Greetings, and welcome to the Full House Resorts Inc. First 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, CFO of Full House Resorts. Thank you, sir. You may begin.

Thank you, and good afternoon, everyone. Welcome to our first 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, I will kick it off here and then turn it over to Dan for some cleanup. But the big change in the quarter you probably saw was that we did change the segments. I think you guys are used to it by now. It's pretty consistent with what you see at a lot of other gaming companies. But we essentially have grouped our segments by geography, really a function of our growing scale and expansion. We think that's the appropriate way for you to look at it, because that's the way we look at it behind the scenes. The Temporary opened quite strong. We had $3.6 million of EBITDA in the quarter, 34% margins. That's in its first month and a half of opening, so not a full quarter of results there. We think results will continue to improve as we expand the amenities and offerings at the property. On April 3, we were permitted to start opening tables at 10:00 a.m. instead of 02:00 p.m. previously on that day. We were also permitted to increase the maximum table bets from $1,000 per hand to $2,000. On April 5, we opened Asia-Azteca, our second restaurant for dinner service. Quite good food, by the way, I have been there many times and encourage you to do the same the next time you are in the area. We managed to cross a few records in April; obviously, the property continues to ramp up. In April, for example, we had our best gaming day so far. It was the first time we crossed $0.5 million in daily gaming revenue. We had our best weekly table games revenue in the month of April. We had our second best weekly table games revenue in the month of April. About one and a half weeks ago, we had one of our best slot volume days since the opening weekend. It was the first time we had a single hour where we crossed $400,000 in coin-in. All of that is happening as that property continues to ramp up behind the scenes. This upcoming weekend starting on May 12, what we expect is to go 24 hours on weekends, and then the removal of all table limits. You can bet whatever we set the maximum bets at. So there are some more changes to come here in the nearer term. Our current team count is over 500 people, and the database in real-time is over 25,000 people and closing in on 30,000 people. So we are doing quite well. Circa Sports, the sports book itself, got approved by the Gaming Commission. They're still waiting on their software to be approved, and they actually can't start operating until we receive our permanent operating license, which we hope to receive at their upcoming meeting in June. Once that's all done, then Sports can begin, and we're expecting that to start perhaps in August of this year. Looking at the other properties, Silver Slipper, I just wanted to flag that last quarter we noted some overmarketing by a competitor. As we exited the first quarter, that overmarketing went away, and our market share returned to normal levels. We were also affected by some adverse hold both on the table games and the slot side in the current year period. Rising Star had a $2.1 million free play sale. We do that every year. It has fluctuated between quarters, for what it's worth. This year we did it in the first quarter; last year we did it in the second quarter. So just make sure for modeling purposes that you adjust your second quarters for that $2.1 million that's already in the results. Outside of that, Rising Star had a pretty decent quarter, acknowledging that they're still absorbing the impact of that new Churchill Downs facility nearby. The other properties, not a whole lot to share. I'm sure you saw the stories about record snowfall up in Northern California and by Lake Tahoe and Colorado as well. With that said, Dan, do you want to do some cleanup or talk about Chamonix?

