Q4 2020 Caesars Entertainment Inc Earnings Call

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Ladies and gentlemen, and thank you for standing by and welcome to the Caesars Entertainment and incorporate that Monday, 24th quarter and full year earnings conference call. At this time all participants lines are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Question during the session and you would need to press star one on your telephone and I'll now turn the call over to your speaker today, Mr. Brian Agnew Senior Vice President of Finance Treasury and Investor Relations, Sir the floor is yours.

Thank you Sarah and good afternoon to everyone on the call.

Welcome to our conference call today to discuss our fourth quarter 2020 earnings.

This afternoon, we issued a press release announcing our fourth quarter financial results for the period ended December 31 2020.

A copy of the press releases are available on 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 Carano, Our President and Chief operating Officer, and Bret Yunker, 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 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 and our forward looking statements.

Should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the Securities and Exchange Commission.

Caesars Entertainment undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur after todays call and also during today's call. The company may discuss certain non-GAAP financial measures as defined by SEC regulation G. The GAAP financial measures and most directly comparable to.

Each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and and the comparable GAAP financial measure can be found on the company's web site at Investor Day, Caesars Dot com by selecting the press release regarding the company's 2024th quarter financial results.

I will now turn the call over to Tom.

Thanks, Brian.

Good afternoon, everyone.

We are thrilled to close the book on 2020.

It was by any measure.

The most challenging year that we've had.

Operationally and personally to date the fourth quarter was no exception to that and I want to start the call by <unk>.

Recognizing all of our frontline employees.

They lived through.

The vast majority of our employees being furloughed, and then coming back into an environment, where they were fearful for health and safety.

Full store, what was happening and homeless children or parents or grandparents or all of the above us.

And they came back and delivered to us.

Exceptional service that our customers are accustomed to at Caesars.

And operated through us.

Some extraordinary.

Contact tracing changes in regulations.

Reopening as closings.

Throughout the year, and we couldnt be prouder of them.

For the fourth quarter, we did 346 million us.

EBITDA.

And we've listened and red others' calls our cadence was similar almost half of our EBITDA.

And in October and then as regulation restrictions tightened across the country November and December.

Sure.

Sequentially less than October and we think the bottom for the business and we'll talk about what we've seen.

In January and February and going forward that.

Makes us highly confident of that.

And Las Vegas, we did.

$100 million of EBITDA, and adding back the Rio <unk>.

And payment, which we're proud of on a relative basis, but we know on an absolute basis, but we've got a lot of wood to chop and Vegas as it reopens.

We're seeing some encouraging signs there.

That I'll discuss.

And the regional markets in the quarter, but we had significant restrictions and Nevada, New Jersey.

Alright, and Ohio that related to operating hours, we had closures in.

Illinois, Pennsylvania.

That and the Lake Charles property from the prior Hurricane.

If you exclude just the closed properties you include everything that had the operating restrictions our regional EBITDA margins were up about 400 basis points for the quarter, So still seeing through the noise.

Wrong evidence on the cost side.

That does that.

And that that progress is continuing.

If you look at.

And when I'm speaking to investors.

I'm, often asked and what it.

What am I missing what is the market missing.

And.

What I think the market is missing now is similar to what I talked about in the last quarterly call.

The demand that is.

Summing as the world Reopens and the flow through that you should expect to see and this business.

Post reopening is wildly underestimated by the markets I see.

Kind of across the board and the sector.

Our view and numbers estimates out there that suggests we get back to 2019 numbers.

Sometime in 'twenty three.

I'm firmly convinced that we will.

We'll be at least run rating those numbers the first quarter that Vegas group businesses back in earnest and that could be as early as the second half of this year. So I think there is.

Their needs there shouldn't be a dramatic pull forward of expectations.

The turn.

And I'll give you a few examples of why.

I believe this to be the case.

Currently in Las Vegas.

We are add on.

And our highest level of bookings.

Since reopening January and February have ramped up it's almost like a switch was flipped.

Sometime.

January early February our bookings are up 20% on a month over month basis.

And the F T and casino segment.

We measure gross and net pickup so growth pick up is how many <unk>.

Rooms are booked in a day or a week or whatever period, you're looking at net pickup as bookings.

Less cancellations and if you look at our gross and net bookings nine of our top 10 days since the pandemic reopening and Las Vegas happened in February.

And with Monday, being the highest that we have seen to date.

