Q4 2021 Penn National Gaming Inc Earnings Call

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Please continue to stand by your conference will begin momentarily we thank you for your patience.

Speaker 1: Please continue to stand by your conference while we begin momentarily. We thank you for your patience.

Speaker 2: Do This is

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Speaker 1: Greetings and welcome to the Penn National Gaming Fort Quarter Conference call. During the presentation, all participants will be in the listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one, fall by the four on your telephone. If at any time during the conference, you need to reach an operator, please press star zero. I would now like to turn the conference over to Mr. Joe Jaffoney and best of relations. Please go ahead.

Your line.

Greetings and welcome to the Penn National Gaming fourth quarter conference call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your telephone.

Any time during the conference you need to reach an operator, Please press star Zero I would now like to turn the conference over to Mr. Joe <unk> Investor Relations. Please go ahead.

Speaker 3: Thank you, Frank. Good morning, everyone, and thank you for joining Penn National Gaming's 2021 fourth quarter conference call. We'll get to management's presentation and comments momentarily as well as your questions and answers. But first, as our practice, I'll review the Safe Harbor Disclosure.

Thank you Frank Good morning, everyone and thank you for joining Penn National Gaming's 2021 fourth quarter Conference call, we'll get to management's presentation and comments momentarily as well as your questions and answers, but first as is our practice I'll review the safe Harbor disclosure.

Speaker 3: In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Security's litigation reform act of 1995, which involve risk and uncertainties. These statements can be identified by the use of forward-looking terminologies such as expects, believes, estimates, and projections, and tens, plans, seeks.

In addition to historical facts or statements of current conditions. Today's conference call contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095, which involve risks and uncertainties. These statements can be identified by the use of forward looking terminology such as expects believes estimates projects intends plans seeks may will should or.

Speaker 3: May, will, should, or anticipates, or the negative or other variations of these or similar words, or by discussions of future events, strategies, or risks, and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures, and operating results.

Or anticipates or the negative or other variations of these or similar words or by discussions of future events strategies or risks and uncertainties, including future plans strategies performance developments acquisitions capital expenditures and operating results such forward looking statements reflect the company's current expectations and beliefs, but are not guarantees of <unk>.

Speaker 3: Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially.

Performance.

As such actual results may vary materially from expectations.

Speaker 3: The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10K and Form 10Q. PEN National Gaming assumes no obligation to publicly update or revise any forward-looking statements.

The risks and uncertainties associated with the forward looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q .

Penn National Gaming assumes no obligation to publicly update or revise any forward looking statements.

Speaker 3: Today's column webcast will include non-GAAP financial measures within the meaning of SEC regulation G and when required a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press releases well as on the company's website.

Today's call and webcast will include non-GAAP financial measures within the meaning of SEC regulation G and when required a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website.

Speaker 3: With that, it's now my pleasure to turn the call over to your host, the company CEO , Jason Odin. Jay, please go ahead.

With that it's now my pleasure to turn the call over to your host the company's CEO Jay Snowden Jay. Please go ahead.

Speaker 4: Thanks, Joe. Good morning, everyone. Here with me in Wyoming, as usual is our CFO Felicia Hendrick.

Thanks, Joe and good morning, everyone are here with me and why I'm missing as usual is our CFO Felicia Hendrix, our head of operations part George as well as other members of my team and we're all happy to.

Speaker 4: Our head of operations taught George as well as other members of my executive. And we're all happy to jump in and answer questions you might have later on the call. I thought before I get into prepared remarks, I first wanted to address the article about Dave Portnoy that dropped last night from the same paywall subscription based publisher as the last article, and which also happened to be on the same day of our earnings call exactly three months ago.

Jump in and answer questions you might have later on the call.

I thought before I get into my prepared remarks, I first wanted to.

Address the article about Dave Portnoy that dropped last night.

From the same paywall subscription based publisher as the last article and what's also happened to be on the same day of our earnings call exactly three months ago.

The allegation.

Speaker 4: are from anonymous sources made about Dave and his personal life. And Dave has responded publicly. Many of you have probably seen that just as he did last time. So before we get started, I just wanted to respectfully ask three things for the call today. One, if you have read or planned to read the article, I would just recommend that you also read and watch Dave's response that he posted last night.

From anonymous sources made about Dave and his personal life and David's responded publically many of you've probably seen that.

Just as he did last time, so before we get started I just wanted to respectfully ask three things for the call today.

One if you had read or plan to read the article I would just recommend that you also read and watch Dave's response that he posted last night.

Speaker 4: Two, that like last time we give this time to play out, there undoubtedly will be more to come in the coming days, just as what transpired three months ago. And then lastly, that we keep today's call focused on Penn and our earnings release and our exciting and unique future outlook. So with that, let me jump into prepared remarks, throw my readers on here that my team's never seen me wear before, but I'm getting old.

To that like last time, we give the time to play out.

There undoubtedly will be more to come in the coming days, just as what transpired three months ago, and then lastly that we keep todays call focused on pad in our earnings release, and our exciting and unique future outlook. So.

With that let me jump in the prepared remarks throw my readers on here that my team has never seen anywhere before but I'm getting old.

Speaker 4: We provided a link to the slide presentation along with our earnings reports this morning that if you haven't already Opened or printed it out. I would suggest you do it now if you have access Our prepared remarks will reference several of those slides today

We provided a link to the slide presentation, along with our earnings report. This morning that if you haven't already opened or printed it out I would suggest you do it now if you had access.

Our prepared remarks will reference several of those slides today.

Speaker 4: So I'd like to start and spend some time on slide four as it provides an appropriate backdrop for all of our comments today. There's been so much focus the last few months on online sports betting handle.

So I'd like to start and spend some time on slide four as it provides an appropriate backdrop for all of our comments today. There's been so much focus the last few months on online sports betting handle.

Speaker 4: and questions about path to profitability that I think it is helpful for context to highlight at a strategic level what it is that makes Penn truly different from the competition.

And questions about path to profitability that I think it is helpful for context to highlight at a strategic level. What it is that makes patent truly different from the competition.

Speaker 4: We have the nation's largest portfolio of regional gaming assets that generate significant and sustainable free cash flow. In fact, 2021 was a record year of free cash flow at Penn that resulted in year-end lease-adjusted net leverage of 4.1 times.

We have the nation's largest portfolio of regional gaming assets that generate significant and sustainable free cash flow. In fact, 2021 was a record year of free cash flow at Penn that resulted in year end lease adjusted net leverage of four one times.

This balance sheet strength and financial flexibility has afforded us the opportunity to pursue the continued evolution of our differentiated omnichannel strategy, which includes a thriving and profitable media business anchored by the score and our investment in Barstool sports and a rapidly growing interactive business with a clear path to near term.

Speaker 4: This balance sheet strength and financial flexibility has afforded us the opportunity to pursue the continued evolution of our differentiated army channel strategy, which includes that thriving and profitable media business anchored by the score in our investment in barstall sports and a rapidly growing interactive business with a clear path to near-term profitability and a long-term path to meaningful value creation.

Profitability in our long term path to meaningful value creation, a path that is not entirely contingent on Tam our scale, our marketing spend but one that is more in our control and based on our business model and margin profile that has unmatched structural advantages that I'll cover in more detail a little later.

Speaker 4: A path that is not entirely contingent on TAM or scale or marketing spend, but one that is more in our control and based on a business model and margin profile that has unmatched structural advantages that I'll cover in more detail a little later.

Speaker 4: Given this unique competitive positioning and confidence in our future growth prospects, I'm pleased to share that our Board of Directors has authorized a $750 million three-year share repurchase program. Our strong financial position provides us with the ability to continue to grow our business and invest where appropriate while also returning capital to shareholders in a rapidly evolving marketplace.

Given this unique competitive positioning and confidence in our future growth prospects I'm pleased to share that our board of directors has authorized a $750 million three year share repurchase program. Our strong financial position provides us with the ability to continue to grow our business and invest where appropriate while also returning capital to shareholders in a rapid.

The evolving marketplace.

Speaker 4: If you move on to slides five and six, you can see that we had a strong finish to really what was a tremendous year for us at Penn, with our fourth quarter revenues and adjusted EBITDA exceeding both 2020 and 2019 levels, despite the ongoing pandemic. I'm incredibly grateful for the hard work and dedication of our team members across the entire enterprise during this challenging time as they continue to deliver best-in-class service to our guests while managing the virus-related impact on their own lives.

If you move on to slide five and six you can see that we had a strong finish to really what was a tremendous year for us at Penn with our four quarter fourth quarter revenues and adjusted EBITDAR exceeding both 2020 in 2019 levels. Despite the ongoing pandemic I'm incredibly grateful for the hard work and dedication of our team members across the entire enterprise during this.

<unk> time as they continue to deliver best in class service to our guests, while managing the virus related impact on their own lives.

Speaker 4: In the fourth quarter, we successfully advanced several of our long-term strategic objectives. Most significantly, we closed on our acquisition of the score. A transaction that provides us with another powerful sports media brand, loyal audience, and full control of our product and technology roadmap.

In the fourth quarter, we successfully advanced several of our long term strategic objectives. Most significantly we closed on our acquisition of the score a transaction that provides us with another powerful sports media brand loyal audience in full control of our product and technology roadmap.

Speaker 4: Looking ahead a year from now, we also have the opportunity to fully own barstell sports, which together with the score will mark our transformation into a major media and entertainment company.

Looking ahead a year from now we also have the opportunity to fully owned Barstool sports, which together with the score will mark our transformation into a major media and entertainment company.

Speaker 4: You will note in our release that we have created a new operating segment for interactive, which delivered very impressive results, certainly relatively speaking. I think there is a misperception right now in the market that there is no clear path to near-term or even medium-term profitability in the sports betting sector. But I would like to remind you that we are employing a very unique strategy, and we are already seeing the benefits of our disciplined marketing approach and numerous structural advantages.

You will note in our release that we have created a new operating segment for interactive, which delivered very impressive results certainly relatively speaking I think there is a misperception right now in the market that there is no clear path to near term or even medium term profitability and the sports betting sector, but I'd like to remind you that we are employing a very unique.

And we are already seeing the benefits of our disciplined marketing approach and numerous structural advantages in fact, our interactive segment exceeded our EBITDA expectations in the fourth quarter, despite launching sports betting in Iowa, and I Casino and sports betting in West, Virginia, as well as some costs associated with the.

Speaker 4: In fact, our interactive segment exceeded our EBITDA expectations in the fourth quarter despite launching sports betting in Iowa and iCasino and sports betting in West Virginia, as well as some costs associated with the integration of the score in an extremely aggressive competitive environment that's been well documented by many of you.

And of the score and an extremely aggressive competitive environment, that's been well documented by many of you.

Speaker 4: We have all seen the incredible level of marketing spend in this space, which we all know is not sustainable in a competitive environment. We have not, at Penn, and will not jump into that fray as we remain focused on channeling our investments into ownable and differentiated products, experiences, and technology platforms for our end users that will have long-term benefits versus spending irrationally on short-term marketing initiatives with very questionable returns.

We have all seen the incredible level of marketing spend in this space, which we all know is not sustainable in a competitive environment, we have not at Penn and will not jump into that Fray as we remained focus on channeling, our investments and to owner Bowl and differentiated products experiences and technology platforms for our end users that will.

Have long term benefits versus spending irrationally on short term marketing initiatives with very question about returns.

Speaker 4: We are also very fortunate to have two dynamic and growing customer acquisition funnels in Barstool Sports and The Score, together with our leading portfolio of retail casinos and sportsbooks that provide us with highly effective organic marketing and monetization opportunities without the need to incur massive losses to compete.

We are also very fortunate to have two dynamic and growing customer acquisition funnel and barstool sports and the score together with our leading portfolio of retail casinos and sports books that provide us with highly effective organic marketing and monetization opportunities without the need to incur massive losses to compete.

Speaker 4: And we're going to stay committed to our strategy of leveraging these strengths.

And we're going to stay committed to our strategy of leveraging these strengths.

Speaker 4: Looking ahead, we expect our interactive business to lose approximately $50 million in 2022, which is an improvement from our prior $80 million EBITDA loss for the year, and obviously pales in comparison to the anticipated losses of the competitive set. Importantly, this estimate is inclusive of investments we are making to scale our operations and infrastructure in anticipation of bringing our technology in-house and launching in a minimum of four new jurisdictions.

Looking ahead, we expect our interactive business to lose approximately $50 million in 2022, which is an improvement from our prior $80 million EBITDA loss for the year and obviously pales in comparison to the anticipated losses of the competitive set importantly, this estimate is inclusive of investments, we are making to scale our operations and infrastructure.

<unk> in anticipation of bringing our technology in house, and launching and a minimum of four new jurisdiction rigor.

Speaker 4: Regarding the cadence of the year, we expect to incur most of that EBITDA loss in the first three quarters as we launch in several new markets and prepare our products and technology stack for football season 2023, sorry, 2022. By 2023, we expect to be generating positive EBITDA in our interactive division, as I've said before.

Regarding the cadence of the year, we expect to incur most of that EBITDA loss in the first three quarters as we launch in several new markets and prepare our products and technology stack for football season, 2023, sorry, 2022 by 2023, we expect to be generating positive EBITDA and our interactive division as I've said before.

Speaker 4: And as I mentioned earlier, we see a lot of attention in the press about handle market share. And while that is a useful metric, particularly when a state first launches, it doesn't mean as much when those incoming dollars generated from that handle are completely offset by marketing and promotion.

And as I mentioned earlier, we see a lot of attention in the press about handle market share and while that is a useful metric, particularly when a state first launches it doesn't mean as much when those incoming dollars generated from that handle are completely offset by marketing and promotions. While we think this point is becoming more widely understood. Unfortunately, because of the varied ways the states.

Speaker 4: While we think this point is becoming more widely understood, unfortunately, because of the varied ways the states report sports betting metrics, the investment community is forced to use Handle to compare company performance in each state.

Sports betting metrics.

<unk> community is forced to use handle the compare company performance in each state.

Speaker 4: Fortunately, there are a few states that report net gaming revenue, which we believe is a more relevant measure of performance. You can see that in states like Pennsylvania and Michigan, our NGR market share underscores the benefit of our profit-focused strategy as shown on slide 16 in our slide deck.

Fortunately there are a few states that report net gaming revenue, which we believe is a more relevant measure of performance you can see that in states like Pennsylvania, and Michigan are N G. Our market share underscores the benefit of our profit focused strategy as shown on slide 16 in our slide deck.

Speaker 4: While we, like all operators, have seen volatility from month to month based on hold and always will with the return of football season, we have gained traction pretty much across the board with our online sports betting revenue more than doubling in the fourth quarter.

While we like all operators have seen volatility from month to month based on hold and always will with return to football season, we have gained traction pretty much across the board with our online sports betting revenue more than doubling in the fourth quarter.

Speaker 4: And we are doing this while spending a fraction, a small fraction of what our competitors spend on marketing.

And we are doing this while spending a fraction small fraction of what our competitors spend on marketing.

Speaker 4: Our performance in New Jersey, which is perhaps the most competitive online sports betting market in the world, is particularly notable as we captured meaningful share despite launching three years or more after our primary competitors.

Our performance in New Jersey, which is perhaps the most competitive online sports betting market in the world is particularly notable as we captured meaningful share despite launching three years or more after our primary competitors.

Speaker 4: Felicia and I regularly are asked when we can expect to see positive contribution margin following new state launches. As you will see on slide 18.

Felicia I regularly or asked when we can expect to see positive contribution margin following new state launches as you will see on slide 18, our low customer acquisition costs and high retention rates are providing a very short payback period, specifically within two or three quarters of launching in the state by the time, we are in a state for a year.

Speaker 4: Our low customer acquisition costs and high retention rates are providing a very short payback period, specifically within two or three quarters of launching in a state. By the time we are in a state for a year, we typically achieve over a two-times return on our initial investment in that state.

Typically achieve over a two times return on our initial investment in that state. This return is even faster of course and higher in states that also offer online casino.

Speaker 4: This return is even faster, of course, and higher in states that also offer online casino.

Speaker 4: Slide 19 reinforces this point by illustrating the impact of our structural advantages versus the competition.

Slide 19 reinforces this point by illustrating the impact of our structural advantages versus the competition.

Speaker 4: We are confident our organic marketing strategy and market access footprint will lead to outsized profitability over the long term. This doesn't even factor in the impact of our retail sportsbooks, which are highly profitable and provide significant opportunities for cross-sell. We now operate 24 retail sportsbooks across the country, and we estimate that our total retail market share outside of Nevada is 12%.

We are confident our organic marketing strategy and market access footprint will lead to outsized profitability over the long term. This doesn't even factor in the impact of our retail sports books, which are highly profitable and provide significant opportunities for cross sell.

We now operate 24 retail sports books across the country and we estimate that our total retail market share outside of Nevada is 12%.

Speaker 4: In Louisiana, we generated over half of the state's retail handle and revenue during the first two months of operation at temporary sportsbooks at our five casinos. We expect even greater upsides when we complete the barstool rebranding at our signature locations in Lake Charles, Baton Rouge, and Bossier City.

In Louisiana, we generated over half of the state's retail handle and revenue during the first two months of operation at temporary sports books at our five casinos, we expect even greater upside when we complete the barstool rebranding at our signature locations in Lake Charles Baton Rouge in Bossier City.

Speaker 4: Speaking of Louisiana, following our recent launch of online sports betting there on January 28.

Louisiana following our recent launch of online sports betting there on January 28, we now operate online sports betting in 12 States and I casino and for looking ahead, we have several important milestones on the horizon, including anticipated launches in Ohio, and Maryland, the establishment of remote mobile registration.

Speaker 4: We now operate online sports betting in 12 states and iCasino in four. Looking ahead, we have several important milestones on the horizon, including anticipated launches in Ohio and Maryland.

Speaker 4: The establishment of remote mobile registration in Illinois in early March, which if you recall, we went live about a year ago and only had one month of remote mobile registration before it reverted back to on-prem. So that's a big deal for us in the state of Illinois. And the recently announced launch date for sports betting and iGaming on April 4th in Ontario.

And in Illinois in early March, which if you recall, we went live about a year ago and only had one month.

Of room up remote mobile registration before it reverted back to on Prem. So that's a big deal for us in the state of Illinois, and the recently announced launch date for sports betting and I gaming on April 4th and Ontario and <unk>.

Speaker 4: And speaking of Ontario, just to quickly recap, on December 20th, the SCORBET became one of the first mobile gaming operators to secure certification from GLI for its sports betting and iGaming platform in the province of Ontario. And just yesterday, the Alcohol and Gaming Commission of Ontario approved the SCORBET's registration as an internet gaming operator. These are two important milestones before the SCORBET can begin operations in the province on April 4th.

Speaking of Ontario, just to quickly recap on December 20th score bet became one of the first mobile gaming operators to secure certification from Gli for its sports betting and I gaming platform in the province of Ontario, and just yesterday, the alcohol and gaming Commission of Ontario approved the score Bath registration as an internet gaming operator, neither too.

Important milestones before the score back can begin operations in the province on April 4th and the score continues to work to satisfy all remaining requirements, including execution of an operating agreement with <unk> gaming, Ontario, our team at the score has been hard at work preparing for this launch in their home province for a long time.

Speaker 4: And the SCORE continues to work to satisfy all remaining requirements, including execution of an operating agreement with iGaming Ontario. Our team at the SCORE has been hard at work preparing for this launch in their home province for a long time, a province with a population of 15 million people, which would rank as the fifth largest state in the U.S. on a population basis. And we believe the SCOREbet brand, supported by the personalities at Barstool Sports, will allow us to be very competitive in that highly lucrative market.

Province, with a population of 15 million people, which would rank as the fifth largest state in the U S. On a population basis and we believe the score back brand supported by the personalities that Barstool sports will allow us to be very competitive in that highly lucrative market.

Speaker 4: As for our iCasino products, we made a number of upgrades during the quarter, including the introduction of our first in-house developer.

As for our casino products, we made a number of upgrades during the quarter, including the introduction of our first in house developed games.

Speaker 4: These improvements have led to steady month-over-month growth this past fall in both handle and revenue for the Barstool Casino. I'm particularly pleased with the performance of our in-house games, which have contributed over 20% of our Barstool Casino handle and revenue since their launch.

These improvements have led to steady month over month growth. This past fall in both handle and revenue for the Barstool Casino I'm, particularly pleased with the performance of our in house games, which have contributed over 20% of our barstool casino handle and revenue since their launch our ability to leverage pen game studios and developing bespoke games like barstool.

Speaker 4: Our ability to leverage Penn Game Studios in developing bespoke games like Barstool Black Jack and Barstool Slots allows us to capitalize on cross-cell from the Barstool audience while also reducing third-party content fees. We see opportunity to expand our IKoceno share this year as we refine our Omni-channel strategy to better leverage our growing my choice database, which is now over 25 million members.

[noise] blackjack and Barstool slots allows us to capitalize on cross sell from the Barstool audience, while also reducing third party content fees, we see opportunity to expand our I casino share. This year as we refine our omnichannel strategy to better leverage our growing my choice database, which has now over 25 million members.

Speaker 4: Turning to the retail side of the business, we saw strong property level performance across our segments most of the quarter with some softness in late December due to Omicron and the increase in COVID-related restrictions.

Turning to the retail side of the business, we saw strong property level performance across our segments most of the quarter with some softness in late December due to the due to omicron and the increase in Covid related restrictions.

Speaker 4: Our properties are still seeing strong visitation from the younger demographics.

Our properties are still seeing strong visitation from the younger demographics, and we are continuing to re imagine our casinos with offerings such as our market, leading retail barstool sports books, and other food and beverage and entertainment options that will help to drive long term retention of this demographic overall, we continue to benefit from a rational and stable marketing and.

Speaker 4: And we are continuing to reimagine our casinos with offerings such as our market-leading retail, barstool sportsbooks, and other food and beverage and entertainment options that will help to drive long-term retention of this demographic.

Speaker 4: Overall, we continue to benefit from a rational and stable marketing and promotional environment and feel confident that the EBITAR flow through achieved in the second half of 2021 is sustainable faring any unforeseen macro or competitive development.

Environment and feel confident that the EBITDAR flow through achieved in the second half of 2021 is sustainable barring any unforeseen macro or competitive developments.

