Full House Resorts Inc Q1 FY2024 Earnings Call

Greetings, and welcome to the Full House Resorts First Quarter Earnings Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Lewis Fanger, CFO of Full House Resorts. Thank you. Please go ahead.

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're making under the Safe Harbor provision of federal securities laws. I would also like to remind you that the Company's actual results could differ materially from the anticipated results in these forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for the discussion of risks that may affect our results. Also, we may make reference to non-GAAP measures such as adjusted EBITDA. For a reconciliation of those measures, please see our website as well as the various press releases that we issue. 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. With that said, there's a lot of good stuff to talk about from the quarter, the biggest of North American place in Waukegan. We had a really good first quarter there. We've been setting record after record for monthly property gaming revenues recently. We hit our property record in December. We beat it in February, and we beat it again in March, and we don't think we're done growing yet. April gaming revenues were put out yesterday by the State of Illinois, and we rose 39% versus April of 2023. From an EBITDA point of view, we are now consistently generating about $3 million of EBITDA per month. We did roughly that in each of February, March and again in April. That puts us on a current run rate of $36 million per year of EBITDA, which is about double the $18 million of EBITDA that we generated at American Place during 2023. That's a good prologue for what we expect to happen over at Chamonix since its opening parallels, the opening of American Place in many ways. The most obvious is that much like the early days of American Place, Chamonix isn't fully open yet. It's being opened in phases. And during the first quarter, our full 300 guest room hotel gradually came online and is fully opened today. A couple of weeks ago, on April 19, we opened our High-End Steakhouse, 980 Prime. Our goal was to create a restaurant that could draw people from all over Colorado, and early reviews have been very good. It's a very good experience. The service is very on point. The food is delicious. And just like the new Steakhouse at American Place was important for our best guests, the same will be very true over at Chamonix. The next amenity to open will be the pool and spa, which we're expecting in the next few weeks. Now we did have some weather complications in the quarter. The rough winter weather that you've heard about on everyone else's earnings call certainly applies to us here. The weekends are our most important part of the week. Unfortunately, the winter snow kept falling on weekends. In Colorado, we had 3 snow-affected weekends in January, 3 more in February and 2 in March. There was a snowstorm in March that cut off electricity to the entire town of Cripple Creek for 3 days. And so with all of those affected weekends, it certainly was not a normal quarter, but it did allow us time to fix some of the opening kinks that we needed to work through. In terms of profitability at Chamonix, we're on the right track. We lost money in the early days when we carried a lot of excess costs that improved as the first quarter progressed. For the first quarter, our adjusted property EBITDA was a loss of about $400,000. We have not closed the books yet for April, but it looks like that should be a breakeven month. As we go into the summer, our amenities should be largely complete. We should have much better weather and our targeted marketing plan should start to kick in. All of that should continue to propel Chamonix forward and result in a pretty meaningful positive EBITDA contribution. Elsewhere in the portfolio, that same winter weather affected us. I'll keep it short on the rest. But if you look at our core customer outside of those weather events, it feels like there's been stability in terms of their spend with us. And perhaps a bright spot elsewhere, I know in the past, we've specifically called out some costs like property insurance at Silver Slipper, that over the last few years has just grown outrageously. Some good news there. We just wrapped up our property insurance renewal and those costs will actually go down by 19% starting on May 15. That's about $900,000 in savings over the coming 12 months. That's my quick highlights. Dan, anything you want to add?

