RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q4 2022 Earnings Call Transcript

Eric Langan: I mean there’s other stuff we’ve looked at. Obviously, we’re not a casino company. So, we would have to have some type of entertainment, restaurant-type component that would be the driving force for the business and the gaming would be just something to create extra revenue of up. We want to have a business as a standalone that has gaming added to it versus just a straight-out casino. But yes, we’re definitely looking at other things out there. I think that what people don’t realize, I think, in Colorado is the — they used to have $5 limits, those limits were removed in September of 2021. And because of COVID, I think that some of your casino operators have just been behind the ball on that. I know Tilman Fertitta of Golden Nugget just recently bought a casino in Cripple Creek which is one of the other three towns out there that have some great opportunities for about $43 million for the casino he just purchased out there.

And I’m sure based on the license applications, there’s several other applications, mainly smaller casinos in Central City or applications are being applied for. So, I think it’s coming. I think we’re just — we got kind of got lucky and got ahead of the curve with the changes and just happen to be out there because of the acquisition we did, the five clubs in Denver really gave us the opportunity to get out there early and get ahead of things. So, we’re looking at other opportunities out there to bring more entertainment to that market and hopefully make Central City, the entertainment capital along with gaming and then with the main gaming casinos where the big boys are out over in Black Hawk, let them bring the people out and then we’ll entertain them and send them back to Black Hawk.

That’s kind of the thought process right now.

Lynne Collier: That sounds great. I have just one more question about Bombshells in Colorado. Will you have to change the prototype less patio. Is there — are there any adjustments to be made for Bombshells when you go into a colder weather market?

Eric Langan: Absolutely. What we’ll do with the patio, we’ll still have the patio but it will be more covered. Right now, we only cover about 60%. We’ll cover 100% of the patio. And we’ll put in basically their glass folding walls. I don’t know if you’ve kind of seeing some of the — excuse me, the big stadiums like in Minnesota, where they have the walls, the whole wall just holds up and you got 40-foot of wall that basically folds up into about a two and a half-foot column. We’ll be using stuff like that type of design of glass work in that. It raises the cost about $300,000, but still well within the ROI that we need to build the location.

Lynne Collier: I just have one more question. Can you talk about the demographic draw of the two new night clubs that you just bought?

Eric Langan: The two brands? Is that–

Lynne Collier: Yes. The demographic — Baby Dolls and Chicas Locas?

Eric Langan: Sure. Obviously, Chicas Locas is a very Hispanic-based. It’s crazy girls, it’s the translation. And so it’s very Hispanic-based. Those three clubs are in really nice markets for that. And then the Baby Dolls is very traditional. It’s hard to explain without actually seeing it. So, it’s a very — I call it — if anything would be a middle class strip club. That’s how — that’s kind of Gentlemen’s Club, very Texas based. So, there’s country music, there’s a lot of more classical rock 90s, 80s, 90s, early 2000s music played there. And it’s very — I think the Baby Dolls and Dallas is a very large building, super high ceilings and just a great fun atmosphere. The easiest way to explain it.

Lynne Collier: Thank you, Eric. I think I’m good. Thank you.

Mark Moran: Fantastic. Thank you so much, Lynne. And Eric, as you were saying, I’m a big fan of Baby Dolls, so I was very happy to see that acquisition. Now, I want to take a moment to do two things. First off, I would like to encourage everyone to retweet this Space for us to be able to get as many people here as possible and to follow the example of 90s random consultant who had a nice retweet of this space recently. I would now like to open the floor to everyone who would like to ask a question, and we would encourage you to do so by raising your hand so that we can be made aware and we’ll bring you up. First off, we’re going to bring the largest shareholder of RCI, Adam Wyden from ADW Capital. Adam take it away. Hey, Adam, you’re on mute.

Adam Wyden: Can you hear me now?

Mark Moran: We can hear you now.