Q3 2020 Caesars Entertainment Inc Earnings Call
[music].
It gets you to what we think are the key points in the quarter sales.
Our same store adjusted EBITDA in the quarter was a little over $460 million, which was a little ahead of the wide end of the range of our pre release during our equity offering.
Key piece of evidence on the strength of the Caesars rewards.
Program.
Going to pour at Caesars, who we inherited on the yield management side as a wizard with this stuff and has done a tremendous job for us in Vegas, and we've moved him throughout the company in this area. So we're excited with what Pat.
<unk> and his group will bring to the table for us.
As I said the merger closed on July 20th So obviously that was during the quarter also we announced an acquisition cash offered to acquire William Hill during the quarter.
For 232 pence per share.
That shareholder vote will take place on November 19th.
Run right.
Cost reduction is about $2 billion for.
Pre covid levels, there's obviously a lot of talk about what will come back what won't come back.
A lot of those costs are never coming back as I've said.
Over the last <unk>.
Several quarters, none of that has changed as I said I think we're going to get to <unk>.
And the flow through that you're going to see it.
Positions us to be a longterm winter.
That the the.
About where we are where we're headed and I'll turn it over to Anthony.
Now turning to Las Vegas in our regional destination markets.
Starting with Las Vegas, we now have every property open except the Rio.
We generated $60 million of adjusted EBITDA in Las Vegas in the quarter with operating performance improving each month throughout the quarter, leading to a strong month of September.
When we announced the proposed transaction to acquire William Hill plc on September Thirtyth.
As we mentioned in the press release, our quarter ending balance sheet was impacted by the cash required to be placed into escrow for William Hill in connection with the rule 2.7 announcement.
On October one we completed a public equity offering of 35.6 million shares generating net proceeds of $1.95 billion. Additionally in early October we entered into a 1.5 billion pound interim facilities agreement with two large international banks execution of this committed debt financing allowed us to.
At least 2 billion of cash that had been escrowed on September thirtyth, allowing us to fully repay a $900 million drop on our parent revolver and return excess cash liquidity to our balance sheet.
As of today, both of our revolvers are undrawn and our unrestricted cash position is over $2 billion based on current operating trends, we expect to end the year with a similar level of cash on hand, and zero revolver balances.
As I mentioned on our second quarter call, our approach to maintenance and growth capital investment will be focused and disciplined over the next 12 months, we expect to spend approximately $300 million to $350 million on capex, excluding any Atlantic city specific capex, that's already been escrowed.
With that I'll turn it back to Tom.
Thanks, Brett Let me give you before we go to questions let me.
Pace.
And bookings were strong in the third quarter basically a normal level of bookings. If you look at the Caesars Forum Convention center, which was over.
Open for about a day and a half before everything shutdown from co Vid Caesars Forum has a 172 events 1.6 million room nights contracted were over $600 million in rooms and banquet revenue.
78% of that business as new new to Las Vegas.
I tell you is not.
None of that matters, if the public health situation does not improve but we are heartened by governor CES lacks recent movement toward.
Socially distance meeting business.
In his statement that he is looking to go to 50% capacity by the beginning of 2021 that should help US sales. Some first half 2021 business, but first quarters you should expect will look very much like the last three.
During the second quarter third quarter of.
20, and this quarter as well and with that I'll turn it over to the operator for questions.
Yeah.
At this time I would like to ask a question. Please press Star then the number one.
On your telephone keypad.
And your first question comes from Steve is it scheme with Stifel.
Hey, good afternoon guys.
[music].
So Tom when I started in Vegas and.
Change in that 55 and over kind of crowd recently.
It's everything is kind of grinding a little bit better.
Every month month over months, but it's <unk>.
Baby steps.
Okay and the last question, so with William Hill, and I don't I'm not sure how much you can say given the pending.
<unk> has been closed yet, but let's say that deal does go through when you talked about that single App do you have any idea yet in terms of when that single lap would be would be deployed.
I'm extremely limited in what I can speak to.
William Hill outside of the corner your four corners of the document you can presume that.
We were already working in that direction.
In the former iteration and we would continue to work in that direction post closing.
Okay, great. Thanks, Tom.
Your next question comes from Thomas Allen Morgan Stanley.
Hey, how are Ya.
So it's now been you know about three and a half months in two parts Caesars can you talk a little bit about your additional synergy upgraded you've found a you've kind of been under the hard for a bit longer.
So the whole synergy discussion as we've talked about was.
Turned on its head by Covid, it's really a question of.
What comes back rather than what the subtract but.
Seizures ran.
Differently than.
El Dorado, just from a basic day to day operation standpoint.
We run our properties off of daily P&L across every property that we own.
Caesars measurement of EBITDA winds.
Far less frequent than that and there wasn't a lot of the.
The operators didn't really have the tools to compare themselves across properties within the system. So when when.
When we were Eldorado is a private company and we were in two markets. We could look at those two markets and say what are we doing well in one versus the other when you've got 55 <unk>.
That ability becomes much much stronger that's a benefit of scale.
Caesars was not taking advantage of that in our estimation and you can imagine that that we are with took us.
The better part of two months to get to a daily P&L and we're still working through the kings in the Cesar system, but we just went through our first round of quarterly reviews and its eye opening for the operators to see.
When I'm looking at each line item, each department and versus others in my market or other similar properties things that I was unaware that I was inefficient in become obvious and.
That sort of black basic blocking and tackling is what we're working through now and that's why I tell you.
I haven't.
An extreme level of confidence and hitting our margin targets here.
That's helpful. Thanks, and then just on the sports pay not giving any updated thoughts around branding.
You should expect that we will use the Caesars brand for Caesar's operated owned and operated properties and for third party properties. We you should expect that the William Hill brand.
Will live on in the U S.
Okay. Thank you.
Makes sense.
Your next question comes from Jerry <unk> with Wolf Research.
Hi, good afternoon, everyone. Thanks for taking my question.
Tom you talked about October Vegas, pushing 50 million in EBITDA I know, there's weird seasonality with Vegas right now in the fourth quarter without the group business in the convention business can you just help us think about November and December obviously, I know, it's dependent on a lot like new year's Eve and other holidays, but how should we think about those two months or are you assuming that.
Sequential step up you've been seen pretty consistently can continue or if there was some other factors to consider there.
No jazz you know you're hitting a normal soft period in Vegas.
November.
<unk> and then pre December pre Christmas December, but what we're seeing is the.
Going to be through EBITDA growth I mean, you have some asset sales that you just talked about that will help but just just curious to get your thoughts on the cadence over the next 12 or 18 months ways that you'll you'll work down leverage.
