Full House Resorts Inc (FLL) 2010 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Full House Resorts third quarter 2010 earnings conference call. During today's presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Monday, November 8, 2010.

And at this time, I'd like to turn the conference over to Garrett Edson of ICR. Please go ahead, sir.

Thank you, Vince, and good afternoon.

By now, everyone should have access to our earnings announcement and Form 10-Q, which were filed earlier today. These may also be found on our website at fullhouseresorts.com under the Investor Relations section.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements. These statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact the future operating results and financial condition of Full House Resorts.

I would now like to introduce Andre Hilliou, Chairman and CEO of Full House Resorts. Andre?

Thank you, Garrett. Here with me today is Mark Miller, our Chief Operating Officer and CFO, who will discuss our financial results for the third quarter.

For the past few earnings conference calls, we have preached patience as we have diligently scouted for an acquisition that could be purchased at a reasonable multiple and provide the ability for significant accretion to our earnings, as well as long-term shareholder value. I'm happy to say that we believe we have found that opportunity with the September announcement of our acquisition of the Grand Victoria Casino and Resorts in Rising Sun, Indiana. At a purchase price of $43 million, which excludes $8 million in cage cash and net working capital, as well as fees and expenses as of the closing date, we believe that we have achieved our objectives, and we greatly look forward to adding the Grand Victoria to the Full House family within the next few months.

To give you the latest of our--on the timeline for the acquisition, last week we announced that we had closed on financing commitments for the acquisition from a Wells Fargo Securities-led bank group for $36 million in debt, consisting of $31.3 million term loan and $4.7 million revolving line of credit. In addition, we have already filed a casino license application in Indiana. We anticipate receiving approval on the license late in the first quarter of 2011, and we remain on pace to complete the acquisition following licensure. We expect the acquisition to be accretive in 2011 and beyond.

The Grand Victoria Casino has 40,000 square feet of gaming space, with almost 1,400 slot and video poker machines and 37 table games. The property includes a 201-room hotel with spa, pool, meeting space, and a pavilion with five food and beverage outlets, including a fine-dining restaurant, buffet, sports bar, quick-service restaurant, and a coffee shop, and also, a large multi-purpose grand theater for concerts and performance events, as well as meetings and conventions. The 300-acre grounds also contain an 18-hole Scottish links golf course with full-service clubhouse. The property is conveniently located within driving distance of Indianapolis and Cinncinati and near Lexington and Louisville, Kentucky and within a 100-mile radius of 5.2 million adults.

Moving on to our current operation, we are pleased to report third quarter earnings of $0.12 per share, which is comparable with the prior year period one, excluding the one-time pretax gain of $1.4 million in 2009. The third quarter, primarily driven by the FireKeepers, generated revenue of $8.6 million, net income of $2.2 million and an EBITDA of $4.3 million.

We had another strong quarter at the FireKeepers Casino, as we celebrated the one-year anniversary of its grand opening in early August. We are thrilled with the success that we have seen at FireKeepers, and it is a testament to the hard work and dedication of the tribe and to our management team.

GEM, a 50%-owned joint venture with RAM Entertainment, received $6.5 million in management fees for the quarter, an increase sequentially from $6.6 million in the second quarter of 2010. For the first year, GEM received a total of $24 million in management fees. For the quarter, gross slot win per unit per day for the quarter was $264, and table win per unit was just under $1,105 per day, both up from the second quarter. EBITDA remains solid, an impressive 61.5% for the quarter.

Going forward, despite a continuing weak economic environment and additional competition on the horizon, we believe there still remain growth opportunities in the south central Michigan market for the FireKeepers Casino to take advantage. In anticipation of the competition entering the market, we continue to refine our marketing strategy and further improve our already outstanding service. In addition, we continue working with the FireKeepers Development Authority on expansion opportunities for the facility.

At Stockman's, the northern Nevada market's persistent weakness continued to have a negative impact on results, but we believe that we are beginning to see sign of stabilization at the property there. The third quarter saw us taking another significant step forward in delivering the shareholder value that we have been pursuing since we arrived here five years ago. First, Delaware keeps on delivering revenues as negotiating that contract, despite tougher competition, higher taxes and a weak economy. We acquired the Stockman's Casino at a reasonable price, and it continues to be the market leader in Fallon, Nevada.

Next, we focus on the FireKeepers opening, and I hope all would agree that we have more than delivered the first-class facility, successful opening and a strong operating result for which we all were hoping.

