Q4 2020 Bally's Corp Earnings Call
Good morning, and welcome to the Bally's.
Fourth quarter 2020 year end earnings conference call. All participants lines have been placed in listen only mode to prevent any background noise for this.
The cause your remarks, there will it be your question and answer session. If you would like to ask a question at that time of please press star followed by the one on your Touchtone phone.
Now I'll turn the call over to Craig Eaton Executive Vice President and General Counsel. Please go ahead.
Good morning, everyone and thank you for joining us on today's call by now you should have received the copy of our Q for full year 2020 earnings release issued earlier. This morning, if you haven't the earnings release and presentation that accompanies this call are available in the Investor Relations section number of Webster.
Right.
Www Dot bally's dot com under the news and events and presentations tabs.
With me on today's call of George Company of our President and CEO, Steve Capp, Our Chief Financial Officer, Mark Chris The Fawley, our executive Vice President of strategy and operations.
The old Giuliano are marketing officer, Joe Mcgrail, our Chief Accounting Officer, and Eddie the Danya, our vice president of strategic transactions and interactive development.
Before we begin we'd like to remind everyone. The comments made by management today will contain forward looking statements. These forward looking statements include plans expectations estimates and projections that involve significant risks and uncertainties. These risks are discussed in the company's earnings release and the SEC.
Islands.
Actual results may differ materially from the results discussed in these forward looking statements.
During today's call management will refer the certain non-GAAP financial measures reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release, we do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability.
For checks special charges.
Certain expenses.
Today's call is also being broadcast live on our Investor site and will be available for replay shortly after the completion of this call.
I'll now turn the call over to George George.
Well, thank you Craig.
Good morning, everyone.
Thanks, very much for joining us we're extremely excited to take this time to recap the fourth quarter and 2020 as a whole and provide some additional color on several of the recent announcements that we've made.
Since our last call. We have continued to make significant progress across our strategic growth initiatives. We have a lots of discuss so we'll get right into it.
I want to start by commenting on the incredible transformative year 2020 was for the company.
Through the various strategic acquisitions and partnerships that we have announced we continued our evolution from a single property operator in Rhode Island.
The a leading national player.
Soon to be 15 casino properties across 11 states the significant mobile and online presence. The primary goal is to continue to work to become the premier truly integrated Omni channel U S gaming company with a b to B to C business model and we feel that we've taken the necessary steps to best position the company to achieve that target.
Yeah.
The start we have continued to adapt and adjust to what for a very dynamic and unpredictable market conditions as the result of the COVID-19 pandemic.
Period of time this year all of our properties for shut down and of course.
Evidence for the CDC guidelines, we took this time to evaluate our operations and we believe that many of the efficiencies we were able to realize as a result of the shutdown for sustainable over the long term and will result in improved profitability for our properties going forward.
Well, we had been operating at some level of still limited capacity across the entire properties in the third.
In early fourth quarter, the second wave of Covid restrictions for supposed to close our twin River Casino Hotel.
And typically the casino hotel in Rhode Island for three weeks between November and December impacting our fourth quarter results notwithstanding the shutdown market indications and preliminary results show markedly stronger consumer demand in January and February were not impacted by weather, including the Rhode Island.
Operations as both properties in that state are now operating 24 seven.
At this point in time, we're pleased to have all of our properties across the portfolio of open and operating with comprehensive health and safety protocols.
In close consultation with state regulators.
Officials in local jurisdictions as.
As the reopening process progressed.
Progresses, the cros are brick and mortar locations coupled with the vaccine rollout. We believe we'll be able to operate the closer to the historical operating levels and we are confident they will continue to benefit from a strong rebound in demand.
That's the IV deeper into our quarterly results overall revenue for the fourth quarter of 2020 decreased nine 4% for $118 $1 million from $134 million in the fourth quarter of 2019.
In addition to the impacts from the Rhode Island closures, the various state travel and capacity limitations due to COVID-19 revenue of at the hard rock Biloxi was negatively impacted by the effects of the hurricane Peter.
In late October and we were forced to close that property for three days for damage repairs.
The decrease in revenues from <unk>, partially offset by the incremental revenue is generated from the recent acquisitions of casino Casey The casino Vicksburg, which was acquired on July one 2020, the Bally's Atlantic City Hotel and Casino, which was acquired on November 18, 2020, and the El Dorado Resort Casino Shreveport, which was acquired on December 23rd.
One of 20.
We ended the fourth quarter with adjusted EBITDA of $21 2 million.
Increase of $19 2 million from 47, 6% from the same period in 2019.
The impacts from business disruptions of already mentioned it was also very encouraging signs in the fourth quarter.
None more than so.
The in Kansas City, where our second quarter of ownership and our first with our system is fully online and marketing calendar in place. The property had its strongest operating fourth quarter since they began tracking in 2000 and for.