Yeah, it's really going to be a combination of all the above again we're.
Hopeful that we're nearing an inflection point here, where we start generating strong free cash flow post this health crisis. So that's obviously number one alongside that we've been announcing asset sales and we expect to continue announcing them going forward. So that'll be part of the package and.
It's Vegas, we want to get past the health crisis, and then think about monetizing an asset here. So all three of those alongside the denominator growing sequentially is going to help us deleverage in the next 12 24 months.
Thanks, Brett.
And Tom on the sports and I Casino strategy.
Assuming the transaction with William Hill proceeds and you look at your portfolio of brands and assets.
Do you see any need or opportunity to add additional.
Services are brands are partners for that portfolio, you've got it make one with ESPN are there is there still more to do as you continue to build that business.
And this is all about building.
Market share profitably in making your customers as sticky as possible and so we think we have.
The building blocks to do that with what we'll have post the William Hill transaction, but will always be looking to.
Improve upon that and.
I've found it interesting to see non gaming.
Entities look into this space.
See movement in the MGM.
Easily what ESD ended with Us and draft Kings.
Obviously, there are a lot of companies out there who are looking for sure a wallet and screentime on your phone. So it wouldn't surprise me if you see more of that as we move into the future and if.
If there were a partnership or a transaction that would improve our position and we can executed in a manner that was that created additional value for our stakeholders. We would certainly take a serious look.
Very good thanks for the questions guys.
Your next question comes from Champignon with Macquarie.
Good afternoon. Thank you for taking my question guys.
Wanted to drill into the regional gaming EBITDA 444 million or I guess, maybe more importantly, the 33 per cent margin.
You noted that it was hamstrung by some of these regional I guess destination properties and in Lake Charles being closed I was wondering if you were willing to I.
Just to help us think about what the drag was or if these properties had been.
Punching at the same level as the other assets what what.
The result would have been any more color just on kind of the impact there and how to think about that going forward. Thanks.
So you've got New Jersey, Reno in New Orleans that.
Are your biggest drags obviously lake Charles this quarter, given the storm, but in the in terms of materiality industry or Atlantic City, Reno New Orleans.
Atlantic City.
Open very beginning of the quarter you had no alcohol service you had no.
Foodservice.
Significant limitations on capacity of that lasted for a significant period of time during your peak season in Atlantic City, So Atlantic City comps, obviously look poor in Reno, we had the.
The silver legacy Tower open we had a fair amount of El Dorado rooms open we did not have the circus Circus Circus Circus 1600 rooms open at all again in the.
Seasonal peak for the market and then New Orleans new.
New Orleans is a significant.
National database.
Receiver of business.
People not traveling New Orleans as a market is their restrictions are stricter than the state itself.
You have.
Legislated mandated.
Labour account in New Orleans, and you have a tax system, where we pay to fixed rate in the corner versus the.
The variable rate that we typically pay so those three properties are significant drags as we move into fourth quarter and you get into the shoulder season Reno in Atlantic City look a lot better because you are doing.
Well on a comp basis made a week in those markets win properties Wurtzel. This time last year and the weekend drop off is not nearly what it was in the summer New Orleans still has all of the same issues that it had in.
In the third quarter.
Great. Thanks, Tom really helpful. And then bread just on the cash flow side could you just remind us in terms of what the annual or quarterly cash interest and cash rent will be a little bit of noise in the reporting here, but that would be held yeah just yeah.
Putting gap aside on a pure cash basis, where roughly $2 billion all in of annual mass release red payments and interest expense.
So you can just divide that by for for the quarters.
Going to a brick and eight eight.
800 of interest.
Great. Thank you guys.
Thanks.
Your next question.
<unk> J P Morgan.
Afternoon, everyone. Thanks for taking my questions.
I was hoping that you could get maybe an <unk> an update on your eye gaming rollout and when would you expect to see.
You're launching in Pennsylvania, more form lately and and maybe if there's any plans from Michigan.
And if you have a market access agreement there.
Yes, Hi, Michigan.
And intention to roll out there, Pennsylvania.
We live in Pennsylvania, Dan right now.
We're rolling out more product and more games as every day and week passes.
So we're expecting to see incremental opportunities in 2021 is these new products are rolled out so we would be optimistic outgrowth in Pennsylvania. In 2021 also in the state of New Jersey, we're going to be launching light dealer on the <unk>.
<unk> sighed for I gaming, so that's a an exciting opportunity as well.
Got it thanks again in Virginia. There was recently passed legislation that legalized gaming in Danville, where you talked about building a casino you maybe talk to us about a little bit about the project potential.
Potential cost and returned bedroom environment, there and how you think about this happened a high level.
Yeah. So the project that was approved.
We'd expect 20 or 20% returns on roughly a 400 million dollar investment keep in mind as you look at that project.
That's in the.
The radius of the Cherokee property that we operate in North Carolina, and the tribe has the opportunity and me the option to opt into up to 80% of the equity of the visit.
Danville property and that became available to them upon the.
The passage of the the vote on Tuesday, So it's too early to say.
Where that will eventually hen.
Got it thanks, so much guidance appreciate it.
Your next question comes from David Cats Jeffrey.
Hi afternoon.
And thanks for taking my question.
I wanted to ask about the.
W. M H acquisition, and essentially why now and the degree to which you know you get closed on it what kind of tech investment and or marketing spend.
You envision might be required to.
Be a leader with a.
Be successful with it.
So we.
As we looked at.
The opportunity and the space as I've said I think this is the.
The most significant growth opportunity in the casino space since riverboats were legalized in the nineties.
We were looking at the partnership that we brought in from El Dorado side, where if you recall, we entered that partnership knowing that Eldorado's brand was unlikely to play on a national basis, we wanted to form a partnership with.
A respected sports betting operator that had a national strategy, where we can participate in the upside. We subsequently bought Caesars, who obviously has a very different brand situation that El Dorado and it became clear that we have a brand that can resonate on a national level, we've got a day.
Database.
That can feed into that business and we had been talking about how should we proceed with the partnership excuse do you recall.
Partner ship included sports betting and not include sports betting and not Internet casino.
If you're going to get to a single wallet solution.
Any bold so it really wasn't ideal for either partner in the current landscape. So.
So as we looked at potential solutions it became clear to us that the best answer for US was to control our own destiny here and so we started discussions about a purchase and ended up where you saw us end up.
On the marketing question Yeah.
The combined company here, the combined pro forma entity.
Aiming.
Sports.
About 100 million will do about $100 million in EBIT positive EBITDA not the.
200, $300 million of negative EBITDA that you're accustomed to in the space. It will do $100 million a positive EBITDA that includes all of the marketing that.
