Q4 2020 Red Rock Resorts Inc Earnings Call
Good afternoon, and welcome to Red Rock Resorts fourth quarter 2020 conference call all participants will be in a listen only mode. Please note. This conference is being recorded I would now like to turn the conference over to Steven Coody Executive Vice President Chief Financial Officer, and Treasurer of Red Rock Resorts. Please go ahead.
Thank you operator, and good afternoon, everyone. Thank you for joining us today on Red rock resorts fourth quarter and full year 2020 earnings call.
Joining me on the call today are Frank and Lorenzo Fertitta as well as our executive management team.
I'd like to remind everyone that our call. Today will include forward looking statements under the safe Harbor provisions of the United States Federal Securities laws.
<unk> results may differ from those projected.
During this call. We will also discuss non-GAAP financial measures for definitions and complete reconciliation of these figures to GAAP. Please refer to the financial tables in our earnings press release and form 8-K, which were filed this afternoon. Prior to the call also please note that this call is being recorded.
Before discussing our financial results, we'd like to take a moment to thank all of our team members, who helped the company through a very challenging year.
For the past 40 years, we have always understood that our most important asset is our team members and 2020 only exemplified their importance to both our organization and our customers and because of this we continue to rollout our focus on family initiative to all of our team members to recognize the contribution that every team member has made for the company a few highlights.
What we have accomplished to date.
Pay team members, a 100% of pay throughout the closure, including full medical dental and vision.
Offered free medical dental and health benefits to all of our team members, making less than $100000 per year.
Opened two medical centers with free office visits free generic prescriptions and lab services for team members and their families.
Implemented pay for performance and competitive pay rate adjustments totaling approximately $10 million, which will positively impact the vast majority of our team members.
And lastly contributed over $8 6 million for our team members for one K retirement program.
These initiatives together with a number a number of other positive changes were designed to enhance the long term health well being and financial security of our team members and their families as well as give us the ability to retain and recruit the best team members and make Red rock resorts the employer of choice in the Las Vegas Valley.
With that let's take a look at our fourth quarter results.
On a consolidated basis reported net revenues of $343 4 million down from $468 million in the prior fourth quarter adjusted EBITDA for $150 5 million up nine 4% from $137 6 million in the prior fourth quarter and adjusted EBITDA margin increased 1397.
Basis points to 43, 8% for the quarter.
With respect for our Las Vegas operations, we reported net revenues of $316 2 million down from $437 9 million in the prior fourth quarter adjusted EBITDA of $137 1 million up five 5% from $129 9 million in the prior prior fourth quarter and our adjusted EBITDA margin increased.
<unk> 1368 basis points to 43 four per cent for the quarter.
When reviewing our fourth quarter Las Vegas performance on a same store basis, which excludes our foreclosed properties, Texas station, yes to Rancho Fiesta Henderson and Palms Casino resort, we reported net revenues of $311 8 million down from $328 7 million in the prior fourth quarter adjust.
EBITDA $142 million up 16% from $122 4 million in the prior fourth quarter and our adjusted EBITDA margin increased 832 basis points to $45 five per cent for the quarter on.
On a same store sales basis, both adjusted EBITDA and EBITDA margin represented our best fourth quarter performance in the history of our operations.
Now, let's turn to our full year performance, which was severely impacted by the 79 day statewide shutdown all non essential businesses, including casinos in an effort to reduce the spread of COVID-19.
Business, which followed an continue through today.
On a consolidated basis, we reported net revenue of $1 2 billion down from $1 9 billion in the prior year adjusted EBITDA of $368 5 million down from $509 million in the prior year and our adjusted EBITDA margin increased 375 basis points to 31, 2% for the year.
With respect to our Las Vegas operations, we reported net revenues of $1 1 billion down from $1 8 billion in the prior year adjusted EBITDA of $335 1 million down from $472 million in the prior year and our adjusted EBITDA margin increased 373 basis points to 36% for the.
Year.
During the quarter, we continued to prioritize free cash flow converting 76% of our adjusted EBITDA to free cash flow generating $114 7 million of free cash flow were 98 per share in the fourth quarter.
This brings total free cash flow generated by the company from June through year end to $259 1 million or $2 21 per share with virtually every dollar going to pay down debt and improve our financial flexibility as we look to emerge from the pandemic.