This is being driven by our execution of a more aggressive marketing effort focus on player relationships and the early results are very encouraging.
And to the marketing campaign since closing the acquisition in July we've begun to implement of redevelopment initiatives in Kansas City to recapture customer segments that were losses over the last several years, while enhancing customer offerings and amenities.
Once completed our new land based facility for the KC will house all of our non gaming activities and include branded restaurants for future sports book and retail outlets in the link the existing parking structure. The casino to provide a stronger sense of arrival and an overall better customer experience.
If you look at the other properties across our portfolio, we have a proven history of transforming locations for the better in Q4 as proof of the strategy with confidence the Kansas City residents, who will see the same type of improvements and impact the casino Casey.
The properties, where we continue to operate with less COVID-19 restrictions, notably in the South East segment and Dover, We continue to mitigate the impact of the revenue reductions by implementing operational efficiencies the res.
<unk> positive impact on margins is a notable continued the trend since reopening from the pandemic margin improvements were primarily driven by labor savings reduced marketing and promotional spend the reduction and lower margin amenities.
Another key impact for Q4 results was Atlantic City.
Since closing the acquisition of Bally's Atlantic City Hotel and Casino in late November operations were impacted by the combination of seasonality year over year revenue impacts due to COVID-19 restrictions.
Every complicated methodical decoupling from the legacy Caesars I T systems, and Caesars reward program, which was largely completed in mid February.
Negatively impacted fourth quarter, adjusted EBITDA by $5 $9 million. It should be noted, though the Q4 and Q1 for traditional loss, making quarters for the property even without the complicated factors I. Just mentioned we believe these impacts will begin the <unk>.
Dissipate in the second half of Q1, and see a path to profitability as we move into the historically more profitable Q2 Q3 time periods.
Additionally, we continue to execute on our integration and strategic plans for Bally's AC on the targeted basis were greatly improving the property the customer experience, including a phase of hotel room refurbishment and the addition of several new amenities, including new and robust food and beverage offers.
These capex projects will be spaced out over multiple years, starting early this year, the minimize any customer disruption.
We also successfully opened of temporary Pittsburgh location within the Bally's Atlantic City property from a previously announced partnership with Sandal and have begun work on a permanent location. We're very excited to expand our relationship with the sandal, adding a robust market the Atlantic City.
As we have discussed new Jersey represents extremely attractive market opportunity.
<unk> with the sandal is just the latest announcements involving sports betting and gaming of the state where required three sports betting and five other union skin. This builds on our partnership with Twitch bet. The.
The sports Entertainment sports trade and the shore and.
And the square bet, all of which are accretive to earnings and have unique elements to the cutting edge, New Jersey mobile gaming market.
Now I'll briefly comment on some of the other major achievements in 2020.
Notwithstanding the impact of COVID-19 pandemic, one of our industry. We continued to advance our disciplined portfolio diversification strategy opportunistically expanding our regional presence through accretive transactions in total we closed on an announced 10 property acquisitions in 2020, which will expand our presence the 15 properties.
Across 11 states once for pending acquisitions are completed we closed on the acquisitions of seven casinos three in Black Hawk, Colorado.
KC, Kansas City.
The Missouri Lady luck casino in Vicksburg, Mississippi, Bally's Atlantic City in Atlantic City, New Jersey.
And the Eldorado Shreveport, and Shreveport, Louisiana.
In addition, we expect that of previously announced acquisitions of the Mont Blue Resort Casino in Spa, The Lake Tahoe, Nevada tumors Casino Hotel in Rock Island, Illinois, and the Tropicana Evansville in Evansville, Indiana for.
All close in the first half of 2021 pending regulatory approval.
In early November we acquired the iconic valleys brand from Caesars Entertainment the rebound granted the company as valleys Corporation with the new ticker B, a L Y which became effective on November 9th 2020.
Many of you know the Bally's brand has a rich history of gaming and entertainment that provides immediate and enhance nationwide recognition. We continued to develop our plans for how best the leverage this prestigious brand of sort of portfolio I look forward to providing further updates on the rebranding of roll it out over the next several months.
We also announced the acquisition of networks, there's proprietary technology platform.
We will power the online sports betting and I gaming offerings under the newly formed <unk>.
Alley's Interactive division as well as our market access agreement in Iowa for the week Casino resorts at the same time, we formed of long term media partnership with Sinclair broadcast group, which provides us with the unrivaled national media and marketing access across Sinclair is the linear and digital assets as well as exciting content.
Asian opportunities Sinclair with its broad holdings of stations channels. The RSM provides immediate national brand recognition that will support the development of the valleys player database for both of our traditional casinos as well as our future online offerings and ultimately deliver significant shareholder value.
