Good afternoon, and welcome to Full House Resorts first quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, you may press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lewis Fanger, CFO of Full House Resorts. Please go ahead. Thank you, and good afternoon, everyone. Welcome to our first quarter 2022 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. 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, I was gonna talk about our newest news really quick with Circa Sports and then let Dan go into operations and our growth projects. We did just announce today our newest agreement with Circa Sports to develop and manage the on-site sports book at the Temporary as well as at American Place. If you've been to the Circa resort here in Las Vegas, you'll know exactly why we're working with them. They have an amazing sports book here in town. It's the largest in the world. It's three stories tall with a podcast studio. Really fun and great sports book. They really embrace sports. If you haven't seen it in person, you need to. They also have a mobile app in several states. As a part of our agreement, they'll use our expected sports skin in Illinois to launch their Circa Sports mobile sports app throughout the state. Usually, we don't go into some of the details of these agreements because of confidentiality clauses, but this is a larger one, so disclosure-wise, we think it's wise to give out some of the details. This agreement had a $5 million market access fee that was paid last week upon the contract signing. As is typical with those market access fees, we'll amortize it over the eight-year life of this contract once operations go live. Also similar to our other skin agreements, we do share in the revenue subject to an annual minimum. That minimum is $5 million per year, which, of course, also doesn't start until operations begin. Beyond the 8-year initial term, there are two potential 4-year renewal periods, both at Circa Sports' option. For those of you keeping track, we do have seven total skins. There's one that we expect in Illinois, three in Colorado, and three in Indiana. We're getting back one skin in Colorado and one skin in Indiana. We get both of those back in the middle of May as we previously reported. When you total all the annual minimums from our various contracts, we're sitting at $9 million per year, not including anything incremental from the two skins that cease in mid-May. We certainly hope and believe that we'll find a replacement operator in each of Indiana and Colorado. We do think that the $9 million figure should go higher. With that said, do you wanna- Yeah. Just point out that the market access fee that we've charged on each of these agreements is not refundable. We don't take it into income. GAAP has us amortize it over the life of the contract, but it's not refundable. There are similar market access fees. I think it was a total of $3 million on the Churchill deals. Churchill opted to exit the business. It's a little bit surprising 'cause they were like the first people in it. They're exiting the business. They don't get that back, so we will take into income. In their case, it was $1.6 million that was still unamortized as of December 31st. Yeah. We take that in. In the first quarter and then [crosstalk] Between the time they told us they were out and May 15 when they discontinue operations. Okay. There's that. We are talking with other companies to replace them. Ultimately, this should be a little bigger business than that. We're excited to work with Circa. If you haven't been downtown to see their place, just to put it in perspective, you may recall we live in Las Vegas and been here a long time, but they are the most successful new casino to have opened in Las Vegas since Wynn opened in 2004. There's been a number of failures. They kind of focused on sports betting more than anyone else, and so it's all over the place. It's out by their pool. It's in their casino, and it works. They're a private company. They do it really better than anyone else, and so we're pretty happy to be partnering with them. Well, let me go back to the quarter. It was a pretty decent quarter, except that we're up against a really strong quarter last year. We were down, and the biggest piece of that was the Silver Slipper. Get the right page here. If you look at the overall EBIT. You know, we were at $10.4 versus $12.6 or $12.7. Most of that was at the Silver Slipper, which was down $1.6 in EBITDA. Colorado, which is very torn up with the construction I'll mention in a minute, was down $2 million. Nevada, which suffered from a win percentage swing, was down about $400,000. Indiana was flat. Let me address Mississippi. There were five things that I think are worth noting. Last year, the government stimulus checks came out in the middle of March, and we definitely saw a lift in our business at that time. You saw lift right away, and then it continued strong through April and then kind of petered out gradually over the year. Hard to know how much of our $30 million, we did $30 million of EBITDA at the Silver Slipper, just under $50 million company-wide. Some piece of that was related to stimulus checks, maybe couple million, $3 million, something like that. But that's a guess. We don't really know. But in the first quarter, our slot win at the Silver Slipper was flat. Our table game win at the Silver Slipper was flat. So despite the fact that there were stimulus checks issued in the middle of March last year, property had flat revenue, in terms of slots and tables, which of course is the bread and butter. That was actually not a factor in the quarter. Even though everybody was kind of like, "Well, last year we had the stimulus checks," but when you really get into the numbers, we did okay this year without the stimulus checks. Almost all of the swing in revenues was our on-site sportsbook, where we have the closest online on-site sportsbook to New Orleans and Baton Rouge. It opened about five years ago. It's grown to be a nice segment of the business there. They legalized online sports betting in Louisiana. There was a bill to do the same thing in Mississippi, and it didn't pass in Mississippi 'cause the industry couldn't get their act together. In Louisiana, it passed, and it opened at the beginning of the first quarter. That pretty much hurt our business quite a bit. We were down like 65% in terms of the tickets written at our on-site sportsbook. Now, we share that with William Hill, who actually runs it, so we get a piece of the income, and they get a piece of the income. Now, given that it's down, and I think it's probably perpetually down because until Mississippi allows online, and even when they do allow online, population of Louisiana is bigger than Mississippi. Mississippi is about 3 million people, and Louisiana is about 4.5. Of course, a lot of that population in Louisiana lives a long ways from us, like Shreveport. The fact that Louisiana approved it and Mississippi didn't hurt us. If Mississippi had approved it, we probably still would have been hurt, but not by as much. To put it in perspective, though, of the $30 million of EBITDA at the Silver Slipper last year, $1.4 was from the sportsbook. If that drops by, you know, 65%, then that would be $1 million out of the $30. That might be a reasonable guess. I mean, the swing in the quarter was $400,000. Now, part of that in income from the sportsbook, but the win percentage was a little lower than normal, and the first quarter has things like the Super Bowl in it, so it's seasonally a little stronger. I don't