Q1 2023 PENN Entertainment Inc Earnings Call

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 if at any time during the conference you need to reach an operator, Please press star zero.

I'd now like to turn the conference over to Mr. Joe <unk> Investor Relations. Please go ahead.

Please continue to stand by your confidence will become momentarily. We thank you for your patience.

Thanks, Frank Good morning, everyone and thank you for joining Penn Entertainment's 2023 first quarter conference call, we'll get to management's presentation and comments momentarily as well as your questions and answers during the Q&A, we ask that everyone. Please limit themselves to one question and one follow up.

[music].

Now ill review the Safe Harbor disclosure.

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 any.

Dissipates or the negative or other variations of these or similar words or by discussion 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 future performance as such actual results may vary materially from expectations.

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

Pan Entertainment assumes no obligation to publicly update or revise any forward looking statements.

Today's call and webcast will include non-GAAP financial measures within the meaning of SEC regulation G.

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.

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

Thanks, Joe and good morning, everyone.

Here with me and while mezzanine, our CFO , Lisa Hendrix, and our head of operations pod, Georgia as well as other members of the executive team, who can help answer any questions that you may have during Q&A.

As for the first time as an official number of our Penn family. We're also joined by Eric errors CEO of Barstool sports.

As you know we completed our acquisition of Barstool on February 17th and our integration efforts to date have gone as planned but more on that in a moment.

First we're pleased to report that <unk> delivered another solid quarter with consistent retail performance across most of our portfolio. Our property has proved to be more resilient than initially anticipated given the increased supply in a few markets and the ongoing uncertain macroeconomic environment.

Greetings and welcome to the Penn Entertainment first quarter 20 twenty-three results conference call.

Turning to slide four in our Investor presentation, Penn generated first quarter revenues of $1 67 billion and adjusted EBITDAR of $478 2 million with strong performance in our northeast statement, helping to offset softer year over year results in the south.

During the presentation of 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.

Anytime during the conference you need to reach an operator, Please press star zero.

As Youll see on slide five and six our retail EBITDAR margins were negatively impacted by approximately 100 basis points due to the regional shift in our gaming revenues year over year to the northeast, which has a higher blended tax rate of approximately 42% versus the south which is approximately 22% and to a lesser extent.

I would now like to turn the conference over to Mister, Georgia Phony Investor Relations. Please go ahead.

Thanks, Frank Good morning, everyone and thank you for joining Pan Entertainments 20, twenty-three first quarter conference call, we'll get to management's presentation comments momentarily as well as your questions and answers during the Q&A, we ask that everyone. Please limit themselves to one question and one follow up now.

The settlement of certain property litigation matters.

Looking beyond the first quarter April really was a story of two halves.

Now I'll review, the Safe Harbor disclosure.

We started the month off slowly with the Easter weekend, but finished strong in the final two weeks, including having our number one companywide slot volume weekend of the year. So far in the last weekend of April .

Given our Q1 performance combined with current trends, we are increasing our prior revenue guidance for the year to reflect the acquisition of Barstool sports, while maintaining our current adjusted EBITDA guidance, Felicia, we'll be providing more color on our guidance in a few minutes.

Dissipates or the negative or other variations of these or similar words or by discussion of future events strategies are risks and uncertainties, including future plans strategies performance developments acquisitions capital expenditures and operating results.

Turning to slide nine we generated over 350000, new sign ups this quarter for our industry, leading customer loyalty program, which is a 13% increase year over year.

Such forward looking statements reflect the company's current expectations and beliefs, but are not guarantee of future performance Ah such actual results may vary materially from expectations.

63% of our Q1 database growth came from our online offering.

<unk> in Q1, we saw the strongest growth rates in our 65 plus year old age segment and rated theoretical revenue.

These gas appear to be returning to more normal pre COVID-19 behavior of late and are responding well to our added amenities and continued improvement in our non gaming offerings.

Penn Entertainment as soon as no obligation to publicly update revise any forward looking statements.

At the same time, the 'twenty one to 44 year old age demographic was stable in Q1 year over year. After very strong growth throughout 2021, and 2022 and continues to grow significantly when compared to 2019. This age segment has grown from 13% of total rated theoretical in Q1, 19%.

Today's call and webcast will include non-GAAP financial measures within the meaning of F. C C regulation G.

When required in 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.

With that it's now my pleasure to turn the call over your to the company C. E O J Snowdon J. Please go ahead.

18, 5% in Q1 of 'twenty three.

Our VIP play also remained strong in Q1 with year over year increase in both guest count and frequency of visitation.

Thanks, Joe Good morning, everyone I have here with me and while mezzanine are CFO Felicia Hendrix in our head of operations part George as well as other members of the executive team, who can help answer any questions that you may have during Q&A.

The positive momentum in our database comes at a perfect time as we recently launched <unk> play are enhanced and rebranded customer loyalty program, which is designed to help better align all of our brands under the pen entertainment umbrella and create a more seamless omnichannel experience.

As for the first time as an official member of our Pen family were also joined by Erica errors C E O of Barstool sports.

Some of the new products include the ability for day, one customers to begin immediately earning meaningful rewards just by signing up in.

You know we completed our acquisition of Barstow on February 17th in our integration efforts to date have gone as planned but more on that in a moment.

In addition members can now earn loyalty points across all of our business verticals interactive as well as retail gaming and.

First we're pleased to report that pen delivered another solid quarter with consistent retail performance across most of our portfolio are properties proved to be more resilient than initially anticipated given the increased supply in a few markets and the ongoing uncertain macro economic environment.

And in marketplace, featuring popular retailers, where they can redeem gift and earned tier point and Penn cash on everyday items.

Turning to slide for in our Investor presentation Pen generated first quarter revenues of 1.67 billion and adjusted EBITDAR, a 478.2 million with strong performance and our northeast statement, helping to offset softer year over year results in the south.

Members also have access to entertainment experiences with pen partner brands, including live nation and choice hotels.

<unk> is supported by our industry, leading <unk> technology, which we've talked about before and which is currently deployed at 21 of our properties collectively representing 70% of our retail EBITDAR.

We've grown our total Penn wallet customers to 195000 and received $104 million and totaled pen deposits as of the end of the first quarter as we've emphasized in the past those guests who use the digital wallet demonstrates superior loyalty through increased visitation time on device and total theoretical.

And as you'll see on slide 11, our effective cross marketing effort combined with our ability to deliver a seamless best in class customer experience has led to a significant increase in guests who engage with us across multiple channels, which is the key to our future growth.

