Q1 2024 Full House Resorts Inc Earnings Call

Participants

Lewis Fanger; Chief Financial Officer, Senior Vice President, Treasurer, Director; Full House Resorts Inc

Daniel Lee; President, Chief Executive Officer, Director; Full House Resorts Inc

Ricardo Chinchilla; Analyst; Deutsche Bank

Eric Ross; Analyst; Citizen's JMP Securities

David Hargreaves; Analyst; Barclays

Presentation

Operator

Greetings and welcome to the Full House Resorts First Quarter Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Lewis Banga, CFO of Full House Resorts. Thank you, please.

Lewis Fanger

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 security laws.
I would also like to remind you that the Company's actual results could differ materially from these anticipated from the anticipated results and 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 are broadcasting this conference call at Full House Resorts.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 in the quarter. The biggest involves American place in Waukegan. We had a really good first quarter there that we've been setting record after record for prep for a monthly property gaming revenues. Recently, we had 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 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 shomi 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, many isn't fully opened yet. That's being opened in phases.
And during the first quarter, our full 300 guestroom hotel gradually came online and is fully open today. 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 earlier 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 overhead, Germany, 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, other rough winter weather that you've heard about on everyone else's earnings call certainly applies to us here the weekends, our most important part of the week. Unfortunately, the winter snow kept falling on weekends. In Colorado. We had three snow effective weekends in January three more in February and two in March.
There was a snowstorm in March that cut off electricity to the entire town of Cripple Creek for three 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 Germany were 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 shomi 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 week specifically, I 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. Thats my part. Dan, anything you want to add for you

Daniel Lee

Address American place first, obviously, it's everything is going the right direction. I don't know that we can keep the pace going for the rest of the year, up 40% of revenues, but we had two months in a row now of 40%. And I think we will be up strongly as the year goes on. Obviously, the comparisons get more difficult this year goes on, but I think we'll be up strongly and there and we're also running margins above 30%, which is obviously a good thing.
And just to put it in perspective, we're doing almost the same revenues as the downtown Chicago property it opened in September didn't have any impact on us at all. And that's still the case. And our gaming tax rate is a full 10 points lower than theirs. And so no.
So we're in pretty good shape and the requirement to build the permanent we have until we can operate the temporary until August of 2027, which is a special build, the legislature approved for us, I assume Valley's would probably have to seek something similar because so they have a pretty short time line anyway.
The our commitment going forward is about $325 million to build the permanent, and we're designing the permanent to fit that number. A lot of what we invested in the temporary will be used for the permanent like the construction of the parking lots and structures and so on. So I'd say we're very happy with the American place.
We always knew we were the closest casino to people and that eventually they would find their way into our tent. It's not very impressive from the outside. But once you win, it's arguably one of the nicest casinos in the state so. And so I think we're in good shape there. Louis mentioned that in Germany, we're opening in stages and they said they know the hotel gradually came online during the first quarter?
Well, that's just that's part of it. We now have all the guestrooms done. And in any given night, there might be a handful that are out of service trying to fix something. But but in effect, we have all 300 rooms, but the occupancy also builds gradually. And so it's been running pretty decent occupancy on weekends, but it drops off during the week, well, absent blizzards and stuff.
So like most regional casinos, we're now preparing to rollout programs designed to help build the midweek midweek business, unlike if you're staying with us tonight and a weekend, you can get a stay one more night on a Thursday or Friday at a much improved rate or even free. And that sort of thing to build occupancy midweek that will take some time.
But the seasonality helps. I mean, we opened this and the debt as part of the year. We're now coming up on summer summers a beautiful up in the mountains of Colorado. And so I think we will be able to fill our hotels just But every night, July and August.
And so we should be quite profitable during the summer, and we're focused on getting meetings groups in the fall so that when the normal vacationers start to go away, we have a lot of very good meeting space to help fill the hotel during the slower season. I'm the Silver Slipper and rising star were off a little bit. Some of that was weather.
And fortunately there they're not as important. I mean, American place earns more than everything else in the Company combined these days and eventually Germany probably will as well. But the fact that we're overlooking it we're also looking at programs that those places to get them back to where we want them to be.
Northern Nevada. We have a lease and the Grand Lodge Casino that expires at year end, we've had some indications from clients that they would like to expand it yet. Again, it's been extended several times. So we're trying to get that Inc.
And then we still have a small casino in town, which is there. So that's kind of where we are. We're still finishing. So we've got a jewelry store. We get one more kind of unique Speakeasy bar to get done the spine the opened just before Memorial Day, we won't have all the treatment rooms, but we'll have enough treatment rooms that we can offer massages and and the pool and the way from and the locker rooms.
Now that all that's done, the salon is being put together as we speak. So people get a haircut and stuff. So and I just suggest I mean, we're at the point where as a company will start, we are already producing positive cash flow.
And I think that will build significantly as we go ahead, I mean it you take our interest expense about $35 million , $36 million a year American place. A lounge should earn that. And everything else does in the mid 20s plus Chaminade, everything else, excluding Germany, as something in the mid 20s. And then now Germany will look, Mike and I will point out that it's not unusual it's a lot of time to find investors.
Thank you, open the doors of the casino, and it's an instant slam dunk, our profit generator, and that's really never the case even last year, the first quarter two was far less than what we expected and then it kicked in and it's been making $500 million a year for 20 odd years.
Now and the same with low fares and lower values and all these other regional casinos. And so the good news is Germany is beautiful. It's getting all sorts of great accolades, even we hosted the Hotel Association of Colorado, which had the GMs and presidents of all the different top hotels from Vale and Aspen and Denver and Colorado Springs all were at our place and had dinner at our new restaurant and without saying names of the President of several, the prominent and hotels in the state came and told us that we thought we had that we had the best restaurant in the state even better than their own job.
And so we're very proud of our team for that. And now we just need to fill it with pick. And we will there were such as we're just trying to finish those things out. Very early stages on that very early, but we're really in the designs of the permanent and Waukegan, frankly, we've been pretty focused on Germany, we have until August of 2027, as I mentioned, and that's not even a requirement of to open the permanent. That's just the outside date at which we can operate the temporary.
And you really want don't want to be a gap going to be able to move customers, employees seamlessly to the new place. So that means we really have to start construction about two years ahead of that. So August of 2025, which means we have 15, 18 months to raise the money before we start construction. But even that is not a requirement because the early stages of construction aren't a whole lot of money. And so there's probably six months of construction we can do on just out of free cash flow.
And so we have a couple of years to figure out the financing or our bonds have come back, they're not quite back to part of the well off their bottom. And so our guess is at the right time, we go to the high-yield market and refinance our debt but we but it's not imminent and much, let's get Colorado making good money. And then people will see that we're actually less levered than most casino companies. And at that point, we should be able to refinance the debt on favorable terms with the extra money to build American PLACE. So that's the that's the strategy, that's the plan and that happy to take any questions.

