties, including the Chicago property that they're building in downtown Chicago for just shy of two billion

dollars, right? And I highlight this for a bunch of reasons. First, they're building that Chicago property for just shy of two billion dollars and GLPI financed basically the whole thing, right? 1.8 billion dollars of 1.8 billion dollars to build. GLP funded, I think it's $1.2 billion dollars through the sale lease back. If you think about the American place, $175 million is already in the ground. They need $500 million in total, so another $325 billion to get that. I think if you look at the sale leaseback precedence, I think they could easily, easily do a sale lease back to finance the entire thing.

And I would just remind Ballets, which I think is a very interesting company. I actually still have a small position in it. I bought it earlier this year. They had a very interesting take private story, blah, blah, blah. But Bally's is way, way more levered. And in my opinion, most of their properties are lower quality than, well, much lower quality than American Place and Chamonay are going to be. The other reason I highlight this is A, you could do a sale leaseback of just American

place to get the construction financing. But B, if you think about full house owning all of their properties and what sale leasebacks are going at, so this is, again, this is the Bally's one. If you kind of look at it, they're doing everything a low 8% cap rate with about 2 to 2.2 times rent coverage. If you apply that to full house and you look at all their properties and you look at all their properties once they're ramped up and everything, you could very easily see a case where the property value for full house alone covers more than all of the enterprise value today, leaving you with the actual operating properties for free. So this would be what's called an opco propco split, right?

I'm talking about if you sold all the properties and then you kept the Remain Co as an op-co, the properties alone would be worth well in excess of the enterprise value, in my opinion. Now, how could I be wrong? America Place or Chamonet, you know, the property is only as good as the earnings underlying the op-co. If I think Shameney is going to do 50 million of EBITA and it actually is doing $15 million of EBITA, obviously that's going to be an issue. If I think American Place can do $100 million and it ends up doing $50 million, that's

going to be an issue. But, you know, if I'm in the ballpark on my ramp up rates and the other properties are mature so you can kind of guess them as well, I think the property value at Full House will cover more than all of the enterprise value here. And this is the second thing I want to shine. For those of you watching on YouTube, this is a clip from Golden Entertainment's Q324 investor presentation. And what it shows is Golden Entertainment, they own, like Full House, they own the real estate under all of their properties. And they said, hey, look, We don't think the stock market is properly valuing our properties. And they're engaging in strategic alternatives right now because of this.

But they put, they said on the low end, if we think that our propco would be worth a 12.5 times multiple, which, you know, that's about an 8x cap rate, an 8% cap rate. On the lowest end, if we think it's worth a 12.5x multiple and we had to pay $90 million of rent, that would be worth almost all of the enterprise value at the company. And I wanted to highlight this for two reasons. Number one, the low end, the worst rate that they put into this presentation was 12.5 times multiple, which again, to flip it over, that's about an 8% cap rate. I was talking about an 8% cap rate for full house, for full house when I was talking about

op-co, prop-co. That's the worst that Golden Uncretion thinks they could get. Again, I think that's kind of in line with what Ballet's got and I think they put in some more tired assets in there. They think they can do better. Their base case, the medium case they present, is 13.5. which would be an under seven and a half percent cap rate, right? I said at a low eights cap rate full house's entire enterprise value would be covered by the property. What if the cap rate's better,

right? What if golden entertainment's right and should be a 13 and a half times multiple or a 14 half times multiple? It would be worth a lot more. So I just wanted to highlight that. Just want to highlight that for two reasons, A, because it's very supportive of the multiple it gave. And B, when I say, hey, I think all of the property value, I think the property value could be more than the EV here. Golden Entertainment thinks the same thing. So, you know, it's not unheard of. Now, maybe they're wrong. Maybe I'm wrong, but I just want to highlight that. Second way I want to point to value unlock here, full house, I've mentioned a few times. I think it could be worth 10 times EBIT up. You know, there is a very active market for M&A in regional casinos. We haven't

seen one in a while, but if you look at history, regional casino M&A is generally pretty active. This is a What I'm showing is a slide from Churchill Downs, I think this is the most recent regional casino M&A we saw. This was back in, I think, 2002. They bought P2E, and they bought PTAE for 10.2 times EBDA. However, that 10.2 times EBDA gave credit for first. There were some new locations that P2E had brought online. They gave credit for a full ramp up for those new locations. And if I remember correctly from the earnings call, they said, hey, these are new locations. We assume year three is the full ramp number, which is considered. with what I've said and everything for full house.

And B, they gave credit for corporate synergies. So when I'm talking about the 10 times EBITDA number, I actually think if we started talking a sale of full house, I actually think they would go for well in excess of that 10 times number because the corporate synergies would be so high. And, oh, this is just one more example. This is, again, from Golden Entertainment's Q324. If you're on the audio, I'll tell it to you in a second,

but if you're on YouTube, you can look at the left-hand side. they sold Rocky Gap. They announced the sale of it. This is a casino out in Maryland. They announced the sale of Rocky Gap Casino in, it was late 2020. It closed in 2003. They got about a 10 times EBIT on multiple for it. And they actually did exactly what I'm talking about.