I will begin with American Place. Everything is progressing well, although I'm not sure we can maintain the 40% revenue increase for the rest of the year. We've had two consecutive months of 40% growth, and I anticipate continued strong performance as the year advances, though comparisons will become tougher. We're also achieving margins above 30%, which is encouraging. To put it in perspective, our revenue is nearly on par with the downtown Chicago property, which opened in September without impacting us, and that remains true. Our gaming tax rate is significantly lower as well. We have until August 2027 to complete the permanent build, based on a special approval from the legislature. I expect Valley's will likely seek a similar extension due to their tighter timeline. Our commitment for the permanent build is around $325 million, and we are designing it to fit that budget. Many of our temporary investments will be utilized in the permanent facility, such as the parking lots and sewage systems. We are pleased with American Place, knowing we are the closest casino to a million residents who will eventually visit us. While the exterior may not be appealing, the interior is one of the best in the state. Regarding Chamonix, we are opening in stages. The hotel began operating gradually in the first quarter, and while we have completed all 300 rooms, occupancy will take time to build. We've seen decent weekend occupancy, but it tends to dip during the week, except in cases of adverse weather. To address this, we are launching programs to boost midweek business. For instance, if guests stay for two nights on a weekend, they can receive a significantly reduced or even free night stay on a Thursday or Friday. The seasonality plays in our favor as we moved past the slow months and are approaching summer, which is beautiful in Colorado. I expect our hotel to be nearly full during July and August, leading to robust profitability during that season. We aim to attract group meetings in the fall to maintain occupancy during the slower months. The Silver Slipper and Rising Star saw slight dips in performance, partly due to weather, but they are less critical since American Place generates the majority of our earnings. Eventually, Chamonix will too, and we are not neglecting the other properties—plans are in place to restore them to our desired levels. In Northern Nevada, our lease on the Grand Lodge Casino ends this year, and Hyatt has indicated interest in extending it. We also have a small casino in Fallon. At Chamonix, we are finishing up a jewelry store and a unique speakeasy bar, with the spa set to open just before Memorial Day, although not all treatment rooms will be available initially. The salon is also in progress. Overall, we are already generating positive cash flow, which is expected to increase. Our interest expense is around $35-36 million annually, and American Place should cover that. Other properties, excluding Chamonix, bring in mid-20 millions, and with Chamonix, that figure will increase. It's worth noting that many investors assume casinos lead to immediate profits, but that's often not the case. Even established names like Bellagio took a couple of quarters to reach profitability but have consistently made substantial earnings since then. Chamonix is receiving positive feedback; we even hosted the Hotel Association of Colorado, where prominent hotel executives praised our restaurant, claiming it surpasses their own. We're eager to attract patrons. As for construction at Waukegan, we have until August 2027, but we’re focused on Chamonix for now. We’re aiming to start construction by around August 2025, which gives us ample time for financing. Initial construction costs can be covered by free cash flow, allowing for flexibility as we approach financing options. Our bond values have improved significantly, and our plan is to refinance debt in the high-yield market when the timing is right. Our goal is to ensure Colorado's profitability while demonstrating our financial stability, which should make refinancing more advantageous as we gather resources for American Place. This summarizes our strategy, and I welcome any questions.

Your first question comes from Ryan Sigdahl from Craig-Hallum.

This is Will on for Ryan. First question here, how do you think you've shifted share in the overall Cripple Creek market? Obviously, it's a pretty slow start to the season given a lot of that snow on the weekends, but curious where you think it's at right now and where it could ideally be long term?

I believe that over the long term, we will expand the market. We often mention how we account for a significant portion of the revenue increase in Cripple Creek. However, it's important to understand the broader market across Colorado. When evaluating our pricing and promotions, we consider what Ameristar and Monarch are doing in Black Hawk, as they are comparable in terms of size and quality to us. While we have 300 guest rooms and they have around 500, I believe our environment is more appealing. Although Black Hawk is legally recognized as a historical mining town, it doesn't reflect that charm as much as Cripple Creek, which has a more authentic feel. In terms of distance, areas in the southern parts of the Denver metropolitan area are equally accessible to us as they are to Black Hawk. Currently, we are generating double the revenue compared to last year, which was not particularly high, and I think our potential is much greater than what we are currently achieving, thanks to market growth. We do have notable competitors in Cripple Creek, such as Golden Nugget, which renovated Wildwood and operates it professionally, and they have 100 rooms that are comparable to a Fairfield Inn. They perform well. Triple Crown is another key competitor located right across the street from us, along with the original Century Casino nearby. Our hotel guests sometimes visit those establishments. There's also a weaker competitor in town, the Double Eagle, which has some ownership issues following the recent passing of one of its owners, making it somewhat unstable. It's a substantial facility, but it doesn't compete closely with us and has historically struggled. Additionally, there are two very small venues being acquired by Waukegan; their intent seems to be to provide a place for our employees to unwind after work. Looking at Colorado as a whole, particularly Monarch is seen as a competitor, but I don’t believe our presence will negatively impact them. The Denver market remains underserved. For context, elsewhere, like in Washington, people spend significantly more on gambling, with an average of $375 per capita, nearly double that of Colorado. This could correlate with the quality of gaming options available. I believe that as awareness grows about what we offer, the gambling spending in Colorado will eventually increase, paralleling trends seen in states like California, where people also travel to casinos. Given that Denver has around $200 per capita spending, and Colorado Springs even less, I believe that as the quality of our offerings becomes recognized, we will see market growth.