Our interactive segment saw revenue improvement during the first quarter driven in part by our acquisition of Barstool sports as well as our recent sports book launches, including Ohio, and Massachusetts. In addition, as highlighted on slide 17, and 18 were continuing to generate impressive results from the score bet and I Casino in Ontario, where we are live with our fully.

<unk> best in class Tech stack, which has helped generate record gross revenues from sports betting in March and six month retention rates that are 118% higher than the U S.

On the <unk> side in Ontario, we had our ninth consecutive record month for <unk> through March and 26% higher online sports betting to I Casino cross sell than in the U S, which we attribute in large part to our in house promotional engine.

Our success in Ontario provides us with a blueprint for improved performance for the Barstool Sports book in Casino. After we complete our migration to this platform in July .

Having full control of our product roadmap in the U S will enable us to connect with our customers on a more personalized level and quickly add new features and bedding market to the Barstool Sports book, while also enhancing our <unk> product with new content and bonus mechanics.

In addition, with an improved customer experience post migration, we will be well positioned to drive stronger loyalty and retention, while offering seamless cross play and our Omnichannel ecosystem.

As I mentioned at the outset of our call our integration efforts with Barstool sports, thus far I've been going very smoothly and we've enjoyed exploring new opportunities for growth across numerous verticals.

On the media side, <unk> demonstrated strong audience and viewership growth in the first quarter, achieving record cross platform views up more than 40% from the prior year and growing more than 60% in both Youtube subscribers and Tic Toc followers.

During the quarter Barstool Golf's, new partnership with the PGA Tour also led to co branded merchandize that the players in waste management tournament.

Meanwhile, the scores mobile business is also delivering strong results in both revenue and engagement metrics with total user sessions up 22% year over year. The scores award winning digital media App is providing its highly engaged audience with up to date scores news community chat features and bedding lines proving to be a perfect second screen.

Jane for watching live sports and another strong acquisition funnel for our retail and digital offerings and with that I'll now turn it over to Felicia.

Thanks, Jay we reported another solid quarter, our retail properties generated adjusted EBITDA of $511 2 million and an adjusted EBITDAR margin of 35, 5%. The combination of a stronger mix of revenue from our high tax geographic segments combined with the settlement.

Certain property litigation matters created a headwind of roughly 100 basis points to the first quarter 23, adjusted we have EBITDAR margin.

Our interactive segment EBITDA results of a loss of $5 7 million reflect a January 1st sports betting launch in Ohio, Our March 10th launch in Massachusetts, and low halls.

January and February .

Roughly half of the loss with data halls, and half was attributable to Barstool sports.

His analogy and the sports calendar.

With the acquisition of a 100% of Barstool sports on February 17, we now required 100% of Barstool sports revenue and EBITDA in our interactive segment as we show on slide seven of our slide deck. Our total first quarter 'twenty three revenues included $28 2 million.

<unk> post acquisition as a reminder, previously with our 36% interest in Barstool sports, we did not record any barstool revenues on our P&L and only recorded our portion of <unk> net income or loss, including adjusting it to our interactive segment adjusted EBITDA.

One quarter in arrears.

I'd like to take a moment to talk about the cadence of Barstool sports revenues as their business media is obviously different from gaming the.

The first quarter as part of those weakest quarter, given that add south to start the year soft and the third and fourth quarters are the strongest quarters due to the ramp up at the house as well as the sports calendar.

So as you think about my modeling Barstool I would keep the cadence in mind.

Now regarding overall company guidance, our new revenue range is 637 billion to $6 eight 1 billion up from the prior 615 billion to $6 five 8 billion and assumes revenues of roughly 220 to 230 million front barstool for the year.

Higher year and growing more than 60% in both Youtube subscribers and Tictoc followers.

From the time of the 100% acquisition on February 17th.

Our full year Standalone basis, we expect barstool can generate 2023 revenues of approximately $250 million.

Regarding EBITDAR by 2023 guidance of $1 $8 75 billion to $2 billion is unchanged given first quarter performance and our expectations for Barstool sports EBITDA to be breakeven for the year. Our land based casino outlook continues to take into consideration new competition in Nebraska.

Kentucky and Lake Charles and ongoing competition in Chicago Land and also continues to imply a retail EBITDAR margin of approximately 36% given the competition gaming tax nicks and the economy.

For our interactive segment, we expect the fourth quarter to be profitable, while the second and third quarters should look very similar to each other given the light sports calendar buildup to our migration in the second quarter and our third quarter ramp into football season on our new technology.

Losses in the second and third quarter should be greater than the losses, we reported in our interactive segment for the first quarter with the fourth quarter more than offsetting the year to date cumulative losses from the first through third quarters now onto the numbers.

Roughly half of the last week did allow halls and half was attributable to Barstow sports.

Corporate expense in the first quarter inclusive of cash settled stock based awards with $26 3 million.

Cash payments to our REIT landlords with 2200, $33 2 million cash taxes were $1 1 million in cash interest on traditional debt was $46 4 million.

Total Capex was $63 2 million of which $9 2 million with project Capex, mostly associated with our four new development projects.

Our fully diluted weighted average common shares outstanding as of March 31st 2023, with $169 5 million, which reflects $2 4 million shares issued for the purchase of Barstool sports.

There are a few additional items in our P&L that I'd like to call out the details of which you will find in our 10-K and our 10-Q filed later today.

For the quarter, we reported a gain on the Barstool sports acquisition of $83 4 million, reflecting an adjustment to fair market value.

We also reported a gain on REIT transactions of $508 8 million, which reflects a net benefit to our balance sheet. Following the amended and restated Penn Master lease and the subsequent lease reclassification associated with our four new growth projects.

<unk> noticed the impact of the amended and restated Penn Master lease on our income statement and majority of the year over year increase in G&A, all as the year over year decrease in DNA and the majority of the decline in interest expense are all due to the lease reclassification.

The time of the 100 per cent acquisition on February 17th.

Accordingly, none of these changes affect our cash rent payments to <unk> or V Chi.

To further help you with your modeling for 2023, we expect 23 corporate expense of roughly $105 million inclusive of our cash settled stock based awards.

Total capex for 2023, and all of its components is in line with our prior guidance of 388 million net of insurance proceeds.

For cash interest expense, we forecast $133 million for the full year 2023, after roughly $30 million of interest income.

Cash taxes will be roughly $155 million for full year 2023, and our weighted average fully diluted common share count for 23, assuming no further share repurchases is projected to be $169 1 million.

We repurchased one 6 million shares in the first quarter for $50 million at an average price of $30.36 per share.

Subsequent to quarter end, we purchased an incremental 647000 shares for $19 million or $29 21 per share we had $80 million remaining under our February 'twenty through 'twenty, two authorization and $750 million remaining under our December 'twenty two authorization.

