Our Rising Star Casino Resort in Rising Sun, Indiana, is also in a mature market. Located midway between Cincinnati and Louisville, and not far from Indianapolis, this casino just celebrated its 26th year of operation. It has a relatively large footprint, with 294 guest rooms, a golf course, and significant banquet facilities. Both Indiana and Ohio allow a fixed number of casinos and almost all licenses are now in well-established operations. Indiana did recently allow a gaming license to be relocated to Terre Haute, Indiana, but we expect it to have little impact on Rising Star, which is located three hours away. In recent years, Kentucky has allowed its racetracks to offer “historical racing machines,” which essentially are slot machines. While those operations may reinvest in their properties to improve on where they are today, we do not expect a significant number of new historical racing machines to be introduced in the region.
Our Grand Lodge Casino is the only casino in Incline Village, Nevada, a high-end residential and vacation community on the north shore of Lake Tahoe. There are casinos just outside of Incline Village, which we believe are lesser in quality. We believe it would be difficult to build a new casino there today, given the cost of land and the local restrictions on development. We lease our casino, located within the Hyatt Lake Tahoe, from the property owner. That lease, which expires in August 2023, has been extended several times in the past, and we hope to again extend it in the future.
We also operate Stockman’s Casino, a small casino in Fallon, Nevada, home to a major training base for U.S. Navy pilots and crew. We believe ours is the largest and nicest of the handful of casinos in this small town.
Finally, we have significant income from Internet sports wagering.
Internet sports wagering is legal in both Indiana and Colorado. In Indiana, each casino is allowed to operate three “skins,” which are akin to web sites. In Colorado, each casino license is allowed one skin, but Bronco Billy’s was formed historically through a series of acquisitions, so we technically operate under three casino licenses and are permitted three skins.
We chose to not operate our Internet sports skins on our own, and we paired with larger sportsbook operators that needed brick-and-mortar casino partners to operate in those states. We collected $6 million in one-time “market access fees” and are entitled to a percentage of revenues, subject to minimum annual amounts that total $7 million per year.
At year-end 2021, all six sports skins were active. More recently, one of our skin operators informed us of its intent to cease operations through one of our skins in Colorado and one of our skins in Indiana on May 15, 2022. Accordingly, we are looking into potential replacements that want to operate in Indiana and Colorado.
Meanwhile, we will soon have the right to operate Internet sports betting in Illinois. Each casino in Illinois is allowed only one skin. With a population significantly greater than that of Indiana or Colorado, and fewer available skins, we believe the value of the Illinois skin is significantly larger than that of our others.
Online casino gaming (i.e., the ability to play a slot machine or table game on a computer or mobile device) is not yet legal in any of the states in which we operate. However, we expect various states to legalize forms of online casino gaming in the next few years, as it could be seen as a good source of incremental tax revenues and we believe it is generally acceptable to a majority of voters in many states.
If this happens, we may choose to operate online casino gaming ourselves, in conjunction with others, or a possible mix of the two. While the software to operate an online wagering web site is readily available, we would need to acquire the skill set to operate and market a successful online casino. We would need to hire appropriate talent, form joint ventures with experienced companies, or perhaps both, and receive any necessary regulatory approvals.