Q4 2023 Full House Resorts Inc Earnings Call
Participants
Lewis Fanger; SVP, CFO & Treasurer; Full House Resorts, Inc.
Dan Lee; President, CEO & Director; Full House Resorts, Inc.
Jordan Bender; Analyst; JMP Securities
Ryan Sigdahl; Analyst; Craig-Hallum Capital Group LLC
Ricardo Chinchilla; Analyst; Deutsche Bank
Chad Beynon; Analyst; Macquarie Capital Inc.
John DeCree; Analyst; CBRE Securities
David Hargreaves; Analyst; Barclays
Presentation
Operator
Greetings, welcome to Full House Resorts fourth-quarter earnings call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to Lewis Fanger, CFO. Thank you. You may begin.
Lewis Fanger
Thank you, and good afternoon, everyone. Welcome to our fourth-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.
And I would also like to remind you that the Company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for the discussion of risks that may affect our results.
While also, we may make reference to non-GAAP measures, such as adjusted EBITDA. For a reconciliation of those measures, please see our website as well as the various press releases, press releases that we issue.
And lastly, we're also broadcasting this conference call at Full House Resorts.com, where you can find today's earnings release as well as all of our SEC filings. And with that said, I'll give a few comments and then Dan will chip in with any clean-up here.
But as we said in our earnings release, we had a transition point now with our company. We borrowed in large part to fund two large casino projects. Our legacy properties have historically carried the burden of that debt largely covering interest expense on their own.
Post COVID business that our legacy properties feels like it has largely settled down to around $30 million or $35 million or so of adjusted EBITDA per year, again, largely covering our annual interest expense. With American place in Germany, both now open and construction CapEx winding down, we are now set up for significant free cash flow generation.
We have long said, we expect $100 million of incremental earnings in total from our temporary American place facility and shomi after they have ramped up. And we continue to believe strongly in those figures. Those amounts are on top of the $30 million-plus dollars generated by our legacy properties.
And so when you start looking at those figures, hopefully you also see that our company is transitioning now into a large free cash flow generator. Somewhat related, we recently received all the necessary approvals to operate our temporary American place facility until August 2027. That is an important development that many have missed.
For casino construction projects, you'll typically spend 40% to 50% of your project budget in the six months before opening. That means we won't and we won't start investing large dollars into the permanent American place facility until the second half of 2026 and into 2027. That's important for two reasons.
First, contrary to what we have heard from many investors recently and means we do not need to be in the debt markets right now, we don't expect the need to finance the permanent American place casino for a few years that additional time should be our friend over the next few years.
The debt markets have the potential to show continued improvement with the potential for interest rate cuts between now and that future financing day. It also means that our two newest casinos will have time to season, allowing their EBITDA to ramp up into the full potential that we expect from them.
If we hit the EBITDA levels that we expect, gross debt to EBITDA should be around 3 times which is a low figure historically for any gaming company. And most importantly, the August 2027 extension offers us more time to generate even more positive free cash flow, allowing us to self-fund a large portion of our permanent American place facility.
Going back to American place for a second. Our temporary American place facility has recently kicked into a new gear recently. In December, American place reported gaming revenue of $8.2 million. That record will be short-lived. For February, you'll see a figure north of $9 million.
At American places anniversary party, a few weeks ago, we did double the coin-in of opening night and had coin, and that was about 50% higher than our previous record for a single day. March is also off to a good start.
At shomi, we purposely crafted a phased opening despite some brutal snowstorms recently, two things are clear to us so far. One is that there is no high quality gaming product in the Colorado Springs market, akin to what we offer at Germany. And two guests are clamoring for something nice in town.
It appears that our rooms will be very easy to fill on weekends when we can easily fill those rooms above 80% and even 90% occupancy. For the midweek period, group business will be important. Group business will start to come into play over the coming months now that meeting planners can see the beautiful facilities that we've created and can be assured that construction will not interfere with their meeting plan.
We also have our high end steakhouse on the verge of opening. Chef Barry is renowned for its various Prime Steakhouse and nine steak house in Las Vegas, and he'll be bringing his culinary talents to shomi around the end of the month.
Once that's open. While we won't have our full breadth of amenities, we will have the most important elements, our casino, our parking garage, all of our hotel rooms and our high end restaurant. We can then turn on our marketing heading into the summer months which is seasonally the strongest period for the Cripple Creek gaming market. That's what I had. And Dan want to do some cleanup. There should hit Q&A.
Dan Lee
You did a lot of stuff. But let me just touch on a couple of things. We've done very focused on and getting a Colorado open. Meanwhile, Illinois continues to mature, which is nice. It was actually editing our 10-K today and resolve this our historic language in there about Mississippi being our most important property.
And it's no longer the case, and it's still important that we actually make more money in Illinois now and pretty soon, Colorado is going to give it a run for its money. But the getting Colorado completed in a small town in the backside of Pikes Peak has been I challenge, but it's mostly done now.