Importantly, the booking window is extending as well so if you look back to.

From reopening until the end of 'twenty.

And it seem like you had a lot of impulse trips very short booking windows you know what.

We're seeing now is almost half of our bookings are for trips that are at least 30 days out.

Which is about double the pace that we had and the fourth quarter.

We're extremely encouraged by that.

If you look at our actual performance January and February January was well in excess of November and December approached October in terms of EBITDA February has been strong as well, obviously with fewer days in the months.

But lee.

But if we as we look forward at our forward booking forecast.

Mid March were well into the fifties in terms of percentage occupancy midweek on the strip.

And we're 95% plus on weekends and if you look at our group business.

For the second half of the year, we've got 32% more room nights on the books for the second half of 'twenty one.

Then we had for the second half and 19 on the same day and I'll Grant you that we didn't have Forum Convention center in the fourth quarter of 19, but youre talking about almost $200 million of.

Room night revenue on the books for the second half of the year for group business and remember when we talk about group business. Those are the rooms that are booked for the actual event.

So as those groups com and here at guess decide to come early and bring their why bring their families stay a little longer those rooms are not included in that group room night business.

We know that Theres, a lot of discussion and debate and.

Prognostication about when the World rule will reopen we're certainly heartened by us.

All of the recent data the vaccine advances in terms of coming supply.

And we're heartened by Governor CIS of lack in Nevada, and providing a path.

That has us in position, where we could be hosting group business by the middle of this year in earnest and so we think Theres light at the end of the tunnel there and.

And when you look at.

What we're messaging to our internal operators is let's make sure that.

All of the cost discipline that we have found.

Over the last year or so remains in place as business comes back.

And.

We had kind of an.

Molly and the fourth quarter in.

The Tahoe market, where California's regulations were far more stringent than.

Nevada.

So you kind of got and early burst of demand.

And with sorted simulate what will happen in a reopening and our team up there John Coster and his team did a fantastic job.

Of maintaining discipline on the cost side, so that Tahoe was up 7% and gaming revenue in the fourth quarter was up almost 60% in EBITDA with EBITDA margins growing by over 1100 basis points and.

And it's that type of view that I admittedly you you don't get to see.

That gives me optimism if you look anecdotally and this past Saturday night in Las Vegas.

Nothing particularly.

Interesting about it was we were and 95%.

Occupied so you get to see what we look like.

Virtually full we were 99% last year at higher rates.

There was nothing particularly notable about.

Our high end play and on that night and our EBITDA margins currently are running several hundred basis point points ahead of last year same day. So as this business comes back you're talking about.

Filling rooms room revenue that's extremely high margin you were talking about.

Hi, and cash restaurant business coming back you're talking about entertainment coming back.

Thank the.

The recovery that's going to happen.

The pace of it is going to be the magnitude of it is going to be far more dramatic than IC model and the pace and my mind is certainly going to be much much quicker and we're now.

What seven eight months post closing.

On the Caesars transaction, so we have done.

Obviously quite a bit of integration.

<unk> transaction and.

And I would tell you that we have already well exceeded all of the synergy targets that we have out there and expect that to remain to be the case even after.

The world Reopens and some of the.

Some of the costs come back we think will be.

Well in excess of both our pre pandemic targets and the targets we added two during the pandemic.

And then finally in terms of my opening remarks William Hill.

And I'm still limited and what I can we can say about that given that the transaction has not closed yet, but we have two remaining kind of full regulatory meetings, one in Nevada, which is actually a two parter and then one and Indiana, we anticipate both have.

Turning in March and then we have.

Final court date in the U K, which is set for March 30th.

Once we clear those we will have clear everything that we need to do to get closed. So you should expect us to be closing sometime.

Post that court hearing.

We are working through all of the integration of William Hill.

Particularly on the tech side, and we think we will be well positioned to have.

And one of the best apps in the industry integrated into Caesars rewards on both the sports side and in the casino side by the beginning of the football season in 'twenty and 'twenty one.

And with that I'll flip to Anthony.

Thanks, Tom and good afternoon to everyone on the call, while 'twenty and 'twenty was certainly a challenging year on many levels I am extremely proud of our team members and their extraordinary dedication and commitment to running great properties and our success. This year could not have been accomplished without our team members tireless efforts each day to provide a safe.

And healthy environment for us.