Now we begin the process of acquiring the Grand Casino. We are very excited to be entering this new phase in Full House history, and we believe that we are extremely well positioned to continue creating shareholder value and growth for the long term.

I will now turn the call over to Mark to go into more detail about the financial results for the quarter, and then I will close with a few additional comments. Mark?

Thank you, Andre. I will review a few highlights of our third quarter 2010 financial performance and condition, and then we'll be happy to respond to questions you may have at the end of our prepared remarks.

For the third quarter ended September 30, 2010, earnings per share attributable to the Company were $0.12 versus $0.17 per share in the prior year period. Third quarter 2010 and 2009 results were based on weighted average common shares outstanding of approximately 18 million shares. Net income attributable to Full House was approximately $2.2 million, compared to $3 million of net income in the third quarter of 2009. Please note, however, that in the third quarter of 2009 there was a $1.4 million one-time net pretax gain. Excluding the one-time gain, net income per common share in the third quarter of 2009 was also $0.12.

Andre gave you most of the operating statistics for FireKeepers, so I won't repeat them here, but GEM earned management fees for the quarter of $6.5 million, compared to last year's $5.8 million. Last year, of course, benefitted from the grand opening revenues experienced in August and part of September, but only had two months of operations compared to this year's full three-month quarter.

As our marketing database, which now exceeds 500,000 players, continues to mature, and we are able to more effectively market to them, we are experiencing continued revenue growth at the FireKeepers property.

Stockman's Casino contributed approximately $2.1 million in revenue for the three month period ended September 30th, 2010. This was down 2% from the prior year period, primarily as a result of continuing economic weakness in northern Nevada and a lower slot-hold percentage than we experienced last year. We continue to maintain a lean cost structure, but have reached a point where we believe additional cost reductions would negatively impact our customer experience. As a result, EBITDA for Stockman's was a little over $500,000 during the quarter.

SG&A expenses of $1.5 million in the third quarter of 2010 were down from $1.8 million in the prior year period, primarily due to lower incentive compensation expense recorded this quarter. I'd also remind you that full expenses of GEM are contained in our SG&A costs, and RAM's 50% share of those costs is credited back to us on the net income or loss attributable to non-controlling interest line found near the end of our income statement. We did incur approximately $84,000 in expenses this quarter related to the acquisition of the Grand Victoria.

Equity and net income from Harrington Raceway and Casino was up 5% from the prior year period in the third quarter, which is in line with the guaranteed annual increase provided in the Company's agreement with Harrington. On a year-to-date basis, our Delaware income is up 2% from last year, and we continue to receive a 5% increase in cash payments year-over-year. We still expect income from Delaware for the full year will be flat to slightly up compared with 2009, as timing differences even out over the course of this year and last year. The term of the management agreement is through August of 2011, and we expect to continue to receive at least the 5% minimum annual increase in payments as set forth in the agreement, which is providing the Company with protection from competition, tax increases and other economic pressures in that marketplace.

We recognized no unrealized gains or losses on notes receivable during the third quarter of 2010, as opposed to recognizing unrealized gains on notes receivable of approximately $249,000 in the prior year period. We continue to monitor the progress of our Nambe receivable and have approximately $399,000 of exposure on our balance sheet at this point in time. Interest income declined approximately $109,000, as the Company is no longer accruing interest on its FireKeepers receivables, which we collected in February of this year. With most of our tribal receivables either collected or reserved for, and assuming Nambe receives its financing in the near future, tribal-related unrecognized gains and interest income should have only a modest impact on results going forward.

Interest expense declined by approximately $45,000, as we have repaid all of our remaining debt at both the Full House and GEM levels. As mentioned on past calls, during the third quarter of 2009 we reached an agreement with RAM Entertainment, our partner in GEM, related to certain reimbursable advances made over the course of many years. We had recently been receiving 70% of the distributions until such time as the full $3.1 million remaining payable to Full House had been repaid. As of September 30th, our balance had been paid in full, and in August, we reverted to the normal 50/50 distribution basis with RAM Entertainment.

Income taxes for the third quarter of 2010 came in at about 43.2%, reflecting a higher concentration of income from Michigan. Consolidated EBITDA, net of RAM's share of the GEM results, came in at approximately $4.3 million versus $3.6 million in the third quarter of last year.

In May 2010, our Board authorized a program to repurchase up to $1 million worth of shares of the Company's common stock. The plan expires on December 31st, 2010, does not obligate the Company to acquire any particular amount of common stock and may be suspended at any time at the Company's discretion. As of November 5th, the Company has not repurchased any shares.