They did a Opco Propco. They sold the Opco to Century City Casinos, which operates one of the casinos right across the street from Chamonet. And they sold the prokco, all the property to Vichy, which is the other REIT that I forgot. They got about 10 times EBITO for that. Rocky Gap casinos, I think it opened in the early 2010s. The last update was in the, like, 2016, 2017. So they got it 10 times even on multiple for it.

It looks like a great property. But I just highlight that to say, hey, you know, Chamonay and American Place, these are going to be absolute brand spanking new properties that I think are quite moody. So, you know, if Rocky Gap's going for 10 times, I think that's the low end of what Chamonay or American Place would go for. So just wanted to highlight that multiple zone. Last thing to highlight. So I mentioned full house.

This is a small company. I think the synergies to a buyer would be huge. If you go through the history of regional gaming, they claim huge synergies when they buy things. And I think full house would be bigger than most. And I'll explain why, but here's just one way to look at it. The biggest merger in gaming in the past probably seven years was El Dorado and Caesars merging. This happened in 2018, 2019. team. Alvarado and Caesars, separately, the companies did $3.1 billion in EBITDA. Together,

they were rejecting $3.6 billion of synergies, a 20% increase in synergies by bringing the two companies together. Now, the two companies separate are billion dollar companies each, right? So that's a bigger integration than putting a bolt on, like a full house, would be to any of those. So I actually think if a strategic bought full house, I think the synergies would be higher as a percentage of earnings because there would just be much more to kind of rip out and just plug and play onto the corporate buyers things. And there's all sorts of things you can think of public company costs are an obvious one. CEO and CFO costs. I think they do a great job at full else. But obviously, you know, Cesar is the multi-billion dollar company bought full house hypothetically.

They're not going to need to keep a CEO and CFO on at full house. Player management systems, tech spend, some marketing, all this sort of software. I think the synergies would just be absolutely enormous if someone bought full house. So I've been talking about 10x EBITDA on kind of their fully ramped up Chamonay American Place earnings. But if you started thinking about what the company would get to a buyer and if they got some of the credit for the synergies that they sold to a buyer, I think it would be a lot higher. And I would just note that the company sold a small casino stockman's. They did a small casino sale over the summer. and I believe that they got a low teams multiple for that casino.

Now, they owned the land and the operating company, and I think almost all of the value was in the land there, but hey, it doesn't matter, right? I'm just, that supports the Opco Propco, low teams. I think that supports all the thesis here. So, the last thing, I just want to highlight synergies. When I say El Dorado and Cesar's merge and they have $500 million in synergies,

you know, I think it's very easy to look and say, look, I've looked at 100 mergers. Everybody claims big synergies at the time, but does anyone ever deliver? And this is a quote from Caesar's Q4, 2021 earnings call, and they talk about synergies, and they say, hey, you guys always doubt synergies. So let us go through some examples. And I'll read in for the people who are listening on audio. Example one, we bought Tropicana.

We thought we could do $40 million of EBITDA. It was doing $33 million of EBITDA. We said we'd do $40 million in synergies. It was doing $33 million of EBIT at the time. it did 72 million. One of the properties we bought did $72 million in the past year. So that one property loan covers all the synergies, forget about the other ones. The big one they talk about is Caesars. They say, hey, we thought we could find 500 million of synergies when we did Caesars.

It's been one year since we've bought Caesars. We're at over a billion of dollars of synergy realizations. And then they talk about they buy a casino in Trifport. It was doing 37 million of EBITDA. They have it doing 72 million of Iwada under their watch. They buy a property in Tunica, Mississippi. It was doing $65 million of EBDA when they buy it. It's doing over $100 million.

Now, look, there's cycle and all these other things. But I highlight that just to show, if a strategic buys full house, I think the synergies would be enormous. I think they would be able to credibly underwrite a significant increase in EBIT. And I have factored none of that into the math that I've done. And again, the math that, forget the math I've done. The math that the CEO laid out that I kind of co-underwrite was, American Place ramps up, shamany ramps up. We can do 200 million of EBITA, 10x multiple. That gets us to

about a $30 per share stop. Okay, whew, I have rambled. It has been an hour. Full House Resorts. It is my best idea for 2025. For 2025, I hope having spent an hour of me rambling into this screen share, I hope you can understand why I am so excited, why it is my top idea for 2025. Look, this has been, if you are still with me, I appreciate you listening. This has been a very different podcast. I'm not sure if I'm ever going to do another one like this because it took a lot of work to prep and it was nerve-wracking going through it with you the whole time. I think and expect, I will do a follow-up of this. Maybe Bill Brewster, my friend, is going to come do an interview with me and we'll talk about this idea in depth. So if you have questions,

if you have feedback, if you have follow-up, Twitter, email, whatever, hit me up. I love pushback on the idea. I'm always open to push back on my ideas. I love feedback. I love thoughts. I love anything. So hit me up. Look forward to that follow-up piece.

I'm recording this December 20th. I think I'm going to aim to release this podcast, January 1st or January 2nd, because it is the best ideas for 2025. So I'll release it in 2025 right at the start. But because I'm recording this December 20th and I don't think I'll talk to you before then, I hope you have a great new year. I hope you had a great holidays. I appreciate feedback.

I'm looking forward to a great 2025, and we will go from there. So I am going to stop my screen share. I am going to stop the recording. I'm going to call it there, and looking forward to big 2025. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor.

Thanks.