I think there's not much to learn from the first quarter. The winter weather over the weekend was quite harsh. A more important point is that our market isn't yet accustomed to heading to Cripple Creek when it snows because they often assume there are no available rooms in town. On the other hand, I've experienced Black Hawk during a snowstorm, and the casino remained busy since people knew they had accommodations. However, many people don't yet realize that we offer the same in Colorado Springs. They worry that if they drive our way during a snowstorm, they might find themselves without a place to stay. This perception will change over time. What provides me with comfort is our concern going into these openings about whether we built the right establishment that is welcoming and comfortable for guests. I can say with confidence that the answer to that is yes.

I have heard numerous customers describe it as a smaller version of the Bellagio. While we lack the fountains and similar features, the quality of the finishes is comparable to what you would find at Wynn or other upscale MGM establishments, as we worked with many of the same designers. Despite our smaller size, with only about 300 rooms, which is a tenth of a typical Las Vegas casino, our casino offers only a few hundred slot machines versus several thousand. This means we are smaller, but guests stay in one room at a time and play one machine at a time. The question is how many rooms are truly necessary? We will gradually inform people about the quality we offer, which is somewhat reminiscent of our experience in Lake Charles. Before L'Auberge opened, the area had poor casinos, and we had to educate people from Houston that something nice existed there, as many viewed it as a chemical dump. Similarly, in Cripple Creek, people have previously encountered subpar experiences, such as a $5 maximum bet. Now, we need to convey that things have changed for the better. An acquaintance of mine, who operates a liquor distribution business, recently visited Cripple Creek for a restaurant opening and was astonished at how nice our facility is. He had no idea something of that quality could be built in Cripple Creek. Now, he plans to return with his sales team for a meeting at our location. This word of mouth will spread. Regarding our performance, I can mention that about half of our slot machines in Colorado are located in Chamonix and the other half in Bronco Billy's. Chamonix boasts the highest win per slot machine per day in the market, while Bronco Billy's has experienced an increase in win per slot machine per day, benefiting from the positive spillover from Chamonix.

Yes, we're still not. We lead the city. We do not yet come close to Black Hawk. But again, as we fill the rooms, that'll all change in time.

I'm curious about the labor situation at the new properties. I know there have been some challenges in the past years, and this is something that is seen industry-wide. Now that you have a few months' experience, and a year in the case of Waukegan, how do you feel about it?

There were various challenges in Waukegan. One issue was that every employee needs to be licensed by the Gaming Commission, which requires filling out a complex form that is only available in English, despite the community being about half Hispanic. This made the hiring process more complicated, not because of the regulators, but due to the state legislature's established regulations that we are obligated to follow. It took time to create a stable workforce, but I believe we have now achieved that, along with a solid management team. While we still experience some employee turnover and the need to train new hires, things have stabilized. The first nine months were difficult. In Chamonix, the process is easier because dishwashers do not require licensing. However, the town, located at 10,000 feet on the backside of Pikes Peak, has a small population of 1,200 people, with about 40% being retirement age or children. There simply aren’t enough people in Chamonix to staff our establishment, let alone all the casinos. However, there are nearby options, and some of our employees commute from Colorado Springs, which is feasible. It's not much different than how some of our Las Vegas employees commute from other parts of town. Although it is challenging, we are making progress in hiring new team members daily and have also utilized some outsourcing for labor. For instance, a cleaning company that services normal hotels and other casinos handles the cleaning of our guest rooms, and they've been effective, drawing from a large pool of workers from Colorado Springs.