Yes, a few things. First, I would point out that we comfortably exceeded expectations in the quarter with $10.1 million of adjusted EBITDA. I think the consensus was $7.5 million, and I think the highest single estimate out there was about $8 million. Even if we take out the sale of Free Play, we met the highest estimate out there. The star of the show was The Temporary in Illinois, which was open almost exactly half the quarter, as Lewis said, and had EBITDA of $3.6 million. If you just take that and multiply it times two, that's $7.2 million, and multiplied times four, it's $29.6 million, which is about what our whole company earned last year. So that's pretty significant for us. It's still only partially open. It had about 25 table games open in the first quarter. Today, it's about 28 at its maximum. The license permits 50. We have a request awaiting approval to expand to 38 games. We have the dealers to do so. We're waiting for the Gaming Commission on that. We opened originally with limited hours of operation set by the Gaming Commission. We were only open from eight in the morning until four in the morning. We shrank that to two hours a day, and now, as of May 12, it'll be at our discretion, and we're going to be 24 hours a day on weekends initially, and then probably go to 24 hours a day every day shortly thereafter. The betting limits started at $1,000 per wager in the first quarter. It's currently $2,000, and as of May 12, it will be unlimited at our discretion. In the food and beverage area in the first quarter, we only had one restaurant open, and even then, only for dinner. In early April, we opened the second restaurant initially for dinner five nights a week. We're gradually expanding the operating hours of the two restaurants as customer demand builds and as we hire more people. We expect the third restaurant to open this summer; it's a diner facility. That's late getting to us, but that's actually okay because we're still building the business at the other two. Our mailing list started with near-zero people on it. Today, it's over 25,000 people. For a property of this size, I expect it to be 40,000 to 50,000 of kind of active people on the mailing list eventually. So we're about halfway there. This is important as you can market much more efficiently once you know who gambles; you don't have to mass market as much. We opened with about 400 employees, and we're now over 500. We think we'll be 700 plus when fully operational. We're making good progress there. Going forward, it's going to be a full quarter, full operations, and full hours of operation, with marketing efficiencies. We think it will build from where it is, but it's already a pretty good number. In a very significant way, this quarter was a turning point for the company. We borrowed quite a bit of money a couple of years ago to build all this stuff, and the interest expense on all of our debt adds up to about $9.5 million a quarter. Adjusted EBITDA was $10 million, so we actually covered our interest expense on all $450 million of bonds and $27 million on the credit facility, despite only having The Temporary for half the quarter and getting less than zero from Colorado. The cash we're sitting on is enough to finish Colorado and contribute to it as well. We're already producing modest amounts of free cash flow, and that's just going to get significantly bigger as the quarters go ahead. If you look at it, as we have full operation at The Temporary and get Chamonix open, we're going to shift very quickly from being one of the most levered casino companies to likely becoming one of the least levered casino companies over the period of about three quarters. In Chamonix, we had indicated before that we thought the earliest parts would be completed in Q3, and that we may open in stages and be all open by year-end. We've now made the decision to open the entire property all at once on December 26, the day after Christmas. A few factors contributed to this. One is that it makes for a better opening if everything is there. You get one shot at a first impression, and we'll be able to do that. Secondly, there is a narrow historical building 25 feet wide that, as we got into construction, we found that the roof of it had some structural issues. This building, built in the 1890s, had two 15-foot beams nailed together. We need to bring in structural engineers and figure out how to support it. This is important because if we tried to open earlier, we'd be opening Chamonix separated from Bronco Billy's because this building is necessary to get from one to the other. We believe it's better to open in its entirety, and frankly, October, November, and early December are slow periods. New Year's Eve, on the other hand, is one of the biggest days of the year. We've decided to focus on getting everything open all at once on December 26. Importantly, there’s no regulatory issue like we had in Illinois. We are already licensed in Colorado and are operating at Bronco Billy’s. We have a core base of employees we didn't have in Illinois, so we don't expect any regulatory issues with us opening on December 26. Importantly, we also entered into a partnership with Barry and Yassine of Barry's Prime, a very successful restaurant that's in Circa in downtown Las Vegas. They were for many years part of the management team at the N9NE Steakhouse at the Palms, which was one of the most successful parts of the Palms. Barry's Prime was just ranked one of the top 100 restaurants in the country by TripAdvisor, and it’s a fairly new restaurant. Our goal is to have the best restaurant in the state of Colorado, and in partnership with them, we think we will get there. That’s very important for the project. The primary market for us is always going to be Colorado Springs, which is close to us; it has about a million people. Colorado Springs, Pueblo, and Canyon City add up to about a million people. But Denver is an important secondary market, being about two hours away. If we can provide better services and a more interesting casino than the ones in Black Hawk, we believe we can capture a significant secondary market from Denver. Not unlike people who live in San Francisco, who are actually closer to Reno than they are to Las Vegas. Many people from Northern California end up in Las Vegas, so that's our vision. Moving forward, Silver Slipper did not have its best quarter, but we've adjusted some marketing, and I think it's going to do better going forward. It wasn’t a disaster, but it was a little soft. In Colorado, we’re not making much; we even lost a little bit of money last year, and that's just because it has no parking, no hotels, and half the facility is under renovation. It’s amazing we’re not losing more money. This will turn around when we get Chamonix open, which is now on the horizon. The Circa Sports Book deal in Illinois, worth $5 million a year to us, covers a good chunk of our interest expense. Circa has a lot of regulatory stuff to navigate, but we think they’ll be up and operating by August. We got the entitlements through the core of engineers to add a tower at the Silver Slipper, but we’re a little busy these days, so it’s not imminent. We are actively designing the permanent American Place, which we expect to open in about three years, and I guess that’s it.

