Q3 2021 Caesars Entertainment Inc Earnings Call

Ladies and gentlemen, please standby.

Mint, Inc. 2021 third quarter earnings will begin momentarily.

Standby your conference call will begin in minutes. Thank you.

Yeah.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Caesars Entertainment, Inc. 2021 third quarter earnings conference call.

At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

That's a question during the session you will need to press star one on your telephone.

I would like to turn the call over to your moderator today, Brian acting senior Vice President of Finance Treasury and Investor Relations. Sir you may begin.

Thank you Ron and good afternoon to everyone on the call and welcome to our conference call to discuss our third quarter 2021 earnings.

This afternoon, we issued a press release announcing our financial results for the period ended September 32021 copy of the press release is available on the Investor Investor Relations section of our website at Investor that Caesars Dot com.

As usual 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 Anthony I would like to remind you that during today's conference call. We may make certain forward looking statements about the companys 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.

That could cause actual results to differ materially from those expressed for additional information concerning factors that could cause actual results to differ from those discussed in our forward looking statements you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the 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 today's call also during today's call. The company may discuss certain non-GAAP financial measures as defined by SEC regulation G. The GAAP financial measures most directly comparable.

To each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at Investor does Caesars dot com by selecting the press release regarding the company's 2021 third quarter financial results I.

I will now turn the call over to Anthony Thank.

Thank you, Brian and good afternoon to everyone on the call. The third third quarter. A 21 was another strong quarter, we delivered $1 4 billion of adjusted EBITDA in the quarter, excluding Caesars digital which represented a quarterly record for our brick and mortar properties 31 of our 51 properties set a record for the highest third quarter EBITDA.

While 30 to set a record for the highest Q3 EBITDA margin.

Starting with Las Vegas demand trends remained exceptionally strong through the quarter, leading to an all time quarterly record of $500 million and adjusted EBITDA in our Las Vegas segment, excluding real rent payments EBITDA improved 44% versus the third quarter of 2019 and margins improved 4500 basis points to 50%.

Total occupancy for Q3 was 89% with weekend occupancy at 97% and midweek occupancy 86%.

Looking ahead, we remain encouraged by booking trends into 2022 and beyond while group attrition remains higher than normal we began to see conventions returned to Las Vegas in the third quarter and this segment represented approximately 10% of occupied room nights, a dramatic improvement versus the first half of 'twenty one.

We continue to expect to see a gradual recovery in the segment leading into next year and we are encouraged as group and convention revenues on the books for 'twenty. Two continue to pace nicely ahead of 19 demand for the Caesars Forum is exceeding the original underwriting expectations with over 175 events booked currently representing one point.

8 million room nights and over $650 million of revenues for all future periods.

76% of this business as new Caesars.

Turning to our regional markets operating results remained strong, especially in markets not impacted by severe natural disaster events adjusted EBITDA, Excluding New Orleans Lake Tahoe in Lake Charles increased 35% versus 2019 with margins improving by 860 bps to 38% on a same store.

Sales basis, we achieved the highest third quarter EBITDA and EBITDA margin in the regional segment in the history of the company.

And our Caesars digital segment, we generated over 3 billion of volume $96 million of net revenue and an adjusted EBITDA loss of $164 million sports betting and I casino handle was split roughly 50 545 <unk>.

90% of our handle was from mobile sports betting and casino.

We are laser focused on scaling our digital business through aggressive customer acquisition. During our first fall sports season post launch of our Caesars branded apps in nine states, while customer acquisition and handle exceeded our internal expectations net revenues were negatively impacted by directed promotional investment in ards and profit boost compare.

<unk> pricing strategies and lower than historical hold in certain markets.

We are pleased that our sports betting handle share in the eight states operating on Liberty Liberty platform has increased to 12% through September.

Arizona has now reported and therefore not included in these stats.

Our national market share through September, including all legalized sports betting states sits at 17%.

Following the exciting launch of retail sports betting in Louisiana on Sunday, We are now offer sports betting in 'twenty jurisdictions, 14 of which are mobile and importantly, we expect to complete the migration of our legacy apps in Washington, D C, Nevada, Pennsylvania, Pennsylvania, and Illinois to our Liberty platform in 2022.