The high end restaurant will open later this month. And then there's a jewelry store shortly thereafter. And we have one significant bar. One tie in restaurants is can we will later and the spot. So it's coming, but it's not done yet. But in effect, we've been saying for quite some time that the company has gotten to at least triple in size. And that's why it's in the process of doing.
And it's also kind of reassuring way because when we issued the bonds and then we did the add-on for the temporary casino. We basically borrowed all the money in advance of construction. So we've been paying the interest expense and all this stuff without having it opened. And in every month, the total cash balance, including the restricted cash, would decline as.
And so you're playing this game of trying to make sure you have enough money to complete construction and everything. And now it's kind of at an inflection point and it's starting to go up. And if you play with the math a little bit. You can see here free cash flow per share, I mean after interest expense and we were pretty well sheltered for taxes, not only with tax loss carryforwards but with a lot of depreciation from the new stuff we built. So effectively, we paid little or no income taxes.
So our free cash flow per share is about $1 headed for $2, and we should be able to generate quite a bit of cash in the next three years of an order to build American place. The permanent, the commitment to the state was $500 million, of which we've invested about $175 million to date. So we have three and a quarter to go when that's a permanent casino with us small, high end hotel and bunch food and beverage facilities.
So figure half size of Durango station, if you will, we can probably generate about half of that internally. And so we need to fund $150 million of debt, and we won't do that this year. The money actually isn't needed until a later date that bought a lot of the lawsuit won't be resolved until the fourth quarter of this year or the first quarter of next year. We think it's just a nuisance lawsuit designed to forestall us from building but they are trying to get the city or state to kind of restart the selection process and give them another shot at it.
Now there were, I think, five proposals and the outside independent consultant rank theirs is the least attractive of all five proposals, unlike eight of nine different measures or something. And I was there and it was there their proposal was pretty bad.
Nevertheless, you have a lawsuit out there saying, you know, we think the weather Full House should have this license is debatable. We're pretty sure we'll win some if we don't we would have a certain legal rights that we would pursue. But in the meantime, we continue to operate the temporary and won't seek the additional financing for the permanent until it's resolved.
And so it's probably a year from now. We're looking at that for at that point, EBITDA two of the three or four times what our interest expenses will actually be underlevered compared to most casino companies. So the task of raising $150 million for the balance of the American place would not be difficult. In fact, it be prone to do it. We'd have to probably refinance the bonds anyway, which are due in 2028.
I believe they're now callable, but you may not increase the size of the bundle, you might just want to create a carve out to allow a term loan or bank facility because once the permanent American places open, we're going to be paying down debt very, very fast. So that's my additional thoughts. A little bit redundant with what Lou said, but happy to take questions.
Question and Answer Session
Operator
Thank you. (Operator Instructions)
Jordan Bender, Citizens JMP.
Jordan Bender
Great. Good afternoon, everyone. Lewis, you really are you reiterated the $100 million EBITDA target. I believe that half of it's coming from Colorado, half from Illinois. But in Waukegan, can you just talk about how much of that is coming from revenue uplift?
You talked about some of the records come in February versus how much of that is coming from more rightsizing the cost structure and just seeing margin improvement off current levels? Thank you.
Dan Lee
Well, it's mostly revenue improvement and a large portion of that falls to the bottom line. We're trying to get a little more efficient on our marketing, but it's more about trying to get more revenue numbers for the same dollars of marketing by targeting the marketing better. But as you go through the numbers, at least half of the incremental revenue is falling to the bottom line. And that will probably continue to be the case.
Lewis Fanger
I mean, we did have some extra marketing spend. So in the fourth quarter, as an example, we spent about $1.2 million more on media and advertising in the fourth quarter than we did in the third quarter. We did kind of and we did mentioned that in passing on our last earnings call for what it's worth but you do those things not necessarily for the sake of the quarter.
You do it for the sake of the longer term of the business. And a lot of that has been stripped back here in the first quarter. You know, there's the question of did we run a lot of extra spend and then it helped it.
Dan Lee
(multiple speakers) We kind of wondered well, but that didn't seem to work with ran a TV ad and so on and didn't see a lift in revenues. But then when we stopped running it, we did see a lift in that revenue. So maybe it was a delayed lift. So it is the but that's a judgment call, but I think most of the improvement going forward will be.
Lewis Fanger
And from revenues, yes, I mean, I'll flip it around you in a little bit. I was looking at our monthly gaming revenue last year, and we had numbers that were consistently around [$7 million, $5 million , $7 million, $6 million] ballpark.
So when we crossed $8 million for the first time in December, everything around telling people look, we think $8 million is the new floor, not $7 million. And now January was its own exception where you had some crazy snow everywhere in the country, including here in Waukegan.
And that ending January. But looking into February and even March, I mean, look, I'm a $8 million is clearly looking like it's the new floor and $9 million may well be the new floor. And I think what people have forgotten recently is that the casinos their best, their best months aren't in the first 12 months of opening.
