Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2023 second quarter 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 second quarter 2023 earnings conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2023 second quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company's website titled News, located at churchilldownsincorporated.com, as well as in the website's investor section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. 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 Dall will provide insight on our financial results, as well as an update on our capital management strategy. After she finishes, we will take your questions. We delivered all-time record net revenues of $769 million and all-time record adjusted EBITDA of $364 million in the second quarter of this year. We were very pleased with the results for this year's 149th Kentucky Derby. A crowd of over 150,000 fans watched Mage, at 15 to 1 odds, pull off an incredible victory. Strong growth in ticketing and sponsorship revenue, coupled with record wagering, generated a sizable increase in adjusted EBITDA, setting a new all-time record for Derby week. We were thrilled to debut on time and on budget, our new First Turn Experience, which provided one-of-a-kind premium accommodations with exclusive views of the horses and the racetrack from the rail of the historic first turn. Our carefully planned and executed capital projects at Churchill Downs Racetrack over the last several years have delivered a solid foundation for ongoing growth in the coming years. We have kicked off our year-long preparation for the 150th Kentucky Derby next year. We launched ticket sales in several areas in late May, and as of June 30th, have already executed contracts for approximately 37% of our planned ticket revenue for next year's Derby, which is significantly ahead of the pace for any previous year. We continue to make excellent progress on the Paddock project, which is a transformative undertaking for our facility. This project has many facets to it. We are adding additional reserve premium seating that will provide a wide variety of new seating and dining experiences for our guests. When this project is done, everyone who enters our racetrack will be treated to spectacular views of the Twin Spires and the Paddock, which we believe will provide a central for a venue that unites everyone who will visit. We announced yesterday that we will be investing approximately $15 million to significantly improve the guest experience in our Jockey Club Suites area, overlooking the home stretch of Churchill Downs Racetrack. We have 61 suites in our Jockey Club Tower and host approximately 2,500 ticketed customers across the suites, dining areas, and terraces. We expect to have the improvements to this area completed in time for the 150th Derby. We are already planning our next series of development projects for Churchill Downs Racetrack. There are many more opportunities to build out our facility to provide innovative and extraordinary once-in-a-lifetime experiences for new and existing guests. We hope to launch the next phase of our multi-year development plan immediately after the 150th Derby. Our commitment to investing in our flagship asset reflects our belief in our ability to generate consistent adjusted EBITDA growth with nominal levels of risk for years to come. Finally, we will also be adding a new sports bar in our existing simulcast area at Churchill Downs Racetrack in time for the launch of retail sports betting in Kentucky on September 7th of this year. Turning to our HRM entertainment venues, we were pleased to open the new hotel and steakhouse at Derby City Gaming in Louisville in early June. This, coupled with the gaming floor expansion and the addition of the new sports bar earlier in the year, provides a suite of additional amenities for our guests to enjoy. While it is still early, we are exceeding revenue and profitability projections in the first month since opening. We are on track to open Derby City Gaming Downtown, our sixth Kentucky HRM entertainment venue, in the fourth quarter of 2023. This venue is located in the heart of downtown Louisville, across the street from the convention center. We announced that our seventh HRM facility will be just outside and to the east of Owensboro, Kentucky. We have identified a greenfield site and believe that this location will enable us to create a premier entertainment destination for all residents of the region. We are now focused on completing the permitting and site planning process. We will provide an update on the project timing and budget on our next earnings call. HRM entertainment venues across Kentucky will benefit from the passage of legislation banning gray games, which became effective on June 30th. Gray games are essentially slot machines; however, they are unregulated and do not pay state or local taxes and do not follow responsible gaming protocols, including restrictions regarding minors, anti-money laundering policies and procedures, and a host of other federal and state laws designed to protect consumers and the community. With the ban only taking effect at the very end of last month, it is still unclear how much of an impact it will have on our HRM venues in Kentucky. We certainly believe that it will have a positive effect and will be a benefit to the Commonwealth of Kentucky, its citizens, and the horse industry as well. Our Kentucky HRM venues will also benefit from the legalization of retail and online sports betting. We