I think we covered everything, Dan. With that said, let's go to Q&A.

Let me address for a moment. We did change the segment report. Just as we've gotten to be a bigger company, it didn't seem to make sense to spend a lot of time talking about Fallon separately or Star separately. It’s not possible to invest in only one of our casinos, as you're investing in the company. So it’s more appropriate to show you what the company is doing, and we break it out by geographic segments, as most casino companies do. So there we go. Any questions?

Our first question comes from David Bain with B. Riley.

Great, thank you. And congratulations on the Waukegan margin ramp. That's certainly faster than we anticipated. I think on the last call, there was actually a mention that Waukegan could hit 40% margins over the course of time. Just looking at what you accomplished in the first 40 days or so, could that 40% ramp be conservative as amenities come on? That may stabilize the ramp for a little bit, but after fine-tuning, has that changed internally, in your view?

I think what you're referring to is that I was referring to 40% of gaming revenue; it could be 40% of gaming revenue.

Okay. So we're pretty at the 35%, sorry.

More restaurants and get more food and beverage revenue. You don't make much margin on food and beverage. But on the other hand, in the casino, it’s predominantly slot machines, as it is at all of our properties. The tax rate in Illinois on table games is significantly less than it is on slot machines, so we’ll have pretty good margins on tables, and everybody has good margins on slots. There’s no hotel here; there’s no golf course. Some of our other properties have these other things that are low-margin businesses; this one doesn't. So it should be a high-margin business.

Yes, because if you think about it, Dave, that food and beverage really is break-even, right? So it ends up bringing down your overall margin if you look at a consolidated basis. The only thing I should tack on there is as we ramp up these other amenities that are in the mix, whether it's the additional restaurants or the additional table games hours, there's probably a little bit of margin degradation due to that too. Apart from just having more lower-margin offerings like food and beverage in the revenue line with not much on the EBITDA line. That will degrade margins a little bit and just the normal ramp-up will degrade a little too. However, I think in the long run, it’s a property that should have margins in the 30% range. Our GM there would tell you, as he's told me many times at his old property, he pulled 40% margins and would love to get to that, and we would love that as well. But it's more of a stretch goal than an easy goal.

Well, I would point out that in the expenses in the quarter, we had a lot of mass advertising. We were running TV ads; we were running a lot of billboards. As you build a mailing list, you can focus more specifically on people who are known to gamble. Your advertising expenditures and marketing costs get much more directed and efficient. So that will happen over time. We even had trains that we wrapped on the commuter line with advertisements for the property. Once you have a mailing list, you don't have to do stuff like that. It’s like fishing in a lake you’ve never been to before; you have to throw your line out in all sorts of places. As you learn where the fish are, you just go back to those places. During this quarter, we were trying to find out where our customers were. As we zero in on that, we’ll become more efficient.

One last thing if it helps you, Dave, for April, to put it in perspective; we haven’t closed the books yet for April, but it’s probably going to be in the high 20% range, not having a three on it. That’s partly because we ramped up that new Asian restaurant. So a little more color there to help you out.

Yes, no, that’s very helpful. Thank you. Have you observed anything from running The Temporary, at least to date, that could be incorporated in the permanent build as either an amenity or something you want to eliminate to further maximize the long-term potential in Waukegan? Or is the roadmap pretty set there?

Oh, we’re learning every day. I could write a book about what we’ve learned in three months, but is it dramatically changing? We learn some stuff. Frankly, we’ve hired the same architects who did the Venetian and Palazzo. They’re very experienced architects by the name of WATG who specialize in hospitality. They’ve come back to us with significant improvements in our design, some improvements in quality and efficiency. So it’s a continuous process. Yes, we are learning a lot.