It's you don't have your best month in year one or year two, and it's after that. So we are we fully believe that data of that, that there is more revenue uplift that you're going to see from here.
Dan Lee
Basically half the incremental revenue falls to the bottom line. That brings up margins because the margins are still lower than they will be at maturity. But most of the way we get there is improve revenue.
Jordan Bender
Great. And then just on the follow-up, the legacy business, you talked about the $30 million to $35 million of EBITDA. Just some commentary out there has been labor levels or wage wages continue to go up and impact margins. So how should we think about that legacy portfolio and maybe the growth profile into 24?
Dan Lee
Well, it's a little different in different parts of the country. Colorado, for example, keeps increasing their minimum wage or actually increased it years ago, but it goes up every year under the law so it's somewhere around $15 an hour now, which is about twice what it is in Mississippi.
And Mississippi has not seen an increase in minimum wage in a long time and of course, we've operated in Mississippi for a long time. In Cripple Creek is challenging.
I mean, we're trying to staff up a place that will employ 4 or 500 people in a town that has 1,200 total residents. So getting people to commute to this mountain community and work hub has a challenge. And we've been doing that.
In Waukegan there's a lot of people around here that's not so hard, but even a dishwasher has to be licensed by the Gaming Commission. And that's a and ominous 25 page form and that's been a little bit of a challenge, but we're working through that. And we now have a pretty stable workforce here and Anna, and we're pretty happy with it. So it varies from different parts of the country.
And the other thing I would just be aware of is, is, I think, like any other business if the cost of labor is going up and the availability of labor is tight. You look for ways to be more efficient with the labor, whether it's a technology that allows you to operate the casino floor a little more effectively, is it going to be a buy? Somebody came in and was pitching me on artificial intelligence stuff.
And I said, you know, we have these video on blackjack games that have a recording of somebody stealing it imagine how much more effective they would be if you used artificial intelligence that the person talks to you about, hey, guys. That was a good bet and so on. And that's I'm sure somewhere down the road. And if you can make it more of a interactive thing, then all of a sudden maybe people are less necessary to have an actual dealer.
And so now you go to the dealing games would only be higher minimums. And we've done that in a number of our markets and by the way, the dealers ultimately like that because if you don't have low minimum games, the tips tend to be higher fewer dealers and higher minimums.
And the dealers. We have some dealers who are making really good money, and we have a lot of dealers make good money, but we have some in some markets that are double what they are in other markets. So and on the same thing in food and beverage area, you find like if you go to has airports have renovated, they now have the place where you said it and I pad you order your meal and you never see the waiter until they bring your mail.
And at some point, people will be accustomed to that enough that maybe we can do that in our facilities and then the same waiter can serve more people. So you're constantly looking for ways to be more effective with the payroll and at the end of the day. And that's also good for the employees because we can pay people more per person if we have fewer people as long as we're providing the same good service. And so if it's done right, it's a win-win.
Jordan Bender
Great. Thank you very much.
Operator
Ryan Sigdahl, Craig-Hallum.
Ryan Sigdahl
Good afternoon, Dan, Louis, two on Germany. First first-hand experience, it is beautiful. It's going to be remarkable in that market. But with the soft opening several inconveniences, I'll say that negatively impacted the player experience in the first days weeks following soft openings, I guess fairly minor corrected with the ongoing construction.
But what feedback have you heard from those early visitors have you got them back to at once more things are done. But just kind of curious the trends you've seen from visitors and feedback.
Dan Lee
So recognize the hotel for the first two weeks was pretty much only invited casino guests. And so then we went back and said, hey, we're sorry or televisions weren't working writer. So the little things you run into like I was up there one day and all of a sudden the cable television wasn't working, turns out some ice. It slid off the top of the building and pancake the dish and he's like, okay, we need to get a new addition, maybe wish put it in a different spot in Ireland.
And so there are a lot of issues like that and we have no problem going back to those people and say, hey, I may have Copa, please come back and give us another shot at frankly, their casino customers. We would invite any time.
So now we have a no excuse to have back. We have some little things that little annoyance is that they really enjoyed the heck out of me but there our architect put in one of our towers, the guestrooms are supposed to have four panels of glass.
So you have this expansive view for some idiotic reason. Architect had some solid panels put in because I guess at first he said it was the energy code, but it turns out it's not the energy code. I think it was just like the look of it on the outside.
I don't know by the time we figured it out the glaciers putting up some of these panels and I think there's 25 rooms that have if the panels on the edge of the room, it doesn't matter that much because the curtains would hide it. But there's about 25 instances where the panels in the middle.
So you open the curtains and you have a solid panel block in your view, and we can't fix that in the middle of the winter. We'll fix it this spring. And so we kind of tongue-in-cheek I put a little sign on those that said the sorry, we blocked your view or architect screwed up. At one point ahead of cellphone number on the thing we decided maybe that was a little too much.