Question and Answer Session

Operator

(Operator Instructions) Ryan Sigdahl, Craig-Hallum.

Okay, good afternoon. This is Will on for Ryan. Thanks for taking our questions up. 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 given a lot of those a lot of that snow on the weekends, curious where you think it's at right now and where it could ideally be long term.

Daniel Lee

Well, I think long term we grow the market and yes, and we get this a lot like they clearly, we account for more than 100% of the increase in Cripple Creek has been showing increases, but that's not the whole picture. You have to almost look at all of Colorado.
And when I look at where our pricing should be or promotion should be. We look at what Ameristar and Monarch are doing up in town black Blackhawk because they're comparable to us and scale and quality, I think were nicer, maybe not quite as big. We have 300 guestrooms that you have about 500, but we are nice and frankly, it's a it's a more romantic environment. I mean, BlackRock is I think legally a historical mining town. But if you go there, you see very few vestiges of it.
And Cripple Creek feels a little bit like Colonial Williamsburg got a brick and so what I think we're at a better environment, no distance wise, the southern parts of the Denver MSA are about equal distance. So Centennial, Castle Rock and so on. They can go to us as easily as they can go to Black Hawk. And so obviously, we're doing double the revenue well, last year's revenues weren't very high. We're doing double, and that's not even close to what we should be doing and we'll be doing.
But I think it comes from growing the market. I mean note the gaming per capita in Colorado Springs is one of the lowest places I know of in the country and there's no inherent reason for that. So I think we will grow the market. We have a few good competitors in Cripple Creek came in the Golden Nugget, having bought Wildwood and rebranded it.
That's a very professionally run now and that's a positive for them, of course. And for us as well. They have 100 rooms and the rooms are about the quality of a Fairfield Inn, but they do five. And then the Triple Crown is our other major competitor right across the street from us and also across the street from us is the original Century Casino & <unk> and in other, they're right next to us. So the people staying at our hotel lender have gone over there. Sometimes there is a weak competitor in town called the Double Eagle and the owner of that. I think this the second of two owners has now passed away.
And so it's a little bit tied up in probate. So on it's a pretty big facility, but not close to us. And it's probably the weak sister in town, somebody gets hit, it's probably down, but they've been the weak sister for an awfully long time. So that's the Cripple Creek market is pretty simple. Then there's two tiny, tiny little places that are just being bought by Michael gone that I think their strategy is to have a place for our employees to go after work.
And that's a perfectly fine strategy for small casino, and that's that's pretty much it. But you can you almost have to look at Colorado as a whole and because it and to a very large extent, we view and particularly market as our competitor, I don't think we're going to take I don't think we're going to hurt them either. Even the Denver market is underserved and if you start looking at what people in say, Seattle, Campo and people in Seattle have to drive up into the mountains to because gaming is all on Indian reservations, but the quality of the stuff that the tribes have built in Washington is quite good.
And that's one of the few states. You can actually get the tribal casino gaming revenues and when you look at it, the people in the state of Washington are gambling about three. I think it's $375 per capita now, which is over double what the people of Colorado gambling and that there's no inherent differences in religion or education or something that would explain that.
I would I would think people in Colorado will eventually gamble as much as people in Washington and there's other markets too, you can look at like in California, there's they gamble about $350 per capita to and most of the people do not live near a casino, they have to drive an hour to get to a tribal casino or four hours to get to Las Vegas. And so when you start looking at it, the danger and which is somewhere around $200 per capita gambling and Colorado Springs was even lower than that. I think as people understand the quality of what we built, we grow the market.