When you combine all of these elements, where their foundational expanding brick and mortar presence, we really feel we have transformed the company and best position ourselves for success in 2021 and beyond we look forward the capitalizing on the evolving industry trends, one online sports betting and I gaming as a premier omnichannel provider.
Of gaming and entertainment in the U S as well as pursuing additional market access opportunities in states with valleys currently does not have a presence.
Switch setting legislation continues to rollout.
I would also note that 2021 is already off to a great start with our announced for.
Bella construct the manage the category for license Casino in Centre County, Pennsylvania.
We also recently submitted a proposal for the city of Richmond developed the Bally's Richmond Casino resort for $650 million World class destination Resort Hotel and casino in Richmond, Virginia.
We also added differentiated arms tour of valleys interactive platform with the acquisition.
Of Monkey night fight the fastest growing daily fantasy sports site in North America, and sport color, a leading global BW provider of free to play games and entered into our first strategic sports betting partnership with the National Hockey League, providing us for the rights to use the league's official marks logos and data as part of our diver.
<unk> sports betting platform I am extremely proud of all of the great work that our teams have accomplished and most importantly, the commitment of keeping our customers and each other safe throughout this challenging environment.
I will now turn the call over to Mark.
Thanks, George and good morning, everyone of the many exciting projects and initiatives that George mentioned I want to focus first on our newly formed Bally's Interactive Division as we announced on November 18th in conjunction with our acquisition of networks Bally's is forming two distinct operating divisions bally's.
Casinos, which will be comprised of our physical gaming and entertainment properties and Bally's interactive, which will include new and exciting contacts for sports betting and gaming.
Since this announcement, we have made significant progress towards launching our interactive division, even as we await a regular regulatory approval for the <unk> networks acquisition, which we currently expect will be in the second quarter.
As George mentioned on January 18th we announced the acquisition of Monkey knife fight the fastest growing daily fantasy sports site in North America in an all stock transaction.
After the closing of this transaction, which we expect will happen later this month monkey knife fight will provide our interactive division with market, leading fantasy sports content and of brand whose player database can be developed and leveraged to support the launch of our sports betting and I gaming operations Daily Fantasy is of high growth element and what is the.
A rapidly expanding industry and adds another layer of differentiation to our omni channel approach.
Additionally on February eight we completed the acquisition of sport collar of.
A leading global beat of be free to play game provider.
Spot sport color will enable us to launch our own suite of free to play games. This year and will generate excitement for our Bali that sports betting app, which we anticipate launching in the second quarter.
Sport caller will also expand our geographic presence internationally as they have more than 100 games and over 20 languages and over 30 sports across 37 countries.
The addition of these two platforms.
Serves as the foundation of our interactive division, enabling us to support networks development resources and support accelerated innovation and deployment of new products that are already underway.
With each announcement, we are making significant progress towards the goal to become the first Omnichannel gaming company operating physical casinos with seamlessly integrated digital solutions, we firmly believe in the digital future and continue to actively position the company to capitalize on opportunities in the fast growing U S online.
Ports betting and I gaming market, we will continue to adapt as sports betting legislation continues to unfold across the country and look forward to pursuing additional market access opportunities in new states.
I would also highlight that the recent acquisitions on the interactive side are complemented by our long term strategic media partnership with Sinclair broadcast group by.
By leveraging the expansive reach of Sinclair is the linear and digital assets, which spanned 88 markets 190 television stations and 19 regional sports networks, we will be able to engage sports fans across the country by providing unique and engaging interactive offerings as well as expand our planer player database in states.
That currently do not permit sports betting.
Our teams are working together to develop this exciting platform, which we expect to begin rolling out next quarter.
Now, let me take a minute to update you on the status of our other pending transactions. We continue to make progress on regulatory approval in Nevada and believe we are on track to close Montblanc and Lake Tahoe later this month.
We currently believe <unk> in Illinois, and Tropicana Evansville in Indiana will close in the second quarter of 2021.
We look forward to working with the local regulatory authorities to receive all of the necessary approvals and complete these acquisitions.
An update on the status of our proposed joint venture with IGT. As we've noted this proposed agreement requires the Rhode Island legislature to pass of public law authorizing the state to enter into or of men. Several contracts. The proposed agreements would also result in changes to our regulatory agreement in Rhode Island.
Including an increase in the maximum leverage ratio of 255 times and greater flexibility of sale leaseback transactions relating to the Rhode Island assets.
We are optimistic that this legislation will be addressed and improved as soon as the second quarter of 2021.
We expect this legislation will be accretive to us and position us to compete more effectively in the region as we feel it will provide us with state of the art Vlt's and of mechanism for ensuring we have of competitive slot floor of well into the future the extended.