And we said the, but we're willing we're happy to give you $20 a few room rate or $20 of free play upon request because we blocked your view and the finding is the I won't say who, but the CEO one of our competitors stayed in our hotel happened to get one of those rooms and as far as $20, which you have to amortize.
So there's some of those things that you're just working through and I think any new hotel has those issues. It's certainly harder. You have to appreciate. This is one of the largest buildings built in what kind of rural, Colorado ever. I mean it's bigger than anything in Vail or Aspen in the only building similar to this where Ameristar and Monarch and Black Hawk, and they had similar issues.
She didn't have enough of a workforce to get everything built all at once. So we couldn't do like Durango station reopen everything at once because we just didn't have enough Finnish carpenters and so on so I so we had them focus on the casino and hotel, and now they're focused on the Steakhouse and then the spot. So we are opening in stages.
Lewis Fanger
And so that's a little of fortuitous in a way as well. You know, we opened into the winter at seasonally weakest in the winter. And so during this ramp-up phase, it gives us the chance to kind of season our employees get all of our amenities up and running before you get the big summer seasonal rush before we put our big marketing spend out there as well.
So it's that we knew that there were going to be issues with the opening. Every single casino opening that I've been to that Dan has been to has had some issue and I can tell you about issues at Wynn Palace. I can tell you about issues of bonds and Blue Laja Mirage, you can go through the list and unfortunately, it must have been acquired Newsday because some of our issues got made it into the local paper.
But the but, you know, it's look, we don't like having issues we want everyone to have a good experience. And for us, it is about making sure that the people that were inconvenienced will have a very, very good experience there the next time they come back.
Dan Lee
Just to remember like the L'Auberge, we had one vertical column in the hotel that didn't have hot water, somebody screwed it up and there's a whole bunch of them didn't have hot water. We had to deal with the block.
As you remember, we had spent a lot of money to have the Fountains that could go on a windy day that have a low phones and then a calm day, they will be the full Board found. So there are actually three different stages of funds and it was all designed that way.
And then I think early on, we decided to never use the low ones because people stand there and say that said, I thought this was supposed to be spectacular. So now they just announced that it's too windy to run the show and they just don't run it right, but an opening night, everybody was out there and they're tuxedos and my wife had a very expensive sell down and it was kind of windy.
And at one point I could see there, I get ready to let the Fountains go and I said to my wife, we have to get insights is what we mean is that there's no way Steve Wynn's going to let them run the low wind farms. We've got to get out of here and choose like resisting.
And I kind of dragged into the building just as the phones went and they Drench the car crowd, everybody was came in running into the place juice drinks there, tuxedos and gowns and so on. So every place as their issues. And but I think we've and I think there's also a little difference when we opened Bellagio, you didn't have Yelp and you didn't have Minister advisor, you didn't have people.
I could go broadcast there on satisfaction and so on. And usually the satisfied. People don't go out and complain, right? It's the unsatisfied people and but we're working our way through it. I think people are I literally think and you mentioned I hope you agree with me.
I think we built the prettiest, not the biggest, but the prettiest regional casino in the whole country and you walk in and it's every bit the quality that win and belies you are and we used a lot of the same designers.
And so I think it will be a long term asset for us and it will it will get there. It's getting all these accolades and but you know, there are things like we didn't have a dinner restaurant. So we've been serving dinner at a makeshift buffet in the medium space that will be rectified now other week and actually here at American place, we felt it took us a long time, but we finally got the steakhouse done.
That's a diner, I shouldn't call it a diner. It it's a modular structure that we bought from a diner company, but the finishes are not what you think of in a diner it's more like five city diner in San Francisco and <unk>. It's been open just a couple of weeks and are ready.
And on people were saying on accumulating all these points, but all I can do is eat in the coffee shop. And now we have a high-end restaurant with that and most of the core stakes and stuff that it is competitive with anything around us or anything at the competing casinos and was a good well, despite all that, I did I did pay for my room, so you got some money out of me and the casino floor was packed.
So it was actually from that actually what I will tell you it inside story that when you said, there's always a surprise and Louis and Adam and I were there the night before was supposed to open and we were checking out the ice pellets down the street and walk back into the place at about 10:30 PM at night and there were some dealers doing last-minute training. And as we welcome the building, they come running up demands.
Mr. Lee, there's water coming out of the ceiling and they show me where it's in the elevator lobby. And as we're standing there, it went from a trickle to a flood. And what had happened is it has been very windy and very cold, and it blew some of the flashing up one of the expansion joints between the building and was lying cold there into the attic part of the building.
And coincidentally, one of the heating units had failed. And so there is adequate area that have gotten very, very cold and it froze the sprinkler pipes and there was a three and sprinkler pipe that froze and it broke the end cap on it, but nothing happened because the data had a plug device in it that kept it shut and the contractor had figured out the heating issue and get the heating unit back up and it put temporary insulation with the flashing was missing.