We had approximately $17.5 million in cash on hand and no debt outstanding as of September 30th. Availability under our loan facility with Nevada State Bank stood at $7.9 million.

Last Monday, we announced that we had executed a credit agreement and obtained a financing commitment from a Wells Fargo Securities-led bank group for our purchase of the Grand Victoria Casino and Resort. We have a commitment for a $31.3 million term loan and a $4.7 million revolving line of credit, for a total facility of $36 million. The facility will fully amortize over a five-year term and is expected to have--initially have an interest rate of LIBOR plus 550, with a 150 LIBOR floor. We expect to apply approximately $19 million in cash on hand, including deposits made and expenses incurred to date, and $33 million of debt to fund the acquisition when we close in the first quarter of 2011, all of which is, of course, subject to customary regulatory approvals.

During the quarter, the Company incurred approximately $84,000 of expenses related to the acquisition and made a $500,000 purchase price deposit. In October, in conjunction with the closing on the financing commitment, we made an additional deposit to the seller of $4.5 million and paid $1.8 million in financing-related fees. The fees will be treated as deferred financing fees on our books starting in Q4, and we now have a total deposit related to the transaction of $5 million. We will not be making any additional deposits between now and the closing in the first quarter of 2011. At this point in time, we have funded approximately $6.9 million of the expected $19 million we planned to fund from cash on hand. We have approximately $13 million of cash on hand as of today.

And one final note. We plan to leave the existing Nevada State Bank facility in place until immediately prior to the funding of the Grand Victoria transaction, at which time it will be terminated and replaced by the Wells Fargo facility.

With that, I'll turn it back over to Andre for a few final comments before we open it up for questions. Andre?

Thank you, Mark.

To sum up, we continue to expect significant fresh cash flow generation in the fourth quarter, aided by FireKeepers, as we prepare for the entrance of the Grand Victoria Casino and Resort to the Full House family. It is an exciting time to be part of Full House, and I look forward to be sharing more information with you regarding the Grand Victoria and any further growth initiatives on our future calls.

Thank you for your time today, and I will now open up the call for questions.

Thank you, sirs. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions)

And our first question is from the line of Justin Sebastiano with Morgan Joseph. Please go ahead.

Thanks. Hey, guys.

The player database, what was the number at the opening? How many players did you have in there?

We had about 75,000 to 80,000 members the day we opened, Justin.

Right. And you have, you said, over 500,000 now?

That's correct.

How many--do you know how many you open every month or what's the average by week or however you guys actually look at that?

You know what, Justin, I haven't really been keeping track of it the last couple of months or so. The database is growing, but it's obviously slowing down as we mature. I don't have that number right here in front of me.

Okay.

But, I mean, is this where you thought you would be? Is this above expectations? Where--?

I think we're a little bit ahead of expectations, Justin, and I think we're very pleased with the fact that we not only have somewhere between 500,000 to 600,000 people in the players' club, but about 90% of them are active, which is really the more significant metric.

So, I think we're very, very pleased with where we are today.

Okay.

Andre, I think you had mentioned you're going to be going over expansion opportunities with the tribe. I assume this is--front and center is the hotel. Is that something that you believe is probably the top of the wish list for the tribe?

Well, you know, I can't speak on behalf of the tribe, Justin. I think the tribe has always--want to do what's right for the customer base at the right time. They're also very conservative, so eventually I think it might happen. But, at this time, I really have to leave that for--to the tribe to answer.

Understood. Okay, so--.

--Because it's really a tribal answer.

I got you. So, let's assume, though, that that is the way they're going to go. Do you know--do you get to extend your management contract for the development of the hotel? I mean, I assume it's--you're still getting a management fee off the bottom line of the property, and the hotel would then become--or whatever it is that you guys end up putting, whether it's a meeting space or what have you. You still get the management agreement fee off of the bottom line of the property, so anything that you help them expand, will you then get to extend your management contract for whatever the negotiated years--?

--A, it's way too early to talk about that, Justin. We really can't talk about that at this stage.

Okay.

And then, with the Grand Vic, I mean, the financing seems to be out of the way, and that's--the last hurdle at this point is just getting licensed by Indiana. Is that fair to say?

It's fair. It's fair, but we have all been licensed in many jurisdictions. So, yes, that's it.

Okay.

After that, we're ready to go.

Great.

And then, you're--you guys are happy with the management team that's in place there right now? You feel like they've been there for awhile, and they know what's--they know that competitive environment pretty well?

I think that's fairly accurate.