plan to have live retail sports books in our HRM venues on September 7th, in time for the football season. We will also have a sports bar with sports betting in our Derby City Gaming Downtown facility when the property opens in the fourth quarter. Retail sports betting in our HRM venues will provide another incentive for new and existing customers to come to our properties. We also monetized a couple of the online sports betting licenses we have in Kentucky with B2B partners, including one with FanDuel. Regarding our expansion in Virginia, our Rosie's Emporia HRM venue will open later this quarter with 150 HRMs in the southern portion of the state, near the North Carolina border, right off Interstate 95. Our Dumfries HRM venue and hotel is being built in northern Virginia, approximately 30 miles south of Washington, D.C., also directly off Interstate 95. This venue will open with 1,150 HRM machines in Phase I, and we can go up to 1,800 total machines in Phase II. The construction is ongoing, and we expect the first phase of the project, including the gaming facility, to be open in the 2Q 2024. In June, we announced plans to run a parimutuel referendum this November in Manassas Park, which is in northern Virginia, where we hope to open a venue with 150-250 HRMs. The city has really welcomed us, and we are excited to pursue this opportunity. Currently, we have 6 of our allotted 10 HRM facilities open. Emporia will be the seventh. Our large-scale Dumfries project will replace our current temporary 150-unit facility and thus will not be additive to our total number of deployed licenses. Manassas Park would be our eighth license, giving us two more to deploy in addition to our ability to relocate any existing facility to another location. We also recently announced that the Richmond City Council approved our partnership with Urban One as the city's preferred casino operator. Over the last week, we obtained the required certificate of approval from the Virginia Lottery, and the Circuit Court has granted our petition, allowing the referendum. As a reminder, we have a 50/50 partnership with Urban One to build a Class III casino, hotel, and event center in the city of Richmond upon approval via a citywide referendum. If and when we obtain the right to proceed, we plan to build it in phases. The first phase consists of the casino and parking facilities, and the second phase will include the hotel and the event center. This phased approach will enable us to expedite opening the casino portion of the project and generate cash flow to offset the construction costs of the second phase. This is the most financially prudent approach and provides near-term tax revenues for the city of Richmond to fund a variety of their priorities. We have also made significant progress on our Salem, New Hampshire, HRM site plans, and we'll be able to share more details on those plans by the end of the third quarter. Although this has taken longer than we would have liked, we remain excited and committed to creating a unique HRM entertainment offering for the Salem area that will also draw guests from the suburbs of Boston. We anticipate closing the Exacta transaction no later than the end of the year, and potentially sooner, if the remaining closing conditions are more quickly achieved. Through our ownership of Exacta, our facilities in Virginia will be able to have a broader variety of games on their gaming floors, and we will be able to reduce the cost of providing and operating the machines. This will improve our top line and our margins for Virginia. We will also continue to improve the technology platform and to offer the Exacta system to third-party HRM operators. HRMs and HRM venues are a key strategic focus over the next 5 to 10 years for our company. These high-growth, high-margin investments provide an excellent return on capital, and we will remain disciplined as we expand our existing footprint and product offerings. Regarding our TwinSpires segment, we were pleased this quarter to see the beginning of the benefits from our B2B expansion strategy. Our TwinSpires and United Tote businesses are now receiving B2B fees related to providing and settling wagers on horse races for FanDuel and DraftKings. Although we cannot comment on our B2B partners' horse racing results, the Kentucky Derby was a great boost for both our TwinSpires horse racing platform, which saw record handle and new registrants, and for our B2B partners. We expect to add additional B2B partners over the next 12 months. We are very optimistic that horse racing and our TwinSpires services can be expanded meaningfully to online sports wagering platforms to reach millions of customers, and that we will continue to benefit from the growth in incremental fees related to our B2B services over the longer term. Our TwinSpires handle was impacted in the second quarter by the loss of 88 race days, as well as over 600 races, many from top tracks, primarily related to the extensive wildfires in Canada. TwinSpires was also impacted by the move of the Churchill Downs race meet to Ellis Park in June. To many of our players, Churchill Downs Racetrack is the single most important track that draws them to our site on any given day. We expect some Canadian wildfire impact on our TwinSpires handle in the third quarter. However, we will return to racing at Churchill Downs Racetrack for our September race meet. Regarding our gaming segment, we delivered record second quarter revenue and adjusted EBITDA with the addition of the