We are also excited to be rolling out enhanced I casino offerings in the fourth quarter following anticipated regulatory approvals related to the release of new games, and New Jersey, Michigan and West Virginia.

Our expanded game portfolio will be accompanied by significant improvements to our in App marketing technologies.

On the development front, we're making great progress on our new land based facility in Lake Charles This significantly upgraded properties should be completed and ready for business in the fourth quarter of 'twenty two.

In New Orleans construction work has started on a new hotel tower and property upgrades in Las Vegas, the remodeling of the entrance to Caesars Palace is making great progress and we look forward to a dramatically improved arrival experience sometime in Q1 of 'twenty two.

In Indiana, we are well underway with our casino expansion of Indiana Grand which should be finished by January of 'twenty, two and finally in Atlantic City, Our 400 million capital plan is actively moving forward with remodeling room towers and setting the stage for exciting new food and beverage and entertainment options.

As we look to 2022, we see several tailwind in our business and we remain optimistic about further visitation gains as consumers return to a property once COVID-19 fears have fully subsided, we remain confident in the eventual return the convention customer to Las Vegas, and our destination markets. Lastly, we are excited.

To rebrand a handful of our properties in 2022 using flagship brands from the caesars' portfolio to even further elevate the customer experience.

I am extremely proud of our operating teams their execution and their exceptional guest service. During this third quarter with that I'll now turn the call over to Tom for some additional insights on the quarter.

Thanks, Anthony and good afternoon everybody.

We pre released.

For our bond deal in earlier in the quarter. So you had two months of brick and mortar operations effectively so I'm going to be lighter on comment.

Brick and mortar and go a little deeper into digital on the brick and mortar side.

Yes.

If I didn't hit New Orleans, and we didn't have the caldor fire in Tahoe, We had about 1 billion won.

Brick and mortar EBITDA in the quarter.

<unk> had an extremely strong quarter demand remains particularly robust.

Regards to New Orleans in Tahoe Tahoe has pretty quickly recovered back to above 2019 levels not quite as strong as it was pre fire, but continuing to build.

In New Orleans recall that we have.

Significant operating leverage there that works in both directions, <unk> got a minimum guarantee tax payment to the state and the city and Louisiana. So New Orleans EBITDA continues to trail 19, although it is continuing to recover as well going into.

The storm, we were doing $11 million to $12 million a month in EBITDA in New Orleans, and now we're more like five or six and building.

<unk>.

Vegas had a record quarter, beating the record of the <unk>.

Second quarter. So $4 24 went to 500 of EBITDA 511, adding back the Rio rent payment as Anthony said, we were 50% margin again that was in spite of us.

Imposing occupancy caps mid week.

So that we could.

We can calibrate.

Supply with our housekeeping services, we are struggling across the country to higher guest room attendant to Vegas is no exception, so even with the operating caps we said.

Quarterly EBIT directory in October.

Vegas had the strongest EBITDA month in the history of Caesars.

This strength has continued into October regionals as well, we're still pacing up in the neighborhood of 40% over 19, so feel very good about the setup going into 'twenty two customer demand customer demand remains strong obviously the virus numbers.

Had subsided considerably over the past.

Six to eight weeks and we're seeing some pickup in demand as bad as that rolls through.

For digital and I spoke to digital in knee.

Second quarter call in terms of what you should expect from us.

We are anticipating investing in in terms of E cumulative EBITDA losses, north of $1 billion into the digital segment and generating cash on cash EBITDA returns at maturity north of 50%.

And what we saw in terms of opportunity for us was.

The ability to activate our 50 plus properties, our 50000 plus.

Employees and most importantly, our 65 million.

Strong Caesars rewards database and that's what we set out to do.

So as I go through these numbers I'm going to talk about how I look at this business in terms of measuring what we're doing versus expectations I would.

Even though we're extremely encouraged.

The numbers that I'm going to be talking about are ahead of our internal expectations as we launch this.

It's very early and this is a long game. So we expect it to not be a straight line, but what we anticipated was.

In states, where we offered our Liberty technology, where we were starting on equal footing.

