Greetings, and welcome to the Full House Resorts First Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Lewis Fanger, CFO of Full House Resorts. Thank you. Please go ahead. .

Thank you, and good afternoon, everyone. Welcome to our first 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 website as well as the various press releases that we issue. And lastly, we're broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release as well as all of our SEC filings.

With that said, there's a lot of good stuff to talk about from the quarter, the biggest of North American place in Waukegan. We had a really good first quarter there. We've been setting record after record for monthly property gaming revenues recently. We hit our property record in December.

We beat it in February, and we beat it again in March, and we don't think we're done growing yet. April gaming revenues were put out yesterday by the State of Illinois, and we rose 39% versus April of 2023. From an EBITDA point of view, we are now consistently generating about $3 million of EBITDA per month.

We did roughly that in each of February, March and again in April. That puts us on a current run rate of $36 million per year of EBITDA, which is about double the $18 million of EBITDA that we generated at American Place during 2023.

That's a good prologue for what we expect to happen over at Chamonix since its opening parallels, the opening of American Place in many ways. The most obvious is that much like the early days of American Place, Chamonix isn't fully open yet. It's being open in phases.

And during the first quarter, our full 300 guest room hotel gradually came online and is fully opened today. A couple of weeks ago, on April 19, we opened our High-End Steakhouse, 980 Prime. Our goal was to create a restaurant that could draw people from all over Colorado, and early reviews have been very good. It's a very good experience.

The service is very on point. The food is delicious. And just like the new Steakhouse at American Place was important for our best guess, the same will be very true over at Chamonix. The next amenity to open will be the pool and spa, which we're expecting in the next few weeks. Now we did have some weather complications in the quarter.

The rough winter weather that you've heard about on everyone else's earnings call certainly applies to us here. The weekends are our most important part of the week. Unfortunately, the winter snow kept falling on weekends. In Colorado, we had 3 snow affected weekends in January, 3 more in February and 2 in March.

There was a snowstorm in March that cut off electricity to the entire town of Cripple Creek for 3 days. And so with all of those affected weekends, it certainly was not a normal quarter, but it did allow us time to fix some of the opening kinks that we needed to work through. In terms of profitability at Chamonix, we're on the right track.

We lost money in the early days when we carried a lot of excess costs that improved as the first quarter progressed. For the first quarter, our adjusted property EBITDA was a loss of about $400,000. We have not closed the books yet for April, but it looks like that should be a breakeven month.

As we go into the summer, our amenities should be largely complete. We should have much better weather and our targeted marketing plan should start to kick in. All of that should continue to propel Chamonix forward and result in a pretty meaningful positive EBITDA contribution. Elsewhere in the portfolio, that same winter weather affected us.

I'll keep it short on the rest. But if you look at our core customer outside of those weather events, it feels like there's been stability in terms of their spend with us.

And perhaps a bright spot elsewhere, I know in the past, we've specifically called out some costs like property insurance at Silver Slipper, that over the last few years has just grown outrageously. Some good news there. We just wrapped up our property insurance renewal and those costs will actually go down by 19% starting on May 15.

That's about $900,000 in savings over the coming 12 months. That's my quick highlights.

Dan, anything you want to add?.

No, I'll address American Place first. Obviously, everything is going in the right direction. I don't know that we can keep the pace going for the rest of the year, up 40% of revenues, but we had 2 months in a row now up 40%, and I think we will be up strongly as the year goes on. Obviously, the comparisons get more difficult this year goes on.

But I think we'll be up strongly. And we're also running margins above 30%, which is obviously a good thing. And just to put it in perspective, we're doing almost the same revenues as the downtown Chicago property. It opened in September, didn't have any impact on us at all and that's still the case.

And our gaming tax rate is a full 10 points lower than theirs. And so -- and so we're in pretty good shape. And the requirement to build the permanent, we have until -- we can operate the temporary until August of 2027, which is a special build, the legislature approved for us.

I assume Valley's would probably have to seek something similar because, they have a pretty short time line. Anyway, the -- our commitment going forward is about $325 million to build the permanent and we're designing the permanent to fit that number.

A lot of what we invested in the temporary will be used for the partner like the construction of the parking lots and strong sewers and so on. So anyway, so we're very happy with American Place. We always knew we were the closest casino to 1 million people, and that eventually they would find their way into our tent.

It's not very impressive from the outside. But once you go in, it's arguably one of the nicest casinos in the state. So I think we're in good shape there. Lewis mentioned that at Chamonix, we're opening in stages, and they said the hotel gradually came online during the first quarter. Well, that's part of it. We now have all the guest rooms done.

And at any given night, there might be a handful that are out of service trying to fix something. But in effect, we have all 300 rooms. But the occupancy also builds gradually. And so we've been running pretty decent occupancy on weekends, but it drops off during the week, absent blizzards and stuff.