Agreement also gives us the horizon, we need to support additional investment in our facility and amenities and would deliver of positive financial return for our shareholders, even before taking into account any improved performance driven by our increased competitiveness.
The Rhode Island House of Representatives Finance Committee of scheduled the hearing on this legislation for next Tuesday March 9th.
We plan, we will we plan to provide further update as this develops.
I will now turn it over to Steve.
Mark Thank you for.
Just a bit of a deeper dive into our results from the fourth quarter.
As George mentioned, we were forced to close our two Rhode Island properties in December three.
Three week shutdown adversely impacted.
Gross gaming revenue for the quarter as numbers were off by approximately 80% in December year over year, that's a pretty big.
A pretty big hit.
When compared to our strong October performance the closure impacted our results by approximately $8 million to $9 million of EBITDA, just in Rhode Island, However, with the shutdown now behind us.
As George mentioned, there are some very strong signs of new strength star.
Starting so far in Q1.
However, our southeast and west segments for once again, particularly strong performers for the quarter, even with the Hurricane disruption George noted with Hurricane Zeta Shreveport, which acquisition closed on December 23rd was actually a contributor providing nearly $1 million nearly $1 million of of <unk>.
The EBITDA in our eight days of ownership at the end of the year.
Also as mentioned by George We are we also acquired Bally's Atlantic City in the fourth quarter historically.
Historically, the second and third quarters are the strongest.
Orders due to increased visitation and traffic in the spring and summer months, which we expect to help offset some of the softness we experienced in the fourth quarter. Following the closing of that acquisition.
Net income in the fourth quarter of 2020 on the GAAP basis was $20 2 million an increase of $6 9 million from net income of $13 4 million in the fourth quarter of last year.
In the quarter was impacted by several large one time non operating charges and income items, notably.
Oregon purchase gains totaling $63 9 million.
Which were recorded on the company's Q for 2020 acquisitions of Bally's Atlantic City and Eldorado Shreveport.
A noncash charge associated with the accounting for equity awards issued to Sinclair as part of our media partnership which totaled $57 $7 million.
And a $50 million tax benefit recorded in the quarter.
As a result of the utilization of net operating loss carry backs under the cares Act.
We believe this tax item along with some other tax impacts from 2020 will result in a cash tax refund of over $80 million in 2021, which were largely defray the expected cash tax payments, we will likely need to make in the next year.
Last comment on the brick and mortar business as we have posted on our website. We see the full run rate consolidated adjusted EBITDA of our full portfolio, including acquisitions under contract in excess of $300 million.
We consider that number to be the middle of the road number it does not reflect the full earning potential.
From Capex expenditures, which both mark and George touched on a bit.
Including at Kansas City.
The at Bally's Atlantic City and in at our Lincoln property as well.
So.
As George mentioned transformation Lee we have moved this company from.
From what it was in 2019 right through 2020 into a.
Cash flow generating machine in excess of $300 million on a pro forma look forward basis.
Those are our management expectations.
Now I'd like to address cash and liquidity as.
As of December 31, we had cash on hand of approximately $123 million.
Pro forma for the approximately $27 million paid at closing for support color in February and taking into consideration of the $215 million that was available for borrowing under our revolving credit facility, our pro forma liquidity totaled approximately $311 million.
When compared to the cash outlays that we expect from committed acquisitions under contract in the next 12 months, which is comprised of $120 million for tumors $62 $3 million for the bet works and zero for the for both Evansville, Indiana and Monkey knife fight.
Given that the REIT structure and use of equity respectively. We have pro forma liquidity of approximately $128 million.
The $15 million of purchase price from won't Blue has payment deferred for one year from closing. In addition, we recently executed a consent solicitation with the holders of our high yield notes in order to permit additional debt capacity to support possible future borrowings.
Solely to enhance our liquidity.
As such we now have the ability to increase our revolver by more than $200 million above the existing revolver size of $250 million.
We're likely to do so in the near future not for any particular funding needs, but rather for an abundance of available liquidity.
In addition to all of that we expect to increasingly generate free cash flow from operations from brick and mortar as our business rebound post COVID-19.
The exclude excluding cash paid for acquisitions, we generated over $10 million of free cash flow in the fourth quarter on an adjusted EBITDA of only $20 million under the real Covid Spike in the fourth quarter, we feel that even with the softness we experienced in the fourth quarter due to regional limitations, we're in a very comfortable liquidity position.
And we remain in a conservative leverage neighborhood, considering pro forma cash flows with plenty of dry powder to continue to pursue opportunities opportunistic M&A prospects now.
Now turning to Capex, Our Center County, Pennsylvania Development project with IRA Leubert will take approximately one year to complete following the receipt of required regulatory approvals operating certificates and other customary closings. The total cost of the project is approximately $120 million and.
And we expect to begin construction of the back half of this year pending Pennsylvania regulatory approval.
