Good day, ladies and gentlemen, welcome to the Churchill Downs Incorporated 2023 Q1 earnings conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Phil Forbis, Vice President, Financial Planning and Analysis. Thank you, Andrew. Good morning, and welcome to our Q1 2023 earnings conference call. Following our prepared remarks, we will open the call for questions. The Q1 2023 business results were released yesterday afternoon. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC, specifically the most recent reports on Form 10-Q and Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release. The press release and Form 10-Q are available on our website at churchilldownsincorporated.com. Now I'll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen. Thanks, Phil. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer, Marcia Dall, our Chief Financial Officer, and Brad Blackwell, our General Counsel. I will share some high-level thoughts on several strategic topics, and then Marcia will walk through our results and provide an update on our capital management strategy. After she finishes, we will take your questions. We delivered record Q1 net revenue of $560 million and record Adjusted EBITDA of $223 million. We were pleased with the performance of all of our segments and our expectations remain high for the rest of the year. Let's start with our historical racing machines or HRM initiatives. HRMs are a key strategic focus over the next 5 to 10 years for our company as we seek to expand our existing footprint. We have developed high-growth, high-margin investments in this segment with excellent returns on capital. We will seek to build on that track record in Kentucky, Virginia, New Hampshire, Louisiana, and perhaps beyond. We are continuing to build on the success of our HRM operations in Kentucky, which began with our inaugural property opening in 2018, Derby City Gaming in suburban Louisville. Our most recent gaming floor expansion there is now complete, and the new hotel is on track to open by the end of the Q2. We have been very happy with how the property has been performing through the significant disruption across the site caused by the floor expansion and the construction of the hotel. Our team is also working hard to prepare for the opening of Derby City Gaming Downtown, our HRM entertainment venue in downtown Louisville, set to open in the Q4 of 2023. In Western Kentucky, we have shifted our plans for our Owensboro HRM extension and are evaluating new locations that will better meet our long-term growth profile and better enable us to create a premier entertainment destination for all of the residents of the region. We are disciplined in our decisions regarding our long-term capital investments, sometimes that means taking additional time to determine the final location that will best meet our long-term return expectations and that is optimal for the communities in which we choose to invest significant time and capital to build long-term relationships. We will share more on these plans on our next earnings call and are very optimistic we are on a better path now. We have made numerous improvements at Ellis Park to enhance the racing experience for our customers and improve safety and environmental compliance at the property. We will kick off the Ellis Park race meet on Friday, July 7th, after the end of the Churchill Downs spring meet. The purse money has increased approximately 50% to over $15 million, and we have added four new stakes races. We have more work to do to make this a great Kentucky racetrack and are committed to doing so. We will save any material investment in the HRM portion of Ellis Park until we complete and then evaluate its HRM extension in Owensboro to ensure these properties complement each other and are as efficient as possible from a customer offering and operational perspective. The area around Owensboro is the larger and more economically attractive market, and thus our focus will be on that first from an HRM perspective. As a reminder, we also have the Oak Grove HRM extension in our portfolio of potential longer-term development projects. We are focused on our other Kentucky projects for now. HRM entertainment facilities in Kentucky will soon benefit from the passage in the Q1 of legislation allowing retail sports and online betting across the Commonwealth. We will look to go live in our retail locations once regulators have promulgated all of the required regulations and operational standards. Currently, we expect this will happen in the second half of 2023. We will be permitted to have up to 9 retail locations and up to 8 online sports betting licenses that we can potentially monetize. Each of our racetracks and HRM facilities in Kentucky already have a sports bar that will be enhanced with sports betting kiosks so that our customers can easily and conveniently place their retail sports bets. We believe our retail sports books help to drive additional traffic to our properties in other states and will further help to grow our HRM properties across Kentucky. With respect to online wagering, we have entered into contracts to provide certain online wagering platforms, including FanDuel, access to the Kentucky market in connection with which we receive a revenue stream. We also expect to enter into other market access arrangements in the near future. Moving to Virginia, our six HRM