And we happen to walk in just as that ice plug, it melted a little bit and they kicked in when it leaks a little. The fire suppression system says, oh, the pressure is down in the sprinkler system turn on the fire pump, which is like a 1,000 gallons a minute. It's going to put out the fire.
And when it did that plug device went through a wall across our server room and embedded in a while on the other side and the water came gushing out and right on the edge of our casino, where we had spent in a $1,500 a foot on the core and everything, and I weren't running up to the second floor.
Fortunately, I had the speed of the construction guys and they've all gone to bed, but the third one answer to his phone, and I told we got water and he hung up and came running down here now almost ran into each other in the second floor and looking for where the water is coming from, he knew where to turn off the fire pump and the open this closet.
And there's a thing that looked like a real lot of a submarine and it turned up the water of the property and then that we had everybody from Bronco Billy's and everything there with towels and shop vacs and everything else soaking up all the water. So it wouldn't get to the casino floor for the water sale to over our servers, but didn't actually damage any of them.
And the next morning we had the pipe repaired and the state fire marshal. We were trying to get his permission kind of shrugged and said it's Colorado pipes freeze all the time that really wasn't an issue form and we open the next day at noon.
And I will tell you at midnight the night before we were very close to having a river of water going right through the middle of the casino. So every opening Has it surprised. And hopefully, that's the worst surprise we're going to have at this one.
Lewis Fanger
So now you know why your visit was a little affected.
Ryan Sigdahl
Yes. Look, foot look forward to the next one, maybe a quicker one, Lewis just on the West flip to negative EBITDA in the quarter. I guess how much was that from the last week in the quarter with the opening of Germany versus preopening versus maybe performance from the two smaller properties in Nevada?
Lewis Fanger
Yes. Well, we made money that last week from Germany for what it's worth is you saw the casino was a pretty packed casino, really that was a carryover of the money that Bronco Billy's was losing for the rest of the quarter. We only we only had nominee for four days in the fourth quarter.
Ryan Sigdahl
Great. Thanks and good luck.
Lewis Fanger
Yes.
Dan Lee
Yep.
Operator
Ricardo Chinchilla, Deutsche Bank.
Ricardo Chinchilla
Hey, guys, thank you so much for taking my question. I was wondering if you could quickly comment on, you know, the first quarter in terms of have you seen any impact from your competitors in Illinois having the ability to operate 24, 7 and to market to, you know, more effectively is there has been a change in dynamic. You see more competition and how is the promotional environment there?
Dan Lee
Well, you know, we're quite a ways away from the Dallas facility. Our main competitors are rivers and put a lot of meat to our North and the and the slot machines at bars and liquor stores around us, and they've been 24 hours a day, seven days a week for quite some time and valleys being net on the and our drive away. But on the other side of rivers.
In other words, to get from downtown Chicago to us, you have to drive past rivers and you're halfway to us wouldn't drive best rivers. And so what happens there is a doesn't have much impact on us. I mean, probably the biggest thing we've seen as we lost some employees to Bally's when they were opening and they've come back a number of them. So and I wish them well, but they don't have much impact on us, so.
Ricardo Chinchilla
Got it. Perfect. You know, when thinking about it, you know, these fate opening of the other property, do you guys have like a target margin or like a targeted EBITDA generation for the for the year? Or how should we think about the you know, the cadence of the profitability of the industry will create properties.
Dan Lee
We have a target obviously in each of them, and Louis kind of alluded to that. But when do we get there is a tougher thing to forecast, right? Because you're trying to build to it and everything. So as long as it's still trending the right direction.
And so for example, at American place, I thought we would be where before we opened, I would have thought we would be where we are now several months ago, but we are where we are now and it continues to get better every month and that's great. And people forget that Bellagio did not make $500 million in its first year or second year or third year.
But I think from about its fifth year to today, which is 25 years, it's made about $500 million a year. And these are not short term assets so and the same thing at Germany, I mean, we are trending in the right direction. We're nowhere near the profitability that we expect to have as it matures.
We don't even have I mean, if you were there on a Wednesday, there are some times we have as many construction people wondering on the property as we have, I guess we're still trying to finish the construction.
Now on weekends, we have a lot of gas and you know, this is something that Louis mentioned, which is pretty important that facility, given where it is it's a little bit like Las Vegas. You have to be Las Vegas builds on weekends and you fill midweek with meetings and conventions and that will be the same thing at Cripple Creek.
It's the same thing in Blackhawk, but those meetings and conventions, it's hard to book them before you open them. You can promise that it's going to be a wonderful place and signed. But that meeting planner wants to see it wants to feel it wants to look at it.
And so those things tend to be booked later. And so at the moment. We're using our smaller meeting room space as a temporary restaurant, and we're really not supplanting any meetings that we're going to be in there. But in the next few months. We have to get out of that meeting room space because there are meetings on the books and there will be more meetings on the books.