Iowa and New York properties from the P2E acquisition. We did see mild softness across some of our regional gaming properties, particularly in the first half of the quarter. Each regional market has different economic and competitive drivers that, on a quarter-to-quarter basis, can impact the performance of a property. Overall, despite the inflationary and economic pressures and increased interest rates over the past year, we remain highly confident in the performance of our regional gaming properties, which generate significant free cash flow. With respect to our Terre Haute Casino & Resort, construction is progressing well with the planned grand opening for the casino and hotel in the second quarter of 2024. In summary, second quarter was another great quarter for us, with all-time record financial results, and the best is still to come. We've delivered strong growth from our investments in the Kentucky Derby, our acquisition of the P2E assets, and our organic investments in HRM and other gaming entertainment venues. We still have a lot more growth to come from the projects we've discussed today and others yet to be far enough along to share with you. We expect our growth plans to drive a material increase in adjusted EBITDA and free cash flow in the coming years, while we maintain 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 all-time record net revenue and all-time record adjusted EBITDA in the second quarter. Our diversified portfolio of businesses generated a 32% growth in revenue and a 25% growth in adjusted EBITDA on a quarter-over-quarter basis. I'll start by sharing a few insights on these financial results, then provide an update on capital management. First, regarding Derby week at Churchill Downs Racetrack, as you saw in the press release that we issued immediately following the Derby, we once again set all-time records for wagering on the Kentucky Derby race, the Kentucky Derby program, and the Kentucky Derby week races. TwinSpires also generated record handle on the Derby day program and on the Derby race. Derby week is expected to generate $14 million-$16 million of incremental adjusted EBITDA for 2023. As a reminder, we recognize nearly all of the revenue and costs associated with Derby week during the second quarter of the year. There are some ongoing SG&A-related costs associated with Derby week that are recognized throughout the year. The impact to Churchill Downs Racetrack from the shift in racing operations to Ellis Park for three weeks in June was approximately $4 million. We are disappointed that we incurred this one-time impact to our financials in the second quarter, we believe it was the best long-term decision for our company. Our HRM properties in Kentucky and Virginia made strong contributions to our financial results in second quarter. Our HRM properties contributed nearly $50 million, or 2/3 of our growth in adjusted EBITDA for the second quarter. Our organic investments in our Kentucky HRM properties grew 10% overall on a quarter-over-quarter basis, and we benefited from the addition of the high-margin Virginia HRM properties that were part of the P2E acquisition. Our Virginia properties contributed $44 million of adjusted EBITDA in the second quarter, reflecting a 46% margin collectively for these properties. Our margin was a point lower in the second quarter than first quarter, reflecting some additional racing-related expenses associated with preparing for the Colonial Downs race meet, which kicked off last week. Our margin was also a point lower, primarily as a result of slightly lower top-line results and increased marketing spend at our Hampton property. As expected, our Hampton property has seen increased competition from a new casino that opened approximately six months ago. We expect to improve margins for our Virginia HRM properties as we enhance the gaming floors and as we realize the benefits from the Exacta acquisition in the future. Third, turning to our TwinSpires segment. TwinSpires handle and adjusted EBITDA were impacted in the second quarter from the shift in racing from Churchill Downs to Ellis Park. TwinSpires has a significant market share of Churchill Downs handle. It appears that bettors did not shift all of their typical wagering during that time to Ellis Park. TwinSpires also was impacted in the quarter by the cancellation at various racetracks of approximately 15% of the Thoroughbred race days during June, as well as a number of Standardbred races, primarily due to the impact of Canadian wildfires on air quality conditions. We estimate that the combined adjusted EBITDA impact of these two unplanned and unusual events in the quarter was less than $2 million. We also had higher content-related expenses and slightly higher ADW taxes in certain jurisdictions. These unplanned events and higher expenses and taxes were offset by increased adjusted EBITDA associated with our B2B expansion related to our horse racing technology and settlement services, and the benefits from our continued pivot out of the direct online sports and casino business. Despite these challenges, it is important to put the TwinSpires quarterly results in perspective. Although TwinSpires adjusted EBITDA was flat on a quarter-over-quarter basis, it was up 15% on a sequential quarter basis. This reflects the overall strength of this business, including the tremendous benefit it receives from the connection to Churchill Downs Racetrack and the Derby, and we believe it will continue to grow as we expand our B2B strategy. We do