Q1 2020 Earnings Call

Thank you, Jay. Thank you.

Our next question is from the line of Thomas Allen with Morgan Stanley. Please proceed with your question.

Thanks, just on the operations side. Thanks for the break even numbers, but just can you help us? Think about the cost structure of operating the casinos when you're reopening you highlight a whole lot of your incremental measures around cleaning. Do you think cost will be higher lower? How should we think about it? Thanks.

To begin with over the last several weeks through our press releases SEC filings stakeholder letters and this morning's earnings release. We have provided a detailed report on the agressive mitigation measures. We've undertaken enterprise-wide to maximize and preserve our liquidity and response to the covid-19 outbreak. So we won't spend a great deal of time reiterating what's already been covered. We'll hear from Dave momentarily on that topic like many others around the world. We have been profoundly impacted by this pandemic at Penn and I'm not just talking about the dollars-and-cents trip Lee. We have lost three of our own valued team members to the coronavirus and of course, it's hard to put into words the the heartache and sorrow we all feel for their families and friends are certainly Times Like These we all reflect on how sacred life and friendships and family truly our our hearts go out to all those affected by this cruel disease and we applaud

Well as as Dave mentioned Thomas, we believe that that break even even our level at the property property by property. It's a bit different, of course cuz you have different tax rates and cost structures and non-gaming amenities and things of that nature, but I think it's safe to assume that if our properties are reopen and and generating twenty-five to thirty percent of pre covid-19. Just consider it prior year level revenues that once we hit that threshold we're better off having the properties open than the current environment where they're all closed and look we're we're probably going to be really thoughtful in terms of how we reopen the properties and we're taking a conservative approach. So hopefully we are maybe understaffed and a bit overwhelmed but we much prefer that model. We're we're calling, you know, more of our team members back in off of furlough in a pinch as opposed to Staffing up too heavy and then realizing that the revenues aren't meeting our expectations so you can assume that

In our maze Everyday by The Bravery of our healthcare workers First Responders and essential Personnel on the front lines of this battle as well as our volunteers. We're doing our small place to support their ongoing effort in addition to donating more than 45 tons of perishable food items. We have donated thousands of masks surgical gloves and hand sanitizer to local hospitals.

We'll only ramp our span both on the facts and cap side of our business as we see these businesses reopen understand what that supply-demand balance and balance looks like and they're ramping to our expectations. And if that happens, obviously, we're only going to be adding incremental costs as we're seeing revenues go well beyond twenty-five and thirty percent. So that's what I guess. Hopefully answered your question. Yeah. Sorry. I should have worded it better long-term. Do you think that on a per Casino basis cost will be higher or lower than they were before? Right? So do these incremental costs mean that it's going to be higher or do you think that one's learnt that they can operate more efficiently and it just says my follow-up for if there any Regulatory Affairs people on the line, what states do you most optimistic around around legalizing I gaming and sports betting. Thanks. Sure. So sorry about that, I misunderstood your question ma'am.

We've also been able to leverage our properties to help in the relief effort. Very proud to share that are Greektown Casino in Detroit. For example has provided two floors of our hotel almost fifty rooms the First Responders free of charge, of course, and we've also opened up our parking lots at several of our properties to serve as covid-19 testing sites and food distribution centers. I'm truly honored to work alongside suck amazing and selfless group of team members at Penn who I volunteer their time and energy to help those most in need in our communities during these challenging times moving out to our results for the first quarter and some additional detail around liquidity. I will hand it over to Dave for a quick review of the financial shape things and good morning everyone. I'm glad to be here at Penn even though I joined the company at the time of great uncertainty. I've been impressed with our leadership with our leadership team's ability to move quickly and decisively once the pandemic began particularly with regard to our Swift.