So like most regional casinos, we're now preparing to roll out programs designed to help build the midweek business. Like if you're staying with us 2 nights in a weekend, you can get a stay one more night on a Thursday or Friday at a much improved rate or even free and that sort of thing to try to build occupancy midweek.

That will take some time, but the seasonality helps. I mean, we opened this in the deadest part of the year. We're now coming up on summer. Summers are beautiful up in the mountains of Colorado. And so I think we will be able to fill our hotel just about every night in July and August. And so we should be quite profitable during the summer.

And we're focused on getting meetings of groups in the fall, so that when the normal vacationers start to go away, we have a lot of very good meeting space to help fill the hotel during the slower season. The Silver Slipper and Rising Star were off a little bit. Some of that was weather. And fortunately, they're not as important.

I mean, American Place earns more than everything else in the company combined these days. And eventually, Chamonix probably will as well. But that's not that we're overlooking it. We're also looking at programs at those places to get them back to where we want them to be.

Northern Nevada, we have a lease on the Grand Lodge Casino that expires at year-end. We've had some indications from Hyatt that they would like to extend it. Yet again, it's been extended several times. So we're trying to get that inked. And then we still have the small casino in Fallon, which is there. So that's kind of where we are.

We're still finishing so we got a jewelry store. We got one more kind of unique speak easy bar to get done. The spa will be open just before Memorial Day. We won't have all the treatment rooms, but we'll have enough treatment rooms that we can offer massages and the pool and the weight room and the locker room all that's done.

The salon is being put together as we speak. So people get a haircut and stuff. So I guess that's it. I mean, we're at the point where, as a company, we'll start -- we are already producing positive cash flow. And I think that will build significantly as we go ahead. I mean, if you take our interest expense is about $35 million, $36 million a year.

American Place alone should earn that. And everything else does in the mid-20s plus Chamonix. Everything else excluding Chamonix, does something in the mid-20s and then Chamonix will come on.

And I will point out that it's not unusual that -- a lot of times, I find investors thank you open the doors of a casino and it's an instant slam dunk profit generator and that's really never the case.

Even Bellagio the first quarter or 2 were far less than what we expected and then it kicked in and it's been making $500 million a year for 20-odd years now. And the same with L'Auberge and Beau Rivage and all these other regional casinos. And so the good news is Chamonix is beautiful. It's getting all sorts of great accolades.

Even we hosted the Hotel Association of Colorado, which had the GMs and presidents of all the different top hotels from Vail and Aspen and Denver and Colorado Springs, all were at our place and had dinner at our new restaurant.

And without saying names of the President of several of the prominent high-end hotels in the state came and told us that we felt that we had the best restaurant in the state even better than their own. And so we're very proud of our team for that. And now we just need to fill it with people and we will. Anyway, that's it.

It's -- we're just trying to finish those things out. Very early stages on -- not very early, but we're really in the designs of the permanent in Waukegan. Frankly, we've been pretty focused on Chamonix. We have until August of 2027, as I mentioned. And that's not even a requirement of -- to open the permanent.

That's just the outside date at which we can operate the temporary and you really don't want there to be a gap. You're going to be able to move customers and employees seamlessly to the new place.

So that means we really have to start construction about 2 years ahead of that, so August of 2025, which means we have 15 to 18 months to raise the money before we start construction. But even that is not a requirement because the early stages of construction aren't a whole lot of money.

And so there's probably 6 months of construction we could do just out of free cash flow. And so we have a couple of years to figure out the financing and our bonds have come back. They're not quite back to par, but they're well off their bottom. And so our guess is at the right time, we go to the high-yield market and refinance our debt.

And -- but we but it's not imminent. And let's get Colorado making good money. And then people will see that we're actually less levered than most casino companies. And at that point, we should be able to refinance the debt on favorable terms with the extra money to build American Place. So that's the strategy. That's the plan.

So on that, I'm happy to take any questions. .

[Operator Instructions] Your first question comes from Ryan Sigdahl from Craig-Hallum. .

This is Will on for Ryan.

First question here, how do you think you've shifted share in the overall Cripple Creek market? Obviously, it's a pretty slow start to the season given a lot of those -- a lot of that snow on the weekends, but curious where you think it's at right now and where it could ideally be long term?.

Well, I think long-term, we grow the market. And we get this a lot like -- clearly, we account for more than 100% of the increase in Cripple Creek has been showing increases. But that's not the whole picture. You have to almost look at all of Colorado.

And when I look at where our pricing should be or our promotion should be, we look at what Ameristar and Monarch are doing up in Black Hawk because they're comparable to us and scale and quality. I think we're nicer, maybe not quite as big. We have 300 guest rooms. They each have about 500. But we are nice. And frankly, it's a more romantic environment.

I mean, Black Hawk is, I think, legally a historical mining town, but if you go there, you see very few vestiges of it, and Cripple Creek feels a little bit like Colonial Williamsburg got a brick. And so I think we're at a better environment. Now distance wise, the southern parts of the Denver MSA are about equal distance.