expect the TwinSpires segment margins to return to more historical levels in the third and fourth quarter of this year, and based on our continued B2B and retail sports betting expansion and reduced marketing spend. Fourth, regarding our gaming business, we once again realized significant contributions in the second quarter from the addition of the New York and Iowa properties acquired in the P2E transaction. As Bill discussed, we did see mild top-line softness, which resulted in a collective modest decline in adjusted EBITDA on a quarter-over-quarter basis for our existing regional gaming properties. Our second quarter same-store, wholly owned casino margins were down slightly more than 1 point compared to the same period in 2022. Our margins on a comparable basis are up 3.6 points for the second quarter compared to the same quarter in 2019, reflecting our retention of approximately half of the margin expansion benefit from the post-COVID peak in 2021. We recorded a $224.5 million non-cash impairment related to the gaming rights intangible for our Presque Isle Casino. This reflects the increasing competitive threat from gray games, the economic environment, including inflationary trends and the high interest rates, and the impact of iGaming on retail gaming, and the impact of operating in a high tax rate environment in this state. Turning to capital management. A reminder, our 2-for-1 stock split was effective May 22nd. All of our per share metrics have been updated for this impact. We generated $372 million, or $4.87 per share of free cash flow during the first half of the year. This is up $15 million, or $0.25 per share, over the first half of 2022. This reflects our strong diversified earnings. This increase over the prior year reflects the strong cash flow generated from our businesses that was partially offset by higher interest rates and a $33 million nonrecurring tax refund in 2022. Regarding maintenance capital, we spent $30 million in the first half of the year. We continue to expect to spend $75 million-$95 million in total for the year. Regarding project capital, we spent $282 million in the first half of the year. We continue to expect to spend between $575 million and $675 million in total for the year. At the end of the second quarter, our bank covenant net leverage remained at 3.9 times. Based on our planned acquisition of Exacta and our capital investments, we continue to expect our bank covenant net leverage to remain in the 4 times range through the end of the year. We expect our bank covenant net leverage to decline in 2024 and 2025. Overall, we are very pleased with the results that our team has delivered for the second quarter. The diversification of our portfolio and our strong balance sheet provides us a solid foundation for growth through various economic cycles and operating opportunities. We're very well positioned to execute on our tangible pipeline of growth opportunities through the remainder of 2023 and beyond. 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're happy to take your questions. Fire away, please. Thank you. To ask a question, you will need to press star one one on your telephone. If your question has been answered or you wish to remove yourself from the queue, press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of David Katz with Jefferies. Hi, good morning, everyone. Thanks for taking my questions. Look, I wanted to just talk about the gaming business, right? And regional gaming, and I suppose we include HRM, you know, in there. You've given us a lot of detail, but what I wanted to talk about in a general sense is. You know, is there some, you know, we've seen some industry numbers that come out a little bit down year-over-year. I'll speak for myself, sort of keeping all of that processed into our numbers for regional gaming, you know, is been a little bit more complex in your case because of the growth. What is the underlying economy and demand environment looking like to you? Particularly as we start to get into July, you know, how is that sort of setting up going forward? Thanks for the question, David. First, when you think about our company, you always have to pull back from just a quarter-by-quarter look. Our company, the way we're structured, the way we're built, we're built to deliver a lot of growth over the next few years because of the projects that we've developed and that the pipeline we have. Everything about that is the same as it's been. It's a time of extreme optimism, and it's a time of execution for our company. Anytime I get a specific question about trends you might see in a given month or even over a quarter, I try to frame them in the context of that larger picture of: how do we grow our company? How do we build our company? That's a course you have to set over a multiyear period, and that's a course you have to stick through even month to month, quarter to quarter, and year to year. Everything about what we're doing in our company remains on course, and it remains a time of great optimism because of the strength of the pipeline that we've built. With respect to this prior quarter, I think if you look at the numbers across the entire country, you can see pockets of strength, and you can see pockets of weakness. In general, I'd say that the second half of the quarter was stronger than the first half. I would say, even though we're currently in an environment where we're demonstrating for you substantial growth in our company, primarily because of the P2E acquisition, and some