Ladies and gentlemen, good day, and welcome to the Full House Resorts Second Quarter Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lewis Fanger, Chief Financial Officer of Full House Resorts. You may begin..

Thank you, and good afternoon, everyone. Welcome to our second quarter earnings call. As always, before we begin, we remind you that today's conference call may contain forward-looking statements that we're making under the safe harbor provision of federal securities laws.

I would also like to remind you that the company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for the discussion of risks that may affect our results.

Also, we may make reference to non-GAAP measures, such as adjusted EBITDA. For a reconciliation of those measures, please see our Web site as well as the various press releases that we issue. And lastly, we're also broadcasting this conference call at fullhouseresorts.com where you can find today's earnings release as well as all of our SEC filings.

And with that said, I'll be really brief and then turn it over to Dan. But this was another very strong quarter and a great first half of the year. Adjusted EBITDA for the second quarter was $14.9 million. This is now our fourth straight quarter of very strong results.

The reasons behind it you've heard over the last several calls and they haven't changed. But the short story is we've revamped our cost structure in-part by investing in new slot marketing systems and other technology, and we continue to think that these changes are sustainable in the long run.

And so when you look at adjusted EBITDA for the first half of 2021 that number sits a little north of $25 million. And if you look at the last four quarters, we're just shy of $48 million of annual -- annualized, I should say, adjusted EBITDA.

The one segment that is a little slower and rebounding from the COVID shutdown last year was our Nevada segment. It feels like we crossed that bridge in the second quarter with guests returning to the Hyatt Complex that houses our Grand Lodge Casino and visitation to Fallon’s Naval Air Station also starting to return.

With regards to our sports skins, we have two more launch during the second quarter, that brings us up to five skins that are now live out of a total of six. Those five skins represent $6 million of annualized contractual revenue. The last remaining sports skin is Smarkets and it feels like they should be launching very soon in Indiana.

The Gaming Commission, of course, has said thoroughly that any company before can launch in the state, but it does feel like we're on the home stretch there. When that last skin launches, it will add another $1 million of annualized contractual revenue, giving us a total of $7 million per year from our sports skins.

And then the last point I just wanted to make was on our cash position. That continues to be in very good shape. Sitting here in real time, we have about $283 million of cash and restricted cash. A little more than $176 million of that is reserved for the construction of Chamonix.

Of course, we'll start to use some of that cash balance as construction on Chamonix continues to ramp up. But do remember also that outside of that project CapEx, our business generates some pretty meaningful cash flow. I know Dan can have a lot more bigger points for you, so I'll turn it over to you, Dan..

Well, this is one of those quarters where the accounting professional likes to confuse things, because they kind of force us to do all these comparisons of the second quarter of 2021 and the second quarter of 2020. And of course, we were closed for most of 2020.

So it's a completely bullshit comparison, which is why we earn their ire by including the 2019 numbers in the supplemental information, which is kind of halfway through the press release, because we think that's a far more interesting comparison because everything was open for the full quarter in 2019.

And if you look at that, in Mississippi, we had adjusted EBITDA of almost $9 million, that's the best second quarter, I think in the property's history. 2019, it was $3.6 million. So it was twice what we did before COVID came around. In Indiana, we did $2.7 million of adjusted EBITDA before the pandemic second quarter in 2019 was $600,000.

That $2.7 million is the best second quarter there for quite some time. In Colorado, we did $1.8 billion versus $876,000 in 2019. Again, very strong quarter, may have been the strongest second quarter in the 20-year history of Bracco Billy's 25 year history.

And then in Northern Nevada, which had kind of lagged in prior quarters, but we had a really good second quarter there with $1.4 million of adjusted EBITDA versus $400,000. And of course, we have the contracted sports wagering income of $1.5 million, which we didn't had any of that back in 2019. And so the adjusted segment EBITDA is $16.4 million.

Corporate is $1.5 million, and that left us with $14.9 million. And back in 2019, it was $5.5 million and corporate was $1.2 million. Much of the increase in corporate is we have a bonus plan that -- and different compensation plans that are based on income.

And so when the income improves as much, we have to take accruals on the assumption that there will be nice bonuses at year-end and so that's the story of the quarter. It was great. And we earned about as much in the quarter as we did in the full year 2019. So we intend to keep this going.

Part of that is the slot system, which Lewis mentioned, the economic system we have put into Colorado and Rising Sun 2 years ago now, almost. We're going to be putting that into Northern Nevada in the fourth quarter. And at that point, we'll have the state of the art slot system throughout the company.