In December we celebrated the opening of Hollywood Casino Morgantown, our fourth casino in Pennsylvania, and the 44th property and our industry leading portfolio like its sister property that opened last August in York, Pennsylvania. This state of the art Casino about an hour outside of Philly is built for the future with our new technologies and customer convenience.

Speaker 4: In December , we celebrated the opening of Hollywood Casino Morgantown, our fourth casino in Pennsylvania, and the 44th property in our industry-leading portfolio. Like its sister property that opened last August in York, Pennsylvania, this state-of-the-art casino, about an hour outside of Philly, is built for the future with our new technologies and customer conveniences, including our three Cs, cardless, cashless, and contactless MyWallet experience.

<unk>, including our three CS cartilage cashless and contactless my wallet experience.

Speaker 4: The property also features the latest evolution of our Barstool Sportsbook, Tony Luke's famous cheesesteaks, and several other F&B and entertainment amenities. We're encouraged with the early results at Morgantown as we were able to reach into a new market with approximately 80% of our rated business being driven by new members to our active database.

The property also features the latest evolution of our Barstool Sports book, Tony Luke's famous Cheesecakes and several other F&B and entertainment amenities. We're encouraged with the early results at Morgantown is we were able to reach into a new market with approximately 80% of our rated business being driven by new members to our active database.

Speaker 4: The three Cs are now live at all of our Pennsylvania properties and our four casinos in Ohio. And we are excited about the potential to introduce this technology to additional properties across the portfolio pending regulatory approval.

The three CS are now live at all of our Pennsylvania properties and our four casinos in Ohio, and we are excited about the potential to introduce this technology to additional properties across the portfolio pending regulatory approvals, our <unk> solution removes friction from transactions and reduces wait times in lines, while also bolstering.

Speaker 4: Our 3C solution removes friction from transactions and reduces wait times and lines while also bolstering our marketing capability.

Our marketing capabilities, our my choice loyalty App now has nearly 750000 downloads up 23% during the fourth quarter and we now have 30000 users of my wallet, which provides our customers with a seamless mobile wallet solution to connect directly to their favorite games and with that I'll now turn it over to Felipe.

Speaker 4: Our MyChoice loyalty app now has nearly 750,000 downloads, up 23% during the fourth quarter. And we now have 30,000 users of MyWallet, which provides our customers with a seamless mobile wallet solution to connect directly to their favorite games. And with that, I'll know.

Uh huh.

Speaker 5: Thanks, Jay. As referenced, as Jay referenced, we generated record-free cash flow in 2021 of approximately $800 million, as well as record net leverage of $4.1 billion.

Thanks, Jay as reference as Jay referenced we generated record free cash flow in 2021 of approximately 800 million as well as record net leverage of four one time, given our strong financial positioning as well as our confidence and improved visibility in our overall business, we not only received board authorization.

Speaker 5: Given our strong financial positioning, as well as our confidence and improved visibility in our overall business, we not only received board authorization for a 750 million share repurchase program, but we're also re-initiating guidance.

And for 750 million share repurchase program, but we're also re initiating guidance for 2022, we're providing a net revenue range of $6 7 billion to $6 three 9 billion and an adjusted EBITDA range of $1 85 billion to $1 95 billion.

Speaker 5: For 2022, we're providing a net revenue range of $6.07 billion to $6.39 billion and an adjusted EBITDA range of $1.85 billion to $1.95 billion, which implies a 37% EBITDA margin at our core operations.

Implies a 37% EBIT margin at our core operations. We believe these ranges capture the uncertainty that still exist.

Speaker 5: We believe these ranges capture the uncertainty that still exists in most consumer sectors will also appropriately bracketing of financial expectations for the year. I'd like to provide you with several other metrics to help your modeling.

And most because consumer sectors, while also appropriately bracketing, our financial expectations for the year I'd like to provide you with several other metrics to help your modeling for 2022, our corporate expense is expected to be $100 5 million inclusive of a cash settled stock based on what maintenance Capex.

Speaker 5: For 2022, our corporate expense is expected to be $100.5 million, inclusive of our cash-settled stock-based awards. Maintenance CapEx is expected to be roughly $300 million. We expect total interest expense of $566 million, of which $95 million is cash interest, cash taxes of $159 million, and an annual share count of roughly $187 million.

It is expected to be roughly $300 million. We expect total interest expense of $5 66 million of which $95 million is cash interest cash taxes of $159 million in annual share count of roughly $187 million.

Speaker 5: Our new interactive reporting segment that we added this quarter reflects our view that the results of our interactive operations represent a strategic and high-growth component of our overall operation.

Our new interactive reporting segment that we added this quarter reflects our view that the results of our interactive operations represent a strategic and high growth component of our overall operations. The interactive segment, which was previously reported within the other segment includes the operating results at Penn Interactive, including Barstool Sports and casino.

Speaker 5: The interactive segment, which was previously reported within the other segment, includes the operating results of Penn Interactive, including Barstool Sportsbook and Casino.

Speaker 5: score and a proportionate share of earnings attributable to our investment in barstool sports.

Sure and our proportionate share of earnings attributable to our investment in Barstool sports corporate expense will continue to be reported in the other segment. In addition to Standalone racing operations, either joint ventures, and management contracts and the Heartland Poker tour.

Speaker 5: Corporate expense will continue to be reported in the other segment in addition to standalone racing operations, other joint ventures, and management contracts and the Heartland Poker Tour.

Speaker 5: As a result of this change in reportable segments, we recast previously reported segment information to conform to the current management view for all prior periods presented, which you can find in this morning's release.

As a result of this change in our reportable segments segment. We recap previously reported segment information to conform to the current management view for all prior periods presented which you can find in this morning's release. These changes have no impact to our company's consolidated financial statements.

Speaker 5: Changes have no impact to our company's consolidated financial state.

Speaker 5: Before I hand it back to Jay, I'll just leave you with a few housekeeping items. In the fourth quarter, corporate expense inclusive of cash settled stock based awards with $24.3 million. Our cash rent payments were $228.8 million. Cash interest with $14.8 million. Cash taxes were $32.7 million and maintenance cap-X with $55.3 million, with total cap-X at $102.1 million.

Before I hand, it back to Jay I'll, just leave you with a few housekeeping items in the fourth quarter corporate expense inclusive of cash settled stock based awards with $24 3 million of cash rent payments with $228 8 million cash interest was $14 8 million cash taxes were $32 7 million and maintenance Capex was.

50, $55 3 million with total Capex at $102 1 million.

Speaker 5: Our balance sheet remains a key asset for us. Total liquidity as of December 31, 2021 was 2.5 billion consisting of 1.9 billion in cash and our 700 million undrawn revolver. Traditional Necdette was 886 million and increased with 841 million during the quarter, principally due to a cash payment of approximately 923 million for the acquisition of the score. And as Jane mentioned earlier, at least adjusted net leverage with 4.1 times a record low for the call.

Our balance sheet remains a key asset for a total liquidity as of December 31, 2021, with $2 5 billion, consisting of $1 9 billion in cash and a 700 million undrawn revolver traditional net debt was $886 million, an increase of $841 million during the quarter, principally due to the cash payment of approximately.

<unk> $923 million for the acquisition of the score and as Jay mentioned earlier at least adjusted net leverage was four one times a record low for the company.

Speaker 5: Our balance sheet gives us the flexibility to be opportunistic in a dynamic marketplace and to return capital to shareholders through share repurchases. While we're not guiding to an optimal net leverage level today, our strong free cash flow generation should enable us to naturally de-lever over time. And with that, I'll turn it back to Jay.

Balance sheet gives us the flexibility to be opportunistic in a dynamic marketplace and to return capital to shareholders through share repurchases, while we're not guiding to an optimal net leverage levels. Today are strong free cash flow generation should enable us to naturally delever over time and with that I'll turn it back to Jack.

Speaker 4: Thank you, Felicia. As you saw in our release, we're continuing to expand on our ESG initiatives as well, and look forward to sharing our 2021 corporate social responsibility report in April in conjunction with our proxy filing.

Thanks, Felicia as you saw in our release, we're continuing to expand on our ESG initiatives as well and look forward to sharing our 2021 corporate social responsibility report in April in conjunction with our proxy filing highlights from the quarter include the launch of a $4 million stem scholarship fund an internship program at historically black colleges.

Speaker 4: Highlights from the quarter include the launch of a $4 million STEM Scholarship Fund and Internship Program at Historically Black Colleges and Universities in states in which we operate.

And universities and states in which we operate in addition, we started a new pilot program to help mentor and develop our hourly and early career team members, who want to pursue leadership positions at our company. We also kicked off our annual 1 million dollar diversity scholarship program for the children of team members and are now reviewing applications for the <unk>.

Speaker 4: In addition, we started a new pilot program to help mentor and develop our hourly and early career team members who want to pursue leadership positions at our company.

Speaker 4: We also kicked off our annual $1 million diversity scholarship program for the children of team members and are now reviewing applications for the 2021-2022 school year.

2021, 2022 school year.

Speaker 4: In our inaugural year, we awarded over $1 million in two and four year scholarships to 58 individuals, the majority of whom were first generation college students, which is an awesome story. We expect this year's program to be similarly successful, and I look forward to sharing more details with you next quarter.

In our inaugural year, we awarded over $1 million in two and four year scholarships to 58 individuals. The majority of whom were first generation College students, which is an awesome story. We expect this year's program to be similarly successful and I look forward to sharing more details with you next quarter and other positive Penn News.

Speaker 4: In other positive pen news earlier this week, we were honored to come in second place out of 34 companies as an employer of first choice in the annual Casino Gaming Executive Satisfaction Survey by Bristol Associates and Spectrum Gaming. I believe that now marks.

News earlier this week, we were honored to come in second place out of 34 companies as an employer of first choice and the annual Casino gaming Executive satisfaction survey by Bristol Associates and spectrum gaming I believe that now marks six or seven maybe eight years in a row that we've finished first or second in this anonymous survey. We're also proud to report.

Speaker 4: 6 or 7 maybe 8 years in a row that we finished first or second in this anonymized survey. We're also proud to report that in the eye game and in mobile sports betting division, Penn Interactive came in first place out of 28 organizations, so congratulations to everybody at Penn and Penn Interactive.

That in the I gaming and mobile sports betting Division Penn Interactive came in first place out of 28 organization. So congratulations to everybody at Penn and Penn Interactive.

Speaker 4: Our support of our nation's heroes also continues. We are approaching 100,000 customers enrolled in our My Hero's Loyalty Program, which provide special benefits for veterans, activity, and first responders. When we hit that milestone, our properties will be contributing $100,000 to local veterans groups in their communities.

Our support of our nation's heroes also continues we're approaching 100000 customers enrolled in our my heroes loyalty program, which provides special benefits for veterans active duty and first responders when we hit that milestone our properties will be contributing $100000 to local veterans groups and their communities.

Speaker 4: Also in conjunction with this year's Army Navy football game, Barstall Sportsbook ran a special Viva LaTrups promotion, matching certain first time deposits and raising $200,000 to support the Fisher Health Foundation and SemperFi and America's Fund Veterans Organizations. Yet another example of how our marketing approach can be a win-win for our bottom line and those in need in our community.

Also in conjunction with this year's Army Navy football game Barstool Sports book ran a special Viva La troops promotion matching certain first time deposits and raising $200000 to support the Fisher House Foundation, and simplify and Americas Fund veterans organizations. Yet. Another example of how our marketing approach can be a win win.

For our bottom line and those in need in our communities.

Speaker 4: So let me just reiterate how excited I am for the significant milestones ahead of us over the next 12 to 24 months, including several new state and province launches, the debut of the scores for proprietary risk and trading platform in Ontario, the integration of the Barstall Sportsbook into the SCORE Media app in the US, and the migration of the Barstall Sportsbook to the SCORE's player-count management and trading platforms before football season 20.

So let me just reiterate how excited I am for the significant milestones ahead of us over the next 12 months to 24 months, including several new state and province launches the debut of the scores proprietary risk and trading platform in Ontario, the integration of the Barstool Sports book into the score media App in the U S and the migration of the Barstool Sports book.

To the scores player account management and trading platforms before football season, 'twenty three so with that.

Speaker 4: So with that, Frank, we'll turn it over to you and we'll open it up for our first question.

Frank will turn it over to you and we'll open it up for our first question.

Thank you.

Speaker 1: Ladies and gentlemen, if you would like to register a question, please press the 1 followed by the 4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1 followed by the 3. If you're using a speakerphone, please lift your handset before entering your request. One moment, please, for the first question.

Ladies and gentlemen, if you would like to register a question. Please press. The one followed by the four on your telephone you will youre at <unk> pump technology a request.

If your question has been answered and you would like to withdraw your registration. Please press the one followed by the three.

If you're using a speaker phone please lift your handset before entering your request one moment. Please for the first question.

Speaker 1: First question comes from a Joe Graft with JP Morgan. Please proceed.

First question comes from Joe Greff with Jpmorgan. Please proceed.

Speaker 6: Good morning, everybody. My first question is a multi-part one and relates to your 2022 guidance and related commentary. One, what's your assumption for a steam store land-based revenue growth? How much of the 6.2 billion or so in revenues relates to interactive? I know you gave us, you know, sort of an EBITDA metric for interaction.

Good morning, everybody.

My first question is a multipart one relates to your 2022 guidance and related commentary.

One what's your assumption for same store land base revenue growth how much of the how much of that $6 2 billion or so in revenues relates to interactive I noticed I know you gave us.

So EBITDA metric interact with this year.

Speaker 7: Joe, we're not going to comment on interactive guidance at this point on the revenue side. We have given you the historical levels and we've given you the EBITAR, but we're just not at the place that we're going to start talking about on the revenue side. And I'll turn it to Todd for the same story. Thanks, Alicia. Joe, basically, we're looking at relatively flat, some upside in the self, but we are going to have

Yes.

We're not going to comment on interactive guidance at this point on the revenue side, we have given you the historical levels and we've given you the EBITDAR, but we're just not at a place yet where isn't it.

Talking about on the revenue side and I'll turn it to Todd for that same store. Thanks, Felicia Joe basically we're looking at relatively flat some upside in the south but we are going to have some headwinds related to our council bluffs property, which will see new competition coming from Nebraska later in the year.

Speaker 7: Some headwinds related to our council bluffs property, which will see new competition coming from Nebraska later in the year as well as a full year now in East Chicago with a hard rock property and then we'll have just one more in Lake Charles with

<unk> as well as a full year now in east Chicago, where the hard rock property and then we will have just one more in lake Charles with.

Speaker 7: Horseshoe, the former aisle property being rebranded as a horseshoe in Q3. But all in all, it'll be minimal growth on a same store basis due to those being offset.

Horseshoe the former oil properties being rebranded as a horseshoe in Q3, but all in all it will be minimal growth on a same store basis.

Due to though is being offset by some of the other properties.

Speaker 4: I would only add to Felicia and Todd's comments just from a quarter to quarter cadence perspective Joe that Q2 is gonna be really hard to match. I think for everybody in industry that was definitely sort of as good as it gets high water marks. So as you think about quarterly modeling, I think Q1 assuming that Omicron impact really that fade away here as we enter February .

I would only add to Felicia and Todd comment just from a sort of.

Order to quarter cadence perspective, Joe that.

Q2 is going to be really hard to match I think for everybody in the industry that was definitely sort of as good as it gets high watermark. So as you think about quarterly modeling I think Q1, assuming that you know omicron impact really does fade away here as we enter February and we can get some bad weather event on weekdays versus weekends, which would be nice.

Speaker 4: you can get some bad weather events on weekdays versus weekends, which would be nice, which didn't happen in January . But I think you should expect Q1 to show upside versus last year Q1. Q2 would likely not meet Q2 of 2021.

Which didn't happen in January but I think you should expect Q1 to show upside versus last year Q1, Q2 with likely not meet Q2 of 2021 in.

Speaker 4: Q3 and Q4 probably pretty close to in line with what we saw in 2021. Somewhere there about, I think, is a decent way to model quarter.

In Q3, and Q4 are probably pretty close to in line with what we saw in 2021 somewhere thereabouts I think is a decent way to model quarter by quarter, Yes, great threat.

Speaker 7: Yeah, great thread ad Jay again Joe excellent point by Jay on Q1 because we are we do have a so much favorable comparison as last year.

<unk>.

Again, Joe excellent point by Jay on Q1, because we are we do have a somewhat favorable comparison.

As last year, especially in the Midwest there are a lot of restrictions still in place.

Speaker 6: Got it. And then, Felicia, you gave us a breakdown on different 2022 items, such as maintenance capex. Can you repeat that with 300 million the right number?

Got it and then Felicia you gave us a breakdown on different 2022 items, such as maintenance Capex can you repeat that with 300 million the right number.

Speaker 5: Yeah, and Joe, thanks for that question. Why is that so high? Yeah. Historically, it's been about $200 million. And there's a few items in there now, revenue-enhancing, investing.

Yeah and Joe.

Thanks for that quite why is that so so high.

Historically, it's been about 200 million and Theres some theres a few items in there now.

Enhancing investments.

Speaker 5: such as investing in bar stool sportsbooks, or retail sportsbooks on the hotel side. We're renovating our hotels with a very new and exciting prototype. Also our investments in technology and three Cs are in that number. So I would use even as you're modeling out, you know, past 22. For the near term, I would use 300 million as your new maintenance cap ex number for a while.

Such as investing in Barstool sports books, our retail sports books.

On the hotel side, we're renovating our hotels with a very new and exciting prototype also our investments in technology and three fees are in that number so even as you're modeling out past 'twenty two for <unk>.

The near term I would use $300 million is your maintenance capex number for a while.

Speaker 6: My last question, I was going to ask something on Barstool and Dave and maybe I'll ask that offline after the call, but Jay, just thinking about Ontario and the anticipation of the market dynamics there and competition there, when you think about Ontario versus some of the U.S. markets, what's different about Ontario, what's similar to Ontario versus some of the maturing online sports betting markets in the U.S.?

Okay.

My last question I was going to ask something on Barstool, and Dave and maybe I'll ask that offline after the call but.

Jay just thinking about on Ontario, and the anticipation of the market dynamics, there and competition. There when you think about Ontario versus some of the U S market.

What's different about Ontario.

Similar to Ontario versus some of the maturing online sports betting markets in the U S.

Speaker 4: Yeah, good question, Joe. And I honestly, I think there's probably more differences than similarities as I look at any of the individual states.

Yeah. Good question, Joe and I honestly, I think there's probably more differences and similarities as I look at any of the individual states here in the U S.

A couple of reasons, one Canada has been a gray market.

Speaker 4: Canada has been a grey market for some time now, but the regulators in Ontario are requiring those grey market operators to go through some KYC and regulatory requirements before they relaunch.

It hasn't been a great market for some time now, but the regulators in Ontario are requiring those gray market operators to go through some Ky C and regulatory requirements before they re launch post April 4th So I think that'll be interesting to see how that plays out versus maybe some of the U S.

Speaker 4: post April 4th. So I think that'll be interesting to see how that plays out versus maybe some of the, you know, U.S. markets, not so much gray operators. If it's more of a dynamic where maybe people were betting illegal offshore with bookies, whereas it was really gray. They were there. It wasn't illegal or legal, just kind of gray. So we'll have to see how that competitive dynamic with gray market operators in Canada plays out. One of the other

Markets not so much great operators. It was more of a dynamic where maybe people are betting.

Illegal offshore with bookies, whereas it was really gray they were there it wasn't illegal or legal or just kind of gray. So we'll have to see how that competitive dynamic with great market operators in Canada plays out.

One of the other factors that I think is encouraging versus what we've seen in all of the U S. States is that there are advertising restriction restrictions in Ontario, as it relates to gaming and you cannot advertise promotions or discounting into your business, which we welcome and so it's gonna be a lot more about.

Speaker 4: is encouraging versus what we've seen in all the US states is that there are advertising restrictions in Ontario as it relates to gaming and you cannot advertise.

Speaker 4: promotions or discounting to your business, which we welcome.

Speaker 4: And so it's going to be a lot more about, I think, just educating. You know, we'll spend some money when we launch there because you're really in education mode about this move from gray market to above the board market legalized.

I think just educating we'll spend some money when we launched there because you're really in education mode. About this move from gray market to above above the board market legalized and you want to make sure that people know who those legal operators are going forward, but I like the fact that you can't just put your business on sell in heavy discount to get people.

Speaker 4: and you want to make sure that people know who those legal operators are going forward. But I like the fact that you can't just put your business on sale and heavy discount to get people to download and deposit in bet, which is what we've seen here in the US in most states.

To download and deposit and bet, which is what we've seen here in the U S. In most states.

Speaker 4: And then lastly, of course, we think we have a, we're in a really strong position because, I think it's somewhere close to 20% of people in Ontario have the score, sports media app on their phone. And so you think about the ability to convert from sports media to sports betting when you can do both on the same app and see all the live odds.

And then lastly of course, we think we have a we're in a really strong position because I think it's somewhere close to 20% of people in Ontario have the score sports media App on their phone and so you think about the ability to convert from sports media to sports betting when you can do both on the same app and see all of the lie of Ards.

Speaker 4: If you're just in there checking scores, you're going to know very quick very quickly if you're a score media app user that we are now offering Live sports betting with the score bet app. So I think we're in a really strong position Obviously, we're going to be very focused on conversion of sports media to sports betting We're going to definitely make sure that everybody in Toronto and Greater, Ontario That they definitely know that we're now live and that it's a legal market and that there are legal operators that have offerings there

You are just in their checking scores youre going to know very very quickly if you're a score media app user that we are now offering.

Live sports betting with the score bet App. So I think we're in a really strong position. Obviously, we're gonna be very focus on conversion of sports media to sports betting, we're going to definitely make sure that everybody in Toronto and greater Ontario.

That they definitely know that we're now live in that it is illegal market and that they are illegal operators that have offerings. There. So what does this all plays out certainly our expectation is to be you know kind of no no lower than low double digit market share from an online sports betting perspective, and maybe you know on the online casino side, we'd like to start off in the mid to high single digit.