properties are performing as we expected and in some cases are exceeding our expectations. Regarding new projects, we are constructing the Rosie's Emporia HRM venue in the southern portion of the state near the Virginia and North Carolina border, right off of Interstate 95. This is a 150-unit facility that remains on track to be completed in the Q3 of 2023. In addition, we are building a significantly larger HRM facility in Dumfries, which is located in Northern Virginia, approximately 30 miles south of Washington, D.C., also directly off of Interstate 95. This is an extremely important project because of its proximity to the significant population in Northern Virginia Interstate 95 corridor. The construction is proceeding according to our schedule, and we expect the first phase of the project with 1,150 HRMs and an approximately 100-room hotel to be open in the Q2 of 2024. We have the right under Virginia law to open up to 3 additional HRM facilities with the number of HRM machines permissible in each, a function of the size and location of the community, subject to an overall cap of 5,000 machines across all of our facilities in the state. We are working towards a goal of conducting HRM-related referendums in 2 new communities this coming fall. We are excited about these projects, and we'll share more details on our next earnings call. We will also discuss in more detail on the next call our plans with respect to our 50/50 partnership with Urban One to pursue a full Class III casino in the city of Richmond, Virginia. This is a separate opportunity from our HRM operations in the state. We are working through the required City of Richmond approvals to conduct a referendum this fall to obtain the authorization necessary to proceed with the construction of this project, which would include a casino, hotel, and event center. We are making solid progress on our Salem, New Hampshire, HRM site plans, and we'll share more details on future earnings calls. Regarding our online operations, TwinSpires had a nice Q1. Our top line declined primarily because of our decision to exit the direct online sports and casino business in 2022, our bottom line improved significantly. We also were very encouraged to see early benefits of our decision to the launch in the Q1 of our services to deliver racing content to FanDuel and DraftKings. We expect to see our B2B business accelerate in the Q2 with the Kentucky Derby. Finally, regarding our preparations for the upcoming 149th running of the Kentucky Derby a week from this Saturday, we have made fantastic progress on our projects at Churchill Downs Racetrack. Our new First Turn Experience is complete. This is a one-of-a-kind entertainment venue that is itself the size of a small stadium with 5,300 covered stadium seats and an additional 2,000 reserved indoor dining seats with exclusive views of the horses and the racetrack from the rail on the first turn. All of the covered stadium seats are sold, and more than Q3 of the indoor reserve seats are also sold, with the remainder selling quickly each day. Overall, we are very excited about our progress towards this year's Kentucky Derby. Based on advanced reserve ticket sales and other metrics available at this time, we expect to deliver record Derby week results. We will issue a press release after the Derby with all of the details. While our focus is on hosting a special Kentucky Derby 149, we are also kicking off our year-long celebration in preparation for the 150th Kentucky Derby in May of 2024. The 150th Run for the Roses will be a remarkable milestone for the longest continually run sporting event in the United States. The Derby has run annually since 1875 through world wars, recessions, and even pandemics. We have announced a number of new guest experiences and ticket offerings that will be available for this very special Kentucky Derby. In fact, early ticket sales are already underway and selling nicely. One of the most exciting developments will be the completion of the Paddock project with breathtaking and unrestricted views of the Twin Spires, along with spectacular new seating and dining experiences. This project will reinvent Churchill Downs Racetrack and create unique once-in-a-lifetime experiences that will surpass anything like it anywhere in the United States. We remain on course to complete the Paddock reimagination in time for the 150th Derby. Our capital projects to grow the scale and profitability of the Kentucky Derby will be supported by our continued ramp-up of sales efforts across the country, as well as a more focused and strategic sales process in numerous foreign markets. We look forward to seeing you at the 149th Kentucky Derby on May 6th of this year. If you cannot join us in person, please be sure to watch the NBC broadcast beginning at 12:00 P.M. Eastern Time. In summary, the Q1 was another great quarter for us with record financial results. We have positioned our company for strong growth for years to come with the ongoing investments in the Kentucky Derby, the acquisition of the P2E assets, including the existing operational properties and our Virginia growth projects, our Terre Haute project in Indiana, our Salem, New Hampshire HRM project and other Kentucky HRM projects, and the pending acquisition of Exacta Systems, which will greatly improve our Virginia, New Hampshire and Kentucky capabilities, all of which we