think you'll see that big a swing every quarter. I think it'd be more reasonable to expect that we're gonna make something like half a million at the sportsbook there instead of $1.4 million, and it just is what it is, and that's perpetual. Another thing I'll mention that is an ongoing issue, and that was our insurance costs. Our property insurance is up significantly. In the quarter at the Silver Slipper alone, it was $280,000. The increase was $280,000. We're not alone on this. I think a lot of companies are dealing with this. There's been a number of, you know, hurricanes and flooding incidents, and the insurance companies are upside down. Then on the flip side, when interest rates are low, that is a negative for the insurance companies. They have been ramping up their cost of insurance pretty steeply, the last couple of years, really. It's affecting us kind of across the board. Now, I know having been dealing with this for a long time, especially on the Mississippi Gulf Coast, there's kind of a long sine wave on this. In other words, you'll go a couple of years where there isn't a storm. At this point, with what they're charging us twice as much for our insurance as they were a couple of years ago, if you go for a period of time without a storm, then competition starts to set in, and you'll get better insurance rates. I think in our unique case, as we get open in Illinois and as we build out the Chamonix in Colorado, we get bigger, more diverse, less reliant on the hurricane area of Mississippi. I think we can do better going forward. I also think we're kind of at a peak in the long-term sine wave of what the insurance companies can charge. Given what they're charging today, I think it's probably a pretty profitable business, and people will come into the business, whereas in the last couple of years, people were exiting the business. You know, I don't think a perpetual thing, but I think the rate at which insurance costs improve will be years, not quarters. For at least the next few quarters, we're gonna struggle with the cost of insurance. The other one is rather unique, and that's the price of crab. Our food cost was up $800,000 at the Silver Slipper in the quarter. All of that was crab. Actually, crab accounted for about 110% of the increase in food costs. We used to buy the crab at $8 a pound, now we're buying it at $17 a pound. It's a very popular part of our buffet. Our buffet is very popular. For the twelve months ended March 31, the recent twelve months ended, we spent $4.6 million on crab. We went back and looked at the 12 months ended March 31st, 2021, we spent $2.4 million on crab. The amount of crab we bought was up $2.4 million, and that was a significant cause that caused over half the swing in income at the Silver Slipper. What's going on? First off, what could we do about it? Well, we could try offering other things, but people like crab. There are local crabs, but they are tiny little crabs. We've kinda made a name for ourselves by offering the snow crabs and Dungeness crabs, which have much bigger claws. But if you look at the crab industry, then when people talk about supply chains, this is a supply chain issue for us. Because in 2020, there wasn't any fishing. You couldn't go out on a boat with a bunch of other people and collect crabs. That was kind of okay initially 'cause there were no restaurants open either. People tend to eat crab more in restaurants than they do at home. There were frozen inventories. Most crab comes from frozen inventory anyway. Certainly, all the crab we serve is frozen. We don't bring crawly little things all the way from Puget Sound into Mississippi. We buy tractor trailers full of frozen crab. The crab we are serving today, we probably bought four or five months ago. It's been in a warehouse in Mississippi. It came out of a, you know. It was a crawly thing 1-2 years ago. This is very different than buying crabs in Pike Place Market in Seattle. When you first had an absence of fishing, you also had an absence of restaurants, and to the extent crab was still being sold, it depleted the frozen inventories. Well, what happened in 2021? The restaurants all opened, everybody wanted crab again. You didn't have any frozen inventories, and the crab season is now not in the summer. The price of crab doubled. Went from $8 a share to $17 a share. I was looking around, something, there was a restaurant chain with crab in their name who really doesn't know what to do, right? You know, we've just gotta bit the bullet. Now, we did do some stuff. We stopped offering two-for-one buffets midweek. Now we've stopped having crab on the buffet midweek, but 65% of our buffet is comped for our casino customers. What we charge to go to the buffet is kind of irrelevant for two-thirds of the people using the buffet. To some extent, we're just, you know, we'll just muscle through it. I found another little factor. There is some snow crab that comes to this country from Russia. But as near as I can tell, it's not significant enough to move the market. It was a comment I heard when I went looking at it. I don't think that's been a factor or will be a factor. In fact, it's the opposite now because people are out fishing now. Guess what? There's a lot of crab, and they're a little bigger crab because of the pandemic, nobody was fishing for them. I think we're gonna have a pretty good crab season this year. Eventually, the inventories get frozen inventories get rebuilt. You're trying to fill the inventories while you also fill the supply chain. If you go out to a restaurant and order, you know, crab, it's pretty expensive these days in most restaurants, much higher than it used to be, but people are still ordering crab. They're trying to fill the current demand and rebuild the inventories, and it will take a little while. Eventually, I suspect it gets back to where crab is $8 a pound. Maybe it goes to $9 a pound because oil is more expensive and the crab boats use gasoline, right? There's no other reason long term why the price of crab should be twice what it is. It's kinda funny because I went looking to see if inflation was a factor. No, our payroll costs are up less than 3%. The cost of all of our other stuff is not changed much. It really came back to crab, and I think that's a short-term thing. In fact, we had the price of crab escalated in September. We have one more quarter to deal with the price of crab year-over-year, and then we should be on a better situation in the second half of this year. The biggest factor at the Silver Slipper and really company-wide in the quarter was ironically the price of crab, and I think it's short term. Win percentage affected the Silver Slipper a little. It's rare we talk about win percentage because usually with portfolio theory, once you get through having four or five properties, it evens out. If you start adding together different quarters. Over the course of a year and company-wide, we see very few swings in win percentage. This was a quarter, though, where company-wide, it was about $2 million. In fact, if you look at the revenue line, on the, not the segment, but on the total income statement, casino revenue was down about $3 million. Two of that was company-wide win percentage, and the rest was the sportsbook in Mississippi. That explains the Silver Slipper. I mean, it was really crab and sportsbook and then property insurance. Those three things account for 100% of the swing in EBITDA. The biggest factor is short-lived. That's the price of crab, and the other two are a little more long-term. In Indiana, we had a