So Centennial, Castle Rock and so on, they can go to us as easily as they can go to Black Hawk. And so obviously, we're doing double the revenue. Last year's revenues weren't very high. We're doing double and that's not even close to what we should be doing and will be doing. But I think it comes from growing the market.

I mean the gaming per capita in Colorado Springs is one of the lowest places I know of in the country and there's no inherent reason for that. So I think we grow the market. We have a few good competitors in Cripple Creek. I mean, Golden Nugget having bought Wildwood and rebranded it.

That's very professionally run now and that's a positive for them, of course, and for us as well. They have 100 rooms and their rooms are about the quality of the Fairfield Inn. But they do fine. And then Triple Crown is our other major competitor right across the street from us.

And also across the street from us is the original Century Casino and they're right next to us. So the people staying at our hotel, will end up going over there sometimes. There is a weak competitor in town called the Double Eagle and the owner, I think the second of 2 owners has now passed away, and so it's a little bit tied up in probate and so on.

It's a pretty big facility, but not close to us. And it's probably the weak sister in town. If somebody gets hit, it's probably them. But they've been the weak sister for an awfully long time. So that's the Cripple Creek market. That's pretty simple.

Then there's 2 tiny, tiny little places that are just being bought by Waukegan that I think their strategy is to have a place for our employees to go after work. And that's a perfectly fine strategy for a small casino. That's pretty much it. But you can't -- you almost have to look at Colorado as a whole.

And because -- to a very large extent, we view particularly Monarch as our competitor. I don't think we're going to take -- I don't think we're going to hurt them either, even the Denver market is underserved.

And if you start looking at what people in say, Seattle Campbell, well, people in Seattle have to drive up into the mountains too because the gaming is all on Indian reservations. But the quality of the stuff that the tribes have built in Washington is quite good. And that's one of the few states you can actually get the tribal casino gaming revenues.

And when you look at it, people in the state of Washington are gambling about 3 -- I think it's $375 per capita now, which is over double with the people in Colorado are gambling. And there's no inherent differences in religion or education or something that would explain that.

I would think people in Colorado will eventually gamble as much as people in Washington. And there's other markets, too, you can look at like in California, there's -- they gamble about $350 per capita too. And most of the people do not live near a casino. They have to drive an hour to get to a tribal casino or 4 hours to get to Las Vegas.

And so when you start looking at Denver and -- which is somewhere around $200 per capita gambling and Colorado Springs was even lower than that. I think as people understand the quality of what we've built, we grow the market. .

Yes. I think there's not a lot to glean from the first quarter for what it's worth, that winter weather on weekend is just -- was just pretty rigid. I think maybe the more important takeaway is we have a market that isn't trained yet to go to Cripple Creek when it snows because they're used to there not being any rooms in town.

And I think conversely, when you look at Black Hawk, I've been to Black Hawk during a snowstorm before, and I've been to Monarch specifically during a snowstorm unaccident. But what I can tell you was, it was a casino that was still pretty bustling because people know that they have their rooms. People don't yet know that in Colorado Springs for us.

They assume that if there's a snowstorm and they drive our way, they might get stuck there without a place to sleep for the night. And so this is all stuff that will change in time. But look it's up. I'll tell you where I find comfort is, we always worry heading into these openings.

Did we build the right thing? Did we build something that's approachable? That's nice that people will feel comfortable in. And I will tell you overwhelmingly, I think the answer to that is yes. .

I mean, I've had the number of customers say it's a miniature version of Bellagio. And of course, we don't have the fountains and so on. But the point being that the quality of the finishes are what you would have at Wynn or one of the high-end MGM places. Not surprisingly, we used a lot of the same designers. And, no, we're not very big.

We're only 300 growing. So we're a 10th the number of guest rooms of a typical Las Vegas casino. And our casino itself is a few hundred slot machines instead of a few thousand. So we're smaller, but you only stay in one guest room at a time. You only play one slot machine at a time.

How many guest rooms do you really need? And so we will eventually educate people on the quality of it and a little bit more of a problem here. Actually, it's pretty similar to Lake Charles when we dealt there, there were really crappy casinos in Lake Charles before L'Auberge opened.

And you almost had to reeducate people in Houston that there was something nice in Lake Charles. They thought of it as a chemical dump. And here, people have been to Cripple Creek before. The product wasn't very good. It had a $5 maximum bet, et cetera. And now to say, no, you really got to come and take a look at it again, it's different.

And there's -- I had an acquaintance there who owns a liquor distributorship and he came up to Cripple Creek for the opening of a restaurant. And he says, everybody tells you how great their facility is. He was blown away when he walked in. He said he had no idea.

And this is a guy whose family had been in the casino business years ago and he said he had no idea that somebody had built something that nice in Cripple Creek. And so now he's coming back up with the sales force from his liquor distributing business, having a meeting at our place. So word eventually gets out.