Now turning to operations and Las Vegas, we generated $90 million of adjusted EBITDA on the quarter and 100 million of property level EBITDA, excluding the Rio rent payments.

EBITDA improved over 40% on a quarterly sequential basis October was our strongest months, where we generated approximately $50 million of EBITDA.

Total occupancy for Q4 was 60% with weekend occupancy of 80% and midweek occupancy of 50%.

Casino mix as a percentage of our odds and she was over 50% during Q4.

Looking ahead, we are encouraged by the booking trends for the second half of 'twenty, One group and convention room nights on the books for the second half of 'twenty. One versus 19 are currently pacing up over 30% and we're seeing good rate growth as well.

'twenty and 'twenty two group pace is up 10% and room nights with strong rate growth versus this time last year.

As we've mentioned before future business on the books remains uncertain, but the strength of forward bookings tells us our customers are anxious to return to Las Vegas.

On the <unk> side, our booking pace continues to accelerate and it's at its highest level since reopening.

Our booking windows are extending us well, 47% of Las Vegas market bookings since the beginning of the year or for at least 30 days out almost double the percentage that we saw on the fourth quarter and.

In 'twenty and 'twenty, one year planning several property improvements and Las Vegas include.

Including completely transforming the arrival experience at Caesars Palace, which has largely been untouched and some property opened and 1966.

In addition, we will be adding several exciting new food and beverage concepts across our Vegas properties.

And our regional markets and operating results were negatively impacted by property closures and incremental COVID-19 restrictions during the quarter.

And our closed properties, we continue to pay team members salaries and benefits throughout the quarter.

And our regional non destination properties and excluding property closures revenues were down 17% EBITDA was down 6% and EBITDAR margins improved approximately 400 basis points.

10 regional properties within the portfolio reported quarterly EBITDA and our EBITDA margin records.

We have spent the last year refining our cost structure and both our destination and regional markets and we expect meaningful EBITDA flow through as the recovery unfolds and 'twenty one and.

This should also lead to higher sustainable EBITDA margins.

We are excited about the year ahead, and we remain confident and eventual recovery of travel and tourism and the us and especially here in Vegas.

With that I'll now turn the call over to Brett for some additional insights on the fourth quarter and details on our balance sheet and capital structure Bret.

Thanks Anthony.

So, we decided and mix things up a bit and the fourth quarter and went from buyers to sellers with the most significant announcements being the sale of two of our Indiana assets, yielding us over $1 billion of rent adjusted debt relief over $700 million of which is in the form of cash proceeds and we expect to receive during the second and third quarters of 2021.

These proceeds further augment approximately $4 billion of yearend liquidity across our unrestricted cash on hand and available revolvers.

We are well positioned to close on William Hill, which as Tom mentioned, we expect to happen early in the second quarter and our nearest debt maturities and December of 'twenty 'twenty four cash.

Opex for 'twenty 'twenty, one is expected to land between 350 and $400 million, excluding Atlantic City, and Lake Charles which we will be funding from escrow and insurance proceeds.

Back to you Tom.

Thanks, Brad and with that we will open it up to questions.

Ladies and gentlemen, and if we have a question at this time. Please press the star and the number one on your Touchtone telephone.

Question has been answered and he wished him have yourself on the queue. These past hip and Keith.

And ladies and gentlemen, if you have question and at this time. Please press Star and then number one on your Touchstone telephone.

Your first question comes from the line of Jared <unk> from Wolfe Research. Your line is open.

Hi, good afternoon, everyone and thanks for taking my question.

So Tom I really appreciate all that commentary I would share that was extremely helpful.

Do you think we need to see Vegas meaningfully improve to.

To the levels that you're talking about on and getting back to those are those prior 2019 run rates before we see a vegas asset sale is that kind of how you're thinking about it.

Yeah, so and.

And thanks for asking that question, because I should address that and the opening remarks I've read.

A lot of comments about how we're about to sell planet Hollywood.

And if whoever knows what's happening there can call me and tell me what we're getting for it I'd appreciate it.

There are no assets for sale in Las Vegas, and our portfolio, we do still anticipate selling an asset in the future.

But I Wanna be marketing that asset off of actual performance on.

Under our stewardship and not having to build a story build a bridge to what it's doing today versus what we think it will be doing so.

I would say based on what I'm seeing.

You should expect us.

Sale.

Unlikely to take place in 'twenty, one probably looking at some.