Yes, it'll be a non-issue in a year. We're not too worried about it. If you're an employee at any other casino in town, you can see the significant difference between our quality and others. Especially if you're in a tipped position, transitioning to our establishment becomes an easy move.

Yes. And you do find some surprises. Like, for example, we have a pastry chef who's world class. He's written books about it. He's done a terrific job. Every time I'm there, I have to remind myself not to eat too many of his pastries or I won't fit in my suits anymore. And he used to be in Denver and he wanted to live in the mountains with his big dogs, so he kind of sought us out and he's enjoying the mountain life. So sometimes it does work in your benefit.

Your next question comes from Ricardo Chinchilla from Deutsche Bank.

I was going in a different direction. There's potentially some assets of the right size that might come to the market, let's say, 6 to 9 months, somebody like Caesars talked about it. Are you guys committed to deleveraging or to build cash for the facility? Or you know the right opportunity for acquisition is something that could be too tempting for you guys with regards to your strategy and capital allocation priorities?

The Caesars team is open to selling Caesars Palace for four times cash flow, and we'll evaluate that. We examine many opportunities and often learn valuable lessons. Our entry into the Colorado market occurred through the acquisition of Bronco Billy's, which we purchased at six times cash flow and enhanced with available land that helped us develop Chamonix. However, we don’t feel any pressure to act immediately. If we project future growth—given that Monarch generates over $100 million annually and we have two-thirds of their guest capacity—achieving 50% of their revenue should be feasible. It may take a couple of years to reach that target. In Waukegan, we're expecting a revenue increase of 35% to 40% this year, with even better results anticipated next year. The permanent casino should significantly boost our earnings as well. Considering the expected building costs of $325 million for the permanent facility, approximately half could come from free cash flow. Currently, our debt stands at $450 million, which may rise to around $600 million once the permanent facility opens. If Illinois brings in $100 million, Colorado $50 million, and additional properties contribute $40 million, our stock could potentially range from three to five times its current value. Lewis, our management team, and I have substantial personal investments in the company, so we are determined to safeguard our efforts. We have a solid company and need to nurture and develop it. There is a competitor we occasionally analyze that has sold off good assets to a REIT, leveraged that capital, and invested in less favorable assets, leading to poor stock performance. We want to avoid repeating any mistakes. Bobby Baldwin once noted the challenge of avoiding bad deals, as they are prevalent and easy to pursue. I’m not stating that we will never consider an acquisition.

It needs to be very compelling.

We want to ensure that we are committed to deleveraging. I don’t see us as highly leveraged at the moment because I have confidence in our projects maturing, similar to any new casino. While I don’t believe we are highly leveraged currently, we will reduce our debt as Chamonix becomes operational and more profitable, along with improving performance in Waukegan. We may take on some debt again, but it will still be less than most casino companies planning for permanent setups. Once the permanent facility opens, we will be among the least leveraged casino companies. While I don’t think it’s wise for us to maintain low leverage indefinitely, I prefer not to be highly leveraged consistently. Ideally, we’d like to be in a position where our EBITDA is two to four times our interest expenses, which is a comfortable scenario for us, and we are close to achieving that now.

As some of that pertains to the bonds, I’m sure you're pleased. However, to Dan's point, this company generated approximately $48 million to $49 million in EBITDA last year. We believe that figure should realistically be in the low to mid-100s as we progress. I’m not providing specific guidance, but whether it’s $120, $130, or $150, I’m just speculating. Essentially, we should be aiming for that range. It’s crucial to ensure that this progression is successful, as that remains our top priority, given the significant growth on the assets where we have already invested capital.

I don't want to be completely rigid about this, but strategically, we see ourselves as having multiple stakeholders, not just shareholders. Legally, we know that in most states, including Nevada, our primary responsibility is to shareholders. However, if we reflect on my track record at Mirage and the experiences Lewis and I had at Pinnacle, both companies consistently improved their credit ratings during our tenure. While we may take on debt to fund new projects, we don’t do so without purpose. We also focus on being an improving credit. There are many factors to consider in this approach.

