Full House Resorts Inc Q4 FY2022 Earnings Call

Greetings, and welcome to the Full House Resorts Inc., Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lewis Fanger, Chief Financial Officer. Thank you. You may begin.

Thank you, and good afternoon, everyone. Welcome to our fourth quarter earnings call. As always, before we begin, we remind you that today's conference call may contain forward-looking statements that we are making under the Safe Harbor provision of federal securities laws. I would also like to remind you that the company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption forward-looking statements for the discussion of risks that may affect our results. Also, we may make reference to non-GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our website, as well as the various press releases that we issue. And lastly, we're broadcasting this conference call at fullhouseresorts.com, where you can find today's earnings release, as well as all of our SEC filings. And with all that said, Dan, are you ready to begin?

Yes, that's great. Typically, Lewis and I aren't in the same location, but we'll manage. The main highlight of this call is the temporary casino we launched at American Place in Waukegan, Illinois. It officially opened at 8:00 PM on February 17th. Although it took longer than we anticipated to open, we did successfully launch at that time. Ignoring the partial day, we operated for 15 days through Saturday. I should have the Sunday numbers soon, but they weren't available when I prepared this. The win for that two-week period was $4.1 million, translating to a run rate of $8.2 million per month, or approximately $100 million per year. To provide context, our entire company had $114 million in gaming revenue last year. Thus, the Temporary’s run rate is comparable to the total revenue of the rest of the company. The trends have also been quite favorable. In the first week, we had 23,000 admissions, followed by 20,000 in the second week. The win per person in the first week was $80, while in the second week it rose to about $97, almost $98. This pattern is typical for new locations, where initial tourist visits gradually evolve into a loyal customer base focused on the slot machines. To break it down, we experienced $1.7 million in wins from the slot machines during the first week. It's worth noting that the casino is only partially open, which led to some uncertainty, making it challenging to promote and hire staff effectively. The hiring process was a bit atypical compared to what I'm used to. We needed to staff certain areas and conduct ongoing training. The Illinois Gaming Board approved practice days for us, and we had two formal practice days overseen by them. We performed well, which allowed us to open promptly. If we hadn't done well, additional training and practice days would have been required, as was the case with a casino that opened in Rockford a year and a half ago. During this period, we were still paying employees without generating revenue, making it hard to promote our opening date accurately. Hiring people was also a challenge because potential employees were curious about the work environment. We plan to employ about 800 people at full capacity in the Temporary, but currently, we have around 400 staff members. There are also approximately 200 applicants who are going through background checks and completing required gaming forms. Some of these applicants might not make it, so we anticipate bringing on about 100 additional employees. In terms of operations, we are not running 24 hours a day; our hours are from 8 AM to 4 AM. This isn't entirely a staffing issue; it’s related to our need to streamline the closing processes from one day to the next. It's complex to transition the accounting day while the casino is still active. To manage this, the Gaming Board and we agreed to temporarily pause operations from 4 AM to 8 AM to ensure all accounting is completed for the day. While many casinos operate 24/7, we will work towards that as it’s not significantly impacting our revenues. We are permitted to have 50 table games, but currently, we have only 28 in operation due to a shortage of dealers. We're initially operating table games from 2 PM to 2 AM, again due to staffing concerns. Eventually, we’ll aim to be open 24 hours with all 50 games active during peak times. Finding dealers has been tricky as there have been no other casinos in Lake County. The nearest successful casinos are Rivers to the south and Potawatomi to the north, and most dealers probably live closer to those locations. We have been conducting training through our dealer school and recently introduced a promotion guaranteeing dealers $60,000 annually, including tips. We believe they will earn more than that, so this guarantee doesn't pose a significant