Speaker 4: So we'll have to see how it plays out. Certainly our expectation is to be, you know, kind of, you know, no lower than low double-digit market share from an online sports betting perspective. And maybe, you know, on the online casino side, we'd like to start off in the mid to high single-digit range and then just continue to grow both of those from beginning.

Range and then just continue to grow both of those from from beginning.

Great. Thank you.

Thanks, Joe.

Speaker 1: Our next question comes from a burning McNeownin with Needham and Company. Please proceed.

Our next question comes from burning Mcneil Hannon with Needham <unk> Company. Please proceed.

Speaker 8: Great. Thanks for taking the question. Good morning. I was wondering if I could just pry a little bit in terms of the 23 interactive guidance. If what meaningful means are we talking tens of millions of dollars or maybe something bigger than 100?

Great. Thanks for taking the question. Good morning, I was wondering if I could just prior a little bit in terms of the 23 interactive guidance. If what meaningful means are we talking tens of millions of dollars or maybe something bigger than a $100 million.

Speaker 4: Yeah, I would say stay tuned Bernie. I mean, I don't want to get too far ahead of ourselves. It will be real EBITDA. And you will likely not have to wait until football season to see it. I actually think we have a good chance of football season 22 of Schoen Prophet. Really depends on the Imperial launch and momentum and is Ohio live yet in Maryland. But I think once we hit that point of being profitable, which hopefully is late 22, you should expect that to just go forward ramping into 20.

Yeah, I would say stay tuned Bernie.

Want to get too far ahead of ourselves it will be it'll be real EBITDA and you will likely not have to wait until football season to see it I actually think we have a good chance of football season, 'twenty two of showing profit.

It really depends on the Ontario launch and momentum and as Ohio live yet in Maryland, but I think once we hit that point of being profitable, which hopefully is late 'twenty. Two you should expect that to just go forward ramping into 'twenty three.

Speaker 8: Understood and thinking about that $50 million investment Going into profitability in 23 is it possible to break down maybe the 50 million into Some buckets whether it's US Canada and the tech stack not sure if those are the right three to think about But if there's a way to kind of bracket it out

Understood and thinking about that $50 million investment.

Going into profitability in 'twenty three is it possible to break down maybe the $50 million into some buckets, whether it's U S, Canada and the tech stack not sure. If those are the right three to think about but if theres a way to kind of bracket it out.

Speaker 4: Yeah, at a high level, Bernie, I would say that you should think about our interactive operation in the U.S.

Yeah at a high level Bernie I would say that you should think about our interactive operation in the U S.

Speaker 4: as a standalone as being profitable in 2022, which I think is noteworthy, but we didn't want to over-highlight that because at the end of the day, it's still net negative 50 when you put everything together.

As a standalone has been profitable in 2022, which I think is noteworthy, but we didn't want to over highlight that because at the end of the day, it's still net negative 50, when you put everything together.

Speaker 4: There's going to be continued ramping and scaling of our headcount and our infrastructure as we are continuing to hire.

There's going to be continued ramping and scaling of our head count in our infrastructure as we are continuing to hire lots of engineers and product development people.

Speaker 4: lots of engineers and product development people working on our tech stack, so there's a lot of staff ramping that's going into the technology investments, which is actually going very well, and we're so pleased to have a big office in Toronto where we can recruit people, and then, of course, the Penn Interactive office in Philadelphia where we do the same thing.

Looking on our tech stack. So there's a lot of staff ramping that's going into the technology investments, which is actually going very well and we're so pleased to have a big office in Toronto, where we can recruit people and then of course, the dependent or active office in Philadelphia, where we do the same thing.

Speaker 4: There's definitely going to be an investment into Ontario at launch because of the education investment that I mentioned earlier of just making sure people in Ontario know that you

There's nothing going to be an investment into Ontario at launch because of the education investment that I mentioned earlier, just making sure people in Ontario know that you have live in legal sports betting options as opposed to maybe gray market ones that have been offered for a long time in that marketplace.

Speaker 4: live and legal, sports betting options as opposed to maybe gray market ones have been offered for a long time in that marketplace.

Speaker 4: So when you throw all that into the pod is where you get to approximately a negative $50 million EBIDA. But if you just think about the core interactive operation in the U.S., it will be profitable in 2022. if

So when you throw all of that into the pod is where you get to approximately a negative $50 million EBITDA, but if you just think about the core interactive operation in the U S. It will be profitable in 2022.

Understood. Thanks for taking the questions.

Thanks Bernie.

Our next question comes from Barry Jonas with true Securities. Please proceed.

Speaker 1: Our next question comes from Barry Jonas, with Truth Securities. Please proceed.

Speaker 9: Hey guys, can you talk about the health of the consumer in this rising inflationary environment? How much of that weighs into your guidance beyond the new supply risks you talk?

Hey, guys.

Can you talk about the health of the consumer in this rising inflationary environment, how much of that weighs into your guidance beyond the new supply risks you talked about.

Speaker 7: Hey Barry, this is Todd. Great question. What we've seen, I mean obviously last year, there was some stimulus money floating around through many of the quarters, but you know, encouraging take Omicron out in some calendar noise in December . What we saw in Q4s continued into January outside of weather, especially the second half. We actually just...

Hey, Barry this is Tod great question.

What we've seen I mean, obviously last year. There was there were some stimulus money floating around through many of the quarters, but encouraging take omicron out in some calendar noise in December what we saw.

In Q4 has continued into January outside of weather, especially the second half we actually just we're coming off.

Speaker 7: We're coming off the best weekend that we had in January was actually this last weekend and that was with, we actually had property closures at Bangor and Plain Ridge up in the Northeast.

The best weekend that we had in January was actually this last weekend and that was when we actually had property closures at a bang or in plain ridge up in the northeast, but the rest of the countries seem pretty healthy.

Speaker 7: but the rest of the country seemed pretty healthy. I feel that we're seeing increased visitation in many of our properties but really much of the story as it was last year continues into this year where a higher value per trip. So people are still coming in and they're spending to the levels that they that we were seeing in in 2021. So to date has

I feel that we're seeing increased visitation and many of our properties, but really much of a story as it was last year continues into this year, where a higher value per trip. So people are still coming in and they are spending to the levels that we're seeing in our in 2021.

To date hasn't really been much of an issue for us.

Great and then maybe just a high level follow up question.

Speaker 9: great and then J maybe just a high level follow up question as the overall North American interactive market develops anything changed in your view relative to the size scale or maybe timing of Penn's long-term opportunity

The overall North American interactive market develops and how do you think changed in your view relative to the size scale or maybe timing of tens long term opportunity.

Speaker 4: Well, there's always the big question that we can never answer with accuracy is what is the TAM going to be, when are more states going to legalize online gaming, how many states will there be at full scale from an online sports betting perspective, what's going to happen in California, in Texas, and so there are a lot of questions that we unfortunately can't answer. I think we have a perspective on.

Well Theres always the big question that we can never answer with accuracy is what is the Tam going to be.

In our more states gonna legalized online gaming.

How many states will there'll be at full scale from an online sports betting perspective, what's going to happen in California, and Texas and so there are a lot of questions that we unfortunately can't answer I think we have a perspective on but no I think that the.

Speaker 4: But no, I think that, you know, the way we viewed this opportunity from the beginning and we still do is that online sports betting is an unbelievable acquisition tool for us.

We view this opportunity from the beginning and we still do as that online sports betting is a unbelievable acquisition tool for us.

Speaker 4: It's not ever going to be as high margin standalone as online casino or brick-and-mortar casino. But because of our structural advantages, we think we can run industry-best margins in online sports betting.

It's not ever going to be as high margin standalone as online casino or brick and mortar casino, but because of our structural advantages. We think we can run industry best margins and online sports betting we have marketing advantages. We're gonna have technology advantage is of course, we have access advantages given our footprint. So it really.

Speaker 4: We have marketing advantages. We're gonna have technology advantages. Of course, we have access advantages given our footprint.

Speaker 4: So it really, things have, I guess, played out mostly how we thought they would. We want to continue to improve our market share in online casino. We have not performed as well there as we anticipated performing. And we're on top of that. We have created Penn Game Studios, which has put out some fantastic.

I guess played out mostly how we thought they would we want to continue to improve our market share in online casino, we have not performed as well there as we anticipated performing and we're on top of that.

We have created Penn Gaming studios, which has put out some fantastic bespoke product and content that we're already seeing over 20% of our handle and online casino coming from games that we created and that's very encouraging as we'd love to see that get to 50% down the road and we've only launched a few games up to this point.

Speaker 4: product and content that we're already seeing over 20% of our handle in online casino coming from games that we created and that's very encouraging as we'd love to see that get to you know 50 plus percent down the road and we've only launched a few games up to this point.

So I think we're very pleased with the things that we have within our control. We think the launches this year in particular, Ontario, and Ohio are very very exciting for us.

Speaker 4: So I think we're very pleased with the things that we have within our control. We think the launch is...

Speaker 4: this year, in particular Ontario and Ohio, are very, very exciting for us.

Speaker 4: throw Louisiana in there as well because we have such a strong presence from a retail casino perspective in Ohio as well as Louisiana.

Throw Louisiana, Louisiana in there as well because we have such a strong presence from a retail casino perspective in Ohio.

As well as Louisiana, and then of course in Ontario, we talked about that already so.

Speaker 4: And then of course in Ontario we talked about that already. So, no I wouldn't say that that look is different other than the big question has been and continues to be what is the ultimate tam going to be. But as I mentioned in our prepare remarks from our perspective, we've got a model that is built to make money and that's what we do at Penn. And whether that tam is 20 billion, 30 billion, 50 billion, we're going to be in the business of making really good margins and generating cash flow.

No I wouldn't say that the outlook is different other than the the big question has been and continues to be what is the ultimate Tam going to be but as I mentioned in our prepared remarks from our perspective, we've got a model that is built to make money and that's what we do at pen.

Whether that Tam is $20 billion $30 billion 50 billion, we're going to be in the business of making making really good margins and generating cash flow.

That's great. Thanks, so much.

Thanks, Greg.

Speaker 1: Our next question comes from Orion Sadal with Craig Allen Capital Group, please proceed.

Our next question comes from Orion Sudan, with Craig Hallum Capital Group. Please proceed.

Speaker 10: Good morning, Jay Felicia, and congrats on the strong business trends and good to see the buyback authorization as well.

Good morning, Jay Felicia and congrats on the strong business trends and good to see the buyback authorization as well.

Good morning, Ryan.

Speaker 10: Curious on interactive. I know there's been several questions, but the loss you were previously expecting a couple months ago, 100 million, give or take in 2022. it's half that now. I guess first was New York in that previous assumption. And then secondly, what's changed positively versus a few months ago?

Curious on interactive I know theres been several questions, but the loss you were previously expecting a couple of months ago $100 million give or take in 2022, it's half that now I guess first was new York and that previous assumption and then secondly, what's changed positively versus a few months ago.

Speaker 4: Yeah, happy to. I honestly, when we put that, when we talked about this on our last earnings call, New York was not in our assumption because we hadn't heard one way or the other. So we wouldn't have built that in because we just didn't know at that time on the call.

Yes, happy to I honestly when.

When we put that when we talked about this on our last earnings call.

New York was not in our assumption because we hadn't heard one way or the other so we wouldn't have built that in.

We just didn't know at that time on the call. It really over the course of the fourth quarter.

Speaker 4: It really, over the course of the fourth quarter, we just continued to operate, I think, smart. We didn't know what the heavy promotional environment and paid media spend environment was going to do in terms of pressuring our margins and maybe moving customers.

We just continued to.

Operator, I think smart we are.

Didn't know what the.

Heavy promotional environment and paid media spend environment was going to do in terms of pressuring our margins and maybe moving customers I've been blown away impressed at the resiliency and the retention that we see in the online sports betting space as we shared.

Speaker 4: blown away, impressed at the resiliency and the retention that we see in the online sports betting space.

Speaker 4: as we shared in a couple of our slides, and as you saw throughout the fourth quarter, we didn't change the way we market in the fourth.

The number a couple of our slides and as you saw throughout the fourth quarter, we didn't change the way we market in the fourth quarter.

Speaker 4: And it was, as irrational as you could ever imagine, the amount of money that's being burned that I'm sure we'll hear about from future earnings called this quarter.

And it was at irrational as you could ever imagine the amount of money that's being burned that I'm sure. We'll hear about from future earnings calls this quarter and we didn't jump into the Fray yet we grew our market share and we were.

Speaker 4: And we didn't jump into the fray, yet we grew our market share and we were operating at better margins than we anticipated. We had built in a little bit of flux there of, well, what if we need to spend a little bit more in marketing to hold on to our base?

Operating at better margins than we anticipated we had built in a little bit of flex thereof, well, what if we need to spend a little bit more on marketing to hold on to our base.

Speaker 4: instead what we saw as we said we probably would, which was football season came back. We saw our market shares in states that we've been live in, like Michigan and Pennsylvania, bump back up again. Our NGR market share was the best quarter we've had. I believe in both of those states said, Juan.

Instead, what we saw as we said, we probably would which was football season came back we saw our market shares in states that we've been live in like Michigan, and Pennsylvania bump back up again.

Our <unk> market share was the best quarter, we've had I believe in both of those states since launch and we did all that without without participating in the really aggressive discounting that we see from most of the others. So.

Speaker 4: And we did all that without participating in the really aggressive discounting that we see from most of the others. So, you know, we're really, really pleased with how we see the interactive business. And that's why we anticipate the loss being less than 2022 than we did just a quarter ago.

We're really really pleased with how we see the interactive business and that's why we anticipate the loss being less in 2022 than we did just a quarter ago.

Speaker 10: Great. Then just moving on to the retail side with one, you have CCC at eight properties now. I believe added one quarter over quarter, but you have a little bit more duration at a few of these properties now. Any financial metrics you can share kind of before or after of what that looks like from either a play standpoint, a margin standpoint, et cetera? Thanks. Good luck. Yeah. Thanks.

Great.

And then just moving on to the retail side with one.

You have triple C. At eight properties now I believe added one quarter over quarter, but you have a little bit more duration at a few of these properties now any financial metrics you can share kind of before after of what that looks like from.

Either a play standpoint or margin standpoint et cetera. Thanks, good luck.

Thank you.

Speaker 7: So a couple of things, we're live in Pennsylvania and Ohio. And today, what we're seeing, obviously, the whole goal with this was to remove friction and.

So a couple of things we're live in the in Pennsylvania, and Ohio and today, what were seeing obviously the whole goal with this was to remove friction and so we've been able to improve service times. We're obviously taking people out of the lines at the cage in at the player's clubs. So that has helped and it all drives more time.

Speaker 7: So we've been able to improve service time. We're obviously taking people out of the lines at the cage and at the players club. So that has helped, and it all drives.

Speaker 7: More time on device more time playing So that all helps and then we've seen this adoption that you would normally see from the the younger demographic And really this is what we thought we would see but it's now working into the older demographics 30s 40s

On device more time, playing so that all helps and then we've seen this adoption that you would normally see from the younger demographic and really this is what we thought we would see but it's now working into the older demographics thirties forties. So.

Speaker 7: So we're seeing actually people that are engaging with us with the app

We're seeing actually people that are engaging with us with the app and with the wallet.

Speaker 7: And with the wallet, we're seeing actually a higher level of play, some of that driven by they're more engaged and they're making more trips.

Being actually a higher level of play.

Some of that driven by.

They're more engaged and they are making more trips, but this is a very encouraging trend for us as we look to roll out into the other states. So it's really kind of proof of concept was in Pennsylvania, and now moving into Ohio, We're starting to pull these trends together and we'll have more to talk about as we have more time and more people adopting the technology.

Speaker 7: But this is a very encouraging trend for us as we look to roll out into the other states. So it's really kind of proof of concept. It was in Pennsylvania and now moving into Ohio, we're starting to pull these trends together and we'll have more to talk about as we have more time and more people adopting the technology.

Speaker 7: And Todd, you want to maybe also highlight the demographic trends we're seeing by age in the fourth quarter and given into, I think it's very encouraging when you think about technology launch and how sticky these relationships have become. Yeah, great point, Jay. You know, really last year, I think we talked about this and some of the other calls.

And Todd do you want to maybe also highlight the demographic trends, we're seeing by age in the fourth quarter and dividend I think it's very encouraging when you think about technology launch and how sticky.

These relationships have become yeah.

Great point Jay.

Really last year.

I think we've talked about this in some of the other calls.

Speaker 7: That younger demographic is what everybody was trying to solve for and how to get the younger demographic into casinos.

That younger demographic as what everybody was trying to solve for and how to how to get the younger demographic into casino. So Q4 was not unlike.

Speaker 7: q4 was not unlike the other quarters and you know really that under thirty-five demographic was up about forty percent year-over-year and then the thirty-five to forty-four was up high thirty percent and

The other quarters and really the under 35 demographic was up about 40% year over year and then the 35 to 44 was up high 30%.

Speaker 7: The part that's been missing, we actually started to be able to see some of that coming back that.

The part that's been missing we actually started to be able to see some of that coming back that 55% to 64 was up about 6% and then the 65 plus that that will be the one that is really impacted by flare ups of the omicron virus. So we are seeing encouraging trends October November .

Speaker 7: 55 to 64 was up about six percent.

Speaker 7: And then the 65 plus, that will be the one that is really impacted by flare-ups of the Omicron virus. So, we were seeing encouraging trends October , November , first part of December . But then, as Jay spoke to in his opening remarks, when we had that bit of a flare-up.

First part of December , but then as Jay spoke to in his opening remarks win when we have that bit of a flare up that part is still lagging behind and we feel that once we can move some of these things behind us that will be the last segment that comes back, but especially with these younger demographics that we're seeing.

Speaker 7: That part is still lagging behind, and we feel that once we can move some of these things behind us...

Speaker 7: That would be the last segment that comes back, but especially with these younger demographics that we're seeing, you know, what I would throw the unrated play segment in there as well. That was still up 12% for the quarter. So all of these are greatly encouraging, and we feel comfortable that with our technology rollouts, we'll see higher adoption than what we initially modeled.

What I would throw the unrated play segment in there as well that was still up 12% for the quarter. So.

All of these are greatly encouraging.

And we feel comfortable that with our technology Rollouts will see higher adoption than what we initially modeled.

I would just add too tied to hit it earlier in terms of some new competition in a couple of pockets across the U S.

That when you pull those impacted properties out.

Our margins, obviously look even better I think we pick up another over 1000 basis points excuse me 100 basis points when you pull those out so.

Speaker 4: It is something that I'm not sure was modeled well enough into people's estimates in terms of how they thought about Q4 and how they think about 22. I think the fact that we're anticipating coming in at the property level of roughly 37% margin

It is something that I'm not sure was modeled well enough.

Into peoples.

Estimates in terms of how they thought about Q4 and how they think about 'twenty. Two I think the fact that we're going to we're anticipating coming in at the property level of roughly 37% margins.

Speaker 4: which is going to be, you know, 500 basis points plus better than 2019.

Which is going to be 500 basis points plus better than 2019.

Speaker 4: is really impressive given that we've got, you know, Chicago land and Nebraska, Colorado, you've got some pockets of new competition or new supply entering these markets.

Is really impressive given that we've got Chicago land in Nebraska, Colorado, you have got some pockets of new competition or new supply entering these markets.

Well done thanks, guys.

Thanks Ryan.

Speaker 1: Our next question comes from Stephen Gramling with Goldman Sachs. Please proceed.

Our next question comes from Stephen Grambling with Goldman Sachs.

Proceed.

Speaker 11: Hi, thanks. Jay, you noted that there's the opportunity to buy the remainder of Barstool. What are the key considerations that you are evaluating in determining the right ownership level? And would the leadership team and our content creators at Barstool have to be licensed at certain ownership levels or would that impact their ability to create certain types of content or even bet on the app? Thanks.

Hi, Thanks, Jay you noted that the there is the opportunity to buy the remainder of Barstool what are the key considerations that you're evaluating and determining the right ownership level and with the leadership team and our content creators at barstool has to be licensed at certain ownership levels or would that impact their ability to create certain types of content. We've been done on the app.

Speaker 4: Yeah, I mean, we're, we couldn't be more excited about moving our ownership position up from its current 36%. And we anticipate in

Yeah, I mean, we're.

We couldnt be more excited about moving our ownership position up from its current 36%.

And we anticipate it.

Speaker 4: at the third anniversary that obviously it naturally contractually goes up to 50% as we've disclosed before, and then there's put call rights after the 50%. We anticipate taking that to 100%, so there really isn't sort of a decision process. We look forward to being the owners of Barstool 100%. They've been great partners of ours. It's a hyper-growth sports media business. They've grown their revenues.

<unk>.

And at the third anniversary that obviously it naturally contractually goes up to 50% as we've disclosed before and then Theres a put call rights after the 50%.

We anticipate taking that to a 100% so there really isn't sort of a decision process we.

Look forward to being the owners of Barstool are 100% they've been great partners of ours, it's a hyper growth.

Sports media business, they've grown their revenues over the last two years somewhere close to 150% in total.

Speaker 4: Over the last two years, somewhere close to 150% in total.

Speaker 4: And it's profitable, which, you know, most smaller, which they're not even that small anymore, sports media businesses don't make money, they burn quite a bit. And so we're really excited for the 30.

And it's profitable, which most smaller sports, they're not even that small anymore sports media businesses don't make money they burn quite a bit and so we're really excited for the third anniversary.

Speaker 4: you know, in terms of what is the structure and how does that impact certain things from a licensing perspective? I would just say TBD on that one, those are things that we're continuing to work through internally. It won't just be...

Now in terms of what is the structure and how does that how does that impact certain things from a licensing perspective, I would just say TBD on that one those are things that we're continuing to work through internally it won't just be we.

Speaker 4: You know, we acquire bar stool and then we don't announce anything beyond that. I think there's going to be some structural implications as well. And we're working through all of that behind the scenes. So you should expect to hear something before the end of the year.

Acquire.

Barstool and then we don't announce anything beyond that I think theres going to be some some structural implications as well and we're working through all of that behind the scenes. So you should expect to hear something before the end of the year.

Speaker 11: Got it. That's helpful. And then on the buyback, maybe this is for Felicia. I know that you have a three-year window there, but is that generally the cadence that we should think through? Or, you know, is this purely opportunistic or will it be viewed more as a consistent buyback? And if it is opportunistic, is there any kind of upper bound on leverage ranges that you'd be willing to go to take advantage of the stock?