And I'll just seal it out, and there's no ego in wanting to be big just to be big either for what it's worth.

Yes, I genuinely admire Monarch; they are a strong company with solid performance. They focus on only two locations, which hasn't negatively impacted their valuation. As we move forward, we will also concentrate on two main sites, which are our new ones. The Silver Slipper remains significant, while the other locations are relatively minor. It's not that we don't appreciate the team at Rising Star, as they have 300 guest rooms and a golf course and are doing an excellent job. However, the reality is that we generate more revenue in a couple of months in Waukegan than we do in an entire year at Rising Star.

Your next question comes from Jordan Bender from Citizens JMP Securities.

This is Eric Ross on for Jordan. Now you've operated the temporary for about a year plus and with the delay of the American Place with the lawsuit, has customer behavior or preference at the property changed any of your thinking around what is ultimately built there in terms of amenities?

We have created a space that can be easily expanded, starting with its core. As the business grows, we can make additions. I often think about these possibilities. For instance, we have options to add rooms at Chamonix and the Silver Slipper. It's essential to consider future growth since a public company has a long lifespan. Ten years from now, someone might decide to build those hotel towers. We've also learned from our experience in Waukegan. The clientele at Rivers is very loyal, and we haven't seen much effect on them. In fact, they've remained the top revenue generator in the state, significantly outpacing others. I initially thought we would affect the video lottery machines more, which was surprising. We're left wondering why people still prefer placing their bets in the back of liquor stores rather than in our nicer environment. Convenience might play a role there; you can easily park at a strip mall and be just a few steps away from the machines. Perhaps we should consider offering valet parking or ways to tap into that market. Interest in dining seems to have lessened as well. We have two sizable restaurants, and we launched a high-end restaurant two months ago that has positively impacted our casino revenue. Although the numbers are surprising, those dining patrons could represent our most crucial customers. Lewis and I, living in Las Vegas, often choose places like Red Rock Casino or Durango Station for meals due to their excellent dining options, which is not the same case in Illinois. The number of diners in casino restaurants remains relatively small, which raises questions about why that is. One factor could be the security regulations, such as showing ID, which is less stringent in Nevada. I've noticed how Durango Station has executed well in creating a food experience. Their restaurant layout resembles a shopping mall with separate loading areas for each restaurant. This approach is uncommon in casinos but allows for significant cost savings. Understanding their strategy has prompted us to reconsider our own designs in Waukegan to avoid costly corridors for food distribution. Customer engagement has been slower than anticipated. I attribute part of this to the building's exterior. We rushed our initial construction and used a temporary structure that lacks visual appeal, unlike eye-catching sites like the Bellagio in Las Vegas. Our setup, which resembles a storage facility, doesn't entice visitors. When we build the permanent casino, it will be designed to attract people. Nonetheless, generating $9.5 million a month in revenue from a temporary tent speaks volumes about what the permanent space can achieve. Regarding the Potawatomi lawsuit, which I view as a nuisance, their presentation did not hold up well under scrutiny. Their tribal casino benefits from less taxation without contributing to Illinois, which should have affected their standing in this matter. Despite their financial success in Milwaukee, this lawsuit offers us a chance to benefit from delays, allowing the high-yield market to recover and giving us time to enhance our offerings at Chamonix. Ultimately, it gives us an opportunity to design the best possible permanent casino. While faster progress would have been preferable without the lawsuit, there have been some unexpected advantages from the situation.

I want to highlight something that always catches my attention every month when I review the gaming report from Illinois. The top performer in April generated $42 million from Rivers, while the second place brought in $12 million, creating a significant $30 million gap between them. It's striking to observe. Furthermore, considering that this is our closest competitor and that the northern suburbs of Chicago remain underserved in terms of overall gaming expenditures, it opens up possibilities. I’m not suggesting we will reach $42 million in gaming revenue, but it certainly makes me excited about our potential once we have an attractive venue that draws people in.

