In Colorado, Cripple Creek City Council has signed off on Full House Resorts $100m expansion plan for Bronco Billy’s Casino and Hotel, which aims to spur the further growth of the area’s gaming market.
Full House Resorts’ development agreement for construction of the company’s expansion project at Bronco Billy’s Casino and Hotel in Colorado has been approved by the Cripple Creek City Council.
This approval was the last major bureaucratic hurdle to overcome prior to commencement of construction work on the expansion project. At present, the property has approximately 17,000sq ft of gaming space and 24 hotel rooms.
On 22 May, rival operator Triple Crown Casinos filed a lawsuit against the city of Cripple Creek and Full House Resorts, appealing the against approval of the expansion project.
In a statement, Full House asserted that it believes the lawsuit is “without merit”, and indicated that both the company and the City of Cripple Creek have filed motions to dismiss.
The $100m Bronco Billy’s expansion will integrate with the company’s existing casino and will include a new luxury hotel tower, a spa, a parking garage, a convention centre, and a high-end restaurant. The $14m first phase of the project was set to begin in July,
In May, Full House reported that net revenues for Q1 2018 decreased 4.3 percent to $37.9m from $39.6m in the prior-year period, while net loss for the period was $4.3m.
At Bronco Billy’s Casino and Hotel, net revenues for the quarter grew 6.5 percent to $6.2m, up from $5.9 million last year.
This was despite the impact of heavy snowfall and icy roads on the largest event weekend of the year for Cripple Creek’s casinos in mid-February, along with the increase in Colorado’s minimum wage in January.
During the Full House’s Q2 earnings call in May, CEO Daniel Lee discussed company’s plans to finance the expansion project.
“There’s many ways we can finance this. I mean, we could – the easy one is go issue equity. Of course, that makes everybody nervous about dilution.
“We could sell the Silver Slipper to a REIT and lease it back. We could bring a REIT in to help us REIT this. We could bring in a partner to do this.
“There’s many, many ways we can do it. I don’t think we can 100 percent debt-finance it on our current balance sheet.”
Despite this, he stated that debt-financing will comprise “a good chunk” of the capital for the expansion, suggesting a figure of between 60 to 80 percent.
“That’s something we’re evaluating now and we’re going to do what we believe is best for shareholders,” he added.
Lee said he wants the hotel to draw upscale customers, just as the 33-story, 530-room Ameristar Casino Resort Spa has expanded the market in the Central City/Black Hawk gaming district.
“We intend to do with Cripple Creek economically what [has] happened with Black Hawk,” Lee explained.
“AmeriStar built a nice hotel, it did really well, attracted people up from Denver who didn’t go to Black Hawk before.
“There’s one million people in Colorado Springs, Pueblo and Canyon City. Their gambling is way below the national average and the demand is there, it just needs a product that people find worthwhile …to go to,” he stated.