Got it that's helpful and then on the buyback.

Maybe this is for Felicia I know that you have.

Three year window, there, but is that generally the cadence that we should think through or is this purely opportunistic or will it be viewed more of a consistent buyback and if it is opportunistic is there any kind of upper bound on leverage ranges that you will be willing to go.

To take advantage of the stock.

Speaker 5: Yeah, thanks Stephen. I don't think we're going to talk about the cadence of our buyback program, but it is a three year program. And like you said, we are going to be opportunistic.

Thanks, Steven I don't think we're going to talk about the cadence of our buyback program, but it is a three year program and like you said, we are going to be opportunistic and obviously it also gives us the opportunity to offset stock option dilution. So it puts us in a much stronger place than we've been in for the past few years and then.

Speaker 5: Obviously, it also gives us the opportunity to offset, you know, stock option dilution. So it puts us in a much stronger place than we've been in for the past few years. And then, you know, obviously, over time, we have to balance our choices of

And obviously over time, we have to balance our choices.

Speaker 5: you know, buyback or growth, and, you know, we're in this great situation where, you know, it's not an either-or for us, right? We can continue a buyback program and pursue growth opportunities at the same time given our balance sheet, and, you know, regarding the leverage and our 4.1 time, or 4.1.

Buyback or growth.

We're in this great situation, where you know its not an either or for US right. We can continue our buyback program and pursue growth opportunities at the same time, given our balance sheet and regarding the leverage and not for one time.

Speaker 5: times now, we are.

One time now.

We are.

Speaker 5: looking at that level as being kind of where our.

Looking at that level as being kind of where our focus.

Speaker 5: focus is, you're probably not going to see us do anything that would be meaningfully levering. So as I said before, we're not going to talk about an optimal level, but we really like where we are now, and so that's always going to be a focus for us as well as we think about the different opportunities that we face. But I would think about it as a three-year program and us being opportunistic as

Our focus is on you're probably not going to see us do anything that would be meaningfully levering and so as I said before we're not going to talk about an optimal level, but we really like where we are now and so that's always going to be a focus for us as well.

As well as we think about the different opportunities that we see but I would think about it as a three year program and being opportunistic as things come up.

Just add Steve I know you know this I think gets lost sometimes.

We generate significant free cash flow and we could use.

Speaker 4: You know, the majority, I'm not saying we're going to, we could use the majority of that authorized share repurchase level in 2022 and have it not be a levering event for us. So, we'll be opportunistic. I think we obviously feel like we're undervalued. That's why you put these things in place. And there might be some dislocation in the marketplace. We'll see how things play out. We'll see how the cadence works out. It felt like a natural time for us to institute that authorization.

The majority I'm not saying, we're going to we could use the majority of that offer our authorized share repurchase level in 2022 and have it not be elaborate event for us. So we will be opportunistic I think we obviously feel like we're undervalued and that's why you put these things in place and there might be some dislocation in the marketplace, we'll see how things play out we'll see.

How the cadence works out it felt like a natural time for us to institute that authorization.

Speaker 11: Makes sense. That's all super helpful. Jump back in the queue. Best of luck.

Makes sense, that's all Super helpful. I'll jump back in the queue best of luck. Thanks.

Thanks Steven.

Speaker 1: Our next question comes from Sean Kelly with Bank of America, please proceed.

Our next question comes from Shaun Kelly with Bank of America. Please proceed.

Hey, good morning, everyone.

Speaker 12: Jay, I just wanted to go back to your comment, I think maybe it was in Felicia's part of the prepared remarks where you talked about the 37 percent core margin. Just to be kind of clear on what's in that, is that excluding interactive on both sides of both revenue and obviously both corporate and losses from the online side or investments for the online side? So that's kind of the first question on just clarifying that, and then the second would be, I think that's actually a little bit better than what you did this quarter, so what would be driving improvement if I'm doing the math right?

Jay I just wanted to go back to your comment I think maybe there was an felicia as part of the prepared remarks, where you talked about the 37% core margin.

Just to be clear on what's in that.

Is that just is that excluding interactive on both sides of both revenue and obviously, both corporate and losses from the online side are investments for the online side.

So that's kind of first question on just clarifying that and then the second would be I think that's actually a little bit better than what you did this quarter, so what would be driving.

Improvement if I'm doing the math right.

Speaker 4: Yep, you are doing the math right, Sean. It's apples to apples. It excludes interactive. It excludes corporate expense and racing and the other stuff that falls in other. It is slightly better than fourth quarter. And fourth quarter is typically one of your, if not the slowest quarter of the year. Certainly from a margin perspective, it historically has been for us.

Yes, you are doing the math right, John it's apples to apples it excludes interactive it excludes corporate expense and racing and the other stuff that falls in other.

It is slightly better than fourth quarter and.

Fourth quarter is typically one of your if not the slowest quarter of the year certainly from a margin perspective, historically has been for us and there was some omicron impacts during the busiest week of the year Christmas to new year's as we definitely felt a bit of a falloff from what we were seeing earlier in the fourth quarter.

Speaker 4: And there was some Omicron impact during the busiest week of the year, Christmas to New Year's, as we definitely felt a bit of a fall off from what we were seeing earlier in fourth quarter and what you would have anticipated as a normal ramp heading into the holidays.

And what you would have anticipated as a normal ramp heading into the holidays. So we felt like 37% is a good target it's going to be aggressive, but we think we can achieve that internally. It's hard in our team of regionals and our general managers have and continue to do an amazing job of sharing best practices and.

Speaker 4: So we feel like 37% is a good target. It's going to be, you know, aggressive, but we think we can achieve that internally. Todd and our team of regionals and our general managers have and continue to do an amazing job of sharing best practices and, you know, just looking under every rock and, you know, making sure that we're thinking about the business differently as we launch new technologies.

Just looking under every rock and <unk>.

Making sure that we're thinking about the business differently as we launch new technologies.

Speaker 4: So, you know, well, it's very difficult in this environment, as you can imagine, Sean, that we debated this guidance thing over and over and over again, because one thing we know is the number we gave will be wrong. I don't know if it's going to be, you know, directionally. We feel like we gave a number that we hopefully we can beat or exceed. But if there are new variants and casino restrictions and shutdown in some markets, or it's very difficult to anticipate. But 37% at the property level still is achievable for us in 2022.

So it's.

It is very difficult in this environment as you can imagine jamba, we debated this guidance thing over and over and over again, because one thing. We know is the number we gave will be wrong I don't know if its going to be directionally. We feel like we gave a number that we hopefully we can meet or exceed but if there are new variants in casino restrictions and shut down in some markets.

Or.

It's very difficult to anticipate but 37% at the property level feels achievable for us in 2022.

Speaker 7: Yeah, sure. The only thing I would add, and Jay touched on it, that week between Christmas and New Year's is really, you know, it's what saves December or the time from Thanksgiving to New Year's Eve.

Sure the only thing.

The only thing I would add and Jay touched on it that that week between Christmas and New year's is really you know.

Let's say December or the time from Thanksgiving too.

New year's Eve, so win win that saw the spike in overcrowded it really made it difficult, but also the way the calendar laid out you typically have a weekend between Christmas and new year's and obviously with Christmas holiday following on the weekend and mirrors and you're calling on the weekend you've kind of lost the.

Speaker 7: So when that saw the spike in Ovicron, it really made it difficult. But also, the way the calendar laid out, you typically have a weekend between Christmas and New Year's, and obviously, with Christmas holiday following on the weekend and New Year's Eve following on the weekend, you kind of lost the extra days where you outperform and over-index.

Extra days, where you outperform an over index. So I think with all of that and then the seasonality again Q4 is kind of a tough comparison.

Speaker 7: I think with all that, and then the seasonality again, Q4 is kind of a tough comparison. You know, our 37%

Our 37%.

Speaker 7: doesn't mean that we're 37% every single month there is some seasonality.

It doesn't mean that we're 37% every single month, there is some seasonality in there.

Speaker 12: It's really encouraging. Thanks for the detail. And then just as my follow-up, Jay, kind of zooming out a little bit, kind of curious on the score. It's an interesting acquisition, and obviously there's a lot of directions you can take it. But could you talk about just sort of getting maybe some more content and traction for that app here in the United States?

So it's really encouraging thanks for the detail and then just as my follow up.

Jay kind of zooming out a little bit kind of curious on.

Score.

It's an interesting acquisition and obviously, there's a lot of directions, you can take it but.

Could you talk about just sort of getting maybe some more content and traction for that app here in the United States and what might it take to convert maybe some of that business into actual revenue obviously its usage and its loyalty as extraordinary I just kind of trying to figure out how to monetize <unk> that might be in the next in the next couple of years.

Speaker 12: And what might it take to convert maybe some of that business into actual revenue? Obviously, its usage and its loyalty is extraordinary. It's kind of trying to figure out how monetizable that might be in the next couple of years.

Speaker 4: Yep, and remember when we announced our acquisition of the score, it was really for three strategic reasons. One, number one, sports media app in Canada and we knew Ontario was coming soon in terms of legalized online sports betting, online casino.

Yep.

And remember when we announced our acquisition of the score is really for three strategic reason.

Number one sports media App in Canada, and we knew Ontario was coming soon in terms of legalized online sports betting online casino.

Speaker 4: Number two, it's a very healthy and fast growing media business as a standalone. And so we knew there'd be a great opportunity of audience conversion.

Number two it's a very healthy and fast growing media business as a standalone and so we knew there would be a great opportunity of audience conversion and they are as good as they come in the sports media World in terms of retention. They really just don't lose users when people download the app they use it a lot and they stay.

Speaker 4: And they are as good as they come in the sports media world in terms of retention. They really just don't lose users. When people download the app, they use it a lot and they stay in the ecosystem. And of course, last, this is a technology company.

And the ecosystem and of course last this is a technology company that is helping us to solve for owning our tech stack and our product roadmap short term medium term long term those are the reasons why we made it happen.

Speaker 4: is, you know, helping us to solve for owning our tech stack and our product roadmap, short term, medium term, long term. Those are the reasons why we made it happen. I, you know, last one, culturally, we are very aligned with the Levees. And it gets back to your question in terms of the U.S. where.

Last one culturally we're very aligned with the levies and it gets back to your question in terms of the U S where they didn't jump into the fray either they didn't burn through tens of millions or hundreds of millions of dollars of paid media expense. They wanted to make sure that they launched their live in four states or we're live with them in.

Speaker 4: They didn't jump into the fray either. They didn't burn through, you know, tens of millions or hundreds of millions of dollars of paid media expense.

Speaker 4: They wanted to make sure that they launched, they're live in four states, or we're live with them in four states here in the U.S.

Four states here in the U S.

Speaker 4: We don't plan on them going live in more states in the US because we're going to work on integrating the Barstool Sportsbook into the SCORE media app across the US.

We don't plan on them going live in more states in the U S. Because we're going to work on integrating the Barstool sports book into the score media App across the U S and so they've really been able to just sort of perfect. What they do and try a lot of things with their new Pam and promotional engine here in the U S in preparation.

Speaker 4: And so they've really been able to just perfect what they do and try a lot of things with their new PAM and promotional engine here in the US in preparation for Ontario. So I would expect that.

For Ontario, So I would expect that.

Speaker 4: You should see improvements in the U.S. in terms of our ability to convert the score media ecosystem.

You should see improvements in the U S. In terms of our ability to convert the score media ecosystem to Barstool sports book as we throw more effort at that in the second half of this year around football season.

Speaker 4: to Barstool Sportsbook as we throw more effort at that in the second half of this year around football season.

Speaker 4: And we'll have more information to share with you as the quarters track on. But the focus right now is on building out the tech stack and a very successful launch in Ontario.

And we'll have more information to share with you as the quarters track on but the focus right now is on building out the tech stack and a very successful launch in Ontario.

Thank you very much.

Sure.

Speaker 13: Her next question comes from Chad Daniel with McCory. Please proceed. Hi, good morning. Thanks for taking my question.

Our next question comes from Chad Beynon with Macquarie. Please proceed.

Hi, Good morning, Thanks for taking my question Congrats on the results.

Speaker 13: On slide 15, you laid out the handle and the gross gaming revenue for the sportsbook. It appears that the conversion or the hold rate is higher than what some of your peers have been talking about. I'm assuming that's just because of the lower reduction from promos, which Jay, you also highlighted as a big strategy. But I'm wondering if you can just talk about how you see hold rates long-term and then any mix of pregame versus endgame that you're happy to disclose for the quarter. Thanks.

On slide 15, you laid out the handle and the gross gaming revenue for the sports book It appears that you're.

The conversion or the hold rate is higher than what some of your peers have been talking about I'm, assuming that's just because of the.

Lower reduction from promos, which Jay you also highlighted is a big strategy, but I'm wondering if you can just talk about how you see hold rates long term and then any mix of pre game versus end game.

Sure happy to disclose for the quarter. Thanks.

Speaker 4: Yeah, hold percentage. It's sort of like talking about blackjack hold. It's some quarters work for you, some work against you. There are times where you can have a really good hold in a quarter and then, you know, Mattress Mac beats you for five million and there goes your hold for the quarter. And, you know, we have the balance sheet to be able to fade action like that, which is why Mattress Mac and VIP players like that enjoy betting with us amongst our service and VIP.

Yeah hold percentage.

It's sort of like talking about blackjack hold it.

Some quarters worked for you some work against you.

There are times, where you can have a really good hold in a quarter and then mattress Mac beats you for $5 million and there goes your hold for the quarter and we have the balance sheet to be able to fade action like that which is why natural smack in VIP players like that enjoys betting with us amongst our service and the.

Focus.

Speaker 4: I think that over the long term, we've sort of modeled in somewhere in that seven, maybe seven and a half percent hold.

Think that over the long term, we've sort of modeled in somewhere in that seven maybe seven 5% hold.

Speaker 4: And, you know, if you look at our life-to-date results across all of our online sports betting launches, that's about where we are. I think we're at like 7.1, 7.2, somewhere in there.

And.

If you look at our life to date results across all of our online sports betting launches that's about where we are I think we're at like 7172 somewhere in there I would imagine I don't know Chad I would imagine that's probably going to be about average for industry.

Speaker 4: I would imagine, I don't know Chad, I would imagine that's probably going to be about average for industry. We obviously are really placing a significant focus on our in-game offerings and we launched football season this year was the first time that we had same game parlay or what we call parlay plus.

We obviously are really placing a significant focus on our end game offerings and we launched football season. This year was the first time that we had same game parlier will be called Parlay plus.

Speaker 4: That was very popular. We saw the parlays of the percentage of total handle went up significantly football season this year. That probably drove some of the whole percentage premium that you're referencing. And also, we just tend to be more disciplined around what we're giving customers to generate the revenue. We try to give them enough to be somewhat competitive and to make sure that we're able to incentivize them to stay loyal with us.

That was very popular we saw the parlays as a percentage of total handle went up significantly football season. This year that probably drove some of the hold percentage premium that youre referencing and also this tends to be more discipline around what we're giving customers to generate the revenue we try to give them enough.

To be.

Somewhat competitive and to make sure that.

We're able to incentivize them to stay loyal with us without giving them. So much that it actually exceeds your total revenue brought in which is what we're seeing with a lot of competitors on an N G R basis.

Speaker 4: without giving them so much that it actually exceeds your total revenue brought in, which is what we're seeing with a lot of competitors on an NGR basis, when you think about their total marketing reinvestment.

When you think about their total marketing reinvestment. So anyway, I think from a whole percentage standpoint, you should probably just model in somewhere in that seven to seven five range I would like to see our in game betting percentages continued to increase they have been I think that as you see have seen over in the UK.

Speaker 4: So anyway, I think from a whole percentage standpoint, you should probably just model in somewhere in that seven to seven and a half range.

Speaker 4: I would like to see our in-game betting percentages continue to increase. They have been. I think that, as you have seen over in the UK, those percentages will continue to be outsized as opposed to pre-matched.

Those percentages will continue to be outsized as opposed to pre match some sports in the U S. It's just hard for endgame basketball moves too fast.

Speaker 4: Some sports in the US, it's just hard for in-game. Basketball moves too fast. Baseball is a perfect in-game betting sport.

Baseball is the perfect in game betting sport and we will be live at the start of baseball season whenever they get through this labor dispute, but we will be alive with same game parlay for baseball season. This year, which I think is going to be a nice shot in the arm for us because if you only have pre match and baseball its just a long slow game.

Speaker 4: and we will be live at the start of baseball season whenever they get through this labor dispute.

Speaker 4: But we will be live with same game parlay for baseball season this year, which I think is going to be a nice shot in the arm for us because if you only have pre-match in baseball, it's just a long, slow game. And in-game, you know, it keeps the fun going throughout and keeps you engaged as you're consuming that content. So I would expect to see some improvements in terms of, you know, how we perform during baseball season this year with better product.

And in game it keeps the fine going throughout and keeps you keeps you engaged as youre consuming that content. So I would expect to see some improvements in terms of.

How we performed during baseball season, this year with better products.

Speaker 4: And we've made other enhancements to our app as well. And we'll see what happens to hold percentage in baseball season now that we have that product.

And we've made other enhancements to our app as well and we'll see what happens to hold percentage in baseball season, now that we have that product.

Speaker 13: Thanks, Jay. And then from a land-based portfolio standpoint, there were a few assets that traded in 2021 in Vegas, and it appears that there's a few more for sale in 2022. Just want to take your temperature on how important the consideration for a destination property is at this point.

Thanks, Jay and then from a land based portfolio standpoint, there were a few assets traded in 2021 in Vegas and it appears that there is a few more for sale in 2022, just wanted to take your temperature on how important the consideration for a destination property is at this point.

Speaker 4: Look, it would be nice to have one in the portfolio. I just would really stress that we're not going to take something that we can't get a return on. You know, there's been a couple of transactions recently, actually three transactions recently in Las Vegas.

It would be nice to have one in the portfolio I would really stress that we're not going to say.

Something that we can't get a return on and.

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There has been a couple of transactions recently, but actually three transactions recently in Las Vegas.

Speaker 4: you know, they were at valuations that we weren't comfortable with. One of them I think, you know, that was worth stretching for because of the condition of the property and how new it is. But you should not expect Penn to be a leading bidder if it's an irrational competitive bid process.

They were at valuations that we werent comfortable with one of them I think there.

It was worth stretching for because of.

The condition of the property and how new it is but you should not expect <unk> to be a leading bidder if it's an irrational competitive bid process.

Speaker 14: With all of that said, you know, we have the balance sheet to do things that not every company can do. And so if the price is right and the property is right for us and the location is something we're comfortable with, we would probably take a look at it at a minimum and kick the tires. Thank you very much.

With all of that said, we have the balance sheet to do things that not every company can do and so if the price is right in the property is right for us and the location is something we're comfortable with we would probably take it will take a look at it at a minimum and kick the tires.

Thank you very much thanks.

Thanks, Chad and Frank will take one more question.

Speaker 1: Next question comes from Ben Chacon with Credits. Please proceed.

Next question comes from Ben Chaiken with Credit Suisse. Please proceed.

Okay.

Speaker 9: Hey, how's it going? Thanks for taking my question. Just a quick clarification from earlier. I believe it might've been in response to Sean's question. You were mentioning taking some of the attributes of the barstool sportsbook and adding it to the score app in the U.S., if I heard you correctly. Is that in line with the strategy you've been thinking all along? Or were you emphasizing the score in the U.S. a little more than previously, maybe? Again, more about clarification there, thanks.

Hey, How's it going thanks for taking my question just a quick clarification from earlier I believe that might've been in response to Sean's question.

You were mentioning taking some of the attributes of the Barstool sports book and adding it to the score apps in the U S. If I heard you correctly is that in line with the strategy you've been thinking all along or you're emphasizing the score in the U S. A little more than previously Navy.

About clarification. Thanks.

Speaker 4: Yeah, happy to, Ben, and when we announced that we were acquiring the score, what I had said at the time, which is, by the way, consistent, not to say we won't change our mind on things, but on this one, we really haven't changed our minds, which is that we would be leading with the Scorebet brand in Canada and supporting it with Barstool personalities and content, but really pushing that audience to the Scorebet, and in the U.S., the exact opposite, where we'll continue to lead with Barstool Sportsbook and do our best to move that score audience.

Yeah happy to bat and when we announced that we were acquiring the score what I had said at the time, which is by the way are consistent not to say, we won't change our mind on things, but on this one we really haven't changed our minds, which is that we will be leading with the score bet brands in Canada, and supporting it with barstool personalities and content, but really pushing.

That audience to the score that and in the U S. The exact opposite where we'll continue to lead with Barstool Sports book and do our best to move that score audience onto Barstool Sports book I think having two different.

Speaker 4: on to Barstool Sportsbook. I think having two different sports betting brands in the same market gets confusing and

Sports betting brands in the same market gets confusing.

Speaker 4: We felt like just keeping it simple and focusing on one brand in the U.S. versus the other brand in Canada was the best course for us. With all that said, we might find a year from now that that was wrong, and we want to have both brands in both markets. And we're launching Barstool Sportsbook in addition to the score in Canada and vice versa here in the U.S. But as of right now, and really since we started talking to our partners at the score of the Levy's, and as we talked about it with...

And we felt like just.

Keeping it simple and focusing on one brand in the U S versus the other brand in Canada was the best course for US with all that said, we might find a year from now that that was wrong and we want to have both brands in both markets and we're launching Barstool Sports book. In addition to the score in Canada, and vice versa here in the U S, but as of right now.

Since we started talking to.

Our partners up to score the levies and as we've talked about it with Dave and Dan and Erica and our team internally here at Penn.

Speaker 4: Dave and Dan and Erica and our team internally here at Penn, we all agree that was the right approach. Single brand Canada, single brand in the U.S.

All agreed that was the right approach single brand in Canada single brand in the U S.

Makes sense I appreciate it thanks.

Speaker 4: Thanks, Ben. Thank you, everybody, for joining us this morning, and we look forward to speaking to you again in three months.

Thanks, Ben Thank you everybody for joining us this morning, and we look forward to speaking to you again in three months.