I'm through and what what I would answer and say is that there's obviously going to be some incremental costs when you think about you know some of the measures were taking from a sanitary in climbing that standpoint but I would also tell you that the way that we're thinking about our business today everything that we do and how we do it from 2 months ago to where we are today we're rethinking we're reimagining off and just to give you some ideas you know and we talked about technology enhancement we still as a company this is a mind-blowing number in my opinion but we still have the company spent almost twenty million dollars a year off in direct mail production and Postage and so you talked about opportunities to move forward I think we'd all agree with Satya Nadella comment during the the Microsoft earnings that there's been about two years worth of digitization of our economy in the last two months and there isn't you know a set of grandparents out there that aren't zooming with their grandkids

efforts to preserve liquidity

Prior to the pandemic our January and February results were very strong. We're performing well ahead of expectations in every segment with property same-store sales growth over 6% off and ebitda our growth of over 15% driven by more mild winter weather and two in the introduction of retail sports betting at several properties while it's j said won't rehash all the mitigation measures we've taken since our closures. I did want to highlight just a couple

First we sold the real estate assets of Tropicana, Las Vegas to our principal.

And emailing and texting and sending emojis. So this office.

For us to operate more efficiently goes well beyond things like payroll goes around technology, you know, we're still an industry probably the the last out there that transaxle in cash. So we're working with our Regulators right now to see if we can't really accelerate this digitalization of payments on our on our properties which brings a tremendous amount of benefit to what so and then of course from a labor standpoint. We're going to be really thoughtful around how we ramped back up. What are what are operating model looks like at the property level and of course at the corporate level as well. We're rethinking everything that we had been doing and need to do on a go-forward basis. So the net the net of all of that is I think you'll find that these businesses can operate more efficiently life then they did pre

And legalization efforts, I would just tell you it's very active right now and conversations were having today. There's certainly more of a sense of urgency at the state level of combat during acceleration of sports betting legalization for states that have not gone down that path and I Casino as well and even states that have already legalized take Michigan as an example. I think there's some interest in may be accelerating the timeline to implement versus what it was pre covid-19.

Thank you. Our next question is from the line of Felicia Hendrix with Barclays. Please proceed with your question.

Hi, good morning. And it's so nice to hear all of you this morning. I just want to start out with a clarification cuz I'm not sure the question was actually answered earlier today that eight to ten million of them on the sports book branding is that in your cache confirm. That number is in our cash burn. Yes, Felicia great. Thanks. And then just take a picture as you guys are thinking about your job openings. Just wondering what lessons you're taking if any from the few casinos that have opened already. And then also, you know, how are you simultaneously thinking about that and the economy, you know, I mean, you know, well look at 2:08 and the time it took for regional GTR to recover. There was a high correlation to unemployment. So with the unemployment rate likely to remain high or higher than it was before how do you see the regional Casino recovery unfolding this time? And and what are your plans to drive demand generally?

Yeah, great. Great questions Felicia and look there's you know, very limited sample to go off of in terms of casinos that have reopened two days. There's you know, a couple of tries Coeur d'Alene and Idaho and we're we're reading up as much as we can on, you know, what they've done and look the the the preventive or precautionary measures they've taken around 5 are very similar to the things that we're we're considering in that I covered in my prepared remarks and you can Envision, you know a casino that every other slot machine is turned off and I thought maybe there's two or three seats versus the six or seven standard seats restaurants or you know open on a limited basis probably a lot more grab and go sit down disposable utensils things of that nature. So those are like, you know, that's what we're considering. We want to make sure that any and all the decisions we make or going to create a really safe environment for our team members and for our guests and that page

feel comfortable and if you read

At least with the casino in Idaho that I've been reading the feedback and social media responses. It's been very positive on the customer's side and the team members side as they've reopened their doors and demand has been a strong. So look every Market is going to be different. I don't think you can extrapolate a whole lot from one or two Casino openings in the last few days, but we have a plan we feel good about the plan and I also feel like we're very much aligned with our state leaders and Regulatory Partners on how and when to reopen state-by-state look and then you know, your your question about do these businesses potentially rant back up we could probably ask people on this call and you'd have 20 different answers to that question. We have our own modeling that we're working through and you know, we're obviously going to going to staff these businesses and ramp that Staffing up as we go once. We understand what the demand profile looks like. We're going to think be really smart about how we Market wage.