Taking a look behind the numbers we saw a strong October followed by a seasonally slower November and December which was further hampered by the both the typical election year slowdown and by the implementation of 25% capacity restrictions by the government in an attempt to slow the spread of COVID-19.
These additional headwinds the overall customer trends, we saw in the fourth quarter were consistent with trends we've seen since our reopening in June as we continue to see strong visitation from a younger demographic increased spend per visit more time spent on device plus the slow but steady return of our core customer.
These trends continue to be offset by higher COVID-19 mitigation cost cash.
Costs associated with our closed properties and the continued government mandated restrictions on our business. While we were hoping that the worst of pandemic is behind US. We expect these offsetting factors to exist at least over the short term as we continue to navigate an uncertain Las Vegas economy moving forward.
Okay.
On the expense side the company continues to benefit from the actions management took.
As I mentioned for the management team took during the closure and since our reopening.
For the combination of streamlining our business optimization, optimizing our marketing initiatives and renegotiating a number of our vendor and third party agreements. We continue to expect to achieve over $150 million per annum of cost efficiencies as referenced in prior earnings calls these.
These initiatives have enabled the company to achieve and sustain higher profitability and drive more free cash flow generation going forward. In this respect we are stronger as a company than ever before.
Now, let's cover a few balance sheet and capital items.
Companys cash and cash equivalents at the end of the fourth quarter for $121 2 million and for its amount of debt outstanding at quarter end was $2 9 billion.
In the fourth quarter, we paid down $102 4 million.
And since a reopening in June we have reduced our net debt levels by almost $260 million from a peak level of $3 1 billion.
Since the close of our fourth quarter. The company's consolidated subsidiary station Casino has issued a conditional notice a partial redemption of 5% senior notes due 2025.
The company anticipates, a $250 million principal amount of senior notes will be redeemed.
The company intends to use cash on hand, and borrowings under its credit facility to pay for the redemption premium accrued and unpaid interest and any fees or expenses related to the redemption.
The transaction is expected to close on Monday February 22nd is expected to save the company approximately $10 million per annum for the life of the senior notes, while further deleveraging the balance sheet and increasing our financial flexibility.
Capital spend in the fourth quarter was $5 1 million, bringing our total 2020 capital spend to $58 5 million as mentioned on our previous earnings call. We anticipate our 2021 capital budget to be between 65 and $75 million.
Finally, an update on our two native American gaming projects.
Okay, Great and casino resort, we reported management fees for the fourth quarter of $24 8 million, an increase of 24, 9% from $19 9 million in the fourth quarter of 2020.
We ceased managing a great on February five seven years and three months after originally opened.
We are very grateful to have had the opportunity to manage the grading and we're very proud of how successfully the facilities performed under our management.
As we have noted before we believe the tolling positions in the management agreement, which were triggered as a result of the pandemic should have resulted in the extended management term even beyond February 5th and we have initiated the dispute resolution mechanism in the management agreement to resolve this question.
Regarding north work based on the favorable California Supreme Court decision reported last quarter. We've continued to ramp up our development efforts on this project and continue to expect to have a shovel in the ground in the second quarter of 2021 with construction expected to take 15 to 18 months.
We're continuing to work through the planning and budgeting phases of the project and when complete we expect this project to be over 213000 square feet, including almost 100000 square feet of Casino space. Initially include 2000 class III slots have 40 table games and two standalone restaurants, as well as a food Hall concept.
We are excited to begin the development of this very attractive project on behalf of the North rock tried and we will be providing more detail once available.
While Las Vegas has been and continues to be going through some very challenging times, just finding a light at the end of the tunnel.
Once we are on the other side, we believe that the favorable supply demand dynamic the positive long term trends in population growth and the stable regulatory environment all serve to support our long term view that the Las Vegas local market is the most attractive gaming market in the United States.
And with our best in class assets and locations unparalleled distribution and scale deep organic development pipeline and our status as one of the few gaming companies is still owns it its all its real estate and operating assets.
And uniquely positioned to thrive in this market.
Lastly, we would like to recognize and extend our thanks again to all of our team members for their hard work and to our guests for their support throughout this pandemic.
Operator. This concludes our prepared remarks today and we are now ready to take questions from participants on the call.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys have had anytime you question. That's been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Okay.
Our first question comes from Joe Greff with J P. Morgan. Please go ahead.
Good afternoon everybody.
We heard from other one other regional not necessarily the Las Vegas local operator.