Speaker 1: That does conclude the conference call for today. We thank you for your participation. And as that you please disconnect your line. Have a great day everyone.

That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect. Your line have a great day everyone.

Okay.

Thanks.

Okay.

Okay.

Sure.

Okay.

Okay.

Yes.

Okay.

Okay.

Yes.

[music].

Okay.

Okay.

Please go ahead.

[music].

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Okay.

[music].

Speaker 2: I.

[music].

Speaker 1: Greetings and welcome to the Penn National Gaming fourth quarter conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. I would now like to turn the conference over to Mr. Joe Gioffone, Investor Relations. Please go ahead.

Greetings and welcome to the Penn National Gaming fourth quarter Conference call.

The presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your telephone.

Any time during the conference you need to reach an operator, Please press star Zero I would now like to turn the conference over to Mr. Joe <unk> Investor Relations. Please go ahead.

Speaker 3: Thank you, Frank. Good morning, everyone, and thank you for joining Penn National Gaming's 2021 fourth quarter conference call. We'll get to management's presentation and comments momentarily as well as your questions and answers, but first as our practice, I'll review the Safe Harbor Disclosure.

Thank you Frank Good morning, everyone and thank you for joining Penn National Gaming's 2021 fourth quarter Conference call, we'll get to management's presentation and comments momentarily as well as your questions and answers, but first as is our practice I'll review the safe Harbor disclosure.

Speaker 3: In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as expects, believes, estimates, projects, intends, plans, seeks, and does.

In addition to historical facts or statements of current conditions. Today's conference call contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements can be identified by the use of forward looking terminology such as expects believes estimates projects intends plans seeks may will should or.

Speaker 3: may, will, should, or anticipates, or the negative or other variations of these or similar words, or by discussions of future events, strategies, or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures, and operating results.

Or anticipates or the negative or other variations of these or similar words or by discussions of future events strategies or risks and uncertainties, including future plans strategies performance developments acquisitions capital expenditures and operating results such forward looking statements reflect the company's current expectations and beliefs, but are not guarantees of <unk>.

Speaker 3: Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially.

Future performance as.

As such actual results may vary materially from expectations.

Speaker 3: The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q . Penn National Gaming assumes no obligation to publicly update or revise any forward-looking statements.

The risks and uncertainties associated with the forward looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q .

Penn National Gaming assumes no obligation to publicly update or revise any forward looking statements.

Speaker 3: Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G, and when required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website.

Today's call and webcast will include non-GAAP financial measures within the meaning of SEC regulation G and when required a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website.

Speaker 3: with that it's been my pleasure to call over to your host the company c e l g snowden j please go ahead

With that it's now my pleasure to turn the call over to your host the company's CEO Jay Snowden Jay. Please go ahead.

Speaker 4: Thanks, Joe. Good morning, everyone. Here with me and why I'm missing, as usual, is our CFO , Felicia Hendrick.

Thanks, Joe and good morning, everyone are here with me and why I'm missing as usual is our CFO Felicia Hendrix, our head of operations part George as well as other members of my team and we're all happy to.

Speaker 14: Our head of operations taught George as well as other members of my executive. And we're all happy to jump in and answer questions you might have later on the call. I thought before I get into prepared remarks, I first wanted to address the article about Dave Portnoy that dropped last night from the same paywall subscription based publisher as the last article, and which also happened to be on the same day of our earnings call exactly three months ago.

Jump in and answer questions you might have later on the call I thought before I get into prepared remarks, I first wanted to.

Address the article about Dave Portnoy that dropped last night from the same paywall subscription based publisher as the last article and what's also happened to be on the same day of our earnings call exactly three months ago.

The allegation.

Speaker 4: are from anonymous sources made about Dave and his personal life. And Dave has responded publicly. Many of you have probably seen that, just as he did last time. So before we get started, I just wanted to respectfully ask three things for the call today. One, if you have read or plan to read the article, I would just recommend that you also read and watch Dave's response that he posted last night.

From anonymous sources made about Dave and his personal life and David's responded publically many of you've probably seen that.

Just as he did last time, so before we get started I just wanted to respectfully ask three things for the call today.

One if you had read or plan to read the article I would just recommend that you also read and watch Dave's response that he posted last night.

Speaker 4: Two, that like last time we give this time to play out, there undoubtedly will be more to come in the coming days, just as what transpired three months ago. And then lastly, that we keep today's call focused on Penn and our earnings release and our exciting and unique future outlook. So with that, let me jump into prepared remarks, throw my readers on here that my team's never seen me wear before, but I'm getting old.

To that like last time, we give the time to play out there undoubtedly will be more to come in the coming days just as what transpired three months ago, and then lastly that we keep todays call focused on pad in our earnings release.

And our exciting and unique future outlook so.

With that let me jump into the prepared remarks throw my readers on here that my team has never seen anywhere before but I'm getting old.

Speaker 14: We provided a link to the slide presentation along with our earnings report this morning that if you haven't already opened or printed it out, I would suggest you do it now if you have access, our prepared remarks will reference several of those slides today.

We provided a link to the slide presentation, along with our earnings report. This morning that if you haven't already opened or printed it out I would suggest you do it now if you have access.

Our prepared remarks will reference several of those slides today.

Speaker 14: So I'd like to start and spend some time on slide four as it provides an appropriate backdrop for all of our comments today. There's been so much focus the last few months on online sports betting handle.

So I'd like to start and spend some time on slide four as it provides an appropriate backdrop for all of our comments today. There's been so much focus the last few months on online sports betting handle.

Speaker 14: and questions about paths to profitability that I think it is helpful for context to highlight at a strategic level what it is that makes Penn truly different from the competition. We have the nation's largest portfolio of regional gaming assets that generate significant and sustainable free cash flow. In fact, 2021 was a record year of free cash flow at Penn that resulted in year end lease adjusted net leverage of 4.1 times.

And questions about path to profitability that I think it is helpful for context to highlight at a strategic level. What it is that makes patent truly different from the competition.

We have the nation's largest portfolio of regional gaming assets that generate significant and sustainable free cash flow in fact, 2021 with a record year of free cash flow at Penn that resulted in year end lease adjusted net leverage of four one times.

Speaker 14: This balance sheet strength and financial flexibility has afforded us the opportunity to pursue the continued evolution of our differentiated army channel strategy, which includes that thriving and profitable media business anchored by the score in our investment in barstall sports and a rapidly growing interactive business with a clear path to near-term profitability and a long-term path to meaningful value creation.

This balance sheet strength and financial flexibility has afforded us the opportunity to pursue the continued evolution of our differentiated omnichannel strategy, which includes a thriving and profitable media business anchored by the score and our investment in Barstool sports and a rapidly growing interactive business with a clear path to near term.

Profitability in our long term path to meaningful value creation, a path that is not entirely contingent on tam or scale, where marketing spend but one that is more in our control and based on our business model and margin profile that has unmatched structural advantages that I'll cover in more detail a little later.

Speaker 14: A path that is not entirely contingent on TAM or scale or marketing spend, but one that is more in our control and based on a business model and margin profile that has unmatched structural advantages that I'll cover in more detail a little later.

Speaker 4: Given this unique competitive positioning and confidence in our future growth prospects, I'm pleased to share that our Board of Directors has authorized a $750 million three-year share repurchase program. Our strong financial position provides us with the ability to continue to grow our business and invest where appropriate while also returning capital to shareholders in a rapidly evolving

Given this unique competitive positioning and confidence in our future growth prospects I am pleased to share that our board of directors has authorized a $750 million three year share repurchase program. Our strong financial position provides us with the ability to continue to grow our business and invest where appropriate while also returning capital to shareholders in a rapid.

The evolving marketplace.

Speaker 14: You move on to slide five and six. You can see that we had a strong finish to really what was a tremendous year for us at Penn with our fourth quarter revenues and adjusted EBITAR exceeding both 2020 and 2019 levels despite the ongoing pandemic. I'm incredibly grateful for the hard work and dedication of our team members across the entire enterprise during this challenging time as they continue to deliver best in class service to our guests while managing the virus-related impact on their own lives.

If you move on to slide five and six you can see that we had a strong finish to really what was a tremendous year for us at Penn with our four quarter fourth quarter revenues and adjusted EBITDAR exceeding both 2020 in 2019 levels. Despite the ongoing pandemic I'm incredibly grateful for the hard work and dedication of our team members across the entire enterprise during this.

<unk> time as they continue to deliver best in class service to our guests, while managing the virus related impact on their own lives.

Speaker 14: In the fourth quarter, we successfully advanced several of our long-term strategic objectives. Most significantly, we closed on our acquisition of the score. A transaction that provides us with another powerful sports media brand, loyal audience, and full control of our product and technology roadmap.

In the fourth quarter, we successfully advanced several of our long term strategic objectives. Most significantly we closed on our acquisition of the score a transaction that provides us with another powerful sports media brand loyal audience in full control of our product and technology roadmap looks.

Speaker 4: Looking ahead a year from now, we also have the opportunity to fully own Barstool Sports, which together with the score will mark our transformation into a major media and entertainment company.

Looking ahead a year from now we also have the opportunity to fully owned Barstool sports, which together with the score will mark our transformation into a major media and entertainment company.

Speaker 4: You will note in our release that we have created a new operating segment for interactive, which delivered very impressive results, certainly relatively speaking. I think there is a misperception right now in the market that there is no clear path in near-term or even medium-term profitability in the sports betting sector. But I would like to remind you that we are employing a very unique strategy, and we are already seeing the benefits of our discipline marketing approach and numerous structural advantages.

You will note in our release that we have created a new operating segment for interactive, which delivered very impressive results certainly relatively speaking I think there is a misperception right now in the market that there is no clear path to near term or even medium term profitability and the sports betting sector, but I'd like to remind you that we are employing a very unique strategy.

And we are already seeing the benefits of our disciplined marketing approach and numerous structural advantages in fact, our interactive segment exceeded our EBITDA expectations in the fourth quarter, despite launching sports betting in Iowa, and I Casino and sports betting in West, Virginia, as well as some costs associated with the integration.

Speaker 4: In fact, our interactive segment exceeded our EBIDA expectations in the fourth quarter, despite launching sports betting in Iowa and Ikecino and sports betting in West Virginia, as well as some costs associated with the integration of the score and an extremely aggressive competitive environment that's been well documented by many of you.

Of the score and an extremely aggressive competitive environment, that's been well documented by many of you.

Speaker 4: We have all seen the incredible level of marketing spend in this space, which we all know is not sustainable in a competitive environment. We have not at Penn and will not jump into that fray as we remain focused on channeling our investments into ownable and differentiated products, experiences, and technology platforms for our end users that will have long-term benefits versus spending irrationally on short-term marketing initiatives with very questionable returns.

We have all seen the incredible level of marketing spend in this space, which we all know is not sustainable in a competitive environment, we have not at Penn and will not jump into that Fray as we remained focus on channeling, our investments and to owner Bowl and differentiated products experiences and technology platforms for our end users.

That will have long term benefits versus spending irrationally on short term marketing initiatives with the very question about returns.

Speaker 14: We are also very fortunate to have two dynamic and growing customer acquisition funnels in Barstool Sports and The Score, together with our leading portfolio of retail casinos and sportsbooks that provide us with highly effective organic marketing and monetization opportunities without the need to incur massive losses to compete.

Where we are also very fortunate to have two dynamic and growing customer acquisition funnel and barstool sports and the score together with our leading portfolio of retail casinos and sports books that provide us with highly effective organic marketing and monetization opportunities without the need to incur massive losses to compete.

Speaker 4: And we're going to stay committed to our strategy of leveraging these strengths.

And we're going to stay committed to our strategy of leveraging these strengths.

Speaker 14: Looking ahead, we expect our interactive business to lose approximately $50 million in 2022, which is an improvement from our prior $80 million EBITDA loss for the year and obviously PELLS in comparison to the anticipated losses of the competitive set. Importantly, this estimate is inclusive of investments we are making to scale our operations and infrastructure in anticipation of bringing our technology in house and launching in a minimum of four new jurisdictions. A

Looking ahead, we expect our interactive business to lose approximately $50 million in 2022, which is an improvement from our prior $80 million EBITDA loss for the year and obviously pales in comparison to the anticipated losses of the competitive set importantly, this estimate is inclusive of investments, we are making to scale our operations and infrastructure.

<unk> in anticipation of bringing our technology in house, and launching and a minimum of four new jurisdiction rigs.

Speaker 14: Regarding the cadence of the year, we expect to incur most of that EBITDA loss in the first three quarters as we launch in several new markets and prepare our products and technology stack for football season 2023, sorry 2022. By 2023, we expect to be generating positive EBITDA in our interactive division, as I've said before.

Regarding the cadence of the year, we expect to incur most of that EBITDA loss in the first three quarters as we launch in several new markets and prepare our prepare our products and technology stack for football season, 2023, sorry, 2022 by 2023, we expect to be generating positive EBITDA and our interactive division as I said before.

Speaker 14: And as I mentioned earlier, we see a lot of attention in the press about handle market share. And while that is a useful metric, particularly when a state first launches, it doesn't mean as much when those incoming dollars generated from that handle are completely offset by marketing and promotion.

And as I mentioned earlier, we see a lot of attention in the press about handle market share and while that is a useful metric, particularly when a state first launches it doesn't mean as much when those incoming dollars generated from that handle are completely offset by marketing and promotions. While we think this point is becoming more widely understood. Unfortunately, because of the varied ways the states.

Speaker 14: While we think this point is becoming more widely understood, unfortunately, because of the varied ways the states report sports betting metrics, the investment community is forced to use Handle to compare company performance in each state.

Sports betting metrics.

And that community is forced to use handle the compare company performance in each state.

Speaker 14: Fortunately, there are a few states that report net gaming revenue, which we believe is a more relevant measure of performance. You can see that in states like Pennsylvania and Michigan, our NGR market share underscores the benefit of our profit-focused strategy as shown on slide 16 in our slide deck.

Fortunately there are a few states that report net gaming revenue, which we believe is a more relevant measure of performance you can see that in states like Pennsylvania, and Michigan are N. G. R market share underscores the benefit of our profit focused strategy as shown on slide 16 in our slide deck.

Speaker 14: While we, like all operators, have seen volatility from month to month based on hold and always will with the return of football season, we have gained traction pretty much across the board with our online sports betting revenue, more than doubling in the fourth quarter.

While we like all operators have seen volatility from month to month based on hold and always well with the return to football season, we have gained traction pretty much across the board with our online sports betting revenue more than doubling in the fourth quarter.

Speaker 14: And we are doing this while spending a fraction, a small fraction of what our competitors spend on marketing.

And we are doing this while spending a fraction small fraction of what our competitors spend on marketing.

Speaker 14: Our performance in New Jersey, which is perhaps the most competitive online sports betting market in the world, is particularly notable as we captured meaningful share despite launching three years or more after our primary competitor.

Our performance in New Jersey, which is perhaps the most competitive online sports betting market in the world is particularly notable as we captured meaningful share despite launching three years or more after our primary competitors.

Speaker 14: Felicia and I regularly are asked when we can expect to see positive contribution margin following new state launches. As you will see on flight 18.

Felicia I regularly or asked when we can expect to see positive contribution margin following new state launches as you will see on slide 18.

Speaker 14: Our low customer acquisition costs and high retention rates are providing a very short payback period, specifically within two or three quarters of launching in a state. By the time we are in a state for a year, we typically achieve over a two-times return on our initial investment in that state.

Our low customer acquisition costs and high retention rates are providing a very short payback period, specifically within two or three quarters of launching in the state by the time, we are in a state for a year, we typically achieve over two times return on our initial investment in that state. This return is even faster of course and higher in states that also offer online.

Speaker 14: This return is even faster, of course, and higher in states that also offer online casino.

Speaker 14: Flight 19 reinforces this point by illustrating the impact of our structural advantages versus the competition.

Casino slide.

Slide 19 reinforces this point by illustrating the impact of our structural advantages versus the competition.

Speaker 14: We are confident our organic marketing strategy and market access footprint will lead to outsized profitability over the long-term. This doesn't even factor in the impact of our retail sportsbooks, which are highly profitable and provide significant opportunities for cross-sell. We now operate 24 retail sportsbooks across the country, and we estimate that our total retail market share outside of Nevada is 12%.

We are confident our organic marketing strategy and market access footprint will lead to outsized profitability over the long term. This doesn't even factor in the impact of our retail sports books, which are highly profitable and provide significant opportunities for cross sell.

We now operate 24 retail sports books across the country and we estimate that our total retail market share outside of Nevada is 12%.

Speaker 14: In Louisiana, we generated over half of the state's retail handle and revenue during the first two months of operation at temporary sportsbooks at our five casinos. We expect even greater upside when we complete the barstool rebranding at our signature locations in Lake Charles, Baton Rouge, and Bossier City.

In Louisiana, we generated over half of the state's retail handle and revenue during the first two months of operation at temporary sports books at our five casinos, we expect even greater upside when we complete the barstool rebranding at our signature locations in Lake Charles Baton Rouge in Bossier City.

Speaker 14: Speaking of Louisiana, following our recent launch of online sports betting there on January 28.

Louisiana following our recent launch of online sports betting there on January 28, we now operate online sports betting in 12 States and I casino and for looking ahead, we have several important milestones on the horizon, including anticipated launches in Ohio, and Maryland, the establishment of remote mobile registrations.

Speaker 14: We now operate online sports betting in 12 states in Icocino in four. Looking ahead, we have several important milestones on the horizon, including anticipated launches in Ohio and Maryland.

Speaker 14: The establishment of remote mobile registration in Illinois in early March, which if you recall, we went live about a year ago and only had one month of remote mobile registration before it reverted back to on-prem. So that's a big deal for us in the state of Illinois. And the recently announced launch date for sports betting and iGaming on April 4th in Ontario.

And in Illinois in early March, which if you recall, we went live about a year ago and only had one month.

Remote mobile registration before it reverted back to on Prem. So that's a big deal for us in the state of Illinois, and the recently announced launch date for sports betting and I gaming on April 4th and Ontario and.

Speaker 14: And speaking of Ontario, just to quickly recap, on December 20th, the SCORBET became one of the first mobile gaming operators to secure certification from GLI for its sports betting and iGaming platform in the province of Ontario. And just yesterday, the Alpha Hall and Gaming Commission of Ontario approved the SCORBET's registration as an internet gaming operator. These are two important milestones before the SCORBET can begin operations in the province on April 4th.

And speaking of Ontario, just to quickly recap on December 20th score bet became one of the first mobile gaming operators to secure certification from Gli for its sports betting and I gaming platform in the province of Ontario, and just yesterday, the alcohol and gaming Commission of Ontario approved the score Bath registration as an internet gaming operator neither.

Two important milestones before the score back can begin operations in the province on April 4th and the score continues to work to satisfy all remaining requirements, including execution of an operating agreement with <unk> gaming, Ontario, our team at the score has been hard at work preparing for this launch in their home province for a long time, a province with a population of.

Speaker 14: And the SCORE continues to work to satisfy all remaining requirements, including execution of an operating agreement with iGaming Ontario. Our team at the SCORE has been hard at work preparing for this launch in their home province for a long time, a province with a population of 15 million people, which would rank as the fifth largest state in the U.S. on a population basis. And we believe the SCOREbet brand, supported by the personalities at Barstool Sports, will allow us to be very competitive in that highly lucrative market.

<unk> 15 million people, which would rank as the fifth largest state in the U S. On a population basis and we believe the score bat brand supported by the personalities that barstool sports will allow us to be very competitive in that highly lucrative market.

Speaker 14: As for our iCasino products, we made a number of upgrades during the quarter, including the introduction of our first in-house development.

As for our casino products, we made a number of upgrades during the quarter, including the introduction of our first in house developed games. These improvements have led to steady month over month growth. This past fall in both handle and revenue for the Barstool Casino I'm, particularly pleased with the performance of our in house games, which have contributed over 20%.

Speaker 14: These improvements have led to steady month-over-month growth this past fall in both handle and revenue for the Barstool Casino. I'm particularly pleased with the performance of our in-house games, which have contributed over 20% of our Barstool Casino handle and revenue since their launch.

Of our Barstool casino handle and revenue since their launch.

Speaker 14: Our ability to leverage Penn Game Studios in developing bespoke games like Barstool Black Jack and Barstool Slots allows us to capitalize on cross-cell from the Barstool audience while also reducing third-party content fees.

Our ability to leverage pen game studios and developing bespoke games like Barstool, Blackjack and Barstool slots allows us to capitalize on cross sell from the Barstool audience. While also reducing third party content fees, we see opportunity to expand our I casino share. This year as we refine our omnichannel strategy to better leverage our growing my choice database.

Speaker 14: We see opportunity to expand our IKUSC-0 share this year as we refine our on-the-channel strategy to better leverage our growing my choice database, which is now over 25 million men.

Which is now over 25 million members.

Speaker 14: Turning to the retail side of the business, we saw strong property level performance across our segments, most of the quarter, with some softness in late December due to Omacron and the increase in COVID-related restrictions.

Turning to the retail side of the business, we saw strong property level performance across our segments and most of the quarter with some softness in late December due to the due to omicron and the increase in Covid related restrictions.

Speaker 14: Our properties are still seeing strong visitation from the younger demographics.

Our properties are still seeing strong visitation from the younger demographics, and we are continuing to re imagine our casinos with offerings such as our market, leading retail barstool sports books, and other food and beverage and entertainment options that will help to drive long term retention of this demographic overall, we continue to benefit from a rational and stable marketing and.

Speaker 14: and we are continuing to reimagine our casinos with offerings such as our market-leading retail, barstool sportsbooks, and other food and beverage and entertainment options that will help to drive long-term retention of this demographic.

Speaker 4: Overall, we continue to benefit from a rational and stable marketing and promotional environment and feel confident that the EBITDA flow-through achieved in the second half of 2021 is sustainable, barring any unforeseen macro or competitive development.

<unk> environment and feel confident that the EBITDAR flow through achieved in the second half of 2021 is sustainable barring any unforeseen macro or competitive developments.

Speaker 14: In December , we celebrated the opening of Hollywood Casino Morgantown, our fourth casino in Pennsylvania, and the 44th property in our industry-leading portfolio. Like its sister property that opened last August in York, Pennsylvania, this state-of-the-art casino about an hour outside of Philly is built for the future with our new technologies and customer conveniences, including our three Cs, cardless, cashless, and contactless MyWallet experience.