The table games demand has actually been pretty robust. When we were opening at 02:00 p.m., it was kind of nice to walk the floor at 1:45 and see a lineup of people waiting for those tables to open. When we went to the 10:00 a.m. openings, we started going through that same buildup all over again. That’s been a nice pleasant surprise to see, especially given that the gaming tax rate there is fixed at a flat 15%. On the slot side, we’re certainly learning our marketing day by day, and that’s why in April, you saw us hit some new records tailoring the marketing to what the locals are responding to. The slot customer is one that is used to getting their free play in the mail every week along with their usual benefits. When you don’t have a database, it’s hard to offer those. It’s not surprising. So from February to March to April to May, as you continue to build that database, you continue to build your slot player too. In May, just at the start of this month, we had our first Kiosk games where you swipe your card and get your bonus points. So this May will probably be the first full month where you have the full breadth of normal marketing amenities available.

Actually, it’s funny. There are two things we’ve learned. One we couldn’t do much about, and the other one we could have. We went through the trouble to have these projectors display interesting visuals on the tent at night. This cost us close to $1 million all in. But when you drive by at night, it catches your eye; it’s spectacular. During the day, it looks like the Department of Public Works parking garage; it’s very unimpressive during the day, and there isn’t much we could do about that—it’s a temporary building. The permanent structure will catch your eye. So we’re figuring out how to market to say, ‘You’ve got to come inside,’ because when you step inside, it’s far nicer than it looks on the outside. That’s been an interesting challenge. I’m glad we went through the trouble to shine lights on it at night; that helps a lot. The other thing was the choice of name, me choosing the name The Temporary. I wanted to choose that name because I didn’t want to confuse people into thinking that this was American Place since American Place will be much nicer. However, marketing The Temporary has been somewhat of an impediment. People think, ‘Why would I want to go to this place? It’s only temporary; it’s not that nice.’ It’s even been a bit of a hurdle with employees, as they say, ‘I have a permanent job now; why do I want to go to work at a place called The Temporary?’ I’ve had to explain, ‘We’re hiring you for American Place; it’s a permanent job; it’s just a temporary structure.’ This tongue-in-cheek name, which was meant to avoid confusion with American Place being bigger and better, has caused some challenges.

Yes, the pleasant thing is when people walk in the door, their jaws drop, and they are just amazed by the place. It’s very different on the inside than what you would expect when you see it on the outside. I hear everything Dan has said, but at the end of the day, a brand new property anywhere will have its own marketing challenges as you brand it. This was a very good start for us. We are extremely pleased with Q1. Nothing has phased our ability or our thinking regarding what this property can do in the long term. It's all there in full.

In effect, we built an industry as big as a speakeasy. If you go down to -

Well, hidden secret, yes.

When Cosmopolitan has all these speakeasies, and you go to the back of their food court and push an emergency exit door, you’ll find a bar back there that’s always packed called Ghost Donkey. It’s like they had to figure out how to get the word out. Our casino is similar; driving by, it looks like a place where the Department of Public Works stores salt for the winter. Until you walk in the door, you don’t realize how special it is.

Yes, okay. Sorry for talking your ear off.

Our next question comes from Edward Engel with ROTH MKM.

Hi. Thanks for taking my question. Two quick ones for me. The first one is on The Temporary. Any update on what the GGR was in April and how it compares directionally versus March, and then for the opening date of Chamonix. How set in stone is that December 26? Also, at what point this year do we start to see less disruption at the profitability property as well? Thanks.

I don't have it in front of me, Ed, but it’s going to be low seven, if I recall correctly. April is always a strange month for a lot of markets because you have Easter in there and some snow days on the weekend, along with what I'm told is a significant Orthodox Easter as well. If I were in your shoes, I would view the opening of additional tables as the next big move for gaming revenues more than anything else in the near term.

And the changes on May 12.

Absolutely, yes.

It's pretty important, and frankly, I don’t understand the Orthodox Easter argument. The property’s told that the Orthodox Easter kind of hurt it. I’m like, really? How many Orthodox Christians do we have gambling at our casino? Anyway, regular Easter definitely slowed us down. The property is doing a couple of million a week pretty consistently. As for Bronco Billy’s, since there are hotel rooms above the parking garage, that’s already completed, but the elevators lead down into the Chamonix casino, which is not hooked up to Bronco Billy’s. We don’t have a way to get parking for Bronco Billy’s until we open Chamonix. That’s a major issue. This summer is seasonally more important than the winter, so we hope to make some money at Bronco Billy’s this summer. But I think the big turn won’t happen until we finish Chamonix; that’s a certain date. There’s no regulatory issue; we've thought this through extensively, and we got all the construction people to sign off. They’re turning parts of the building over to us up to two months in advance. We need to furnish it, which takes a while, but we have approval from fire authorities to do that pre-occupancy. We’ll leverage Chamonix to train people. It’s a pretty certain date at this point. If you wanted to reserve a guest room for that last week in December, we would take the reservation right now.