Lewis Fanger

Yes, I think there's not a lot to glean from the first quarter for what it's worth that when that winter weather on weekends is just was just pretty ratchet. I think maybe the more important takeaway is we have a market that isn't trained yet to go to Cripple Creek when it snows because they're used to there not being any rooms in town.
And I think conversely, when you look at Black Hawk, I've been the Black Hawk during a snowstorm before and I've been a Monarch specifically to hearing a snowstorm on accidents. But what I can tell you was it was a casino that was still pretty bustling because people know that they're they know that they have their rooms have people don't yet know that in Colorado Springs for us, the assume that if there's a snowstorm and they drive our way, they might get stuck there without a place to sleep for the night.
And so this is all stuff that will change in time. But look, it's up. I'll tell you where I find comfort is we always worry heading into these openings. Did we build the right thing? Do we build something that's approachable? That's nice that people will feel comfortable. And I will tell you overwhelmingly, I think the answer to that is yes.

Daniel Lee

I'm a pin number of customers say it's a miniature version of blogs. You know, Chris, we don't have the talents and so on. But the point being that the quality of the finishes or what you would have it at Wynn or one of the high end, the MGM places?
Not surprisingly, we used to have a lot of the same designers and now coordinate whenever there were only 300 rooms. So we're a 10th of the number of guestrooms are the typical Las Vegas casino and our casino itself is a few hundred slot machines instead of a few thousand. So we're smaller, but you only stay in one guestroom at a time, you only play one slot machine at a time when it guestrooms Do you really need.
And so where we will eventually educate people, the quality of it and a little bit more of a problem here. It actually is pretty similar to Lake Charles, when we dealt there, there were really crappy casinos in Lake Charles before L'Auberge and you almost had to reeducate people in Houston that there was something notion like, Charles, they thought of it as a chemical dump.
And here people have been to Cripple Creek before the product was very good. It had a $5 maximum bet, et cetera. And now to say, no, you really got to come and take a look at it. Again, it's different. And there's a I had an acquaintance there who is owns a liquor distributorship and he came up to Cripple Creek for the opening of the of our restaurants.
And it is everybody tells you how great their facility is. He was blown away when you walked in a city had no idea. And this is a guy whose family had been in the casino business years ago and and a city had no idea that somebody built something that nice in Cripple Creek. And so now he's coming back up with the sales force from his Liquor Distribution business, having a meeting at our plate software to eventually get so.
Okay. Gregory, other.

Thanks for that, guys.
Certainly, I'm sorry, Dan, go ahead.

Daniel Lee

Yes, as Lewis said, the win per slot machine per day, and I recognize, but half our slot machines or Colorado or in Germany and about half are in Bronco Billy's. And the win per slot machine per day in Xiaomi is by far the highest in the market. And the interesting thing is the win per slot machine per day in Bronco Billy's is actually up because the spillover from Germany going into Bronco Billy's.

Lewis Fanger

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

Daniel Lee

Let's look at another question with your question.

Fair enough. Thanks for the color there, guys. Maybe who does a whole level. Yes, just curious maybe on labor at the new properties. I know there's a few struggles maybe in past years and just kind of industry-wide now that you've got, you know, a few months and a year in the case of Waukegan under your belt. How do you feel about that?