And where we had existing.

Strong database that those would be our most effective markets.

And that describes Arizona to a tee, which launched during the quarter has not published results yet, but we think that the results will show us in excess of the handle numbers percentage numbers that Anthony described earlier in the Liberty States in total and Im.

Looking at handle because in the current customer acquisition environment hold as volatile not just because of.

The results of the sporting events, but because of the booths and the promotions that you offer so when I talk about share I'm talking about handle share.

In our Liberty States handle share has almost doubled since launch that's.

In the sixes to about 12%.

Mobile market share that's without Arizona, as I said, I'd expect that to exceed the average and bring it higher.

Arizona is our second our third strongest state behind.

Nevada, and Iowa, where we have incumbent.

Advantages and that reflects exactly what we expected states, where we launched but we were late to the game, but did have liberty. We're seeing continuous continued build in market share on the order of two to 500 basis points, depending on the market since we.

Launched importantly, if youre looking at analysis that looks at market share across the.

The entire U S market realize that we are not competing for the time being in Pennsylvania, and Illinois, which are two of the biggest markets out there when we launched the Liberty platform was not approved in either state.

It will be approved in the first half of 2022 is our expectation.

But we didn't want to spend money.

Guiding customers to an experience that would not be what we wanted to offer them and so you see our share in those markets sucks for lack of a better term.

<unk>.

If you look at where our customers are coming from when you're spending like we're spending on.

Advertising and promotion.

You're you're going to get lots and lots of customers that show up at your door.

A lot of them are not going to be worse.

A lot of value if you look at our customer by count Caesars rewards customers are somewhere around a third of our total new deposits since we relaunched by handle Caesars rewards customers are about half of our <unk>.

Handle sensory lunch, so validating that we think caesars built a system over two decades that identified the valuable customers that everyone is out there searching for we're seeing that in our experience and that's extremely encouraging as we look to the future.

The performance in the Arizona also encouraging as we look to states like Louisiana, which just launched retail.

Sunday will launch mobile in the near future, Maryland will come online soon as well. These are states, where we're in a similar position to where we were in Arizona. So we'd expect to perform well when we show when we give you our 17% total market share.

That's everything that's the states were not doing well in like Pennsylvania, and Illinois that are not Liberty States, but also includes Nevada, which is not a liberty state that where we have tremendous market share we're not adding fantasy numbers in there we're not adding a horse racing business in there we're showing.

You pure sports betting handle and if you think about what we're doing what we did in sports in the quarter our handle for the third quarter was a little over a little under one point.

7 billion I'm, sorry, a little over $1.7 billion for the full quarter in October alone. We did over 1 billion three of handle.

So we think we're continuing to generate momentum and when I talked about the return on investment obviously, we had.

Our model that showed where we expect it to get in market share and the pace at which we expect it to get there. So you can see from the EBITDA loss that it's relatively in line with what we were telling people to expect.

But our ramp in market share has been has exceeded our expectations in terms of its pace now that.

The question to that is does that mean, there's a broader market a bigger market share number down the road and the candid answer is we don't know right now, but what we do know is we're gaining share.

At a pace stronger than we expected given the investment that we've made.

So encouraging results from sports.

And I casino.

If you want to say if you want to think about somewhere where we have tracked a little bit below plan, we inherited a platform and I casino Ted was noncompetitive from a game offering standpoint, and so again, we've not spent money advertising and promoting.

Our I casino business until we get the approvals we need to offer a broader array of games, that's competitive with our peers that are out there we expect that will take place.

Before the end of this year and so then we can talk with Frank.

Frankly.

More relevance as to what's happening in casino, we continue to perform strongly in new Jersey, and I casino, but we have not pushed a launch in a casino beyond New Jersey today.

So in summary, we're extremely encouraged both brick and mortar and one thing I should say about.

Wrapping this digital business into the physical enterprise the employees that have leaned.

Just had an outstanding job of leaning into this launch for us and Caesars rewards activating the database. This is not something where you just flip a switch this is going to continue to build momentum as the quarters pile up we I think we've done a good job of.

Getting our message out there getting our brand out there and we're encouraged to see the customers respond.