That we're doing now so if you see us ramp up marketing, it's from an EBITDA positive position in terms of the tax spend.
William Hill has been spending a significant amount of capital developing its liberty platform that rolled out in new Jersey too strong reviews. They are in the process of continuing to roll that out throughout the U S. You're never going to stop standing on.
<unk>, but I don't see a.
Significant material Tech spend that's you should be plugging into your model, that's going to be a giant sort of cash you should be thinking of.
10 $20 million a year.
Neighborhood.
Okay and I recall.
I hope I have your terminology.
Terminology correct, but.
The notion that gaming and sports betting.
May warrant it's own brain at some point, how have you thought about making sure that that business can grew.
Zero and achieve what it needs to achieve.
<unk> under your roof.
Versus.
<unk>.
So.
It will.
It will be an unrestricted sub.
Caesars Entertainment upon closing.
Post the Caesars acquisition, Eric cash in and Chris Holger and out of the Caesar side.
Agreed to stay on as co presidents of that business for Us Christians.
Christian Steward on the operation side has been invaluable in this process for US will remain involved so you will see it as it it will operate as a subsidiary of its own you will be able to see the numbers of it on its own then the question becomes.
<unk>.
What's the best structure from our capital markets perspective, and we have time to make those decisions the the expectation.
At the outset is it will be.
Only one unrestricted Caesars entertainment will not have its own currency, but as you know we are 100% focused on driving value to our shareholders and if the right answer is it becomes a second separate entity with its own currency.
Might see his head in that direction in the future.
Great. Thank you so much.
Your next question comes from Barry down it's maturity security.
Hey, guys.
When it started Vegas can you maybe just talk about the reintroduction of entertainment how profitable.
Think that can be either directly or indirectly and then also what what's been the response, so far to the return of paid parking.
[laughter].
Yeah. So.
Question of entertainment.
Sure absolutely thrilled that we've seen movement in that area.
And the ability to operate what are.
Some fair.
Fairly small venue entertainment across the city, what you're seeing coming back you're not seeing head.
Headline entertainment come back you're not seeing big production shows come back what you're seeing are the.
Five 600 seats that are now offering 100 200 seats.
It's not a hugely profitable business on its own.
But it creates additional reason to visit the market and that's important to US every piece that we get that becomes.
Another reason for someone to make the move to either drive here fly here and stay in the market is good for the whole market. So we're.
Extremely pleased that we are able to offer entertainment today. The initial response has been extremely strong and we're happy to have it back.
Issue a parking.
You got a heavy drive in business now as I said, we're midnight mid to high nineties occupancy on the weekends as you and you know that we have had a 50 yard line real estate on the strip. So we were finding was our best customers.
We're having difficulty finding parking in our garage is even if they had a lodging reservations.
And so what we wanted to do was to bring back parking.
To bring back parking fees.
As kind of a hurdle so that our best customers can get to the property if we if if.
You are <unk>.
Significant Caesar's award customer, you're a larger or your local you're not paying for parking.
And to.
To drive home the point that this was for.
Those purposes, and because of the situation that we've seen in Nevada.
As we implemented we said we're going to donate all of our profits from parking.
For this quarter and next to local charities that support can.
Community and those that have been displaced by.
So the the response has been overwhelmingly positive.
From.
The city and from our customers.
That's great.
And then just a follow up how are you thinking about I guess opco mixture the business now.
You've talked about sort of like a 50 50 mix is that still the goal once the dust settles.
Yeah, you shouldn't see us doing.
Sale leaseback transactions of or sales of real estate that will skew that.
As you have seen us in the past we've utilized the.
The propco market for financing typically for transactions, so where there.
Thing to come up.
Made sense it could be a tool that you use but I don't expect this to be particularly acquisitive from here. So you shouldn't see much movement on the real estate side.
Great. Thank you so much.
Thanks Mary.
Your next question comes from Sean Kelly with Bank of America.
Hi, good afternoon, everyone.
Two questions just wanted to go back to the sort of regional margin performance. If we look at the kind of the numbers on a core basis.
Talk about 700 basis points.
It fair just as we think about.
Continued recognition of some of the synergy can be your initiatives that that's 700 basis points could actually improve or accelerate from here or do you think this is a good reflection of what the ability of the business can be when everything else is.
Our everything else search the settlement.
You should expect that.
That it can continue to grow because as I talked about earlier.
What's missing from the business is some of your highest flow through revenue. So is that starts to come back.
Into these markets and I'm thinking, particularly of Atlantic City, Reno, and New Orleans flow through is quite high end up their contribution to the total regional pie.
And a.
Post in a post Covid world should drive the entire regional sector margin higher.
That's really helpful. Tom and then sort of a separate but big picture strategic question. So there's been some discussion as it relates to William Hill, and I get the bigger picture.
Tragedy here as it relates to this is kind of single single wallet or access to the customer probably be via an app and.
And I'm just kind of curious like Caesar is always took a pretty centralized or increasingly moved to a centralized marketing approach Tom in El Dorado, I think without mischaracterizing, you guys realized pretty focused on a decentralized approach truly accessing the customers and empowering some of the local property managers. How do you think about that in the digital realm. So just sort of how do you.
Kind of like connect all this together as it relates to software and one vision of the customer does it sort of need to be centralized or.
Can you balance those two approaches and how would you sort of go about doing it or does anything need to change.
I think you should think about it how as to how we operate.
The entire business, what we will differentiate us in this space is.
The stickiness of our customers fee immersion in our network. If you think of I know you're.
In the free covered world you would he be a frequent traveler like I was think of.
The gymnastics you would go through to make sure that you're flying on your favorite airline or you're staying in your hotel, where you've got the most points.
That's what we've got in the Caesars reward system and it's a much broader relationship than just how much money did I give you to place your sports bad on my App, It's a much stickier customers. So you shouldn't think of the.
Sports betting marketing is going to be.
Curiously different than the way that we built the business.
On the bricks and mortar side I understand there's this race for.
Market share in hand on all the numbers that come out monthly right. Now this is a long game.
I go back to my Riverboat example.
I remember, calling on names like Casino Magic and Casino America and players International Argosy gaming.
All of those ultimately went away and got consolidated into the leaders in the business, that's where we're going to end up you are in.
Aiming one.
Of.
If you're thinking in baseball terms, what ultimately will be an extra inning game.
And we're assembling the building blocks to be a winter here long term.
Attract as much shit.
Market share as we can over time profitably, but make sure that it's sticky I can make my market share in any individual market look the way that I would want it to look to report to you at the end of the month, if I throw enough money at it that's not how we do business that's not how you.