of those properties are performing very, very well for us. We still showed organic growth in our base business, absent that acquisition. Those are the larger trends and themes, I think, to focus on when you think about our company. I look, I think the important follow-up, if I may, is, you know, that the growth pipeline, the considerable growth pipeline, you know, since we last spoke on a public call about it 90 days ago, right, is still, you know, comfortably intact, correct? Oh, yeah. I think, you know, start with the Kentucky Derby and the performance that we saw with the First Turn project, that really did exceed our expectations in terms of the immediate customer acceptance of that and the positive feedback we got from that. If you break it down, we feel very optimistic about all the projects we're doing around the Derby. From that, you spread into the HRMs with the Dumfries project that's coming on, the Emporia, all the projects we're doing there. We feel really good about Terre Haute as well. At this point, what's important for us, David, is execute, execute, execute. Get those properties done on time and on budget. Just focus on executing the plans we've already put in place. In general, I'd say there is a lot of cause for optimism, and those remain on course for delivery, as we previously discussed. Perfect. Thank you. Thanks, David. Thank you. One moment, please, for our next question. Our next question comes from the line of Daniel Politzer with Wells Fargo. Good morning, everyone, and thanks for taking my questions. I wanted to follow up and drill a bit more into the gaming segment. I mean, if I look at just the Iowa and New York properties that you recently acquired, it looks like revenue was more or less flat quarter-over-quarter, and EBITDA was down. Is there a big seasonality component, or is there something going on specifically at those properties? Along those similar lines, like, is there anything specific in Louisiana? That one also stood out as, you know, being down a bit year-over-year. I, I ask this in the context of, you know, this was a segment to the prior question we generally have a good feel for, and it seems there was just a lot of squishiness here. Thanks. I think in general, there are some labor pressures at different properties. I think those are common themes throughout the country. There's also some mild softness just in general on the top line. I wouldn't want to call out those 2 particular properties or talk about the properties where there are strength. I would just say there's some of that noise going on in the market in general. In general, it'll wash out. I'd never, while our team focuses and will respond quickly to data that they'll see week to week, I don't personally ever draw big trends from a month or 2 months. Again, in the last quarter, I saw a mixture of things. I thought the first half was a little rougher generally than the second half. I don't want to communicate to you, Dan, that I thought there was anything we needed to significantly adjust to based on what we saw in the first several months of owning that property or what we saw in the last quarter. It's okay. It's gonna be fine. It'll settle out, and it'll settle down, and I don't think there's any. Institutional or seismic, you know, sort of paradigm shifts that we have to adjust to in those markets in particular or in general. Got it. Thanks. That's helpful. I know it's a bit early, as we think about, you know, next year's Derby and maybe the puts and takes, between the Paddock, the Jockey Club, you know, maybe possibly more B2B deals, and then just it being, you know, 150 and as you think about pricing. Can you maybe walk through some of the puts and takes here as we try to bridge from this year to next year and what may be the most incremental drivers of EBITDA growth? Yeah, next year, we're delivering a really seismic change in the on-track experience at Derby. We're delivering a bunch of new ticketing options. We're impacting for existing seats, the experience. Next year, you'll see a pretty significant expansion in ticket revenues. I think other things are moving well. Things like wagering are the trend lines have been extremely strong there. But the biggest driver of Kentucky Derby EBITDA over time has been the experiences, not seats. We never like to talk about it in terms of seats. We like to talk about it in terms of delivering different experiences for our customers. Next year, Derby 150, which is going to be a really significant event in the country. It's, no one else can really make claims of 150 consecutive events in a row. We're building around the uniqueness and specialness of the 150th consecutive Derby and the capital investment that's been made in our facility to drive a meaningful increase in ticketing revenues. Understood. Thanks for the call. Thank you. One moment please, for our next question. Our next question comes from the line of Barry Jonas with Truist Securities. Hey, hey, guys, good morning. Happy to hear racing's coming back to Churchill Downs soon. Wanted to just ask about the suspension. You know, what were the conclusions of the investigation? What steps have been taken to minimize future risks? Thanks. Thanks for the call, Barry. We'll announce shortly more details on the September meet and some of the safety protocols that will be enhanced. The takeaway is the track is very safe, and what we needed to do was spend some of this time in the interim, while we ran the rest of the race meet at Ellis, to just go soup