And with that I'll flip to breath.

Thanks, Tom we had a active third quarter of M&A and capital markets activity.

Timber night, we announced an agreement to sell the non U S assets of William Hill to 88 holdings for $2 2 billion pounds.

Following repayment of debt, we will receive net proceeds of approximately $1 2 billion U S. Dollars. We expect this transaction will close during the first quarter of 2022.

On September 10, we priced $1 2 billion of new unsecured notes at a four and five 8% coupon and.

And we repriced $1 8 billion of CRC term loan B at LIBOR, plus $3 50, a decrease of 100 bps.

Proceeds from the new notes alongside $500 million of cash on hand were used to fully retire one 7 billion of existing CRC notes.

In late September and October we continue to use excess cash on hand to permanently repay debt through $100 million of open market purchases of our existing aiding the eight and an eighth notes.

Aggregate year to date debt reduction is approaching 1 billion, which has resulted in approximately 75 million of annualized interest expense savings.

Net proceeds from the sale of William Hill's non U S business will be applied to debt reduction in the first half of 2022, yielding further interest expense savings and enhanced free cash flow.

Our 2021 calendar year Capex spend excluding Atlantic City is now $350 million to $400 million, which includes approximately $75 million for Caesars digital. This is simply a shift in timing of planned Capex for 2021 to 2022, driven in part by the Hurricane that impacted our New Orleans expansion and Covid related supply.

With that I'll turn it back to Tom.

Thanks, Brett and to talk a little bit about 'twenty two when we closed the Caesars transaction.

We closed into an uncertain environment with a highly leveraged capital structure and we needed to bridge to.

To the point, where we'd be generating a lot of free cash flow to pay down that debt you heard Brett talk about the beginnings of that in 'twenty. One 'twenty two is going to be a massive cash flow generation cash generation and deployment year for the company as Brad said, we've got.

The William Hill asset sale.

Ling.

But between the William Hill, non U S business to Neo games.

Sale, we got about 1 billion and a half of proceeds to deploy.

The bulk of which will be coming in 'twenty two.

We're generating in the brick and mortar business something in the neighborhood of $2 billion a year of free cash flow right now and so if youre looking from now till from end of third quarter to end of.

22, you're well over 2 billion of cash there.

We also think this is an opportune time to <unk>.

Execute on our strategy of a strip asset sale. So you should expect us to put that in motion.

The early part of 'twenty two.

And if you look at all of them and as Bret said, you should expect us to be aggressive on the refinancing front in 'twenty, two as well, which should dramatically lower our cost of debt and so if you add all of those.

We should have well in excess of $5 billion of cash to deploy in 'twenty two.

Some of that will be spent in the digital business some of that and some of that will be spent on <unk>.

Capital projects that drive ROI in the portfolio, but the vast majority of that.

Cash is going to go to pay down debt, where we can be in a position to.

Be pushing almost half of our conventional debt off the balance sheet and ultimately reducing our cash interest expense by the end of 'twenty, two to three or $400 million a year less than it was when we closed the transaction.

So we are extraordinarily excited for what's to come in 'twenty, two happy very happy with the results that we're reporting to you today and happy to answer any questions that you have.

Yes.

Operator can we open the line for questions.

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

If you wish to remove yourself from Nike you May proceed.

Your first question comes from the line of.

Carlo Santarelli from DB Your line is open.

Hey, guys. Thank you.

And I know it hasn't been a long time since you kind of started but given a few months of the ramp in relative to your expectations on the sports side and keeping aside the casino side for a second when do you believe you could start to see that business turn positive in terms of EBITDA.

Contribution because it is that as soon as 2023 or are we looking kind of beyond that and out into 'twenty four 'twenty five.

I'm expecting football season 'twenty three.

Okay, Great and then.

You talked a little bit about the.

Las Vegas sale and clearly the comps have been you know your patients has seemingly paid off with what you've seen in terms of comps.

Is there anything special about the first half of next year that are early next year that that you guys will get aggressive in terms of looking to make that transaction happen.

No it's really a matter of as we discussed we want it to be marketing off.

An EBITDA number that we're generating from the property not trying to bridge to.