Our customers and you know, last name world you want to do is have is the in a position where you're buying business and you know marketing Wars and I think you just need to be really thoughtful around how you cannot just reopen these businesses just do it in a way where they're they're profitable and that you continue to ramp up your cost structure only as your revenues are ramping up and so you're not continuing to burn cash and our goal of course is to gain a point as quickly as possible, but we're not burning cash. And the last thing that I would mention Felicia is and I I know you know this and I think most on the call do but as I we actually just recently as a team went back to what happened during 2008 and post 2008 recession and if if you'll recall, you know, the the regional markets bounced back pretty quickly, you know, you saw declines and 2008 to 2009 but back like by two thousand and ten Regional markets were flat 2011 up 3% and 2 age.

From 12 up double-digit percentage. So you look at a you know, a four-year cagar of the regional market post-recession and it was positive in the low single-digits. So that's encouraging to me, you know about forty of our 41 properties are in markets that are you know, the customer comes within a 20 to 30-minute distance and it's it's drive. It's not it's not air travel which I think ought to take longer to recover in this case much like it took longer to recover post-recession. So that's that's sort of how we're thinking about it will be prepared for you know, whatever the business office hours are in. Our focus is on doing this in a safe way in a way that we can generate a profit obviously that's important to us.

Thank you for that and then just my follow-up, you know on the break-even commentary if you're thinking about Break Even on a free cash flow basis after all corporate office rent obligations. Obviously that break even is higher. So just wondering how you're thinking about that and then just putting into that calculus. You know, how we should think about corporate expense quarterly on a quarterly run rate during the shutdown. But then also as you ramp up things, I'll tackle the second one around corporate expense and I'll Dave the answer your question around, you know free cash flow and the variable is about five cash flow break-even on the corporate expense side, you know, we're still working through our our models right now and you know that corporate expense is it's going to be conservative and it's going to rain as our business is reopen and as our revenues ramp, we have to be thoughtful and mindful around that and I think it's safe to assume that even back when we get back to you age.

90 to 100% of our pre covid Revenue levels that corporate expense is going to be lower than it was pre covid-19.

Working on that. I don't have a whole lot more to share. We will obviously as the the month track on I think next earnings call. Felicia will have a lot more um, uh that we can share with you on on corporate expense, but just assume it's going to continue to be a conservative approach much like the way we're thinking about ramping up and the cost structure at our properties day. If you want to talk about the variables of the free cash flow break-even sure J. I think as Jay said there's a lot of unknowns here. We don't know when we're going to open and at what rate so we also have to look at that at a property by property base wage and so becomes pretty complicated, but I think that if we look at the components of what we have making up our free cash flow cash tax now and off until we ramp up significantly are going to be much lower our capex. As I said are going to be minimal the interest expense, you know that it's in our earnings and you also birth

So when we talk about achieving twenty-five to thirty percent of last year's Revenue to break even on ebitda R. I think you can I think you can get most of their once we start reopening properties will be able to manage that very carefully and we're going to be able to manage our our cash and we're going to be able to manage our operational efficiencies very closely.

Thank you and welcome and probably just gets better from here. So the worst is probably behind you good to hear your voice to Felicia. Thank you.

Thank you.

Our next question is from the line of Steve license key with stifel. Please proceed with your question.

Yeah, he good morning guys. So j a bigger bigger picture question about bar stool and I understand you know, you did this transaction as a way of materially lowering your your upfront acquisition costs, but I wanted to ask about retention cost and how you think about those especially in this kind of environment. And you know, I guess what I'm getting at here is not have to assume with the sports betting Market being shut down. Is that opens back up the online betting Market will be ultra-competitive and if you know some of your competitors are out there giving away all kinds of stuff to attract customers. You know, how will you guys in Barstool react to you know to that type of environment? I I hope that makes sense cause it it does see it. I it's a good question and we we don't know right we don't know when sports are going to be live again. We also don't know you know, how many states are going to be legal at that point. And what is the competitive set look like so there's a lot of a lot of question marks there, but I would tell you is that you know, we we feel strongly and we said this on January 29th when we announce our birth