In the first quarter, we ended the year with $2 $3 billion in liquidity inclusive of $1 $3 billion in cash and cash equivalents traditional net debt at the end of the quarter was $1 4 billion an increase of roughly 300 million from December 31, 2022, due to a lower cash balance, reflecting a net cash.

Payment of approximately $315 million for the acquisition at Barstool and recent activity under our share repurchase program. We ended the quarter with lease adjusted net leverage of four six times compared to four four times on December 31, 2022, 85% of our debt is fixed.

Right. If you include our leases and our nearest debt maturity is in 2026, we expect our lease adjusted net leverage to end the year at roughly four five times and with that I'll turn it back to Jay.

Hey, Felicia in closing I want to call special attention to our 2022 corporate social responsibility report, which was published on April 25th and is available for download on our website.

I'm really proud of how much our ESG initiatives have grown over the last two years since we issued our first report I want to thank the members of our ESG and diversity committees as well as our board's nominating and governance committee, which helps to oversee and guide our efforts and all of our property in ore and interactive leadership teams across the country for their continued support of our ESG journey.

Slide 22, Slide 22, excuse me detailed some of our most recent activities, including holding numerous events to drive open and meaningful conversation around D. Eni, providing disaster relief to those affected by tornadoes in Mississippi and Barstools efforts to help raise awareness for mental health issues on college campuses.

So before I turn it over to the operator I just wanted to extend a giant. Thank you to all of our retail casino interactive and media team members for continuing to give US 110% every day and provide best in class service and experiences to our customers guests and fans across North America, and with that Frank I'll turn it back over to you to open it up for questions.

Thank you.

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Our first question comes from Barry Jonas with Trust Securities. Please proceed.

Hey, guys last quarter, you noted the midpoint of EBITDA guidance could be conservative potential upside a fairly year trends held do you still feel that way and should interactive still total to about.

$25 million for the year. Thanks.

Hey, Barry good morning.

I would say no change to how we felt when we had our call in February it's still very early in the year. So.

It really depends on the macro and your guests and speculation around what's going to be the environment three months or six months from now it would probably be better than mine are as good as any.

So I think it's too early in the year to consider doing something like that I would just highlight what we said earlier during the prepared remarks in terms of our core retail casino businesses and momentum we had our strongest slot volume weekend of the year. The last weekend of April after a relatively slow start around Easter so.

It's really it's hard to peg, we talk about it a lot internally and you go through these pockets of two or three weeks for trends start to soften up and then they come back strong and we're still kind of going through that real time. So as of right. Now we're feeling really good about the volume and customer trends and behavior, but I would say too early and.

The year and yes is the answer to your question on interactive.

Our next question comes from Joe Greff with Jpmorgan. Please proceed.

Hey, good morning, it's Omer Sander on for Joe You mentioned in the past that you are likely to reinvest more or increase your marketing and get more active in promos interdigital business through 2024, as your competitors likely ratchet down those activities and this is the reason why the arc of ramp and profitability may look different for Penn or OSP and other gaming peers.

Hockey stick hockey stick shape profit growth will be more than 25 and beyond can you. Please talk about how you are presently thinking about this and what Directionally. This might look like in 'twenty, four and 'twenty five relative to 2023 digital profitability.

Hey, Omar.

Great question, and I would say that your summary is consistent with how we're thinking about things. It's a little too early to get into a detailed discussion around what that stick is going to look like in 24 versus 25.

I would say that we're very encouraged by the product based on our trends in Ontario.

We've shared a lot of stats around retention and the success of our promotional engine and the momentum we have and not just online sports betting, but importantly, we continue to set new records every month and online casino in Ontario. So we're feeling really good about what bringing that product to the U S and that technology stack.

Going to allow us to do.

Better than we do today here in the U S.

You have to recall that we really had kind of a frozen product for the last six to nine months and it'll continue to be frozen until we migrate in July everything is on track for that migration Benjy Levy and our team at the score in Penn Interactive had been doing a great job getting ready for July ever.

<unk> is on track.

And I would say more to come in terms of how we're thinking about what football season. This year and then going into 2020 for what that looks like but I think you are right about we have a great product, we're going to invest in that product and make sure that people know we've got a brand new product that we believe is going to be as good if not better than most everything out there.

Six months from now it would probably be better than mine are as good as any so were they think it's too early in the year to consider doing something like that I would just highlight what we said earlier during the prepared remarks in terms of our core retail casino businesses and momentum we had our strongest slot volume weekend of the year.

And you can't just launch a product without supporting it from a marketing standpoint. So we will do that and I think 2025, obviously it'll be a really important for year and when youll start to see the EBITDA growth really starts to make a difference as we report numbers on a quarterly and annual basis.

The last weekend of April after a relatively slow start around Easter. So it's really it's it's hard to pay we talk about it a lot internally and you'd go through these pockets of two or three weeks, where trends start to soften up and then they come back strong and we're still kind of going through that real time. So as of right now we're feeling really good about the.

Great. Thanks, and then a follow up to that how do you think about the profitability and barstool sports in 2024, what drives the improved profitability versus the top line growth how profitability sort of be different going forward.

And sure Whats the Bull case versus the base case.

Yes sure.

Volumes and customer trends in behavior, but I would say too early in the year and yes is the answer to your question on interactive.

Eric feel free to jump in and I'll, just make a couple of comments on that.

We provided this morning revenue cadence throughout the year of how things will likely play out from a quarter to quarter basis here in 2023, you should assume that from a seasonal perspective.

Our next question comes from <unk> grasp with J P. Morgan. Please proceed.

Hey, good morning, it's Omer Sandra on for Joe You mentioned in the past that you are likely to reinvest more increase your marketing and get more active and promos under digital business through 2024 is your competitors likely ratchet down notes activities and this is the reason why the arc of ramp and profitability may look different for Penn under <unk> peers and the hockey stick.

Our seasonality perspective that would look the same in 2024 and.

We're assuming roughly breakeven here in 2023.

We have and will continue to make investments and top talent as well as new potential business verticals for us of which we are exploring a number of with Barstool sports now so I don't want to get into 2020 for discussion around Barstool sports and guidance, we'll do that at the right time more toward the end of the year.

Hockey stick shaped profit growth will be more than 25 and beyond could you. Please talk about how you're presently thinking about this and what Directionally. This might look like in 24, and 25 relative to 20 twenty-three digital profitability.

As we sit here today I think you should continue to see revenue growth because we have been showing strong revenue growth every year as.

<unk>, Great question, and I would say that your summary is consistent with how we're thinking about things. It's a little too early to get into a detailed discussion around what that stick is going to look like in 24 versus twenty-five I would say that we're very encouraged by.