expect to drive a material increase in Adjusted EBITDA and free cash flow in the coming years. Our overarching objective is to pursue what we have demonstrated we are good at, growing the Kentucky Derby, developing greenfield and organic opportunities, as well as executing strategic acquisitions that fit our profile. We do this while maintaining one of the best balance sheets in the industry. With that, I'll turn the call over to Marcia, and then we will take your questions. Marcia? Thanks, Bill. Good morning, everyone. As Bill shared, we delivered record Q1 revenue and Adjusted EBITDA. I'll start this morning with a few insights on these financial results and then provide an update on capital management. First, all of our HRM properties made strong contributions to our financial results in Q1. Our Oak Grove HRM facility continued to penetrate the Southwestern Kentucky and Nashville, Tennessee markets. We also had nice growth in our Northern Kentucky market as Turfway Park and Newport Gaming continued to improve and expand their market presence during Q1. Our Virginia properties contributed $98 million of net revenue and $47 million of Adjusted EBITDA in the Q1. This represents a 48% margin collectively for these properties. This performance is prior to any material improvements to the gaming floors at these properties that we expect to realize in the future. Second, regarding our TwinSpires horse racing business, our overall handle was higher in the Q1 than the prior year. We did generate lower Adjusted EBITDA from our online TwinSpires horse racing business as a result of higher content-related expenses and slightly higher ADW taxes in certain jurisdictions. Despite a slight decline in Adjusted EBITDA, we are pleased with the strong margins that this business delivered in Q1. The pivot out of the online sports and casino business provided a nice uplift to our Adjusted EBITDA and margins in Q1 compared to the prior year quarter. We believe the B2B expansions related to our horse racing technology and related services will provide a further enhancement to our Adjusted EBITDA and margins in the coming quarters. Regarding our gaming business, we realized significant contributions from the addition of the New York and Iowa properties acquired in the P2E transaction. Our equity investments in Rivers and Miami Valley Gaming also delivered strong performances in Q1 compared to the prior year. Our existing regional gaming properties in Maine, Maryland, Louisiana, and our Harlow's property in Mississippi collectively delivered a small increase in Adjusted EBITDA compared to the prior year quarter that was more than offset by declines at our Pennsylvania and Florida properties and our Riverwalk property in Mississippi. Our Q1 same store wholly owned casino margins were down less than one point compared to the prior same period in 2022, primarily reflecting the margin pressure from the decline in Adjusted EBITDA from our Pennsylvania properties. We are very pleased with the results that our team has delivered in the Q1, and we believe we are very well positioned to continue to grow through the remainder of 2023. Turning to capital management, we generated $204 million of free cash flow in the Q1, up $79 million over the prior year, primarily as a result of the strong cash flow generated from our businesses. Regarding maintenance capital, we spent $12 million in the Q1 and continue to expect to spend $75 million-$95 million in total for the year. Regarding project capital, we spent $123 million in the Q1 and continue to expect to spend between $575 million and $675 million in total for the year. At the end of Q1, our bank covenant net leverage was 3.9 times. Based on our planned acquisition of Exacta and our capital investments, we expect our bank covenant net leverage to remain in the 4 times range over the coming year. We expect our bank covenant net leverage to decline in 2024 and 2025 as our ongoing investments in all of our new projects come online. From a financing perspective, at the end of February, we completed a $500 million Term Loan A financing. We utilized the proceeds from the Term Loan A financing to fully repay the outstanding balance on our credit facility. We also completed a $600 million bond offering this past week. We used a portion of the proceeds from this bond offering to repay our Term Loan B that would have matured in December 2024. The remainder of the proceeds will be used for capital projects or for the Exacta transaction. Lastly, on Tuesday of this week, our board approved a 2-for-1 stock split and a corresponding proportionate increase to the authorized shares of the company. The stock split reflects their belief and ours in the long-term growth potential of our company. With that, I'll turn the call back over to Bill so that he can open the call for questions. Bill? Thank you, Marcia. At this point, we'd like to take any questions that you have for us. Please. To ask a question, you will need to press star 11 on your telephone. If you wish to remove yourself from the queue, please press star 11 again. One moment, please. Our first question comes from the line of Barry Jonas with Truist. Hey, guys. Good morning. Thanks for taking my questions. Now that you've had some time owning the P2E assets, curious what you see as the upside case and how that maybe compares to when you initially underwrote the