cost but rather encourages them to join us. Additionally, we are offering up to $5,000 for relocation expenses for experienced dealers coming from farther away. We are implementing several creative strategies to attract dealers and are confident we'll have enough to operate fully. In the slot area, we are adequately staffed, but over 100 machines are currently out of service. One of our suppliers did not meet our expectations; we opened with around 800 out of 1,000 machines and are working to close that gap. The food and beverage section has been a challenge. We have two large restaurants—a 300-seat venue and a 200-seat venue. A third restaurant, a diner that will serve as our steakhouse, is set to open in April. Due to staffing issues, we are currently operating only one restaurant for dinner service. We aim to quickly fill staffing gaps so we can open the second restaurant within a few weeks and expand our meal offerings. Presently, we are only 50% staffed, yet we are achieving a $100 million annual run rate. There are certain extraordinary initial costs that will impact our income statement. However, given that we are running at this revenue level despite being understaffed, our margins—excluding unusual expenses—should be robust. It's also noteworthy that we launched with a minimal mailing list. In a market this size, one would typically expect to have a customer list of 40,000 to 50,000 individuals, but we started with essentially none. Today, we have around 15,000. A segment of these 15,000 may become active gamblers, likely those who signed up for a free buffet. While we have significant work to do in building our mailing list, we are pleased that we reached a $100 million annual run rate with so little customer support. In Colorado, construction is on track. The large tower crane is coming down, indicating the external work is completed. Internal plumbing and electrical installations are underway, with drywall being installed in guest rooms and public areas. Some parts of the project will be ready in five months, while others may take up to 10 months. We plan to launch sometime in the fall, with the timeline dependent on the readiness of certain facilities, such as guest rooms, restaurant spaces, and parking areas. We hope to have key amenities available upon opening, even if we might have to proceed without the spa being ready. Our experience with the Temporary has taught us the importance of building the employee base concurrently with the construction project. Luckily, the regulatory process for opening a casino in Colorado differs from that in Illinois, so we will have a clearer opening date. Additionally, we have a solid base of experienced staff to begin with, as we’re not starting from scratch; we already have a few hundred employees. We also benefit from an existing mailing list from Bronco Billy's, established over 25 years, giving us insight into potential gamblers in Colorado Springs or Denver. This is a considerable advantage compared to our situation in Illinois. Meanwhile, construction of Chamonix has significantly impacted Bronco Billy's. The casino now lacks parking and has reduced gaming capacity. Last year, we further diminished business by closing part of Bronco Billy's for renovations in anticipation of Chamonix’s opening. Although the casino space reopened in late December and is looking good, the Italian restaurant is still months away from opening, slated to coincide with Chamonix's launch. Financially, we've accessed our credit facility to cover the upfront gaming tax from the Temporary, and our pre-opening costs extended longer than expected. The delays in opening meant we had less income than planned. Illinois gaming law presents some ambiguities regarding taxes we owe, particularly a significant gaming capacity tax. We're striving to clarify these obligations as one interpretation requires us to pay $50 million upfront, which is a larger figure than we expected. To ensure we have the funds, we've added $35 million to our senior secured bond issue. As of now, our liquidity position is solid, thanks to both current cash reserves and operational profits, including initiatives from the Temporary, which are sufficient to finalize Chamonix and begin construction at American Place. This gives us the flexibility to manage our financial strategy while waiting for our new properties to perform and for the bond market to stabilize. Our existing bonds will become callable in February 2024, and we plan to issue new bonds after that time to refinance and gather funds for constructing the permanent American Place. With this recent bond add-on, we have financial room to engage in construction using our current resources into 2025, allowing us ample time to establish the right timing for advancing American Place. Lewis, I’ll now hand it over to you.