very good result. I think it's good because remember we had stimulus checks last year this time, and we also have an increase in insurance costs there. Yet despite that, you know, we did fine. I'm looking for where the win percentage number was, where I put that. While the big swing, Dan, would've been on the table game side, it was a 16 percentage point difference in hold this year versus last year. When you look at both slots and tables, it was roughly $850,000 of lost revenue when comparing this year to last year. The property offset that, and they ended up the quarter with flat income. That's why I view flat as being actually pretty good. Yeah. Cause they offset some headwinds and came in just fine. Colorado is quite torn up with construction at this point. We have no on-site parking. We are running valet parking. We have a parking lot three blocks away that we have a shuttle bus to. The market as a whole is doing very well since April of last year when they got rid of the betting limits. We're down despite the market being up, and that's a direct reflection of how torn up the property is. We've actually torn down a good chunk, about 25% of the Bronco Billy's building was torn down because it'll become part of Chamonix. This is a seasonally slow quarter there, and that's the only reason we had a loss. We won't have a loss on that over the year, but I also wouldn't expect much income for the year. I think we'll have something, but it's kind of irrelevant. We're building a $250 million place. Do we really care whether we make money this year? You know, obviously we care, and we're doing the best we can. The construction people, of course, would prefer to just close it. That would make their life easier. We have a couple hundred employees there have been loyal employees to us, and we want them to be part of Chamonix. Our customers, we have very loyal customers who we want them to be part of Chamonix. We are, you know, expecting and willing to have this construction disruption this year. Chamonix should open about a year from now, and we'll have a much brighter future at that point. In Nevada, the Grand Lodge at the Hyatt T ahoe actually had a pretty good winter. It was an okay ski season, or certainly better than the year before when the pandemic inhibited capacity at the ski areas. But it had a pretty big win percentage swing there, which cost us like $600,000 in revenue. That accounts for pretty much all the swing in income. Northern Nevada was okay except for win percentage. There really wasn't anything else going on there. In the contracted sports wagering, we talked about lots of different things coming and going. Last year, we didn't have all the six skins up and running. This year we did going into the quarter, had all six skins, and then two of the skins said they were gonna discontinue their business, and then we signed the deal with Circa. That, that's all the different things going on there. Corporate was about flat. Really the more important things in the company is that we have these two major things that we're building. It took us longer to get started in Waukegan than I would've hoped. I understand it. This is a big project for the city of Waukegan and Lake County. When we went in and said, "Okay, we want to get going really quickly," they hired outside parties, outside lawyers, outside consultants, as they should, and those people all said, "Well, we wanna review the whole plans. We wanna see the whole, you know, how you're laying out the parking lots and so on before we let you start construction on the foundation." The irony is the sprung structure is completed and ready to be delivered. We don't have a foundation to build it on yet. We got the building permit on Friday. The tent, the fence and erosion protection stuff is going up today, which allows us to be putting in the foundations this week. When you take that timeline out, we had hoped to be open in the summer. It's gonna be the fall. If I were to guess at a month, it's probably October. It might be late in October, but it's somewhere around in there. The good news is we're now underway finally. I think the supply chain issues, we've been ahead of the curve. As I mentioned, we have the tent, which will enclose an area the size of one and a half football fields. We will have 1,000 slot machines, 50 table games, three restaurants, 20 ac of parking. It's kind of a big deal. We will get open as quickly as we can. Having gotten the permit at this point, I think that was the biggest hurdle. It was not only the city, but also the Gaming Commission, which we got their approval. We're off and running now. I think we're ahead of the supply chain issues. We got the tent. We have a floor that goes in. It's kind of a raised floor. If you've been to G2E at the Las Vegas Convention Center, when you go in and look at the slot machine manufacturer's stuff, that's all on a raised floor. In other words, the convention center here is a big concrete floor. They bring in this kind of it's a plastic sort of thing that raises you up like four inches, and that allows you to run all the cabling in it to get to all the slot machines. That's what we're doing 'cause it's the most efficient way to do it. We were able to find, whatever this is, 3 ac of raised floor that we own now. We've been dealing with the slot manufacturers to make sure we can get the slot machines. One of the bill validating companies is having supply chain issues out of Japan. Fortunately, that's not the one we're using, so we think we're in good shape there. We've started to hire people. We've hired a number of department heads now, and that will continue through opening. That's you know, you could talk recession or inflation or any of that stuff. Far more important for us and for our stock is getting Waukegan open 'cause it's the closest casino to 1.2 million people, and it will do well. We're looking forward to that. The construction is still ongoing apace and quite well in Cripple Creek. It's on track to open in the second quarter of next year. We're also just starting to renovate Bronco Billy's itself, so we're gonna have additional disruption within Bronco Billy's, but it's gonna be significantly better when it's all done. You could see those on the website, a couple of different websites we have. The one I usually go to is just ChamonixCO.com. Think of ChamonixCO.com. There's links to the webcams there where you can see the construction in progress. The elevator towers, which are the tallest things on the project, are done. The guest rooms are getting filled in. You can't see it from the webcam, but behind the main building is the meeting room space, and it's getting filled in and closed. It's coming along pretty fast now. There, you know, we were a little concerned whether we could find the manpower. We've actually found the manpower just fine. We've had some issues with getting the light gauge steel on time, but it really came from the architects who didn't finish the drawings on time. We've overcome those, and we're doing better. We're on track to open in the second quarter of next year. We've had a couple little bumps on price, but we're pretty close to that $250 million number, well within the contingency. I think we're in good shape there. I can't think of anything else to say about Chamonix. It's pretty exciting 'cause we're now starting to buy some stuff. In fact, I'll find a way to put a picture up of. We have a piece of art that was, like, $300,000 as part of the budget that hangs at a prominent spot in the place that's made of solid gold because