And as we fill in the midweek, and that's what you need in order to get to the numbers that we have in that. And that's a gradual process now. And the summer drilling midweek will be because it's nice up in the mountains, but in the shoulder seasons and then the winter that meeting and convention business is very important and there and there's a lot of it is.
I remember being at Ameristar before we started construction outlook to Black Hawk and look around because we're pretty similar to Ameristar or Monarch, which are both very successful. And there was a meeting at Ameristar and it was quite busy.
And I was trying to figure out who is this meetings I went to their meeting. It was the Colorado association of courts to Naga first. And if it has, there's enough courts demographers in the state of Colorado to keep Ameristar pretty busy for three or four days.
And it just gives you an idea of the types of meetings that are out there that you may not think about. But yes, courts demographers have an annual convention and maybe one of these days, we'll get them to Cripple Creek.
Lewis Fanger
Yes, I don't know if it's helpful to give you a little bit of winter color. You know, January was certainly a challenging month system-wide with snow everywhere crazy levels this now I'm sure you had it there in New York where you were two.
And so we weren't immune to that over in Cripple Creek. And so don't expect us to have made significant amount of cash in the month of January. But as we kind of move out of the winter and into the summer of the script books, pretty meaningfully as snow stays away. The flip the script it flips pretty easily as well. I can't talk today.
Dan Lee
But if tomorrow, you know, if you've seen the news Tahoe has like 10 feet of snow. And so all the roads going in Incline Village, we have been closed and about their open right now, they would close this weekend.
And the other hand, their casino still open and there's much people to hire to couldn't get out. So we did a little bit of business, but the and our Tahoe always has weather you just don't know what are the risks, but it always has weather, but February in general shaped up to be really good month and we don't have the final numbers yet, but we know it's going to be pretty good.
Ricardo Chinchilla
I appreciate all the color. That was very helpful.
Lewis Fanger
You're welcome. Thank you.
Jordan Bender
Chad Beynon, Macquarie.
Chad Beynon
Afternoon, guys. Thanks for taking my question. Maybe first, just kind of thinking about CapEx. Lewis, you talked about the permanent project CapEx being pushed well into '26 and '27, how should we think about just kind of overall CapEx for '24 and '25 either from a maintenance standpoint from paying the rest of the bills on Germany, kind of what's left here in the first half? Just trying to bridge that free cash flow. Thanks.
Lewis Fanger
Yes, that well, So many Just think of the restricted cash account, largely taken care of that. We had about $38 million left in that restricted cash account at the end of the year on, I think in real time. We're literally as of today, I've got $20 million sitting in that account now, so you food for thought there.
So we'll work through that balance before the end of the second quarter. Our maintenance CapEx historically has been on the lighter side. So we've been trending close to $3 million. I tell people generally $3 million to $5 million a year for maintenance CapEx, maybe that creeps up slightly as we buy things like more slot machines.
But the yield, the nice thing is while we have some newer properties, they are new. And so there isn't a lot of maintenance CapEx outside of things like slot machines. So it's not going to be a it's not going to be a crazy year.
Actually go into kind of end of '24 and into '25 and we start generating some pretty meaningful cash flow will start looking at things like on completing the construction quality blueprints for American place and things like that, maybe even doing some site work. But that work is very, very small in terms of cost.
Dan Lee
I mean, it might be $10 million or $15 million out of the $325 million.
Chad Beynon
Yes. Okay. So Perfect, thank you. And then as we think about kind of the completion of American place permanent, any updated view in terms of that $325 million that's left to spend on what type of return we should get on that will the property significantly change in terms of who's in the property, how much it will cost to run the property? And how are you thinking about that kind of medium term, what that can mean in that deep population market?
Dan Lee
Yes, it's kind of a little bit of a complicated algorithm because we're not allowed to operate that temporary indefinitely, right? So how do you how do you really look at it right. But the temporary is making what it's making in a in a tent, strong structure.
And during the day, it looks like where the Department of Motor Vehicles store salt I mean, it really is pretty unimpressive at night. We project images on it to. So it's not just a black hole, but it doesn't have the curb appeal that you drive by and say, well, look at that once you walk again, it's a much nicer than you expect from the outside. But getting people to walk in the door is a little bit of a challenge. So the permanent will have much better curb appeal and be even nicer on the inside, it'll be somewhat bigger.
And you start looking at I mean, I remember, Rivers is making $300 million a year EBITDA. We figured and I think the part of what to me is about $200 million a year.
Lewis Fanger
It sounds right.
Dan Lee
We're trying to get to $100 million. And if you look at the demographics that should be doable with the permanent facility, it's not doable with the temporary facility, temporary facility may be able to achieve half of that. So if you say where there's an incremental $50 million for $325 million investment, that's a that's an okay.