That allows us to do things that are better experience for the customer, but we also get much greater marketing data that allows us to be more efficient on our marketing, and that's been part of the reason for our success. In Colorado, Chamonix is starting to take shape. The webcams are available at ChamonixCO.com, Chamonixcolorado.com.

And we're rocking and rolling, put up a big tower crane, that's 230 feet tall with a 200 foot arm on it. So it can reach everywhere at this kind of extended property we're doing. And the foundations are going in. Pilings are in, where the elevators go is where the sheer wells around the elevators are all going in. It's still very early in it.

It's a topsy turvy world to try to build something, as you can imagine, price of lumber shut way up and then it crashed way down. And it's unclear what the tariffs are going to be with the stuff from China and so on. So our budget is $180 million. We're planning to be open in the fourth quarter of 2022, make sure I get it right.

There are some challenges in that. We think we're pushing a little bit on that fourth quarter. We'll know better in the months ahead, but it could slip into the first quarter of 2023, but we're striving for the fourth quarter of 2022.

The $180 million, if I were to guess at this point because we put out the bid of pretty small part of the project at this point, but the bids have come back a little higher than we thought. So there's some pressure there. And we'll know, again, better as we put more of it out to bid, but it's probably pushing $200 million or somewhere in there.

We are evaluating not only trying to get a better number because we're putting up bid packages. So we get smarter just about every week. But it looks like one of our competitors opened a 100 room hotel, seems to be pretty booked up. It's a pretty kind of a motel 5 hotel. But nevertheless, they've done pretty well.

And the bigger new hotel up at Black Hawk that Monarch build seems to be doing pretty well I went and visited it, and they did a nice job. They're constrained by their footprint, which is long and narrow. Nevertheless, they seem to be doing well.

But I think there are a number of ways where we will have the best casino in the state because we don't have some of the constraints that the places have in Black Hawk. And so we are evaluating whether to add another 70 rooms and suites to it. We had always had this idea that we could add another leg at some future date.

And we're evaluating whether to do it now. And part of that is to get a firmer grasp on where we are versus that $180 million. I don't want to increase the scope of it if we're not having the costs contained. But we also would need approval of the city's Historic Preservation Committee and City Council in order to increase the project to 370 rooms.

Now Monarch, I think, is 500 rooms. And Ameristar in Black Hawk is 534 rooms, if I remember correctly. So as we go up in size, we can't go tall because we're in a historical area. So we're kind of sprawling out. Fortunately, we have quite a few acres so we can sprawl out. Not too long ago, just checking out of the nice hotels in the state.

I stayed at the St. Regis in Aspen, which is a very nice hotel in Aspen, gets a really high room rate and everything else. It sprawls. You can't go tall in Aspen either, and yet it feels very nice. So we can -- and frankly, that's roughly comparable to the size of what we're building. So if you want to feel what it feels like in the St.

Regis in Aspen is similar to what we're kind of building in terms of guestroom wings that stretch out that are four, five and six floors tall.

And so we'll make a decision in the next couple of months on whether to go to City Council and get those approvals and get our Board approval and so on, but pretty good chance we'll try to upsize the scope of this because the market seems to be there for it. And we have the money. Frankly, we have more than enough money even for the expanded project.

The -- down at the Silver Slipper, we also achieved something pretty remarkable. Silver Slipper is on a pretty constrained little piece of land. And we've been trying to figure out how do we add another hotel tower someday. Finally concluded the best way to do it was to build out over the water out over the Gulf of Mexico.

Everything is built on pilings down there anyway because it's body Mississippi, if you don't put it on pilings, it's going to sync. So if you build that over the water, the pilot drivers on a barge instead of on a truck that's conceptually the same thing.

You still have to have the livable space, something like 25 feet above sea level for storm surges, from hurricanes and all that sort of thing. The bottom of the Gulf of Mexico belongs to the state of Mississippi for the first X miles going offshore.

And so to build out over the water, we needed to reach an agreement to lease land from the state of Mississippi. They won't sell it, so they end up leasing it. And so we have an option to lease. If we exercise that option, we can lease it for up to 60 years. Once it's open, the rent is about $100,000 a year.

The option payments before that are pretty minor. Obviously, the state of Mississippi would like to see us do this. They get gaming tax revenue in our casino if we have more rooms. We'll have more casino revenue, more jobs, more development and all that. And so the governor signed that within the last month.