it's a gold mining town, we're near a big gold mine, and we wanted something that kinda stands out. We're getting into kind of the exciting stuff. This isn't art like the Steve Wynn art we did at Bellagio. It's much less expensive, but it's going to be a pretty showy thing, and it's kinda fun. That's coming along. Rough day to report earnings, rough day in the market. I know everybody just wants to go have a scotch to wake up or something. I will tell you, business-wise, we're just fine. I mean, I feel like the Canadian lighthouse when the ships was coming towards them, what was it? They announced on the frequency, "The ship that's ahead of us, so many miles, we suggest you veer course." The other person said back, "We suggest you veer course." The Enterprise said, "This is the USS Enterprise. We're an American aircraft carrier, and we have a whole fleet of ships that's escorting us. Again, we request that you re-change course." The Canadian came back and said, "Yeah, we're a fucking lighthouse. Do what you want." It's kind of like, okay, the market's all over the place. Well, you know what? We have our money. It's fixed rate. Our business is doing fine. Our business does fine during recessions. We're building this stuff. There's a side of me that says, "Yeah, bring on a little recession. Maybe we can build this stuff cheaper." Right? I think we're just fine. The stock is volatile, but at the end of the day, we're building value for shareholders, and the stock will reflect that. You know, the only other thing. Oh, yeah. Let me just tirade a little bit about crazy GAAP. No. No. Well, I will tell you. You will see the charges on debt restructuring, and to me, it's a little illogical, but we issued another $100 million of bonds that are the same CUSIP as the bonds we have outstanding now. As a result, some of the fees that are associated with the issuance of those bonds get expensed under GAAP, and that's why you see the charge. Had we issued them with a different CUSIP, they would have been capitalized, which makes no sense to me at all, but that is GAAP. Yeah. We followed GAAP. The end result is the charge we take this quarter on that is basically offset by slightly lower interest expense over the life of the bonds. It's kind of a big much ado about nothing. That's what you see there. Yeah. Okay The only other. Of course, the bond buyers wanted to be in the same CUSIP 'cause it's more liquid. Yeah. So. The only other thing I was gonna mention, Dan, is from a liquidity point of view, we still have a lot of cash. Here in real time, we're sitting on about $318 million of cash, with $205 million of that reserved for the build-out of Chamonix. On top of all that cash, we still have our $40 million undrawn revolver. The only thing being utilized on that revolver is a $1 million standby letter of credit for the build-out of the temporary in Waukegan. We've got quite a bit of additional liquidity there. That's all I had. If you're ready for a question. Yeah, I'm ready for any question. I mean, the only real supply chain issue we've been dealing with is crab. Yeah. Who knew? Yeah, right. Operator, before you go to questions, I actually got two emailed in to me from David Bain, who is having connection issues. I get to ask you questions, Dan. Okay. Here's his first. "Dan, hoping we could leverage your experience with minor recessions, major recessions, or macro events that impacted operations from Mirage, Pinnacle, Full House, or through your general industry observations over the years. For regionals, the impact is relatively benign based on historical gaming revenue data. We're dealing with a fixed cost base, and in every recession, it tends to be a bit different. While real-time trends are not worrisome, we're getting questions about the back half macro. We would love to hear how you think about the world as it relates to the portfolio. Well- You kinda did that already, but go ahead. Yeah, well recognized. When somebody goes to our casinos, we're a cheap trip. You know, we're an easy trip. You get in your car with two or three people and drive there. So it's not the cost of gas. You're not driving very far, so it's not a lot of gas. It's being split between two or three people. It doesn't matter a lot. Whereas when the price of oil goes up, the price of airfare goes up proportionally more, and you're buying a ticket for each person. It has a much bigger impact on Las Vegas. Then, of course, a big part of Las Vegas is convention business. It has an impact there. When you have a recession, companies tighten up on who can go to conventions, and so on. It has a much bigger impact on Las Vegas than it does on the regional casinos in general. We become the staycation at home or something. If you go back and look at the recession in 2008, 2009, which was, what, the Great Recession, the biggest recession in our lives, regional casinos did just fine. I think we'll see not much impact going through it. Now, availability of gas, and if you go way back in history, you know, if you're in L.A., and you could only buy gas on even days of the week, and you've gotta be my age to remember those days, right? Well, you don't necessarily wanna go across the Mojave Desert and find out if you can get gas to go home, okay? Nobody seems to be talking about the availability of gas. Even there, you know, it's kind of interesting. I recently bought a new car, and all the manufacturers are shifting to electric, and my other car is an electric car. That is the wave of the future. Somewhere five years from now, 10 years from now, you're gonna have gas stations that are empty. You're gonna be charging your car up, and you'll have solar batteries on the top of your house. Well, for example, in the parking garage at Chamonix, we have a whole bank of places where you can charge your car because we think that in the not too distant future, that's gonna be important. I think, you know, if you build a hotel these days and you think in 30 years, you better be thinking about having enough power in that parking garage for people to be able to charge their cars. I think the availability of gas doesn't seem to be an issue. Price of gas is an issue, but it probably works to our favor. A recession, you know, I don't know. Every time they talk about all these people trying to get across the border, I'm like, "No, let them in because we need employees." But of course, I don't mean to be political. Of course, we don't wanna just take the border down. But yeah, unemployment is still 3.5%. We do find employees. It's a little bit of a challenge, but then we try to make sure that we are good employers, so we can keep the employees we have and so on. I'm not worried about a recession. I'm not actually worried about interest rates. I mean, somewhere out there, we'll have to refinance our existing debt, but it's a couple of years away, and we don't absolutely have to. We could find other ways to finance the permanent one in Waukegan if we had to, and leave our existing bonds outstanding. We've always been assuming that we'll be able to borrow cheaper at some future date when we're more diverse and so on. We would just call the bonds we have. You know, I guess if interest rates went up a lot, it might not make sense to call the bonds we have. You keep the bonds you have, and you figure out how to finance something and the other thing. Our balance sheet, I wish I could say must have been Lewis' brilliance because we are perfectly situated today for what's going on in the world. We have the money to build these things, and our debt's all fixed