Sometime in 'twenty, two most likely first half.

Okay.

Okay. Thank you and just to switch gears here on <unk>.

Sports betting and I gaming I know, Tom and in the past your message has been that your interactive digital business is profitable, whereas competitors are not I guess, a multipart question here is online sports betting and I gaming profitable for you I know I gaming is but I guess the first question.

As online sports profitable as well and how has your strategy evolved on that thinking I mean, do you think that it's time to start getting more promotional and start to start to capture more market share.

And then maybe you can just help us think about how youre thinking about that and and then do you need to get the William Hill deal close before you start maybe a more robust.

And strategy on that front.

So I'm limited in what I can say here are the answer to the first question is yes, we are profitable and.

All verticals in that business.

And as.

On.

On the second piece.

William Hill has been and a bit and suspended and when and animation since we announced the transaction, where obviously they were not integrated into Caesars, when we announced it there's not a lot.

And that we're able to do in the period between signing and closing so William Hill face a situation where they.

They had a brand that they knew was ultimately going to go away as the main driver of the business. So it made little sense to spend a lot of money to build a brand and that's going to change.

Early in 'twenty and 'twenty, one we have not been in charge of that the operating side of that business in the past so we will.

And we're in this to be a winner and.

And if the answer is we need to invest more money to build market share and whatever form that takes.

You should expect that we would consider that I consider us to be.

A pretty strong operating team and you shouldn't expect that to be any different when we're <unk>.

Managing the sports and online business.

Alright, Thank you very much.

Your next question comes from the line of John Decree from Union Gaming Your line is open.

Hi, everyone. Thanks for taking my questions.

I guess to maybe build off that last discussion a little bit Tom.

And I'm wondering if you could talk a little bit about.

Your thoughts on the game and trajectory I think on the last discussion talking about profitability in that segment and it's a business that Caesars has been and for a while I think we've seen some legislation float around and Illinois, and and being considered and Indiana. So a lot of discussion on sports betting, but it seems like Caesars has a has a.

Particular advantage given the experience and I gaming and curious to get your thoughts on that.

The pace of that market rollout.

Yes, Jon as we've discussed I think the Miss.

And that area of the.

The market in terms of expectations is the view that.

Gaming is going to.

Significantly trail sports and ultimately not be legalized and nearly as many share.

Jurisdictions and my experience when.

States start to see the revenue feeding and from.

Something like sports I think their inclination is going to be to expand that and I gaming is certainly an easy path there I'm encouraged by.

And the January numbers that we saw and effectively two and a half states.

That suggests I gaming from a total market standpoint is already pushing $3 billion.

We.

Our significantly profitable there and that business keeps growing for us.

We obviously think we are well positioned there and and sports with <unk>.

Caesars rewards and we think we're well positioned to take advantage as I gaming continues to rollout.

If I could ask a follow up on that I'm not sure how much detail you prepared or can talk about but we get a lot of questions on.

Crossover play and.

And I don't know if you have any stats out of new Jersey or anecdotally, if you could tell us anything about how much of the Caesars rewards database.

And I was playing on online or how many customers were acquired online and to enter the Caesars casino for I gaming specifically.

Yeah, I'm not going to be disclosing that level of detail until we've after we've closed William Hill out of an abundance of caution.

Fair enough I can appreciate that if I could ask a second one instead on daily fantasy sports you've made a minority and.

Investment in a business and and obviously the cross sell rate we've seen from competitors has been pretty high but I wonder if you could give us a high level on the strategy and thought process as to how you might leverage that going forward.

Yeah for us it was twofold really you had.

We think we were acquiring the customers add a particularly attractive.

Acquisition costs, and the ability to fold it into Caesars rewards quickly and their capabilities.

Positioned us well to start to grow that business and it was also.

And obvious hole in our lineup as we talked with.

Our partners in the sports World both teams and.

And be.

The NFL itself so we.

That was.

Effectively what we did was we rolled our flutter stock that we got and the T. S. G skins deal into the investment into Super drafts, which given.

What had happened to flutter stock and where we think we can take superdrug. If we thought that was a good trade for us.

Understood. Thanks, Tom I appreciate it.

Your next question comes from the line of Carlo Santarelli of Deutsche <unk>.

Your line is open.

Hey, great. Thanks, guys.

Tom you, obviously talked a lot about kind of a las Vegas recovery, and what Youre seeing and group.

