Detailed narrative
American Place Performance & Outlook
American Place continued its record-breaking performance, with May 2026 gaming revenue reaching $12.7 million, exceeding previous monthly highs. The temporary facility has seen consistent growth, and management expects this to continue, with July being the second-best gaming revenue month ever. The permanent casino, while still 18-24 months out, is designed for expansion and will address capacity constraints, with management noting that the temporary facility is not yet capped out.
Chamonix Turnaround Efforts
Following a marketing agency change, Chamonix launched new strategies, revamped branding, and augmented its casino host team. These efforts led to a nearly 12% revenue increase in Q2, though EBITDA was approximately break-even. Management aims to significantly improve 'win per position per day' from $175 to the Blackhawk average of $330 or higher, targeting $30M-$40M in annual EBITDA over the next 18 months by filling the hotel and expanding the customer database, particularly focusing on VIP segments.
Permanent American Place Casino Development
The company secured legislative and gaming board approvals to extend the temporary casino's operation until February 2029, ensuring minimal downtime during the transition to the permanent facility. An amendment to the development agreement with the City of Waukegan allows the temporary structure to be retained for five years post-opening for potential use as an event center, a new revenue opportunity not included in current projections. This facility is noted as potentially the largest event center of its kind between Chicago and Milwaukee.
Complex Financing for Waukegan
The refinancing of existing bonds, financing of the permanent casino construction, and closing of a new revolving credit facility are progressing, with commitments secured for the revolver. The process is legally complex, involving inter-creditor issues and extensive documentation (estimated at 1,500 pages). Management is confident it will be completed in Q3 FY26, with some architectural and civil drawings already completed and soil testing underway to accelerate construction post-financing.
Operational Refinements & Property Updates
Rising Star was impacted by a 42-hour power outage, resulting in a quarterly loss. Silver Slipper saw slight revenue decline but improved EBITDA by eliminating unprofitable business. Grand Lodge Casino continues to be affected by the Hyatt Lake Tahoe renovation, now expected to complete in H2 FY27, impacting earnings. Chamonix is also undergoing F&B improvements, like the successful relaunch of Don Juan's Mexican restaurant, and optimizing slot machine placement in underutilized areas.
M&A Stance
Management indicated a low appetite for M&A due to current focus on American Place and Chamonix, high leverage, and undervalued equity. While open to opportunistic, creative deals (e.g., with a REIT to acquire property and operate), they are not actively pursuing acquisitions at this time, emphasizing that their current equity valuation makes using it for M&A unattractive.