deal. Thanks. Thanks, Barry. So far we've been, pleased with the P2E assets. One of our thesis in investing to acquire P2E, was that these properties were still on the early stages of their development and hadn't reached maturity. In general, we see that. we are also, of course, excited about the growth projects that hadn't been executed on, and that is a big part of what a portion of our team spends our time on. For the existing properties that were already there and operational, that is been a breath of fresh air. Generally, they've been quite strong, and we are quite optimistic looking forward. Got it. Just a follow-up. There's been more concern,, across the market on the health of the consumer. What are you guys seeing across your businesses? Maybe what options do you have to best respond if you did see things deteriorate? in the Q1, we were pleased with the consumer trends that we saw across our properties. We have to look at the results as they come in. We read everything everybody else does as well. So far they've been pretty strong and I feel pretty good in general. Some markets are better than others, but across a portfolio that is as broad and as diverse as ours, I do not have any yellow or red flags to raise with you at this time. In the future, if we do see economic headwinds, so, external economic headwinds in the economy, we'll adjust our marketing and our expense structure to deal with it appropriately because we are always goin to be focused on our margins. Right now we are not doing that because there isn't enough trend data to suggest that we need to. That is helpful. Thank you so much. Thanks, Barry. Thank you. Our next question comes from the line of David Katz with Jefferies. Hi, good morning, everyone. I wanted to go back to an issue. I apologize if this came out in the remarks. With respect to Kentucky sports betting, have you talked about what the opportunities are and what the magnitude of that is and what your strategies are for activating that once it goes live? Hi, David. Good morning. Yes, we can put these in our racetracks and also our HRM extensions. We will have 9 opportunities over time to deploy retail sports betting. We do this in other markets, we do this in several other markets, so we have an approach. We find that it does drive traffic to our properties, that it does help the overall energy and flow of people through our properties. it is a good thing. We will follow the strategies we followed in our other markets around our sports bars. We designed our facilities thinking that this may happen in Kentucky at some point. We've already built the sports bars, and we'll put in the kiosks, refine the custom-customer offering. It'll be a nice bonus. it is not material to the scale of the company or anything like that, but it'll help each of these HRM properties, not only from the contribution of the sports wagering piece, but from the additional traffic that it drives to the rest of the facility. Understood. On the subject of HRM facilities, one of the issues that comes up regularly with investors is the degree to which those HRM facilities, can perform, Whether an HRM machine, how it compares with a traditional, regular slot machine, whether there's any noticeable difference in consumer spend or behaviors or any of those sorts of things, or is it just the same? if you see the margins we drive from these facilities and the locations of some of them with the competition of other types of gaming on our surrounding borders, you can see it is a very competitive product. If you think about game titles, it is a process constantly of getting more game titles from the traditional Class III manufacturers converted to HRMs. it is a constant journey to make the product better. I would tell you that there are ways to further improve it, most with concentrated around the variety of product, getting more games available to us. As a business model, we are very, very pleased and excited about HRMs. As a company that is driven first and foremost by margins, you see the evidence of that and see why we are excited about it. Part of reaching maturity, eventually, property by property, and I am of the view that we haven't reached maturity at any of our HRM properties. Part of reaching maturity over time is constantly improving, working with the manufacturers to improve the quality and depth of products available using the HRM model. More to come. More to come, and that is part of the reason I'm excited about the Exacta acquisition as well, when we are able to close that over the rest of the year. that just helps us with our toolkit to work with manufacturers to make this product as competitive as we can with Class III. we are not where we are going to be over the long term yet. Appreciate it. Thank you very much. Thanks, David. Thank you. Our next question comes from the line of Dan Politzer with Wells Fargo. Hey, good morning, everyone, and thanks for taking my questions. First, I want to touch on the Kentucky gray machines. Recently, there was some legislation there that cracked down on this. Can you maybe talk about the size of what the gray machines was in Kentucky, maybe the properties that you could see the most uplift or that had you've seen the most drag there from this? And then just any way or hints in how to think about or quantify this impact of this, more restrictive regulation. Thanks. Happy to