Greetings, welcome to the Full House Resorts Inc. Second Q uarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lewis Fanger, CFO of Full House Resorts. Please go ahead. Thank you, and good afternoon, everyone. Welcome to our second quarter earnings call. Before we begin, we did post some slides on the website, so if you go to investors.fullhouseresorts.com, you'll see that bronze banner. And if you hover over Company Info, you can go to the Presentation section and find some of the slides that we'll discuss today, including a bunch of current photos of the work going on at Chaminade. 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'd 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, ready to go, Dan. All right. Well, it's kind of a complicated quarter, so I've got to figure out where to start. You know, we're, we're busy these days, and, and the busyness kind of falls into four categories. One is still ramping up the temporary. This was its 1st full quarter of operations, and it did well and is getting better. The table games is starting to be a bigger factor, and we're still hiring more dealers. We now rank 3rd in the state in table games as of the July numbers that came out yesterday. Our steakhouse should arrive in late September. It's disappointingly late. It's basically a large diner. It's coming in seven trucks, and they're trying to line up the permits to bring these oversized trucks from Florida to Illinois. It's got to be assembled and opened, so it probably doesn't get open until sometime in Q4. The sports book should be up and running in September. You know, we're still pulling it together and, and still hiring people, but the trends are pretty good, and it's, and it's profitable. It's, it's going very much the way most successful new casinos go. Second big task is completing construction of Chaminade in Colorado. It's pretty unusual for a company our size to undertake two things at the same time, but we didn't pick the timing in Illinois, and that's, that's how it ended up. We're preparing for it to open on December 26th. It's not only completing the construction, which is a job and a half, but also preparing for the opening. Along those lines, we made some pretty good progress with the staff. The high-end restaurant, which we intend to be one of the best, if not the best restaurants in the entire state of Colorado. We've done a deal with Barry Dakake and Yassine from Barry's Downtown Prime down at Circa Resort & Casino. They used to run the N9NE Steakhouse at the Palms Casino Resort, and before that, Barry was with Aureole, which is Charlie Palmer's company, was in Manhattan, and he moved to Las Vegas to open the one at Mandalay Bay quite a few years ago. This is a guy who's had Michelin stars before, knows how to run high-end restaurants and high-end restaurants in a casino setting. We're excited to have them as part of the team. It's a, it's a outside chef deal, very much like most of the restaurants at Bellagio, where they get a percentage of revenues and percentage of profit for running it. It's, it's our restaurant, but they're motivated to make it their restaurant as well. We have a this is a small part of the overall business, but, nevertheless, pretty important. We have a prominent jewelry store on the property. We have a consultant from Santa Fe who's got a successful business there called Rockfeather, and she's helping pull together how to make our jewelry store special. In terms of new hires, we just hired Brett Modell, who I think started work actually today. That's a pretty important hire. He's Director of Non-Gaming Operations. Recognize that this is a high-end hotel that we're building here, and our team there has not operated a lot of this high-end stuff before, and so we needed somebody with that experience. You know, Brett grew up in New York City, but he's actually fluent in Mandarin. He's, he's fully American, his wife's from China, but he trained at Wynn Macau in Macau, and then he helped open casinos in Vietnam and Nepal. He worked for Aman Resorts for a while in Bhutan. Aman is probably the highest end hotel chain that's out there. After working in China, he was running a hotel in Crested Butte, which is where we found him. He and his family are relocating to our part of Colorado, and we're excited to have him on board, and he can make sure that the hotel, the spa, the meeting room space, the food and beverage, all lives up to the expectations that the high-end customers expect. He's an important hire, and he starts today. Third thing, of course, is we have an existing company with existing properties and that's had some challenges. In particular, in this quarter, the Silver Slipper had some cost issues. The payroll went up quite a bit and the revenues didn't, and that had an impact on the bottom line. We're getting that back under control. We've got a freeze on any raises. We're looking at staffing numbers. We'll get it under control. At in Tahoe, there was a huge winter in Tahoe, and the snow has been gradual going away. That caused people to delay their return for the summer, and the summer is pretty important up there. Now we're in the heart of it, and it's doing better, but in the second quarter, that affected it. It's a off-season quarter for the Tahoe property, and so it was down. In Colorado, the construction of Chaminade has been affecting Bronco Billy's for quite some time. That continues to be the case. Bronco Billy's, because of Chaminade, doesn't have any parking. We try to operate valet parking as best we can, and we shuttle from an outside lot, but all of our competition has on-site parking, and we don't. We also don't have an on-site hotel. We have a bed and breakfast two blocks away. All of that will change when Chaminade opens, but at the moment, Bronco Billy's is making money in the summer, but wasn't in the second quarter. Rising Star in Indiana is doing okay, especially considering that there is a competitor that didn't exist a year ago, and that's the Churchill Casino at Turfway Park in Northern Kentucky. It's a mature market, so when somebody adds a casino in a mature market like that, it becomes a market share game, and I think we're holding our own. The fourth task that we're busy with is frankly designing the permanent American Place. We're incorporating a lot of what we've learned from the temporary. We've learned quite a few things. We haven't started construction yet. We are actively designing it, which costs some money, but it's. There's a lawsuit out there from the Potawatomi tribe, who's a competitor of ours to our north. They've filed a whole bunch of lawsuits, not against us, but against the city and the state. That may end up delaying our start of construction and financing. I