Helpful. Thank you.

Having said that, I need to make sure they’ve opened up the website, but yes.

I don’t think we have quite yet.

I’m sure Baxter is listening on the call and probably scrambling to do that. Any other questions?

Our next question comes from Chad Beynon with Macquarie.

Good afternoon, Dan and Lewis. Thanks for the color and nice quarter. In terms of the Silver Slipper, this is a property that generated exceptional results back in ‘21. Now we’ve had a couple of quarters of tough comps, and performance has come down. Dan, you talked about potentially doing some things to improve it when you shift focus away from other projects right now, but can you shed some light on the current macro environment? Have trends leveled off? We all know that the southern region is generally outperforming, which was fairly uniform, but just trying to get a sense of where this settles out in the current macro environment. Thanks.

Well, I think Boyd mentioned they saw weakness in Mississippi and Louisiana in their quarter. I've been wondering if you can pull the results by property from Louisiana because both Boomtown on the West Bank of New Orleans and Treasure Chest, which isn’t far from there, were both down strongly, not sure why. In their case, they're down like 20% each. We’re not down that much. It’s a little soft for us; we’ve had better quarters. I think the main thing we’re competing against is that Penn put money into the Hollywood, which is down the street from us. They opened a refurbished spa, a Baccarat room, and a noodle bar. They’ve been more aggressive with their marketing. We’ve responded with new marketing programs and seem to be holding our own heading into April. So as the company shifts, this is part of the benefit of growing. We used to count significantly on the Silver Slipper; now it can have a soft quarter and be easily made up for by The Temporary. When Chamonix opens, the Silver Slipper is likely to be our number three property, not number one. We’re looking at the insurance rates continuing to surge as the insurance companies face significant losses from various hurricanes, and we may cut back on our insurance on the Silver Slipper, which had been super overinsuring since the whole company relied on it. We’ll still ensure it, but it won’t depend entirely on it. From what I’ve seen, despite some softness, we’ve been okay in that regard.

Let me help you out a little bit, too, Chad. Look, the property, when it did $30 million of EBITDA two years ago, we were out there telling people it wasn’t a $30 million asset, for what it’s worth. If it’s doing between $15 million and $20 million, I’m disappointed at $15 million. I’m looking at Dan to make sure he agrees with that. If you’re doing in the ballpark of $20 million, it’s probably the right performance. Yes, it’s a little disappointing. The answer is yes. We did have some slot and table hold issues that I briefly mentioned at the top of the call. To quantify it, table games hold was 2.9 percentage points below last year's first quarter, equating to $230,000 of lost revenue if the same hold percentage had remained. On the slot side, we were about 37 basis points lower, approximately $800,000. So those are significant numbers.

Okay, great. Thanks.

It's interesting that people talk about the region being weak. We've been okay; we're a bit weak, but we've been fine. I do wonder whether inflation has a bigger impact there than in other regions, considering that the per capita income is lower in Mississippi and Louisiana than other areas. If you raise the cost of necessities, it might significantly impact household income. That's just a guess; I don’t know why that market would be weaker than any others. From what I can see from Boyd and Penn, with the exception of Penn at Hollywood, I think we’re performing better than most in the region.

Good color. Thank you. I wanted to touch on Table Games opportunity at The Temporary. You talked about bet max limits, number of tables, hours. Where do you expect tables versus slots to be? And should we expect for some nice demand to come in on weekends during NFL season from people who might be going in to watch the games at what appears to be one of the bigger sports books in the county and then maybe transition to the table games, considering their demographics? Just trying to figure out the opportunity on the table games later this year.