You should expect us to tackle this area.
Thank you very much.
There are no further questions at this time I would know him to call back for closing remarks.
Alright, Thanks, everybody will talk to you.
In 2021 after fourth quarter.
That concludes today's conference. Thank you for your participation you may now disconnect.
[music].
[music].
Good afternoon, ladies and gentlemen, and welcome to the Caesars Entertainment, Inc. 22 in the third quarter earnings call.
This time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time, if anyone should require assistance. During the conference. Please press Star then zero on your Touchtone telephone I would now like to turn the conference over to your host Mr., Brian <unk> Senior Vice.
President of Finance Investor Relations and Treasury.
[music]. Thank you Ashley and good afternoon, everyone on the call.
Welcome to our conference call to discuss our third quarter 2020 earnings.
This afternoon, we issued a press release announcing our third quarter financial results for the period ended September 32020.
The press release is available in Investor with the Investor Relations section of our website at Investor Day, Caesars Dot com.
Joining me on the call today are Tom Reed, our Chief Executive Officer, Anthony Corrado, President and Chief operating Officer, and Fred younger our Chief Financial Officer.
Before I turn the call over to Tom I would like to remind you that during today's conference call. We may make certain forward looking statements about the company's performance such.
Such forward looking statements are not guarantees of future performance and therefore, one should not place undue reliance on them.
Forward looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed for additional information concerning factors that could cause actual results to differ from those discussed in our forward looking statements you should refer to the cautionary statements contained in our press release.
As well as the risk factors contained in the Companys filings with the Securities Exchange Commission.
She is an entertainment undertakes no obligations to revise or update any forward looking statements to reflect events or circumstances that occur. After today's call also during today's call. The company may discuss certain non-GAAP financial measures as defined by FCC regulation G., the GAAP financial measures most directly.
In parallel to each non-GAAP financial measure discussed and the reconciliation of these differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at Investor Day, Caesars Dot com by selecting the press release regarding the Companys companies 2023rd quarter financial results.
I will now turn the call over to Tom.
Thanks, Brian Good afternoon, everybody.
We're back to report our third quarter earnings as you look at our income statement keep in mind that Eldorado resorts was the surviving.
Entity and the transaction, we changed our name to Caesars Entertainment.
So there's a lot of noise in the financial statements you're looking at <unk> to.
2019 numbers are that our legacy Eldorado, you're looking at 2020 numbers that are legacy Eldorado only through July 20th.
And then the combined company through the end of the quarter work.
We're going to cut through and get you to what we think are the key points in the quarter.
Our same store adjusted EBITDA in the quarter. It was a little over $460 million, which was a little ahead is the wide end of the range of our pre release.
Turning to our equity offering.
We're quite pleased with the progress that we've made since closing the transaction we.
We have seen.
Not quite a bit of opportunity within the Caesars somewhat as expected somewhere where nice surprises.
We.
Continue to believe that we will bring the consolidated EBITDA margin in a postcode world at least to the mid to high Thirtys, if not 40% EBITDA margin.
The consolidated entity.
Vegas, Anthony will get into.
Detail, but we did 60 million of EBITDA in Vegas, and keep in mind that was dragging.
Rio and Cromwell and planet Hollywood were closed for the whole quarter Planet Hollywood and Rio have opened since Bally's was also closed for part of the quarter. So we are carrying the operating losses.
Relative to those assets to get to that $60 million number our occupancy for the quarter in Las Vegas was just under 60% just a few.
Two basis points under 60% we're running.
In the mid Fiftys on a.
Weekday is now and weekends were well into the mid to high Ninetys. So.
So we use.
And hardened by our performance clearly that's.
Hey.
Key piece of evidence on the strength of the Caesars rewards.
Program.
Having to poor at Caesars, who we inherited on me.
Management side is a wizard with the style.
And has done a tremendous job for us in Vegas, and we've moved him throughout the company in this area. So we're excited with what.
Pavel and his group will bring to the table for us.
As I said the merger closed on July 20, and so obviously that was during the quarter.
Also we announced an acquisition or a cash offer to acquire William Hill during the quarter.
For 272 pence per share.
That shareholder vote will take place on November 19.
As is the kaz needs to be the case under UK takeover code, we cash confirmed the entire amount for that transaction, including an equity offering that was just shy of $2 billion on October onest of this year.
We entered and we expanded our relationship with the U.S.P. and then the quarter on the sports betting side, which we think is an exciting piece for customer acquisition for US. We've got a co exclusive link out across all European channels with Draftkings and we're excited with what that will bring to the table.
Yeah.
We were also active on the asset sales front, we closed the sale or we announced the sale I'm sorry.
Tropicana Evansville for 480 million two twin River Atg LPI.
Just about a week ago, you should expect to see more news in Indiana prior to the end of the year from us.
And you know I would say a couple things that.
I stress as takeaways and then the questions that I get.
On the operating side of the business if you annualize.
The costs that are out of the business this quarter.
Excluding gaming taxes, which obviously reduce.
As gaming revenue goes down.
Our run rate.
Cost reduction is about $2 billion of free.
Pre co bid levels.
Theres, obviously had a lot of talk about what will come back what won't come back.
A lot of those costs are never coming back as I've said over the last several quarters. None of that has changed as I said I think we're going to get to.
35% to 40% EBITDA margins at a minimum it's enjoyable from my seat to see our peers in the space reporting.
The same types of cost savings opportunities that we've been talking about.
For many years and to see Las.
Las Vegas locals margins in excess of 40%.
For the quarter I had a couple of our peers. That's a roadmap to whats coming you know you think about what.
Revenue is missing from our business it's.
The highest flow through revenue in the business. It certainly is.
Hotel room rate and occupancy in Las Vegas and.
What I'd say and I told you two quarters ago prior to the re openings that you were going to be surprised with.
What regionals could do on the margin side, and we had another quarter, where if you look at our pure regionals without.
Destination properties EBITDA was up substantially assay will get into that.
What I tell you today is.
When we get into a postcode world.
The pent up demand you're going to see for.
Gaming in general at Las Vegas in particular is going to be beyond your wildest dreams.
Your.
Yes, the flow through that you're going to see in the sector is unlike anything that's happened historically in this space and so I can't tell you when is that going to happen I can't I wish I could answer when the public health situation will change, but as we look at the pieces of art.
Database that are missing or lagging they're the most profitable pieces of our data base its feet, the 55 and over cohort thats not calming. These.
These are people that are are not going anywhere and are not spending and are going to come out of this with.
Yes, significant pent up demand and spending power and it's going to be extremely powerful what you will see I think across the entertainment space, but particularly.