to nuts through every single thing we do at the racetrack. There were nothing that jumped out as an apparent cause of the injuries, of the breakdowns. As we went through and rebuilt our processes from the ground up to check everything that we do to make sure, extra sure, we didn't find anything material. The way to think about news like that is, you have to do the best you can. You have to take the steps that you can to make it as safe as possible, and you constantly have to challenge yourself and review everything you do. This was a series of unfortunate circumstances that happened during the early portion of our meet. To the extent that there can be good that comes out of it, everything we'll do going forward, starting in September, we'll do a little bit better and be a little bit more thorough, and we'll learn what we can. There aren't any material changes that have been made to the structure of the track or the surface of the track, because bringing in some of the best in the world to help us evaluate it, we didn't find anything fundamentally wrong or different about our track from previous years. That, in a sense, can sometimes be unsatisfying, but that's business and that's sports. We just have to commit to continually doing everything we can, constant incremental improvements to be as safe as we possibly can, and we've done that. Great. I appreciate that, caller. Just as a follow-up, wanted to ask about the Richmond casino process. You know, how do you see the ballot initiative process differing now versus the last time? This time we have the benefit of the data behind the process that was run 2 years ago that didn't involve us. The task of our team, of our partnership, is to evaluate everything about last time to find places where we can drive incremental improvement. The good news about running a referendum a second time, and again, we didn't run it the first time, but our partner was involved in running it the first time. The good news about doing that is you have a lot of data about how people voted and why they voted that way, and we'll try to take all that and fold that into our processes this time to drive incremental improvement. It was 51-49 last time. It wasn't a catastrophic defeat. It was lost in the margins, so we'll be fighting to win the confidence and the approval of those voters in the margins that last time didn't have enough confidence in the project. Great. Thank you. Thanks, Barry. Thank you. One moment, please, for our next question. Our next question comes from the line of Joe Stauff with SIG. Thank you. Good morning, Bill, Marcia, Bill. I, Bill, I know you had mentioned in your opening comments, but I wanted to ask you maybe the best way to think about timing of the benefits associated with, you know, the new Kentucky law and outlawing, basically, gray market machines. You know, it's a tough answer, right, in terms of anticipating when, you know, say, that tailwind starts to show up for you guys. I wondered if you could maybe talk about that a little bit more, and then I have one follow-up, please. Sure. It was the decision of the legislature to pass legislation, which was signed by the governor, banning gray games, was a really good thing for the Commonwealth. Gaming is supposed to be a regulated and taxed business. In particular, on the regulatory front, it's important that there are basic protocols and processes in place to protect patrons who choose to participate and to prevent patrons who shouldn't be participating. All in all, this was a very good thing that happened in the Commonwealth of Kentucky. Obviously, when you have unregulated, unlicensed, uncontrolled gaming, you see a lot of proliferation and expansion, this arrested all of that. This stopped all of that. As we go forward from this point, and the opportunity for people to engage in that illegal gray game behavior is no longer there, we'll see some of that demand shift over. By the matter of logic, you'll see it shift over to the licensed, regulated gaming, which we participate in, the HRM business. As to the individual impact of that, it'll probably vary by facility, and it'll be hard to always isolate, because at every one of our properties, we're also doing other things to improve our business. For example, Derby City Gaming, we've opened up the hotel. We're learning how to run that well. We've expanded the gaming floor. We also have sports wagering that goes live on September seventh. We have these other good things that are going on in our properties across the state, and one more positive factor will be the fact that illegal gaming in Kentucky is no longer permissible. I can't totally isolate it for you at this time. As we actually get real data, and as I think you know, we're a very data-driven company. As we actually get real data into the system, maybe we'll be able to comment more specifically. At this time, it's just kicking off, and we know it's going to be positive, but it's hard to quantify. Gotcha. Then just to follow up on the Dumfries comments that you had. You know, Phase I, the second quarter, I believe you outlined 1,150 in terms of just the number of units. You know, what is the right way to think about how quickly or you, you think about adding and, and getting up to that more maximum number of roughly 1,800 units? Really good question. I think it can go a couple of different ways, and I think we'll see how quickly it ramps. We'll be talking to the community about the conditions around expansion, which involves opening the event center