Yes, I was going to say the win per slot machine per day, and recognized about half our slot machines in Colorado are in Chamonix, and about half are in Bronco Billy's. And the win per slot machine per day in Chamonix is by far the highest in the market.

And the interesting thing is, the win per slot machine per day in Bronco Billy's is actually up because the spillover from Chamonix going into Bronco Billy's, so... .

Yes, we're still not. We lead the city. We do not yet come close to Black Hawk. But again, as we fill the rooms, that'll all change in time. .

Maybe -- just curious maybe on labor at the new properties. I know there's a few struggles maybe in past years and just kind of industry-wide, but now that you've got a few months and a year in the case of Waukegan under your belt.

How do you feel about that?.

Well, there were different challenges in Waukegan. The challenge is that every single employee must be licensed by the Gaming Commission and that's a pretty ominous form that they have to fill out. And it's only provided in English when we're in a community that's about half Hispanic.

And so the hiring process was complicated by not the regulators because the regulations are set in place by the state legislature and it just is what it is. That's what the law is and we had to adhere to it. And so it took time to build a stable workforce. I think we're there now.

We have a good, stable workforce and a good management team on top of that now, we always have some people quit and we always have to train new people. But it has stabilized. And the first 9 months, it was a struggle. And now in Chamonix, dishwashers don't have to be licensed, so it's an easier process.

But you're at 10,000ft on the backside of Pikes Peak. And so the population of the town is 1,200 in total, and probably 40% of those are either retirement age or kids. And so there's not enough people in Chamonix to staff our place, let alone all the casinos. But there's places like [indiscernible] which is nearby, and Woodland Park.

And a number of our employees actually commute from Colorado Springs, which if you live on the west side of Colorado Springs, a place called Manitou Springs and so on, that's a doable commute. I mean, that's not unlike. Our offices in Las Vegas are here in Summerlin and Lewis commutes from Anthem or Green Valley on the other side of town.

That's not much different than going from Colorado Springs to Cripple Creek. And -- so we are -- I mean, it is a challenge, but we are every day able to hire some people and kind of build the team. And then we also used some outsourcing of labor, which has helped.

So, for example, the cleaning of the guest rooms is being done by a cleaning company who does it for normal hotels as well as other casinos. And that's worked out pretty well. They do all the hospitals in Colorado Springs, so they had a big pool of people to draw in so... .

Yes, it'll be a non-issue in a year. We're not too worried about it. It is -- if you're an employee at any other casino in town, you see the very big difference between our quality and others. And if you're -- especially if you're in a tipped position, it becomes the easy move into our building, so... .

Yes. And you do find some surprises. Like, for example, we have a pastry chef who's world class. He's written books about it. He's done a terrific job. Every time I'm there, I have to remind myself not to eat too many of his pastries or I won't fit in my suits anymore.

And he used to be in Denver and he wanted to live in the mountains with his big dogs, so he kind of sought us out and he's enjoying the mountain life. So sometimes it does work in your benefit. .

Your next question comes from Ricardo Chinchilla from Deutsche Bank. .

I was going in a different direction. There's potentially some assets of the right size that might come to the market, let's say, 6 to 9 months, somebody like Caesars talked about it.

Are you guys committed to deleveraging or to build cash for the facility? Or you know the right opportunity for acquisition is something that could be too tempting for you guys with regards to your strategy and capital allocation priorities?.

Well, the Caesars guys are willing to sell Caesars pallets for 4x cash flow, we'll figure it out. But we look at a lot of things. You almost always learn something from it. We did get into the Colorado market through acquisition.

We acquired Bronco Billy's at 6x cash flow at the time and had a bunch of surplus land and then we added to the surplus land, which allowed us to build Chamonix. But it's not -- we don't have to.

I mean -- and frankly, if -- if you run the math and just say, okay, just get this stuff mature and you get Chamonix up to -- I mean, Monarch is making over $100 million a year. We have 2/3 as many guestrooms as them. Can we make 50%, we should be able to. It's not going to happen tomorrow, but we should be able to get to that sort of number.

And it might take us a couple of years to get there. But -- and then in Waukegan, I mean, we're going to do 35% to 40% this year and probably better than that next year. And then the permanent casino is probably a big notch up from that.

And if you start playing with the numbers and say, well, they have to spend $325 million to build the permanent, but about half of that is probably generated from free cash flow. And so the debt today is $450 million. When the permanent opens, we might be something like $600 million.

And then you say, well, if they're making $100 million in Illinois and $50 million in Colorado and $40 million in all the other properties and you work backwards, our stock will be 3x or 4x, 5x where it is today. And Lewis and I and the rest of the management team. It's a big part of our net worth is tied up in the company.

And so we look at it as like, let's not screw that up. We have a very good story, not even a story. We have a very good company. We just need to get this stuff to mature and stay focused on it. And you can go out and without naming companies, there's a competitor of ours who we would look at once in a while that may be acquiring.