Noting that you believe you could be on times, a day and 20 E rate as early as the second half of this year.

My question around that is just obviously with the group demand and you guys see on the books, we have pretty good visibility into it could you maybe quantify kind of what what revenue level relative to 2019, you guys think you need to be add on a quarterly or annual run rate basis, and a key 2019 like EBITDA levels.

In Las Vegas, specifically.

I mean, I think you should be thinking about.

A minimum of.

500 to 1000 basis points of margin expansion on a consolidated basis.

So you can do the math that backs into where would we get to.

Call It three and a 5 billion which was.

The pro forma Eldorado, and Caesars numbers, and 19 plus to $500 million of.

Synergies, we announced in the D and the original deal.

Okay and that would that would be off the pro forma kind of 28 and change margin from 2019.

Yeah.

And I would've expected.

And maybe certainties at a minimum and I think we'll be chasing 40 pretty quickly.

Great. Thank you and then if I could just as you guys and thinks about the regional portfolio on.

Honestly.

<unk> had multiple transactions.

Over the last year plus.

Is there anything else that you guys are looking at across the board and your regional portfolio that you would consider kind of non core any and regions, where you feel like potentially there could be something that you'd want to do to kind of you know.

Clean up the portfolio or get it more tailored to you know kind of what you're trying to do with the business going forward.

I would say unlikely that we would be.

Buyer of anything material, that's already operating domestically.

If market's like.

New York, and Texas open up to commercial casinos, we would certainly take a hard look as to whether it would make sense for us to play there.

Okay, great. Thank you very much.

Your next question comes from the line of Thomas Allen from Morgan Stanley. Your line is open.

Thank you.

So when you announced the one hell of a deal you talked about reaching six and 700, my inbox and sports betting and gaming revenue and 2021.

Or do you still think that that's a good target.

I can update any numbers that arent in the public filings Thomas.

I thought it was worth a shot.

Yes.

No.

So switching gears a little bit.

You know when we think about the strength that we're gonna see and Vegas cabin.

And the second half of this year.

And your 'twenty 'twenty two could you just talk about how you're managing your rooms like are you holding back convention bookings because you think that kind of business is going to be so strong how do you do that thank you.

No I mean keep in mind the your booking windows are.

Entirely different when you're booking a convention.

You're typically booking for.

Many months are typically more than a year out and we've got a block of rooms that typically roles and about 15% of our total room capacity and there's no need to.

There's no need to artificially reduced that for expectations of what can happen.

And F. T are really managing that from a rate perspective and we.

We've got a team here led by pattern Kapoor, who was already at Caesars, who are the best and the business add.

Yielding and revenue management and that's been.

Evident in our results for a couple of sales since the closing and that's what that's who we lean on US we move forward.

Okay.

I guess asking that question a different way or like are you guys, keeping and rates steady or even increasing rates. Further groups that you are booking and 'twenty 'twenty two and the second half of the year because of your confidence around group.

The group business and the second half of the year is at higher rates than 19, and it's pure <unk>.

Supply and demand within that block.

Okay perfect. Thank you.

Your next question comes from the line of Steve Ritchie and SKU from Stifel. Your line is open.

Hey, guys excuse me good afternoon.

So Tom if we go back to that Youre Vegas commentary around the group business could come back and some material form us earlier in the middle of this year.

And I understand you have a significant secondary began and amount of more room nights booked at this point, but I guess the question is.

How many and on the I don't know if you can answer this but how many of these nights do you think will actually pan out and materialize, meaning the conventional group meeting takes place and those folks actually show up.

Yeah, and that's part of what patterns group does in terms of forecasting and managing the revenue is youre assuming that in.

In any environment and 100% of those room nights are going to ultimately show up the discount.

From.

What we would have been discounting and 19 in terms of expectation is and what would show up is larger.

But we think given what we're seeing in that.

T and casino in terms of that wave of.

Demand, we feel very good about where will be whenever that business does come back and Ernest.

And Thats irregardless of basically where airline capacity is at that point does that anything to do with it.

And our expert airline capacity in this market has been.

A lagging indicator when you've got the demand for people to show up.

More seats tend to flow to this market and that should in.

In particular would be the case in an environment where.

Airline performance is as it's been.

Okay got you and then and then Tom or Brent can you update.

Date us on where you stand today in terms of leverage targets or goals and the timelines around potentially getting to those and then.