Should the Rhode Island legislation pass as mentioned by Mark The Lincoln expansion project will occur over about 18 months commencing as soon as practicable, we expected cat, we expect that Capex to hit both 2021 and 2022 year calendar years.
We continue to make progress on our redevelopment plan of Kent Casino.
The casino Casey for approximately $40 million.
The projects should greatly enhance the property and guest experience driving growth in the nice return for us on that investment the casino Casey project is largely of second half.
2021 event with planned groundbreaking in May and we expect you will finish sometime in 2022.
And as George mentioned, our capital investments in New Jersey are underway, we expect to spend approximately $25 million.
In the 2021 year.
Based on the current and pending portfolio of properties, we expect our ongoing maintenance capex run rate.
In the range of $35 million to $40 million annually.
And at this point there've been no material changes for the project Capex plans, we discussed last quarter.
My final remark.
Look we continue to be situations, the opportunistic and expanding this company in terms of physical properties as well as our interactive platform and delivering accretive growth for our shareholders and other stakeholders. Our pro forma leverage remains moderate our liquidity profile is very strong and we have considerable unencumbered real estate.
Of that combination is foundational to our ongoing growth ambitions as an omni channel provider of brick and mortar and interactive gaming entertainment to a very large and growing customer base.
And with that I'll turn it back over to George.
Well, thank you Steve.
2020 was truly a pivotal year for Bally's, we were very excited about what's in store for 2021 and beyond with that I'll now ask the operator to open it up for questions.
As a reminder to ask the question you would need the press star one on your telephone too much value.
Your question press the pound key.
Bob will be can tell of the Q&A roster.
The first question comes from the line of Barry Jonas with <unk> Securities.
Hey, guys good morning.
Good morning day.
Wanted to start with interactive can you talk about sort of timing before we'll see a full launch and once we are up and running how should we think about the ramp.
Thanks, Barry I'm going to turn this over to Mark.
Good morning, Barry So what you should think about in terms of interactive for US is as you saw on the release of working now going to close on that works. It looks like it'll be towards the end of the second quarter of of the year and so we'll focus on ramping up in the states that theyre in first so there are four of them, It's New Jersey, Colorado, Iowa and Indiana.
And we will be targeting getting all of those rolling in the second half of 2021.
Okay, Great and then once you are up and running is this sort of.
What are sort of expectations in terms of how youll build up market share do you think you'll kind of hit the ground running or more of a slower pace.
It's a little hard to tell right now until we get it closed it up and running but obviously, we want to make sure. We're building it properly for the long term. So we have to see how those initial launches go and then we'll start to layer in additional states beyond that so you can expect of pretty ambitious program through 2022, as we bring all of those assets online.
Great and then just with the Sinclair can you just maybe help us understand how you think about risks around the cord cutting maybe just walk through sort of the streaming of interactive.
The strategy beyond just TV.
Yeah. So let me let me just take a step back on the Sinclair I think it is helpful. Look Sinclair is the largest owner of sports rights in America over time, we believe it will grow and it makes sense for a scaled player to negotiate on behalf of the industry as the sports industry recovers from Covid and as we start having a full calendar of sports, we expect a recovery and think of the RF.
And the Sinclair has as an important component for us to execute our vision when we did our deal with Sinclair the diamond bonds were trading at a significant discount and we structured the deal accordingly to plan for a contingency across the other assets owned by Sinclair look we are pleased with the commitment of our partner and have a plan to capitalize on the gamification of opportunity.
With all of their assets. Furthermore, as you may be aware, we signed our deal with the parent company and still believe that there is significant opportunity to capture value. Barry. We you can anticipate us starting to rollout all of the platform renaming in the second quarter it'll start early second quarter and we're pretty excited about how that's all going to work.
Great. Thanks for thanks, so much.
Your next question comes from the line of Jordan Bender with Macquarie.
And thanks for taking my question on the call you hosted a part of the Sinclair of that works partnerships.
You felt comfortable with the conservative 10% market share.
With the NHL Monkey night by the Spa.
For color do you see upside to that 10% number on a run rate basis.
I'm going to leave that remark.
Yeah, we're not going to make any change to how we're thinking about it right. Now. These are all moves that we had anticipated obviously monkey knife fight and sport call our warrant specific moves, but they're all part of our broader strategy to make sure. We have all of the different products that we need to offer a full suite of of options to our to our customers. So I wouldn't I wouldn't anticipate.
Any changes in how we're thinking about things right now, we're just continuing to build out our strategy to make sure we control technology and have all of the products. We need so that we can innovate and bring everything to life. So I wouldn't I wouldn't be making any changes on any of that yet.
Okay, and then turning to the Virginia Casino can you talk about possible financing for the project would you be open to using of REIT and then what is the ideal opco propco structure for.