Daniel Lee

Whether there were different challenges in Waukegan?
The challenge is that every single employee must be licensed by the Gaming Commission and that's a pretty ominous form that they have to fill out. And it's only provided in English when we're in a community that's about half Hispanic. And and so that the hiring process was complicated by the regulators because the regulations are set in place by the state legislature and <unk>. It just is what it is. That's what the lows we had to adhere to it. And so it took time to build a a stable workforce.
I think we're there now. We have a good stable workforce and a good management team on top of that. We always have some people quit since we always have to train new people, but it is it has stabilized the first nine months, it was struck. And now on Germany, dishwashers don't have to be licensed. So it's an easier process.
And but you're at 10,000 feet on the backside of Pikes Peak. And so the population of the talent is 1,200 in total and probably 40% of those are either retirement age or kids. And so there's not enough people in Germany too to staff our place a low level on all the casinos, but there's places like fluorescent, which is nearby and Woodland Park and a number of our employees actually commute from Colorado Springs, which if you live on the west side of Colorado Springs was placed for Manitou space.
So that's a doable commute. And that's not unlike our offices in Las Vegas are here in Summerlin and Lewis commutes from Anthem or greenbelt in their side have said not much different than going from Colorado Springs to Cripple Creek sale. And so we are I mean, it is a challenge, but we are everyday able to hire some people and build the team.
And then we also used some out sourcing of labor, which has helped. So for example, the cleaning of the guestrooms has been done by a cleaning company who who does it for normal hotels as well as other casinos. And that's worked out pretty well. They do all the hospitals in Colorado Springs. So they had a big pool of people drawn.

Lewis Fanger

So yes, it will be a non-issue in a year. We're not we're not too worried about it is it is if you're an employee or any other casino in town, you see the very big difference between our quality and others and the pure, especially if you're an attempt to position it becomes the easy move into into our building.

Daniel Lee

So you do find some surprise like for example, we have a pastry chef was world-class has written books, but it has done a terrific job. And every time I'm there. I have to remind myself and I did too many of us. Pastries were one trip message anymore, and he used to be in Denver and he wanted to live in the mountains with this big dogs. So he kind of sought us out and he's enjoying the mountain life. So sometimes it does work in here benefits.

Good to hear. Thanks, guys.

Operator

Ricardo Chinchilla, Deutsche Bank.

Ricardo Chinchilla

Hey, guys, thank you so much for taking the question and for all the great color I was doing in a different direction potentially, you know, some assets of the right size that might come to the market, let's say six to nine months, you know, someone somebody like Keith has talked about it.
Are you guys committed to give that to deleveraging or to build cash for the facility? Are all you know that the right opportunity for acquisition is something that could be tempting for you guys with regards to your strategy and capital allocation priorities?

Daniel Lee

Well, this is as good as we're willing to sell Caesars Palace for four times cash flow, we'll figure it out. But we look at a lot of things. You almost always learn something from it. We did get into the Colorado market through acquisition. We acquired Bronco Billy's at six times cash flow at the time and had a bunch of our surplus land. And then we added to the surplus land which allowed us to build Germany.
But it's not we don't have to I mean And frankly, if all you do is you run the math and just say, okay, just get this stuff mature and you get Germany up to I mean, Monarch is making over $100 million a year. We have two thirds as many guestrooms is that can we make $50 million, we should be able to it's not going to happen tomorrow, but but we should be able to get to that sort of number. And it might take us a couple of years to get there, but and then in them Waukegan, and we were going to do $35 million to $40 million this year and probably better than that next year.
And then the permanent casino is probably a big notch up from there. And if you start playing with the numbers and say, well, they have to spend $325 million to build the permanent, but about half of that has probably generated from free cash flow. And so the debt today is $450 million .
The permanent opens. We might be something like $600 million and then you say, well, if they're making $100 million and Illinois and $50 million in Colorado and $40 million and all the other properties you work backwards in our stock will be 3 times or 4 times, 5 times where it is today. And Louis and I and the rest of the management team, it's a big part of our net worth is tied up in the company.
And so we look at it like let's not screw that up. We have a very good story that I'm going to start. We have a very good company. We just need to get this stuff to mature and stay focused on it and you can go out. And without naming companies, there's a competitor of ours who we would look at once in a while that may be acquiring and bought in the last couple of years, they went out and sold their good assets to a rate and took the money from that leveraged against it and bought a bunch of share.
And now we look at it and say, well, let's not do that, okay. And their stock has not done well, and I'm not naming the company, but what I just said, probably closed about four times. So I would say we're very careful to not make mistakes at Bobby Baldwin used to have a saying I really like pieces. It's so hard to not do a bad deal because there's so many bad deals out there and they're so easy to do and so I'm not going to say we will never do an acquisition in the MA, very compelling. It needs to be very compelling because it we want to make sure that and the other thing is when you say are we committed to delevering?
Yes, because just the I don't view us as highly levered now because I'm very confident in this stuff maturing as any new casino does. And so I look at it that I don't think because they're highly levered now, but we will delever as Germany comes online and becomes more profitable and as Waukegan continues to do better, and then we'll lever up a little bit, but still less than most casino companies to go build the permanent and when the permanent opens will be one of the least leveraged casino companies.
Now I don't think it makes sense for us to have low leverage, but I also don't want to be highly levered all the time. So if we can be in a spot where our EBDIT. is 2 times, 3 times, 4 times interest expense, that's very comfortable place to be. And we're not too far from being in that range now.