We started with 25 table games and have expanded to 28, with a maximum capacity of 50. However, increasing from 28 to 50 does not mean that revenues will double; the demand is not consistent throughout the week. While we might utilize all 50 games on busy nights like Saturdays, I anticipate a revenue increase of about 50% from the table games as we expand. Still, I project that slot machines will make up at least two-thirds of the overall revenue for the property, although table games may outshine our other locations in performance. Because of the lower tax rate in Illinois, we can achieve better margins on table games than in other markets. The sports book is still a new area. The ability to place a bet on a game via your phone from anywhere in the state reduces the need to visit our property for that. However, the sports book, especially as Circa operates, creates an attractive ambiance that people enjoy. There’s probably no better place to be during March Madness than sitting at Circa’s sports book. Eventually, American Place will have a sports book very similar, and it becomes an amenity that people want to visit, almost like a nightclub. So that’s important. We also participate in the online betting, and we expect a minimum of $5 million a year. I'd be surprised if our share of that doesn’t exceed $5 million. I think the online is probably larger. But is it a nice amenity for the casino? Yes, we’re eager to have it open, but it’s still an unknown. Generally, in states where online betting is permitted, people enjoy that convenience. Louisiana's implementation of online sports betting hurt our in-house sports book significantly at Silver Slipper, as people could place bets from home now.

Another way to think about tables, if it helps, is that if you look at Rivers, Rivers in March did around 40% of their total gaming revenue from table games. Our other closest competitor, Grand Vic, was closer to 21%. And I think we did something like 14% of our total revenues from table games. The question remains: are we going to be closer to 20%, like most casinos in the state, or closer to Rivers at 40%? I don’t know the answer. My instinct suggests we’re probably somewhere in between.

I think we’re likely to be between the two. The Asian communities in the Chicagoland area are significant and are concentrated near Rivers. While there are Asians in Lake County, they're not as numerous, making that market critical for us. We also haven’t had many people sign up from downtown Chicago, which we expected. It shows that when Bally’s eventually opens downtown Chicago, we don’t anticipate much impact on us. Rivers lies directly between us and downtown Chicago, so someone coming from the downtown area drives about 40 minutes past Rivers to get to us.

Our next question comes from Ryan Sigdahl of Craig-Hallum Capital Group.

Good afternoon, Dan, Lewis. Not to beat a dead horse here on The Temporary, but I understand margins will dip as it ramps, but I guess as you add the lower margin amenities, should we assume EBITDA dollars will grow from here, running at the rate you’ve done for the first 45 days?

Yes, I think you’ve got it. By the way, as for beating dead horses, they’re all over at Churchill Downs, we don’t have any dead horses around here. The 40% number refers to gaming revenue, and I think that’s totally achievable. You need to be cautious because, in this industry, many look at total revenue and examine margins against it. Considering restaurants will reduce that margin, we’ll likely end up with margins around 30% on total revenues and close to 40% on gaming revenues. If that helps you, yes, this will build from here. We previously indicated that The Temporary could generate $50 million a year EBITDA. We’re already at $30 million, and we’re not even fully open, suggesting we can reach that target. This won’t happen overnight, but it may be a reasonable expectation for calendar 2024.

Yes. You obviously don’t add these amenities if you think they’re going to detract from the dollar amount. We focus less on the margin and more on the dollar amount. So you’re not wrong; we want to see the total dollar number continue to rise.

Yes, that makes sense. Down in Mississippi, it seems like there’s a new project every year, but South Beach Casino is trying to develop right near the Silver Slipper. Any thoughts there?

We have a right of first refusal on that piece of land, which is secure, I’m pretty sure. I think he’s just trying to maintain entitlements on his land. It’s a mature market; we’ve run the numbers repeatedly and I don’t believe the numbers support the construction of a new facility. The Diamondhead is still around; it’s a public company and has talked about building a new property for around 20 years. The last brand new property built was the Scarlet Pearl, and its returns have been lackluster. You can make the numbers work for expansions, as Island View did a few years back, and we’re contemplating at the Silver Slipper. However, for building something from scratch, it’s tough to justify it. In Colorado, it’s still one of the least penetrated gaming markets. The gaming per capita in Denver and Colorado Springs is about half the U.S. average. Yes, you have to drive an hour to get to those casinos, but that’s typical in Washington and California. There are dozens of tribal casinos in California, but they're not located in cities; they require an hour’s drive. The gaming per capita in Illinois is significantly higher than in many other states, creating opportunities for us.