Sure. So, as Dan noted, we did the revolver draw and the $40 million tack-on notes last month. That's led to us having a lot of cash currently sitting on the balance sheet. Here in real-time, we’re sitting on about $210 million of cash, which includes $110 million of restricted cash for the completion of Chamonix and obviously, $100 million of unrestricted cash. We'll use a portion of our unrestricted cash to pay the initial license fees for the Temporary, which are somewhere between $40 million and $50 million, as Dan noted. We do have some modest, very modest uses of capital like that restaurant redo that Dan mentioned at Bronco Billy's, which will cost us about a million bucks. But then of course, don't forget that our existing business generates cash too, especially with us heading into our seasonally strong season and a large new property, the Temporary now open. Some other cleanup items of note for you: We did sign a new sports skin agreement for Colorado, which we actually executed back in December, and it began its contractual term a couple of days ago. That means here in real-time, we have two sports skins that have not yet launched. One of those is in Illinois, where we contracted with Circa Sports. There's a natural process that gets followed, but pending normal gaming approvals, we believe that Circa Sports could go live here in the next few months. We have one idle skin left in Indiana, which we continue to evaluate whether we use it ourselves or sign up a third party similar to all of our other sports skin agreements. For those of you keeping track, once Circa goes live, the total for all six of our sports skin agreements is $10 million per year of annualized minimum revenue, and half of that $10 million is related to our agreement with Circa, which is the most valuable, by the way, because Illinois has so many people in the state and there just aren't very many sports skins in the state. In Lake Tahoe, we and our landlord agreed to extend our lease agreement for the Grand Lodge Casino. It was due to expire on August 31st of this year. With the extension, it now goes until December 31, 2024. Normally, we would ask for a longer extension, but its new owners plan on putting the property through an extensive renovation. I think in their ideal world, they would probably prefer to close down our casino while they renovate the entire tower. In our ideal world, we would have them renovate around us like we did a few years ago. We will continue to have conversations behind the scenes about how we can still operate even while they do some extensive work on-site. For the fourth quarter that we just finished, I know you have already heard from a bunch of our regional competitors about a challenging end to the quarter. Quite simply, there was just bad weather portfolio-wide, especially in December. In Mississippi, for example, we had icy roads, which always creates chaos down south, as people are not used to those icy roads, and they end up just staying indoors. In Lake Tahoe, as another example, we had snowfall up until 8 PM on New Year's Eve, which is never ideal. The two softer moments in the property portfolio were at Silver Slipper and Bronco Billy's. At Silver Slipper, our nearest competitor put out some pretty crazy promotions in the fourth quarter. Since then, promo levels have gone back to normal and we've seen a recovery in visitation. Here in real-time, for example, we are seeing visitation that's about 10% higher than levels we saw in November and December. And then over at Bronco Billy's, I don't want to go over everything that Dan already mentioned. But the sheer fact is the size of the casino is a fraction of what it usually is. At its lowest point, we were running Bronco Billy's with 55% fewer gaming positions than pre-construction levels and even today, after the opening of the renovated gaming space, we're still at about half of our usual gaming capacity. So we look forward to when Chamonix is open. And we have parking on-site and hotel rooms on-site, and a full casino as well. With all of that said, I probably have two last points that I want to make here or a couple of last points. One is, if you look at the EBITDA numbers in 2022, they were down. But I do want to remind all of you that we still had some pretty good record numbers in there. Silver Slipper had its second-best year in its 16-year history. I don't think it's slipped much from what you have seen for what it's worth. And then over at Rising Star, they had their second-best year in at least the past 10 years. From our seats here, I think we were probably a couple of million dollars or below what we would have liked. But that shortfall is made up through just 15 days of EBITDA from a fully ramped-up American Place. Dan kind of hinted at it; I’ll be a little more blunt. I don’t think the ramp-up period is going to be very extensive at all at American Place. We are very, very pleased with what we have seen out of the box there, given all the limitations that we are currently running with. I think you are going to see a pretty positive impact from that opening here very, very quickly. The other last point I want to make is that I view the opening of the Temporary as a massive deleveraging event. Again, as Dan noted, we are very pleased with how the opening weeks have been. Regardless of what your estimate might be for EBITDA out of the Temporary, it should result in very meaningful growth for this company. Keep in mind that we have raised the majority of our debt to fund the construction of the Temporary and Chamonix, and now you have the first of those projects open and doing well. The second one, which should be just as meaningful as the Temporary, is only a few quarters away from opening. So just keep all that in mind. But with all that said, Dan, do you want to take some Q&A? Operator, let's go for it.