In December we celebrated the opening of Hollywood Casino Morgantown, our fourth casino in Pennsylvania, and the 44th property and our industry leading portfolio like its sister property that opened last August in York, Pennsylvania. This state of the art Casino about an hour outside of Philly is built for the future with our new technologies and customer convenience.

Including our three CS cartilage cashless in contact with my wallet experience.

Speaker 4: The property also features the latest evolution of our Barstall Sportsbook, Tony Luke's famous cheese steaks and several other FNB and entertainment amenities. We're encouraged with the early results at Morgan Town as we were able to reach into a new market with approximately 80% of our rated business being driven by new members to our active database.

The property also features the latest evolution of our Barstool Sports book, Tony Luke's famous Cheesecakes and several other F&B and entertainment amenities. We're encouraged with the early results at Morgantown is we were able to reach into a new market with approximately 80% of our rated business being driven by new members to our active database.

Speaker 4: The three Cs are now live at all of our Pennsylvania properties and our four casinos in Ohio. And we are excited about the potential to introduce this technology to additional properties across the portfolio pending regulatory approval.

The three CS are now live at all of our Pennsylvania properties and our four casinos in Ohio, and we are excited about the potential to introduce this technology to additional properties across the portfolio pending regulatory approvals, our <unk> solution removes friction from transactions and reduces wait times in lines, while also bolstering.

Speaker 4: Our 3Cs solution removes friction from transactions and reduces wait times and lines while also bolstering our marketing capability.

Our marketing capabilities, our my choice loyalty App now has nearly 750000 downloads up 23% during the fourth quarter and we now have 30000 users of my wallet, which provides our customers with a seamless mobile wallet solution to connect directly to their favorite games and with that I'll now turn it over to Felipe.

Speaker 4: Our MyChoiceLoyalty app now has nearly 750,000 downloads, up 23% during the fourth quarter. And we now have 30,000 users of MyWallet, which provides our customers with a seamless mobile wallet solution to connect directly to their favorite games. And with that, I'll now close.

Speaker 5: Thanks, Jay. As referenced, as Jay referenced, we generated record-free cash flow in 2021 of approximately $800 million, as well as record net leverage of $4.1 billion.

Uh huh.

Thanks, Jay as reference as Jay referenced we generated record free cash flow in 2020 line of approximately 800 million as well as record net leverage of four one time, given our strong financial positioning as well as our confidence and improved visibility in our overall business, we not only received board authorization.

Speaker 5: Given our strong financial positioning, as well as our confidence and improved visibility in our overall business, we not only received board authorization for a 750 million share repurchase program, but we're also re-initiating guidance.

750 million share repurchase program, but we're also re initiating guidance for 2022, we're providing a net revenue range of $6 7 billion to $6 three 9 billion and an adjusted EBITDA range of $1 85 billion to $1 95 billion.

Speaker 5: In 2022, we're providing a net revenue range of 6.07 billion to 6.39 billion and it adjusted EBITDA range of 1.85 billion to 1.95 billion which implies a 37 percent EBITDA margin at our core operation.

Implies a 37% EBIT margin at our core operations.

Speaker 5: We believe these ranges capture the uncertainty that still exists in most consumer sectors while also appropriately bracketing our financial expectations for the year. I'd like to provide you with several other metrics to help your modeling.

We believe these ranges capture the uncertainty that still exists in most consumer sectors. While also upheld appropriately bracketing, our financial expectations for the year.

To provide you with several other metrics to help your modeling for 2022, our corporate expense is expected to be $100 5 million inclusive of a cash settled stock based of what maintenance Capex is expected to be roughly $300 million. We expect total interest expense of $5 $66 million of which 95.

Speaker 5: For 2022, our corporate expense is expected to be $100.5 million, inclusive of our cash-settled stock-based awards. Maintenance CapEx is expected to be roughly $300 million. We expect total interest expense of $566 million, of which $95 million is cash interest, cash taxes of $159 million, and an annual share count of roughly $187 million.

As cash interest cash taxes of $159 million and our annual share count of roughly $187 million.

Speaker 5: Our new interactive reporting segment that we added this quarter reflects our view that the results of our interactive operations represent a strategic and high-growth component of our overall operation.

Our new interactive reporting segment that we added this quarter reflects our view that the results of our interactive operations represent a strategic and high growth component of our overall operation. The interactive segment, which was previously reported within the other segment includes the operating results of Penn Interactive, including Barstool Sports I think as you know this.

Speaker 5: The interactive segment, which was previously reported within the other segment, includes the operating results of Penn Interactive, including Barstow Sportsbook and Casino.

Speaker 5: and our proportionate share of earnings attributable to our investment in bar sales sports.

Core and our proportionate share of earnings attributable to our investment in Barstool sports corporate expense will continue to be reported in the other segment. In addition to Standalone racing operations other joint ventures, and management contracts and the Heartland Poker tour.

Speaker 5: Corporate expense will continue to be reported in the other segment in addition to standalone racing operations, other joint ventures, and management contracts and the Heartland Poker Tour.

Speaker 5: As a result of this change in reportable segments, we recast previously reported segment information to conform to the current management view for all prior periods presented, which you can find in this morning's release.

As a result of this change in our reportable segments segment. We recapped previously reported segment information to conform to the current management view for all prior periods presented which you can find in this morning's release.

Speaker 5: These changes have no impact to our company's consolidated financial statement.

These changes have no impact to our company's consolidated financial statements.

Speaker 5: Before I hand it back to Jay, I'll just leave you with a few housekeeping items. In the fourth quarter, corporate expense inclusive of cash settled stock-based awards was $24.3 million. Our cash rent payments were $228.8 million. Cash interest was $14.8 million. Cash taxes were $32.7 million and maintenance capex was $55.3 million, with total capex at $102.1 million.

Before I hand, it back to Jay I'll, just leave you with a few housekeeping items in the fourth quarter corporate expense inclusive of cash settled stock based awards with $24 3 million of cash rent payments with $228 8 million cash interest was $14 8 million cash taxes were $32 7 million and maintenance Capex was.

50, $55 3 million with total Capex at $102 1 million.

Speaker 5: Our balance sheet remains a key asset for us. Total liquidity as of December 31st, 2021 was $2.5 billion, consisting of $1.9 billion in cash and our $700 million undrawn revolver. Traditional net debt was $886 million, an increase of $841 million during the quarter, principally due to a cash payment of approximately $923 million for the acquisition of the score. And as Jay mentioned earlier, our least adjusted net leverage was 4.1 times a record low for the current year.

Our balance sheet remains a key asset for a total liquidity as of December 31, 2021, with $2 5 billion, consisting of $1 9 billion in cash and a 700 million undrawn revolver traditional net debt was $886 million, an increase of $841 million during the quarter, principally due to the cash payment of approximately.

<unk> 923 million for the acquisition of the score and as Jay mentioned earlier at least adjusted net leverage was four one times a record low for the company.

Speaker 5: Our balance sheet gives us the flexibility to be opportunistic in a dynamic marketplace and to return capital to shareholders through share repurchases. While we're not guiding to an optimal net leverage level today, our strong free cash flow generation should enable us to naturally de-lever over time. And with that, I'll turn it back to Jay.

Balance sheet gives us the flexibility to be opportunistic in a dynamic marketplace and to return capital to shareholders through share repurchases, while we're not guiding to an optimal net leverage level today, our strong free cash flow generation should enable us to naturally delever over time and with that I'll turn it back to Jack.

Speaker 4: Thanks, Felicia. As you saw in our release, we're continuing to expand on our ESG initiatives as well and look forward to sharing our 2021 Corporate Social Responsibility Report in April in conjunction with our proxy filing.

Thanks Felicia.

As you saw in our release, we're continuing to expand on our ESG initiatives as well and look forward to sharing our 2021 corporate social responsibility report in April in conjunction with our proxy filing highlights from the quarter include the launch of a $4 million stem scholarship fund an internship program at historically black colleges and universities and.

Speaker 4: Highlights from the quarter include the launch of a $4 million STEM Scholarship Fund and Internship Program at Historically Black Colleges and Universities in states in which we operate.

States in which we operate in addition, we started a new pilot program to help mentor and develop our hourly and early career team members, who want to pursue leadership positions at our company. We also kicked off our annual $1 million of diversity scholarship program for the children of team members and are now reviewing applications for the 2021 2000.

Speaker 4: In addition, we started a new pilot program to help mentor and develop our hourly and early career team members who want to pursue leadership positions at our company.

Speaker 14: We also kicked off our annual $1 million diversity scholarship program for the children of team members and are now reviewing applications for the 2021-2022 school year.

22 school year.

Speaker 14: In our inaugural year, we awarded over $1 million in two and four year scholarships to 58 individuals, the majority of whom were first generation college students, which is an awesome story. We expect this year's program to be similarly successful, and I look forward to sharing more details with you next quarter.

In our inaugural year, we awarded over $1 million in two and four year scholarships to 58 individuals. The majority of whom were first generation College students, which is an awesome story. We expect this year's program to be similarly successful and I look forward to sharing more details with you next quarter and other positive pen new.

Speaker 14: In other positive pen news earlier this week, we were honored to come in second place out of 34 companies as an employer of first choice in the annual Casino Gaming Executive Satisfaction Survey by Bristol Associates and Spectrum Gaming. I believe that now, Mark.

News earlier this week, we were honored to come in second place out of 34 companies as an employer of first choice and the annual Casino gaming Executive satisfaction survey by Bristol Associates and spectrum gaming I believe that now marks six or seven maybe eight years in a row that we finished the first or second in this Anonymised survey. We're also proud to report.

Speaker 14: six or seven, maybe eight years in a row that we've finished first or second in this anonymized survey. We're also proud to report that in the iGaming and mobile sports betting division, Penn Interactive came in first place out of 28 organizations, so congratulations to everybody at Penn and Penn Interactive.

Short that into I gaming and mobile sports betting Division Penn Interactive came in first place out of 28 organization. So congratulations to everybody at Penn and Penn Interactive.

Speaker 14: Our support of our nation's heroes also continues. We are approaching 100,000 customers enrolled in our My Hero's Loyalty Program, which provide special benefits for veterans, active duty, and first responders. When we hit that milestone, our properties will be contributing $100,000 to local veterans groups in their communities.

Our support of our nation's heroes also continues we are approaching 100000 customers enrolled in our my heroes loyalty program, which provides special benefits for veterans active duty and first responders when we hit that milestone our properties will be contributing $100000 to local veterans groups and their communities.

Speaker 14: Also in conjunction with this year's Army Navy football game, Barstall Sportsbook ran a special Viva La Troops promotion, matching certain first time deposits and raising $200,000 to support the Fisher Health Foundation and SemperFi and America's Fund Veterans organizations. Yet another example of how our marketing approach can be a win-win for our bottom line and those in need in our community.

Also in conjunction with this year's Army Navy football game Barstool Sports book ran a special Viva La troops promotion matching certain first time deposits and raising $200000 to support the Fisher House Foundation, and simplify and Americas Fund veterans organizations. Yet. Another example of how our marketing approach can be a win win.

And for our bottom line and those in need in our communities.

Speaker 4: So let me just reiterate how excited I am for the significant milestones ahead of us over the next 12 to 24 months, including several new state and province launches. The debut of the scores for proprietary risk and trading platform in Ontario, the integration of the barstool sportsbook into the score media app in the US, and the migration of the barstool sportsbook to the scores player count management and trading platform before football season 23.

So let me just reiterate how excited I am for the significant milestones ahead of us over the next 12 months to 24 months, including several new state and province launches the debut of the scores proprietary risk and trading platform in Ontario, the integration of the Barstool Sports book into the score media App in the U S and the migration of the Barstool sports.

Look to the scores player account management and trading platforms before football season 'twenty three.

Speaker 14: So with that, Frank, we'll turn it over to you and we'll open it up for our first question.

So with that.

Frank will turn it over to you and we'll open it up for our first question.

Thank you.

Speaker 1: Ladies and gentlemen, if you would like to register a question, please press the 1 followed by the 4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1 followed by the 3. If you're using a speakerphone, please lift your headset before entering your request. One moment please for the first question.

Ladies and gentlemen, if you would like to register a question. Please press the one followed by the four on your telephone.

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Speaker 1: First question comes from a Joe Graph with JP Morgan. Please proceed.

First question.

<unk> comes from Joe Greff with Jpmorgan. Please proceed.

Speaker 6: Good morning, everybody. My first question is a multi-part one and relates to your 2022 guidance and related commentary. One, what's your assumption for a steam store land-based revenue growth? How much of the 6.2 billion or so in revenues relates to interactive? I know you gave us, you know, sort of an EBITDA metric for interaction.

Good morning, everybody.

My first question is a multipart, one and relates to your 2022 guidance and related commentary.

One what's your assumption for same store land base revenue growth how much of the how much of that $6 2 billion or so in revenues relates to interactive I noticed I know you gave us.

Sort of EBITDA metric.

For this year.

Yes, Joe.

Speaker 7: Joe, we're not going to comment on interactive guidance at this point on the revenue side. We have given you the historical levels and we've given you the EBITAR, but we're just not at the place that we're going to start talking about on the revenue side. And I'll turn it to Todd for the same story. Thanks, Alicia. Joe, basically, we're looking at relatively flat, some upside in the self, but we are going to have going to put it a shot, just to keep on open that stuff.

We're not going to comment on interactive guidance at this point on the revenue side, we have given you the historical levels and we've given you the EBITDAR, but we're just not at a place yet where it isn't it.

Talking about on the revenue side and I'll turn it to Todd for that same store. Thanks, Felicia Joe basically we're looking at relatively flat some upside in the south but we are going to have some headwinds related to our council bluffs property, which will see new competition coming from Nebraska later in the year.

Speaker 7: Some headwinds related to our Council Bluffs property, which will see new competition coming from Nebraska later in the year as well as the full year now.

<unk> as well as a full year now in east Chicago, where the hard rock property and then we will have just one more in lake Charles with.

Speaker 7: In East Chicago with a hard rock property and then we'll have just one more in Lake Charles with

Speaker 7: Horseshoe the former aisle property being rebranded as a horseshoe in q3, but all in all it'll be minimal growth on a same-store basis Due to those being offset

Horseshoe the former oil properties being rebranded as a horseshoe in Q3, but all in all it will be minimal growth on a same store basis.

Due to though is being offset by some of the other properties.

Speaker 14: I would only add to Felicia and Todd Comments just from a sort of, you know, quarter to quarter, Kate and perspective Joe that Q2 is going to be really hard to match. I think for everybody in the industry that was definitely...

I would only add to Felicia and Todd's comment just from a sort of.

<unk> to quarter cadence perspective, Joe that.

Q2 is going to be really hard to match I think for everybody in the industry that was definitely sort of as good as it gets high watermark. So as you think about quarterly modeling I think Q1, assuming that you know omicron impact really does fade away here as we enter February and we can get some bad weather events on weekdays versus weekends, which would be nice.

Speaker 4: sort of as good as it gets high water marks. So as you think about quarterly modeling, I think Q1 assuming that Omokron impact really that fade away here as we enter February .

Speaker 14: can get some bad weather events on weekdays versus weekends, which would be nice, which didn't happen in January . But I think you should expect Q1 to show upside versus last year Q1. Q2 would likely not meet Q2 of 2021.

Which didn't happen in January but I think you should expect Q1 to show upside versus last year Q1, Q2 with likely not meet Q2 of 2021 in.

Speaker 14: Q3 and Q4 probably pretty close to in line with what we saw in 2021. Somewhere thereabouts, I think, is a decent way to model quarter.

In Q3, and Q4 are probably pretty close to in line with what we saw in 2021 somewhere thereabouts I think of a decent way to model a corridor by corridor.

Speaker 7: Yeah, great thread ad Jay. Again, Joe, excellent point by Jay on Q1, because we do have a somewhat favorable comparison as last year, especially.

Great Jay.

Again, Joe excellent point by Jay on Q1, because we are we do have a somewhat favorable comparison.

As last year, especially in the Midwest there are a lot of restrictions still in place.

Got it and then Felicia you gave us a breakdown on different 2022 items, such as maintenance Capex can you repeat that with 300 million the right number.

Speaker 5: Yeah, and Joe, thanks for that question. Why is that so high? Yeah, historically, it's been about $200 million. And there's a few items in there now, revenue-enhancing investing.

Yeah, and Joe Thanks for that quite why is that so so high historically.

Historically, it's been about 200 million and Theres. Some theres a few items in there now and revenue enhancing investments.

Speaker 5: Such as investing in Barstool sports books, our retail sports books. On the hotel side, we're renovating our hotels with a very new and exciting prototype. Also, our investments in technology and 3Cs are in that number. So I would use, even as you're modeling out past 22, for the near term, I would use $300 million as your new maintenance CapEx number for awhile.

Such as investing in Barstool sports books, our retail sports books.

On the hotel side, we're renovating our hotels with a very new and exciting prototype also our investments in technology and three fees are in that number so I would use even as you're modeling out past 'twenty two for.

For the near term I would use 300 million at your maintenance Capex number for a while.

Speaker 6: Okay, and my last question, I was going to ask something on Barstool and Dave, and maybe I'll ask that offline after the call, but Jay, just thinking about Ontario and the anticipation of the market dynamics there and competition there, when you think about Ontario versus some of the U.S. markets, what's different about Ontario, what's similar to Ontario versus some of the maturing online sports betting markets in the U.S.?

Okay.

My last question I was going to ask something on Barstool, and Dave and maybe I'll ask that offline after the call but.

Just taking a bet on Ontario, and the anticipation of the market dynamics, there and competition there when you think about.

<unk> versus some of the U S market.

What's different about Ontario, with similar to Ontario versus some of the maturing.

Sports betting markets in the U S.

Speaker 14: Yeah, good question, Joe. And I honestly, I think there's probably more differences than similarities as I look at any of the individual states.

Good question, Joe and I honestly, I think there's probably more differences and similarities as I look at any of the individual states here in the U S.

Speaker 14: here in the U.S. for a couple of reasons. One.

A reason one Canada has been a gray market.

Speaker 14: Canada has been a grey market for some time now, but the regulators in Ontario are requiring those grey market operators to go through some KYC and regulatory requirements before they relaunch.

It hasn't been a great market for some time now, but the regulators in Ontario are requiring those gray market operators to go through some Ky C and regulatory requirements before they relaunch.

Speaker 4: Post April 4th, so I think that'll be interesting to see how that plays out versus Maybe some of the you know US markets not so much gray operators. It was more of a dynamic where maybe people were betting Illegal offshore with bookies whereas it was really gray. They were there. It wasn't Illegal or legal just kind of gray so we'll have to see how that Competitive dynamic with gray market operators in Canada plays out One of the other

April 4th so I think that'll be interesting to see how that plays out versus maybe some of the U S markets not so much great operators, if it's more of a dynamic where maybe people are betting illegal offshore with bookies, whereas it was really gray they were there it wasn't illegal or legal or just kind of gray. So we'll have to see how that competitive.

That dynamic with great market operators in Canada plays out.

One of the other factors that I think is encouraging versus what we've seen in all of the U S. States is that there are advertising restriction restrictions in Ontario, as it relates to gaming and you cannot advertise promotions or discounting into your business, which we welcome and so it's gonna be a lot more about.

Speaker 14: is encouraging versus what we've seen in all the US states is that there are advertising restrictions and Ontario as it relates to gaming and you cannot advertise.

Speaker 4: Promotions or discounting to your business, which we welcome.

Speaker 4: And so it's going to be a lot more about, I think, just educating. You know, we'll spend some money when we launch there because you're really in education mode about this move from gray market to above the board market legalized.

I think just educating we'll spend some money when we launched there because you're really in education mode. About this move from gray market to above above the board market legalized and you want to make sure that people know who those legal operators are going forward, but I like the fact that you can't just put your business on sell in heavy discount to get people.

Speaker 4: And you want to make sure that people know who those legal operators are going forward. But I like the fact that you can't just put your business on sale and heavy discount to get people to download and deposit and bet, which is what we've seen here in the US and most states.

To download and deposit and bet, which is what we've seen here in the U S. In those states.

Speaker 4: And then, lastly, of course, we think we have a, we're in a really strong position because I think it's somewhere close to 20% of people in Ontario have the Score sports media app on their phone. And so you think about the ability to convert from sports media to sports betting when you can do both on the same app and see all of the live odds.

And then lastly of course, we think we have a we're in a really strong position because I think it's somewhere close to 20% of people in Ontario have the score sports media App on their phone and so you think about the ability to convert from sports media to sports betting when you can do both on the same app and see all of the light odds.

Speaker 4: If you're just in there checking scores, you're going to know very quickly if you're a ScoreMedia app user that we are now offering live sports betting with the ScoreBet app. So I think we're in a really strong position. Obviously, we're going to be very focused on conversion of sports media to sports betting. We're going to definitely make sure that everybody in Toronto and greater Ontario, that they definitely know that we're now live and that it's a legal market and that there are legal operators that have offerings there.

If you are just in their checking scores youre going to know very quick very quickly if you're a score media app user that we are now offering a live sports betting with the score bet App. So I think we're in a really strong position. Obviously, we're gonna be very focus on conversion of sports media to sports betting.

We're going to definitely make sure that everybody in Toronto and greater Ontario.

That they definitely know that we are now live and that is the legal market and that there are illegal operators that have offerings. There. So what we'll see how it plays out certainly our expectation is to be you know kind of no no lower than low double digit market share from an online sports betting perspective, and maybe you know on the online casino side, we'd like to start off in the mid to high single digits.

Speaker 4: So we'll have to see how it plays out. Certainly our expectation is to be, you know, kind of, you know, no lower than low double-digit market share from an online sports betting perspective. And maybe, you know, on the online casino side, we'd like to start off in the mid to high single-digit range and then just continue to grow both of those from beginning.

And then just continue to grow both of those from from beginning.

Great. Thank you.

Thanks, Joe.

Speaker 1: Our next question comes from a Bernie McNeerlin with Meet Him & Company. Please proceed.

Our next question.

<unk> comes from burning Mcneil Hannon with Needham <unk> Company. Please proceed.