think ultimately the suits will end up being resolved and everything go forward. At the moment, it's, it's something that just happened last week. We, we thought this suit was pretty much gone, and they had appealed something, and the appellate court sent it back to a lower court, so that puts it back into flux a little bit. So that's on the permanent. There's a bunch of unusual stuff because we have a lower tax rate in Indiana than most of the other casinos, 'cause we're the smallest one, and there is a progressive tax rate in Indiana. There is an amount of free play that you're allowed to deduct every year. We have found it makes sense for us to sell our free play to guys in a higher tax bracket, and we've done that every year for about five years now. We did that this year in the first quarter for $2.1 million. We did it last year as well for $2.1 million. It was in the second quarter last year. Looking at the year-over-year results, that kind of affects it. You know, generally, we'll do it early in the year as possible, 'cause you never quite know. During the pandemic year, for example, when we were closed for three months, fortunately, we had sold the free play before that period, because with everybody being closed for three months, we might not have sold it for as much as we were able to sell it for. On the sports books, Churchill got out of the online sports book business in the second quarter of last year, when they did that, they had paid us an upfront fee plus a% of the revenues. The upfront fees of these deals go into deferred revenue. When they pulled out of the deal, it accelerated the unamortized deferred revenues. There was about $1 million of revenue and income in last year's second quarter. One of those sports books that they backed out of, we now have a deal with a new company, who paid us a new upfront fee and is paying us on a regular basis. The big number there is the sports book operation in Chicago, where we were paid $5 million upfront, which again, is deferred revenue. We will receive a minimum of $5 million a year from that, and that starts in the middle of August, whether the sports book is actually up and running or not. We do expect them to be up and running pretty soon, and if they're very successful, we will get more than $5 million a year. The, the minimum of $5 million starts in mid-August, and, and that's by far the biggest of these. See, Illinois- no, Indiana and Colorado, in Indiana, each casino is allowed three websites. In Colorado, each casino is allowed one website, but we actually have three licenses, so we end up with three there as well. There's quite a few, small casinos in the state, each of which gets a, a license. In Illinois, there's, I think, 13 total casinos, if I remember correctly, and each gets one website. Of course, the population of Illinois is much bigger than either Colorado or Indiana, actually bigger than Colorado and Indiana combined. Each website's worth much more. That's why, our, our agreement in Illinois will be very important in, in coming on stream in a month in a week, I guess. A week, yeah, next week. There was some accounting issues, not unusual in a new casino. You find, you start up, then you'll find some little things. For example, our progressive- our slot machines, a number of them have a progressive-type jackpot on them. You don't start those at zero, you got to start them at something else because it's not very exciting to look at a progressive jackpot that's zero. That amount, when you open, would be a charge to preopening costs, it's a liability. It's, I forget whether it's a debit or a credit on the old T accounts, but it's. There was about $300,000 that we missed, so we took that charge in the second quarter. We have a new finance person who helped us discover that, and we moved him from Rising Sun, and we think we have everything straightened out now, but that, that was a little bit of a surprise for us. We do continue to have training costs in Illinois because we are trying to hire more dealers, and we run our own dealer school, and we pay dealers their wage in order to go to the dealer school. We will also pay relocation costs to get dealers. We're, we're gradually getting there. We have enough dealers now to operate 30 games on a Saturday night. We're allowed to have 50. As people get more experienced, we can also increase the table limits. Right now, we go to $5,000 a hand. One of our key competitors will go to $20,000 a hand. We don't want to do that until we have more experienced dealers. That's going on. I guess that's the main unusual stuff. All of this stuff is going to get cleared up in the next few quarters. A year from now, we should be pretty mature at both of the new properties and generating a lot of free cash flow. If we go to the presentation we put online that Lewis mentioned, everything I just said I meant to be kind of a summary, but I guess I went into a little more detail than a summary. You know, on, on the presentation that's online, it notes that our revenues increased 34%. That's really the temporary, which is most of that, in fact, more than all of it. Adjusted EBITDA declined, but a good chunk of that is the timing of the free play, the $1 million that I mentioned from the deferred revenue, and that the temporary actually made $4.1 million, despite that accounting charge I mentioned. There's a couple of other small accounting charges, it was closer to $4.5 million-$5 million, if you back out the accounting charges. Which is, you know, it's, it's not where we expected to mature at, but for the first full quarter of operations, that's respectable. Then we start getting the Illinois sports guns here shortly. You know, part of the reason for my comfort with the results in Illinois is the next few slides. If you look at admissions, they've been trending up very nicely since April. Now, when we first opened, you get a lot of tourists coming into town, what Mike Edson used to refer to as looky-loos. People come in and look at the casino, but they don't gamble a lot. Over time, you build a mailing list, and you start replacing tourists with gamblers. Since April, we've had a steady trend of admissions going up. You can see, as a result, on the next slide, you can see our slot coin in likewise, is steadily going up. Our table games drop steadily going up. Now, on table games, it's also affected by the fact that we are offering more tables at any given time, and we're operating them more hours of the week than we had before, and we are also allowing larger bets over time. So, you know, if you're, if you, if you had these charts on the same scale, you'd see that table games drop is actually growing faster than the slot coin in, and that's a result of adding more