Okay.

And then--.

--I mean, I think, Justin, that we're very impressed with the management team that's there. We've always said that when you--when we were looking at acquisitions, we have a number of criteria, and one of the criteria is having a strong management team in place. And we certainly feel like the Grand Victoria opportunity meets that criteria fully, and we're--we've had several meetings with those folks. We're looking forward to the opportunity to work with them. We're obviously limited in what we can do until we're licensed in Indiana, but we feel very excited about the property and the management team and the entire employee base there. I think we're very, very impressed with the level of customer service and their knowledge of the business.

The more we talk to them, the more impressed we are, Justin.

Got you. Got you. That's good. Okay.

And then, just lastly, the growth prospects, I mean, you guys have hit exactly what you said you're going to do. You opened FireKeepers as best you could, and, I mean, the numbers out of there speak for themselves. And now you've pulled off the acquisition that everybody's--was clamoring for and will hopefully get that closed in the first quarter.

I mean, clearly, I don't think you guys are sitting back now. I mean, obviously, you'll be focused on getting Grand Vic closed and performing well, but what's on the horizon as far as acquisition targets? I mean, are we still looking at $8 million to $10 million or $11 million in EBITDA or do you think you could go up a little bit on that? I mean, is management contracts where you want to be? What's sort of the long-term vision now for the Company?

Well, I think, Justin, that one of the keys to our success, as you--as I think you understand, is that when we've taken a project on, we've focused on it, and we've tried to avoid being distracted. And I think we demonstrated that successfully with FireKeepers, and we're not underestimating the Grand Victoria acquisition. It--there's a lot of work to be accomplished between now and when we close in the first quarter. And all opportunities have their challenges, and there's certainly a lot of potential there.

So, we are going to focus very much over the next four to five months on making sure that the Grand Victoria acquisition goes smoothly and that it performs as absolutely as best as it possibly can. And, of course, our current operations, including FireKeepers, are very important to us.

So, I think that on the acquisition front, as you know, these acquisitions come when they come, and we have to continue to be in the market looking at them. We are going to continue to do that. We're going to continue to respond to opportunities and see how they fit for us. And we are very actively interested in and pursuing the potential for management contracts where capital contribution, equity contribution, would be a little bit less important.

But--so, I think that in terms of order of priority right now, it's Grand Victoria acquisition and current operations, and we will continue to look for growth opportunities, recognizing that for the next four or five months, the Grand Victoria will occupy us both from a capital structure perspective and from a personnel, organizational structure.

Okay, thanks, guys.

Thank you, Justin.

Thank you. Our next question is from the line of Adam Steinberg with Merriman Capital. Please go ahead.

Yes. Hi, guys. Thanks for taking my questions.

Andre, Indianapolis Downs defaulted on their second lien note. I was wondering if that's--if there's an opportunity there for you guys to think--maybe step in if that property's foreclosed upon to manage it or if you're hearing of another competitor that you might--that you're--is going to go in there?

You know, Justin, at the end of the day, as Mark said, we incorporate--incorporating the Grand Vic in the Full House family is--will be one of our major goals over the next four to five months, as well as ensuring that Fallon and FireKeepers do well. So, I think over the next four to five months, we're really going to focus on the FireKeepers--I mean, on the Grand Victoria.

You know, I would just add to that, Adam, that the Indianapolis Downs and the Grand Victoria are competitors. And while we would--while we certainly would be interested in looking at a management agreement there, it's possible that a lender or an owner would have concerns about the potential conflict.

All right.

What are you hearing on--everyone expected if Governor Strickland won, that he was going to ask for summary judgment on VLTs at the racetracks. What are you hearing is Kasich's viewpoint on that, and do you see that as a threat?

You know, we haven't heard anything as of yet. The election is--was--it took place a few days ago, so we haven't heard much about that.

But, I think when someone new comes in the process, it's always a little bit of a learning curve. But, we see that as somewhat positive for us.

We haven't seen anything different than what you've seen, Adam. Kasich has said that he's going to take a hard look--hard and comprehensive look at it. He hasn't said one way or the other how favorably disposed he is towards it. But, as Andre said, we expect that it'll take some time for him to formulate a position, and we'll see what happens.

Okay.

I think that eventually it's got a good chance of happening, though. The question is when.

What's the budget situation like there? Can you refresh my memory?

In Ohio?

Yes.

They have a budget issue just like everybody else--.

--South Dakota doesn't, but--.

--They're certainly moving towards--they've got the Casino Initiative underway.