do that. For everyone else on the call, during the Q1, the Kentucky legislature passed new legislation that was signed by the governor, banning the category of gaming machines that euphemistically we refer to as gray games. These were popping up in bars and taverns and restaurants and convenience stores across the state. There wasn't a fully accurate count of how many of these were, but it is fair to say there were several times the number of these compared to actual HRM machines in licensed, authorized facilities like the ones we run. This was a circumstance where these machines were multiplying rapidly and had gained an unfortunate foothold in the state. They were unauthorized, they were untaxed, they were unregulated, they were not fully understood because there were no reporting on them. It was the collective view of many, including us and including the legislature, that they were harming and multiplying across the state. The state has taken steps through legislation to ban them. The law takes effect in the late summer. that is just a function of how Kentucky law works. The law isn't being implemented yet. It doesn't get implemented until the late summer. We think, given the while not precisely counted, clearly huge number of these machines all around us, that it is likely to have a positive impact when they go away on legal authorized gaming. Just as importantly, these were terrible for our industry. They were unauthorized, unregulated, and unmanaged by the state, and that is dangerous for a product like gaming. we are happy to see them go. We expect that it will improve all facilities out there that are licensed and regulated like ours. To precisely quantify it is hard because there was never an accurate count of the number of these things that were out there. Got it. Just to follow up on Kentucky and HRMs, the Turfway Park, it is, it is obviously a newer property. it is still ramping. Can you talk about maybe some of the puts and takes in that Northern Kentucky market? any cannibalization between that and Newport and how you look to grow that, as well as the margin profile over time? Any, insights into how to think about that relative to a Derby City or an Oak Grove? Thanks. That is a good series of questions. I'll unpack that one at a time. The Northern Kentucky market is the Cincinnati region. In that region, you have Ohio, Indiana and Kentucky all coming to meet with borders. Indiana and Ohio has had gaming in that market for many years, so it was a developed competitive market. We bring the advantage of being the only gaming on our side of the Ohio River, but it is a very competitive, developed market. It started with Newport for us, followed by building out the full Turfway Park. Every quarter is better than the last, and I thought we showed great improvement between our opening last year and the Q1 of this year. We were very pleased with the path we are on towards improvement, and we are on a path. you'll see improvement over the next several quarters. We look at Turfway and Newport as one combined product offering. I do not have anything material to say or any material concerns about the interplay between people that go to Newport versus Turfway. it is about reaching these customers in the market and convincing them they have an alternative to driving over these bridges to Indiana and Ohio. More to come on that, but the market dynamics are we are the new guy in a developed market, and we have to convince the customers to try us and give us an opportunity to compete for their consumer dollar. that is a process that takes time in a competitive market. I'm very pleased with our team and very pleased with our start and very pleased with the progress we showed over Q1. Great. Thanks so much. Thank you. Our next question comes from the line of Shaun Kelley with Bank of America. Hi, good morning, everyone. Thanks for taking my questions. Just wanted to ask a specific one around TwinSpires, maybe just to start is, are we yet seeing any, what we consider material contribution from some of the, agreements reached with FanDuel and DraftKings on the partnership side there? Should we expect to see or possibly see something a little bit more material, in terms of contribution coming through, with the Derby? Just kinda how to think about that relationship. I know the economics are spread across a couple of different places, but just help us think, strategically about maybe where those partnerships sit at this stage. Sure, Shaun. that is a interesting question, it is one that you'll see the answer play out over an extended period of time. In our organization, we track a lot of data, and we look at it constantly. We do see initial signs that FanDuel is investing in pushing horse racing and that others will as well. we are very excited to see the first real milestone of that, though, around the Kentucky Derby. this is one of those things where I can tell you that I've paid a lot of attention to the TwinSpires business since the day it was conceptualized and became a real thing. I follow that data personally very carefully. the proof will be in the pudding, though, and we are very close to starting to see some of that proof. Look out for Derby, look out for handle on the Derby this year., if you'll show some patience, we'll be able to provide you a better, more complete answer in the Q2 after there's a chance for the Triple