Investment Strategic investment in Barstool Sports is that there's so many benefits to the way that we structured this investment and a couple of them is, you know, we we made an investment of birth on 36% of Barstool, but on a go-forward basis, you know, we are exclusive partners with Barstool for all things related to sports betting and I Casino anything casino-related. And so we get one hundred percent of that attention from Barstool and we're very much aligned with our partners there because they own pain equity and what's good for pain is good for the folks at Barstool as well. So we're all very much aligned on really leveraging their 66 million. It's a lot higher than that. Now 66 million was the last official number we had from last month fans and there's ways to do that that I think are very compelling and very unique and you know, they have so many platforms and they produce so much content off.

can Envision um

The Barstool pain relationship really playing out and being fully integrated across all of those platforms and old their personalities at Barstool. So there's there's one thing that we we can do things that others just simply can't they may have a great platform or a strong brand but they don't necessarily have, you know, people behind that brand that have loyal followings am continuing to Market our our product together. So we think that we can you know, operate our mobile Sportsbook and sports betting in general do to our relationship and invest in in Barstool in a way that is more profitable than anyone else out there over the long term and does that mean that we won't compete from a promotional standpoint, of course not I mean you have to you have to stay viable there needs to be a reason to come to your app in the first place. And so there's going to be acquisition cost and that's that's typical of any new product launch because you think about you know, how we're envisioning building birth.

Friendships and the features within our app that are going to be truly differentiated that I'll share with everyone at another time, but I'm very excited about as we continue to work on the development of that app and it's but spoke with qualities. That's something that is very exciting to us and remember too that you know, because we operate in nineteen with an option for a 20 of State in Maryland with Perryville. We don't have to pay access fees to get into those States and access fees and cost you anywhere between 5 to 10:00 and some cases higher than that percentage of Revenue. So we don't have that friction costs and then Thursday then not only do we not have the friction costs. We also have skin partners by virtue of the sports betting licences that we have that we have Revenue shares from some of those players like DraftKings and points Black Box bed and others potentially coming back to us because of the access agreements that we have with them. So we think that you know, like I said that's on January 29th, but just to Thursday

It again, we expect to be a top-three market share player in every state where we operate sports betting. And and doesn't matter what state we're talking about. And we expect to have that profit margins. Will that be day one? I don't I don't know the day one matters, but I think it's it's not going to take us a real long time to ramp up and get to that level but we're going to be as competitive as we need to and we'll see what the promotional environment looks like at that time.

Thanks J. That was very helpful. And the second question. I'm not sure if you're going to know the answer to this and I'm not sure, you know, you're fully entrenched yet with you know with Barstool. But you know, is there any way to help us think about what advertising revenues have looked like over there the last couple of months and I and I guess what I'm trying to get your try to figure out here is given their strong online presence. Have you seen you know, any kind of material slow down with ads in this environment or you know having a pretty resilient?

Yeah, I would answer it this way Steve and Mark my conversations with Eric. I think it's certainly been more resilient than most digital media companies. And if you consume Barstool content, you'll continue to see that there are there are no shortage of advertisers. Some of them have changed somewhat stayed the same. So I would tell you that they are continuing to be creative as they always are around their business page. But you know, I think every every company has had to think differently about how they run their business as Erica and Dave and team are at Barstool, but as I highlighted in my prepared remarks there, you know followers social media video blog video and blog excuse me are through the roof nine million Tik-Tok followers. So they're relevant is better today than it's ever been which obviously is very exciting as we think about this launch coming up in um later in the third quarter and I'm not concerned about their financial performance. I have clear visibility to it Eric and I toss

Out of all the time and they're making the appropriate adjustment. That's all businesses are right now.

And if you if you said this day by apologize but the six hundred million impairment charge during the quarter did did you say what that was related to?

No, I didn't get into it. But what I can tell you is that you know, we had a trigger event as a result of the temporary closures of the properties that basically uh required us to do a test of our intangible assets and Goodwill under the accounting literature and we recorded a total of 616 million of impairment charges primarily related to gaming licenses trade names and Goodwill.

Okay, gotcha. Thanks guys. Really? Appreciate it. Thank you.

Thank you.