As a reminder, barstool sports revenues have more than doubled since we made our initial investment three years ago.

And 2023 is going to show a nice growth on 2022, we'd expect to see that in 2024 as well, but with regard to 2024 and some of the things that we're working on and are excited about Eric I'll hand, it over to you to make a few comments.

The products based on our trends in Ontario.

Shared a lot of stats around retention and the success of our promotional engine. The momentum we have and not just online sports betting, but importantly, we continue to set new records every month and online casino.

So when.

When I look at this quarter in particular, we had record growth. So we did $19 billion.

<unk> platform video views nearly six of those were original content. When you think about the future. Our vision is to monetize those impressions fully we're beating our peers in terms of our year over year revenue growth in our audience continues to grow and we continue to grow on multiple platforms, so being sure that.

Ontario, So we're feeling really good about what bringing that product to the U S and that technology stock is going to allow us to do much better than we do today here in the U S. I mean.

You have to recall that we really had kind of a frozen product for the last six to nine months and it will continue to be frozen until we migrate in July everything's on track for that migration Benji Levy and our team at the score and Penn Interactive had been doing a great job getting ready for July everything.

We maximize that with a diverse revenue set will continue to be our priority and then we'll obviously get more efficient about how and where we do it.

Our next question comes from Carlo Santarelli with Deutsche Bank. Please proceed.

Things on track.

And I would say more to come in terms of how we're thinking about what you know football season. This year and then going into 2024, what that looks like but I think you're right about you know we have a great product, we're gonna invest in that product and make sure that people know we've got a brand new product that we believe is going to be as good if not better than most everything out there.

Hey, Thanks, good morning, everyone.

Jay Felicia when you guys think about kind of the segments in the first quarter, where you saw revenue growth, namely kind of the northwest and sorry, the northeast and the Midwest.

When you look at the flow through and obviously with the Pennsylvania growth that you guys saw on the tax rate there, it's understandable, but youre also in both segments lapping periods, where clearly more employment came back on more amenities came back back on et cetera, and staffing levels were higher when do we start to see over the course of this year flow through start to normally.

And you can't just launch a product without supporting it from a marketing standpoint. So we will do that and I think 2025, obviously it'll be really important for a year and when you'll start to see the the EBITDA growth really start to make a difference as we report numbers on a quarterly and annual basis.

As to what you guys have experienced in the past in those regions.

Great. Thanks, and then a follow up to that how do you think about the profitability in bars to a sports in 2024, what drives the improved profitabilities versus the top line growth health profitability sought it'd be different going forward.

I'll, let Todd answer that Juan Carlos Great question, Hey, Carla.

So I think youre kind of seeing it now and I think what had been happening with some of the expense creep.

<unk>, what's the bull case versus the base case.

Yeah sure now Erica feel free to jump in and I'll just make a couple of comments on that we provided this morning revenue cadence throughout the year of how things will likely play out from a quarter to quarter basis. Here in 2023, you should assume that from a seasonal perspective our season now.

There was some inflationary pressure in there, but I think what we're seeing is that starting to moderate more more kind of muted growth in there.

And then as we've added the amenities back we've been more strategic than we were in <unk>.

You still look at 2019, and what we're flowing through then.

Lady perspective that would look the same in 2024 and you know we're assuming roughly breakeven here in 2023, we have and will continue to make investments in top talent as well as new potential business vertical truss of which were exploring a number of with Barstools sports now so I.

Prior to what we're flowing through now and we're still showing tremendous improvement.

As we start looking at our models our playbook.

We were more strategic in our offerings, we're trying to avoid the entitlement programs that were there in the past and the offerings that were there in the past that.

Don't Wanna get into 2024, a discussion around barstool sports and guidance will do that at the right time more towards the end of the year.

Really didn't add a tremendous amount of value so.

I think what we're seeing especially February March timeframe.

We're starting to see what will be normalized as we go forward, there's still obviously going to be seasonality in some of the different regions, but.

Sit here today I think you should continue to see revenue growth because we've been showing strong revenue growth every year as a reminder, barstool sports revenues have more than doubled since we made our initial investment three years ago.

That growth coming from the lower segments.

<unk> 2019, and finally, starting to see the.

And 2023 is gonna show a nice growth on 2022, we would expect to see that in 2024 as well, but with regard to 2024 and some of the things that we're working on and are excited about Eric I'll I'll hand, it over to you to make a few comments.

The older demographics come back.

It's feeling more like we can start looking to traditional trends in this area.

I would just add one thing to Todd's comments, which we hit a little bit in the prepared remarks in the earnings release that and you've noted this carlo.

Sure. So you know when when I look at this quarter in particular, we had record growth. So we did 19 billion Cross cross platform video views nearly six of those were original content. When you think about the future. Our vision is to monetize those impressions fully we're beating our peers.

Have that there is some new supply that entered the market over the course of the last call. It six to 12 months between Blackhawk.

Council Bluffs, obviously lake Charles with the Horseshoe opening there and we've been pleasantly surprised we had estimates kind of.

Worst case base case best case in terms of what the impact would be and I would say that we've held up better than most all of those markets with new supply Todd.

In terms of already year over year revenue growth in our audience continues to grow and we continue to grow on multiple platforms. So being sure that we maximize that with a diverse revenue sat will continue to be our priority and then well obviously get more efficient about how and where we do it.

Todd and our team of regional executives and general managers in those in those markets have done a great job really focusing on the customers that are of highest value and that we have very strong long term relationships with so that continues to be a good story and you can see that on the revenue growth.

Our next question comes from Carlo centrally with Deutsche Bank. Please proceed.

In terms of being ahead of where I think a lot of US estimated we would come in in Q1, maybe a little bit less so for this quarter on the earnings for all the reasons that we've covered and making some additional reinvestment at the VIP.

Hey, Thanks, good morning, everyone.

J Felicia <unk> when do you guys think about kind of the the segments in the first quarter, where you saw revenue growth, namely you know kind of the northwest and ER, sorry, the northeast and the Midwest and you look at the flow through and obviously you know what with the Pennsylvania growth that you guys saw on the tax rate there, it's understandable, but you're also in both <unk>.

Strong core player level in some of those key markets, but I agree with everything Todd said and Youre starting to see things settle out here.

This is probably I would say maybe April of this year should be the last time that we're really talking about noise on a year over year basis, I think for the first four or five months of this year, you'll probably still want to compare to 2019 to see what the trends really look and feel like because last year Jan February .

It's lapping periods, where clearly more employment came back on more amenities came back back on it said red and and staffing levels were higher when do we start to see over the course of this year flow through start to normalize to what you guys have experienced in the past in those regions.