Crown events around which some of these folks can do comprehensive marketing because they have events to push people towards. Initial signs prior to those events, I found encouraging, but not the thing that we should use this call to drill deeply into. I just ask that you show a little patience and wait for the Triple Crown events that are happening in the Q2, where these folks can do some marketing around. So far, particularly FanDuel,, they're showing a lot of interest and appetite. The thesis that we have here is that many of our customers will enjoy a bet on the Kentucky Derby or on horse racing, but we never managed to reach those customers with our TwinSpires offering. These folks that are out there now with a broader sports wagering platform like FanDuel, they've reached a lot more customers than we ever were able to with our very narrowly focused TwinSpires app, which we still think is the absolute best in the business for betting on horse racing. That is all you do on it. You do not bet all these other sports. An optimistic time for us, but the proof is goin to be in the pudding, and we are happy to wait for that. We'll talk about that in more detail next quarter. Makes sense, and something to look forward to. Second question would just be, Richmond came up just on the slate of it sounds like you got a couple referenda you are targeting, in Virginia for this fall. just wondering if we could revisit, scope and scale there of potential opportunity, as well as just, any milestones or things that need to occur relative to,, a, competing proposal that exists up in Petersburg. your proposal has been around much longer. Just kinda a couple of the, the pros, cons there because I believe that the scope and scale there is pretty material. That is a potentially $500 million-$600 million project. We hope to get the opportunity to do it. Last year, there was a one-year delay in our ability to conduct a referendum in Richmond. A city referendum is required for authorization to move forward with the project. This year, we are working towards authorization by the city to conduct the referendum. we are on a pathway to do that. We hope to achieve that. We haven't achieved that yet. Those are a series of steps that we are processing through, but so far, nothing to nothing to be concerned about. We'll do our best to process through that to put ourselves in a position to conduct the referendum this year. There are five authorized licenses in the state of Virginia. Four have been awarded. This is the fifth and final full Class III license. It requires a hotel, a casino which will include table games and Class III machines. This is the fifth license that the city of Richmond has awarded the partnership, and now we have to go through the process to authorize the referendum or get the referendum authorized so that it can be conducted. There's still several steps here before the project could be realized, and we are on that path. Never a guarantee that you get to the finish line, but so far everything is going well. We'll proceed down this path over the second and Q3, hopefully achieve all the required approvals, hopefully then conduct the referendum and win the referendum, and then the process to construct would start. The fruition of the project is still something that is not measured in 2023 timeframe or probably even 2024. These are the initial steps to unleash a, what we think would be a fantastic project. Thank you very much. Thank you. Our next question comes from the line of Chad Beynon with Macquarie. Hi, good morning. Thanks for taking my questions. First, I wanted to revisit just some comments around margins, I guess, specifically focusing on the gaming and then the HRM facilities. I believe you said, outside of Florida and Pennsylvania, margins were very strong. Wondering if you could just dig into that a little bit more? Have we seen the labor and utility pressures plateau? I guess, just going back to the hypothetical, if revenues and demand remain strong, are these margins that are sustainable, at least for the year? Thank you. Thanks, Chad. Appreciate the question. I would answer that by saying, look at our results for the quarter. Those are the trends that are in the books that we see and that we can fully understand. Week to week, we always look carefully to look at trends. I've been around doing this for a long time, and I'd say, comparisons are always something that you have to give time to watch them develop. There's always weather events from prior year or other things like that that can affect them. The short answer is, we are doing our thing. we are not seeing material changes that we have to respond to. If we did see these things developing in our operations, then we move to plans where we tighten up the cost structure and tighten up the operations in order to best maintain our margins. There's no cause for alarm here. Things generally look pretty solid across the whole portfolio. When you have as many properties as we have, you might find an example of anything across that many properties. Generally, in operations, I feel good, and there's nothing to report or dig deeper into at this time. we are just goin to execute as we have been executing. When it comes to construction, timing, and cost, I do not have an update on the timing or cost versus what we disclosed in our Q1 press release last year. Yes, there are