Lewis Fanger

So as a as a as somebody that covers the bonds, I'm sure you're very happy with that.
If I look at the end point. This is a company that last year did whatever it was $40 million to $49 million of EBITDA. And we think that number realistically should be somewhere in the low to mid hundreds when everything we I don't know if the number is up, take your pick a number, whether it's $120 million , $13 million , $150 million , whatever number you want to use. I'm throwing out numbers by the way, I'm not giving you guidance, but the but realistically, that's where everything should be ramping up towards. And so we need to make sure that that works correctly. That will always be job number one here for us because that has massive, massive growth on assets that we've already invested the capital in.

Daniel Lee

and I don't want to be completely wedded to those. But just strategically, we do view ourselves as having multiple sort of stakeholders, not just shareholders now legally, we know shareholders and most states, I think, including Nevada, that is our primary responsibility. But if you look back at the track record.
But I had at Mirage and that Lewis and I had it at Pinnacle of both of those companies were gradually improving credits the entire time we were there. And so we may lever up to go build something, but we don't just lever up to lever up, and we do pay attention to trying to be an improving credit as well. And so there's a lot of different aspects to this.

Lewis Fanger

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

Daniel Lee

Yes. I mean, I kind of and I will freely tell you I admire monitor and they are a pretty good company and they trade pretty well. They only have two places and they stay very focused on the two and and it doesn't seem to hurt their valuation. And and so as we evolve, we're going to have two principal places, which are the two new ones.
And then the Silver Slipper is still be important and the other stuff is pretty small. So the stuff that we don't love the team at Rising Sun because I'm sure you're listening on this, Kevin, as 300 guestrooms in the golf course, and they're doing a terrific job. But being realistic, we make more money in it couple of months and color in Waukegan than we do in a year at pricing, sir.

Lewis Fanger

All right. Next question.

Ricardo Chinchilla

Got it.

Daniel Lee

Oh, Steve, I saw there was that Steve registered.

Lewis Fanger

No.

Ricardo Chinchilla

Thank you so much again, as all the Borealis, I appreciate all the color and that's kind of what you want to hear being, you know, covering the bonds.
Thank you.

Lewis Fanger

Thank you.

Operator

Jordan Bender, Citizen's JMP Securities. Please go ahead.

Eric Ross

Hi, this is Eric Ross on for Jordan. Thanks for taking our question. Now you've operated the temporary for about a year plus and with the delay of the American place with velocity as customer behavior or preference at the property changed any rethinking around what is ultimately built there in terms of amenities.