Yes. And the Potawatomi is up in Milwaukee also generate $450 million a year in revenue. And so we're doing 25% of what either of them are doing. And I think we can do...

In one of the wealthiest counties in the country.

I believe we are well-positioned with significant barriers to entry. No other casinos can be established near us. I've received information about an Indian tribe from Kansas or Oklahoma that is gaining recognition for a possible reservation southwest of Chicago, and they are looking into establishing a casino. However, if you check a map, that area is far from us. It might affect Aurora, which is closer, but that does not concern us. Additionally, another tribe is attempting to set up a casino in Wisconsin, but the Potawatomi tribe is strongly opposed to that, and they have significant influence in Wisconsin. There are numerous obstacles to establishing a new casino in our area, unlike places like Nevada, Mississippi, or Atlantic City, where entry barriers are minimal.

And then maybe just a quick follow-up. Can you speak about some of the trends you've seen in a legacy portfolio in the first quarter and how you expect those properties to perform for the rest of the year?

We anticipate an improvement in performance, although the Silver Slipper had a weaker quarter. I can't pinpoint a specific reason for this, other than we were somewhat distracted by Colorado. We aim to understand their operations better and recognize the need to enhance our marketing efforts and manage payroll more effectively. Such fluctuations happen from time to time. The Silver Slipper is doing reasonably well, but it should be generating more profit. Rising Sun continues to face challenges, especially with the new racino that opened in Northern Kentucky in September 2022, which has gained some market share. Despite the competition, we have managed reasonably well. In addition, Churchill is expanding in Louisville, which adds to the competitive landscape, but we are maintaining our position. Tahoe's performance is often influenced by weather conditions, particularly in Incline Village. A typical month can yield excellent income, but unexpected weather can significantly affect that. Lastly, the situation in Fallon is contingent upon various factors.

Well, it's really a Navy base. yeah. And in March and April, the Navy had increase in visitation. It didn't happen in January and February, but it was back in March and April.

It's interesting that when aircraft carriers come into San Diego, many people are unaware that for a plane to take off from a carrier, the ship needs to be moving and requires a headwind of about 10 to 15 miles per hour. Before the carrier arrives in the San Diego harbor, any plane that can be flown is taken off and lands at a Naval Air Station. While the ship is being outfitted or personnel are on leave, the pilots, co-pilots, and mechanics usually go to Fallon for training, which is a Naval Air Station located in Nevada. This can be a bit frustrating because our business tends to surge when Carrier Air Groups are in town, but it's treated like a national secret when they're arriving. The air force base doesn’t inform us, so we only notice when uniformed individuals suddenly appear in our casino, and then we have to quickly prepare for them. It's a small and unique market for us, but we're managing.

We have 2 last people in the queue, so let's try to get through them real quick.

I should mention the sports betting. The Illinois, which is the bulk of it, is doing fine and some of the other licenses are not being used now. And we continue to look for either partners or the possibility of doing something very modest where we don't lose money and offer sports betting online ourselves, mainly for the people who are in our database as kind of an amenity. And I think that could be done without losing money.

Your next question comes from Chad Beynon from Macquarie.

Hi, this is Sam on for Chad. So monthly GGR, the temporary in Waukegan, is taking a step up into the $9 million to $10 million range. What's further required at the temporary to get another step up into the $11 million range? And what do you think run rate EBITDA would be at that mark?

I'll be frank. It's time. People often don't realize that when opening new casinos, different marketing promotions work in some locations but not in others. For us, it seems we've really figured out what works for Thursdays through Sundays, while on other days, we're still making adjustments to determine how to attract players in real time. I won’t divulge the specifics of what we’ve learned over the past year, but I can say that we’ve conducted some recent events that seem promising. Overall, our database is growing, which is crucial; we now have over 71,000 people in it. Learning from this and maximizing the benefits of our steakhouse is key.