rate. It's just a matter of getting them built. It all starts opening in six months, Dan. Yeah. Here's the second question, then we'll open it up to normal Q&A. Are there any changes that you would make now, either in design and development or operations to hedge for a softer consumer, or is it pure execution mode based on real-time trends? No, nothing really. I mean, yeah, I wish we could have figured out how to build Chamonix with less disruption to Bronco Billy's, but there really isn't a way. I mean, it is what it is. Silver Slipper is solid. You know, we have been slowly working on getting entitlements to expand the Silver Slipper someday, but we're so busy building the other two things that it's kind of on the back burner for now. We do keep inching our way forward with different entitlements, but I think even if everything cleared up tomorrow, I don't think we'd start construction right away because we're busy trying to build what we have. Well, that's what I do. I guess now I'm in pretty good shape. I mean, I think we're in pretty good shape. Maybe some of that is brilliance or some of that is luck, but I can't think of what else I would do. Well, these are all assets built for the long term, and that's what we're doing. That's what we're doing. Yeah. You know, once in a while we're offered different properties in Las Vegas, and we live here, so of course, we look at it. I've had operated casinos in Las Vegas before. But, you know, this is not an underserved market anymore. When you think that California used to be half of Las Vegas visitors, today it's still 30% of Las Vegas visitors. You have 60+ tribal casinos in California that are newer and just as nice. Many of them are newer and just as nice as the casinos are in Las Vegas. This is kind of a tough market, and so we've looked at a lot of stuff and not done it. I think that positions us well at the moment. Now never say never. I mean, if somebody offers to sell us Bellagio for $50 million, we'd try to figure out how to do it, right? That has not happened. Let's go into proper Q&A now. Yeah. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Ryan Sigdahl with Craig-Hallum Capital Group. Please go ahead. Ryan. Good afternoon, guys. Lewis, you did such a nice job, I thought about just emailing my questions and letting you guys handle it. We'll press forward. Congrats on the Circa sportsbook. I agree with you. I've been there. It is absolutely fantastic and the best sportsbook in Vegas. Like, it draws people. Curious if you're able to disclose, I guess, scale, and any plans you have on the one that'll go in your casino, if it's similar to that or anything to comment there. The one in the temporary, you know, we're trying to build this so quickly, so that'll be a pretty normal sports book. I mean, we bought two Airstream trailers that are like little food trucks that'll be located near it so that you can get a beer and or a cappuccino pretty easily. That's about as creative as we're getting in this tent 'cause we're trying to build it so fast. Now, in the permanent casino, I'm looking forward to working with Derek Stevens to try to figure out how to have the best sports book in the Midwest. You know, our design is early enough there that we can do some things there to make it a really kickass sports book. It's fun. It will be fun working with them because they really get into the details of it. I love people like this. He went out of his way to, like, pull a light bulb out of the light display to show how it's got a little cover over it so that you can see the bright lights in the sunlight of Las Vegas, the one he has out by the pool and all this stuff. It's like, wow, this guy really lives and breathes this stuff, which is great. I think we have the opportunity to do something in the permanent that will be the best race and sports book in the Midwest. That's, you know, that's a, as I've said many times on these calls, that's a business we've been hesitant to do it ourselves, 'cause not only is it kind of a unique expertise, but as a small company, if we end up with a team in one of our markets in the Super Bowl, and if the other team is not in one of our markets, we'd be unbalanced. He's got enough of a business with a base up here in Las Vegas where people come from all over, that he doesn't have that problem. He's a private company, so if he has a bad quarter because the wrong team won the Super Bowl, he's okay, right? We're happy to partner with him, and he's got good online stuff. You know, he's kind of a. Everybody knows DraftKings, but this guy's a private company, does a pretty good job. The place he has downtown is like. I didn't quite realize. I knew out by the swimming pool he had this big design, and they charge, like, $20 to get out by the pool. It's up on the roof. When you go out there's like six swimming pools, and he kept them heated all winter long. Like, normally, swimming pools in Las Vegas close in the winter. He had them heated, so people were out there sitting in heated water in, like, 50-degree temperatures watching football games in January. I was like, "Huh, that worked?" He goes, "Oh yeah, it worked really well." I was like, "Good on you." He had to have the windows on that side of his hotel tower the extra thick glass because he knew he was blasting sound out by the pool, and he didn't wanna keep people up at night. Somebody told me that they had dinner the other night in the steakhouse on top of Binion's, and they could hear everything going on by his pool a block away. I said, "Well, he's got extra thick windows in his guest room, so he doesn't really care." Maybe Boyd has to step it up. Who owns Binion's these days? Boyd. Whereas the steakhouse on top of Binion's needs thicker windows. This guy pays attention to his business. I like that. We try to pay attention to our business, so I think it's gonna be a really good partnership. To the beginning of your question, we do expect you're gonna walk in to our American Place sports book and say, "Wow." That is our goal. Yeah, that's our goal. Great. We'll work together. Yes. To follow up on that, I guess the $5 million annual skin fee, does that include only sports book, online sports betting, or is that also iGaming that's legalized? Secondly, does Circa have online sports betting in Indiana or Colorado, or is that an opportunity with the last Churchill skin? Yeah. No. They, you know, currently they're in- Public. They're not in Indiana. They are in Indiana and Colorado. The, uh- They are. I'm pretty sure they're up and running. Look, we're stumped. They're not interested in being with us in Indiana and Colorado. I think they are up and running. If they're not, it's because they probably have a deal with somebody else. There are other companies we are talking with for Indiana and Colorado. That is true. It is not. They are not in internet gaming that I'm aware of, but our agreement is strictly for sports betting. If internet gaming becomes legal in Illinois, then we would be able to do that separately, so. Good. One more for me, kinda switching over to the core business. Anything you've seen in March into April and even early May, given all the macro challenges, anything impacting the consumer that you've noticed? I will tell you, April last year was one of the best months in this company's history, and I think that was the stimulus checks that came out mid-March. We don't have our month closed yet, but I think April's gonna be a little behind last year. Now, it's early in the quarter, and I hope we can make that up. I think even our budget showed us