Daniel Lee

I'm like well I mean, we have designed a place that can be easily expanded, and we're going to start with kind of the core of it.
And then as the business builds somewhere down the road, it can be expanded. And by the way, I do that conceptually all the time we have a way to add rooms at Germany. Also, we have a way to add rooms at the Silver Slipper. And we're not doing our job. If we're not thinking through of where it might go, a public company goes forever. So 10 years from now somebody might go build those hotel towers and now and we have learned some things from Waukegan. I mean that that reverses a very loyal clientele.
We haven't Nick them very much in fact, I think we had very little impact on the Bally's casino seems to have had a little bit of an impact on it, but they are still there GBP500 gorilla in the state, they make far more revenue than anybody else in the state that we would impact the video lottery machines more than we have.
That was interesting and we've been kind of scratching our heads saying why are people still going to the closet at the back of liquor store to place six slot machines when our environment is much nicer and maybe that's convenience like there, you pull a new strip shopping mall, you park your car and you walk in your 20 feet from the slot machine.
Well, maybe we need to think about offering valet parking that we don't today are trying to figure out how to how do we get into that market. People don't eat as much, and that's interesting and we have we have two pretty good-sized restaurants and then we two months ago opened the high end restaurants. The high in-restaurant seems to have kicked our casino revenues up quite a bit. And that was that in a little if you look at the turnstile and you're getting 2000 people a day in the casino and then you look at the steakhouse. It's serving 150 people a day at best.
And so it really but those 150 people are perhaps your most important people. And so getting it open. But if you look at the food covers relative to the gaming revenue, I mean Louis and I live here in Las Vegas and we frequently end up walking into the Red Rock Casino or Durango station or something for a male because they have great restaurants uniting think twice about it. That pattern has not happened in Illinois, a number of people go to a restaurant and a casino is relatively small. And that's interesting and that's kind of like.
Okay, why is that? And part of that is you have to go through the security and show your driver's license and all that, whereas in Nevada, you don't. So part of that is perhaps the regulations part of this, the design. And so for example, at Durango station win. And I will tell you, I think stations did a fantastic job at Durango station and I go in there. They have probably the best of food question. I have a food court. What do they call it?
Food Hall, food hall that I've ever seen as very well done. Lots of different brands and so on. And we're scratching our heads saying, okay, how do we do something like that in Waukegan and maybe it's like part in part out of the casino environments, you can kind of get around the regulation. So so you know, it is you learn a lot from Durango station did not have a large, a system of corridors underneath the casino to get the food from one loading dock to the restaurants.
They designed it more like a shopping mall where the rest of each restaurant has its own luck. Loading dock to restaurants will share a loading dock and on the outside of billings kind of camouflage that it's a loading dock that's pretty typical in shopping malls, but not very typical. And casinos saves a lot of money and what I realized what they were doing and say, okay, let's let's let's think about this for Waukegan because we can save the money of building these expensive corridors.
So that the food gets distributed throughout the property, it just makes Cisco make multiple stops at their expense. And so there are things we've learned the customers it has built. I thought it might ramp up a little faster than it is. And when I look at why it's not, I think the outside of the building is a big part of that. I mean, we tried to build this very quickly and we used a sprung structure at night.
We project things on this current structure to make it look interesting, but it's not affecting building. It's not like if you drive down the strip and see Bellagio with the Fountains going, every bone in your body wants to get into the building on the other side, it draws you win and and our and our tenant doesn't do that. It looks like where the Department of Public Works store salt for the winter.
And and so we've been getting past that when we build the permanent casino, it will be fetch. It will draw you. And I think it's pretty remarkable that we're doing $9.5 million a month in revenue in a row stretched Kevlar fabric tint and the kind of shows you what can be done to permanent and that. But I think that the delay from the part of the lawsuit, which I am convinced is a nuisance lawsuit. I was there when they made their presentation.
And if I were on City Council, I would have just said you operated a tribal casino across the state line that pays much less in taxes and none of it goes to Illinois, why the hell would we choose you? That's all you needed to say. But if you didn't know that and you just further presentation like that as the ugliest pieces should I've ever seen, I wouldn't pick them for that.
So I don't think there's any leg they can stand on where they should have gotten this license. I think they're just they hit. They make a lot of money in Milwaukee that using a piece of it trying to delay us, but that delay is perhaps good because it's allowed the high-yield market to come back.
I think it will come back more allows us to get Germany open and get it ready and have it been contributing cash flow that can be used for the permanent and allows us time to think more about the permanent so we had who we build the smartest and best casino pass. So don't get me wrong. It would would've been better if the part of why don't we have not filed the lawsuit and we could have moved faster, but the fact that they did have some benefits to us as well.

Lewis Fanger

I only because we're running out of time a quick quick thing here too. I will play what always catches my eyes every month when I look at the gaming report from Illinois is number one in the state, like in April $42 million from Rivers number two, $12 million of gaming revenue. So $30 million gap between number one and number two in the state. It is a bananas thing to look at and then when you start thinking well, wait a minute. That is our closest competitor and we have a northern shore or North Shore and these northern suburbs of Chicago that are just still underpenetrated in terms of overall gaming spend?
I'm not saying that we're going to hit $42 million of gaming revenue by the way, but it just it keeps my eyes wide open as to what the or what the ultimate potential will be for us when we have a beautiful building that people actually want to walk inside of

Daniel Lee

So anyway, the bottom is up in Milwaukee.
Also, it generate $450 million a year revenue yet enough. And so we're doing 25% of what either of them are doing.

Lewis Fanger

Yes.
And I think we can do it in one of the wealthiest counties in the country.