For the total company. Thank you.
Steve you want to handle it.
Yeah, Let me let me take the second one first.
Terms of optimal Opco propco listen we we don't we don't have a number in mind.
Fairly.
We intend to be opportunistic in the use of our unencumbered real estate on a go forward basis.
Uh huh.
Look we're not going to I don't think we're going to embrace the.
100% Opco.
Model anytime soon.
Rather we will use real estate selectively here and there some of that.
A portion of the real estate portfolio is used for the for financing purposes, We think a more moderate approach.
And combined with the traditional more traditional capital structure.
It makes it a bit more sense and one of the reasons for that quite frankly is when you look at the at the credit markets, we believe that a.
Our portfolio.
Grounded in.
The real assets is relatively more attractive to the to the secured and the unsecured credit markets alike and that over time.
Will the will provide returns in terms of cost of capital that the makes sense.
And in that regard so very moderate on that side.
And then.
Sorry, what was the quote.
Repeat the question on Virginia again once more it's would you please.
Can you kind of covered it there are margin.
On the possible financing behind that project.
Yeah, listen that that one and and Pennsylvania as a matter of fact.
What kind of eyes wide open right now.
You know in projects that the jointly owned sometimes it's it's a it's just cleaner to kind of Street project finance. Those so you might see an off balance sheet financing there depending on credit markets project financing.
The market conditions kind of come and go but.
Given given common given multiple ownership or I should say non wholly owned.
Ownership, there we might look to straight project finance, one or both of those of your question about rights remains a possibility and then of course, there's always there's always the possibility of bringing it on the balance sheet and doing it that way. So we're kind of looking at those three angles on both of those properties as a matter of fact.
Okay, and then one more here I don't know.
If I missed a day.
You give the capex growth Capex number for the year I know, there's a couple of moving parts with some of these projects.
Well, we we mentioned for the year, but we might spend upwards of about 25 look at all of it all depends on market markets reopening of post Covid of course so.
Don't don't don't quote us on this but our expectations are we might spend upwards of $25 million to $30 million in Atlantic City kind of true.
Towards the back end of of the year again, depending on.
Covid limitations being lifted.
We do intend to break ground.
Kansas City and in the cut the May June timeframe at the $40 million project, you'll probably see a good portion of that 40 spent this year and then as.
As Mark outlined regarding the Lincoln that Capex is dependent upon the legislature passing.
The the the IGT.
Contract of for Us and so that's a bit of of of a binary kind of go no go on that project, but we expect that will get done.
In the next month or two as mentioned and so.
Probably.
In the neighborhood of 20 to $20 million to $30 million of Capex. Later this year at that project as well that's about it for the growth project.
The capex on the on the brick and mortar side for 2021.
Perfect. Thanks for thanks for all of the answers from the pass it off.
Your next question. Thank you for the line.
Of Brett Andress with Keybanc capital.
Hi, Good morning, Martin Brough, hoping you could.
Good morning, hoping mark each other a little bit more light on the timing of the rollout of.
The four states I think you said.
The second half, but is that something before football season, just any more details on what you expect there.
Yeah, you look you'll you'll definitely see some before of football season, but until we actually get the the.
The acquisition of of networks closed its really hard to get into that level of granularity. We're obviously working on things already. So you would expect to see at least some of them opened before football season, and we'll have more of an update for you once we get the closing down of networks.
Got it Okay, and then as you think about monkey knife fight.
One how quickly can you start to leverage that.
That.
Business once you close it on the RSA and <unk>.
Ecosystem, there and then secondly, how does that business in sports color.
Fit into the bigger.
Free to play.
Of the customer acquisition strategy.
Maybe what I'm trying to get out of more specifically how additive do you think these products could be to that $14 million database.
The good question I'm going to turn this over to my colleague <unk> Who's our VP of strategy and interactive and he can provide a little more color on that for Ya sure. Thank you for the question. So as it relates to monkey nitrite, we feel pretty optimistic that we have.
Pathway to use their content and leverage that content across inquiries assets be it on the digital side and or doing something with them out of the linear side as well as it relates to sport collar and Monkey 90 fight in how we think about of the databases.
For us this is a top of funnel of opportunity when we think about free to play in support of color. It helps us build that top of funnel customer database that we could eventually convert to real money sports betting with DFS and monkey nitrite offered to US is the opportunity to build a database of the states. We don't currently operating or not legalized.
And what we've seen with peers in our industry is that's a great way to crossover and sell to the <unk> platform. So we have now a massive portfolio of that margin.
Free to play.
The DFS.
One wants to use scale and then you have room on the sports betting just to convert the funnel and and get them once of the value based platform.
Got it okay.
If I could squeeze one more.
It does seem like the casino business improved year January February just.
