Rick's Cabaret & Steakhouse in Colorado: A Strategic Play on Historic Gaming and Event Momentum

RCI Hospitality Holdings (NASDAQ: RICK) has positioned itself to capitalize on a unique confluence of cultural momentum and geographic opportunity with its new Rick's Cabaret & Steakhouse in Central City, Colorado. Set to open on June 27, 2025, the three-story venue merges Las Vegas-style nightlife with fine dining in the heart of the federally designated Central City-Black Hawk Historic District—a nod to the region's mining heritage while catering to modern entertainment seekers. This strategic move taps into a high-margin niche, leveraging the area's gaming tourism and two major events: the Stills in the Hills festival (June 28) and the Central City Opera's season launch of The Barber of Seville.

The timing could not be more fortuitous. The Stills in the Hills festival, celebrating the end of Prohibition, and the opera's opening draw tourists seeking both history and leisure. RCI's venue is poised to capture this traffic, offering a rare blend of adult entertainment and gourmet dining—a formula that differentiates it from traditional casinos. Eric Langan, RCI's CEO, emphasizes the vision to make Central City a hub where “history, hospitality, and excitement converge.” With over 60 locations nationwide, RCI brings operational scale and expertise, enabling it to optimize pricing and manage risks in a competitive market.

The stock's valuation, however, presents an intriguing opportunity. shows muted volatility, suggesting underappreciation of its growth potential. Analysts note that RICK trades at a 25% discount to peers in adult entertainment, despite its geographic diversification and niche focus. Meanwhile, highlights steady expansion in the state, even after past setbacks like canceled casino plans.

Risks remain. Regulatory hurdles in adult entertainment—such as licensure and compliance—could disrupt operations, as seen in Denver's recent license revocation proceedings. Operational challenges in a new market, including labor costs and competition, also loom. Yet the Central City project mitigates these risks through its historic district designation, which may offer tax incentives, and the immediate demand from concurrent events.

For investors, RCI's Colorado play represents a compelling contrarian bet. The stock's current valuation does not yet reflect the synergies of its strategic location and event-driven tailwinds. With a market cap of $280 million and projected EBITDA margins of 30%+, the expansion into Central City could unlock significant upside. We recommend a buy rating for opportunistic investors seeking exposure to underpenetrated niche markets, provided they monitor regulatory developments closely. As the Stills in the Hills festival kicks off, RCI's gamble on Colorado's historic charm—and its ability to blend it with modern entertainment—appears more calculated than risky.