Yes. In today’s lending environment, I don’t know how a project gets funding in what is essentially a mature market. It’s one thing to have a site that could potentially qualify for a casino and get gaming approval, but it’s entirely different to bring it to fruition.

Lewis and I have been around this a long time. About 15 years ago, during our time at Pinnacle, the casino magic in Biloxi was destroyed by Hurricane Katrina. It was generating about $15 million a year. We received over $200 million in insurance payouts and could have rebuilt it. But instead, we allocated that money to build opportunities in St. Louis for better returns. The last thing we wanted was to rebuild in Biloxi, so we sold the site to Harrah's. After they analyzed the site, they decided not to pursue it either. I think it’s a mature market, making it very difficult to justify building a new facility.

Yes, we’ve got about eight minutes and four people in the queue. I don’t think we’ll get to all of them, Dan, but let’s try.

I’ll try to be efficient. Okay, what’s next?

Our next question comes from Jordan Bender with JMP Securities.

Great. Thanks for taking my question, Dan. You touched on the reach of your database. Will there be an initiative to target Rivers or Potawatomi more in the near term? Or will you wait to take market share from them until the final structure is built in a couple of years?

I think the permanent place with hotel rooms and high-end amenities might capture more market share. But this is such an underserved market; I believe there’s enough for everyone. Right now, if you live in downtown Chicago and drive out to Waukegan, which takes around an hour, you might find it nice. But when you drive out to American Place, you’ll say, ‘Wow, this place is remarkable.’ So I think the permanent one will be a greater competitor for market share, while The Temporary is focused more on Lake County.

We believe the marketing radius will expand now. It’s extremely local. If you live in Wilmette or Evanston or those nearby towns halfway between us and Rivers, it will be much more convenient to drive towards us once The Permanent opens. Currently, the rationale for them to drive towards downtown Chicago isn’t compelling. I think our facility is quite excellent inside. In fact, I’d even argue that our Temporary is nicer than many of the Permanent facilities in the area, but not nicer than Rivers or Potawatomi. We’re also hearing the same from individuals on the Wisconsin-Illinois border. They are hesitant to drive towards downtown Milwaukee. Dan is right; in the longer term, this region is large enough for everyone to participate, but we are very localized at this moment.

It's about 80 miles from Rivers to Potawatomi. That creates an 80-mile gap without any casinos until The Temporary opened. The Temporary is located near the midpoint of those 80 miles and is surrounded by 700,000 people living in Lake County, which is our core market. We’ve mentioned Grand Vic, which is a similar distance from us as Rivers; however, you can’t drive that distance. If you leave Grand Vic, headed toward us, you’ll have to drive past Rivers first.

Our next question comes from Ryan Sigdahl of Craig-Hallum Capital Group.

Good afternoon, Dan and Lewis. I want to discuss The Temporary further. I understand margins will dip as it ramps up, but considering you will be adding lower-margin amenities, should we expect EBITDA dollars to grow from the initial run rate?

Yes, I think you’ve got it. As mentioned earlier, I think that could be reasonable. By the way, in relation, I want to stress we don’t have any dead horses around here, only at Churchill Downs. Our 40% number refers to gaming revenue, and I think that’s entirely achievable. Keep in mind when they look at total revenue, what are the margins against that total, and with things like restaurants, the margins will go down. Ultimately, we’ll probably find ourselves near 30% on total revenues and close to 40% on gaming revenue.

You don’t add amenities unless you believe they are beneficial to your bottom line. We emphasize more the dollar amount and less the margin. You’re spot on; our goal is to continue to increase the total dollar numbers.

Yes, if we wanted to improve margins significantly at Rising Star, we could close the golf course and hotel and see higher margins, but our income would also drop.

Yes, fewer customers on the property. That’s right.

That concludes our Q&A session. I would like to turn the floor back over to Lewis Fanger, CFO of Full House Resorts, for closing comments.

Well, I’ll speak for Dan. We thank you all, as always. Come out and see The Temporary. I know many of you haven’t yet; it’s pretty impressive to see in person. We’ll see you again next quarter.

Look at the webcam of Chamonix; it’s impressive too.

Yes, sounds good. Thank you all. We’ll see you next quarter.

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