Our next question is from the line of Shawn Kelly with Bank of America. Please proceed with your question. Hi, good morning. Everybody was hoping I could dig in a little bit deeper on just some of the a little bit of the state-by-state Dynamics. So so maybe a two-part question. First of all, you know, for the reopen I think you talked broadly about some ideas around, you know towards the end of the month here in May and then early June but what states are you watching on, you know more specifically I think we've heard some commentary coming out of Louisiana that Memorial Day, you know could be could be a soft Circle Target. Yeah, I think Mississippi's didn't mentioned and then and then got it mentioned in different, you know different phase, you know, just maybe a handful of states for investors to keep an eye on Just Cause any tracking this kind of in real time would be a great start.

Yeah, I'll tell you what I what I can shot. I mean, it's very very fluid and conversations are being had hourly and and we're working with you know, Health authorities and state officials in our regulators. And I would just tell you generally that the States you mentioned. I think there's been some, you know, public comments around that so you can go off of those Mississippi Louisiana. I think of talked about maybe a Memorial Day Target and then you've got a number of properties in the midwest that have just been impacted differently not every state is is created or or off the same in terms of covid-19 packed and what that curve looks like how it flattened out when it flattened out the death rate et cetera. So we're all staying close to this. I think that's the best I can tell you. I would I would imagine that if I had to say today somewhere between three and five states would likely to be reopening in some partial limited capacity in May and I think you'll pass

The bulk of the remaining states where we operate from probably go live in June. There may be an exception or two to that sort of Outlook and without getting into too much specifics. I think that would be safe to to model around that that that helpful and appreciate that and then the the follow-up is we've also seen some states starting to talk about, you know, potential and Bearnaise posals for tax relief the gaming operators think the two that have been out there are or that I'm aware of at least are in Atlantic City some some direct proposals and then in Louisiana Joe's discussions around, you know, I think taxes or removal taxes on on some some of the promotional credit piece. Can you talk a little bit more about that? You know, how much is this coming up in your dialogs with States? Um, you know, it's just something they you know that you're seeing some Flex on you know, because obviously they've got a desire to help you be a healthy industry and on the flip side to try and get tax revenues in the door. So that's dead.

You know two competing interests that they've got a balance when they're thinking about helping you out. So just how is that conversation going? And where where could it apply for a patent? Yeah. Well, that's

Let me start by saying that you know, our our state Partners have been and and and local Partners have been terrific to date. You know, we've received abatement from a property tax standpoint a number of cases. There have been relief actions and their continued to be released discussions around tax rates in general and Regulatory fees and license fees and things of that nature. So I would just tell you it's very active there is that natural tension that that you described? So it's not the same in in every state some stage tax rates are really high and they give you a tax free promotional credits and other states they don't and so I would tell you that right now. I can't think of anything that you mentioned or anyone else has that isn't on the table for discussion and continues to be active dialogue. I think in some states obviously more active than others, but these are topics of conversation dead.

Okay, and can I ask Dave housekeeping?

That were having daily at this point and maybe this is the last would be you know, if you could you at least dimensional eyes something like Louisiana for us like how impactful could that be to the overall winner? When you switch something like, you know tax on a promotional credit like that is that you know, is that a nice to have or is that could that be you know material for the financials not overall but to you know, the state level, you know, the the stage performance Louisiana is a super important state for us. We're the largest operator of casinos in Louisiana, and it's right there with you know, Ohio and not ready for us in terms of states where we generate the most revenue and the portfolio so it would be material and uh, certainly not just at the state level but for us given our presence, Louisiana, you would notice it. I think at the at the corporate level as well and something like that happen. It's in the millions of dollars per year. I don't have the number in front of me but just rest assured that it's that is a meaningful wage.

Opportunity for us and we'll see what the conversations go. Great. Thank you very much.

Thank you.

Our next question is from the line of Barry Jonas with SunTrust. Please proceed with your question.

Hey, good morning, guys. J a lot of good commentary on the call, but I guess maybe more at a higher level. What do you think the longer-term impact your business is could be from this crisis off.

Yeah, look there. We're we're modeling about 27 different scenarios because no one knows exactly I would just tell you that we're preparing for any and all of that. So and I think policy safe to say bury that we think that in in an environment where revenues maybe don't come back completely to where they were pre covid-19 next, you know year year and half we think we can get re Bedard levels back to where they were that's sort of the way we're thinking about it is, you know revenues in the next year go from, you know Thirty to forty to sixty to seventy to seventy-five but we're continuing to try to solve for is what are the decisions that we can make from a technology standpoint from a how we manage the business from what our corporate and property structures look like from what centralized vs. Decentralized were, you know whiteboarding as we should everything that we have done historically in order to age.