Daniel Lee

Yes. So I think we're in a great location, great barriers of entry. Nobody else can get a casino anywhere near us. I've got a flurry of stuff. There's a Indian tribe out of Kansas or Oklahoma. That's getting some recognition of a potential Indian reservation, south west of Chicago and I got a bunch of phone calls will state that they're obviously doing this trying to get a casino. Is that going to impact you get out a map and look at it. It's a long ways from us. It may impact us. Scott weather was over.
I think it's a rise not too far from them. That's not us so in other ways. And then there's different Indian tribe who's trying to get another casino up in Wisconsin. I think the automakers are pretty opposed to that. And the power of automation, a force to be reckoned with and was constant. And so there's lots of barriers to entry doesn't mean people want Tri, but it's very hard to build a new casino there, whereas in a place like Nevada and Mississippi, Atlantic City is very few barriers to entry.

Eric Ross

Okay. Okay. That's great to hear. And then maybe just a quick follow-up, can you speak about the trend as you've seen our legacy portfolio in the first quarter and I expect those properties to perform for the rest of the year and do.

Daniel Lee

We expect them to perform better. The Silver Slipper was a weaker quarter and I don't have a good reason for it other than we were a little distracted with Colorado and we want to get back in and understand what they're doing. And either the we've got to get smarter at marketing of or smarter at controlling the payroll or both and that happens. Sometimes it's still it's still done.
Okay, but it should be making more money in those Rising Sun is doing okay for us, it's always been a tough property. There is a new Rossignol that opened in Northern Kentucky in September of '22, I guess it was and it's been building some market share, which has been a little bit of a challenge. We've done relatively well despite that.
And then Churchill also has built some stuff down in Louisville, the other side of us, but we're hanging in there. Tahoe would soften driven by weather would cause on an incline village. If we get a normal month, all of a sudden we'll have great income. And then all of a sudden we'll have too much or too little stuff. It's just the nature of the tourist places like that. And Fallon, it depends on whether there's a it was really an beta ACR.

Lewis Fanger

And March and April, then the Navy had increase in visitation happened in January and February, but it was back in March and April.

Daniel Lee

So it's a little bit when the aircraft carriers go into San Diego before it was a lot of people don't notice when when the plants to take off a plane on an aircraft carrier, the carrier has to be moving and you need that headwind of like 10 miles an hour, 15 miles an hour for the planes to get off the carrier. And so when it goes into San Diego Harbor before it gets to the harbor. The any plane that is capable of being flown has taken off and then they go Land & Naval Air Station.
Well, then while that boat is being outfitted or people are on leave. And so on the pilots and copilot and mechanics and everything they've got developed for training. And so it's a Naval Air Station kind of in the middle of Nevada. And it gets a little frustrating because our business surges, whenever there is a keg carrier Air Group in town, but it's like considered the national secret when they're coming.
So the Air Force base doesn't tell us, oh, yes, we've got a whole bunch people coming next week. All of a sudden, we just find people in uniform showing up in our casino and then we're scrambling to to accommodate them. So yes, it's a unique little market, yes, very small for us at this point, but to but it's it's okay.

Lewis Fanger

We have to ask people in the queue for trying to get through them real quick.

Daniel Lee

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 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 other questions.

Operator

Chad Beynon, Macquarie.

Hi, this is Sam on for Chad.
Thanks for taking our questions. So monthly GGR, the temporary in Waukegan, just taking a step up into the $9 million to $10 million range, what 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?

Lewis Fanger

Mark, while I'll be frank, it's time, but what it is, I think people don't realize sometimes that when you open these new casinos, different marketing promotions, work in some places, and they don't work in others. And so for us, it feels like we've really cracked the code for us on Thursday, Friday, Saturday, Sunday, no other days in the week. It feels like we're still making tweaks and figuring out what brings and those players in real time. And I'm not going to?
Yes, the I don't don't spill the secret sauce for what we've learned already. We spent the last year and change learning it ourselves. But I will tell you we've run some recent events that we think are promising. And so I think I think we're getting there, but at the end of the day, that database continues to grow, that probably the most important thing.
We're over 71,000 people in the database now. And it's that and really just just learning and quite honestly using that's take us now to maximum benefit.

Daniel Lee

Last year at this call, we would about talking about 10,000 or 20,000 people in the database. So but they're actually the other thing I noticed yesterday when Illinois results came out from the Gaming Commission and looking through it and they have a column of square footage and it shows us a 70,000 square feet and River Zone A little bigger than us. But based and I looked at it at that, it shows us as being one of the largest in the state and square footage. And I actually stopped and thought I wonder if that's including our restaurants that are in the tent or not including the restaurants?
I'm not sure, but I think it's the more I think about I think it's probably accurate because places like Grand Vic and I were and Juliette, those are riverboats and they are stacked and crowded and not a whole lot of square footage are places a large single level casino, 70,000 square feet. And so I don't think we're if you go in there on a Friday night.
Sure, it's busy. I mean, of course, busy but we're not close to capacity. I mean, I remember at the bears down in Lake Charles, we used to do $500 per machine per day. We're not doing that here yet. And interestingly, a couple of reverses doing they might be close, but it's we can do a lot more revenue in our 70,000 square foot than we're doing now and I think it will continue to build.