That January was pretty encouraging from the perspective of the 55 years and older crowd can you.
You talk about you Frank Williams, what youre seeing in that demographic for us.
Quarter to date.
And then to what extent are you seeing a continuation of.
Tighter restrictions in California benefiting you.
Here in early early part of 2021.
Yeah.
Hey, Joe Frank.
Well we are.
Since we reopened in June.
I think we have surprisingly seeing a nice increase from a younger demographic, especially.
Sign ups in our rewards program to Crave these direct marketing relationships with our younger profile.
We have seen I think up.
Up until very recently.
65.
Europe, plus demographic had been fairly shy about coming back from facility, but I think it would go along with it.
While you were talking about that as the vaccine has continued to ramp up and rollout. We are cautiously optimistic that we're starting to see the 65 plus demographic slowly returned back to our facilities. So I think we could be a sweet spot.
Not only having new younger demographic.
<unk> profile that is coming through our facilities for giving the return of our older tried true very loyal customers back for facilities. Joining us is consistent with the research. We've been doing is essentially saying that the 65 plus year old demo is ready to come back they're anxious to come back the vaccine is.
<unk> is kind of the key threshold, there, but I think the encouraging thing like Frank said is they seem to be in pretty good shape from a financial standpoint, because they just haven't been spending their money. There is a lot of disposable income there. So we're as Frank says constantly optimistic that things could be lining up pretty well.
Great and then are you seeing incrementally more and more traffic coming in from California.
Latter part of my question.
Not anything that really sticks out.
Really worth.
Looking about I mean other than the fact that just as I'm sure you've seen that.
The housing market continues to be very strong here there is continual migration.
From California, and even from other states surprisingly like Washington, and Oregon, and Illinois as well. So the migration population migration story is probably is well intact as it's ever been honestly, we've been doing this for a long time.
Okay.
Thank you very much debt.
Our next question comes from Carlo Santarelli with Deutsche Bank. Please go ahead.
Hey, guys. Thanks for taking my question EBIT.
In your prepared remarks, you, obviously talked about the cadence about other strong October and.
What has generally been seasonally softer in November and December periods, just wondering.
As you look at kind of the wage.
For any evidence you're potentially seeing some of those stimulus dollars getting back into the market and whether or not that that's provided any.
Boost for the business relative to kind of the November December period.
Yes, Carlos I'm going to refrain from kind of giving Q1 guidance for talking about Q1, but that said as you know the stimulus checks rolled out in January and it's just in general in our view that anytime you do stimulate an increase to.
Disposable income.
Las Vegas folks in the valley, it's good for our business.
Okay and relative to November.
<unk>.
Sorry about kind of a yes.
Yes, just relative November was kind of a double whammy red.
Free for years, we have the big election, we tend to see a bit of a two or three day.
Days, where people are focused on something else and things start to come back.
And back to normal and I think in this situation like I said it was a double whammy you had the election and the right on the heels of the election, the governor came out and put further restrictions on our business and typically when we've seen is when the government comes out and does this people get a little skittish, they maybe don't get out of it.
Their normal patterns are not going to restaurants are not going out and it takes them a little longer to kind of creep back into their normal patterns and that's kind of what we saw this quarter was the 25% capacity limitations that.
We saw it come into place from November.
Hopefully with the fact that the <unk>.
Number seem to be going in the right direction relative to.
The COVID-19 impressions hospitalizations and deaths.
Factors that are monitored in the Las Vegas market, we're hopeful.
Near future, we will be able to return to higher occupancy levels are for service.
Great. Thank you guys and then if I could just one follow up obviously you guys over the last two quarters at least.
And acknowledging that there is.
Still uncertainty out there.
Cognizant of the fact that you're running a company here and not running for stock.
Youre doing 100 billion plus of free cash flow of three.
The 100 million plus of free cash flow and <unk> done a great job paying down debt.
How do you think about kind of 2021, all things equal if the situation is as a base case would be right now.
We continue to generate those types of numbers.
As you think about kind of.
Potential future developments relative to taking leverage to a place where you ultimately want it to be a room for.
Reinstating the dividend and other other things of that nature.
Yep.
So for all 2021, I mean, I think let's start with where it all begins from margin right. So when I think about margin.
As we said in the third quarter as you said, we just delivered in the fourth quarter feel very comfortable that we're going to be able to generate free cash and generate higher margin and for all the reasons that you know of as you know our business very different from the strip is predominantly a high margin slot business.