tables over time. So a lot of our growth is coming from tables at the moment, but we're continuing to show growth in slots. Slots will always be the preponderance of the business here, but tables are going to be meaningful, whereas in some of the markets, they're not very meaningful. Going way back when we opened, we had this on slide eight, we had 28 table games. By middle of May, we were at 36. By now, we have 48, but we don't have enough dealers to operate all 48, so we have about 30 open on weekends. Of course, we pull people from potential shifts during the week in order to have more tables open on weekends. As we hire more dealers, it helps how many tables we have open on a weekend, but it also helps how many tables we can open during the week. Generally, our table games are $15 minimum bet. We might have, during some times of the week, $110 table as kind of a loss leader out there. Generally, we're $15 minimum table and up. As mentioned, in July, we were third in the state, which is pretty good for, for a place that's only been open a few months. We, we expect to extend our weekend table games hours to 4:00 A.M. Currently, it closes at 2:00, we're picking that up. The guest database, you can see, has been building. We're now at about 40,000 people in our database. That's pretty important. We started at zero. This allows us eventually to be more efficient on our marketing costs. We, we are still spending quite a bit of money on marketing and advertising, getting our brand out, letting people know we exist, and so on. Over time, we, we are already being more targeted, and that will continue to be more targeted as we have, you know, a more, a bigger database. It's, it's almost like. We were talking with the advertising agency. It's like showing up at a lake in, in Wisconsin, you know, to go fishing. You've never been there before, and you don't really know where the fish are. So you end up going out in different places and dropping your bait. Over time, you start to realize that certain bays, certain depths, certain areas have more fish, and you start going back to those areas more and more. That's effectively what happens when you open a casino in a market where you haven't been before. You, you, you gradually figure out who gambles and who doesn't gamble, and, and how to incentivize the people who actually gamble. That's American Place. On Chaminade, on page 10, we show the original renderings of the project. It's very large by Cripple Creek standards. I, I remind myself sometimes that it's about 10% of the size of the casinos we built in Las Vegas 20 years ago. We're also a small company, so this has a pretty big impact on us. It's $250 million. It's a very high-end casino, 300 guest rooms. I remember Steve Wynn, when he opened the Golden Nugget in Atlantic City, it had 500 guest rooms, and it was doing $100 million a year of income 25 years ago, 35 years ago, right? If you get the right people in the guest rooms, you can make a lot of money. I mentioned the steakhouse. We've got a rooftop pool and spa, a nice parking garage, and opens December 26th. We'll be having play nights. The construction will get turned over to us early in December, and our employees will be practicing and doing play nights. We'll send the employees home for Christmas with their families and open the day afterwards. You know, like, like most families, I find you get together with your family and you all celebrate Christmas, and the day after Christmas, like, what the hell do we do now? You end up doing something else. Well, hopefully, we're the something else. We, we hope that we can have a lot of people there. Then we're planning a significant party on December 31st, which is both kind of an opening party and a, obviously, New Year's Eve celebration. Page 12 shows the front of the facade, and all that fancy brickwork is actual brick. Some of our competition, one in particular, used like a brick veneer, which is now peeling off, so it doesn't look. Ours looks really nice. We did spend the money to have some pretty fancy brickwork, which fits very well with the old buildings in town. Then the hotel, a lot of the hotel rooms are in that glass thing up on top, which is designed to kind of meld in and reflect the clouds from the mountains, and kind of mask the size of what the building really is. That one square rectangular building you see in front, the one-story building that's got a ladder leaning against it, that's a jewelry store. When we got the city's permission to close Second Street, because this building squats right across Second Street, one of the commissioners had said they didn't want a big gap in the facades along the street. They thought that would take away from it, and there was some suggestion that we could take an old, streetcar and put it there. There's an old streetcar up the street they use as a tourist information booth. We didn't want to do that, but we said we'd build a jewelry store there, that's the size of a streetcar, so that's what that is. Jewelry stores go very well with casinos. People, people will, win money, and, and then they have to bring home involuntary jewelry, as someone once called it. We think the jewelry store will be a, a, a nice amenity, and it fits very well. And, and it was important to the city in order to get permission to close Second Street. We, we addressed it in a good way. The high-end restaurant is those windows to the left. You can see a chimney there. That's because where there's valet pickup, we have a outdoor fireplace that can keep you warm while you're waiting for your car. This is a cold climate, and the main valet entrance is behind the jewelry store. The parking garage is on the back of the building. The next page shows the main part of the casino, the table games part. The those tall windows will be shaded, and they have curtains on the inside because you don't want a lot of daylight into the casino. We wanted the outside to look regal, so we put these windows on the outside, but on the inside, they will not bring in a lot of light. It looks right on the outside. The next page shows. Hey, hey, Dan, really quick. Then on slide 13 as well, I, important thing is just to see those blue awnings there. That's existing Bronco Billy's. Some of you that have never been to town often ask us how, just how tightly are they integrated? The answer is, very tightly. You, you won't have to leave the Bronco Casino to go into the Chaminade Casino. As you can see there, they're, they're essentially attached. Yeah, it's a lot like going from Tomorrowland to Fantasyland at Disneyland. I mean, it's a different theme. You go through an arch in one direction, it says, "Welcome to Bronco Billy's." The other direction, it says, "Welcome to