Return now that we've invested $175 million so far, but a good chunk of that is stuff that will go into the permanent. For example, there's $20 million-odd of slot machines that we will move next door. And there's we had put in storm sewers and surface parking lots and a fence around the place.
That is all part of the permanent and then recruiting and training a workforce and which is tens of millions of dollars of pre-opening expenses. We now have a workforce that can move next door very easily.
Lewis Fanger
Three years or four years of marketing in a place right now, a lot of that sort of stuff.
Dan Lee
So there's a lot of ways to look at it. You can look at it as in the temporary, what it earns you say, well, maybe of the $175 million we've spent so far, maybe $100 million is temporary and $75 million is stuff that's really for the permanent. I'm making these numbers up now.
And so the temporary will pay for itself and then produce cash towards the permanent. And so the net cost of the permanent is not really $500 million. You end up building the permanent for $400 million net of what you did in the temporary, and then you make $100 million a year.
There's a lot of different ways to analyze it. It's kind of a complicated algorithm, but just but any way you analyze it, you get a pretty good return, which is what happens if you have the closest casino to 1 million people.
Go to Durango station and they can drill because frankly, they did a very nice job there. And in fact, there's some stuff they did there that that we're going to kind of take notice when we complete the designs of the permanent American place, they are probably the closest casino, the 300,000 or 400,000 people that that slice of Las Vegas sits on the southwest side of town.
And you look at how many people they have in the place. And part of that is in Las Vegas. We're very accustomed to thinking well, we're going out to dinner. Let's go to Red Rock Station. Let's go to Durango station. And that isn't here yet people that we don't get a lot of people who come in to have dinner at our place, and then they'll gamble before after and so there's a learning process that will come on.
But the demographics of what we have here is significantly better than what they have at Durango station. And now we're not going to spend that type of money that we're not going to be as big as they are. I think we could be the same quality that they are, but they spent $750 million. We're not we're going to spend about half that and but we can be the same quality just not as big. And we've designed it in a way that it can be expanded later quite easily.
Lewis Fanger
So it's funny sometimes, Chad, because when you think about where we are, we're located in one of the wealthiest counties in the entire country. And when I look at our gaming database, sometimes we have customers, I know that that have already gambled spent five, six figures in our casino.
And I scratch my head sometimes and I say, well, the despite they tend to work on the outside, they have come inside and then saying, oh, my gosh, this is a great place on the inside of the people are unbelievably kind of the services.
Great. And but the but the thing is there are a lot of other people in this very wealthy county that will never get past the fact that that is a tent on the outside and where the permanent will make. A lot more sense is that that building in itself will be a draw for the first time for a lot of people.
Chad Beynon
Thanks, guys. Appreciate it.
Dan Lee
Yes, I would I would tell you Rivers is a great location with not great curb appeal. Yes, drive-by, they have some backlit glue glass. We will have better curb appeal than rivers. They have a great location.
Operator
John DeCree, CBRE.
John DeCree
Good afternoon, Dan. Good afternoon. I just wanted to revisit in an earlier question. We've been getting a lot of questions about the temporary in the quarter I think Lewis, maybe earlier, you've talked about elevated marketing. If I heard correctly, that was [$1.2 million] or so in the quarter.
But I think even adding that back at the margin, it was a step down sequentially than we would have expected. So I was wondering if there's any other costs in the 4Q in Waukegan either temporary or permanent? We have structurally that we should think about.
And then the follow-up, I'll just I'll just tag into you can answer all at once in marketing, obviously a decision that you guys made but is there more of those decisions to be made in in 2024? I guess, bigger question.
How do we how do we think about the margin going forward from here or the cost structures, you don't kind of see marketing normalize next year? Or might you still think about kind of picking some spots where you see opportunity to grow the database or get some customers in the door?
Lewis Fanger
Yes. Well, you had a couple of things going on at the at the temporary here, we you did have about $1 million less in gaming revenue. So the reverse flow through, I guess it being Johnny on the other way, right? So and that really was a function more of just some a little bit of winter seasonality versus the third quarter.
And we had some actually I'm looking at, Adam, as I say this, we actually had some catch-up accruals that benefited us in the third quarter as well. So it's not quite an apples and apples to apples between 3Q and 4Q on. So a little bit of color there.
John DeCree
Great. That's helpful.
Dan Lee
And seasonally the fourth quarter is our weakest quarter in most markets (multiple speakers)
Lewis Fanger
Sorry, did you have a second part to that? I know what it was.
John DeCree
It was related to the cost structure there in 2024, you highlighted specifically that the elevated marketing, which you talked about as you know, that in 3Q and I think even 2Q as well, that you'd be doing that, but should we expect some more opportunistic, some marketing dollars like that in 2024? Or where does the marketing budget start to normalize next year or I should say as of right now.
Lewis Fanger
And I look at Dan and Jeff, as I say this, it does feel like we're going to be a lot more in a normal mode, not in an excessive mode here in 2024. I mean, there are a few things. Look, it's challenging when you open any new casino because you have to go out and do a general marketing period. And you know, and it was doubly difficult in this case because we had zero people in the database.