being down a little bit in the second quarter. We have a little bit. I mean, what those stimulus checks were for us, I don't know. I mentioned earlier it might've been $3 million of income, and a good chunk of that would be second quarter comparisons. Apart from that, April was actually a pretty decent month. You kind of look at it and say, "Well, some portion of the revenues last year were kind of a blip over any April and any year before that." Like, this April compared well with any prior April, except last year. Okay. Other than that, I mean, you gotta remember, a year ago, you still had mask requirements in some places. We don't have that now. You know, people are back to their normal lives. The senior citizens who disappeared in the pandemic 'cause they were afraid of getting sick and dying, they're now vaccinated and they're out again. That market segment is back for us, back to where it was pre-pandemic, which is a good thing. We've kept some of the younger people. When I look at the April results, the only thing I see that stands out a little bit is we definitely got a lift last year from the stimulus checks. I know that the big infrastructure bill was another big government surge of money into the economy, but it's not immediate. It's not. You didn't get a check in your mailbox. That's gonna be customers of ours who, you know, get a contract to build a new bridge or build a new road, and that will eventually end up in the economy and eventually end up with us. It's not the same as a stimulus check in terms of the immediacy of getting into people's pockets and ending up in our casino, in our slot machines. I recognize, but, you know, it's not like everybody got a stimulus check and went to a casino. Some people spent their stimulus check and went to a casino, right? I think if you could get the Best Buy numbers, I know the Best Buy here had a line of people buying, trying to buy televisions. I think it was probably a much bigger positive for Best Buy than it was for us. It was a positive for us for sure. Thank you. Helpful detail as always, Dan, Lewis. Good luck, guys. Bye. The next question is from Chad Beynon with Macquarie. Please go ahead. Hi. Afternoon, guys. Thanks for taking the question. Lewis, you mentioned the current status of the balance sheet. You're at $318 million of cash, so that kind of indicates that you haven't spent much on Chamonix. Can you just kinda help us think about how the CapEx should look through the remainder of 2022 and what will slip, I guess, more into 2023? Thanks. What we did spend roughly about $15 million for what it's worth. This is the point at where it really starts to ramp up. Here in the second quarter, I'll look at Helenka as I say it, but my gut says we're about $25 million of CapEx here in the second quarter. That's gonna ramp up towards $45 million of CapEx in the third quarter, and then maybe a little more from that in the fourth quarter. It is starting to get in ramp-up phase. If you think about it just from a site level point of view, as you get more people on site showing up, not just for the steel, but now people on the inside with electricians and plumbers and that sort of stuff, that's you know by having more cars in the parking lot and people working, that's when you see the number really start to go up. But rough figures, that's how it's looking to ramp up from here. I mean, they recognize the commitments we've made are quite a bit ahead of the money that's actually been spent. You commit for somebody to make a light fixture or furniture or steel, right? Some foundry somewhere is making steel to our specifications. We have to buy that, but we don't actually pay for it until it's delivered to the property and accepted by us. The commitments are. If we looked at the construction in progress, do you have that at the end of March? What Chamonix showed? Well, we were thinking. It's a relatively small number. It was like 10% of the $250. About $45 million. $45 million. Okay. We've spent out the door $45 million. Of the $250, we spent $45. Yeah. I'll bet our actual commitments that we would be obligated to pay for if we stop construction, for example, is probably at least $45 million. Yes, I would agree with that. Yeah. It's so we're well into it at this point. In fact, we're pretty close to the point where we will be able to have a total GMP from our contractor. Hensel Phelps. Yeah. Hensel Phelps. Yeah. I think most of the risk is behind us at this point. Yeah. Then if it helps you as well, Chad, for the temporary, we're about $7 million of spend here, so far of the hundred. The big number, the fee that's due to the Gaming Commission, that doesn't happen until after the door is open. What was that number, Alex? $32 million bucks. Shortly after it opens, I think $32 million. Yeah. The slot machines are 20. Yeah. We don't pay for those until they're delivered. Yeah. Um- Here in the second quarter, you know, you could have a sizable number. So far, it's just a lot of deposits, but you could have a number that's in the ballpark of $30 million here this quarter, and then the balance in 3Q as you prep for an October opening. Okay. Lewis, sorry if I missed this. What was the reason why the opening date got pushed back? Was that just more certainty and, you know, getting the licensing and the permits and everything? It's just gonna be a hair later than, I think, what you said. Yeah. Maybe I was a little optimistic. I was like, "Okay, well, we need to get this tent here." We actually paid them a little premium to get the tent quickly. Well, the tent has to go up on a foundation. Well, we went to the town, said, "We just wanna build this quick ring foundation, so we can start building the tent, and then we'll design the parking lots and everything else." They were like, "No, no. Hold on. We wanna look at the whole thing, review it in its entirety. We need to first hire outside consultants," and there's a process they have to go through to hire outside consultants. It's a municipality. They can't just, you know, pick somebody. They have kind of their own little RFP. So they hired the outside consultants. We had to get up to speed on the process and, like, literally, you know, we designed all the parking lots, and then their outside consultant wanted the handicapped parking to be in a different spot so that the people in their wheelchairs wouldn't have to cross any traffic. We pointed out that that's not actually what the ADA code requires, and we wanted it to be very much like Red Rock Casino here, which works very well. We went back and forth on that. You know, eventually, we got there, and we pulled the building permit on Friday. By the way, they've been working with us. They've been very good to work with, as has been the Gaming Commission. I think we were a little too optimistic about how quickly we could get going. With hindsight, they were probably right. In fact, we got a message from the Gaming Commission at one point that was actually very clear, and they said, you know, we're rushing and saying, "You want the gaming taxes and you want the employment." They're like, "It's more important that you do it right than you do it fast." I remember when I got that message, I said, "Okay, that's pretty clear." I mean, it was a very simple statement. We were like, "Okay, take a deep breath. Let's design it and meet their approval and so on." I mean, it took us seven weeks longer than we had hoped in order to get the permit to put this in, and I think that was a function of us being overly optimistic of that process. I think they kinda forced