Some number that we've not done before so now we've got a track record that we can point to in terms of what the property can generate and the deck is that the playing field has kind of been cleared with the.

The Cosmo and ARIA trades to wear.

We should have.

Pretty robust.

We should've encountered pretty wrote about robust demand for our centers strip asset that frankly may be one of the last ones to trade for quite some time.

Great and then if I could Tom just just one follow up as it pertains to kind of Las Vegas trends.

From <unk> to <unk> more or less.

Clearly business volumes are higher revenues were up nicely sequentially Opex was also up.

Do you guys kind of think the current Opex run rate is something that's sustainable on these business volumes or I know you talked about staffing and keeping occupancy kind of in check during mid week to adjust to labor levels, but is kind of the current opex environment that you had with <unk>.

In Las Vegas, specifically is that a place where you think you can kind of maintain going forward.

I do but frankly I'd like to see.

Opex come up some as we sell our.

Particularly guest room attendant positions. So that we can unlock the caps on the midweek and I'd expect that to happen at some point in 'twenty two.

I appreciate the time thank you.

Your next question comes from the line of Joe Greff from JP Morgan Your line is open.

Good morning, everybody.

Maybe as we can.

<unk> talented local carload talking about sort of on the sustainability of margin was there.

A big difference between the margin exit rate in Las Vegas, and the regional.

You know versus what are they going into the beginning of the <unk>, excluding weather impacted areas.

Can you margin what margin exit rate no I mean, we were pretty stable throughout the quarter gel and into October.

Still running.

40% consolidated EBITDA margins.

Okay, Great and then.

You mentioned by the end of this year, you would have a larger quantum of competitive by casino game launch.

Which you've talked about before.

Can you talk about what you sort of think the incremental investment is.

Part of the $1 billion of cumulative losses in <unk>.

If you think of that as you move sequentially from September and October to the end of the year and digital more broadly in terms of what that incremental investment might be.

So that was built into the guidance says a framework I gave for build of the entire business as you know.

To the extent those are the bulk of those are third party games their participation.

From a revenue standpoint, so that was all built and its just a question of timing of getting them through the approvals in the various states.

Great. Thank you.

Thanks, Joe.

Your next question comes from the line of Steve <unk>.

From Stifel. Your line is open.

Yeah, Hey, guys good afternoon.

So so Tom you called out that the $1 billion investment or spend level on digital on your last call that that would last let's say eight to 10 quarters I think that's what you talked about.

I guess the question is with what you've seen so far the progress you've made with market share.

Are you still comfortable with that all in investment and will that be sufficient or I guess another way I could ask that is let's.

Let's say two years down the road your market share doesn't pan out where you think it's going to be could that 1 billion investment eventually turn into a much higher number or at this point you just don't see that being the case.

No I'd say, it's the opposite of what you described Steve.

Post launch the bulk of our spending now is success based it's tied to customer acquisition. So if we do worse than we're expecting from a share perspective, I would expect that the ultimate investment will be less.

If we do better than we expected from a share perspective, I'd expect the ultimate investment to be more but obviously the return will fall in both directions.

Okay understood.

And then second question I think Tom you called out a $5 billion number of of cash to deploy next year and that assumes.

Our biggest asset sale.

I guess the question there is you've talked about potentially.

Letting go more than one asset in Las Vegas and at this point is that still the case or is it kind of one and 'twenty two and then go from there or is there or is there the possibility that you could eventually do more than one and 'twenty two.

Okay.

Well with the caveat that as a public company.

Every assets for sale everyday there is some confusion there were two rovers in the.

Vinci agreements at the clubs.

We have never said, we expect to sell a second property nor do we expect to at this point, we would expect to sell.

Oh property can be done, but we will assess where we are in the market what our balance sheet looks like afterward, and how we feel about our future prospects, but I think it'll be limited to one asset and also just to go back to when I talk about deploying cap.

At all in 'twenty, two I think it is going to be well in excess of 5 billion not five not five.

<unk> 5 billion on the notes.

Okay perfect. Thanks, Tom appreciate it.

Your next question comes from the line of Thomas.

MS Allen from Morgan Stanley Your line is open.