Speaker 8: Great. Thanks for taking the question. Good morning. I was wondering if I could just pry a little bit in terms of the 23 interactive guide into what meaningful means are we talking tens of millions of dollars or maybe something bigger than 100?

Great. Thanks for taking the question. Good morning, I was wondering if I could just prior little bit in terms of the 23 interactive guidance. If what meaningful means are we talking tens of millions of dollars or maybe something bigger than a $100 million.

Speaker 4: Yeah, I would say stay tuned Bernie. I mean, I don't want to get too far ahead of ourselves. It will be real EBIDA. And you will likely not have to wait until football season to see it. I actually think we have a good chance of football season 22 of Schoen Prophet. Really depends on the Ontario launch and momentum and is Ohio live yet and Maryland. But I think once we hit that point of being profitable, which hopefully is late 22, you should expect that to just go forward ramping into 20.

Yeah, I would say stay tuned Bernie I mean, I don't want to get too far ahead of ourselves it will be it'll be real EBITDA and you will likely not have to wait until football season to see it I actually think we have a good chance of football season, 'twenty two of showing profit.

Really depends on the Antares launch and momentum and as Ohio live yet in Maryland, but I think once we hit that point of being profitable, which hopefully is late 'twenty. Two you should expect that to just go forward ramping into 'twenty three.

Speaker 8: understood and thinking about that fifty million dollar investment uh... going into a profit only in twenty three is it possible to break down maybe the fifty million into some buckets whether it's u.s. Canada and the tech stack not sure if those are the right three to think about but if there's a way to kind of bracket it out

Understood and thinking about that $50 million investment.

Going into profitability in 'twenty three is it possible to break down maybe the $50 million into some buckets, whether it's U S, Canada and the tech stack not sure. If those are the right three to think about but if theres a way to kind of bracket it out.

Speaker 4: Yeah, at a high level, Bernie, I would say that you should think about our interactive operation in the US.

Yeah.

At a high level Bernie I would say that you should think about our interactive operation in the U S.

Speaker 4: as a standalone as being profitable in 2022, which I think is noteworthy, but we didn't want to over highlight that because at the end of the day, it's still net negative 50 when you put everything together.

As a standalone has been profitable in 2022, which I think is noteworthy, but we didn't want to over highlight that because at the end of day, it's still net negative 50, when you put everything together.

Speaker 4: There's going to be continued ramping and scaling of our headcount and our infrastructure as we are continuing to hire...

There's going to be continued ramping and scaling of our head count in our infrastructure as we are continuing to hire lots of engineers and product development people working on our tech stack. So there's a lot of staff ramping that's going into the technology investment, which is actually going very well and.

Speaker 4: lots of engineers and product development people working on our tech stack, so there's a lot of staff ramping that's going into the technology investments, which is actually going very well, and we're so pleased to have a big office in Toronto where we can recruit people, and then, of course, the Penn Interactive office in Philadelphia where we do the same thing.

We're so pleased to have a big office in Toronto, where we can recruit people and then of course, the dependent or active office in Philadelphia, where we do the same thing.

Speaker 4: There's definitely going to be an investment into Ontario at launch because of the education investment that I mentioned earlier of just making sure people in Ontario know that you

There's nothing going to be an investment into Ontario at launch because of the education investment that I mentioned earlier of just making sure people in Ontario know that you have live in legal sports betting options as opposed to maybe gray market ones that have been offered for a long time in that marketplace.

Speaker 4: live and legal, sports betting options as opposed to maybe gray market ones have been offered for a long time in that marketplace.

Speaker 4: So when you throw all that into the pot is where you get to approximately a negative $50 million EBITDA. But if you just think about the core interactive operation in the U.S., it will be profitable in 2022.

When you throw all of that into the pod is where you get to approximately a negative $50 million EBITDA, but if you just think about the core interactive operation in the U S. It will be profitable in 2022.

Understood. Thanks for taking the questions.

Thanks Bernie.

Speaker 1: Our next question comes from Barry Jonas with Truth Securities. Please proceed.

Our next question comes from Barry Jonas with true Securities. Please proceed.

Speaker 9: Hey guys, can you talk about the health of the consumer in this rising inflationary environment? How much of that weighs into your guidance beyond the new supply risks you talked about?

Hey, guys.

Can you talk about the health of the consumer in this rising inflationary environment, how much of that waste into your guidance beyond the new supply risks you talked about.

Speaker 7: Hey, Barry, this is Todd. Great question. What we've seen, I mean, obviously, last year, there was there was some stimulus money floating around through many of the quarters. But, you know, the encouraging take Omicron out and some calendar noise in December , what we saw in Q4 is continued into January outside of weather, especially the second half, we actually just

Hey, Barry this is Tod great question.

What we've seen I mean, obviously last year. There was there were some stimulus money floating around through many of the quarters, but.

The encouraging take omicron out in some calendar noise in December what we saw.

In Q4 has continued into January outside of weather, especially the second half we actually just we're coming off.

Speaker 7: We're coming off the best weekend that we had in January was actually this last weekend, and that was with we actually had property closures at Bangor and Plainridge up in the Northeast.

The best weekend that we had in January was actually this last weekend and that was when we actually had property closures at a bang or in plain ridge up in the northeast, but the rest of the countries seem pretty healthy.

Speaker 7: but the rest of the country seemed pretty healthy. I feel that we're seeing increased visitation in many of our properties, but really much of the story, as it was last year, continues into this year, where a higher value per trip. So people are still coming in and they're spending to the levels that we were seeing in 2021. So today has been a great deal.

I feel that we're seeing increased visitation and many of our properties, but really much of a story as it was last year continues into this year, where a higher value per trip. So people are still coming in and they're spending to the levels that we were seeing in our 2021. So.

To date hasn't really been much of an issue for us.

Speaker 9: Great. And then, Jay, maybe just a high-level follow-up question. As the overall North American interactive market develops, has anything changed in your view relative to the size, scale, or maybe timing of Penn's long-term opportunity?

Great and then maybe just a high level follow up question.

Overall, North American interactive market develops has anything changed in your view relative to the size scale or maybe timing of <unk> long term opportunity.

Speaker 4: Well, there's always the big question that we can never answer with accuracy is what is the TAM going to be? When are more states going to legalize online gaming? How many states will there be at full scale from an online sports betting perspective? What's going to happen in California and Texas? And so there are a lot of questions that we unfortunately can't answer. I think we have a perspective on.

Well Theres always the big question that we can never answer with accuracy is what is the Tam going to be.

Men are more states gonna legalized online gaming.

How many states will there'll be at full scale from an online sports betting perspective, what's going to happen in California, and Texas and so there are a lot of questions that we unfortunately can't answer I think we have a perspective on but no I think that the.

Speaker 14: But no, I think that the way we viewed this opportunity from the beginning, and we still do, is that online sports betting is an unbelievable acquisition tool for us.

We view this opportunity from the beginning and we still deal is that online sports betting is a unbelievable acquisition tool for us.

Speaker 4: It's not ever going to be as high margin standalone as online casino or brick-and-mortar casino. But because of our structural advantages, we think we can run industry-best margins in online sports betting.

It's not ever going to be as high margin standalone as online casino or brick and mortar casino, but because of our structural advantages. We think we can run an industry best margins and online sports betting we have marketing advantages. We're gonna have technology advantage is of course, we have access advantages given our footprint. So it really.

Speaker 4: We have marketing advantages, we're going to have technology advantages. Of course, we have access advantages given our footprint.

Speaker 14: So it really, things have, I guess, played out mostly how we thought they would. We want to continue to improve our market share and online casino. We have not performed as well there as we anticipated performing, and we're on top of that. We have, you know, created Pen Game Studios, which has put out some fantastic.

I guess it played out mostly how we thought they would we want to continue to improve our market share in online casino, we have not performed as well there as we anticipated performing and we're on top of that.

Have created Penn Gaming studios, which has put out some fantastic bespoke product and content that we're already seeing over 20% of our handle and online casino coming from games that we created and that's very encouraging as we'd love to see that get to 50% down the road and we've only launched a few games up to this point.

Speaker 4: product and content that we're already seeing over 20% of our handle in online casino coming from games that we created and that's very encouraging as we'd love to see that get to you know 50 plus percent down the road and we've only launched a few games up to this point.

Speaker 4: So I think we're very pleased with the things that we have within our control. We think the launches.

So I think we're very pleased with the things that we have within our control. We think the launches this year in particular, Ontario, and Ohio are very very exciting for us thrilled.

Speaker 14: this year, in particular Ontario and Ohio, are very, very exciting for us.

Speaker 4: Throw Louisiana in there as well because we have such a strong presence from a retail casino perspective in Ohio as well as Louisiana.

Throw Louisiana, Louisiana in there as well because we have such a strong presence from a retail casino perspective in Ohio.

As well as Louisiana.

Speaker 4: And then, of course, in Ontario, we talked about that already. So, no, I wouldn't say that outlook is different other than the big question has been and continues to be, what is the ultimate TAM going to be? But as I mentioned in our prepared remarks, from our perspective, we've got a model that is built to make money, and that's what we do at Penn. And whether that TAM is $20 billion, $30 billion, $50 billion, we're going to be in the business of making really good margins and generating cash flow. Thank you.

And of course in Ontario, we talked about that already so.

No I wouldn't say that the outlook is different other than the the big question has been and continues to be what is the ultimate Tam going to be but as I mentioned in our prepared remarks from our perspective, we've got a model that is built to make money and that's what we do at pen.

Whether that Tam is $20 billion $30 billion $50 billion, we're going to be in the business of making making really good margins and generating cash flow.

That's great. Thanks, so much.

Thanks, Greg.

Okay.

Speaker 1: Our next question comes from Orion Siddhal with Craig Allen Capital Group. Please proceed.

Our next question comes from Orion, Saddam with Craig Hallum Capital Group. Please proceed.

Speaker 10: Good morning, Jay, Felicia, and congrats on the strong business trends and good to see the buyback authorization as well.

Good morning, Jay Felicia and congrats on the strong business trends and good to see the buyback authorization as well.

Good morning, Ryan.

Speaker 10: Curious on interactive. I know there's been several questions, but the loss you were previously expecting a couple months ago, 100 million, give or take, in 2022, it's half that now. I guess first was New York in that previous assumption. And then secondly, what's changed positively versus a few months ago?

Curious on interactive.

There's been several questions, but the loss you were previously expecting a couple of months ago 100 million give or take in 2022, it's half that now I guess first was new York and that previous assumption and then secondly, what's change positively versus a few months ago.

Speaker 14: Yeah, happy to. Honestly, when we put that, when we talked about this on our last earnings call, New York was not in our assumption because we hadn't heard one way or the other, so we wouldn't have built that in because we just didn't know at that time on the call.

Yes, happy to I honestly when.

When we put that when we talk about this on our last earnings call.

New York was not in our assumption because we hadn't heard one way or the other so we wouldn't have built that in.

We just didn't know at that time on the call. It really over the course of the fourth quarter.

Speaker 14: It really, over the course of the fourth quarter, we just continued to operate, I think smart. We didn't know what the heavy promotional environment and paid media spend environment was going to do in terms of pressuring our margins and maybe moving customers.

We discontinued to.

Operate I think smart we didn't know what the.

Heavy promotional environment in our paid media spend environment was going to do in terms of pressuring our margins and maybe moving customers I've been blown away impressed at the resiliency and the retention that we see in the online sports betting space as we share it.

Speaker 4: blown away, impressed at the resiliency and the retention that we see in the online sports betting space.

Speaker 4: as we shared in a couple of our slides, and as you saw throughout the fourth quarter, we didn't change the way we market in the fourth.

The number a couple of our slides and as you saw throughout the fourth quarter, we didn't change the way we market in the fourth quarter.

Speaker 4: And it was as irrational as you could ever imagine the amount of money that's being burned that I'm sure we'll hear about from future earnings calls this quarter.

And it was at irrational as you could ever imagine the amount of money that's being burned that I'm sure. We'll hear about from future earnings calls this quarter and we didn't jump into the Fray yet we grew our market share and we were.

Speaker 4: And we didn't jump into the fray, yet we grew our market share and we were operating at better margins than we anticipated. We had built in a little bit of flux there of, well, what if we need to spend a little bit more in marketing to hold on to our base?

Operating at better margins than we anticipated we had built in a little bit of flux thereof, well, what if we need to spend a little bit more on marketing to hold on to our base.

Speaker 4: Instead, what we saw, as we said we probably would, which was football season came back, we saw our market shares in states that we've been live in like Michigan and Pennsylvania bump back up again. Our NGR market share was the best quarter we've had, I believe, in both of those states since launch.

Instead, what we saw as we said, we probably would which was football season came back we saw our market shares in states that we've been live in like Michigan, and Pennsylvania bumped back up again.

Our <unk> market share was the best quarter, we've had I believe in both of those states that launch and we did all that without without participating in the really aggressive discounting that we see from most of the others. So.

Speaker 4: And we did all that without participating in the really aggressive discounting that we see from most of the others. So, you know, we're really, really pleased with how we see the interactive business. And that's why we anticipate the loss being less than 2022 than we did just a quarter ago.

We're really really pleased with how we see the interactive business and that's why we anticipate the loss being less in 2022 than we did just a quarter ago.

Speaker 10: Great. Then just moving on to the retail side with one, you have the triple C at eight properties. Now I believe I added one quarter of a quarter, but you have a little bit more duration at a few of these properties now. Any financial metrics you can share kind of before after of what that looks like from either a play standpoint, a margin standpoint, et cetera. Thanks. Good luck. Yeah, thanks. Thanks.

Great.

And then just moving on to the retail side with one.

You have triple C. At eight properties now I believe added one quarter over quarter, but you have a little bit more duration at a few of these properties now any financial metrics you can share kind of before after of what that looks like from.

Either a play standpoint or margin standpoint et cetera. Thanks, good luck.

Thank you.

Speaker 7: So a couple of things, we're live in Pennsylvania and Ohio. And today what we're seeing, obviously the whole goal with this was to remove friction.

So a couple of things we're live in the in Pennsylvania, and Ohio and today, what were seeing obviously the whole goal with this was to remove friction and so we've been able to improve service times. We're obviously taking people out of the lines at the cage in at the player's clubs. So that has helped and it all drives more.

Speaker 7: So we've been able to improve service time. We're obviously taking people out of the lines at the cage and at the players club. So that has helped, and it all drives.

Speaker 7: uh... more time on the vice more time playing uh... so that all helps and then we've seen this adoption that you would normally see from the the younger demographic and really this is what we thought we would see but it's now working into the all the demographic thirty forty

On device more time, playing so that all helps and then we've seen this adoption that you would normally see from the younger demographic and really this is what we thought we would see but it's now working into the older demographics thirties forties. So.

Speaker 7: Uh, so we're seeing actually people that are engaging with us with the app.

We're seeing actually people that are engaging with us with the app and with the wallet.

Speaker 7: And with the wallet, we're seeing actually a higher level of play, some of that driven by they're more engaged and they're making more trips.

Seeing actually a higher level of play.

Some of that driven by.

They're more engaged and they are making more trips.

Speaker 7: But this is a very encouraging trend for us as we look to roll out into the other states. So it's really kind of proof of concept. It was in Pennsylvania and now moving into Ohio, we're starting to pull these trends together and we'll have more to talk about as we have more time and more people adopting the technology.

This is a very encouraging trend for us as we look to roll out into the other states. So it's really.

Kind of proof of concept stores in Pennsylvania, and now moving into Ohio, We're starting to pull these trends together and we'll have more to talk about as we have more time and more people adopting the technology and Todd do you want to maybe also highlight the demographic trends, we're seeing by age in the fourth quarter and even into <unk>, It's very encouraging when you think about.

Speaker 7: And Todd, do you want to maybe also highlight the demographic trends we're seeing by age in the fourth quarter? And even into... I think it's very encouraging when you think about technology launch and how sticky these relationships have become. Yeah. Great point, Jay. You know, really last year, and I think we've talked about this in some of the other calls,

Technology launch and how sticky.

These relationships have become yeah, great point Jay.

Really last year.

I think we've talked about this in some of the other calls that.

Speaker 7: That younger demographic is what everybody was trying to solve for and how to get the younger demographic into casinos.

That younger demographic as what everybody was trying to solve for and how to how to get the younger demographic into casino. So Q4 was not unlike.

Speaker 7: Q4 was not unlike the other quarters, and really that under 35 demographic was up about 40% year over year, and then the 35 to 44 was up high 30%.

The other quarters and really that under 35 demographic was up about 40% year over year and then the 35 to 44 was up high 30%.

Speaker 7: The part that's been missing, we actually started to be able to see some of that coming back that.

And the part that's been missing we actually started to be able to see some of that coming back that 55 to 64 was up about 6% and then the 65 plus that that will be the one that is really impacted by flare ups of the omicron virus. So we are seeing encouraging trends October November .

Speaker 7: 55 to 64 was up about 6%

Speaker 7: And then the 65 plus, that will be the one that is really impacted by flare-ups of the Omicron virus. So we were seeing encouraging trends October , November 1st, part of December , but then as Jay spoke to and his opening remarks, when we had that bit of a flare-up.

First part of December , but then as Jay spoke to in his opening remarks win when we have that bit of a flare up that part is still lagging behind and we feel that once we can move some of these things behind us that will be the last segment that comes back, but especially with these younger demographics that we're seeing.

Speaker 7: That part is still lagging behind and we feel that once we can move some of these things behind us.

Speaker 7: That will be the last segment that comes back, but especially with these younger demographics that we're seeing, and you know what, I would throw the unrated play segment in there as well. That was still up 12% for the quarter. So all of these are greatly encouraging, and we feel comfortable that with our technology rollouts, we'll see higher adoption than what we initially modeled.

What I would throw the unrated play segment in there as well that was still up 12% for the quarter. So all of these are greatly encouraging.

And we feel comfortable that with our technology Rollouts, we will see higher adoption than what we initially modeled.

Speaker 4: I would just add too, Todd hit it earlier in terms of some new competition, a couple pockets across the US, that when you pull those impacted properties out, our margins obviously look even better. I think we pick up another over a thousand basis points, or excuse me, a hundred basis points when you pull those out.

I would just add too tied to hit it earlier in terms of some new competition in a couple of pockets across the U S.

That when you pull those impacted properties out.

Our margins, obviously look even better I think we pick up another over 1000 basis points excuse me 100 basis points when you pull those out so.

Speaker 14: It is something that I'm not sure was modeled well enough into people's estimates in terms of how they thought about Q4 and how they think about 22. I think the fact that we're going to, you know, we're anticipating coming in at the property level of roughly 37% margin.

It is something that I'm not sure was modeled well enough.

Into peoples.

Our estimates in terms of how they thought about Q4 and how do you think about 'twenty two I think the fact that we're going to.

Anticipating coming in at the property level of roughly 37% margins.

Speaker 14: which is going to be 500 bass points plus better than 2019.

Which is going to be 500 basis points plus better than 2019 is really impressive given that we've got you know Chicago land in Nebraska, Colorado, you've got some pockets of new competition or new supply entering these markets.

Speaker 4: is really impressive given that we've got, you know, Chicago land and Nebraska, Colorado, you've got some pockets of new competition or new supply entering these markets.

Well done thanks, guys.

Right.

Speaker 1: Our next question comes from Stephen Gramling with Goldman Sachs, please proceed.

Our next question comes from Stephen Grambling with Goldman Sachs. Please proceed.

Hi, Thanks, Jay you noted that the there is the opportunity to buy the remainder of Barstool. What are the key considerations that you are evaluating and determining the right ownership level and with the leadership team and our content creators at barstool has to be license that certain ownership levels or would that impact their ability to create certain types of content. We've been done on the app.

Speaker 14: Yeah, I mean, we couldn't be more excited about moving our ownership position up from its current 36% and we anticipate in

Yeah I mean.

We couldnt be more excited about moving our ownership position up from its current 36%.

And we anticipate.

Speaker 14: in the at the third anniversary, that obviously it naturally, it can actually goes up to 50% as we've disclosed before and then there's put call rights after the 50%. We anticipate taking that to 100%. So there really isn't sort of a decision process. We look forward to being the owners of bar store 100%. They've been great partners of ours. It's a hyper growth sports media business. They've grown their revenues.

And the third anniversary that obviously it naturally contractually goes up to 50% as we've disclosed before and then Theres a put call rights after the 50%.

We anticipate taking that to a 100% so there really isn't sort of a decision process.

We look forward to being the owners are still 100% they've been great partners of ours.

Hyper growth.

Our sports media business, they've grown their revenues over the last two years somewhere close to 150% in total.

Speaker 4: over the last two years, somewhere close to 150% in total.

Speaker 14: And it's profitable, which, you know, most smaller, or if they're not even that small anymore, sports media businesses don't make money. They burn quite a bit. And so we're really excited for the third.

And it's profitable, which most smaller sports, they're not even that small anymore sports media businesses don't make money they burn quite a bit and so where we're really excited for the third anniversary.

Speaker 14: You know, in terms of what is the structure and how does that impact certain things from a licensing perspective, I would just say TBD on that one. Those are things that we're continuing to work through internally. It won't just be.

In terms of what is the structure and how does that how does that impact certain things from a licensing perspective, I would just say TBD on that one those are things that we're continuing to work through internally it won't just be we acquire.

Speaker 4: You know, we acquire Barstool and then we don't announce anything beyond that. I think there's going to be some structural implications as well, and we're working through all of that behind the scenes, so you should expect to hear something before the end of the year.

Barstool and then we don't announce anything beyond that I think theres going to be some some structural implications as well and we're working through all of that behind the scenes. So you should expect to hear something before the end of the year.

Speaker 11: Got it. That's helpful. And then on the buyback, maybe this is for Felicia. I know that you have a three-year window there, but is that generally the cadence that we should think through? Or, you know, is this purely opportunistic or will it be viewed more as a consistent buyback? And if it is opportunistic, is there any kind of upper bound on leverage ranges that you'd be willing to go to take advantage of the stock?

Got it that's helpful and then on the buyback.

This is for Felicia I know that you have a three year window, there, but is that generally the cadence that we should think through or is this purely opportunistic or will it be viewed more of a consistent buyback and if it is opportunistic is there any kind of upper bound on leverage ranges that you will be willing to go.