Chaminade." Your points are good from one to the other, it has a different theme. Chaminade is more modern, European, sophisticated. In fact, the tagline is, European elegance with Colorado comfort. Bronco Billy's is more Wild West, historic Cripple Creek, like a lot of the casinos there are. On page 14, this is the back of the property. This is our parking garage, and you can look down the back. Go in this garage, and it drops you right down to the back of the casino. There's some decorative stuff that goes up on this bare concrete that's not up yet. Otherwise, it's pretty far along. As you can see, the parking garage is there. You know, we could use it if we could get occupancy permits and so on, except that the elevators from the parking garage go into the back of the Chaminade Casino. I can't use the garage to help Bronco Billy's the next few months because there's not an easy way to get from those elevators into Bronco Billy's. Page 16 shows the table games pit. This is when I mentioned earlier, the big window on the outside. Well, that's one of those on the right. You can kind of see, that will get curtains, but the table games pit are quite elegant, very intricate. Molding going in here. To the left, you can see that steel door that's closed. That would normally be open. That's a fire door that goes from the new building, which is Chaminade, to a historic building. The very first historic building will also be part of Chaminade, but we have to have a firewall in between. If you go through that and keep going, you end up in Bronco Billy's. I'm not sure why Lewis included a public restroom other than- Just so you can see that they look quite nice. They do. Quite nice. Yeah, they, they're better when they actually have toilets in it, but that's, the finishes are quite nice. Page 18, the escalators, which are in there, covered to protect them during construction, but there's a set of escalators that goes up to the meeting space on the 2nd floor. We have significant surface parking space that you access off the 2nd floor. That's going to be pretty important. Moldings are going up on the meeting room space. We have a nice skylight there as well, and you can see that on slide 19. Slide 20 is the main ballroom, which is, you know, large by Colorado standards. You know, this is an important difference between us and Monarch, for example. We have pretty significant meeting space. Monarch really doesn't. Ameristar does. I think it's important to helping Ameristar fill up midweek, and it's going to be important for us midweek as well. We have a very nice meeting space. Our site, I mean, Monarch did a nice job, and they have a nice casino, but they're on a very narrow lot. We're not. We sprawl out better, and that allowed us to have meeting room space that's not wedged into a hotel tower. That's important for when even if you have entertainment or you have some function. That's important. You see the meeting courtyard. This courtyard actually serves several purposes. One is those are meeting rooms off the left, and obviously, we could have a cocktail party outside and so on, if it's a nice day, which it often is there. That's also a corridor from the surface parking lot. You go in those doors at the back, and you're right at the top of the escalators that feed you down to the casino. It works very well. Next page is one of our guest rooms. Not all of our guest rooms have both a shower and a bathtub, but quite a few do. That's the shower behind the glass door on the back and a nice freestanding bathtub in the front. The toilets are, in every case, in a water closet, and then nice stonework and so on. Page 24 shows one of-- we have quite a few rooms like this, where there you can see the headboard for where the bed's eventually gonna go. That sofa there is actually a Murphy bed, and that thing pulls down from the wall, and that, and that sofa kind of folds out of the way and supports the bed. So it's pretty cool, Murphy bed arrangement. This room can be rented to a couple that wants the extra space of kind of a sitting area, or if you rented it to two couples traveling together, you'd have two queen-size beds. Pretty nice room. And then page 25 is, is a picture of part of one of the suites. On 26, we have two of these two-story suites, where there's an upstairs, downstairs element, which is pretty cool, and a lot of glass, a lot of views of the mountains, and the gold mine, and the historic town. Every room in our place, or almost every room in our place, has a nice view. The handful that don't, we've actually put nice patios on them, so you can at least sit outside, and that'll be popular with people who might want to be able to smoke, because you can't smoke in the building in Colorado, but you could have a patio where you could. Then you can see on 27, when I said we, we closed and bridged across Second Street. Well, this is looking down Second Street, and this is the view from one of our suites. Then our pool deck, it's a rooftop pool deck. Now, the pool will be heated and open year-round, as is not uncommon in ski areas in places like Colorado. We have a pretty high-tech insulated cover that goes over it at night to try to reduce the heat loss. The pool is as much an advertisement because from the competing casinos that you see in the background, that's the Century Casino with the yellow awnings there, and to the left of that is Triple Crown. They'll be looking at the steam rising off our pool. It'll be kind of visible throughout town. It's one of those, "Hey, look, they have a pool up there. How cool is that?" One wall of the pool, that's kind of in the foreground, is actually plexiglass. You could actually, from certain angles, see people actually swimming in the pool. It's not a huge pool, but it's enough to give it a pool deck, and the pool deck will be a great place for events and parties and could even be on a If you have a warm summer day, you could turn it into a kind of a, almost a nightclub out there. The pool is pretty important. We opted to let it be outside and let the steam go off it. Pretty common at ski areas, whereas both Monarch and Ameristar have indoor pools on their highest deck, which is, when the weather's nice, I'd much rather be outside. Frankly, if you want to have a polar plunge, we have a sauna, a couple of saunas not far from the pool, and you can get warm and go jump in the pool in February. That, that's always fun. Page 29 is just our segment results. You don't need to go over the rest of these. We've already talked through it, I, I guess. And, and, and on that, I think I'm ready to take any questions. Right? Have I missed anything, Lewis? No, no, we are ready for questions, operator. Okay. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment, please, while we pull for, pull for questions. Our first question comes from Jordan Bender with JMP Securities. Please go ahead. Good afternoon. Thanks for taking my question. I want to start on the funding for the permanent casino in Illinois. I guess, you know, looking at my model at least, it looks like you'll need to raise the permanent funding sometime in the middle of next year. I was just trying to get an update on when you guys are thinking about that timing, as well as kind of the optionality behind, you know, the sources of where that money could come from. Thank you. Well, we've, we've always said that that would be roughly the timing we've looked at. You know, our existing bonds become callable in February, and so refinancing the bonds gets a lot cheaper from February on. You know, that's still seven months away. The bond market has its ins and outs. It's not a great bond market today. It's not a horrible one. We now have this lawsuit that came back again, and that, that'll be something that factors into it. You know, the fact is, on our license, there's no deadline of when we have to be open. There are some limitations on how long we can operate the temporary. You know, it's possible that could be revisited. You know, we would like to move forward as quickly as possible. We think the permanent makes quite a bit more than the temporary. We are continuing to refine the design, as I mentioned. You know, you're not wrong in saying you'd like to finance it in the middle of next year, but, you know, if somebody says, "Well, it's gonna cost you, you know, 20% interest," or something, then you'd say, "Well, maybe that's not the best way to do it." We do still have a standby facility with a large private equity firm that's in, that's there. It's, it's kind of expensive. We, we hope we can do it cheaper than that, some other way. You know, we think our stock at these prices is, is extremely cheap, and so that would probably be, you know, the most expensive way to do it. So the I can, I can pretty much assure you there's no issuance of equity being contemplated. Not pretty much, I can assure you that there's no issuance of equity being contemplated. You know, we, we could do a, a REIT deal, as they have for the downtown project, where a REIT provides most or all of the financing. Of course, the once we get Chaminade open, we should be generating quite a bit of free cash flow. So the, the longer it takes us, you know, the, the easier the financing is. Now, we would still like to move sooner rather than later. You know, delays aren't all bad because it does make the financing easier. So that's, that's where it is. I mean, I, I don't have an answer, but, we have probably one year to figure it out, so. Okay, great. Thank you. Then just turning to Colorado, you know, the property historically has done about 10%-20% margins, just given, given the year. As that property ramps up, is it fair to assume that it should exceed that 20% margin? I guess, how should we think about what the ultimate margin profile of that property looks like, when fully ramped? Thank you. Yeah, I think we can have pretty high margins there, as Monarch does. The, you know, the gaming tax rate in Colorado is a progressive rate, but it caps out at 20%. For regional gaming properties, it's actually a pretty acceptable tax rate. Also, in general, if you're the leading property in a market, if you're the best property in a market, you usually have better margins. You don't have to market quite as much. You know, I remember one time, a long time ago, the CFO of MGM called me up when I was at Mirage Resorts and wanted to know what we spent on advertising, and I went and looked up the number, and it was, like, $5 million. He said, "That's not possible. MGM spends, you know, $30. I said, "Well." He says, "Does that include all the billboards for Siegfried & Roy?" I said, "Well, that's a good question. Let me go check." I went back to him and said, "Yeah, the preponderance of that is actually the billboards for Siegfried & Roy." He said, "That's still not possible." I said, "You know what? We had a volcano that was a really big attraction and a ton of palm trees, and they had a plastic lion on their front door that nobody wanted to walk through. Of course, you have to spend money on marketing," and we did. We will have, by far, the best property in Cripple Creek, and I think the best property in Colorado, one of the best properties in the Midwest. I think that the Not right away, it takes a while to get there. Long term, that will play into good margins and a great return. He, you know, a little, little more color for you, too. Another way to think about it is over in, in Mississippi with Silver Slipper. Before we had that hotel, what you would see is a, a casino that would largely die out at, you know, 7:00 P.M., 8:00 P.M. Really, earlier than that midweek, maybe a little bit later than that weekends. Largely because you had people that, that didn't want to drive home an hour on the roads and, and be too tired or drunk or all the things that, that we don't want them doing either. When you have all of a sudden 300 rooms attached, you end up getting much better utilization out of a lot of your existing assets, whether they be the slot machines, the restaurants and all that other jazz. You know, the margins, you should see a pretty meaningful move just from that alone. Great. Appreciate it. it. Thank you. Monarch does not break out Reno from Black Hawk. You can look back to when before they got Black Hawk open, and it's and, and at what they were earning in Reno and so on. They only have the two properties. It's pretty clear they're making at least $100 million a year there. They have 500 hotel rooms. Now they are an hour west of Denver. We're an hour west of Colorado Springs. They have significant competition as well, including Ameristar. I mean, the Golden Nugget has bought the Wildwood and is doing some minor fixing up. It has 100 rooms and kind of a Hampton Inn-type hotel. They're a good operator. I expect they'll fix it up better. Down the road, we'll have better competition. But that's, you know, five years away. We're gonna have a big lead on anyone else. It's not easy to assemble land in Cripple Creek. It took us years. For somebody else to try to assemble something that would compete with us, will not be easy. I think we'll be the leading casino there for quite some time. Thanks, Dan. Thanks, Lewis. Next question comes from Ryan Sigdahl with Craig-Hallum Capital Group. Please go ahead. Good afternoon, guys. You've covered a lot, so I'm going to ask two more specific questions here, both related to the temporary. Curious how much the cost burden is related to the dealer school in