We also are carrying a significant amount of cash to the tune of almost $20 million a year in COVID-19 mitigation costs that we expect to roll off over time. The closed company costs also burdened almost $16 million to $17 million of Covid restrictions, which we expect to roll off over time and I think we're hopeful that as the vaccination rolls out tourism will return back to normal.
Our hotel and convention segment is very.
Very profitable to us that's probably.
No.
Segments that have been impacted or probably work.
Essentially another $50 million.
The EBITDA that we're missing from from the Hotel convention.
Movie theaters.
Things like that so.
As we look towards the future vaccine rollout and things normalize we think that we have for more upside in cash.
For a lot of kind of really hammer on what your free cash flow question.
Again, while we don't give EBITDA guidance plug in your estimate you know, we're not going to pay taxes were about $383 million of Nols and about five or $6 million of watching credit sitting there ready available. We don't expect a working capital interest expense just given our debt profile should be significantly lower probably 110, 115, and we've already given capex guidance. So you can just see.
<unk>.
We're on pace to have continue to generate free cash flow.
When you go through those numbers, obviously, we're generating a substantial amount of free cash flow on and the focus for us as we mentioned the last couple of quarters, obviously has been responsible allocators and great allocators of capital. So our priority is to.
Delever the balance sheet.
But we're either going to return capital to shareholders through the Paydown of debt, we have a plan, where we can buy back stock.
Honestly, we can't pay dividends and then we have multiple pieces of property here in the Las Vegas Valley and if you go back and look historically at the projects that we've developed from the ground up we've generated roughly about a 20% IRR. So.
We feel pretty book pretty good about kind of where we stand relative to free cash flow with with multiple ways to increase shareholder value from where to do it.
Great. Thank you guys.
Our next question comes from Barry Jonas with true Securities. Please go ahead.
Hey, guys.
How are you thinking about the closed properties here, whether that's timing on reopening them or any other options.
Look I think we have tried to take a very disciplined approach.
To this since we reopened in June the reality is we have more restrictions.
Our capacity now than we did when we reopened.
On June 4th and so we're going to continue to be very disciplined and we want to be in a position that when we reopen any additional properties that we're going to know that it's going to be positive and accretive to our overall cash flow.
And we really break that down into two buckets. So I think the palms is very.
Oriented towards the tourist market visitation to Las Vegas.
Giving that business to return to normal and other local properties, we're going to continue to look at how the older demographic response, given the vaccine.
Business back to normal before.
Do anything unless we're certain that we can free cash flow positive.
Great and then just given the strong free cash flow profile you guys are exhibiting.
Is there less of an emphasis on selling some of your unused land banks any properties currently being marketed for sale right now.
Well, we're constantly evaluating how we maximize.
Shareholder value and we own.
Significant number of gaming entitle real estate development side. So I think our primary focus right now is.
On going to be on Durango, moving forward book.
We're always looking at how we can.
We monetize things.
Great shareholder value, so everything's on the table.
And it's all value related.
Barry we can I think we can monetize a number of these non returning assets and still have an extraordinary growth profile.
Okay.
Number of growth opportunities.
We're looking at not only.
Some of the larger sites, but but.
Pieces of existing sites as well that don't necessarily take away a development opportunity sort of get you get the best of both.
Great. Thanks, that's really helpful. Thank you.
Yeah.
Our next question comes from Stephen Grambling with Goldman Sachs. Please go ahead.
Thanks. This is perhaps a bit of a halt some of those questions on maximizing shareholder value and you had referenced the historical return on invested capital I guess, how does the permanent reduction in cost that you've identified impacts how you think about the returns on potential development opportunities.
Well I think I think it's a combination of.
Some of the costs, we've been successful at taking out of the business, but also over the last gosh, what Frank 10 years as we've developed a number of native American gaming opportunities looked at some of the properties. We built historically as far as when we move for we feel like we're going to be able to.
Build more for Robert easier and be significantly more efficient.
Less overall square footage.
<unk>.
And really architect these things so that we can build them to generate.
Similar margins to what we're driving at some of our most.
Successful properties currently within the portfolio so.
Really kind of taken a very focused approach and as we move forward and to build these build these out obviously more information to come on what our net development will be but really taking our time to make sure that we're developing the most efficient box that we can development at the same time.