In casinos in particularly in Las Vegas.
The other question I get it.
All the time is about sports and online that I'd tell you, our new Jersey Casino business continues to ramp up even after physical properties.
Reopen we're now on a run rate for 150 million of annual revenue out of the.
Hi gaming business in New Jersey at margins in the mid Thirtys. So.
So we're extremely excited about that business, we think controlling our destiny in this space positions us to be a long term winter.
The.
The ability to wrap our I gaming and our eye casino into a single wallet.
Attached to your Caesars reward database with the ability to earn and use points in any way that you like online or offline our customers truly get an immersive experience in this company and you see it with what we're doing in Vegas, we think thats going to trend.
It is late into.
The online business and I don't really have a roadmap to what what the ultimate size of this business will be but.
But I do know that if you're betting against.
The.
And the American People's propensity to gamble or you're betting against the.
The lower for states to attract tax revenue when their budgets are in the pay and put in place that they are today, yes, that's been a losing that since the dawn of civilization.
So I feel real good about where we are where we're headed and I'll turn it over to Anthony.
Thank you Tom and good afternoon to everyone on the call I'd like to take a few minutes to provide you with some operational highlights for our portfolio during the third quarter.
Before I begin I want to express my sincere gratitude to all of our team members for their hard work and dedication during the quarter to 19 pandemic.
Our operations performed extremely well during these trying times do the due to the outstanding service that our guests receive on a daily basis from all of our great team members. Our success. This quarter is a clear reflection of the commitment our team members.
Who continue to work hard each day to improve to provide a safe healthy and exciting environment for our guest and their fellow team members.
Now turning to operations.
We now have 55 of our 56 properties reopened.
As we mentioned in our press release, our regional properties are performing strongly.
Within our regional segment and excluding destination markets like Atlantic City, Reno, New Orleans, and Taco our.
Our regional properties generated a revenue decline of 11% and EBITDA growth of 10% leading to over 700 basis points of margin expansion.
10 properties had margin growth of over 1000 basis points in total, including the destination markets and our regional portfolio regional EBITDA for the third quarter was $447 million.
Now turning to Las Vegas, and our regional destination markets.
Starting with Las Vegas, we now have every property open except the Rio.
We generated $60 million of adjusted EBITDA in Las Vegas in the quarter with operating performance improving each month throughout the quarter, leading to a strong month of September.
We continue to see strong occupancy trends on the weekends in excess of 90% with mid mid week, obviously, you still running 50% to 60% range.
We were encouraged with when Governor says lack lifted the meeting caps from 50 to 250 people, which has allowed us to host some small group meetings in Q4.
Excluding the closed properties during the quarter property level EBITDAR was approximately $100 million.
Our destination markets and the regional portfolio displayed sequential improvements in operating performance throughout the quarter, leading to September showing that displayed sequential improvement in operating performance throughout the quarter, leading to September showing material improvement in the rate of EBITDA declined versus July and August. These.
These regional destination properties with large hotel room portfolios are slowly recovering as operations returned to normal and customers are returning to the properties.
Overall, our immediate actions to reduce operating expenses, how to reopen properties contributed to a leaner cost structure that we believe will contribute to sustainable EBITDA margin expansion.
We are encouraged by the performance of the regional markets and the sequential rate of change and property performance within our destination markets during the quarter with that I'll now turn the call over to Brian for some additional insights on the third quarter and details on our balance sheet and capital structure.
Great. Thanks Anthony.
As everyone on the cause of where we had quite an active third quarter, even by our own standards. We closed on the Caesars merger on July 20th and subsequently announced the proposed transaction to acquire William Hill plc on September Thirtyth.
As we mentioned in the press release, our quarter ending balance sheet was impacted by the cash required to be placed into escrow for William Hill in connection with the rule 2.7 announcement on that.
Silver first we completed a public equity offering of 35.6 million shares generating net proceeds of $1.95 billion. Additionally in early October we entered into a 1.5 billion pound interim facilities agreement with two large international banks execution of this committed debt financing allowed us to release.
2 billion of cash that had been escrowed on September thirtyth.
Allowing us to fully repay a $900 million draw on our parent revolver and return excess cash liquidity to our balance sheet.
As of today, both of our revolvers are undrawn and our unrestricted cash position is over $2 billion based on current operating trends, we expect to end the year with a similar level of cash on hand, and zero revolver balances.
As I mentioned on our second quarter call, our approach to maintenance and growth capital investment will be focused and disciplined over the next 12 months, we expect to spend approximately $300 million to $350 million on capex, excluding any Atlantic city specific capex, that's already been escrowed.
With that I'll turn it back to Tom.
Thanks, Brett Let me give you before we go to questions let me.
Add a few comments on cadence of business since the quarter.
Sequentially. It continues to get stronger October was better than September September was better than August.
If you think about what that looks like in Las Vegas, I'm going to give you some numbers that I'm not we're not in the habit of giving you, but given me.
The cloudiness of business as you look look at the Cove and World I think it's useful if you look at EBITDAR by month for Us in Las Vegas.
July was $10 million positive and these are aggregate numbers. So include the losses from properties that were shutdown.
The $10 million in July 16 million at August 34 million in September and October should push 50 million. We've got preliminary numbers, we have not closed the month, yet so vegas continues to get better for us.
We are not we're not going to be talking about shutting properties midweek. We're obviously, we're talking about opening additional properties. We opened Cromwell last week I'd expect to see REO opened before the end of the year.
On the group side.
The second half of 21 and beyond have record business on our books.
[music].
Q2 to Q4 21 are well ahead of our 2019 pace.
And bookings were strong in the third quarter basically a normal level of bookings. If you look at the Caesars for a convention center, which was.
Open for about a day and a half before everything shutdown from co that Caesars Forum has 172 events 1.6 million room nights contracted worth over $600 million in rooms, and banquet revenue and 78% of that business is not new to Las Vegas.
Yes.
I'd tell you is not.
None of that matters, if the public health situation does not improve but we are heartened by governor CES lacks recent movement toward.
Socially distance meeting business.
In his statement that he is looking to go to 50% capacity by the beginning of 2021.
That should help us save some first half 2021 business, but first quarters you should expect will look very much like the last three core in the second quarter third quarter of.
20, and this quarter as well and with that I'll turn it over to the operator for questions.
Okay.
At this time I would like to ask a question. Please press Star then one.
And our telephone keypad.
Your first question comes from Steve is it skewed with Stifel.
Hey, good afternoon guys.
[music].
So Tom when I started in Vegas and.