First question is from David Bain with B. Riley Securities.

Dan and Lewis, congratulations on another exciting casino opening. First, I guess, Dan, you gave some early run rate numbers for Waukegan. That was very helpful. I mean, how should we view it in context, though, with the upcoming augmented hours, games, amenities, and marketing of the database? Can you help us think about how that $100 million, kind of that cadence from here as those things begin to funnel in? And then maybe, Lewis, on that, how should we think about EBITDA margins, that cadence given fixed costs for a temporary relative to a new permanent casino opening? Qualitative is fine, but quantitative is better.

Well, at this point, you have kind of a rotation of the tenants. In other words, these tenants will probably continue to run at a pretty good base of 20,000, might slip a little into the teens, 15,000 to 20,000 people per week coming through. But the win per admission, which today is about $100, that's pretty low by Illinois standards. So I think the win per admission will creep up as we have longer operating hours and frankly, more resources will come. I mean, at this point, our food and beverage offerings are pretty limited, for example. And so as you transition, I would — I mean, granted you get some kind of pre-business, maybe everybody coming to see the new place, but a lot of those people don't gamble or frankly couldn't get to a table, because we didn't have enough tables. I mean, on opening night, within an hour of opening the doors, every table was filled. I think we will end up at a higher run rate than $100, and it'll build gradually over time. Almost all — and that number's just gaming revenue; I'm not counting food and beverage in there. We have a center bar that's doing pretty phenomenal numbers, but we're not going to pay for everything with the bar; it's a very successful bar. I think we end up with something north of $100 million. I mean, I don't think it's going to be $200 million, maybe not even $150 million, but $120 million, $130 million, $140 million, somewhere in there and pretty high margins because it's almost all slot machines. I think we are running 80/20 today, slot machines to tables, and as we get the tables open longer, we might be 70/30 instead of 80/20. In Illinois, the gaming tax is actually lower on the tables, so that shift probably shouldn't hurt margins very much. But that's the bottom line. We have to build the mailing. Typically, I try to characterize it to our advertising agency that you’re looking out at a lake that you've never fished in before and you have to go out and fish in a lot of different places. Eventually, you figure out where the bigger fish are hanging out and now you start focusing on them. Right now, we’ve been doing lots of broad-based marketing. We’ve got wraps on the commuter trains, signage all over the commuter train station in downtown Chicago, we're on television, we have billboards up all over the place. Gradually, as you build a mailing list, you stop paying for the general media and you focus on the segments and the people. That’s why the players club is so important as you build that players club database and you know a lot about those people, because you know how much they gamble and you know what days of the week they gamble. That’s part of getting the second restaurant open, an opportunity for us to market it and say, 'Hey, come back and try our Asia-Azteca, which is just opening.' When we get the steakhouse, we can say, 'Come in and try North Shore Steak and Seafood.' So it's a process. Whereas in Colorado we already have a pretty good-sized mailing list, it's just going out to them and saying, “We know you've gambled in Cripple Creek before, why don’t you come up and see this new thing we built?'

I don't know that I have a ton to add to that, Dave. I mean, I'll tell you a couple of things, though. I do want to reinforce that when Dan talks about $100 million of run rate revenue at this point, that is purely gaming revenue. All that means when you think about overall margins, all the food and beverage tends to dilute your margin. So don't run a 30% margin off of just Dan's gaming number. It's higher than 30%. I’m not saying it very well, right? I think you get what I mean; everything else dilutes your margin down. So whatever margin you're using on the run rate gaming revenue should be a much higher number. All that gives me a lot of confidence. If you run a 40% margin on Dan’s run rate number there, you’re looking at roughly $40 million of EBITDA, assuming everything else is breakeven from the restaurant side. When you walk through the facility, I’ll be honest, I’m meeting people there for lunch this week on Thursday, and I don’t have anywhere in the building to take them for lunch yet. And it’s not just on a Thursday; it’s every day of the week. If you’re a gaming customer going in, you can go and grab a hot sandwich from the two Airstreams that we have on site there. But if you want a true sit-down meal, you don’t have it. We've got a — we're making sure we put some food trucks on the outside, especially on weekends. We do try — and we are planning on getting some brunch service into L’Américaine here in the near term. You’ve got a portion of your day where if you are a normal good gamer, you expect to want to show up, have a meal, and go and play a game. Right now, we’re only servicing you for the dinner part of every day of the week. So do keep that in mind. And despite all that, we're doing a $100 million run rate revenue. The first mailers didn’t start hitting people’s inboxes until a couple of days ago. We went all of February without any of your usual promotions out there as an example. This is a very, very strong start. I won’t give you numbers per se; I will tell you that I continue to think that this thing will be EBITDA positive pretty quick out of the gate, and I'll leave it at that. But I feel very good.

And then I just had one follow-up strategic question. I’m looking at ‘22 EBITDA generation, particularly from a few properties as they begin to normalize, but still be dwarfed by Waukegan and Chamonix. Can you remind us of the strategic rationale not to divest kind of the smaller portions of the portfolio? From a forward equity capital or investment into the more sizable contributors, your time, and even from an investor standpoint, sometimes it’s a little distracting when properties are off like $500,000 for a one-time reason and it’s like 30% off of consensus.