And boy, in the last couple of years, they went out and sold their good assets to a REIT and took the money from that leveraged against it and bought a bunch of shit. And now we look at it, it's like, well, let's not do that, okay? And their stock has not done well. I'm not naming the company, but what I just said probably applies to about 4.

So we're very careful to not make mistakes. Bobby Baldwin used to have a saying I really liked, he says it's so hard to not do a bad deal because there are so many bad deals out there and they're so easy to do. And so I'm not going to say we will never do an acquisition... .

It needs to be very compelling. .

It needs to be very compelling because we want to make sure that -- and the other thing is when you say are we committed to deleveraging? Yes, because just the -- I don't view us as highly levered now because I'm very confident in this stuff maturing as any new casino does.

And so I look at it and say, I don't think for that highly levered now, but we will delever as Chamonix comes online and becomes more profitable and as Waukegan continues to do better. And then we'll lever up a little bit, but still less the most casino companies to go build the permanent.

And when the permanent opens, we'll be one of the least leveraged casino companies. Now I don't think it makes sense for us to have low leverage, but I also don't want to be highly levered all the time. So if we can be in a spot where our EBDIT is 2x, 3x, 4x interest expense, that's very comfortable place to be.

And we're not too far from being in that range now. So... .

As some of that covers the bonds, I'm sure you're very happy with that. But look, to Dan's point, this is a company that last year did whatever it was $48 million or $49 million of EBITDA.

And we think that number realistically should be somewhere in the low to mid-100s when everything -- I don't know if the number is a take or pick up number, whether it's $120, $130, $150, whatever number you want to use, I'm throwing out numbers, by the way, I'm not giving you guidance.

But realistically, that's where everything should be ramping up towards. And so we need to make sure that, that works correctly, that will always be job #1 here for us because that is a massive, massive growth on assets that we've already invested the capital in. .

And I don't want to be completely wedded to this, but just strategically, we do view ourselves as having multiple -- what is the word, stakeholders. It's not just shareholders. Now legally, we know shareholders in most states, I think, including Nevada, that is our primary responsibility.

But if you look back at the track record that I had at Mirage and that Lewis and I had at Pinnacle, both of those companies were gradually improving credits the entire time we were there. And so we may lever up to go build something, but we don't just lever up to lever up. And we do pay attention to try to be an improving credit as well.

And so lots of different aspects to this. .

And I'll just seal it out, and there's no ego in wanting to be big just to be big either for what it's worth. .

Yes. In fact, I mean, I kind of -- I will freely tell you I admire Monarch and they are a pretty good company and they trade pretty well. They only have 2 places and they stay very focused on the 2, and it doesn't seem to hurt their valuation. And so as we evolve, we're going to have 2 principal places, which are the 2 new ones.

And then the silver slipper will still be important, and the other stuff is pretty small, so -- it's not that we don't love the team at Rising Sun because I'm sure you're listening on this, it has 300 guestrooms and a golf course and they're doing a terrific job.

But being realistic, we make more money in a couple of months in Waukegan than we do in a year at Rising Sun, so... .

Your next question comes from Jordan Bender from Citizens JMP Securities. .

This is Eric Ross on for Jordan.

Now you've operated the temporary for about a year plus and with the delay of the American Place with the lawsuit, has customer behavior or preference at the property changed any of your thinking around what is ultimately built there in terms of amenities?.

Well, I mean, we have designed a place that can be easily expanded. And we're going to start with kind of the core of it. And then as the business builds somewhere down the road, it could be expanded. And by the way, I do that conceptually all the time. We have a way to add rooms at Chamonix also. We have a way to add rooms at the Silver Slipper.

And we're not doing our job if we're not thinking through of where it might go, a public company goes forever. So 10 years from now, somebody might go build those hotel towers. And now -- and we have learned some things in Waukegan. I mean that Rivers is a very loyal clientele. We haven't nicked them very much.

And in fact, I think we had very little impact on them. The Bally's casino seems to have had a little bit of an impact on it. But they are still the 500 pound gorilla in the state, they make far more revenue than anybody else in the state. I thought we would impact the video lottery machines more than we have. That was interesting.

And we've been kind of scratching our heads saying, why are people still going to the closet at the back of the liquor store to place 6 slot machines when our environment is much nicer. And maybe that's convenience, like there, you pull into a strip shopping mall, you park your car and you walk in, you're 20 feet from the slot machine.

Well, maybe we need to think about offering valet parking that we don't today or trying to figure out how do we get into that market. People don't eat as much. And that's interesting. And we have 2 pretty good sized restaurants, and then we 2 months ago, opened the high-end restaurant.

The high-end restaurant seems to have kicked our casino revenues up quite a bit.

That was -- it's a little -- if you look at the turnstile and you're getting 2,000 people a day in the casino and then you look at the steakhouse that's serving 150 people a day at best, it's like, really? But those 150 people are perhaps your most important people, and so getting it open.