If you look at this point you said your occupancy is are running above 90% on the on the weekends mid Fiftys rig days is there any way to kind of think about that that we can kind of traffic how much of that business in terms of the mid ninetys is kind of a cash business versus whether that's a comp business or reward redemption.
[music].
So you should presume that if you look at our historical mix, Steve that the convention business has been replaced by casino block of business and that the other segments remain relatively constant as you look back.
Okay Gotcha and then the comment you made about demand is going to be I think you said beyond either my wildest dreams are your wildest dreams.
Was that mostly related to Vegas is that kind of cross the entire.
No you across the entire U.S.
It's across the entire us when I tell you that our 55 and over group is significantly lagging the rest of the business that's throughout the country and those are.
The people that tend to skew to older population that are not leaving their houses right. Now my my mother is one of those and when.
When you get a vaccine and you have.
Freedom of movement and feel better in terms of.
The.
Likelihood of contracting Cove, it I think that the pent up demand.
For Vegas and for Entertainment generally.
Is well beyond what anyone is thinking today.
And have you seen any change in that 55 and over kind of crowd recently.
It's everything is kind of grinding a little bit better every month month over month, but it's.
Baby steps.
Okay, and then last question, so with William Hill, and I don't I'm not sure how much you can say given the pending.
The deal Hasnt closed yet, but you know.
Say that deal does go through and you talked about that single App do you have any idea yet in terms of when that single App would be would be deployed.
I'm extremely limited in what I can speak to on William Hill outside of the corner four corners of the document you can presume that.
We were already working in that direction in the former iteration and eight we would continue to work in that direction post closing.
Okay, great. Thanks.
Your next question comes from Thomas Allen with Morgan Stanley.
Hey, how are you.
So it's now Ben you know about three and a half months since you bought Caesars.
Can you talk a little bit about your additional synergy opportunities you're bound to you've kind of been under the hood for a bit longer. Thanks.
Yes, I mean, so the whole synergy discussion as we've talked about was.
Turned on its head up.
By Cove. It it's really a question of what comes back rather than what do you subtract but.
Caesars ran Dick.
Differently than older.
Eldorado just from a basic day to day operations standpoint.
We run to our properties off of daily PL across every property that we own seized.
Caesars measurement of EBITDA was.
Far less frequent than that and there wasn't a lot of the operators didnt really have the tools.
To compare themselves across properties within the system so when when.
When we were Eldorado as a private company and we were in two markets. We could look at those two markets and say what are we doing well in one versus the other when you've got 55 that.
That ability becomes much much stronger that's a benefit of scale and Caesars was not taking advantage of that in our estimation and you can imagine that that we are what took us there.
Latter part of two months to get to a daily fee at all and we're still working through the Kinks in the Caesars system, but we just went through our first round of quarterly reviews and its eye opening for the operators to see.
When I'm looking at each line item, each department and versus others in my market or other similar properties things that I was unaware that I was inefficient and become obvious and.
That sort of blocked basic blocking and tackling is what we're working through now and Thats why I tell you.
I have.
An extreme level of confidence in hitting our margin targets here.
That's helpful. Thanks, and then just on the export grain I'm hearing.
Good thoughts around branding.
You should expect that we will use the Caesars brand for Caesars operated owned and operated properties and for third party properties. We you should expect that the William Hill brand will live on in the U.S.
Yes.
Okay. Thank you.
Thanks, Tom.
Your next question comes from Jared Shojaian with Wolfe Research.
Hi, good afternoon, everyone. Thanks for taking my question.
Tom you talked about October Vegas, pushing 50 million in EBITDA I know there is weird seasonality with Vegas right now in the fourth quarter without group business and the convention business can you just help us think about November and December obviously, I know, it's dependent on a lot like new year's Eve and other holidays, but how should we think about those two months are you assume.
Thing that sequential step up you've been seeing pretty consistently can continue or is there. Some other factors to consider there.
No Jeff as you know you're hitting a normal soft period in Vegas.
November and then pre December or pre Christmas December, but what we're seeing is the.
The reduction in volumes is not nearly what its been historically at least in our business. So.
We feel good about posting a strong fourth quarter number in Las Vegas.
Okay. Thank you and then I'll I'll try to tackle this question a little differently, but if I think back to your your most recent synergy target the 800 million cost savings of $100 million of revenue synergies should we assume the entire 800 million of opportunity is already in that $2 billion number of.
Costs that have been taken out so really it's entirely just a matter of getting the revenue back or are there still some additional cost do you think you could take out and then presumably the $100 million of revenue synergy that still outstanding is it fair to say you really havent got any of that yet.
Yes, the revenue synergies, yes, absolutely on the cost side, the one piece that.
Aim through Cove at relatively unscathed on this either side was corporate.
You can see in our numbers that we caught about 200 million from.
On an annualized basis from corporate.
And that's what we expected to do and you can see that that's complete you should presume the rest of the cost savings.
Included in those numbers, but if you think about we had an 800 million dollar.
Target.
Between cost and revenue 100 was revenue so 700 million of cost.
They did.
About 11 billion or the combined company that about 11 billion.
Revenue.
But let's call it a 28% margin for 2019, so if we were to get to our 35%.
Outside of the range that I've been talking about that's almost $800 million of just cost savings.
And obviously, if we get to 40, there is more than that.
Okay, Great and maybe just to quickly follow up on on that I think you're divesting a lot more properties than you had initially expected when you announced the deal is that positive negative or neutral to.
To the margin.
It depends on.
The property is I would say of the properties that Weve sold.
And that we're anticipating selling all of those would be removing them from the equation would be accretive to that overall margin target.
Okay, great. Thank you very much for the time.
Your next question comes from John Decree with Union gaming.
Hi, everyone. Thanks for taking my questions.
Top Brett I wanted to ask you guys, a little bit about de leveraging from here and the capital that you've raised this quarter earmarks for William Hill talking.
Talked in the past about at some point selling a strip asset.
Just to help de lever more quickly, but based on what you see now in the amount of costs that have come out of the business in your kind of outlook for margin how.
How do you approach de leveraging from here is it going to be through EBITDA growth. I mean, you have some asset sales that you just talked about that will help but just curious to get your thoughts on the cadence over the next 12 or 18 months.
Youre kind of leverage.
Yeah, it's really going to be a combination of all the above again were hopeful.
Hopeful that we're nearing an inflection point here, where we start generating strong free cash flow post this health crisis. So thats, obviously number one alongside that we've been announcing asset sales and we expect to continue announcing them going forward. So that will be part of the package and.
Las Vegas, we want to get past the health crisis, and then think about monetizing an asset here. So all three of those alongside the denominator growing sequentially is going to help us deleverage over the next 12 to 24 months.