totality? I get it's, it's necessary, but curious of that cost. Second, a lot on the revenue side, but curious how the margins have trended over the past couple of months, and then into July with the, the ramp-up in revenue? Yeah, the dealer school is not huge. It's probably, you know, including the people we're paying to actually be trained and their instructors, it's like $30,000-$50,000 a month. There's other training of other job titles as well. The dealer school is, is, is something, it is a drain. It's not huge. The margins will get better. One of the main things driving it is we've still got a pretty robust advertising and marketing campaign. As we get a bigger database and get more focused, we'll be more efficient with the marketing. I mean, listen, we're, we're, we're comfortably profitable in our first full quarter of operations, and a lot of casinos are not. I mean, I can tell you back when Rivers first opened in Lake Charles, the first full quarter of operations, it, it didn't make much money at all. Then it's made $100 million a year ever since. Bellagio, the first quarter of operations was so-so, everybody's like, the same questions you're asking me now. Bellagio has done, you know, $400 million a year of income for 25 years now. We're off to a good start. Now, the revenues aren't where we expect them to be. The profits aren't where we expect them to be. The margins aren't where we expect them to be, but they're, you know, they're, they're okay and trending in the right direction. I, I should also mention, you'll notice, I, I realize investors primarily look at EBITDA, which is appropriate in this industry. Sometimes, newspaper reporters get caught up with the net income and operating income that accountants and their delusional craziness make us be more prominent. Because the temporary is operating for three years, there's a whole bunch of stuff we're depreciating over three years. Now, some of that will probably have ongoing value, like the parking lots and so on. That's why you see such a large depreciation charge over the three years. Now, for tax purposes, it's not yet clear how fast we can depreciate it, but when we close it in three years, we'll get an abandonment charge. If you notice a very big jump in depreciation, that's because accountants take a very conservative assumption that the stuff like, for example, the, the, you know, the, the restaurant stuff, the restaurant equipment, all this stuff, they just assume after three years, it's worthless, and it probably is not worthless. You know, we have two Airstream trailers that are mounted in the middle of the casino floor that are like food trucks, and it turns out they're pretty popular. So one of the things we've done is said, "Hey, let's keep using those trailers. They're not going away." So they're going to be in the permanent. And yet we're, I, I believe, depreciating them over three years currently, which is a very conservative approach. It may be helpful to give you a little bit more there. Right now, the EBITDA margins are running in the high teens. You know, one of the things that Dan hinted at is we are spending quite a bit more on marketing. One of the things that any casino should do, but one of the things that we had been hearing from players that had not gone into our facility is that they would see pictures of the tent and think, "Why would I want to go to that? I'll, I'll wait until you have the real thing. The, you know, I think what anyone would tell you once they go inside the doors is it is unbelievably beautiful on the inside, not what you would expect from looking at it on, on the outside. We're spending a little bit more to try and drive more players into the, the, the building itself, trying to build up that database. That's going to be extended here for a little bit of time. There's a new ad campaign that's getting ready to roll out. You'll at least see that for another quarter. The, maybe the right takeaway for you guys is, is that the trends are all there. They're upward. If you look at the month of July, we did $7.8 or $7.9 million of gaming revenue in the month. That was up about $1 million from the prior month. The trends are there, and we're feeling pretty good. Yeah. Recognize most of the casinos in the state have operated for 20 years. Rivers has operated for, I think, 12 years, and the only other recent one is the one in Rockford that's been open one year longer than us, Rockford. You know, for, for us, all of, and already after only a few months, we're number three in table games and number six or seven overall, is pretty remarkable, given that everybody else has, like, a 20-year head start on us. I'll give you one more data point, and we'll all shut up. If you take the first full month of Rivers is Rivers Casino's annualize that first full month of gaming revenue, you would have gotten to a number that was around $409 million or so. If you were to look a year later and look at the actual trailing 12-month of revenues, it was like $406 million or something. Once you cross that point, you start to see some pretty big increases in that overall revenue line. Today, as you probably know, it's doing close to $600 million a year in gaming revenue. Now they've gotten more positions since then as well, but even in those early years, you saw a pretty meaningful upward move in overall gaming revenue. That's no different than what we'll, what we'll have here. It's, it's been a pleasant surprise to see how well, how quickly we've gotten to number three for the table games, revenue line. The slot business always takes a little bit longer because you need that database, you need the free play to go out, and so that's why we're so focused on marketing and making sure that database builds up. Great. Thanks, Dan, Lewis. Good luck, guys. Thank you. Next question comes from Chad Beynon with Macquarie. Please go ahead. Hi, guys. This is Sam on for Chad. Thanks for taking our questions. I was hoping you guys could speak to any consumer trends or change in the promotional environment that you saw during the quarter and into August? Yeah, we got so many big things going on that, that almost seems less important. Certainly, you know, the Silver Slipper, the property, complains about the competitive impact they're getting from a competitor down the road. When we really got into the numbers, it was more of our own costs being up, we're trying to get that more under control. I'm not saying that it isn't a competitive environment. I believe it is. Does that mean there's a recession in Mississippi? That's hard for us to know. You know, like in Indiana, you know, the revenues are a little soft. Is that a recession? You got a new casino across the river in, in Boone County. That's probably