RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q1 2023 Earnings Call Transcript

Tyler Moore: Yeah, I do. Congratulations on the quarter Eric. Great quarter, I want to talk a little bit about what you guys are doing out in Colorado. It seems like you’re spending quite a bit to get into the gaming space. I just want to know a little bit more about that about what the expansion plans are there.

Eric Langan: Sure. Thanks for the question. The main thing we’re doing out there right now is creating an entertainment zone. If you’re familiar I know Barstool Sports and Penn Gaming have the Ameristar out there great property one of my favorites, but there’s no entertainment. There’s no night clubs. There’s no fun places, I would say other than casinos. You all a gamble if you want to hit the tables you want to hit the spot. That’s great out there. If you want to go the outdoors it’s great. But as far as nightlife and for younger people, one of the big things when we first started looking up there and almost passed, because I was like well, I mean, this Colorado casinos for since 1990s come on. This is nothing new. Why would I go to this market and try to do something that nobody has been able to work for 30 years?

And so I started a study and I said, well, wait a minute. They had $5 bet. Then they had $100 bet. Now there’s no limit. In the trailing 12 months through June 30, 2022 $9 billion went into slot machine in Black Hawk Central City area. The average keep was 8%. It’s huge. The amount of money was huge. And so we said well, okay how are we going to differentiate ourselves? I don’t get to come just be the same thing. And so we saw let’s build a club. Let’s build a Rick’s Cabaret up here, and let you have nightlife entertainment. Let’s turn the music up, and let’s draw the 30-year-olds up here, because right now they rarely come up here. As we were going to the clubs, I was talking to all the people in our clubs, especially all the entertainers the wait staff or bar tenders, all this age group that’s that 20 to 35-year-old crowd I said “Hey, you all want to go to Central City, I want to go to Black Hawk with me tonight, why?

There’s no reason to go because there’s nothing to do. And so what we want to do is create €“ take Main Street in the City of Central, and say let’s do some music festivals, let’s do street festivals, they already have some, but what do we do all the stuff. And in the meantime, if we can control the nightlife, so on the street got closed 11:00, it’s a residential area. So, all the stuff goes down 11:00. We call everybody into the buildings. We built a couple of nightclubs or turn the music up and I think we can do some unbelievable business up there.

Mark Moran: Phenomenal. Thank you so much for that question. Now next up let’s bring Adam Wyden up. Adam? And Adam before you go ahead. Adam, I think you are on mute.

Q €“Unidentified Analyst : Can you hear me?

Eric Langan: Yeah. Now we can hear you.

Bradley Chhay: Yeah.