And so we now have a firm option to lease 1/2 acre of the bottom of the Gulf of Mexico, as oddly as that sounds, to allow us to build a hotel tower that would be ideally located vis-a-vis our casino. We still require some environmental approvals.

We do have an option on some land that we think is environmentally sensitive, so we can do a swap so that we can fill in some of the Marshland that's next to us to create parking that would be needed by having more hotel rooms. And so we still have to work that out.

And meanwhile, we're looking over our shoulders at the casino being proposed in Slidell, which I think has gotten perhaps too much visibility versus our company. They have -- we were a little surprised that they got to the legislature.

They just barely got to the legislature, and they did it with -- there was one committee where a guy was going to abstain any change his vote to vote for it. Well, his wife was one of the 19 lobbyists that the casino proponent had hired. So that's pretty questionable. But they go to a local referendum on November 13.

We've been doing polls, the polling that we've done, and it's not push pulling. It's an honest pole, shows that loses by a pretty wide margin. This is a very conservative region heavily Republican. People move there from New Orleans to get away from urban issues. And so they don't want things like casinos.

But even if -- and by the way, the Sheriff, the Head of Police and mayors of the two biggest towns have all come out against it. Even if it wins what is being proposed is relatively minor compared to all the casinos that are around. And casinos like us in Mississippi have a tax rate that's half of what it is in Louisiana.

And so it's reminiscent of when Peninsula built the casino in Rochester, New York, kind of ignoring the existing competition that had a lower tax rate and that property ran into trouble immediately.

Or the other one I'd point out is the M Resort that was built on the South side of Las Vegas, they go, oh, we're going to catch people before they get to the strip, but it wasn't big enough and important enough to get people to stop before they get to the strip. And so people continue to drive further to better places.

And of course, the M Resort failed shortly after it opened. We compete already with a number of casinos. Probably our most vibrant competitors, a place called Island View. It's a private company out of Gulfport, and they've got over 1,000 guest rooms in the lazy river swimming pool and a couple of casinos, and frankly, it's a nice place.

And you have to drive past us to get to it, and they do quite well, and we managed to do well as well. The Hollywood Casino is quite close to us. They have 3x the guest rooms that we have. And they do well, we do well. We compete with the places in Blocky and a whole 10 of them over there.

We compete with the Fair Grounds, which if you leave Slidell and head to us, you do not go buy the new proposed casino site. But if you're going from Slidell to New Orleans, the closest casino to Slidell is actually fairground, which is owned by Churchill Downs. And you do pass that casino site going to New Orleans.

And so we compete with Fair Grounds, we compete with New Orleans. The Harris property in New Orleans cost $900 million when it was built 20 years ago. They're in the process of putting another $500 million into it. That's the 700 pound gorilla in the region, and they're not going away.

And then we compete with the casinos in Baton Rouge, including L'Auberge, which I don't know what your life by designed, and it's a good property on the South side of Baton Rouge. And there's 2 other properties in Baton Rouge, plus a tribal casino on the Northwest side of Baton Rouge.

So adding one more casino to that mix, is it a plus? No it's not a plus, but it's not a very big negative to us. And I think we'll do just fine. And of course, we'll know pretty -- certainly here in a couple of months, whether it's going to happen at all.

Meanwhile, in Waukegan, the Gaming Commission, who -- the law actually said they were supposed to choose somebody by late last year, but they have not because of COVID. And so they didn't. Now they've hired a consultant to help them a experienced consultant and casino industry on this stuff.

And the Head of the Illinois Gaming Board had indicated that once they had a consultant, they thought they would be 6 months from a decision.

And so that would imply that in somewhere perhaps in the fourth quarter, we and the other 2 proposals for Waukegan get to make a presentation to the Illinois Gaming Commission and Illinois Gaming Board, I guess, it is, and hopefully, they come to a decision thereafter.

And the way this normally works is you then negotiate a development agreement with the Gaming Board, and you have certain time lines that you have to meet and certain milestones, and then you're off to the races, and you build it as quickly as possible. We were deemed by the city's consultant as having the best proposal.

We simply had the smallest balance sheet relative to what we were proposing. I think we fixed that over the past year, and we're now sitting in pretty good shape for what we proposed. Obviously, we'd have to arrange financing, but I don't think there's any question that we could.

We also have a private equity firm that has signed up to step in, although, frankly, with where bonds are trading, might be cheaper to do it directly. And we've been working on our proposal in terms of the details of it. The city process was very quick, and you had to put something together very fast, which we did.