Thanks.

I think I heard correctly that you said your data over a billion seven in sports betting handle in the third quarter and then over a billion the Rio <unk> in October which based on my numbers implied down about 15% U S market share in September sorry in the third quarter then of course, there's 20% in October.

Can you parse out a little bit you relaunched your exports August 2nd sort of like how would the trajectory in the third quarter and then any color, Nevada, Nevada versus the rest of the state just to kind of get a give a view on kind of what the legacy business did versus the newer businesses. Thank you.

Yeah. So the in terms of handle as you would expect the quarter built August was considerably bigger than July and September Dorst August because of the calendar October is considerably more than September.

In terms of the state's I've talked about so Liberty States, we went from.

In the sixes to about 12 in terms of.

<unk> market share is we're measuring it in total we're about 17%, Nevada share was flat over that timeframe, we obviously have.

Very large share in Nevada, but didn't have any significant move in sure keep in mind, Nevada is not a liberty state yet either.

Alright, Thanks, Tom and then just as my follow up can you just talk a little bit I mean, you gave some color on whats been going well and the cross sell wanted to reward customers, but can you talk about some of the other things.

<unk> $5000 with very bad the commercial is all of that.

How you're how do you think they're doing okay.

It's hard to parse all of that from a commercial standpoint.

They measure unaided brand awareness.

That's through the roof. Since we started the commercial was basically ask your question is no.

List Sports list companies that offer sports books.

The amount of people percentage of people that would name Caesars today is dramatically higher than it was on August 1st.

Individual promotions, we're constantly tweaking those I don't really want it.

For competitive reasons get into what's worked the best and what hasn't worked what you should expect.

To see that continue we've rolled out single game Parlays, which.

In NFL action is has been growing substantially as a percentage of our beds and that's very high whole business. So that's good to see and the App I'm sure. You track. This promise has seen a significant improvement on the sports category rank on iOS I mean, we were trailing.

We were roughly 150 ranked and now we're <unk>.

Great progress between 15 and 20 on the iOS App. So it's just a tremendous improvement there.

All helpful color. Thank you very much.

Your next question comes from the line of Barry Jonas from Covid. Your line is open.

Alright, Tom and team. This is matti, thanks very much.

I think Barry might be a technical difficulty.

Sure.

Hey, guys.

Think about ROI and digital markets with higher tax rates like New York.

Obviously, that's going to influence your reinvestment rate youre looking for ultimately.

What's my return on capital, but you.

You can.

In larger population stage high velocity high.

Participation.

You can conceivably make money at higher tax rates than in lower volume states, but obviously, we prefer that we prefer the lower tax jurisdictions as an operator.

Got it.

Once you reach a point when you can pair back promos for digital how do you think about the size and profitability.

Are there any business loss.

With that any updated thoughts on a mature market share goal.

We've not been out there with a market share goal and don't want to start that today other than to make the point again.

The target that we had in mind when we put out the metrics last quarter, we're gaining share much much quicker than we anticipated as we started out.

What was the other piece of that.

Barry Richards.

Yes.

The question was.

When you reach a point you can start paring back promos, how do you think about.

What business stays in what remains sorry.

Where can you know as we as you have your deposit in our App.

We're signing up for Caesars rewards and.

The vast majority of cases, if you're not already a customer so we're bringing new customers into the system.

Our expectation is our history has been that customer becomes sticky to the brand over time as they realize the benefits of what the rewards program brings them. So we're looking at it from the standpoint of we think if you.

We're thinking of lifetime value of a customer we think our lifetime value of a customer is going to compare favorably with our peers, both because of the profile of the average Caesars reward customer.

<unk> is starting to dominate our handle and the length of time that they're going to stick with the app because of the relationship with the rewards program, but we do know that we're going to lose some of these guys that are shopping from site to site for whats the best promo I can get Tonight.

Great. Thanks, so much.

Yes.

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

Hey, good afternoon, everyone.

Just thinking about like the ramp up in some of the let's call. It the non fair fight States, where you were a little bit later can you just talk maybe at a higher level I need to try to give us some direction in a couple of different ways, but could you talk a little bit about.