And I think the VLT question is an expansion question, and you've seen this in several states where it seems somewhat logical that they would make the step towards VLTs at the racetracks. And in some states they have, and in other states it's been a long and arduous process. So, we're just going to have to wait and see what happens in Ohio.

Okay.

GM is looking to rework that Lancing plant they have to do some Cadillacs. It's going to add about 600 jobs. Which is closer to Lancing, Gun Lake or FireKeepers?

We would be a bit closer to Lancing.

Okay.

But, not significantly closer. I think Lancing will be a marketplace for both us and Gun Lake.

Okay.

Mark, the other revenue line is $103,000. If you do the math, Stockman's is only $18,000, so where's that other $85,000 coming from?

We had a one-time consulting agreement. During the quarter, we did some work on a deal, and we had a little bit of income that flowed through there. But, it's a one-time deal.

Okay.

So, I shouldn't count on that then, obviously, going forward?

No. No, you should not count on it as going forward, right.

All right.

My last question, and I'll let you guys get back to the rest of the callers. Mark, I'm trying to calculate how you got the interest income of $3,000. I mean, your average cash balance for the quarter looked like it was around $13 million. Even just a small 0.5% interest rate on your bank holding should have gotten you a little bit more than $3,000 in interest income.

Yes, if you look in the 10-Q, Adam, one of the interesting quirks in the law has been the extension of FDIC insurance to bank balances, provided they do not bear interest. And we, like many people, have opted for the full FDIC insurance coverage and given up the very, very minimal interest earning opportunity in return for that FDIC insurance coverage. So, effectively, we're not earning anything on our cash balances, but we--but our cash balances are fully insured under the FDIC.

I thought that was taken up to about $250,000 or is that different for business?

That's for an individual. For businesses, Congress passed a--this has been in place now for a little while--a provision that provided for companies to have their bank balances fully insured. But, in order to qualify for that insurance, you had to--they have to be in non-interest bearing accounts.

There's a--there's some discussion about that in our 10-Q. It's probably buried a little bit, but if you want to take a look at that, and then if you have any additional questions, we'd be happy to answer them. But, I think we've just come to the conclusion that the additional--the FDIC insurance was worth more to us than the small amount of income we would have otherwise earned.

And is that--probably there's not going to be--is that for a limited time period?

It is for a limited time. It's been extended at least once, and I think it's extended through the end of this year. And I'm not really sure what the prospects are for extension.

Okay. Thanks for your time, guys. I appreciate it.

Thank you.

Thanks, Adam.

Thank you. Our next question comes from the line of Mark Argento with Craig-Hallum. Please go ahead.

Yes. Hey, guys. Congrats on getting the funding in place for the Grand Vic deal. It's not an easy environment out there, even though things look like they're improving a little bit. So, that's great to see you guys were able to put that together.

In terms of that--.

--Thanks, Mark.

Yes, in terms of that property, and I think you've alluded to it, but how do you feel about the way the property's been kept up? Will it need a lot of additional capital or any additional capital, sizeable capital over the near term? And maybe longer term, maybe what are some of your high-level plans, assuming, of course, you get through the--get through and close the deal?

I think the property has been very well kept. I think that Hyatt is known for keeping their properties rather well.

You know, at the end of the day, we looked at the casino floor. We will improve the casino floor as needed, whenever needed, but otherwise we are very satisfied that the property that we are buying is in very good shape. It will require the usual upkeep that a casino needs, but that's about, frankly, where we see the Company going. We might look at maybe extending a few suites here and there, but we like what we see, and it's in good shape.

Great.

And then, in terms of the management contracts that you might--guys might be looking to go after here given the fact that you have a pretty full plate in terms of the Grand Vic deal, I mean, what--are these clearly non-native, I'm assuming, type contracts? And I know you guys have been out talking with a lot of people over the last two years looking for deals. I mean, do you sense that sellers are becoming more--a little bit more realistic across the board in terms of valuations or--I mean, how do you see that market right now and people's willingness to bring in third parties to help them through their situations?

Native management are really few and far between now. I think some of the management contracts that are out there are really reorganizations. So, as those properties come to reorg, I think they--there is some good opportunities to manage those properties. But, again, it is taking an awful long time for those properties to come out of reorg. Some have been in it for two to three years.

Valuation, I think valuations have come down. I think that the owners of the property are much more realistic now that--and as shown by the Grand Vic. The Grand Vic is a prime example. Well, if you do your homework, you can get a good property at a good multiple. I don't think the Grand Vic is the only one out there.