And now we're kind of enhancing that more to put a little more meat on those bones so that when we show it to Illinois Gaming Board, it will be the most thought out, most thoughtful proposal they've seen, I believe. Meanwhile, in Indiana, about 3 or 4 years ago, we had proposed building a casino in Terre Haute.

That's an area with about 150,000 people. It is about an hour from Indianapolis on the West side of Indianapolis, which is a city of 2 million people. There are two casinos that catered to Indianapolis, they're both east of Indianapolis. And they're outside of town a little bit.

So it's a pretty good market, we think, Terre Haute itself, plus you can probably draw some from Indianapolis. And there's a whole bunch of towns in that region that are 100,000 to 200,000 people, Champaignâ Urbana and Lafayette, Indiana and so on that don't have casinos and might also be attracted to a place in Terre Haute.

The Indiana Gaming Commission had selected a partnership to develop Terre Haute, it wasn't us. But as I mentioned before, you end up with milestones and time lines and that developer did not meet those milestones. And so they didn't renew those approval.

And instead, they've now put out a request for proposals for other people to potentially developing Terre Haute. And we're looking very carefully at that. Deadline is middle of September, and we'll see where that goes.

I think that's it, Lewis, did I miss anything?.

I think we're good, Dan..

Yes, turn to some questions. I didn't tell them about our proposal to acquire [Win], but we'll leave that conversation. And that's a joke. Win is 20x our size. Okay..

Let's take some questions..

Maybe 50x or so..

[Operator Instructions] We'll take our first question from Ryan Sigdahl from Craig-Hallum Capital Group..

Congrats on the record results.

Curious trends into July, both revenue as well as margins and just kind of visibility and expectations, I guess, on what you're seeing on the casino side?.

I'll tell you, generally, we continue to be pretty pleased with the business. So I'll let you read into that, however you will. Last year was obviously a very, very strong year as we reopened. Look, it continues to be good as maybe the best thing to tell you. That's a very short way of answering you but….

No, that's good..

Just be aware that we were fully open in the third quarter last year. So the percentage increases will not be nearly as big as they were second quarter to second quarter..

Absolutely true..

Curious on the tech side, you mentioned rolling out the slot system in Nevada.

Any opportunity or thoughts around rolling that across the whole portfolio of properties?.

No, we've actually done that. We've had it in Mississippi for years, so we're pretty familiar with it. Although Konami, every year or two has an upgrade and makes it better and better. They even have down the road, the ability for that machine, almost like your iPhone to recognize your face.

And so you won't need a card anyway you could just sit at a machine and play. And then if you go somewhere else, your points and credits will go to the other machine. So that's not rolled out yet, but it's pretty interesting, some of the stuff they're working on. So we had it in Mississippi.

It was a pretty big investment for us to install it in Indiana and Colorado, which we did year and half ago. And that we had just put it in when COVID forced us to close everything. Well, that actually gave us an opportunity to really get up to speed on what the system was and how to use it. And that's been part of the uptick in those 2 properties.

So now the only part of the company that doesn't have it is Northern Nevada, we're going to put that in the fourth quarter..

I knew the Indiana and Colorado. I wasn't aware of the same system was also in Mississippi cashless….

It's kind of a big -- it's a big deal. You've got to open every single slot machine and change your circuit board inside of it, tie it into a server of some sort. It sounds easy to say, well, we're going to put it this slot system. And it's not -- it's a big process..

What about cashless technology rolling out, there's some casinos, Resorts World, et cetera, that are kind of taking an accelerated approach to it.

Any thoughts there?.

I'm rooting for them. I've been down to Resorts World and some of the stuff they have. It takes a while for consumers to really link onto it. I remember when MGM opened back in the 1990s, they had a section of their casino where the slot machines did not take coins. It was paperless, and it failed.

And then a few years later, IGT came out with the ticket in, ticket out, which is basically the same system or another variation in the same system. And now nobody has coins. So customers are all accustomed to that. And so I think it eventually will be cashless. And Resorts World is kind of the beta site for some of that.

And how wonderful would it be if we could get rid of chips because this is a very expensive process of counting the chips and doing all that stuff.

And if you could -- when you're done gambling at a table, if we can give you a TITO ticket and you go away from the table with the TITO ticket, well, you can redeem it at any of the normal redemption machines or sticking in a slot machine.