Thanks, Brett.
And Tom on the sports and I Casino strategy.
Assuming the the transaction with William Hill proceeds and you look at your portfolio of brands and assets.
See any need or opportunity to add additional.
Or services or brands or partners for that portfolio, you've got big one with the S.P. and are there is.
Is there still more to do as you continue to build that business.
And this is all about building.
Market share profitably and making your customers as sticky as possible and so we think we have the.
The building blocks to do that with what will have post the William Hill transaction, but we'll always be looking to.
Improve upon that and.
I found it interesting to see non gaming.
Entities looking into this space just the I see movement into MGM.
Obviously, what he asked ended with us and Draftkings.
Obviously, there are a lot of companies out there who are looking for share of wallet and screen time on your phone. So wouldn't surprise me if you see more of that as we move into the future and if there were a partnership or a transaction that would improve our position and we could.
Executed in a manner that was that created additional debt value for our stakeholders, we would certainly take a serious look.
Very good thanks for the questions guys.
Your next question comes from Chad Beynon with Macquarie.
Hi, good afternoon. Thanks for taking my question guys.
One I wanted to drill into the regional gaming EBITDA 444 million or a I guess, maybe more importantly, the 33% margin you noted that it was hamstrung by some of these regional I guess destination properties.
And in Lake Charles being closed I was wondering if you're willing to.
I guess to help us think about what the drag was or if these properties had been.
Punching at the same level as the other assets what what there.
The result would have been any more color just on kind of the impact there and how to think about that going forward. Thanks.
So you've got New Jersey, Reno, and New Orleans that.
Sorry, your biggest drags obviously lake Charles this quarter, given the storm, but in the in terms of materiality the three our Atlantic City Reno New Orleans.
Yes Atlantic City.
Opened very beginning of the quarter you had no alcohol service you had no.
Foodservice.
And most significant limitations on capacity that lasted for a significant period of time during your peak season at Atlantic City, So Atlantic City comps, obviously look poor in Reno, we had the.
The silver legacy Tower opened we had a fair amount of Eldorado rooms open we did not have the circus Circus Circus Circus 1600 rooms opened at all again in the.
Seasonal peak for the market and then New Orleans.
In New Orleans is a significant.
National database.
Receiver business it with people not traveling New Orleans as a market is there restrictions are stricter than the state itself you have.
Legislative mandated labor account in New Orleans, and you have a tax system, where we paid a fixed rate in the quarter versus.
The variable rate that we typically pay so those three properties are significant drags as we move into fourth quarter and you get into the shoulder season, Reno and Atlantic City look a lot better because you're doing pretty.
Pretty well on a comp basis mid week in those markets when properties work full this time last year and the weekend drop off is not nearly what it was in the summer New Orleans still has all of the same issues that it had.
In the third quarter.
Great. Thanks, Tom really helpful. And then Brad just on the cash flow side could you just remind us in terms of what the annual or quarterly cash interest and cash rent will be a little bit of noise in the reporting here, but that.
That would be helpful just kind of.
Putting gap aside on a pure cash basis were roughly $2 billion all in of annual master lease rent payments and interest expense. So.
So you can just divide that by four for the quarters, but.
Going into a Brent.
800 of interest.
Great. Thank you guys.
Thanks.
Your next question comes from Dan Pulitzer with JP Morgan.
Afternoon, everyone. Thanks for taking my questions.
I was hoping that you could give maybe an.
Update on your Igaming rollout and when we could expect to see.
Your your launch in Pennsylvania, more formally leased and maybe if there is any plans for Michigan.
And if you have it market access agreement there.
Yes on Michigan.
And intention to roll out their Pennsylvania, we're live in Pennsylvania, Dan right now.
We're rolling out more product and more games as every day and week passes.
So we're expecting to see incremental opportunities in 2021 as these new products are rolled out. So we would we would be optimist. So from Pennsylvania. In 2021 also in the state of New Jersey, we are going to be launching live dealer on the Caesar side for I gaming, so thats, a exciting opportunity as well.
Got it thanks, and then in Virginia.
As recently passed legislation that legalizing gaming and Danville, where you talked about building. It because you know you maybe talk to us about a little bit about the project.
Total cost and return to that environment, there and how you're thinking about this at a high level.
Yes, so the project that was approved.
We'd expect 20 or 20% returns on roughly a 400 million dollar investment keep in mind as you look at that project.
That's in the.
The radius of the Cherokee property that we operate in North Carolina, and the tribe has the opportunity and me the option to opt into up to 80% of the equity of the odds.
The Danville property and that became available to them upon me.
The passage of the vote on Tuesday, so its too early to say.
Where that will eventually happen.
Got it thanks, so much guys appreciate it.
Your next question comes from David Katz with Jefferies.
Hi afternoon.
Thanks for taking my question.
I wanted to ask about.
The W. image acquisition at Us.
Centrally why now.
On the degree to which.
Get closed on it what kind of tech investment and or.
Marketing spend.
You envision might be required to.
Okay.
To be a leader with it might be successful with it.
Yeah. So we.
As we looked at the opportunity in the space.
As I've said I think this is the debt.
The most significant growth opportunity in the casino space since riverboats were legalized in the nineties.
We were looking at the partnership that we brought in from the Eldorado side, where if you recall, we entered that partnership knowing that Eldorado's brand was unlikely to play on a national basis, we wanted to form a partnership with.
Our respected sports betting operator that had a national strategy, where we could participate in the upside we subsequently bought Caesars.
Obviously has a very different brand situation that Eldorado and it became clear that we have a brand that can resonate on a national level. We've got a database that can feed into that business and we had been talking about how should we proceed with the partnership to get Rick.
Paul The partnership included sports betting and not include sports betting and not Internet casino.
If you're going to get to a single wallet solution.
Any both so it really wasn't ideal for either partner in the current landscape.
So as we looked at potential solutions it became clear to us that the best answer for US was to control our own destiny here and so we started discussions about a purchase and ended up where you saw us end up.
On the marketing question.
The combined company here, the combined pro forma entity I.
Hi gaming.
And sports.
Does about $100 million will do about $100 million in EBITDA positive EBITDA not the.
200, $300 million of negative EBITDA that you're accustomed to in the space. It will do $100 million of positive EBITDA that includes all of the marketing that.
That we're doing now so if you see us ramp up marketing its from an EBITDA positive position in terms of the tech spend.
William Hill has been spending a significant amount of capital developing its liberty platform that rolled out in new Jersey to strong reviews. They are in the process of continuing to roll that out throughout the U.S., you're never going to stop spending on tax, but I don't see.