Had softness between weather and Omicron Hangover and then you had pent up demand in March April and so those year over year comps look a little odd, but I think April is a good example of you don't want to look at it versus 19 also once we get to May.

I'll I'll I'll, let Todd answered that one car looks great question, Hey, Carla So I I think you're you're kind of seeing it now and I I think what had been happening with some of the expense Creek.

Certainly June I think you can just start looking finally year over year and going forward that'll be the case.

There was some inflationary pressure in there, but I think what we're seeing is that starting to moderate more more kind of muted growth in there.

Great. Thanks, Todd and thank you J J, one more follow up and you kind of.

And then as we've added the amenities back we've been more strategic than we were and you know you you.

Gave a little bit of a prelude to the question I'm about to ask but I think if you just look at the four regions year over year EBITDA down about 3%.

You still look at 2019, and what we were flowing through then compared to what were flowing through now and we're still showing tremendous improvement as we start looking at our models are playbook.

The mix of revenue and the tax impact that that has was a factor, but when you isolate.

The assets that did not see year over year competition or said differently, how much of that that year over year was stemmed from some of the competitive impacts that you guys mentioned.

We're we're more strategic in our offerings were trying to avoid the entitlement programs that were there in the past and the offerings that were there in the past that.

Really didn't add a tremendous amount of value so.

Yes, Todd.

I think what we're seeing specially February March timeframe.

Feel free to jump in here I guess I would answer it this way Carla that as you look at our portfolio of properties.

Starting to see what will be Normalised as we go forward, there's still obviously going to be seasonality and some of the different regions, but that growth coming from the lower segments compared to 2019, and finally, starting to see the older demographics come back is feeling more like we can start looking to traditional trends.

Market by market and asset by asset we have some that are showing very strong growth on the topline bottomline and even margins. Despite how strong the margins were last year and then you've got some offsets and some and.

In some markets, where you've got new supply or you've got assets that.

Our more tired some of which we're addressing obviously like the two in Illinois, Joliet and Aurora. So it's a bit of a mixed bag, but certainly when you look at markets like Ohio and Missouri.

In this area and I would just add one thing to Todd comments, which we hit a little bit in the prepared remarks in the earnings release that and.

You've noted this Carlo most have that there was some new supply that enter the market over the course of the last call at six to 12 months between Black Hawk.

Even it's interesting because even though we were down year over year and I always stress year over year in the South if you look at our results region by region compared to 2019.

Council Blas, obviously lake Charles with the Horseshoe opening there and we've been pleasantly surprised you know we we had estimates kind of you know worst case base case best case in terms of what the impact would be and I would say that we've held up better than most all of those markets with new supply.

The South region is still showing the strongest results from a topline and Bottomline perspective, all of the region. So it's down a little bit there is some noise in pent up demand and whatever that was in there last year, but we feel we feel good about the trends that we're seeing across most of the portfolio with the exception of some new supply Todd feel free to jump in with anything yeah. The only thing I would add Carlo.

And our team of regional executives in general managers in those in those markets have done a great job really focusing on the customers that are of highest value and that we have very strong long term relationships with so that continues to be a good story and you can see that on the rare.

The South segment, yes, it's down year over year, but it was such an amazing quarter last year. So it's still an amazing quarter of this year just comparatively speaking it's down slightly and then maybe a little more color on the new competition.

Revenue growth you know in terms of being ahead of where I think a lot of US estimated we would come in in Q1, maybe a little bit less so for this quarter on the earnings for all the reasons that we've covered and making some additional reinvestment at the VIP and.

What we're seeing is.

Traditionally when new competition come into a market that really came in very aggressive and they were trying to get people to come over and kick the tires, but I think what we're seeing is a more rational approach trying to come out of the gate very responsibly. So it's led to a really good competitive environment in all of the <unk>.

A strong core player level in some of those key markets, but I agree with with everything Todd said and you're starting to see things settle out here and.

This is probably I would say maybe April of this year should be the last time that we're really talking about noise on a year over year basis, I think for the first four or five months of this year you probably still wanted to compare the 2019 to see what the trends really look and feel like because last year Jan fed <unk>.

That's that we're seeing in <unk>.

Jay and I and others were recently traveling around viewing our own properties, but also some of the competition. It's it's well thought out it's well done.

And the goal will be that they'll continue to grow the overall market and grow the overall pie and we'll hold onto our share.

Had softness between whether an omicron hangover and then you had pent up demand in March April and so those year over year comps look a little odd, but I think April is a good example of you'll want to look at it versus 19 also once we get to May.

Yeah.

Okay.

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

Hi, good morning, everyone. Thanks for taking my questions.

Certainly June I think you can just start looking finally year over year and going forward that'll be the case.

I just wanted to start with the younger demographic, so kind of going back to the slide deck.

Great. Thanks, and thank you J J, what more follow up and you kind of you know <unk>.

I think you pointed out there.

<unk> gave a little bit of a prelude to the question I'm about to ask but I think if you just look at the four regions year over year EBITDA down about three per cent, obviously, the the mix of revenue in the tax impact that that has was a factor.

And the lowest demographic cohort.

I think it's actually did slow.

A little bit year on year.

How would you characterize that I think broadly speaking you are still up a lot from where we were in 2019.

But when you isolate the access that did not see year over year competition or said differently, how how much of that that year over year was stemmed from some of the the competitive impacts that that you guys mentioned.

This just a little bit of behavioral normalization and kind of what are your people on the ground, telling you about that change.

I think Sean.

Good question I think it's probably more of a you know last year dynamic than a this year dynamic we're not hearing or seeing any anything from our folks on the ground, telling us that things have changed and the point that you made about what these.

Yeah, I mean time feel free to jump in here I guess that would answer it this way Carla that as you look at our portfolio of properties.

You know market by market an asset by asset we have some that are showing very strong growth on the top line bottom line and even margins. Despite how strong the margins where last year and then you've got some offset send some in some markets, where you've got new supply or you've got assets that you know are more tired some of which were addressing obviously like the two vanilla.

Age demographics look like versus 2019, I think is really important and when youre looking at it versus 2019 in Q1 that 21% to 34 year old age segment is still up 76% versus 19% to 35% to 44 year old segment is up 51% versus 19 <unk>.

No a juliet in Aurora, so it's a bit of a mixed bag, but certainly when you look at markets like Ohio, and Missouri, and you know, even it's interesting cause even though we're down year over year and I always stress year over year in the South if you look at our results region by region compared to 2019.

45 to 54 is up 38% compared to 19 and 55% to 64 is up 12% and then you have a decline of 13% at 65, plus so we feel really good about the mix and we've been.