You try to run this business.

As profitably as we can under a variety of different scenarios, so we're still working through that but just know that we don't have to get back to even you know, ninety-five percent of where revenues in order to be generating the car that we were generating pre-coated. Okay. That's that's great. And then, you know, maybe this is not a question for today. But in terms of new markets, you know a what would you need to see to exercise the option for the glpi Perryville asset and then I guess be we've seen assets in Atlantic City go for somewhat. Nominal Amounts. Is that black market? You want to enter just to get that full license be on the sports betting deal. You've you've announced. Well, here's the way we're thinking about m&a Thursday at 1 obviously right now focused primarily is on liquidity and ensuring that we fortify the balance sheet and that's something we've been doing and we will continue to do birth.

We move forward but but we are and I think I mentioned this on the last call but as we think about m&a going forward whether you're in a covid-19 it or not is that for us to make further Investments on the brick-and-mortar side? It's got to really be strategic a good strategic fit for us from Perryville was a great example of that Greek Town in Michigan was a great example of that month where you know, those give you access not just to a brick-and-mortar opportunity that you think is valuable with upside that you can you know generate higher than maybe the previous owner because you have or scale and things of that nature. So on the Synergy side, but importantly it's giving you access to what we've been talking about for the last several quarters of this, you know sports betting and and online casino opportunities. So, you know, what, what would we need to see from Perryville? We'd have to make sure obviously that we have appropriate liquidity to move forward on that option. We anticipate being able to age

That and you know, we have if we if we announce that we're moving forward on that option by the end of this calendar year we have until the end of 21 to execute on that option off so we can buy ourselves some time but importantly that's access to a significant population that we don't have access to today. Now. It's specific to Atlantic City. We do have access to New Jersey from a sports betting standpoint by virtue of our joint venture with parks at Freehold the racetrack in New Jersey and their skins available for I Casino, so we're not we're not looking at anything per se the next city right now, but safe to safe to assume that anything we would do on the brick-and-mortar m&a side would have to be a strategic strategic set for pain.

Great. Thanks so much guys.

Thank you.

Our next question is from the line of Harry Curtis with instanet. Please proceed with your question.

Good morning, everyone two questions for me in your in your written comments. You you commented that January and February off quite strong as in in part because of the strength in sports betting. Can you give us a sense of some of the metrics around around that strength with respect to incremental visitation to the casinos and spend per customer, please hurry, and we actually provided some pretty good detail on our last call around our Hollywood Lawrenceburg property that in the fourth quarter, you know sports betting this sports betting in fourth quarter of nineteen know sports betting in fourth quarter of 18 months and we saw a table game volume and wind growth of 20% food and beverage growth of 20% even slot business grew low single-digits in a market that ended up

Pretty that had been in Decline.

For to a competition in Ohio for years. So yeah, those are the kind of trends that we had been seen during the pre covid-19. I would just tell you just sort of glancing it off results here in front of me. If you consider the properties that have newly launched Sports books such as our Charles Town property and West Virginia are two properties in Indiana life in East Chicago are Vicksburg property in Mississippi there for larger properties that have sports books and their Sports books are relatively new you're looking at Revenue reserve for January and February and ebitda results for those for properties that are double what they've shared with you as the average for the company. So you're looking at revenues that were north of 10% off your over a year and even that was closer to 30% growth. Now, I'm not saying that that's entirely due to sports betting but I think you're seeing that the properties that have sports books of scale. It drives.

Results largely on the table games and non-gaming side and the flow through is really good.