No, I mean, it doesn't. Like the smallest one is Fallon and we could sell it pretty readily; there are a lot of people who'd be interested in buying it. We manage it in conjunction with the Hyatt Tahoe. To a large extent, it's the same management team that goes back and forth, and that makes it more efficient for us to run those two. If you sold Fallon, you would have to put the entire management team just against the Hyatt. If you go to the Rising Sun, which is relatively smaller. A few years ago, we felt we might have to close it. Frankly, the management team there has done a terrific job, and it's now making $6 million, $7 million, $8 million a year. I think it was $8 million at a peak here with the stimulus checks and six and change last year. We are pretty happy with that in a very competitive environment. And frankly, if we don't need the money, and we have enough to build everything we are doing, it really wouldn’t move the needle much if we sold one of these properties. It is also a good place to build that management team that you can promote to other places. So anyway, we've got no real reason to divest. When you start thinking, okay, what happens if the bond market is crappy and it comes time for us to raise the rest of the money to build American Place. Well, we could always do a Bally’s deed and go turn to a REIT and get the REIT to fund most of it. We could even do a sale leaseback on some of our other properties. I happen to think that's probably more expensive than it will be to go to the bond market, if you really, really measured everything. But we have multiple ways to finance American Place. It’s an asset of the company that we have not done the sale leaseback thing yet. We are a public company; everything is for sale. If somebody comes in and offers us 25 times cash flow for any asset we have, we will be happy to take it.

I was just going to say — and the good news is Northern Nevada has not taken too much of our time, for what it’s worth. So I think you are trying to — ultimately, we are trying to balance the time relative to the EBITDA contribution. At this point, the team up there is doing a decent job.

Our next question is from the line of Ryan Sigdahl with Capital Group.

A lot of talk about the first two weeks of performance. Obviously, on the Temporary, it's top of mind, it's the focus. Curious about that run rate that you keep referencing back to. I guess, how when you look at other openings, how accurate is that? Or I guess is there typically a lull, I guess, after the first few weeks before you get the mailing list, before you get the amenities, before you get the hours, all of those things ramped up?

Every opening is unique. I always say that every opening comes with its own challenges. In this instance, we're facing understaffing, which is quite frustrating as I visit the restaurants we are working hard to launch. Now that they are complete, we lack the staff to operate them effectively. In Illinois, even non-gaming employees must navigate a lengthy 30-page form with 25 pages filled out, which includes excessive personal details that seem unnecessary for waitstaff. While Lewis and I expect such rigor due to our ongoing dealings with gaming commissions, it is unusual for potential waiters to be subjected to these requirements, especially in a community that is 50% Hispanic, where the majority of applicants are from that demographic. We often find ourselves assisting them with the application process. The responsibility lies not with the gaming board but with the existing legislation, which I believe also frustrates them. We are attempting to hire waitstaff for these restaurants, yet the lengthy background check process could dissuade them, especially when they have an opportunity to work nearby with less hassle. With unemployment rates at record lows, we are navigating this challenge, which we know will take time. Many tourists fit the description of "lucky losers," and as they circulate, we gradually identify the gamblers to build our mailing list, which is a standard process we’ve experienced in places like L'Auberge and St. Louis. As for a potential lull, it's uncertain; the second quarter may not hit a $100 million run rate, but I believe it will, as we’ll be increasing operational hours, getting all the gaming machines fully functional, adding more table games, and opening up the restaurants. At L'Auberge, we did see a slight lull following its opening, which we overcame despite having all the restaurants and games operational from the start. I think we are less likely to experience such a lull this time due to our commitment to building staff and expanding operating hours. While having only 28 table games may not significantly impact a Tuesday, it becomes much more critical during shifts like Saturday evenings.

The other thing to keep in mind, Ryan, is Dan's right. Usually, you open up with your full breadth of amenities, and we haven’t in this case. On top of that, we opened without a set date, or rather, we opened later than expected, the day after the public knew the date, which may be the right thing to say. So if you were to sift through the questions that we get on Facebook and all those channels via Google and everything else, the number one question by far, last I looked, was something like 75% or 80% of our questions: 'Are you open?' Normally, with a typical casino, you’ve got that date out there six months in advance and you’re telling people, 'We’re opening this day, we’re opening this day, we’re opening this day,' for months and months. In this case, there are a lot of people who just don’t even know the doors are open yet. I’m not sweating it here.

Two quicker ones here on Bronco Billy's, and I’ll turn it over. But one, how long in advance do you think you’ll be able to announce that opening? Is it a few months? I guess, any timeline there? Secondly, with the new casino renovation floor done, do you think that property can turn back to EBITDA positive going forward, even before Chamonix opens, the bigger one?