Trying to answer because we haven't had a great answer on that why is that 65, plus still down and when is it going to normalize and return and I'm not sure that you get back to flat there on a versus 19 basis, just because some of those older segments, where your most frequent visitors on buffets and things that we're not <unk>.

The South region is still showing the strongest results from a top line and bottom line perspective of all of the region. So it's down a little bit there's some noise and pent up demand and whatever that was in there last year, but we feel we feel good about the trends that we're seeing across most of the portfolio with the exception of some new supply Todd feel free to jump in with anything yeah. The only thing I'd add Carlo you know.

Offering anymore. So I don't know that we should set the target of getting back to breakeven versus 19, but I think getting it from 13% down to a single digit number given that we're starting to see some more and more sort of pre pandemic visitation pattern behavior return right now I think is probably a good goal.

That that self segment, yes, it's down year over year, but.

It was such an amazing quarter of last year. So it's still an amazing quarter. This year just comparatively speaking it's down slightly and then maybe a little more color on the the new competition.

If we can keep these other segments continuing to grow with such strong growth versus 19, but even if we have a small hiccup in this current quarter of down 5% versus last year.

What we're seeing is you know.

Traditionally when new competition coming through a market. It really came in very aggressive and you know they were trying to get people to come over and kick the tires, but I think what we're seeing is a more rational approach trying to come out of the gate very responsibly. So it has led to a really good competitive environment and all the mark.

Growth in all of the other segments, obviously more than offset that and we've been adding so many new amenities that appeal to all of the age demographics, but in particular the younger.

Todd and his team have done a great job figuring figuring that out and we've been we've seen a ton of success as we've shared every quarter for the last couple of years.

It's that we're seeing and J and I and others were recently traveling around viewing our own properties, but also some of the competition. It's it's well thought out it's well done and.

Sean just a couple of other ads and sorry to throw more percentages at you but.

And the goal will be that they'll continue to grow the overall market and grow their overall pie and will hold onto our share.

Even that younger demographic the much of the growth from 2019 is coming from the.

The value on a per trip basis, so that alone is up over 51% for that 21% to 44 segment and then even on the 55 plus its maybe fewer trips, but we are seeing them play at a higher level when they come in and then Jay and I'm sure others were talking about this last week a lot of that.

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

Hi, good morning, everyone. Thanks for taking my questions.

J I I just wanted to start with the younger demographic show you know kind of going back to the the <unk> you know I think you pointed out there that in in the lowest demographic cohort things actually get slow a little bit you know you're on your you know just kind of how would you characterize that I think broadly speaking you know you're still up a lot from.

Hunger demographic.

Comes back in during the kind of the spring and summer months, when we have outdoor events in outdoor concerts and things like that to kind of drive the overall experience. So we're very comfortable with where we're at now as well as the programming we have for the upcoming months.

Where we were in in 19 is this just a little bit of behavioral normalization kind of what what are your people on the ground telling you about that change yeah, I I think Sean another good question I think it's probably more of a you know last year dynamics and this year dynamic, we're not hearing or seeing any anything from our folks on the ground.

I appreciate all the color and my follow up maybe turning to parcel and Erik a little bit obviously, there is a pretty big event as it relates to social media and the Barstool team last night I was just wondering if you could comment on that Jay maybe for Jay do you expect any sort of financial impact a fault.

And telling us that things have changed in the point that you made about you know what these age demographics look like versus 2019. I think is is really important when you're looking at it versus 2019, and Q1 that 21 to 34 year old age statement is still up 76% versus 19.

Out from that in for Erika.

More of the cultural question.

How do you protect kind of the content and the talent acquisition side.

As you start to grow into this bigger platform a tan with obviously a different set of kind of cultural guard rails, and maybe you had in the past.

<unk> the 35 to 44 year old statement is up 51% versus 1945 to 54 is up 38% compared to 19 and 55 to 64 is that 12 per cent and then you have a decline of 13% at 65, plus so we feel really good about the mix and we've been you know trying.

I'll.

Hit that first and then Eric can jump in on the second part of your question Summer, we're obviously not commenting on personnel issues with on the call or publicly.

Something that happened inside the company that we dealt with we felt like we dealt with it appropriately.

And I would also say that you know you've been following us and the relationship and I think the public markets.

To answer because we haven't had a great answer on why is that 65 plus.

He'll down and when is it gonna normalize in return and I'm not sure that you get back to flat there on a versus 19 basis, because some of those older segments, where your most frequent visitors on buffets and things that we're not offering any more so I don't know that we should set the target at getting back to breakeven versus 19.

Financial community has gotten to know barstool pretty well over the last three plus years and theres going to be some drama, sometimes there's going to be some things that pop up here and there and we'll manage through those as we always have it's one of the strongest sports media brands certainly in the U S. If not the world at high growth, we've got tremendous people at Barstool.

But I think getting it from 13% down to a single digit number given that we're starting to see some more <unk> more sort of pre pandemic visitation pattern behavior return right. Now I think is probably a good goal and you know if we can keep these other segments continuing to grow with such strong growth versus 19, but.

Tremendous IP, great leadership and have a very exciting future ahead of us, but Eric I feel free to jump in on any of the cultural questions or anything else that you want to address.

Sure. So you know the.

We think about things we have about 100 personalities here and when you think about Barstool sports.

In some ways, we're a media company and in other ways. We're a collection of Influencers and when you look at our business. Overall, there is very very few competitors left most people who play in the digital media space or the cable media space or the print media space don't exist or are faltering and.

Even if we have a small hiccup in this current quarter of down 5% versus last year.

Growth and all the other segments, obviously more than offset that and we've been adding so many new amenities that are I think appeal to all of the age demographics, but in particular the younger.

Todd and seem have done a great job figuring figuring that out and we've we've seen a ton of success as we've shared.

You look at the success of our business a lot of that is due to the fact of how we run our creative team and had the freedom, we give them the tools, we give them the entrepreneurial spirit that exists inside of <unk>. We also are a company that talks about anything and everything in separately right. This is a company.

Every quarter for the last couple of years.

Sean just a couple of other ads and sorry to throw more percentages out to you but.

Even at younger demographic the much of the growth from 2019 is coming from.

Are you on a per trip basis. So.

Thats authentic it's a company that is unapologetic, it's a company that exists on the Internet 24, seven and Thats part of what makes Barstool sports interesting is that we are not particularly corporate and how we think about the culture of our content.

That alone is up over 51% for that 21 to 44 segment and then even on the 55, plus it's maybe fewer trips, but we are seeing them play at a higher level when they come in and then Jane I'm Felicia others were talking about this last week a lot of that younger demographic.