But if you look at the food covers relative to the gaming revenue, I mean, Lewis and I live here in Las Vegas, and we frequently end up walking into the Red Rock Casino or Durango station or something for a meal because they have great restaurants, you don't even think twice about it. That pattern has not happened in Illinois.

The number of people who go to a restaurant in a casino is relatively small. And that's interesting. And it's kind of like, okay, why is that? And part of that is you have to go through the security and show your driver's license and all that, whereas in Nevada, you don't. So part of that is perhaps the regulations. Part of that is the design.

And so for example, Durango station -- and I will tell you, I think stations did a fantastic job at Durango Station. And I go in there, they have probably the best food court, not even a food court, what do they call it, food hall that I've ever seen. And it's very well done, lots of different brands and so on.

And we're scratching our heads saying, okay, how do we do something like that in Waukegan? And maybe it's like part in, part out of the casino environment. So you can kind of get around the regulation. So you learn a lot.

Durango Station did not have a large system of corridors underneath the casino to get the food from one loading dock to the restaurants. They designed it more like a shopping mall, where each restaurant has its own loading dock or 2 restaurants will share a loading dock.

And on the outside of the buildings, kind of camouflaged that it's a loading dock. That's pretty typical in shopping malls, but not very typical in casinos. Well, it saves a lot of money.

And when I realized what they were doing and say, okay, let's think about this for Waukegan because we can save the money of building these expensive corridors so that the food gets distributed throughout the property. Just make Cisco make multiple steps at their expense. And so there are things we've learned.

The customers, it is built -- I thought it might ramp up a little faster than it is. And when I look at why it's not, I think the outside of the building is a big part of that. I mean, we try to build this very quickly and we used a sprung structure at night. We project things on the sprung structure, try to make it look interesting.

But it's not a fetching building. It's not like if you drive down the strip and see Bellagio with the fountains going, every bone in your body wants to get into the building on the other side. It draws you in. And our tent doesn't do that. It looks like where the Department of Public Works store salt for the winter. And so we've been getting past that.

When we build the permanent casino, it will be fetching, it will draw you in. And I think it's pretty remarkable that we're doing $9.5 million a month in revenue in a stretched kevlar fabric tent. And it kind of shows you what can be done at the permanent and on and, there you go.

The delay from -- the Potawatomi lawsuit, which I am convinced is a nuisance lawsuit. I was there when they made their presentation. And if I were on City Council, I would have just said, you operate a tribal casino across the state line that pays much less in taxes and none of it goes to Illinois.

Why the hell would we choose you? That's all you needed to say. But if you didn't know that, and you just saw their presentation, it's like that is the ugliest piece of shit I've ever seen. I wouldn't pick them for that. So I don't think there's any leg they can stand on where they should have gotten this license.

I think they're just -- they make a lot of money in Milwaukee. They're using a piece of it to try to delay us but that delay is perhaps good because it's allowed the high-yield market to come back. I think it will come back more.

It allows us to get Chamonix open and get it ready and have it being contributing cash flow that can be used for the permanent and allows us time to think more about the permanent. So we build the smartest and best casino possible. So don't get me wrong.

It would have been better if the Potawatomi had not filed the lawsuit and we could have moved faster. But the fact that they did have some benefits to us as well. .

Only because we're running out of time, a quick thing here, too. I will tell you what always catches my eyes every month when I look at the gaming report from Illinois is #1 in the state, like in April, $42 million from Rivers. Number two, $12 million of gaming revenue -- it's a $30 million gap between #1 and #2 in the state.

It is a banana thing to look at. And then when you start thinking, well, wait a minute, that is our closest competitor, and we have a northern shore or these northern suburbs of Chicago that are just still underpenetrated in terms of overall gaming spend. I'm not saying that we're going to hit $42 million in gaming revenue, by the way.

But it just -- it keeps my eyes wide open as to what the ultimate potential will be for us when we have a beautiful building that people actually want to walk inside of.

So anyway?.

Yes. And the Potawatomi is up in Milwaukee also generate $450 million a year in revenue. Yes. And so we're doing 25% of what either of them are doing. And I think we can do... .

In one of the wealthiest counties in the country. .

Yes. So I think we're in a great location, great barriers of entry. Nobody else can get a casino anywhere near us. I've got a flurry of stuff. There's an Indian tribe out of Kansas or Oklahoma that's getting some recognition of a potential Indian reservation southwest of Chicago.

And I got a bunch of phone calls while they're obviously doing this to try to get a casino. Is that going to impact you? If you get out a map and look at it, it's a long ways from us. It may impact -- I forget whether it was -- I think it's Aurora, it's not too far from them. That's not us.

So we -- and then there's a different Indian tribe who's trying to get another casino up in Wisconsin. I think the Potawatomis are pretty opposed to that, and the Potawatomis are a force to be reckoned with in Wisconsin. So there's lots of barriers to entry.