Actually, the numbers were already quite a bit better just in the five or six weeks since we got it open. So the answer to that question is yes. It was — I mean, it’s still operating with a lot of the amenities not there, but it’s much better than it was a few months ago. And I’m sorry; that was — and in terms of an opening date, well, we can largely pick the opening date, but I don’t want to get too far ahead of the constraint. There’s a point where the construction is largely done and you're installing the furniture. At that point, it becomes very predictable when you can open. We have a few pieces that we’re trying to catch up with, like the kitchen for the specialty restaurant needs to catch up a bit. There's an issue with — we couldn't do all three towers at once because we didn't have enough light gauge steel workers. We had to build towers one and two, and what we call tower two is behind the other ones. It’s possible to open without that tower being completed except that some of the exiting from tower one goes through tower two. We have to satisfy the fire marshal so that while that tower may not be completely furnished and open to the public, there are safe fire exiting methods to go through. If we can’t reach an accommodation with the fire marshal, you probably don’t want to open without towers one or two. Tower one has most of the suites, for example. It’s issues like that we have to resolve, but we should know 60 days ahead of the opening date so we can then advertise the opening date and have a party. We actually had a pretty decent opening party at the Temporary, but it was a process of telling people, 'Hey, we’re getting close, we’re getting real close; be ready; you might only have 24 hours notice.' We literally got approval at like two o'clock on Thursday and blasted out emails to about a thousand people saying, 'We’re opening tomorrow, party's at 6 o'clock, we open to the public at 8 o'clock,' and we were able to get 400 people in the place. Despite our staffing challenges, the staff there did a terrific job serving a high-end meal and having a great party atmosphere in the place, and it went very well. It was not the way you normally want to open. You don’t usually want to tell people you got 24 hours’ notice to come to a grand opening party.

Our next question is from the line of Chad Beynon with Macquarie.

Lewis and Dan, congrats on the opening. Dan, just one on the outlook here. I know you guys don't give guidance. I'm just trying to think about some of the same-store growth opportunities of the business that aren't facing new competition or disruption. I guess, mainly Mississippi and Nevada. In the press release, you outlined a number of things that hurt the properties in the fourth quarter and for the year. But as we look at kind of where the floor is for the foundation of those financials, is there any reason to think that these couldn't grow from here? I know Indiana, you talked about some competition, but just trying to figure out Mississippi and Nevada if the worst is behind you guys?

Well, I think in Indiana, you do have a new competitor opened in September, so we have several more months of that. We have done reasonably well despite that competitor. I think that’s okay. In Mississippi, we had a competitor get very promotional for a while. Then I think they realized they were spending money foolishly and they backed off. We are about to lap or we have lapped the opening of online sports betting in Louisiana. So that shouldn’t be a factor going forward. In Colorado, where the guys are adding capacity, nobody else is. In Northern Nevada, Larry Ellison acquired the Hyatt over a year ago, I guess, and that’s good news. Because he has a history of going in and significantly improving the hotels he’s bought. He owns four or five now, and we hope to continue to be the casino operator there. At least indications so far are that will be the case. I don’t think he wants to go get a gaming license and have to deal with those issues. It’s an amenity to a hotel. He apparently intends to significantly refurbish the hotel. He'll start with the stuff along the lake, which is hugely valuable real estate; it's exciting to think what he could do with that. Then he’s going to go to the main hotel building, which is where the casino is. We may end up going a year, year and a half without a casino while he's doing that. But we’ll see how it shakes out. In Mississippi, we’ve made a lot of headway to have the approvals to build a hotel tower out over the water. We are a little busy building the other stuff we have but we think we could get a pretty good return adding a hotel tower there someday. Let’s finish the construction we have now, but we do have stuff we can do down the road. The sports books, it was a little bit of surprise to us when Churchill shut down their sports betting operation 10 months ago. We’ve now replaced one of them, and then we got the Circa deal. I think we’re back in a good position with the sports betting stuff. It’ll be guaranteed minimum of about $10 million a year, as Lewis said, with one Indiana skin still available. I addressed everything. Bronco Billy’s is going to be part of Chamonix. When it opens, it’s a whole different scale. Chamonix is going to make 10 times what Bronco Billy's ever made.