Now there are certain lines, you don't cross Theres guardrails that exist those have obviously increased now that we're in a highly regulated category and we knew that going into the patent acquisition, we knew it prior to that going into the Penn investment.

It comes back in during the spring and summer months, when we have outdoor events in outdoor concerts and things like that to kind of drive the overall experience. So we're very comfortable with where we're at now as well as a programming we have for the upcoming months.

And what we really believe is that there is no place like barstool sports to make content. There is no platform that will give a talent or create or a laptop a microphone in the camera and to enable them to broadcast opinions creative thought franchises all sorts of <unk>.

Follow up maybe turning to parcel and and Eric a little bit obviously, there's a pretty big event as it relates to social media and the Barstool team last night I was just wondering if you could comment on that you know maybe for J, you expect any sort of financial impact or fall out from that and and for Erica more.

Content and to be able to have the promotion of barstool sports as well as the monetization engine underneath it and we feel really strongly about that that's how we felt the top podcast brands in the world. That's how we've built some of the most captivating creators and Influencers in this country and we will continue to do that.

The cultural question you know how do you protect kind of the content and the talent acquisition side, you know as you start to grow into this bigger platform of Tan without with obviously a different set of kind of cultural guard rails and then maybe you had in the past.

Yeah.

Yeah I'll I'll.

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

Hit that first and then Erica can jump in on the second part of your question Summer. We're obviously not commenting on personnel issues with on the call or publicly if it's something that happened inside the company that we dealt with we felt like we we dealt with it appropriately.

Good morning, Thanks for taking my question just in terms of the gaming conversation earlier in the year. It sounded like there was a lot of momentum in six or seven states. Good just kind of legislative support all at this point I believe have died J curious how youre thinking about what the industry learned in kind of where the <unk>.

And I would also say that you know you've been following us in in the relationship and I think the public markets and financial community has gotten to know barstool pretty well over the last three plus years and there's gonna be some drama, sometimes there's gonna be some things that pop up here and there and we'll manage through those as we always have it's you know one of the strongest sports media.

<unk> is maybe the setup for next year, which would obviously be a big catalyst for interactive and for the industry.

Yeah, Chad I would say that.

Brands certainly in the U S. If not the world is high growth, we've got tremendous people at Barstool tremendous IP, great leadership and have a very exciting future ahead of us, but erika feel free to jump in on any of the cultural questions or anything else that you want to address.

Obviously, well covered well documented that it looks like Theres, probably no movement here in 2023.

They are absolutely could be in 2024, it's really hard to handicap because it does depend on.

A number of factors, probably well known but not worth getting into on a year to year basis.

Sure so.

[noise] way, we think about things we have about 100 personalities here and when you think about Barstools sport.

I think the way the way we think about this is that it's only a matter of time and the states that have already legalized online sports betting that is online gambling and so online online casino is very likely to come. It's a question of what does that cadence look like is it staggered I think once you get a state or two.

In some ways, where media company in other ways, where a collection of Influencers and when you look at our business. Overall, there is very very few competitors left most people who play in the digital media space or the cable media space or the print media space don't exist or are faltering and when.

In the Midwest It usually becomes an arms race for revenue tax revenue purposes, and so it'll probably start to move faster once you get a Indiana, Illinois or Iowa.

You look at the success of our business a lot of that is due to the fact of how we run our creative team and have the freedom, we give them the tools, we give them the entrepreneurial spirit that exists inside of Barstools. We also are a company that talks about anything and everything incessantly right. This is a company.

Start to move from there.

So nothing imminent I'm not going to try to put a bring out a crystal ball and say exactly what that might look like in 'twenty four 'twenty five I would say that from our perspective, given the timing of our technology and product migration. This summer. This is actually setting up quite well for us because we have an inferior product today and we don't believe that's going to be the case.

Authentic it's a company that's unapologetic, it's a company that exists on the Internet 24, seven and that's part of what makes Barstool sports interesting is that we are not particularly corporate and how we think about the culture of our content now there's certain lines you don't cross stairs guardrails that exist those have odd.

Half of this year and as we head into 'twenty four we're going to be in a position to be able to launch.

Standalone online casino apps and today its all mixed in with what we do on the online sports betting side and so we've got a lot in front of us that's exciting and so the timing of legalization being maybe pushed off to 'twenty four 'twenty five and start to really roll from there we think that sets up very well for Penn.

<unk> increase to now that we're in highly regulated category and we knew that going into the Penn acquisition, we knew it prior to that going into the Penn invest it.

And what we really believe is that there is no place like Barstools sports to make content. There's no platform that will give a talent or create or a laptop a microphone and a camera and to enable them to broadcast opinions creative thought franchise is you know all sorts of <unk>.

Thanks, Jay and then Eric you mentioned, just the changes with Barstool now being part of a bigger and more regulated industry bigger company more regulated industry.

Just in terms of what that could bring on the positive more access to capital.

How are you thinking about inorganic opportunities with recent valuation adjustments for high growth companies are there things that maybe you decided not to do in the past couple of years, just because of where your North Star Wars and kind of how you were running the company and now that it's part of a bigger company with different goals, maybe there could be other pieces of the media ecosystem that could mean.

Content and to be able to have the promotion of Barstools sports as well as the monetization engine underneath it and we feel really strongly about that that's how we felt the top podcast brands in the world. That's how we felt some of the most captivating creators and Influencers in this country and we will continue to do that.

Thanks.

Yeah, absolutely. It's a great question is something I spend a lot of time thinking about when you look at if you look at the last six to nine months, we are putting on a major scale live sporting events with our own comedy with our own personality with our own with our own commentators on those broadcast we are in.

<unk> doing that because it's something that Penn has made possible for us that's not something we would have been able to do prior to the investment or prior to the acquisition and I really look at Barstool sports is a company that can create and do most anything and Penn provides gotten this money in steel for us to be able to.

Do that and whether that's hiring new personalities are extending into new demographics, and new categories, new topics or taking on more traditional sports in terms of broadcasting events hosting events you name. It. So we look at a lot of that and the acquisition exactly to your point.

<unk> has made much of that possible, whereas that was not something you know in the last six years seven years that we would have been able to afford nor have been able to execute.

Our next question comes from Orion Cingal with Craig Hallum Capital. Please proceed.

Good morning.

Or stay on Barstool.

I don't think you've commented, but curious what your thoughts were on the start in Massachusetts, 6% GTR share there in the first partial month, but obviously barstools home state.

Yeah happy to Ryan.

Look.

It's interesting because as you saw in Ohio, and then again in Massachusetts every state provides a little bit different level of granularity and what they report.