It doesn't mean people won't try, but it's very hard to build a new casino there, whereas a place like Nevada, Mississippi, Atlantic City, there's very few barriers to entry. .

And then maybe just a quick follow-up.

Can you speak about some of the trends you've seen in a legacy portfolio in the first quarter and how you expect those properties to perform for the rest of the year?.

We expect them to perform better, yes, the Silver Slipper was a weaker quarter, and I don't have a good reason for it other than we were a little distracted with Colorado, and we want to get back in and understand what they're doing and either the -- we've got to get smarter at marketing, of course, smarter at controlling the payroll or both.

And that happens sometimes. It's still doing okay, but it should be making a little more money than it is. Rising Sun is doing okay for -- it's always been a tough property. There is a new racino that opened in Northern Kentucky in September of '22, I guess it was. And it's been building some market share, which has been a little bit of a challenge.

We've done relatively well despite that. And then Churchill also has built some stuff down in Louisville, the other side of us, but we're hanging in there. Tahoe, it's often driven by weather, what goes on in Incline Village.

If we get a normal month, all of a sudden, we'll have great income and then all of a sudden, we'll have too much now or too little snow. It's just the nature of a tourist place like that. And Fallon, it depends on whether there's a --.

Well, it's really a Navy base. yeah. And in March and April, the Navy had increase in visitation. It didn't happen in January and February, but it was back in March and April. .

It's a little when the aircraft carriers go into San Diego before -- a lot of people don't know this, when the plane -- to take off a plane on an aircraft carrier, the carrier has to be moving and you need that headwind of like 10 miles an hour, 15 miles an hour for the planes to get off the carrier.

And so when it goes into San Diego harbor, before it gets to the harbor, any plane that is capable of being flown is taken off and then they go land in a Naval Air Station. Well, then while that boat is being outfitted or people are on leave and so on, the pilots and co-pilots and mechanics and everything, they go up to Fallon for training.

And so it's a Naval Air Station kind of in the middle of Nevada. And it gets a little frustrating because our business surges whenever there's a -- what are they call, CAG, Carrier Air Groups in town. But it's like considered a national secret when they're coming.

So the air force base doesn't tell us, oh, yes, we got a whole bunch of people coming next week. All of a sudden we just find people in uniform showing up in our casino and then we're scrambling to accommodate them. So, yes, it's a unique little market, a very small force at this point, but it's okay. .

We have 2 last people in the queue, so let's try to get through them real quick. .

I should mention the sports betting. The Illinois, which is the bulk of it, is doing fine and some of the other licenses are not being used now.

And we continue to look for either partners or possibility of doing something very modest where we don't lose money and offer sports betting online ourselves, mainly for the people who are in our database as kind of an amenity. And I think that could be done without losing money. .

Your next question comes from Chad Beynon from Macquarie. .

Hi, this is Sam on for Chad. So monthly GGR, the temporary in Waukegan, is taking a step up into the $9 million to $10 million range.

What's further required at the temporary to get another step up into the $11 million range? And what do you think run rate EBITDA would be at that mark?.

Well, I'll be frank. It's time. Look, it is -- I think people don't realize sometimes that when you open these new casinos, different marketing promotions work in some places and they don't work in others.

And so for us, it feels like we've really cracked the code for us on Thursday, Friday, Saturday, Sundays, other days in the week, it feels like we're still making tweaks and figuring out what brings in those players in real time. And I'm not going to -- Dan, don't spill the secret sauce for what we've learned already.

We spent the last year and changed learning it ourselves. But I will tell you, we've run some recent events that we think are promising, and so I think we're getting there. But at the end of the day, that database continues to grow. That's probably the most important thing. We're over 71,000 people in the database now.

And it's that and really just learning. And quite honestly, using that steakhouse now to maximum benefit. .

Last year at this call, we would have been talking about 10,000 or 20,000 people in the database. So -- but actually, the other thing I noticed yesterday, when the Illinois results came out from the gaming commission, I'm looking through it, and they have a column of square footage, and it shows us it's 70,000 square feet.

And Rivers is only a little bigger than us, but based -- and I looked at it, I thought it shows us as being one of the largest in the state on square footage. And I actually stopped and thought, I wonder if that's including our restaurants that are in the tent or not including the restaurants.

I'm not sure, but I think it's -- the more I think about it, I think it's probably accurate, because places like Grand Vic and Aurora and Joliet, those are river boats, and they are stacked and crowded and not a whole lot of square footage. Our place is a large single level casino, 70,000 square feet.

So I don't think we're -- if you go in there on a Friday night, sure, it's busy. I mean, of course it's busy, but we're not close to capacity. I mean, I remember at the bears down in Lake Charles, we used to do $500 per machine per day. We're not doing that here yet. Interesting to look up what Rivers is doing.

They might be close, but we can do a lot more revenue in our 70,000 square foot than we're doing now. And I think we'll continue to build. .