Get the project hard bid get a GMP, making sure we fully understand what the what the costs going in are going to be so that we can make sure that we're delivering the returns.
And then from two are then we need to.
Okay.
And then as a follow up I think it was Joe's question I may have missed this in your answer but I think you referenced the golden window of both younger and older customers coming into the location is there any color you can provide on retaining that younger cohort, maybe what percentage of customers converted to rated play and their behavior changed at all over the course of kind of where you.
For opening remarks.
<unk> restrictions come back.
I mean, I think throughout the quarter and who actually since reopening we've been quite engaged in terms of converting unrated play to two carded play and so our new sign up program has been quite successful in fact in the quarter Q.
Q4.
Say over 60, approximately 60% of new sign ups were under 40.
Okay.
That's helpful. Thank you.
Yeah.
Our next question comes from Steve <unk> with Stifel. Please go ahead.
Yeah, Hey, guys good afternoon.
So Frank you talked about this a little bit already but I wanted to try to dig into it a little bit more and those those restrictions that are there in places point in terms of capacity.
Restrictions have you had or you guys had any discussions with.
The government the government there in Nevada about what they are actually looking for.
When they might start to reduce those capacity restrictions and I guess, what I'm getting at here is this something that could happen sooner rather than later or is this something that still could be a.
Six months down the road kind of process.
I'm not going to get over my skis relative to the governor and what the governor's decisions are going to be relative to the restrictions, but I can tell you that all of the indicators.
They have discussed and then looking at seem to be going in the right direction. We know that vaccination is rolling out.
Ramping up.
And so I don't want to get over my skis with it but I am hopeful.
Thanks for one of the right direction I think we are seeing at least light.
At the end of the tunnel at this point, whereas going back June July August September where there wasn't.
A lot of things to be looking towards.
Indicators are that we're in a better place than they were.
Even though we have tighter restrictions and we have overall, we're hopeful that they'll return to normalcy.
Okay got you and then the second question.
I guess I wanted to get your updated thoughts around your view.
Around sports betting and obviously you've seen a lot of your regional peers go down the debt.
Sports betting path and clearly it's been up it's been positively received by investors, but is that something that you guys sit there and kind of scratch our heads by some of the some of these moves and some of these some of these equities or.
Is this a potential opportunity for you down the road and something you.
Still might explore.
Look we've been.
And the sports book business.
From 19 Navy everyone.
I think we've always been one of the first movers when it came to.
Phone betting.
Mobile sports Wagering, we've been doing now for about 10 years.
In a very good business for us from.
I believe that we're the market leader.
In this marketplace here.
We expect to continue to be it's been a good business for growing business and a profitable business for us.
We just scratch our heads when people like to lose money, because we'd like to make money.
Overall, it's a good business for us.
We expect to continue to be the dominant player in the market.
Yes, we're always going to look at various opportunities. We're continuing to study things obviously with the valuations that are being attributed to a lot of these opportunities you have to pay attention to that I'd like Frank said I mean.
If we were to embark into another state or another jurisdiction, we would only do it if we felt like we could do it in a profitable fashion, we wouldn't go into a crowded market and try to.
The way in and essentially buy share just doesn't fit with our overall <unk>.
Operating philosophy, so we're taking a bit of a conservative approach to that but like Frank said, we've been in the mobile sports betting business for over 10 years now, it's a very profitable business for us and our number one priority is maintaining that position here in Nevada.
Look the good thing for US we have I think probably for the most robust database in this marketplace, 90% of the adult for Las Vegas.
Within five miles from one of our <unk>.
Our locations, we know other customers.
And we think we're well positioned.
Okay, great. Thanks, guys appreciate it.
Yes.
Our next question comes from Shaun Kelly with Bank of America. Please go ahead.
Hi, good afternoon, everyone.
Maybe just one because I think a lot's been addressed here, but if we look at the model it looks like sort of just your non tax operating expense cadence in the quarter was very very flat sequentially. So fourth quarter relative to third and just sort of thinking big picture I mean, what's going to change that youre sort of run rate of expenses.
Move into 2020.
We move throughout 2021 is it going to be.
Reopening of some of those amenities that you mentioned that maybe hotel Convention center movie theaters or is it more really the step function would be with the reopening of some of the clothes properties.
Are you talking about margins is that we referred to are we talking about yes, I mean, the margins the output I'm really talking about the operating expense trajectory of just like basically labor and marketing costs combined.