more important. I, I don't see anything that I can point at and say, "That's a recession." I, I will tell you, on the flip side, our contractor in Illinois is telling us that construction costs have not come down. There's a side of me that's been hoping for a recession because maybe construction costs would get lower. You know, you could argue that we would benefit more from a recession because of what it would save us in, in construction costs going forward. The short answer is, we're probably the wrong people to ask. We got so many things going on, it's hard for us to tell. You know, somebody like Penn National has got 25 casinos all over the country and doesn't build much, is probably a better company to ask, that question to. Yeah, fair enough. Yeah, I was going to say, like, if you look at Silver Slipper in particular, we, to Dan's point, we do have a little bit going on. Our, our, our admissions are down, but we also have a 21 and over policy today that we didn't have a year ago. You have to enter the casino to go to the buffet, as an example. You would expect admissions to be down. Win per admission is up, but again, the denominator is down, so, so you'd expect that number to go up as well. You know, rated play seems to be pretty solid. We, we are seeing more rated players these days versus unrated players. So maybe some of the, some of the froth of, of that unrated play is going away, but it feels like the rated customer is still hanging in there, for what it's worth. Okay, good to hear. I guess, for a follow-up, any, any updates on the strategy for your remaining sports betting skins and potentially any future iGaming ones that you might acquire in the states that you operate? We have, one, one still outstanding, which is in Colorado? Indiana. Indiana. One of the Churchill ones in Indiana, and we, we have been looking for somebody to take it on. We haven't, haven't found anybody yet on terms that make sense to us. If iGaming comes to the states we're in, and I think it will eventually, we will look at whether we do a similar thing with outside parties kind of riding on our license, or do we take it up ourselves? And, and it's quite possible we'll do both. If iGaming is legal in a state and we have 3 skins, we might keep 1 for ourself and license others. You know, most of you know this, we didn't, we didn't get into the sports betting business ourselves because as a small company, you can end up upside down on that. If, if, if one of the teams in the Super Bowl is from a market we're in, but the other team is not, we would be out of balance and we could move the line, but then we would not be providing as good of terms to our customers as our competition. So we decided early on to leave it to people who have more experience in that field and just take a percentage of revenue. And, and that's a reflection that, that there are certain games and that, notably the Super Bowl and basketball, March Madness, that are a, a very large part of the sports betting business. You, you tend to have a lot of concentration on those events. In iGaming, where you're allowed to play a slot machine online, that's a large number of independent statistical events. That's the normal business we're in. We're comfortable with that. You can lease or buy the software that allows you to run that website. The games themselves are owned by the slot companies, and they'll, they'll license those pretty readily. We would have to hire people who specialize in marketing websites, but there's a lot of those people available. It, it is a business we could do on our own, but it's not yet legal in any market that we're in. If it becomes legal, it's a business we'd look at pretty seriously. We don't-- you know, it's also not something You, you don't have to be, giant, like, you don't have to be DraftKings or FanDuel to make money on it. I mean, we do have a mailing list in each of these markets, so you go to people and say, "Well, you know, if you, if you can't come in, you know, if you're one of the 40,000 people in our database in Illinois, and you can't come in, or you ended up in the hospital, or you ended up in a nursing home, or you're on vacation, but you still want to play your slot game, you know, we have a way for you to do it." So having that database of a physical casino gives you a market to advertise to, and you can go the other way around too and say, "Look, when you gamble online, you're accumulating points that allows you to come and get a stay at our hotel." So we, we would. we don't have to be a giant market share for it to be a profitable business for us. If it does become legal in the markets we're in, we would probably try to do it in a, in a, a financially responsible way. Okay, great. Thanks for the color, Dan and Lewis. Next question comes from Edward Engel with Roth MKM. Please go ahead. Hey, thanks for taking my question. On the dealers in Waukegan, just curious if you have any timeline when you could be closer to being able to operate 40- 50 tables on the weekends? Could that happen by the end of the year, or is that kind of just as she goes on progression? We're, we're probably a month away to be able to have 40-50 tables on a weekend. We're, we're getting there. To, you know, recognize that where we are, the people who had dealer experience were already well employed at Rivers and the Potawatomi. We've had to reach out and be creative. We, we, we are paying relocation costs for dealers who are experienced and might live in the middle of Wisconsin or something. We're training dealers from scratch, and by the way, we've learned from that in Colorado, so we're trying to get ahead of the game in Colorado. In Colorado, the existing dealers at existing casinos are looking at our building, which kind of, pretty impressive in the town, and drooling over the tips that they'd make at our casino. It's probably an easier task, but even there, we are reaching out to dealers who might work at tribal casinos in Oklahoma and New Mexico and so on. We're trying to be ahead of the game, so we make sure we have enough dealers to operate the full table game pit when we open in December. Helpful, thanks. For for when the source, the Circa sports book opens in September, just curious if there's kind of any marketing events planned, and I would assume that would be on their expense rather than yours? Well, the, the online, the, the, the in-house Circa place, we share the income from it, and we haven't really worked out the details, but we would, we would certainly publicize it and have some sort of event, but I don't think it'd be particularly expensive, so. Helpful. Thank you. Yeah, I mean, it, it, you know, we'd be silly to open it and not publicize it, but it, but it, it's not, it's