us to go down a more methodical process, which with hindsight was probably the smart thing to do anyway. As a result, we'll open in the fall instead of the summer. Yeah. I mean, this leads into the permanent, and that's a 30-year business. You know, whether you open in October or July, in the grand scheme of things, in the overall shareholder value, it's more important to do it right than do it fast, so. Yep. Agree. Separately, I think, you know, we've heard from all of the operators, a lot of your competitors and other companies in other markets, it sounds like the reinvestment rates for players hasn't really changed, and everyone continues to be rational. I guess the big market for you guys, Mississippi, you called out some of the things that caused a little bit of a decline. You know, within that region is Biloxi and, you know, Bay St. Louis being rational at this point and then the properties across the Louisiana line as well. Thanks. Yeah. Recognize we compete more probably with Harrah's in Downtown New Orleans and the Fair Grounds than we do with Biloxi. Biloxi is quite a ways east of us. Even the casinos in Baton Rouge are probably more important competitors than Biloxi. Bay St. Louis and Gulfport are important. Yes, they're being rational. I mean, we deal with this a little bit, like, should we stop offering crab? Should we put quantity limits on the crab? Two-thirds of the buffet is comped, and so we've kind of just bitten the bullet and buying crab, and hopefully it's only at these prices for a limited period of time, because it's important to our customers. Maybe that's being a little irrational. I mean, put it in perspective. Our buffet is now $50 on a weekend in the evening. The average person at the buffet eats 2lb of crab. At $17 a pound, that's $34 worth of crab before you get to steaks or any other cost of food, let alone the payroll. So if somebody really does eat 2lb of crab, and on average, they do, we're upside down on the buffet. I could raise the price even more, but two-thirds of it's comped anyway, so it doesn't matter. Mm. I could take crab off the buffet and our current earnings be better, but that's kinda what we're known for. It's kind of like we'll sustain the pain for a little while longer and hopefully, guys go and catch a lot of crab. The crab season's right now, so hopefully, this will come back to normal. Okay, perfect. Thanks, guys, and congrats on the Circa partnership. Great. Thanks, Chad. The next question is from Edward Engel with Roth Capital. Please go ahead. Hi, thank you for taking my question. Just wondering, since Golden Nugget acquired Wildwood in Cripple Creek, I was wondering if you've heard of any development plans that they have for that property. I haven't. I actually viewed that kind of positively. You know, the Wildwood was a screwed up property. I mean, they buried a parking garage underneath it, which is like an odd decision 'cause land in Cripple Creek is not that expensive. You know, there are three ways to park cars. You can do surface parking, which is really most of our parking, even in Chamonix will be surface parking, but we do have a garage coming in. Surface parking is like $2,000-$3,000 a space. You can build a garage, and that's about $30,000 a space. You can bury the garage like the Cosmopolitan was built in Las Vegas with a buried garage. Palazzo has a buried garage. You're digging a big hole in the ground and putting a garage in that hole and then putting the hotel on top of it. That's really expensive. Not only digging the hole, but then you have to all sorts of special ventilation. Even with the special ventilation and sprinklers and all that stuff, it's still not a very pleasant garage. I mean, every time I go down to Cosmopolitan, I hate that garage. Why they would do that in Cripple Creek, I have no idea. They got a five-story deep parking garage, and the lowest floor floods all the time 'cause it's underneath the water table. Then they built a pretty simple casino on top of it. I think they spent $80 million. It went bust really fast. One of the key guys became kind of debtor in possession and started running it and they kind of got it maneuvered, and it got sold to a REIT out of Scottsdale who owned it. It was kind of run by this guy, owned by a REIT, and I think he saw what we were saying about how the town needs more hotel rooms, so he persuaded the REIT to build this little motel with 100 rooms. It's a stick-built motel. It's like a Fairfield Inn at best. It's actually across the street from his casino. We've heard that it doubled their income from like $5 million a year to $10 million a year. More than that we hear. Yeah. Yeah, which is great. I mean, it kind of proves our point, and we're gonna have a high-end 300-room hotel. Watching their little motel open a year ago, their income went up a lot. Tilman buys it. Well, Tilman's actually a pretty good casino operator. Recognize, I worked for Steve Wynn. I worked before that at Drexel Burnham Lambert, which had Mike Milken. Biggest ego I've ever met was Tilman Fertitta, right? He's good at running his business. He's actually really good at running his business. I will hand that off to him, and he'd probably be proud to say he has a big ego. I expect them to come in and fix it up and do things with it and which the REIT in Scottsdale probably wasn't willing to do. I think that's an important part of turning Cripple Creek into a better destination. I think it's great that Golden Nugget's coming there, and I would expect them to fix it up. He's kind of on the edge of town now. He's on the edge of town as you come into town, but everybody wants to come down to the main street anyway. His it's kind of like the M Resort you know, it's in Las Vegas. Technically, it's on the strip, but it's not where you really wanna be. I think a little bit of money into that property will enhance it and enhance the experience of the town, and I don't think the REIT would have done it, and I'll bet Tilman will. When I heard that, I thought that's probably a good thing. By the way, I've met Tilman a couple of times. He's actually a nice guy. Big ego, but not a bad guy. Okay. Maybe he's earned the right to have a big ego. Great. Thanks for the color. Thanks, Ed. Dan, technically, we're out of time, but if you can keep it short, we've got one last question. All right. All right. The next question is from. [crosstalk] Can I get one yes or no question? Yeah, the next question is from David Levine with MidOcean. Please go ahead. Hey, David. Hey, guys. How's it going? Appreciate the time. Couple if I could squeeze them in. First one, just on the temporary. Anything left that we should know about that's kind of major in terms of approvals? I noticed in the press release, it just said, "Subject to customary regulatory approvals." Wasn't entirely sure what that related to. I know that a lot of these are kind of you know not a big deal, but just wanted to kinda confirm. Has your outlook changed at all in terms of what you've called out in terms of what that the temporary can do from an EBITDA perspective, or you still feel pretty good about that? Thanks. I feel really good about it. I mean, literally this was a better deal than I thought it was when we got the deal. I mean, we got the deal. You know, I'd been to Waukegan a few times. It's kind of a down and out rust belt town. Then I started looking at it and it's like, wait a minute, Lake County. Waukegan is the head of the capital city of Lake County. Lake County is like 700,000 people. Waukegan is only 80,000. Lake County is one of