Thank you.

And then, as a follow up, what are the marketing plans for Chamonix as we head into the summer months and the potential for increasing group hotel revenues?.

Well, groups book quite a ways in advance, so we're trying to -- we have a sales team now, it's very small. We're trying to augment it and that's really about putting business on the books for the fall, the winter, and thereafter.

Because if you call up a group now and say, hey, why don't you bring your group to our place in June? Well, they already have it booked somewhere. They've already told their attendees where they are and so on. So that's a more long-term thing. Now, summers, people go to the mountains in the summer.

So I think we will fill with gamblers and retail customers in July and August, even midweek. But there's a lot of stuff if you go in part of the way the hotel business has evolved.

The [ Expedia ] contract says if you offer a $150 rate on your website, then Expedia is allowed to offer $150 rate on their website and they keep 20% of it before they give you 80% of it. And so whenever you're booking, go to the hotel website where you're traveling and look for a button that says offers, and they will have offers.

And it's very hard for the Expedia bot to try to compare the offers. And all of a sudden you'll see, well, a room's $150, but if I do this weekend package, I get free valet parking and breakfast and a bottle of champagne in the room or something and then say, oh, wait a minute, that's much better than booking on Expedia.

And so more and more you'll see hotel chains kind of doing that. Well, if you go and look at our competition in Colorado and click on the offers button, there's all sorts of creative stuff there that we will have as well soon that says, hey, and you try to direct business to the midweek.

And so an email goes out to people that maybe there's a database that we've been able to purchase that tells us, these are retired people in Castle Rock who tend to gamble, and we will send them a thing that says, hey, come on up and try us.

We'll give you a meal coupon on the weekend, but if you want to come during the week, we'll give you a hotel room. And so you try to drive business to the midweek. And that's the key. That's always been the key in Las Vegas as well.

I mean, the hotels in Las Vegas would naturally fill every weekend by people who drove over from LA, and that's still the case. And the entire convention business that's been built up here in 60 years is about trying to fill the midweek.

And that's why you'll notice when COMDEX show starts it's like, well, it starts on Monday morning because they want you to fly in on Sunday night because their hotel is otherwise going to be empty on Sunday night.

But the hotels on the strip want that convention out of here before the weekend because you're likely to get people who are more prone to gamble and pay more for their rooms and their food retail than you do for meetings and groups. Anyway, that's just the hotel business. And time... .

And time will help, too. That database will continue to grow. We picked up about 5,000 people in that database in the first quarter. That's going to get kicked into a next level of overdrive in the second and third quarter with better weather. And so with that database, it's obviously important as well. .

Your last question comes from David Hargreaves from Barclays. .

Congrats on the successful opening. I'm just wondering if there's any more adjustments to where the final budget is shaking out. And could you talk about the cadence of payments over the next few months? I assume there's probably some construction payables. Anything you could give us on that would be helpful. .

Well, there's roughly $20 million of restricted cash in the restricted cash account still and that should pay for completion of it. There's some small amounts outside of that, but there's small and not very material.

And so, when we started this process and issued the bonds, the bond buyers and the underwriters requested that we have a construction reserve account.

And actually, that's kind of nice for us because there's a third-party who monitors all the construction expenditures and makes sure that you're in balance, that you always have enough money in the construction reserve account to complete the project. And so I think we're fine. .

It's been a relatively slow spend from here, a lot of it, honestly, just sitting in retention, for what it's worth. Last month, I think our draw was a little over $3 million. It's kind of trickling out at this point, but certainly by the time you head into.

My gut says end of third quarter, you'll see that have been exhausted, but it could drag on slightly longer than that. .

I mean, to give you an example, we have a big surface parking lot across car. Midway through construction, we were able to buy 3 houses that finished off the rectangle. So it's a clear rectangle. Well, that makes that parking lot a little bigger than it was before.

So there's some additional curbing and asphalting that wasn't covered in the construction reserve number and will be paid for separately. But it's not a big number. That's the sort of thing you run into. .

Got it.

You guys think you filed the queue tonight or soon?.

Yeah, I think in the next 30. That's the goal. Watch for it. If you have a really boring night ahead, David, you'll have that reading for you. .

Well, thank you, everybody. If you -- I would actually urge you to get to these places, if you can, because they speak for themselves. So when you walk into Chamonix, you go, oh, my gosh. Actually, when you pull up to Chamonix, you say, oh, my gosh. Whereas in Waukegan, when you pull up to it, you say, this looks like a public works garage.

And then when you walk in, it's surprising. And even for me sometimes. I stopped in there on a weeknight 2 or 3 weeks ago, and I walked in and the place was surprisingly busy on, like, a Wednesday night. And I was like, okay, that's nice to see. So there's no replacement to actually visiting these things once in a while.

So both for us running it and for you guys investing in it. So, anyway, thank you very much for your support, and we'll see you in a couple months. .

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..