Whereas if you walk away today with chips from a gaming table headed to the cage, you can't put those in the slot machines. So a lot of this stuff is coming down the road eventually, and we'll adapt it pretty quickly once it's kind of a proven technology..

Dan and I go over the pros and cons of these systems all the time. And looking at the Resorts World one in particular, the table game side, I think, is the more interesting side.

When you start looking at the slot side, there are certainly benefits that you get from not having to drop all those slot machines on a twice a week or whatever it is that you do and reducing the amount of cash that you have just kind of sitting idle on the floor, there's certainly a benefit in that.

But if you were to go to that Resorts World kind of now, it's actually -- and want to play a slot machine, it's unfortunately still easier to put your cash in the slot machine then to load up your e-credits and then think your phone as a slot machine and go through all that jazz.

So we're kind of watching all sides of it and watching it very, very closely. Table games are certainly very interesting. Would love to get the full casino on board, but it's still early in that whole process..

We're not quite there. I mean at Resorts World, you have to open an account and transfer money to it, and then it's cashless, right? But I think pretty soon, you'll be able to walk up to a machine and just Venmo the money from your phone into the machine. And when you're done, it can credit back into your bank account.

Now that's not a technological hurdle, it is a regulatory hurdle that the regulator has to be on board with that. And then some of the fees that are -- not to pick on Venmo, but that sort of thing have fees that with the amount of money that moves in and out in a casino, you can't have a significant fee. But they used to have the same thing.

I remember when you used to go to stores and they'd say, well, no credit card transaction is less than $10 or something, right? And today, you buy a cup of coffee at Starbucks for $2 and you've charged on your credit card. So I think it's evolving, and it's a plus. Look, the bigger thing that's out there is you are going to have online gaming.

And I think Colorado and Indiana will take it up pretty soon, and we're in both of those markets. And the experience in New Jersey and other markets is that, that's a very big market, bigger than online sports betting. And so we're watching that. And we also think it will probably come to Illinois and pretty quickly. So we're watching that..

One more for me. Dan, certainly, an acquisition of Win, it'd be fantastic. But any other M&A opportunities out there, you guys have a lot of growth across just with Chamonix, Terre Haute, Waukegan.

But anything on the M&A side where you can bolt-on 1 or 2 other regions?.

We look at a lot of stuff. And unfortunately, a lot of times when somebody is trying to sell something, it's got hair on it, right? But we did a couple of years ago, bought Bronco Billy's, which is now pretty important part of the company. So we look at all sorts of stuff, but there's nothing to report today.

So -- and frankly, from our point of view, if we just execute on what we have, even if it's just Chamonix, forget about Waukegan, forget about Terre Haute, if we just execute on Chamonix, the stock will be a home run. And you've run the numbers and shared them with your customers. And so we, first and foremost, don't want to screw it up.

And a lot of times, when you're looking at acquisitions, you're like, well, if you buy that at that price and then it turns out to be a dog, you kind of screwed it up. So we're pretty cautious about that stuff..

We'll take our next question from Chad Beynon from Macquarie..

Wanted to ask about just broad returns on Chamonix. Given the recent strength in the gaming industry and the overall improvement in business models across the country.

Have you changed your view in terms of what returns you think you can generate at the project? And then also related to that, with the CapEx, how should we think about the cadence of when that's actually flowing through the balance sheet over the next six to eight quarters?.

Let me take the first..

Yes, the last one first..

Yes, roughly speaking, so for this year, it's going to be somewhere in the ballpark of $50 million of spend. It's probably a little -- slightly on the lighter side of that. And then you're going to get another $100 million of -- $130 million of spend in the year beyond that in 2022.

Depending on the timing, of course, you could see some of that spend slip into 2023. And then you always get a weird game with the payables as we have holdbacks for -- waiting for work to be finished and with the GCs. That time, we can also push some of those payments into 2023..

Well, and then, look, based on the -- you have all these different bid packages you go out when you compare with where they came in and they end up negotiating on each 1 and so on. And we're coming in like 10% to 15% above where we thought we'd be in that $180 million number.

Now the $180 million number includes a $19 million contingency, which is there in part for this, but it's pretty early in the game to be drawing on contingency. And we've also only bid out a small portion of the project. But we're working seriously to kind of bid more of it out and get more of it signed up.

If I were to guess at this point, and it's a guess because at the point where we are more definitive, we would have to put more money into the restricted account and so on. But my guess is it's not $180 million is more closer to $200 million.