not a $1 million marketing cost. Probably have time for one last question. Time for one last question, and it comes from John DeCree with CBRE. Please go ahead, sir. Hi, Dan. Hi, Lewis. Thanks for squeezing me in here. maybe two, two questions, and just to circle back to, to the topic today, which is the margin at, at Waukegan. I wonder if you could, you know, speak to, you know, where you think, you know, you can get the margin to at the temporary. In that outlook, you know, what's the, what's kind of the order of operations? Is it more costs normalizing, on labor, pre-opening and marketing and some of the things that you've talked about? Is the bigger driver of getting that margin up, you know, really the additional revenue that, that you'd expect as the facility continues to ramp? A little bit of both. I mean, as the revenues continue to go up, and you, you can see from the numbers, the number of admissions are going up, the revenue per admission is going up. You know, that affects our gaming tax, of course, higher revenues and higher gaming tax, but it doesn't really affect the payroll very much. You know, you have the same number of security guards. The slot machines, you know, are the revenues on the slot machines could go up 50%, and our payroll probably wouldn't go up 10. Then on the marketing side, you know, you gradually get more efficient. I mean, marketing never goes to zero. Right now, we're trying to tell people in, in this new campaign that you can't judge a book by the cover. If you looked at the outside of the tent, you've got to come inside and look at it. There's that. Actually, in my last question, I want to point out that one of the challenges in Illinois is the way the regulatory system works, is they go through lots of different checks and balances and so on, and all of a sudden, they're likely to say, "Okay, you can open the sports book." I didn't want to give the impression that we would have a great big party on the opening of the sports book. It's like, literally, you open the sports book, and then you, you figure out how to advertise to people that you have it open. So there will be some cost involved. I, I think the person who asked the question, kind of said, "Is there going to be a marketing event?" There'll be some marketing dollars. I don't know if there's necessarily an event. It, yeah, this, this, this all takes time. You also, the other thing that happens in any new casino is you tend to have quite a bit of turnover. You'll, you'll open, I can remember when we opened Bellagio, we had 10,000 employees, and, within months, you lost a third of them. It's because they find that, you know, they didn't really want to wear high heels all evening and serve cocktails, or they, they didn't really want to be a dealer, or they, or they, you know, they didn't really want to be a waiter or whatever it is. Those people leave, and you have the recruiting and training costs to replace those. Some portion of those leave, and you have recruiting and training costs to replace those. It, it takes a few iterations before you kind of normalize into a stable workforce. You know, even at the Silver Slipper, you know, we have about 500 employees. There's about 300 who are with us year in, year out, who have lots of tenure with us, and they're happy, and we're happy, and they're the core. There's, like, 200 that turns over every year, too. We're, we're trying to figure out that core. In the meantime, you do incur additional costs with recruiting and training and so on. Over, over, it's all part of the maturation. I, I, I, I think if you had total access to all the data in the entire industry, I think you'd be hard-pressed to find a casino whose margins reached their highest point in their first full quarter of operations. It's just, it's never the case. Your, your margins, in fact, it's sometimes you have no margin in your 1st quarter of operation. You know, two years later, you get to kind of a normalized margin. In this case, normalized margin is probably 30%, in Illinois. That's not higher than that because of very high tax rate there. With the gaming tax in Colorado, it could be higher than that, so. Yep, that's a good point, Dan, on, on the time to, to get to stable margins. Appreciate that, that color. Maybe, you know, more detailed question, just to sneak one in to the extent you guys can, can comment. As you, you know, spoke to the database a little bit as that ramps up. You know, curious if you give us any insight into kind of your rated play mix at the property now, and, you know, at least maybe some parameters. How has that ramped over the last, you know, call it quarter? And, and maybe where is it relative to, you know, what you'd expect at Stable or some of your other operations? To kind of give us some insight as to, you know, how, how much more runway you have to really get that database working for you. Well, we're, we're, we're already in the high 60s in Illinois. Some other markets we're in the 80s. For, for rated play? Rated play versus total play. As you attract more people, you get more rated play as, as well. Recognize that the 40,000 people, that's the total names we have. Eventually, you, you start to figure out some of those names don't come back, right? Other ones come in all the time. So you, even within the 40,000 people, you, you start to figure out, "Oh, well, there's 10,000 of these people that are pretty important." It's like any other business, 80% of the revenues come from 20% of the customers. So you, you keep getting smarter and smarter at figuring it out. You know, we have, we have customers at some of our properties who are with us more than 100 days a year. They're in our casino, and you gradually learn who they are and what they like, and what appeals to them and what's important to them. You know, and a lot, a lot of times they're either independently wealthy or retired, and it's just what they do for their entertainment. Until you know who those people are, you're flailing around a little bit. That's part of the normal maturation of a new casino. Just like any other new business, I suppose. I mean, if you open a clothing store, you know, just because somebody came in and bought a tie doesn't mean you're going to see them every month. I don't know. Does anybody buy ties anymore? Anyway, you get the idea. Thanks, Dan. Appreciate it. Thanks, Lewis. You got it. Okay, I think we're done. Okay, thank you, everybody. We're very busy and, and, and, you know, over the next six months, this will all normalize out. You know, we're very excited to get Chaminade open and, and, then eventually to get going on the permanent. We'll, we'll get going when the time is right. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a-