and the other spaces. We'll be looking at all of that based on what actually happens when we open. Obviously, we, while without being able to predict the future, we expect strong demand, particularly on a per-machine basis. Give us a little bit of time to get it open. Give us a little bit of time to complete the road infrastructure. Give us a little bit of time to talk to the community about our partnership for expansion of the facility. All of that will be in play, and we'll go from there. We're obviously interested in ramping up as quickly as we can. We think the demand is going to be there and is going to be there quickly. All this has to be done carefully and in conjunction with the community and their expectations on traffic flow and the other amenities in the facility. We're prepared to move very quickly, and we'll end up doing that, but I don't want to promise that till we get the place open. Okay. Thanks a lot, Bill. Sure. Thank you. One moment, please, for our next question. Our next question comes from the line of Chad Beynon with Macquarie. Morning. Thanks for taking my questions. First, with respect to reducing leverage, you obviously have several options, including divesting assets, sale-leasebacks, you have some excess land that could be sold, or you could just, you know, grow your way out of leverage, which is kind of how you framed it before, given the ramping and opening of properties that you've laid out. You know, given the current status of the environment from a macro standpoint, has anything changed just in terms of how you're planning on deleveraging? Thanks. I don't believe anything has really changed. While I read the same articles and look at the same data many other people do about the economy and understand the natural concerns people might have about the state of the economy over the next year or two, and interest rates, et cetera. For us, this is a time of expansion in our company. We have a very strong pipeline of great projects that make sense in any economic environment. Nothing about the current economy makes us want to change our plans for executing our growth strategy. Along with our growth strategy, and along with these properties and projects we've talked about today, will come a lot of additional EBITDA. That's how we've been building this company over the last number of years, and that's how we're going to continue to build it, even through an economic cycle that some people feel or is likely to give people headwinds. I don't think we believe, as a senior management team, that we're feeling the headwinds in any material respect. We're going to go continue to do what we've been doing, and we feel fortunate and blessed to have the pipeline of opportunities that we have. Thank you, Bill. Back to Virginia, the HRMs. You kind of outlined the process in Dumfries, and I'm guessing it would be the same with the licenses that you have remaining outside of that. A lot of items going on in Virginia with new properties opening. We've seen North Carolina land-based casino legislation potentially proposed. In terms of those, those last licenses, can you kind of help us think about, you know, the timeline of when you would green light those or pick sites? Is this something that could be several years out, or, you know, maybe after the Richmond ballot and some other items in North Carolina that would give you enough confidence to kind of move forward in certain locations? Sure. Good question. I'm reminded of the famed UCLA basketball coach, John Wooden, "Be quick, but don't hurry." We plan on moving very quickly with respect to our remaining licenses in Virginia, and we think about things about what we do with underperforming ones as well, although they've all been fairly solid. I think you'll see us move as quickly as we possibly can. There's really a two-pronged approach to thinking about it. One is we have to identify markets in the state that we think are the best markets to use one of 10 licenses. You know, we have to identify those, and then we have to go talk to those communities and get support to run a referendum. As part of that phase, we also have to win the referendum. There's a lot that can happen in that second phase. Now we have additional things like the activity in North Carolina, which impacts Virginia because Virginia say, shares its southern border with North Carolina immediately to their south. We weren't very focused for any additional sites anywhere near the southern border of Virginia, because that's where the Class III casinos in Virginia are largely. That's where they're all located, except for the Richmond license, which is the one we're participating for. The rest of them are down there on the southern border. That was not a market that we were interested in continuing to pursue anyway, for any of our remaining Virginia licenses. We're looking through more of the middle portion and the upper portion of the state. We have lots of leads and lots of opportunities that we're exploring. That second phase I was talking to you about, where the community is really your partnership in these, you have to have the city council support, or the county support, depending on the individual site. You have to win a referendum. Those are the logistics and the wrinkles that make this more than an academic exercise of simply looking at population centers and wealth centers through the st. We're sorting all of that out. We, of course, want to get to 10 licenses as quickly as we responsibly can. We don't want to waste