Yes, I think it is.
Really all of the above so maybe just start you start with if you start bringing on amenities, namely as restrictions start what youre getting lower and we start bringing on some of our Bob loss leaders that Frank talked about our theaters.
Our hotel our catering these are incredibly profitable high margin business. So we're only going to bring those on when we make money. So we're happy to add labor in those those instances and those actually should be from a margin perspective margin neutral to margin and here I think the hotel catering movie theaters.
For those should be neutral to beneficial.
The margin.
And the business there.
Then you have.
For the ability to hopefully have our 35 plus customer.
Customer return.
<unk>.
Of course, we're not going to want to open another property unless we believe it's going to be accretive to overall EBITDA.
Very focused on margins, we're very focused on profitability and margins and like Frank said I mean, the movie theaters are essentially 100% flow through.
When those come back on.
We are very focused on.
Also trying to capture as much of the business from our closed properties for existing facilities as the chair of interest.
Literally on the book.
Agenda every single week.
No.
What do we have what are we missing how do we get the customers and through our open facilities.
We're historically planning of the closed facilities, so as far as amenities that are currently closed.
That could be reopened I mean, theres really nothing that I don't think that we see that should should be degradation to our margins like for instance, we don't have any plans to open the buffets anytime soon in fact, that's right now not on the table. So obviously that would that would hurt our margins. We're only looking to bring on amenities that would be any.
Hanson or at least neutral to the margins as they exist today.
That's great I appreciate the color.
Sure.
As a reminder, if you have a question. Please press Star then one day be joined the queue. Our next question comes from Chad Beynon with Macquarie. Please go ahead.
Hi, good afternoon, Thanks for taking my question.
It's a small part of the business book can you talk about any I guess meetings groups convention outlook, maybe for the back half of.
Of 2021, or just conversations that you've had with groups that are are encouraging any any change versus the prior quarter.
Alright, Robert throwing things at me.
For me.
Meeting Convention standpoint, as you know we're still under the.
Standard restrictions from the government. So the first thing first is getting that lifted.
We are seeing from groups and through discussions are there are some green shoots in the back half, namely Q4.
Thank you right now Q2, and Q3 are somewhat of a wash, but what we are seeing if you kind of mega drop off line in the sand same time last year 2022, right now is showing some green shoots and we are developing traction across our property. It's mainly mainly from a meeting standpoints, mainly social business, there's a lot of delayed weddings in the market.
Place.
So there is a it's mainly things like that versus for instance, like big corporate business or anything like that.
Great. Thanks.
And then for north for from a cash outflow standpoint could you just remind us how this works I believe you make pre construction advances to the tribe and then youre going to seek.
Traditional development financing, but could you just kind of remind us how that works in terms of money out the door and that I believe when the property opens you get it back thanks.
Yes, that's usually a negotiation between the lenders the tribe and the management team. So yes, we have outlaid a significant amount of money to the tune. If you include interest about $60 million to $63 million.
We'd like to get as much of that back in the initial financing as possible, but that's not guaranteed.
Thank you very much.
Our next question is a follow up from Barry Jonas with tourists Securities. Please go ahead.
Hey, Thanks, I just had a follow up on sports betting I wanted to get your view.
On the prospect of Nevada at some point reversing its in person registration requirement.
And any thoughts on how impactful that can be for you.
I mean, it's a great question.
It is somewhat important to us.
Given the fact, we have 16 locations and more conveniently located at <unk> 90 per cent of the Las Vegas populations from I guess familiar customer AML exactly.
All of their book.
We believe in person registration as an important aspect for the business.
That said Barry if it if it happened to go the other way.
And we do have the deepest database, we have customers that come in for to seven times, a month and as Frank said this business is about developing personal relationships and there is no one better positioned in the value of a personal relationship with a trusted that's right and we do think that there is there is value creation. When you have land based casinos, along with an online channel.
And I think probably over time youll see that in some of these other markets as well there is a benefit to having having to land based and the database.
And then the online all put together so we'll see.
Great. Thank you.
Mhm.
This concludes our question and answer session I would like to turn the conference back over to Steven <unk> Executive Vice President and Chief Financial Officer, and Treasurer of Red Rock resorts for any closing remarks.
Well. Thank you everyone for joining the call when we look forward to talking to you about 90 days take care.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.