Macquarie Research Analyst Chad Beynon recently called Full House Resorts “the most creative gaming company nobody ever heard of.” Its share price has increased three-fold since Lee took over. The company’s five properties produced net revenue of $161 million last year, driven by an acquisition in mid-2016. However, Full House still posted a net loss of $5 million, due to bad weather in the South and Midwest, and no snow in Northern Nevada.
But Full House Resorts President Dan Lee, who took over as chairman in December 2014, has plans. For example, Full House’s Rising Star Casino in Rising Sun, Indiana expects to get a boost this summer from a new $1.5 million ferry service scheduled to start on July 4 weekend. ‘’If they don’t come through on time, I am going to be in a tent in front of the Corps of Engineers office in Louisville and I will sit there until they give us the permit,’’ Lee stated.
Located on the Ohio River near Boone County, Kentucky and Cincinnati, Ohio, Rising Star previously generated $50 million cash flow on $160 million of revenue. But after two competitors opened near bridges bringing customers from Kentucky and Ohio, cash flow fell to $2.7 million.
Boone County, population 120,000, is located just 2,000 feet across the Ohio River—but a one-hour drive from the casino. Data indicated Indiana residents living near Rising Star lose about $150 a year at Full House but Kentuckians were losing just $4 a year, meaning they primarily were playing at the other two casinos closer to home. So with building a bridge out of the question, Lee determined to revive ferry service—probably the first owned by a U.S. casino–to tap into the potentially lucrative Boone County market.
Currently Lee is awaiting the Corp of Engineers’ permission to operate the 10-car vessel that would make a round trip every 10 minutes. In anticipation, he is creating a “sense of arrival” at Rising Sun, upgrading an old pavilion with trees, new flooring and street lights.
Earlier, Lee, the former chairman at Pinnacle Entertainment and chief financial officer at Mirage Resorts, created a “sense of arrival” at the 129-room Silver Slipper casino in Bay St. Louis, Mississippi. Before Lee became head of Full house in late 2014, Silver Slipper’s cash flow had declined by 20 percent, due to increased regional competition. He personally piloted a single-engine turbo plane to a tree farm to select 20 Zahidi palm trees, worth $130,000, to plant around the pool he had built at front of the hotel overlooking the white beach along the coast—visible to guests as they arrived.
When Lee was Pinnacle’s chairman, he invested $370 million in 2008 to build the 700-room L’Auberge Casino Resort, the largest in Lake Charles, Louisiana. Lee said players from Houston, a 2-hour drive away, would spend the night if there were non-gaming amenities. Today the property generates about $150 million in cash flow. “It was the right call to realize that people traveling that far want something more than just gambling. That’s the same evolution of Las Vegas in the last 30 years,” Lee said.
Now Lee is applying the same philosophy at Full Houses’ new property in Cripple Creek, Colorado, about a 2-hour drive from Denver. “When you look to Cripple Creek, it doesn’t have that today. It really is just a town with slot machines. So we’re making basically the same bet we made in Lake Charles,” Lee said, adding success in Cripple Creek will “put the company on the map” of gaming operators.