Just trying to fine-tune everything. I know, we're all focused on the Temporary and Chamonix, but as we said, the legacy business still matters to cash flow. And then in terms of some iCasino movement, I know Indiana and Illinois have been states that everyone has talked about potentially being on the docket in ‘23 or ‘24. I know, there was a little bit of lost momentum in Indiana. I'm just wondering if this is legalized, would you guys consider doing it on your own, running one of these very valuable, profitable skins, or would you consider leasing it out and bringing in kind of guaranteed cash flow similar to what you’ve done on the sports wagering side?

Well, we’ve considered both. It's probably easier for us to do the iGaming ourselves because you can rent or buy the software to do it. There was a particular issue with the sports betting as a small company. You were concerned that, let’s say, the Colts got into the Super Bowl, while all of our customers in Indiana were going to bet on the Colts. If the other team in the Super Bowl was not a place we have a casino, we were going to end up with an unbalanced book. That’s kind of a difficult thing to do. If you change the betting odds at our sports book to try to attract bets on the other team, then we will not be offering our customers as good a deal as they can get from another casino in Indiana. We made the decision early on to do the sports betting through licensing with companies like Wynn, who’ve got a huge sports book in Las Vegas. They can balance it with what they have out of Las Vegas; they don’t have that concern. When you get into iGaming, that’s just a large number of small independent statistical events, and that’s the business we’re in. We’d have to hire some people who understand how to market that business online, but those people are available. On the other hand, if somebody offered us a great deal to run a skin, then we might decide to license it as we did in sports betting. We are a public company, everything is for sale. If somebody comes in and offers us a 25 times cash flow for any asset we have, we will be happy to take it. Maybe the real answer is as the company gets bigger, maybe we should take the small ones and just group them all together. When you see the Boyd numbers and they talk about the Midwest district, the portfolio theory of one casino in the Midwest might be up 30%, and another one down 30%. You look at it, it looks very stable. They camouflage it by grouping things together.

Well, we appreciate all the details on the properties and the temporary. So congrats on the opening.

Hey Dan, we've got five minutes and two last questions, so let's try to get through both real quick.

That’s Lewis's way of telling me to be succinct, so go ahead.

Our next question is from the line of Edward Engel with ROTH MKM.

And again, congrats on getting everything up and running. I appreciate the early updates. But is there any kind of early learning of where that customer base is coming from? Is it all Lake County or are you seeing people kind of close to the suburbs of downtown Chicago as well?

No, it's heavily Lake County. There’s very little from downtown Chicago.

Yes, not a lot to add to that. It's very heavily Lake County.

I think like the City of Waukegan is the third; I've saw the numbers. It’s interesting. We’re not even drawing very far from Rivers or Potawatomi. I think that casino revenue we have, as we've been saying all along, will mostly be from increased gamblers in our region. My guess is we haven't had a very big impact on either of those guys. Rivers does about $600 million a year in revenue, Potawatomi does about $400 million, and then Grand Vic, which is also in the market, does about $120 million. So there's $1.1 billion in revenues, and if we take 10% of that, well, that’s $100 million; that’s our run rate. I don't think we're going to have much impact on them, and I don't think we have very much overlap with Bally’s at all. People in Chicago don’t want to drive up to Lake County; they think it’s a place you go on weekends or something, and people in Lake County don’t want to go downtown because you get stuck in traffic.

Great. Thanks, I’ll pass it off.

I mean, the one way to think of Lake County is like having a casino in Greenwich. You know, it's not going to compete with Manhattan; it's going to draw on people who live in Greenwich. If you're familiar with the New York geography, we're the Westchester County Casino, if you will.

Alright, one last question, Dan.

Our last question is from the line of Jordan Bender with JMP Securities.

Keeping in mind the bumps in Illinois with the hours, the laborers, some of the restaurants opening, etc., how should we think about that property running a run rate over the next couple of months? I mean, should we expect something in the next month or two, or should it be more of a traditional two to three quarter ramp?

I think it's going to ramp slowly, but it won't necessarily be completely consistent. Eventually you will get monthly numbers from the Illinois Gaming Board, and if there's one month that's a little below an $8 million per month run rate, I wouldn't worry about it. The trend will gradually be up. By the time we get to later this year, it should be running 10 million. I think I told you what some of the numbers are of the competing casinos. Grand Vic is a tired 25-year-old traditional riverboat and it’s still doing $120 million.