Well, great. Well, congrats again, guys.

Thank you.

Thanks, Mark.

Thank you. Our next question comes from the line of David Bain with Sterne Agee. Please go ahead.

Great, thank you.

Hey, David.

Hey, how you doing? On your script earlier, you mentioned you may be altering your marketing plan a little bit with regard to the--well, hoping to offset competition, I guess, in Michigan. And I'm wondering, kind of, granularity wise what that may encompass, and also forward margins, if that may have an impact at FireKeepers?

Well, I think, David, it's just part of the natural process. As our database has grown and matured and we're able to more accurately understand where our customers are coming from, what their trip values are, and what kinds of marketing programs they respond to, I think that that refinement process is still very much underway, and we obviously are looking very carefully at customers that we are getting who may be--who may also be customers of the future Gun Lake Casino.

So, I don't think it's a significant change in marketing philosophy, but I think it's--it definitely has, sort of, been part of the natural evolution of understanding our customers. And this is one of the things that we talked about when we first opened the casino, why it was so important for us to have a lot of people in the club day one, to actually have cards in their hands when they walked in, because it gave us an opportunity to gather this data faster than you might otherwise and be able to start using it more effectively. And I think we're--I think that's part of what drove our third quarter results and will continue to drive our results going forward.

But, I don't think that that marketing refinement will necessarily have, in and of itself, a huge impact on margins.

Okay.

We are expanding our reach, that's really what we are doing. And we are also focusing on where Gun Lake will be competing with us. So, we are doing that as well.

Okay.

And then, the same kind of question on Grand Vic. I mean, with the upcoming Cincy build in '12, how you maintain that core customer from Cincy coming. Maybe, if you could, one, quantify the percentage of visitation from Cinncinati to the best of your ability, and also, have you started to review some strategies?

And, maybe, Andre, if you can give us just a general backdrop of--you worked in a competitive market in the past, and when a new property opens up, what's your personal strategy or philosophy around something like that?

I think the customer base that Grand Vic has is a very loyal customer base. In order to get there, they already have to pass in front of two competitors, Belle Terra and Hollywood. So, it's a customer base that is very loyal.

What we intend to do is to do what we have done in all of the properties that we manage, to look at the customer base and to use the tools that we have used at FireKeepers and any place else to expand that customer base. We will have to also deal with a casino in Cincinnati, but it's an urban casino, and we are a suburban casino, two different customer base.

We feel pretty confident that the existing management team has done a great job over the last year or two or three, especially the last two years, to service that customer base, to meet the needs of that customer base, and to really, to a certain extent, increase or at least retain that customer base. And the last quarterly report that they had that was discussed--I think the last numbers that came out of the Gaming Commission have shown that they have done a good job retaining that customer base.

So, I think that what is there will probably stay there, and we're going to work on increasing that base as well. We can't really give you now any numbers on the customer base coming out of the Cincinnati area since that information is private as of now.

Okay. Okay.

And then, on Grand Victoria, I'm looking at the revenue through--I guess, last month is when I can tell, and I'm wondering on the margin trajectory how that's looking? If you can give us a sense on that.

Well, again, David, we have to be careful here. We don't own the property yet, and it is a private entity. So, numbers are not ours to give you. But, we can give you some general--a general sense. The Grand Vic has been improving its market share performance over the last several months. You can get that from the Indiana revenue numbers.

I know that there's been some speculation in the marketplace that Grand Vic has been ratcheting up its marketing spend. We can tell you that that's not true. If anything, I think the Grand Vic management team has been gradually reducing their marketing spend. We can't give you the numbers. We can't really tell you what margin impact has been, but we can tell you that they have been rationalizing their marketing programs. And in the process, their market share has actually increased a little bit.

So, that's about all that we can tell you right now about what's going on there. But, we are monitoring it, and the results to date have been very consistent with what we modeled as part of our purchase price expectations.

Okay, great. Thanks, guys.

Thank you. And I'm showing no further questions at this time. I'd like to turn the conference back to management for any closing remarks.

Well, we would like to thank everyone for their participation on the call today and for their support as we continue pursuing growth on behalf of our shareholders.

With that, we will end the call and wish all of you a great rest of the week. Thank you.

Thank you, sir.

Ladies and gentlemen, if you'd like to listen to a replay of today's conference, please dial 1-800-406-7325 or 303-590-3030 using the access code of 4378444 followed by the pound key.

That does conclude the Full House Resorts third quarter 2010 earnings call. Thank you for your participation. You may now disconnect.