any. You know, the challenge for the team is: How do we maximize each of those licenses? That's back to that quote, you know, "Be quick, but don't hurry." We don't want to make mistakes and deploy these to suboptimal places. I think you'll see us be very active in 2023, 2024, and to the extent we have remaining licenses, 2025. Thanks, Bill. Great quote and great insights. Appreciate it. Thanks, Chad. Thank you. One moment, please, for our next question. Our next question comes from the line of Jordan Bender with JMP Securities. Great. Thanks for taking my question, Bill. Maybe a bigger picture question on TwinSpires and the horse racing industry. With horse wagering getting maybe a little bit more crowded with fixed odds or some of the real money gaming companies coming into the space, does consolidation make sense, either from a track perspective to control more of the distribution of content or even platform M&A just to gain scale within the industry? Always a good question. In times of change and uncertainty, it's always a good question to think through things like that. What I would say is, I believe our company has the single best online gaming asset. Others might disagree with that, and they're free to have their opinion, but. Our asset has stood the test of time. It generates a great deal of EBITDA. It demonstrates strong, consistent margins. It's a great asset. As we look at the winds of change in the online gaming space, whether it be horse racing or larger, we look at that from a position of strength, knowing that we have something that's very valuable, that is a proven commodity and around which we can build. I think I would start my answer with that, and I would end with that. We pay attention to all the themes and all the trends that are going on, but we really like our business, and we know how strong it is, and we know what it's capable of, and we have lots of thoughts on how we can and should build that. We also, we're never cocky about it or overconfident about it. We're also really watching to see how things develop, because nobody really has a crystal ball, including us. We're the company that tries to be good at responding to reality. We're not claiming that we have a crystal ball and that we can always predict what happens, but we do think that our track record shows that we're very good at responding rationally and in real time to what actually happens in the markets out there. This is a time now and over the next couple of years, where we're going to see various changes in the competitor landscape and in the markets in general, as this sort of nascent online sports wagering space grows up a little bit. Great. And then for my follow-up, I know there's always a, a push to get international involvement into the Derby. Maybe just an update on what you saw this year, you know, coming out of Europe, coming out of Japan, either from a, a wagering or a participation point of view. We're still in the beginning of our odyssey on international. It is a big focus for us, particularly around ticketing and reach. It's as several initiatives in the company have started, when you first start them, you're seeing change, but it's off a very small base, and that's how I'd say our international profile looks. We're seeing improvement, we're seeing encouragement, but it's off a very small base. For our company, this is a big push going forward. We want our content out there for wagering, and we also want to reach the consumers across industrialized the industrialized world, where just about in any major industrialized country, you see horse racing, just about, not in every one, but in most. We want to reach those customers because, as you know, covering our company, but also from our discussion a little bit earlier, driving ticket revenue, high-end ticket revenue, that's a big part of the Kentucky Derby economic puzzle. That's something we've been good at, and we want to reach those people that already demonstrate they pay those ticket prices to go to the equivalent of the Kentucky Derby. There's not really an, but the equivalent of that race, our race, in other, in other countries. It's a focus, but the base is so small right now, it's not material change that we're talking about. Over the next three to five years, you'll hear us talking a lot more about this because we're gonna be demonstrating a real commitment and effort to growing, to growing that piece of our pie. Great. Thank you very much. Thank you. I would now like to hand the call back over to CEO, Bill Carstanjen, for any closing remarks. Thank you. I want to thank all of you who participate in these calls and listen in, for your interest in our company, for your commitment to our company. The folks that asked questions today, these were in particularly really strong, sharp questions. We appreciate them. We'll try to be good stewards of people's trust in us and the capital they've given us. We'll talk to you next quarter, but you're gonna see activity over the next 90 days because we're not slowing down. We're charging ahead. This is a good time. There's opportunity, there's opportunity in environments like this. This management team, this group of people, we've been together a long time, and we've proven through a variety of different environments that we can succeed. We're full speed ahead building our company, even if others out there are showing reticence, not us. We'll talk to you in 90 days. Thanks again for your confidence. Talk soon. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.