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

Daniel Lee

Well, the group's book quite aways in advance. So we're trying to we have a sales team now. It's for a very small. We're trying to augment it. And that's really about putting business on the books for the fall winter and thereafter.
Because if you if you call up the group now and say, Hey, why don't you bring your group to replace in June, while they already have a book somewhere, they've already told their attendees where they are and so on. So that's a that's a more long-term thing. Now, summers people go to the mountains in the summer. So I think we will fill with gamblers and retail customers in July and August, even midweek.
But there is a lot of stuff as you go in part of the way the hotel business has evolved. The Expedia contract says if you offer a $150 rate on your website than Expedia has allowed to offer $150 rate on their website and they keep 20% of it before they give you 80% of ANA and so whenever you're booking.
I go to the hotel website where you're traveling and look for a button that says offers and they will have offers and it's very hard for the Expedia, but just to compare the offers and all of a sudden, you'll see well rooms, $150. But if I do this weekend package, I get free valet parking and breakfast and and a bottle of champagne in the room or something. And then so Waymo, that's much better than Booking and Expedia. And so more and more, you'll see hotel chains kind of doing that?
Well, if you go and look at our competition in Colorado and click on the offers button, there's all sorts of creative stuff there that we will have as well soon that says, hey, if any, and you tried to direct business to the midweek. And so in an email goes out to people that maybe there's a database that we've been able to purchase.
That tells us these are retired people in Castle Rock who tend to gamble and we will send them a saying that says, hey, come on up and trials. We'll give you a meal coupon on the weekend. But if you want to come during the week, we'll give you a hotel room. And so you're trying to drive business to the midweek. And that's the case that's always been the key in Las Vegas as well. I mean, the hotels in Las Vegas would naturally fill every weekend by people who drove over from LA, and that's still the case.
And the entire convention business that's been built up period 60 years is about trying to fill the midweek and that's why you'll notice when Comdex show starts, it's like well, it starts on Monday morning because they want you to fly in on Sunday night because their hotel is otherwise going to be empty on Sunday night.
But the hotels on the strip want that convention holiday here before the weekend because you're likely to get people who are more prone to gamble and pay more for their rooms in their food retail than you do for meetings and groups anyway, that's that's just the hotel business and time and time will help to.

Lewis Fanger

We know that database will continue to grow.
I mean, 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.

Thanks, guys. Best of luck.

Lewis Fanger

Best of luck, and thank you all my gosh, I think we have time for one last question, if you can be quick there.

Operator

David Hargreaves, Barclays.

David Hargreaves

Hi. 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 pay payments over the next few months on I assume there's probably some construction payables. Anything you could give us on that would be helpful. Thank you.

Daniel Lee

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

Lewis Fanger

A lot of it, honestly, just sitting and retention for what it's worth on last month, I think our job was like three was three, little over $3 million. So it's it's it's kind of trickling out at this point but certainly by the time you head into Well, my gosh, I my gut says in the third quarter, you'll see that have been exhausted, but the but it could drag on slightly longer.

Daniel Lee

I mean, it gives you an example that we have a big surface parking lot across car and Midway to construction. We were able to buy three 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 asphalt thing 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.

David Hargreaves

Got it. You guys think you file the queue tonight or assume we?

Lewis Fanger

Yes, I think in the next 30, that's the goal I watch for it. But if you have a really boring that I had, David, you'll have that reading for?

David Hargreaves

Yes.Thanks very much. Congrats again.

Lewis Fanger

And when I wrap it up.

Daniel Lee

Then I'll thank you and everybody a few. I would actually urge you to get to these places if you can, because they speak for themselves.
So when you walk into Germany, oh, my gosh, I actually when you pull up to Germany, and say, oh, my gosh, whereas in Waukegan, when you fill up to say this looks like a public works fresh. And then when you walk in it surprising even to me sometimes I stepped in there on a weekday two or three weeks ago and worked in and places surprisingly busy, unlike a Wednesday night, then it's like, okay, that's that's Ester-C.
So it is there's no one replacement to actually visiting these things once in a while. So both both for us running it and for you guys investing in it. So anyway, thank you very much for your support and we'll see when couple of months.

Operator

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