Hoping you could put some numbers around that maybe more focused on Rhode Island or any property you want to highlight if.
Could you just give us any sense of maybe property level margins here, just trying to frame up some kind of.
<unk> kind of margin run rate for the business as things start to reopen.
Okay.
We've got granular.
With numbers of January February I know, we're talking top line.
Yeah, the love look where we're not.
Not they're not ready to let go of much granularity there George.
What we've what we've got for you at this point.
Is it kind of of the the overarching commentary that the the <unk>.
Market indications in our in our preliminary.
The book book closings have half the business turning around Robert Handsomely in January and February.
But the most.
But.
Stay tuned more detail of loved to come later, but we're feeling very good about the strength of the business. So far this quarter.
And I'll just add Brian.
I'll just add one thing to that we are maintaining the all.
The improvement of margins that we've seen coming coming.
Out of the reopening for.
For the most part so we're happy we're glad to see that.
Alright, thanks, Thanks for the color.
Thanks for the questions.
Your next question comes from the line of John Decree with the Union gaming.
Good morning, everyone. Thanks for taking my questions.
If I if I could.
Try one more time at that asking the of the last question, perhaps a little differently.
Steve or George not sure if you could provide a little bit more anecdotal color.
When you think about the reopening of Rhode Island relative to the the reopening of earlier.
Earlier in 2020 any comparison of similarity is that has consumer demand been been similar on return obviously, some seasonality might be in play there but.
If you could kind of compare to the last opening.
Of reopening because of it.
It's it's much well.
We're focused on Rhode Island, it's significantly.
The significantly improved over the reopening.
After the Covid is actually it's actually been the strongest zone.
So for quarter of the year I'll say, so and you can just you can just look at top line and the <unk>.
Once we came out of the the <unk>.
2021 day closure.
January continued the trend of October, but actually a little bit better.
And then February other than the impact of weather, because we had that kind of trained event of weather for the 10 day period of time the.
Trend for the days that were not impacted by weather in February.
Consistent with the trend line in January so we're feeling good about that.
Yes, John this is anecdotal, but it appears that the George's comments are supported by a an increasing level of comfort with our customer base a round of the vaccine and we're seeing we're just seeing stronger numbers.
Thanks, Steve Thanks for that that's great additional color I appreciate that and if I could ask one.
Question on <unk>.
Plans for future market access.
Taking two approaches so far I think one market access agreement and then announced the project in Pennsylvania, as well as Richmond, which appears to be kind of of Standalone investment, but when you think about going forward can you talk a little bit of off the strategy of market access.
Will you look to do more of kind of asset light market access agreements.
Could we see some more opportunistic M&A on the land based side.
And in addition to kind of how you approach it.
Any sense of of timing or how long vicious you might want to be in and adding states. Realizing that maybe it's the back half of the year, where you really start to launch and already have a couple of states to go so your strategy on market access going forward.
How how aggressively you will pursue filling out the map.
Sure so.
The continued to be opportunistic.
We'll always continue to look for avenues of access for sports betting and gaming through bricks and mortar.
As well as of what you mentioned that license applications for open states, So theres opportunity there.
And in addition to that we're going to continue to look for complementary technologies platforms that we can add that.
That will complement sports betting and gaming.
The good examples of that as the acquisitions of the United.
And then the sports color so yeah, we're going to the.
The opportunities there, we're looking for access and we're going to we're going to try and capitalize on that.
Thanks, George Thanks, everyone and congratulations on a very busy and successful year.
Thanks, John appreciate it.
Your next question comes from the line of Jeff <unk> with Stifel.
Hey, great. Thanks, good morning, everyone.
So you completed the rebrand.
The bally's back in early November just curious now youre in a couple of months and do you of any updated thoughts on how you plan to leverage the brand moving forward have you done any survey work on kind of brand awareness with your database or anything like that just anything you could share there would be helpful.
Sure So mark I'm going to pass the server over to you.
Yes happy to do it.
Yeah, Yeah look of all we've made of out of progress since we announced the acquisition in November we're almost done with all of our work and you can expect in the second quarter to start to see significant heavy activity around rebranding most of our assets on the land based side, we're getting ready to launch the renaming of the for.
Sports.
Assets that Sinclair has entered into bally's sports. So we're pretty excited about that it's all moving along pretty nicely. If you can just kind of monitor things over the next 60 days, you'll start to see the tangible progress from it.
Okay. Great. Thanks helpful. And then just switching gears over to the interactive side. You know look we talk a lot about the omni channel approach and kind of that synergistic impact of offering both retail and online gaming in the given market and I know, it's I realize it's still early days here as we're coming up on the App rollout, but I wanted to just get your thoughts.