How you expect.

To be able to monitor what do you actually expect to see about the ramp up in some of those.

Really competitive existing states, New Jersey, Pennsylvania, and Michigan to the World just how should those trend as we see that data coming in.

Every month and what Kpis are you looking for to kind of continue to show.

So in those markets.

I mean, we're looking at handle share for the time being and a few on Michigan went from <unk>.

Three to over six.

Tennessee, you went from two to almost.

H.

Virginia went from six to 10, so youre seeing it in the states, where we jumped in late that we're gaining share.

Materially early on and expect that we would expect to continue took lot cost share over time. So there's really no state I can point to where I would say.

We haven't seen the experience since launch that we're building share from where we were its just in the case of <unk>.

The stage.

We talked about where we were late we're starting from.

The low base in the cloud is going to take more time.

And my follow up would be a little bit on the cost side. So you've obviously been very visible with the kind of national AD buy but theres been some discussion already that there has been some pullback in the big TV buys.

And you've also talked about your performance marketing a little bit. So can you just talk I mean I'm sure.

Sure you've got your own competitive plan out there, but how do you think about.

Maybe switching some of that spend through channels as youre awareness reaches a level that everybody's going I know youre out there and you really start to focus on effectiveness is there is there a timeline to think about for that or do you know what kind of how have you thought about those buckets evolving over time.

You should expect through this football season, we're going to continue to be aggressively just filmed another around what we're calling season too.

That will start rolling out this month.

So youre going to we're going to be all over the place in terms of media, where we have.

We've kept our powder dry as they advertise the media that was targeted toward high casino until we get the product up to the standard that we want.

Thank you very much.

Your next question comes from the line of Dan Pollack Sir.

Fargo. Your line is open.

Hey, guys good afternoon, and thanks for taking my questions.

Tom You mentioned this a little bit in terms of the new sign ups from the Caesars rewards members. I mean can you can you maybe quantify that or put some numbers there and have you seen this.

To what extent have you seen the new sign up the new players flowing to your properties and create more of an omnichannel benefit.

As I said on the answer the first question is no I'm not going to put.

Raw data on those numbers, but.

Figure.

Caesars reward first time depositors have been a quarter to a third of our first time deposits, but as far as handle have been about half.

Those are.

Kind of broad those are broadly where we're at and as I said as you sign up for the App and deposit you are prompted to sign up for Caesars rewards and we're seeing extremely high uptake in terms of.

People signing up for Caesars rewards and we're seeing cross visitation.

One of the areas where we're.

Particularly active is the high end of the market.

Large betters that are new to our system, where we're willing to take large sports bets and we're seeing those customers make their way into our there are high limit rooms as well. So that's been an encouraging sign and we've seen that all the way down to the low levels of the database as well.

Got it and then just for my follow up I think for William Hill in Nevada, I think it's historically had around 30% or so of market share for.

For sports betting since you guys took full ownership have you seen any changes.

In terms of your partners, there and you know I know.

<unk> certainly grown a lot as well.

We're about half of Nevada.

Got it thanks, so much.

Your next question comes from the line of David Katz from Jefferies. Your line is open.

Hi, Ethan.

Everyone. Thanks for taking my question.

I wanted to go back to the commentary gone over a little bit on the I gaming with.

The offering not being up to what your standard is and I think early on you indicated the breath of games was not what you wanted.

From a technology and game engine perspective.

Are those elements that you're still working on or is it really just a content offering.

Issue primarily.

We are never stopping work on the.

So nuts and bolts behind both OSB and I gaming, but the I gaming piece that we're waiting on is virtually entirely content at this point.

And it's just a matter of us.

Getting through the bureaucracy in each state in terms of.

Getting the games approved on our apps and this is a function of.

This is not states dragging their feet William Hill, and its former life as a.

U K domiciled in managed company didn't.

Didn't provide the resources to the U S business to develop.

Both the OSB platform.

Platform to their fullest extent.

And so what we're doing is providing.

Providing the resources and ability to let gaming catch up with OSB.

Understood and with respect to I gaming there is I believe a conventional wisdom.

With fewer states and perhaps smaller share are smaller total handle.