Very good and then my second question goes back to the the two casinos in in Pennsylvania where you faulted construction, probably some the reason behind that perhaps liquidity driven, but I was also interested in given the the off the fewer gaming positions went permitted when you when you reopen and who knows how long that'll last but are you rethinking how you how you design the casinos? What you what you expect to invest in the casinos and what you're expected roic is

Well Harry, yes is the answer. I mean, we're we're were you evaluating everything and we believe that both of those projects in the aggregate as we've shared before our very good return projects, but you know, we thinking about number of slot machines and the layout and food and beverage offerings and sports betting and all the gaming and non-gaming amenities how we structure those properties is and how we think about the marketing effort. Absolutely. All of those things are on the table and we would expect that if we're moving forward not if but when we're moving forward with the construction of those two facilities, it's because we believe that the roic is very similar and hopefully better than it was when we initially announced these two projects. So we don't have a firm timeline odd, but liquidity is King right now, but there are two projects that we still feel good about and will re-imagine them like we're reimagining and everything else in the company.

Do you think just as a quick follow-up do you think that it's likely that you'll restart construction sometime this year or is it probably pushed into next year Pac-Man 100% depending on how how many businesses have opened and what the ramp looks like and cash flow free cash flow. There's there's a lot of factors there Harry. I think if we're moving forward with the build-out of those properties before the end of the year, we're feeling really good about how things have ramped and about the covid-19 and we've been successful and you know say fifty and up our properties and they're ramping to our expectations. So I don't want to put a a hard date on it just know that we do believe in these projects and their return profile.

Yeah, those would be great.

Road signs. Well, thanks Jack. I'm sorry.

Thank you. Our next question is from the line of John decree with Union gaming group. Please proceed with your question. Good morning everyone. Thank you for asking questions to J1 on kind of gaming capacity utilization. I think you mentioned in a recent question that you don't necessarily need to get back to black 2019 Gaming revenue to get to those are levels. But as we think about the casino floor being reconfigured something like every other slot or fewer seats per table. Can you get back to Prior gaming levels with less capacity and it's probably not an exact science, but how should we think about as as gaming capacity comes back online wage ability. Do you have to exceed capacity with demand? Yeah, we're going to have to see how this plays out done, but I would tell you that, you know Todd in our birth.

Operations team and and Jennifer Weitzman our our CMO. We're all thinking about how do we best yield the available Supply that we have so you can think about you know, maybe sending offers to customers based on Words and they have ability to come in and and participate During certain times of day or days of week and you have to be really thoughtful or limited from a capacity standpoint of how do you maximize your yield inside the casino so and that might be different market-by-market and state-by-state some of our properties on Iraq were built for Easter Sunday decades ago and they're bigger than they will ever need to be again. So it's pretty easy for us to you know, loosen up the floor take machines off and maybe you're still at 50% of a fire code, but your capacity feels good and there's energy and in others where it's there's a lot more demand. It's probably going to be, you know, every other slot machine turned off, but if you've got a dead

Customer on average that's in your facility. Then you could probably generate even at 50% capacity higher than 50% of revenues. But we're going to see how all this plays out. We're certainly thinking through the equation. Got it. Thanks Jan that's helpful for now and then one additional question on relief, I guess the cares at specifically have you guys been able to qualify or think about might be too soon to quantify but some of the benefits like payroll tax credits carrybacks interest deductions. Is that going to be meaningful for your company company is it millions or or maybe tens of millions of dollars on the other side kind of any any thoughts or framework around how you're thinking about that would be helpful sure babe. You want to tackle that one or hi John, you know the facts facts and the the guidance of bounced around a little on this. So it's hard to give an exact number but based on our preliminary evaluation. We currently believe that will qualify for certain wage.

double payroll credits

Defer deferral of certain payroll taxes and the nol carryback box and immediate expensing be eligible qualified Improvement. So with all that we're anticipating receiving an estimated tax refund between forty and fifty million dollars within the next twelve months and that's primarily due to the Wells

That's helpful there. I appreciate it and welcome to the team looking forward to meeting you at some point soon. Thank you. All right. Thanks. And we're we're out of time here. So really wanted to thank you for joining us this morning, especially with everything going on and stay safe. We look forward to having a lot more to share with you in terms of how are businesses have reopened wage. And um the progress that we're making across our portfolio as well as the development of our sports betting app, which the next time we talk will be, you know, soon-to-launch and hopefully sports are ready to go live as well. So thanks everybody. Stay safe and talk to you all soon.

That does conclude the conference call for today. We thank you all for your participation, and we ask that you disconnect your lines. Thank you and have a great day.

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