Yes. I think the only thing to add to that is, usually I would talk about a casino ramp taking 18 months before you're on the run rate. In this case, I think it's going to be a lot faster than that for what it's worth. I don't think it's 12 months either; I think it's quicker than that. Part of it's going to depend on how quickly we can get the rest of our amenities up and running. I do think that's going to be sooner rather than later. We have got enough labor, I think, on the table game side so that we can extend the hours here very, very shortly for what it’s worth. The other thing that helps us out is our typical guests don’t need to travel 40, 45 minutes to come visit us for the first time. A typical guest is going to be traveling 15, 20 minutes. When you get to the site, I think what a lot of people have been appreciating is that we are right off the freeway, we are right across the street from a giant Walmart. We're kind of already inserted into people's everyday lives, into their shopping patterns and everything else. I think all of that is going to combine into a scenario where the ramp is on the shorter side versus what you would see for most other casino openings.

And then one last housekeeping. How much is left to spend in Colorado?

Say it again…

So how much is left to spend in Colorado?

Yes.

Recognize that $110 million in the restricted payment account. There is a third party who every month goes through and looks at what it takes to spend and to complete where we are, and that’s the $110 million. There is some stuff that — like I'll probably want to spend a little more on marketing Denver than is in the budget currently and so on. But for the most part, that’s what’s needed to complete it. That does not include the $1 million change in the steakhouse into the Italian restaurant.

Yes, that’s right there. And one truly last question, Dan. We will be quick, so we don't go too far over time. But we’ll go ahead and clear it out.

By the way, before we get to questions, just remind people that, I meant to say it when the fellow from ROTH asked a question, but we are going to be at the ROTH Conference next week and we are looking forward to it. So the last question was?

Our last question is from the line of John DeCree with CBRE.

I think you covered everything, so maybe one just for you, Lewis. Point of clarity, the real-time cash you had given, the $210 million. Does that include the $36 million or so that was drawn on the revolver? And then if that's accurate, how do you think about the timing of repaying that? Is that just after Waukegan ramps to a point you're comfortable with?

Yes, I'll probably — we'll probably end up paying at least a decent slug of that back here in the near term for what it's worth. When we originally did that draw, we did it on a three-month draw. We've already put in the request to kind of term out that SOFR contract, if you will, behind the scenes. But yes, the short answer is it does include all the cash from that revolver draw, and you should expect us to pay a decent chunk of that back in the near term. I don't think we're going to pay it all back yet, in large part, just to hold onto some extra liquidity as we kind of weigh through the opening weeks, but not expecting to need it for what it's worth.

And last one, Lewis, excluding what's left in Chamonix and at Waukegan. Do you have a rough number as to what we should expect the CapEx to be for the rest of the portfolio this year?

Chamonix is — well, we’re spending roughly $10 million bucks a month these days, and we've got $110 million left to spend. In theory, you should be clearing out most, if not all, of that account here over the balance of the year. You might have a little bit of that pushed into 2024 just because of retention and whatnot. But by and large, expect us to clear out that account in 2023. For the Temporary, the real-time cash number that I gave you already includes the vast majority of construction spend for the Temporary. There’s a couple million bucks of trailing out of that real-time $210 million cash number. Depending on what that final number is for that gaming license fee is, it will affect the full year. We made — I’m looking at Adam as I say this, I want to say we made maybe $7 million bucks or so prior to this real-time cash number. If you include the $7 million already spent plus another couple million, let's say for the first quarter, $10 million of trailing CapEx at the Temporary, plus the gaming license fee. Out of that $10 million, about $7 million or $8 million has already been spent in the real-time number I gave you. Hope it didn't confuse you there, but I don’t want you to accidentally double that.

Let me add to that. The other properties, very little needs to be spent. We’ve fixed up Silver Slipper, Rising Sun, and Fallon. Even Grand Lodge is all in pretty good shape. We probably will spend single-digit millions in the next, I don’t know if it’s this calendar year, but certainly in the next year on professional fees for designing American Place. We got civil engineers and architects and all that so that we can get going with the construction. We have to be open in three years. So we have to get going here pretty fast.

Yes, I’ll give you one last number there, John, if it helps you. The maintenance CapEx figure for 2022 was about $3 million for the properties.

Okay, pretty small. That's perfect, everything I need. And congratulations again, guys on getting the Temporary open.

Yes. Thanks, John.

And I'll see you in a couple of days at the Temporary.

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