Last year during this call, we would have discussed having 10,000 or 20,000 people in the database. However, I noticed something interesting yesterday when the Illinois gaming commission released their results. They included a column for square footage, and it shows us having 70,000 square feet. Rivers is only slightly larger, and my impression is that this indicates we are one of the largest in the state by square footage. I paused to consider whether this measurement includes our restaurants in the tent or not, but I believe it's likely accurate. Compared to riverboats like Grand Vic and Aurora and Joliet, which are crowded and offer limited space, our casino is a large single level with 70,000 square feet. While it's busy on a Friday night, we are not at capacity. I recall that at the Bears in Lake Charles, we used to generate $500 per machine per day. We're not at that level here yet, but it’s interesting to see what Rivers is achieving; they might be close to capacity. However, we have the potential to generate much more revenue in our 70,000 square feet than we are currently doing, and I believe we will continue to grow.

Thank you. And then, as a follow up, what are the marketing plans for Chamonix as we head into the summer months and the potential for increasing group hotel revenues?

Groups tend to book well in advance, so we are working to expand our small sales team to secure business for the fall, winter, and beyond. When reaching out to groups now for bookings in June, they often have prior commitments. This is a longer-term strategy. During the summer, we anticipate drawing in gamblers and retail customers, even on weekdays. The hotel industry has changed; for example, if a hotel offers a $150 rate on its website, Expedia can match that and keeps 20% of the fee. Customers should check hotel websites for special offers, which can often provide better deals than third-party booking sites. You may find compelling packages that include perks like free valet parking or breakfast that enhance the value of booking directly. Our competitors in Colorado are also using similar strategies, offering creative packages to attract midweek visitors. We plan to leverage data to target specific demographics, such as retired individuals who enjoy gambling, offering incentives to visit during the week. Driving midweek business is crucial, as Las Vegas hotels traditionally fill up on weekends but work hard to attract attendees for conventions that occur midweek to maximize occupancy. This has been a consistent trend in the hotel business, where maximizing weekday reservations is key to overall success.

And time will help, too. That database will continue to grow. We picked up about 5,000 people in that database in the first quarter. That's going to get kicked into a next level of overdrive in the second and third quarter with better weather. And so with that database, it's obviously important as well.

Your last question comes from David Hargreaves from Barclays.

Congrats on the successful opening. I'm just wondering if there's any more adjustments to where the final budget is shaking out. And could you talk about the cadence of payments over the next few months? I assume there's probably some construction payables. Anything you could give us on that would be helpful.

Well, there's roughly $20 million of restricted cash in the restricted cash account still and that should pay for completion of it. There's some small amounts outside of that, but there's small and not very material. And so, when we started this process and issued the bonds, the bond buyers and the underwriters requested that we have a construction reserve account. And actually, that's kind of nice for us because there's a third-party who monitors all the construction expenditures and makes sure that you're in balance, that you always have enough money in the construction reserve account to complete the project. And so I think we're fine.

It's been a relatively slow spend from here, a lot of it, honestly, just sitting in retention, for what it's worth. Last month, I think our draw was a little over $3 million. It's kind of trickling out at this point, but certainly by the time you head into. My gut says end of third quarter, you'll see that have been exhausted, but it could drag on slightly longer than that.

I mean, to give you an example, we have a big surface parking lot across the car. Midway through construction, we were able to buy 3 houses that finished off the rectangle. So it's a clear rectangle. Well, that makes that parking lot a little bigger than it was before. So there's some additional curbing and asphalting that wasn't covered in the construction reserve number and will be paid for separately. But it's not a big number. That's the sort of thing you run into.

Got it. You guys think you filed the queue tonight or soon?

Yeah, I think in the next 30. That's the goal. Watch for it. If you have a really boring night ahead, David, you'll have that reading for you.

Thank you, everyone. I encourage you to visit these locations if you can, as they really represent themselves well. When you arrive at Chamonix, you immediately feel impressed. In contrast, Waukegan may initially look like a public works garage, but once you step inside, you'll find it quite surprising. I visited a few weeks ago on a weeknight and was pleased to see it busy, even on a Wednesday. There's no substitute for visiting these places occasionally, both for us managing them and for you as investors. Thank you for your support, and I'll see you in a couple of months.

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