Tom I don't want to I don't think we've talked about this and a while but the original 10 dollar free cash flow target is that still in play at this point.

Yeah, Steve I see you started to creep down to seven five or eight but I'm still at 10.

<unk>.

Yeah.

On the geologist.

I'm highly confident we will be $10 a share of free cash flow.

On the in terms of leverage and nothing has changed.

We have more leverage than certainly we anticipated going into the deal obviously a.

A function of the pandemic and we you should expect us to be as soon as we are generating.

Generating significant free cash flow again, you should expect us to be number one target us debt paydown and we fully expect to drive leverage and.

Sub four times on a gross lease adjusted basis.

And as we do that we will see.

Are we reaching a point of diminishing returns in the equity or do you push it further.

And we as you know Brett and I both come from.

Fixed income background, so we tend to be.

A little more conservative here anyway and.

And we recognize the benefit of the flexibility to be having less leverage provides and.

The wider potential equity buyer audience that it creates and we are going to get there and as soon as we possibly can.

Okay, great. Thanks, Tom I appreciate it.

Your next question comes from the line of Stephen Grambling from Goldman Sachs. Your line is open.

Hey, thanks.

About some of the upside that you've found and the initial synergies and this potential March to 40% where are the biggest opportunities being uncovered.

I mean, it's a whole different operating model Stephen and then it was before we've been talking about this.

Since reopening the marketing environment is entirely different the pieces of the properties that are.

Open are entirely different and.

Some of the most labor intensive pieces or the areas, where you were losing the most money are never coming back and layer on top of that we were in the middle of.

A combination in the merger that would normally lead to <unk>.

Synergies through reducing redundant capacity and Caesars was.

Certainly much heavier in.

On the corporate departments than we that we haven't been we have historically run and if you roll all that together, that's how we get to the margins. We expect we can get to.

And I guess, there's an unrelated follow up when you've seen this ebb and flow of customers and and restrictions book in Vegas and regional.

Properties.

How is the customer and that's showing up evolve and are you seeing new customers that are signing up on the rewards program or is that mainly existing customers and rewards program.

Okay.

Yeah, you've got.

Mix of both obviously given the size and.

And the effectiveness of the Caesars rewards system, we've seen a lot of.

On rated play come back, but we have seen significant increases in the under 35 crowd that unfortunately has more than offset by.

Decreases in me over 55 crowd and in terms of how it's evolved it's Ben.

A fairly.

And consistent kind of everyone moving at the same time, if you look at your segment or.

<unk> groups by our business by rated and unrated or by age cohort you've seen similar behavior in terms of how much they're down sensory opening and then.

When the restrictions tightened and then when we started to reopen again, they've kind of moved in lockstep.

Great. Thank you.

Your next question comes from the line of Chad Beynon from Macquarie You May ask your question.

Hi, good afternoon, and thanks for taking my question.

Tom I just wanted to follow up on your last remark there I believe.

You mentioned that.

The regional the non destination regional revenues were down 17% on the quarter, obviously, including markets with us with restrictions do you have a sense of what this was and periods and at properties, where it where there weren't restrictions or I guess more importantly and win.

This starts to ease and we kind of get get the vaccinations and.

Do you think this can be closer to kind of a flat to slightly down just trying to figure out what was intentional versus everything else that was going on in the quarter. Thanks.

Yes, the answer and short answer is the way you laid it out yes. If you took obviously Chad you know, we've got Atlantic City, Reno, and New Orleans in our regional properties, which.

Has heavy dependency on rooms.

So those are the properties that were most impacted.

In the quarter in terms of.

Restrictions and.

And if you went to our true regional assets. If you were trying to compare us to say.

A pen or a boy to regional you'd say, yeah, we would have been around flat in revenue and EBITDA expansion would have been several hundred basis points ahead of it to 400 basis points I pointed to earlier.

Okay, perfect, Thanks and I.

I know in the past, you've said that you're not interested and.

And he assets outside of the United States.

Can you just confirm that and then also give us an update on where the Korea project sits and if theres any additional capital that needs to be funded from from your side of the relationship.

So we still have the Windsor management contract and.

In Ontario.

We would expect that we're going to continue to operate that you should expect that over time that will be the extent of our non U S business.

Ask again, the second piece check growth.

Correct.

Korea, Yes, Korea has gone we.

Sold it for some Bbq pork.

Sure.