challenges on labor. Yes, there can be challenges on material, but we are managing all those. What we disclosed last quarter in terms of timing for our projects and cost for those projects, we are still on course for that. Other than as I disclosed in my prepared remarks, where we decided of our own volition that we could do better in Owensboro and select a better site that would serve us better long term. Otherwise, yes, there can be challenges on the construction side, but we are managing through those, and there's nothing to report on the call. It is great to hear. Thanks for that update. Separately, just on the HRM content side of things, when we talk to the slot manufacturers, it sounds like they're all focused on generating good content for your business, for HRMs in general. Where are we just in terms of the content journey? Are there still opportunities to improve the floor, whether it is diversification or overall content, obviously understanding that the Exacta acquisition is pending? Thanks. We are nowhere near the end of the journey. There are lots of pieces of content and some manufacturers that we haven't reached yet, that we haven't developed, and it'll be a constant state of catch up because the businesses, the manufacturing businesses are run and oriented towards the Class III machines. Getting that product converted for ours will always be something we are working on. There's still a pretty healthy product map and roadmap for what we want to see happen in terms of HRM product on our floor. Our manufacturers,, get the, the attractiveness of HRMs for their business model, the ability to sell us machines and make a return on our HRM floors. it is working fine. it is working well. I'd leave the question on that. Obviously, there's a lot we could talk about, and we do work on here, but I would leave it at this. it is an area of significant strategic focus for us to think about how to improve the floors and what product is out there of various types that would help us shape the floor. I would also say that already we've achieved a quality product, but our goal is always to be as good as any of our competition has, and we always are goin to have that extra step that we are HRM. All good. You'll see improvement every quarter. All good. Great. Thanks, Bill. nice quarter. Appreciate it. Thanks. Appreciate the questions. Thank you. Our next question comes from the line of Jordan Bender with JMP. Great. Thanks. Good morning. I want to start in Virginia. There was a casino opening there during the quarter, and your margins were flatter, unimpacted quarter-over-quarter. When we think about the land-based product on the casino side coming online in the coming months, is that 48% margin sustainable or something we should think about throughout the rest of the year? Thanks. Good question. Certainly there is competition coming online. There already is competition that is come online in Virginia. I feel good about our margins and our ability to sustain and improve as we do the Exacta transaction. Our challenge in the state are across all our facilities there, we are limited to 5,000 machines. If one particular property feels pressure versus another because of competition, essentially that is an opportunity to move product around the state. We do not have enough machines ultimately. Right now we've deployed 2,700, but we will get to 5,000 relatively quickly as we expand our footprint. Ultimately, our real challenge in the state of Virginia is the number of machines we have, and we have 10 places we can move those machines around based on, based on the competitive environment. it is part of the chess match, but I do not view it as a margin threat because ultimately, that is on us to be smart on where we deploy our resources. We have great locations now and we think great locations that we'll deploy to in the future. it is part of the chess game of how to maximize the utilization of these machines so that we maximize our margins in the state. our team will meet that challenge. Far they have. Great. Thanks, Bill. Marcia, it looks like share repurchases were somewhat minimal or none in the quarter. We know you have the dividend in Q4. As we think about capital allocation going forward, is it fair to assume that share repurchases will be kinda close to none until we get through most of these growth projects? As we've said in the past, Jordan, we are very opportunistic on a share repurchase perspective. Based on all things considered, based on our leverage, we have tremendous capacity, as you just saw, with our credit facility to be in the market to buy shares back when we decide that we want to. You'll see us, buy shares back opportunistically in the future as well. Great. Thanks. Nice quarter. Thanks, Jordan. Thank you. I would now like to hand the call back over to Chief Executive Officer, Bill Carstanjen, for any closing remarks. Thank you. Everyone, we appreciate your interest in our company and your investment in our company. We'll try to be good stewards of your capital. We obviously have a lot going on right now with the Kentucky Derby and all of our growth projects, we are up for it though. This is an exciting time for us, an optimistic time for us, and we just want to execute and take good care of your capital investment in us. Thank you, and we'll talk to you all soon. Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.