The data we opened today we're closing in on 65,000 people in the database. And so we can be a lot more targeted to those 65,000 people. But on top of that, we don't have to go out those general messages anymore. We can also start to look at honing in on zip codes and everything else. So it becomes a lot more of a science today than what we would have had a year ago.
John DeCree
Got it. Thanks. Thanks, Lars and Congratulation guys on in Germany opening in December.
Dan Lee
Yes, you know, it's kind of funny everybody is trying to figure out what the earnings are like this quarter next quarter. And so we have to be honest, we wanted to be trending positively to get to that $50 million in each place and $30 million from the traditional places. And whether we get there and three quarters or six quarters or eight quarters isn't as important as the fact that we get there.
And so we're focused on it and but we don't sweat it. And I sometimes think that the analyst community tends to be very much like what's this quarter's earnings and it's like, well, let me tried to get the steakhouse open and let you know, right, because you do tried to tried to fix those things.
But I mean recognize we just finished a year where we had $48 million of EBITDA at its best year in the history of the Company. We had interest expense, cash interest expense before capitalized stuff of about $35 million. So we comfortably paid our interest expense. And without having much of anything from Germany, it was only opened the last four days of the year.
And the property here in Illinois was ramping up, but it didn't do a whole lot of cash flow in the first half of the year. And so we constantly get this will untrue both to do some financing to do American places like no, actually, we're not even close. And the bond market is gradually getting better. But we don't have a need for the money now, and that's at least a year away.
And the need that we have a year away is a lot less than people think because we're producing, you know, really good free cash flow, and that's just going to augment itself throughout the year. I mean, how many stacks do you know that are trading at between 5 and 3 times free cash flow.
And that's fractionally where our stock is. I'm just a little bit not and I think people have just the looking at the fact that we have to build the permanent American place like it's some big number and it actually isn't. And we've already spent quite a bit of the money needed to build the permanent American place. So that's where we are.
One more question.
Lewis Fanger
Yes, probably time for one last one.
Operator
David Hargreaves, Barclays.
David Hargreaves
(inaudible) Hello, so I understand if I heard correctly listening to the sorry, I'm at the airport. So if I missed some stuff in the press release, I apologize. I think you opened the steak house in February, it was Keegan, and I'm interested in what the impact is there.
And then just taking liquidity from another angle, I'm curious as to how much liquidity you expect to have left over and what it might be it?
Dan Lee
Well, the that's easy. I mean, we're going to build up some cash here and then pass to the from an American place that we build the two to three years from now. Well, that's your second question.
Lewis Fanger
Yes, we're not we're not out in the market for dividends or quite frankly, our indenture doesn't allow for a meaningful stock buybacks or anything like that. So it really is for us and taking that cash, preserving it and then investing it in the permanent Merrick American place for now.
Dan Lee
I mean, we have, as Lewis mentioned, we have I think $23 million drawn under our credit facility will probably pay that down this year, '27 from what was the first question?
Lewis Fanger
Well, then the first thing is about as a steakhouse. Yes, I don't I don't know. Look, I what you probably missed, David, was we had a February is going to be our best month ever in the history of this property. That's after December having a month of $8.2 million we think February's going to be north of $9 million, not think we know it's going to be north of $9 million of published gaming revenue.
So no, it was a very, very good month. I was here. I got here on Saturday afternoon, walk the casino and had dinner with our GM, Jeff at the steakhouse. And the first thing that I said to him was Jeff's area is a completely different energy in this building. Now Good for you. It is a it is a very, very dynamic for especially on the weekends
Dan Lee
And this was the last part of what we needed to get out of Quebec. As you know, it's hard to say that can you say we have the best month in the company's history because the state has resumed for half the month, it was a contributor, but it probably would have had the best content in Fiat net.
Lewis Fanger
But it but it is an important addition for a good, a good high end of the needed amount.
Dan Lee
You get how many people through the building today.
Lewis Fanger
Through the building a 2000 day.
Dan Lee
Yes, we got 2000 people a day at the front door and we're doing 120 covers generic yet. So it's still relatively small for some people coming in the front door, even the steakhouse, but the people who do work the more important things.
David Hargreaves
And if I recall February, you have the ice festival with Cripple Creek is a pretty important month how's that going?
Lewis Fanger
It was a very good week for us in Cripple Creek with that, yes.
David Hargreaves
Okay, great. Thank you so much and congrats.
Lewis Fanger
Congrats on your new job to David.
David Hargreaves
Thank you.
Operator
We have reached end of our question and answer session. I will now turn the call over to Dan Lee for closing remarks.
Dan Lee
I'd say we're in the process of tripling the size of the company, and we're making progress every quarter. So we'll talk to you next quarter. So thank you very much, everybody, for your support.
Operator
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.