And then if we decide to add the other rooms, we probably end up at something like $230 million -- $225 million, $230 million. Now on the positive side, we've always been very conservative on what we think we can earn there. We believe Ameristar is making something like $85 million, $90 million a year of EBDIT with their 534 rooms..

By the way, maybe north of that in the post COVID world Dan..

Yes, maybe. If you look at the maximum bet limits just went away in the last few months, and the table game play in Black Hawk grows like 50%, right? And Cripple Creek has less decent hotel rooms and so on. But even in Cripple Creek, it was up like 35%. We have very little table game business at Bronco Billy's.

We don't have many hotel rooms or almost none. And our focus has always been saw machines. But Chamonix will do table games. And so it's entirely possible that this place can make $50 million, $60 million a year on an investment of $230 million.

And that's what's driving us to think, well, the most efficient way to add the extra wing is to do it right now. When you have the contractor there and everything, and it's kind of easier to say to your electrical subcontractor, you know what, you're already driving up on the hill, putting in wiring for this hotel, we're going to add this other wing.

So let's figure out what it would cost now. And so it's something we're studying pretty carefully.

And I wanted to mention it because if we decide to go ahead and if our Board approves it, we would be in front of the historical preservation committee and in front of City Council, I think they would look at it favorably, but of course, there's never certainty on that.

So I wanted to make sure we kind of broadly said, hey, we're looking at this, so that we don't end up in a situation where it ends up in a local newspaper, and then our phones start ringing off the hook and what the hell is this. So you know..

We've worked on -- or I guess, Dan, specifically, has worked on a lot of these products more than me, but what is this number 10, 11, Dan, how many have we done like that. And I will tell you, of the list of projects, this has always been the one where we look at it and beat down the numbers and still get a good return.

And when we look at this project, we have long said to ourselves internally, we like the upside from our numbers a lot. We've always thought there was way more upside potential than downside risk on the -- for the return profile for this project. So we feel quite, quite good.

That's only been made better by watching what appears to be a very, very good showing out of Monarch and Black Hawk, a very good showing out of Wildwood with their expansion hotel.

And I think what a lot of people forget sometimes is Black Hawk is what Cripple Creek -- like Cripple Creek today is what Black Hawk was pre Ameristar opening, right? We don't have any 4 or 5 Star product.

And so when you run around that town, the potential for us to open with a very, very nice product for what is a very good customer base in Colorado springs, it's almost outsized. We will stand apart in a very big way, is maybe the right thing to say..

Actually, the other data point to be aware of is that $1.8 million of EBDIT that we earned in the second quarter at Bronco Billy's. We did that without any parking. The construction has taken up the parking. So we're running valet parking at the curve on Bennett Avenue in front of us and parking the cars, 3 blocks away.

We have a self park lot as you're coming into town. We're running a shuttle bus from it. And the customers are still coming. And Bronco Billy's is not exactly Bellagio. I mean it's a nice comfortable little place, but it's -- Chamonix will be far nicer and significantly bigger. And we will renovate Bronco Billy's as well.

But it's pretty amazing the amount of business that gets done in Cripple Creek when you consider the poor quality of what's there..

And then at Rising Star, you guys posted record -- I believe, record quarterly revenue and -- or I'm sorry, record quarterly EBITDA and probably record margins at 25%. So it looks like the team is doing a good job there. I believe the tax change still hadn't gone into effect.

Can you just confirm that? And then when that does go into effect, how should that flow through to margins in the back half of the year?.

We always have to be careful when we address record numbers at Rising Star because when it first opened back in the mid-1990s or early 1990s, it was the only casino in the region, and it made huge numbers. But this was certainly the best quarter in many years at the property or several years anyway.

And the lower tax rate just started, right?.

Well, it started on July 1, but because accounting is always fun, what you have to do is you look at what you expect your blended rate will be for the full year. And so you've already effectively seen that tax -- that average tax rate in the first and second quarters..

So on a cash basis, it just started. But on an accounting basis, we started.

On January..

First quarter..

That's right..

[Operator Instructions] It appears we have no further questions. Please go ahead, speakers..

It was a great quarter. Yes. I was just going to say, it was a great quarter, and our whole team deserves credit for it. Everybody has been working hard. And it's kind of a new attitude that this is the new normal and trying to maintain this sort of trend while we build out Chamonix and look at these other opportunities to grow the company further.

So I'd like to thank everybody for your support, and we'll continue to work hard on your behalf. Thank you..

That concludes today's conference call. Thank you, everyone, for your participation. You may now disconnect..