A.
Significant material Tech spend that's you should be plugging into your model, that's going to be a giant soc of cash you should be thinking of.
Yes, 10 $20 million a year.
Neighborhood.
Okay.
And I recall.
I hope I hope, you're right terminology correct, but.
The notion that I gaming and sports betting.
May warrant its own brain at some point.
How have you thought about making sure that that business can.
You know grow and achieve what it needs to achieve under.
Under under your roof.
Pursues its own roof.
So.
It will it will be an unrestricted sub of Caesars entertainment upon closing.
Post to the Caesars acquisition.
Eric Hession, and Chris soldier and out of the Caesars side.
Agreed to stay on as co presidents of that business for us.
Christian Stuart on the operation side has been invaluable in this process for us. He will remain involved so you will see it as it's all it will operate as a subsidiary of its own you will be able to see the numbers of it on its own then the question becomes.
What's the best structure from a capital markets perspective, and we have time to make those decisions the act the expectation.
At the outset is it will be a wholly owned unrestricted sub at Caesars Entertainment will not have its own currency, but as you know we are 100% focus on driving value to our shareholders and if the right answer is it becomes a second separate entity.
With its own currency, you might see us head in that direction in the future.
Great. Thank you so much.
Your next question comes from Barry Jonas Vitreous security.
Hey, guys.
I want to start with Vegas can you, maybe just talk about the reintroduction of entertainment how profitable.
I think that can be either directly or indirectly.
And also whats been the response, so far to the return of paid parking.
Thanks.
Yes, so on the question of entertainment.
We're absolutely thrilled that we have seen movement in that area.
And the ability to operate what are.
So fair.
Fairly small venue entertainment across the city, what you're seeing coming back you're not seeing had.
Headline Entertainment come back you are not seeing big production shows come back what you are seeing or that.
Fivesix hundred seats that are now offering a 100 200 seats.
It's not a hugely profitable business on its own.
But it creates additional reason to visit Submarket and that's important to US every piece that we get that becomes another reason for someone to make the most either drive here or fly here and stay in the market is good for the whole market. So we're.
Sure.
Extremely pleased that we're able to offer entertainment today. Their initial response has been extremely strong and we're happy to have it back.
Issue a parking.
You got a heavy dry van business now as I said were midnight mid to high Ninetys occupancy on the weekends as you and you know that we have kind of 50 yard line real estate on the strip. So what we are finding was our best customers.
We're having difficulty finding parking at our garage is even if they had a lodging reservation and so what we wanted to do was to bring back parking for to bring back parking fees.
As kind of a hurdle so that our best customers can get to the property if we if if.
You are.
Significant caesars reward customer, you're you're a larger or your local you're not paying for parking.
And yet.
To drive home the point that this was for.
Those purposes, and because of the situation that we've seen in Nevada, we as we implemented we said we're going to donate all of our profit from parking for.
For this quarter and next to local charities that support the community and those that have been displaced by code and so the the response has been overwhelmingly positive.
From.
The city and from our customers.
That's great.
And then just a follow up how are you thinking about I guess I'll go next to that business now Tom in the past.
You've talked about sort of like a 50 50 mix is that still the goal once the dust settles.
Yeah, you Shouldnt see us doing.
Sale leaseback transactions of or sales of real estate that will skew that.
As you've seen us in the past we've utilized the.
The propco market for financing typically for transactions. So we're there something to come up that made sense. It could be a tool that to use but I don't expect us to be particularly acquisitive from here. So you shouldn't see much movement on the real estate side.
Great. Thank you so much.
Thanks Barry.
Your next question comes from Shaun Kelley with Bank of America.
Hi, good afternoon, everyone.
Two questions I just wanted to go back to the sort of regional margin performance. If we look at the kind of the numbers on a core basis, the let's talk about the seven.
700 basis points.
Is it fair just as we think about.
Continued recognition of some of the synergies some of your initiatives that 700 basis point could actually improve or accelerate from here or do you think this is a good reflection of what the ability of the business can be when everything else is.
Everything else starts to settle it.
You should expect that there is that it can continue to grow because as I talked about earlier the.
What is missing from the business is some of your highest flow through revenue so as that starts to come back.
Into these markets and I'm thinking, particularly of Atlantic City, Reno, and New Orleans flow through is quite high and their contribution to the total regional pie.
In a.
Post in a postcode world should drive the entire regional sector margin higher.
That's really helpful. Tom and then on sort of a separate but big picture strategic question. So theres been some discussion as it relates to William Hill, and I get the bigger kind of picture strategy here as it relates to this kind of single single wallet or access to the customer probably the via an app on it I'm just kind of curious like.
Caesars always took a pretty centralized or increasingly move to a centralized marketing approach you know Tom Eldorado I think without mischaracterizing, you guys rise pretty focused on a decentralized approach really accessing the customers empowering some of the local property managers. How do you think about that in the digital realm. So just sort of how do you kind of like connect all this.
Together as it relates to software and one vision of the customer does it sort of need to be centralized or can you balance those two approaches and how would you sort of go about doing it or does anything need to change.
I think as you think about it how as to how we operate.
The entire business what will differentiate us in this space is.
The steadiness of our customers the immersion in our network. If you think about I know youre.
In the pre covered world you would you'd be a frequent traveler like I was think of.
The gymnastics you would go through to make sure that you are flying on your favorite airline or year staying in your hotel, where you've got the most points. That's what we've got in the Caesars reward system and it's a much broader relationship than just.
How much money did I give you to place your sports bet on my App, It's a much stickier customers. So you shouldnt think of the.
Sports betting marketing is going to be.
Materially different than the way that we built the business.
On the bricks and mortar side I understand there is this race.
Race for.
Market share and handle and you know all the numbers that come out monthly right. Now this is a long game.
I go back to my Riverboat example.
I remember, calling on names like Casino Magic and Casino America and players International Argosy gaming.
So all of those ultimately went away and got consolidated into the leaders in the business, that's where we're going to end up you are in.
Ending one.
[music].
If you're thinking in baseball terms, what ultimately will be an extra inning game and we're assembling the building blocks to be a winner here long term typically to attract as much.
Share market share as we can overtime profitably, but make sure that it's sticky.
I can make my market share in any individual market look the way that I'd want it to look to report to you at the end of the month, if I throw enough money at it thats not how we do business. That's not how you should expect us to tackle this area.
Thank you very much.
There are no further questions at this time I will now hand, the call back for closing remarks.
All right. Thanks, everybody, we'll talk to you.
In 2021 after fourth quarter.
That concludes today's conference. Thank you for your participation you may now disconnect.