And we're completing that we felt we saw hit back to our partners, where we have no more commitment we're out alright and there's.

And with many more.

Okay. Thank you very much appreciate it.

Yeah.

Your next question comes from the line of Dan Go ahead, Sir of TB Morgan Your line is open.

Hey, guys. Good afternoon, and thanks for taking my question.

Tom you mentioned and that you've seen an uptick and the.

The younger unrated players similar to a lot of your peers I guess to what extent if any have you been able to kind of get them on the Caesars rewards program and maybe it starts to cycle them through to maybe your sports betting our I gaming apps.

And any color there would be helpful.

We're pretty good at.

And.

And when people come to visit and signing them up and some of them up to our program. The you know the and.

They're 35 crowd has not been any different than any other new cohort that shows up at the property. So we've converted them to Caesars rewards remember that Caesars rewards is not yet connected to sports and online since we have not closed.

The William Hill transaction, so it's not yet.

And frankly as seamless as it will be a few months from now in terms of moving customers out of Caesars from Caesars rewards on to Rs.

Got it.

Alright, and then just kind of switching gears in terms of market access for sports betting.

You know your regional gaming footprints, obviously, among the largest of your peers can you remind me of some of the outstanding access agreements, maybe you have and I know you announce once a day, but maybe if you could put some numbers around book ending this opportunity as it relates to our high margin revenues here.

That's another one I should wait until after we close.

And now you're talking about the access agreement sales that we're doing.

Right and so yeah.

Yeah, I mean, let us get too.

As soon as we close William Hill, we can get some data out on that day.

Trying to stay within the four corners of what's been filed there.

Alright understood. Thanks, so much.

Your next question comes from the line of Daniel.

Loop capital your line is open.

Hey, Thanks for taking my question.

Keeping it very simple Tom is it safe to conclude at this point that Las Vegas is now and now.

And as things stand today and recovery mode, and then just related to that is it possible to see a full revenue recovery and not necessarily EBITDAR, but revenue recovery on the strip, even if business travel and and convention demand and never fully return.

If business travel convention demand and never fully returns.

I think I think youre going to have trouble of getting back to 2019.

Revenue numbers remember that that group business.

Even though it's only 15% of our business, it's a big piece of.

Cash operating income in high end restaurants, and entertainment. So that's an important piece of our business, even though it's only <unk>.

15% of our business, it's important that piece of business.

For our peers and the market, where it's larger in.

In terms of.

Art.

I would describe it as we've been wandering in the best for.

Almost a year now since we started shutting down and <unk>.

You can clearly see the light shining through at this point and Las Vegas in terms of customer behavior just.

The people booking the pace of the booking and the fact that it's people actually planning trips in the future is a sea change from where it was in 'twenty and 'twenty.

And given our database and what we can mine here and we.

We feel very good.

Presuming there are no further public health setbacks, which.

Obviously is a big presumption and given what we've seen.

We feel very good that we've seen.

The bottom and Vegas, and and the business and that we're only going to keep getting better sequentially.

Okay great.

And then on the online gaming and sports betting side to the extent you can comment on this.

So draft Kings and fan dual.

Currently seem to be the clear number one and two players and in most markets with William Hill bet MGM.

And I guess, you can say barstool.

Even on their own in two states.

Sort of establishing themselves on the second tier and the market I guess longer term, where do you think you know within that second tier where do you think long term margins can settle on the I gaming and sports betting side not necessarily commenting about William Hill, specifically thanks.

I think youre looking at.

25% to 30% EBITDA margin business.

At maturity for.

Your top tier operators and the market.

Okay great.

And so much.

Your next question comes from the line of David Katz from Jefferies. You May ask your question.

Hi, good evening, Thanks for welcoming me on.

I wanted to go back to the online question first if I may and just.

Speakers high level and strategically as you're permitted to do.

But.

And as it is it a business where you believe you need to be and all of the available stage.

Obviously some of the larger ones its obvious where you have access and others, where you may not.

Do you need to be and all the states to be successful is that part of your definition.

I mean, it's part of our plan we have.

We have access.

And what we were in 15 states operating plus.

<unk> see it should be 20 jurisdictions by the end of this year, we have access to nearly 80% of the U S population and our system and you should expect us to be pursuing the opportunity everywhere we can.

Got it and with respect to just regional gaming again philosophically, we have so many discussions about sort of what the new regional gaming experience will be in a post COVID-19 world and I think it's easy for all of us to slip into <unk>.