To take advantage of the stock.

Speaker 5: Yeah, thanks, Steven. I don't think we're going to talk about the cadence of our buyback program, but it is a three-year program, and like you said, we are going to be opportunistic.

Yeah. Thanks Steven.

We're going to talk about the cadence of our buyback program, but it is a three year program and like you said, we are going to be opportunistic and obviously it also gives us the opportunity to upset and stock option dilution. So it puts us in a much stronger place than we've been in for the past few years and then obviously.

Speaker 5: Obviously, it also gives us the opportunity to offset, you know, stock option dilution. So it puts us in a much stronger place than we've been in for the past few years. And then, you know, obviously, over time, we have to balance our choices of

Over time, we have to balance our choices.

Speaker 5: you know, buyback or growth and, you know, we're in this great situation where, you know, it's not an either or for us, right? We can continue a buyback program and pursue growth opportunities at the same time given our balance sheet and, you know, regarding the leverage and our 4.1 time or 4.1.

Buyback or growth.

We're in this great situation, where it's not an either or for US right. We can continue our buyback program and pursue growth opportunities at the same time, given our balance sheet and regarding the leverage at 4.1 time point.

Speaker 5: at like, spHiH

One time now.

We are.

Speaker 5: Looking at that level as being kind of where our

Looking at that level at.

<unk> kind of where our focus.

Speaker 5: focus is, you're probably not going to see us do anything that would be meaningfully levering. So as I said before, we're not going to talk about an optimal level, but we really like where we are now, and so that's always going to be a focus for us as well as we think about the different opportunities that we face. But I would think about it as a three-year program and us being opportunistic as

Our focus is on you're probably not going to see us do anything that would be meaningfully levering and so as I said before we're not going to talk about an optimal level, but we really like where we are now.

And so that's always going to be a focus.

Sure.

As well as we think about the different opportunities that we see but I would think about it as a three year program and as being opportunistic as things come up Yeah, I would just add Steve I know you know this.

Speaker 4: Yeah, I was just sad, Steven. I know that if I didn't get to loss sometimes, that we generate significant free cash flow and we could use...

It gets lost sometimes.

We generate significant free cash flow and we could use.

Speaker 4: know, the majority, I'm not saying we're going to, we could use the majority of that authorized share repurchase level in 2022 and have it not be a levering event for us. So we'll be opportunistic. I think we obviously feel like we're undervalued. That's why you put these things in place and there might be some dislocation in the marketplace. We'll see how things play out. We'll see how the cadence works out. It felt like a natural time for us to institute that authorization.

The majority I'm not saying, we're going to we could use the majority of that offer our authorized share repurchase level in 2022 and have it not be a levering event for us. So we will be opportunistic I think we obviously feel like we're undervalued. That's why you put these things in place and there might be some dislocation in the marketplace. We will see how things play out we'll see.

How the cadence works out they felt like a natural time for us to institute that authorization.

Speaker 11: Makes sense. That's all super helpful. I'll jump back in the queue. Best of luck.

Makes sense, that's all Super helpful. I'll jump back in the queue best of luck. Thanks.

Thanks Steven.

Speaker 1: Our next question comes from Sean Kelly with Bank of America. Please proceed.

Our next question comes from Shaun Kelly with Bank of America. Please proceed.

Hey, good morning, everyone.

Speaker 12: Jay, I just wanted to go back to your comment, and I think maybe it was in Felicia's part of the prepared remarks where you talked about the 37 percent core margin. Just to be kind of clear on what's in that, is that excluding interactive on both sides of both revenue and obviously both corporate and losses from the online side or investments for the online side?

Jay just wanted to go back to your comment I think maybe it was an felicia as part of the prepared remarks, where you talked about the 37% core margin.

Just to be clear on what's in that.

Is that just is that excluding interactive on both sides of both revenue and obviously, both corporate and losses from the online side or investments for you on my side.

Speaker 12: uh... that kind of first question on just clarifying that in the second would be i think that's actually a little bit better than we did this quarter so what would be driving uh... improvement if i'm doing the math right

So that's kind of the first question on just clarifying that and then the second would be I think that's actually a little bit better than what you did this quarter, so what would be driving.

Improvement if I'm doing the math right yes.

Speaker 4: Yep, you are doing the math right, Sean. It's apples to apples. It excludes interactive. It excludes corporate expense and racing and the other stuff that follows in other. It is slightly better than fourth quarter. And fourth quarter is typically one of your, if not the slowest quarter of the year. Certainly from a margin perspective, it historically has been for us.

You are doing the math right, John it's apples to apples it excludes interactive it excludes corporate expense and racing and the other stuff that falls in other.

It is slightly better than fourth quarter.

Fourth quarter is typically one of your if not the slowest quarter of the year certainly from a margin perspective, historically has been for us and there was some omicron impacts during the busiest week of the year Christmas to new year's as we definitely felt a bit of a fall off from what we were seeing earlier in <unk>.

Speaker 14: And there was some Omacron impact during the busiest week of the year, Christmas to New Year's, as we definitely felt a bit of a falloff from what we were seeing earlier in fourth quarter, and what you would have anticipated as a normal ramp heading into the holidays.

Fourth quarter, and what you would have anticipated as a normal ramp heading into the holidays. So we felt like 37% is a good target it's going to be aggressive, but we think we can achieve that internally is hard and our team of regionals and our general managers have and continued to do an amazing job of sharing best practices.

Speaker 4: So we feel like 37% is a good target. It's gonna be aggressive, but we think we can achieve that internally taught and our team of regionals and our general managers have and continue to do an amazing job of sharing best practices and just looking under every walk and making sure that we're thinking about the business differently as we want new technology.

Is and you know just looking under every rock and <unk>.

Making sure that we're thinking about the business differently as we launch new technologies.

Speaker 4: So, you know, it's very difficult in this environment, as you can imagine, Sean, but we debated this guidance thing over and over and over again, because one thing we know is the number we gave will be wrong. I don't know if it's going to be, you know, directionally. We feel like we gave a number that we hopefully we can beat or exceed. But if there are new variants and casino restrictions and shutdown in some markets, or it's very difficult to anticipate. But 37% at the property level feels achievable for us in 2020.

So you know what.

It's very difficult in this environment as you can imagine Sean we debated this guidance thing over and over and over again, because one thing. We know is the number we gave will be wrong I don't know if it's going to be directionally. We feel like we gave a number that we hopefully we can beat or exceed but if there are new variants in casino restrictions and shutdown in some markets.

Or.

It's very difficult to anticipate but 37% at the property level feels achievable for us in 2022.

Speaker 7: Yeah, sure. The only thing, the only thing I would add, and Jay touched on it that that week between Christmas and New Year's is really, you know, it's what saves December or the time from Thanksgiving to New Year's Eve.

Yes, the only thing the only thing I would add and Jay touched on it that that week between Christmas and New year's is really you know.

Let's say December or the time from Thanksgiving to.

Speaker 7: So when that saw the spike in Ovicron, it really made it difficult. But also, the way the calendar laid out, you typically have a weekend between Christmas and New Year's, and obviously, with Christmas holiday following on the weekend and New Year's Eve following on the weekend, you kind of lost the extra days where you outperform and over-index.

New year's Eve.

So when when that saw the spike in overcrowding. It really made a difficult but also the way the calendar laid out you typically have a weekend between Christmas and new year's and obviously with Christmas holiday following on the weekend and mirrors and Youre, calling on the weekend you kind of lost the.

The extra days, where you are outperforming over index. So.

Speaker 7: I think with all that, and then the seasonality again, Q4 is kind of a tough comparison. You know, our 37 percent.

I think with all of that and then the seasonality again Q4 is kind of a tough comparison.

Our 37%.

Speaker 7: doesn't mean that we're 37% every single month there is some seasonality.

It doesn't mean that we're 37% every single month, there is some seasonality in there.

Speaker 12: It's really encouraging. Thanks for the detail. And then just as my follow-up, Jay, kind of zooming out a little bit, kind of curious on the score. It's an interesting acquisition, and obviously there's a lot of directions you can take it. But could you talk about just sort of getting maybe some more content and traction for that app here in the United States?

So it's really encouraging thanks for the detail and then just as my follow up.

Jay kind of zooming out a little bit kind of curious on.

The score.

As an interesting acquisition and obviously, there's a lot of directions, you can take it but.

Could you talk about just sort of getting maybe some more content and traction for that app here in the United States and what might it take to convert maybe some of that that business into actual revenue, obviously, if usage and its loyalty as extraordinary I just kind of trying to figure out how to monetize <unk> that might be in the next in the next couple of years.

Speaker 12: And what might it take to convert, you know, maybe some of that business into actual revenue? Obviously, it's usage and its loyalty is extraordinary. It's kind of trying to figure out how monetizable that might be in the next couple of years.

Speaker 4: Yep, and remember when we announced our acquisition of the score, it was really for three strategic reasons. One, number one, sports media app in Canada, and we knew Ontario was coming soon in terms of legalized online sports betting, online casino.

Yes.

Yep.

And remember when we announced our acquisition of the score is really for three strategic reason.

<unk> number one sports media App in Canada, and we knew Ontario was coming soon in terms of legalized online sports betting online casino.

Speaker 4: Number two, it's a very healthy and fast growing media business as a standalone. And so we knew there'd be a great opportunity of audience conversion. And they are as good as they come in the sports media world in terms of retention. They really just don't lose users. When people download the app, they use it a lot. And they stay in the ecosystem.

Number two it's a very healthy and fast growing media business as a stand alone and so we knew there would be a great opportunity of audience conversion and they are as good as they come in the sports media World in terms of retention. They really just don't lose users when people download the app they use it a lot and they stay.

Speaker 14: And of course, last, this is a technology company that is helping us to solve for owning our tech stack and our product roadmap, short-term, medium-term, long-term. Those are the reasons why we made it happen. Last one, culturally, we are very aligned with the Levees, and it gets back to your question in terms of the U.S., where they didn't jump into the fray either. They didn't burn through tens of millions or hundreds of millions of dollars of paid media expense.

And the ecosystem and of course last this is a technology company that is helping us to solve for owning our tech stack and our product roadmap short term medium term long term those are the reasons why we made it happen.

Last one culturally we're very aligned with the levies and it gets back to your question in terms of the U S where they didn't jump into the fray either they didn't burn through tens of millions or hundreds of millions of dollars of paid media expense. They wanted to make sure that they launched their live in four states or we're live with them in.

Speaker 4: They wanted to make sure that they launched, they're live in four states, or we're live with them in four states here in the U.S.

Four states here in the U S.

Speaker 4: We don't plan on them going live in more states in the U.S. because we're gonna work on integrating the Barstool Sportsbook into the SCORE media app across the U.S.

We don't plan on them going live in more states in the U S. Because we're going to work on integrating the Barstool sports book into the score media App across the U S and so they've really been able to just sort of perfect. What they do and try a lot of things with their new Pam and promotional engine here in the U S in preparation.

Speaker 4: And so they've really been able to just sort of perfect what they do and try a lot of things with their new PAM and promotional engine here in the U.S. in preparation for Ontario. So I would expect that.

For Ontario, So I would expect that.

Speaker 14: You should see improvements in the U.S. in terms of our ability to convert the score media ecosystem.

You should see improvements in the U S. In terms of our ability to convert the score media ecosystem to Barstool sports book as we throw more effort at that in the second half of this year around football season.

Speaker 4: to Barstool Sportsbook as we throw more effort at that in the second half of this year around football season.

Speaker 4: And we'll have more information to share with you as the quarters track on, but the focus right now is on building out the tech stack and a very successful launch in Ontario.

And we'll have more information to share with you as the quarters track on but the focus right now is on building out the tech stack and a very successful launch in Ontario.

Thank you very much.

Sure.

Yeah.

Speaker 13: Our next question comes from Chad Bunyan with Macquarie. Please proceed. Hi, good morning. Thanks for taking my question.

Our next question comes from Chad Beynon with Macquarie. Please proceed.

Hi, Good morning, Thanks for taking my question Congrats on the results.

Speaker 13: On slide 15, you laid out the handle and the gross gaming revenue for the sportsbook. It appears that the conversion or the hold rate is higher than what some of your peers have been talking about. I'm assuming that's just because of the lower reduction from promos, which Jay, you also highlighted as a big strategy. But I'm wondering if you can just talk about how you see hold rates long-term and then any mix of pregame versus endgame that you're happy to disclose for the quarter. Thanks.

On slide 15, you laid out the handle and the gross gaming revenue for the sports book It appears that your <unk>.

The conversion or the hold rate is higher than what some of your peers have been talking about I'm, assuming that's just because of the.

Lower reduction from promos, which Jay you also highlighted is a bigger strategy, but I'm wondering if you can just talk about how you see hold rates long term and then any mix of pre game versus in game.

Sure happy to disclose for the quarter. Thanks.

Speaker 14: Yeah, hold percentage. It's sort of like talking about Blackjack hold. It's some quarters work for you, some work against you. There are times where you can have a really good hold in a quarter and then, you know, mattress, Mac beats you for five million and there goes your hold for the quarter and, you know, we have the balance sheet to be able to fade action like that, which is why mattress, Mac and VIP players like that enjoy betting with us amongst our service and VIPs.

Yeah hold percentage.

It's sort of like talking about blackjack hold it.

Some quarters worked for you some work against you.

There are times, where you can have a really good hold in a quarter and then mattress Mac beats you for $5 million and there goes your hold for the quarter and we have the balance sheet to be able to fade action like that which is why mattress Mac and VIP players like that enjoys betting with us amongst our service and VIP focus.

Speaker 14: I think that over the long term, we've sort of modeled in somewhere in that seven, maybe seven and a half percent hold.

Think that over the long term, we've sort of modeled in somewhere in that that and maybe seven 5% hold.

Speaker 4: And, you know, if you look at our life-to-date results across all of our online support betting launches, that's about where we are. I think we're at like 7.1, 7.2 somewhere in there. And, you know, we're at like 7.2.

If you look at our life to date results across all of our online sports betting launches that's about where we are I think we're at like 7172 somewhere in there I would imagine I don't know that I would imagine that's probably going to be about average for industry.

Speaker 4: I would imagine, I don't know, Chad, I would imagine that's probably going to be about average for industry. We obviously are really placed in a significant focus on our in-game offerings and we launched football season this year was the first time that we had same-game parlay or we call parlay plus.

We obviously are really placing a significant focus on our in game offerings and we launched football season. This year was the first time that we had same game, partly or what we call parlay plus.

Speaker 14: That was very popular. We saw the parlays of the percentage of total handle went up significantly football season this year. That probably drove some of the whole percentage premium that you're referencing. And also, you know, we just tend to be more disciplined around what we're giving customers to generate the revenue. We try to give them enough to be, you know, somewhat competitive and to make sure that we're able to incentivize them to stay loyal with us.

That was very popular we saw the parlays as a percentage of total handle went up significantly football season. This year that probably drove some of the hold percentage of premium that you are referencing and also this tends to be more discipline around what we're giving customers to generate the revenue we try to give them enough to be.

<unk>.

Somewhat competitive and to make sure that we're.

Able to incentivize them to stay loyal with us without giving them. So much that it actually exceeds your total revenue brought in which is what we're seeing with a lot of competitors on an N G R basis.

Speaker 4: without giving them so much that it actually exceeds your total revenue brought in, which is what we're seeing with a lot of the competitors on an NGR basis when you think about their total marketing reinvest-

When you think about their total marketing reinvestment. So anyway, I think from a whole percentage standpoint, you should probably just model in somewhere in that seven to seven and a half range I would like to see our in game betting percentages continued to increase they have been I think that as you see it hadn't seen over in the UK.

Speaker 14: So anyway, I think from a whole percentage standpoint, you should probably just model in somewhere in that seven to seven and a half range.

Speaker 14: I would like to see our in-game betting percentages continue to increase. They have been. I think that, as you have seen over in the UK, those percentages will continue to be outsized as opposed to pre-matched.

Those percentages will continue to be outsized as opposed to pre match some sports in the U S. It's just hard for endgame basketball moves too fast.

Speaker 14: Some sports in the US, it's just hard for in-game. Basketball moves too fast. Baseball is a perfect in-game betting sport.

Baseball is a perfect in game betting sport and we will be live at the start of baseball season whenever they get through this labor dispute, but we will be alive with same game parlay for baseball season. This year, which I think is going to be a nice shot in the arm for us because if you only have pre match and baseball its just a long slow game.

Speaker 14: and we will be live at the start of baseball season whenever they get through this labor dispute.

Speaker 14: But we will be live with same game Parallel for baseball season this year, which I think is going to be a nice shot in the arm for us, because if you only have pre-match in baseball, it's just a long, slow game. And in-game, you know, it keeps the fun going throughout and keeps you engaged as you're consuming that content. So I would expect to see some improvements in terms of, you know, how we perform during baseball season this year with better products.

And in game it keeps the fine going throughout and keeps you keeps you engaged as youre consuming that content. So I would expect to see some improvements in terms of.

How we performed during baseball season, this year with better products.

Speaker 14: And we've made other enhancements to our app as well and you know We'll see what happens to hold percentage in baseball season now that we have that product

And we've made other enhancements to our app as well and we'll see what happens to hold percentage in baseball season, now that we have that product.

Speaker 13: Thanks, Jay. And then from a land based portfolio standpoint, there were a few assets that traded in 2021 and in Vegas, and it appears that there's a few more for sale in 2022. just want to take your temperature on how important the consideration for a destination property is at this point.

Thanks, Jay and then from a land based portfolio standpoint, there were a few assets traded in 2021 in Vegas and it appears that there's a few more for sale in 2022, just wanted to take your temperature on how important the consideration for a destination property is at this point.

Speaker 4: It would be nice to have one in the portfolio. I just would really stress that we're not going to take something that we can't get a return on. And there's been a couple of transactions recently, but actually three transactions recently in Las Vegas.

It would be nice to have one in the portfolio I would really stress that we're not gonna.

Say something that we can't get a return on and.

There's been a couple of transactions recently, but actually three transactions recently in Las Vegas.

Speaker 14: you know, they were at valuations that we weren't comfortable with. One of them, I think, you know, that was worth stretching for because of the condition of the property and how new it is. But you should not expect Penn to be a leading bidder if it's an irrational competitive bid process.

They were at valuations that we werent comfortable with one of them I think.

It was worth stretching for because of the.

The condition of the property and how new it is but you should not expect tends to be a leading bidder. If it's an irrational competitive bid process.

Speaker 14: With all of that said, we have the balance sheet to do things that not every company can do. And so if the price is right and the property is right for us and the location is something we're comfortable with, we would probably take a look at it at a minimum and kick the tires. Thank you very much.

With all of that said you know we have the balance sheet to do things that not every company can do and so if the price is right in the property is right for us and the location is something we're comfortable with we would probably take it will take a look at it at a minimum and kick the tires.

Thank you very much.

Thanks, Chad and Frank will take one more question.

Speaker 1: Next question comes from Ben Chacon with Credit Sus. Please proceed.

Next question comes from Ben Chaiken with Credit Suisse. Please proceed.

Okay.

Speaker 15: Hey, how's it going? Thanks for taking my question. Just a quick clarification from earlier. I believe it might've been in response to Sean's question. You were mentioning taking some of the attributes of the Barstool Sportsbook and adding it to the score app in the US, if I heard you correctly. Is that in line with the strategy you've been thinking all along? Or were you emphasizing the score in the US a little more than previously maybe? Again, more about clarification there, thanks.

Hey, How's it going thanks for taking my question just a quick clarification from earlier I believe it might have been in response to Sean's question.

You were mentioning taking some of the attributes of the Barstool sports book and adding it to the score App in the U S. If I heard you correctly is that in line with the strategy you've been thinking all along or you're emphasizing the score in the U S soda more than previously maybe more of a clarification. Thanks.

Speaker 4: Yeah, happy to, Ben, and when we announced that we were acquiring the score, what I had said at the time, which is, by the way, consistent, not to say we won't change our mind on things, but on this one, we really haven't changed our mind, which is that we would be leading with the Scorebet brand in Canada and supporting it with Barstool personalities and content, but really pushing that audience to the Scorebet and in the U.S., the exact opposite, where we'll continue to lead with Barstool Sportsbook and do our best to move that score audience.

Yeah happy to bat and when we announced that we were acquiring the score what I had said at the time, which is by the way are consistent not to say, we won't change our mind on things, but on this one we really haven't changed our minds, which is that we will be leading with the score bet brands in Canada, and supporting it with barstool personalities and content, but really pushing.

That audience to the score bet and then you asked the exact opposite where we'll continue to lead with Barstool Sports book and do our best to move that score audience onto Barstool Sports book I think having two different.

Speaker 14: on to Barstool Sportsbook. I think having two different

Speaker 14: sports betting brands in the same market gets confusing. And...

Sports betting brands in the same market gets confusing.

Speaker 4: We felt like just keeping it simple and focusing on one brand in the US versus the other brand in Canada was the best course for us. With all that said, we might find a year from now that that was wrong and we wanna have both brands and both markets and we're launching Barstall Sportsbook in addition to the score in Canada and vice versa here in the US. But as of right now, and really since we start talking to our partners up to score the Levy's and as we talk about it with...

And we felt like just.

Keeping it simple and focusing on one brand in the U S versus the other brand in Canada was the best course for US with all that said, we might find a year from now that that was wrong and we want to have both brands in both markets and we're launching Barstool Sports book. In addition to the score in Canada, and vice versa here in the U S, but as of right now and really since we started talking to.

Our partners up to score the levies and as we talked about it with Dave and Dan and Erica and our team internally here at Penn. We all agreed that was the right approach single brand in Canada single brand in the U S.

Speaker 4: Dave and Dan and Erica and our team internally here at Penn, we all agree that was the right approach, single brand Canada, single brand in the U.S.

It makes sense I appreciate it thanks.

Speaker 14: Thanks, Ben. Thank you, everybody, for joining us this morning, and we look forward to speaking to you again in three months.

Thanks, Ben Thank you everybody for joining us this morning, and we look forward to speaking to you again in three months.

Speaker 1: That does conclude the conference call for today, we thank you for your participation and ask that you please disconnect your line. Have a great day everyone.

That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect. Your line have a great day everyone.