the wealthier counties in the country. You realize there's some neighborhoods pretty close to us that are pretty wealthy. It's like. In fact, I went down to Cosmopolitan this weekend to specifically eat at China Poblano. Because we have a big American restaurant, burgers and pizza, what you'd expect. Then we had another restaurant, we kept labeling it ethnic. It's like, well, what is ethnic? Because the population is 22% Hispanic and 8% Asian, but the Asians gamble, which is. Well, China Poblano is both. It's Chinese and Mexican, and it actually works pretty well. We actually have trademarked the name Señor Wong's, and we're gonna have Señor Wong's, which would be Asian and Mexican, right? You start running into stuff like that. The other regulators, they recognize in our business, you need approval of a Gaming Commission at every step of the way, and as it should be, right? They're constantly looking over your shoulder and it takes their approval. I will tell you so far, well, it took Illinois a long time to decide who would get this license. Since they chose us, they've been very nice to work with. They have an agent who's assigned to us, been very reasonable. He's not a pushover, but he's very reasonable and I haven't met him yet, but all the people that have worked with him say, you know, he comes through when they need it and very approachable. I don't think that will be an issue. You know, it's a union construction environment, which has its challenges. You know, we've found out that one of our subs was about to give a contract to a non-union shop, and we had to stop that and say, "No, this is supposed to be a union job. It's gotta go to a union shop." We have those challenges. The big one was getting started, and we've started. Now we've started, we have an MOU with the city for what the lease will be. We have yet to have that lease finalized. Our lawyers are working with their lawyers to finalize the lease. The MOU is very much in line with what was discussed with the Gaming Commission when the license was awarded. I don't expect there to be any problem there. Actually a very good sign of how well the city is willing to work with us. They're allowing us to start construction on the MOU. We are starting construction on a piece of land we don't own, and we're not even leasing yet. We're starting construction on a piece of land that the city owns and intends to lease to us in accordance with the MOU. We're all working together to make this happen as quickly as it can. I don't expect there to be a problem. Now I will tell you that we spent a day the other day going through the construction timeline. It could slip into November. It's also possible to be done in September, but I think it's unlikely. You know, kind of worst case is December, but it's somewhere in that time. In terms of like the customary approval thing, that's like not. Just don't think that's really a big deal just from the, No. Just from the release. To help you out, David, Illinois is one of those states, as are many, where you don't get your gaming license until the second before you open. You're gonna see that language up until we open. Not Okay. Just so you don't get freaked out. It will continue for another quarter or two. Yeah. You'll see that same language when we refer to Colorado. I think you'll see that same language any casino company building any casino anywhere. Yeah. Says subject to gaming approvals. Yeah. Yep. If I could just squeeze one in on Colorado. You know, obviously you're still kind of a year out, so there's a lot to do, but anything kinda major, you know, that we should be kinda looking for in terms of, you know, major milestones that could cause issues or you'll feel a lot more comfortable, you know, once it's kinda complete? I know I've probably asked this question over the course of the last couple months, but just curious your thoughts on that, like, you know, anything kinda major, you know, the timeline where you feel kinda like the major hurdles are coming. Well, for example, I don't think we've done it yet. We're about to open a new table games pit in a different part of Bronco Billy's, so we can take the old table games pit and refurbish it. We're gonna be doing lots of stuff like that in the next year, moving shit around within Bronco Billy's, which is gonna be confusing for everybody, but it's what you have to do to do it. There is a milestone, there's a point, we're getting there, where we have, as I mentioned, a GMP contract from Hensel Phelps. Otherwise, we're kind of at the point where this stuff is just on rails. It's like, just finish it. Like, I mean, Helenka is sitting here as our head designer. She and I had an epiphany about two weeks ago that one of the cages in Bronco Billy's was designed in the wrong place, and the bathrooms were in the wrong place. We swapped it, right? And it was like an oversight. It's like, "Well, shit, that shouldn't have been there." We're kind of at the point where you really try hard not to make changes like that, 'cause you just want the construction people to finish. Yeah. There's, I'm purposely trying to keep my fingers out of it because I know that change orders at this point are expensive. In Chamonix, it's. Even that was in Bronco Billy's, which is a little later in the process than Chamonix. In Chamonix, we're trying not to make any changes at all. Okay. Yeah. I just have one last. Sorry. [crosstalk] Just let the construction guys build it. I mean, they're building it now. Literally, I said to our head of construction the other day, "If you need me to jump on anybody 'cause they're not being timely, let me know, but otherwise just build what we told you to build. Right? Let them do it. What's your last question there, David? Yeah, thanks. Just so I get the sports wagering stuff right. With this new Circa deal, obviously it's going to kick in once the temporary opens. It'll be $9 million on sports wagering, with an upside if you get additional partners in Indiana and Colorado for those two skins, and then upside also on Circa. It's kinda $9 million at minimum with upside. Is that kinda the right way to think about the sports wagering? Yeah. Though there's a gap. We lose Churchill Downs May fifteenth. Well, the $9 million doesn't have Churchill in it. Yes. Right. Yeah. I know, but we're currently seven. Yeah, run rate. I'm just saying run rate. Yeah. Yeah. We're currently seven, we're gonna lose three, and we pick up five. That's right. There's several months here where we are at four. Right. Yes. Right. Yes. Yeah, we're only thinking. The $9 million's the way to think about, like, the base case kinda run rate with potential upside for getting those other ones back. We will get something for the other skins. We just don't have it under contract yet. Just a modest correction to what you said there, David. Technically, we share in the revenue with all of the skins. It's not just potential for additional upside with Circa, it's potential upside with all of them. You are right. It's $9 million with more to come, hopefully. Okay. Yeah. All right, guys. Thanks a lot. You got it. Thanks, David. Okay. Thank you, everybody. This concludes our question and answer session, and I'll turn the conference back over to Dan Lee for any closing remarks. No, I wish it were a brighter day in the market because I think we have a pretty good situation here, but we got taken down along with everyone else and hopefully we'll grow out of it eventually. Thank you, everybody, for listening to us on a rough day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.