A discussion in absolute terms were.

Margins are great and regional casinos, but.

There's nothing to eat you you know you need to lunch pallet.

And perhaps there's the other end of the spectrum, where we do cover operators, who happen to like their food offerings and lead with it and my sense is theres a reality that doesn't lie on either end of that spectrum and how are you thinking about that.

So this is something we talk about quite a bit your customers in the regional market.

As we started to point out.

On a five plus years ago that they show up for hours at a time.

It may be the case that.

That happens to coincide with.

When they want and need they may get hungry, while they're there and you can't have nothing but.

You don't need to lose.

Lose money.

And nearly certainly nearly as much money as this industry has lost feeding people.

I'm old enough to remember when.

No.

Casinos were only in Nevada, and New Jersey, and yet in those other 48 states everybody figured out how to eat dinner.

And once.

And once the casino is open and.

It became.

How do we feed them dinner and lets just given away for free.

Because god forbid they go stop at Mcdonald's on the way home.

We I can't speak for what others will do.

Gonna be smarter about where we're at and how we are in the food and beverage business.

And just make sure we're not bleeding.

No.

$3 million and every buffet and the country.

Hum.

We're going to figure out how to do it in a way that meets customer demand and maximize our profitability.

Alright, and it's not going to be something that is going to be a competitive decision.

Along the way right.

It's not going to it'll be a competitive experience with what everyone else is doing for the most part I am not concerned that I'm hamstring myself.

Competitively.

With my food and beverage offerings.

Got it thanks, so much appreciate it.

Okay.

Your next question comes from the line of Barry Jonas of Chili's Securities. Your line is open.

Hey, guys. Thanks for fitting me and just can you give us an update on the pompano development and with that any thoughts on the prospects of sports betting and Florida.

Hi, I'm on the Pompano development, we continue to work through.

On the planning and local zoning we are racing. This season, we are we have.

<unk> license that we can move to there has been litigation around that license, we would like to see if we can resolve that amicably.

But you should expect that everything that was.

That we've talked about in the past remains on the table, obviously I would've hoped it was.

Construction was in earnest.

Well in earnest at this point so the timing has not been.

And as quick as we'd hope, but the opportunity and the plan has not changed in terms of Florida sports betting.

Florida's and.

And interesting place every year.

And the legislative session starts your lobbyists tend to be Super optimistic about what they're going to deliver and then by the end of the session and they say why don't we just couldn't get anything done.

It's a complex.

Place to negotiate and you've got obviously, the Seminoles down there the commercial casinos.

Disney you've got Miami interest so.

And I think like other places the momentum publicly for wanting to be able to bet on sports is no different and Florida than elsewhere is that enough to break a log jam this year.

I would probably bet no just because that's what floor and Florida has shown me in the past, but I'm hopeful I'll be surprised.

Got it and then just while we're at any thoughts on Jackson.

Texas is that's another state where.

I'm highly confident there will be significant public interest.

Can you get through the legislature, there with all the various competing bodies the odds would be against you.

And given what's happened there historically, but were working there as well.

Really appreciate it thanks Tom.

Thanks Barry.

Your next question comes from the line of Shaun Kelley of Bank of America. Your line is open.

Hey, thanks, everyone.

Maybe just one question for me, Tom because it sort of and I think as you know and a bunch of different ways, but if I was going to think about it pretty simplistically four.

By the fourth quarter is is it possible to basically get back to historical run rates of revenue in Las Vegas.

Without citywide compression you've done such a good job on the casino block.

And clearly you got the group piece and that's an in house number so not thinking about business travel, but just if you don't have compression and the market.

Could you just based on the mix shift that you've already done kind of get pretty back to what it looked like normal without that or do you need the market to go along here.

I think in terms of EBITDA and not revenue.

So.

I can't conceive of a scenario where.

We're testing too.

2019 revenue and the rest of the market has not lifted with us.

I think that.

We have the benefit of.

The rewards program.

Helps us from a revenue management standpoint, but if.

Pick your property is running at 55% of occupancy because groups aren't here.

It's unlikely we're going to be running at 96% occupancy, which was the pre pandemic number.

Got it thank you very much.

I am showing no further question at this time I would now like to turn the conference back to Mr. Tom week.

Alright, thanks, everyone and we will talk to you next quarter.

Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.

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