There there's been I would say the launches that these states have been <unk>.

More promotional than they were initially in many cases and so we have made the decision that we're not going to get into that initial launch arms race of promotional spend and have negative MGR for the first three or four months.

So we took a similar approach in Massachusetts, I would expect that as things settle out.

You'll see that percentage of market share continue to grow.

I also think that you know you just have to keep in mind and this has been very very strategic on our part and you have to have patients when thinking about it but we have not been aggressive because our products really a substandard today and we know that and so you have to think about that as you're launching and how much money do you want to spend to get people on and you may lose some.

Armed with a bad first impression and so we have to think through all of that.

We've been very thoughtful and judicious in our approach for these state launches.

We're able to generate positive MGR after the first month in profitability really by month three in almost every case.

So.

That's been the approach I think youll see us transition when we have a product that we believe stands up well to the competition that will be more aggressive and getting some marketing dollars.

Dedicated towards getting new people into the ecosystem downloading the app registering and depositing in engaging with us because we feel like our retention results will be significantly higher based on the new capabilities in the new promotional engine and how we'll think about the business. So I think the setup for us is actually it is.

Again sort of like the eye casino question, but the setup for us on OSB is I think a good one and that there clearly is a focus amongst the top five or six players of which we're one of there is a clear focus on getting to profitability quickly which means that.

Most of the most of the top tier are going to have to pull back significantly on their marketing and promotional expense. That's the path to getting to profitability quickly and we're in a position with a much improved product and an ability to support some additional spend to get people onto the platform and engage with US I think that's a good setup for us as we get to the end of the year and certainly in.

2024, Ryan the only thing I would add this is Todd is if you look at slide 15. That's also a big part of the story for us and looking at that growth in Massachusetts of over 14% from our traditional core product.

Is pretty impressive and a lot of that is new to our brand and new to the property and its very much driven by the new sports book offerings.

And then just a quick clarification for my follow up.

Two 4 million shares issued to barstool within the diluted share count I guess is that stock options or was that part of the purchase price of the company and if it's the latter was the companys decision or was that Barcelona decision to take stock per cash. Thanks.

Yeah. So Ryan if you go back and we kind of.

To put this out in our in our financial backing on occasion, our Ts and over time, when we had the the.

Put call options. There was also an option on the part of Penn Two you know in terms of the mix of cash and stock.

So it mirrored the initial the initial award Ryan the remember the ownership group structure. The Chernin group was the majority owner and that was all cash and then for those who were.

Owners from Barstool.

Founder, Dave Portnoy, Erika Dan in a number of others, who had equity in barstool. They received 55% consideration with Penn stock and <unk> 45 per cent consideration was cash and so.

When we made when we moved from 36% owners to a 100% the consideration was the same breakdown.

Our next question comes from Bernie Mcternan with Needham <unk> Company. Please proceed.

Good morning, Thanks for taking the questions maybe to start Joe you've talked a lot about just retention capabilities that will be coming that you don't have access to now once you have your own tech stack in the U S. Can you just talk about some of those whether it's like the ability to segment customers. If it's certain product capabilities basically just trying to get at what's driving the better retention in Ontario versus the U S.

Currently.

Hey, Bernie this is Todd I'm happy to share some of that so basically everything you. Just said is what we're focused on and what we're seeing in Ontario, not only three months of going up to six months, it's the ability to personalize and tailor the messaging and the reinvestment levels.

It will be a tremendous help to us where we don't have an easy way to do that now it's much more of a manual process. So it'll bring more automation to the process allows us to be much more nimble.

And really allow us to do a lot better promotions, but traditionally that reinvestment that you would see with a gaming customer we're excited to have that capability post migration.

The point I think about what we've been able to do today on third party platforms is really more shotgun style marketing not personalized really at all so we do a promotion that's kind of a promotion for all that's not an effective.

Approach from a CRM perspective, you're under reinvesting in some customers over reinvesting in some and so we'll be able to tailor the reinvestment in our promotions based on what we know about the user and you know a lot of our competition, they're they're they're on their way there and we're doing it in Ontario, and we're looking forward to being able to bring that level.

Personalization in our marketing efforts and our new promotional engine here to the U S. Here soon.

Great and then just a follow up for Barstool, Erika we constantly get a breakdown of barstool revenue just advertising versus E. Commerce I know, we got the mix pre pandemic, but I'm sure. It's been shifting since then.

Hey, I would just add Eric I don't think we're ready to provide that level of detail yet I think Bernie what we might do that down the road, but I think it's too early and we're trying to keep the results within the interactive at a pretty high level.

So I would say more to come.

As you would imagine advertising is the biggest driver, but we're not going to get into exact breakdowns on the on the revenue mix today.

Fair enough. Thank you all.

Bernie.

Our last question comes from John Decree with CBRE. Please proceed.

Hi, Good morning, everyone and thank you for taking my question, maybe just wanted to to round it out.

On brand strategy.

Its pretty early still but.

Or are there thoughts or plans, especially in light of the new loyalty program too.

Integrate some of your brands or with the idea would be to kind of continue to run a multi brand strategy and I guess the question, maybe specifically for the media properties are still in the scores if theres some ideas in and kind of cross pollinating, but also more broadly across Hollywood or any of the other retail brands.

Yes, Tom I'll, let you jump on that one from a pen play launch perspective, and how we're thinking about sort of enhanced features and how we're thinking about the pen entertainment brand umbrella and everything that sits underneath it.

Jay and John really the pin play moving from my choice to Penn play as well.

It was a huge step for us as we work to try to create that brand loyalty and allow people to kind of play across the different channels. We have so when you start thinking about what we've been able to add and it's really listening to what the consumers want and making sure that we can integrate technology where appropriate.

As well as make it very seamless for them. So it kind of be a host for all approach, where we have different options that we can create through technology, a more seamless experience where people can start engaging with us long before they come through a property or a.

Start engaging in wagering or gaming activity.

Improvements in our App improvements in our cashless technology sharing information and being transparent with our rewards statements offering greater flexibility with a unified currency the pen cash option and then eventually having one wallet to play across not only online, but taking that into one of our properties.

And then really that increased awareness that we have and I think you can look to a lot of other hotel companies that are out there that may have multiple brands in their portfolio, but they are all.

Tied to the major flag, whether that's a hilton or Hyatt Marriott. So we'll have we'll continue to have different brands because they really have a lot of value in the specific markets that we're in.

But we'll make sure that people understand that it's part of the broader <unk> family.

Great. The hotel analogy is perfect. Thank you.

<unk>.

Thanks, John and thank you all for dialing in this morning, and we look forward to speaking with you again next quarter have a good one.

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 everyone.