Profitability in the Ltvs are those customers et cetera.

Ken.

One two or even better than it.

OSB is that what you're.

Our expectation is as we start to get some of those handle numbers into some of those share numbers from you.

We are I gaming as.

Is and has been.

A material profit generator in new Jersey for Us and.

And we would expect we would expect.

Michigan, Pennsylvania, West, Virginia, and as we rollout to follow that same path.

One last one if I may.

Yes.

Within sports betting and gaming.

The appearances that you have a fully integrated control over that enterprise is.

Is that correct or are there be to be participants in there that maybe driving certain aspects of your sports betting enterprise.

The only piece.

Is the Pam that's provided by Neo games, but that's a unique arrangement given our ownership interest in neo games, where we have.

A dedicated team that works on only the Caesars Pan at Neon games.

Perfect. Thanks, a lot.

Once again to ask a question you will need to press star one again Touchtone telephone again Thats star one on your Touchtone telephone.

Next question comes from the line of Chad Beynon from Macquarie. Your line is open.

Hi, good afternoon, Thanks for taking my question.

I'll add onto the digital questions just one on Canada, specifically, Ontario, I know the the marketing will be a little bit different up there versus what we're seeing in the United States can you give us a sense of how you think the market will shake out and any commentary around your rewards program membership up there.

Given that the customer acquisition will be different than what we're seeing state side. Thanks.

So we're watching as you are as well.

They go through the mechanics of how it will roll out.

<unk>.

We anticipate that we will be among the better positioned operators and Ontario, given our long management contract history with Caesars Windsor. So we have.

We have a large amount of Ontario customers available to us and known to us through Caesars rewards.

Okay. Thanks.

Tom I'm not sure. If you were Anthony mentioned this in your prepared remarks, but on the regional markets I know a lot of the recovery has been driven by spend per visit versus visitation visitation has certainly been a laggard can you help us think about visitation is if the recovery has plateaued or if you're still seeing that.

Improve as that 55 and older customer gets comfortable coming back to your properties. Thank you.

Yes, I would say the story has remained the same that spend per visit.

<unk> to be elevated.

I would expect that to remain the case as long as.

The U S savings rate is about two X what it's been historically, we do expect.

If and when you get a full retreat of Covid.

On the retail side, we do expect that there is significant portions of the database significant portion of the population that will then be willing to come to the casinos that are not coming today. We also expect that as business travel returns we'd.

Back there to be a similar experience of pent up demand for business travel.

Once we've got this behind us.

Thanks, Tom appreciate it.

Thanks, Chad.

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

Hi, Thanks.

These are kind of follow ups to some of the digital questions earlier I guess as you launch I gaming how are you thinking about who that customer is and how to ensure it's truly incremental revenues and profits versus kind of cannibalizing the base.

Yeah, Steve we've got a lot of experience there.

In New Jersey that is going to be relevant to us in other states. If you think about the states, we're going to be rolling out in.

We don't have a property in Michigan, we know we have a single property that's not.

Large in Pennsylvania, and we don't have a property in West Virginia. So we don't expect that to be a material factor for us in those states.

That's helpful and maybe another follow up I know that you gave a little bit of detail about people spending on device and then in property is there anything else that you can kind of provide in terms of thinking about how it is.

They are in terms of.

Greater time on device or step up in frequency of bats, as you've been launching thanks.

It's awfully early to be.

Six stating anything definitively in terms of that.

That type of behavior, considering we've really been.

Our lives first 60 days here.

I would say is.

Things like digital customers.

Value being invited to brick and mortar properties, we're doing a lot of that and the response has been overwhelming that doesn't happen in.

Apps are our peers. So we think this is.

As I said earlier this isn't you just flip a switch this is you've got to activate this you get better at it every day and momentum builds but some of this stuff that we're seeing that.

Small and kind of need right now is going to be significant drivers of value going forward.

So.

Anybody else operator.

There's nobody else in the queue. Sir This concludes our Q&A session I would now like to turn the conference back to Mr. Tom Reeg.

Thanks, everybody.

During the holiday season will be back in 'twenty, two with our fourth quarter results.

Okay.

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

Okay.

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