On how you see that advantage playing out relative to call. It your strictly online peers. You know any parameters you can provide around that would be helpful. Whether in terms of expectations around relative to ADT the markets with vs. Without all of my and cross selling opportunities to and from the casino really anything you have there would be helpful. That's a really loaded.
Question, and so I'll turn it over the idea and he'll try and touch on some parts of it sure. Thank you for the question I think look the way to think about this is we are of a multi pronged approach. So you are right. We have casino databases in states, we operate our own casino. So we will be marketing because of that database the <unk>.
All of the thing to think about is the.
The relationship with Sinclair It gives us access to a variety of assets right.
On the regional sports networks, which will be renamed to value Sportsnet going forward.
We also have access to their broadcast television stations that penetrates roughly 70% of the U S households.
You also get tennis channel and multi platform assets of just stadium and OTT platforms.
So.
Thinking about all of the different assets that we have with our database and the reach and distribution we get from Sinclair you can expect us to.
Come up with integrated content and game of five content as we roll out of our battery.
The platform.
Okay. Great. Thanks, that's helpful. I appreciate the color of everyone.
Thanks, Joe.
Your next question comes from the line of Lance Vitanza with Cowen.
Hi, Thanks, guys for taking the questions maybe just one on the bricks and mortar business and then one of the interactive side again on the.
On the first question on Slide 16 in your deck you have the post COVID-19.
For the EBITDA range of 331 million of I think you've had that out there before but my question is how can you bridge from the 300 million pro forma number and keep out of 19 sort of the $331 million post Covid I mean, theyre, both pro forma so I assume.
It's not the additional properties so is that just.
Well I'll, let you tell me the Dennis Thanks.
Please go ahead from the handle that for the last.
What's the what's the first number you're looking at you're looking at 2019.
The 300 million go into a post COVID-19 and run rate of $3 31.
Yeah listen to the the the 19 number was all of those properties.
Historically to the extent we had that.
We had that data.
More about more of an actual representation of.
Pre COVID-19 environment until we used that as the as the starting point of the step off point of view will for a post COVID-19.
Pro forma management expectation.
Included in that $3 31, Lance are there is there is the impact of some of the capex initiatives that we have talked about on this call, but not all of them because some of them are a little longer in the tooth if you will.
Hence our commentary that that that numbers, we can sort of that would be kind of middle of the road, meaning that there is upside in this portfolio. We believe in a post COVID-19 world.
Up up.
The well into the mid three hundreds of post capex basis.
And I guess is it fair to assume that some of that improvement is also just from the George.
George you talked about being able to maintain or maybe even talked about being able to maintain the margin improvements even as the traffic comes back as we.
Put some distance between Covid.
Yeah, well, well well well some of those George Good George commented on this in his.
And his.
Comments earlier that.
Not necessarily all of them are lance because look what when the windows of post Covid world assuming.
The competitiveness.
Starts to sort of starts to ramp up again, we're likely to see some pressure on the marketing spend but as it relates to labor savings and other.
Cost initiatives, we've gotten smarter about yes, we intend to carry those forward.
Okay. Thanks, and then just on the interactive side I don't think the I've never seen the company accomplished so much interest in short period of time in terms of all of the partnerships and acquisitions that you've announced I mean as you think about going forward from here should we expect additional acquisitions or partnerships. What do you think you've got the right asset mix at this time.
We've sort of gotten to the point, where we sort of pause on that part of the of the growth.
The plants.
Touching on that a little bit earlier, so yeah, we're going to continue to look for complementary technologies and platforms. So anything that we feel it's been the complement our efforts for sports betting and ultimately I gaming will continue to.
To bring on and into the into the company.
So the full speed ahead, there okay great.
With respect to the <unk>.
Piece initially that was expected to close in the first quarter and now it sounds like it's the end of the second quarter I'm. Just wondering why the delay and is there anything we should be concerned about given that delay either from a regulatory of intelligence standpoint.
Mark you want to handle the yeah, yeah, absolutely no concern at all the.
Nothing has changed we're just going through the regulatory process is going very smoothly.
We're really we're just focused on Indiana right now that's kind of the the last place we need to get done and in the Indiana Gaming Commission. They are of a lot of things going on they've been wonderful to work with but they meet only once a quarter and this is this has essentially been lumped in for approval. It appears with our acquisition of the Tropicana.
Evansville, So we're kind of targeting the June Indiana Gaming Commission session to have both considered at the same time.
Thanks, very much I appreciate it.
Thank you Larry.
We have reached the allotted time for questions I will now turn the floor back over to George up in the air for any additional or closing remarks.
Well. Thank you everyone. We're looking forward to continuing our continuing into an impressive 2021 and I want to thank you for joining our call today.
This concludes today's bally's fourth quarter 2020 earnings call. Please disconnect your lines at this time and have a wonderful day.
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