Q4 2023 Bally's Corp Earnings Call

Operator: and others. And I'm going to be here for a long time. Please stand by, your program is about to begin. Good day, and welcome to Bally's Corporation's fourth quarter 2023 and full year earnings conference call. At this time, all participants are in a listen-only mode.

Please standby your program is about to begin.

Good day, and welcome to Bally's Corporation fourth quarter, 2023, and full year earnings Conference call.

At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. In order to ask a question during the session, please press the star followed by the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star, then zero.

After the speaker's presentation, there will be a question and answer session in order to ask a question. During this session. Please press the star followed by the number one on your telephone keypad.

Please be advised that today's conference is being recorded if you require any further assistance. Please press star then zero.

Charlie Dow: I'd now like to turn the call over to Charlie Dow, Senior Vice President and Treasurer for Bally's. Please go ahead. Good afternoon, and thank you for joining us on today's call. The earnings release and presentation that accompany this call are available in the investor relations section of our website at www.ballys.com. With me today are our Chief Executive Officer, Robeson Reeves, our President, George Pampanier, our CFO, Marcus Glover, and our Vice Chairman of the Board, Jamin Patel.

Now like to turn the call over to Charlie Doe Senior Vice President and Treasurer for balance. Please go ahead.

Good afternoon, and thank you for joining us on today's call.

This release and presentation to accompany this call are available in the Investor Relations section of our website at.

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With me today.

Our Chief Executive Officer, Rob series.

George Pampa near.

Our CFO Mark.

Glover.

And our vice chairman of the board Jamie to tell.

Charlie Dow: Before we begin, we would like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that involve significant risks and uncertainty. These risks are discussed in the company's earnings release and SEC filing; financial results may differ materially from the results discussed in these four states. In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the Most Comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project non-recurrent expenses and one-time costs. This call is also being broadcast live on our investors website and will be available for replay shortly after the completion of this call. Let me hand the call over to Rob. Thank you, Charlie.

Before we begin we would like to remind everyone that comments made by management today will contain forward looking statements.

These forward looking statements include plans expectations estimates and projections.

While significant risks and uncertainties.

These risks are discussed in the Companys earnings release and SEC filings.

Financial results may differ materially from the results discussed in these forward looking statements.

In addition, Doug.

During today's call management will refer to certain non-GAAP financial measures.

Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release.

We do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project nonrecurring expenses and one time costs.

This call is also being broadcast live on our investors website.

And we will be available for replay shortly after the completion of this call.

Let me hand, the call over to Rubinson.

Thanks, Charlie I'm pleased to share our thoughts on valleys solid fourth quarter, which equates to 23 operating performance.

Rob: We're pleased to share our thoughts on Bally's solid fourth quarter and 2023 operating performance as well as a strong forward growth prospect. And fourth, revenue grew a robust 6% year over year, reaching $612 million with increases across all three of our operating sectors. It can be seen as the results achieve a 7% revenue increase and maintain strong adjusted EBITDA margins as we successfully offset rampant costs in Chicago and the wind-down tropical climate. International Interactive continued its solid performance, driven once again by a leading market presence in the UK.

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Fourth quarter revenue grew a robust 6% year over year, reaching.

Reaching 612.

It's across all three of our operating segments.

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International Interactive continued its solid performance driven once again by a leading banking presence in the UK.

Rob: The North America Interactive segment gained additional iGaming market share while the rollout of Bally Bet OSB progressed. For the full year 2023, our revenues and adjusted EBITDA both increased by an impressive 9%. As we turn the page to 2024, I'm excited to share with you our vision for Bally's future, including continued operating performance improvements and our roadmap of unparalleled development opportunities. George and Marcus will follow and dive deeper into the specifics of our quarterly report, regarding our vision. There are some who believe that Bally's diversity makes for a complex story.

The North American Interactive segment.

Additional gaming market share, while the Rollouts at Valley Beth OSB progressed.

For the full year 2023, our revenues and adjusted EBITDA, both increased I think Brexit is 9%.

Okay.

As we turn the page 2024.

To share with you our vision of valleys future, including continued operating performance improvements in our roadmap unparalleled development talk is cheap.

George and Markus will fall out and dive deep into the specifics about quarterly quotes.

Regarding ambition.

Yes, we believe that by at least like that makes for a complex story.

Rob: However, we view our core business through a lens of high confidence, seeing it as a source of opportunity and strength. This distinguishes us within the industry and allows us to successfully navigate through various macro environments. For Equity and Credit Stakeholders, operations across casinos and resorts, International Interactive, and North America Interactive offer unique and unparalleled long-term growth potential. Combining our consistently strong adjusted EBITDA performance and a thoughtful stage development pipeline, we're crafting a bright future and setting a new industry standard. As Adjusted EBITDA is a crucial measure for assessing our financial health, the strength of our Adjusted EBITDA generation enables us to reinvest in our properties and development pipeline. Moving to our development pipeline, let's first touch on Chicago. As of the beginning of 2024, our temporary facility will be fully operational with a full quarter of financial performance behind it.

However, we view our core business through a lens of high confidence, saying that the sourcing opportunity constrained.

This distinguishes us within the industry and allows us to successfully navigate through various macro environments.

Equity and credit stakeholders, while these operations across casinos are results international interact with North America Interactive offers unique.

Parallel long term growth potential.

Coupled with our consistently strong adjusted EBITDA performance.

Stage development pipeline, we're crafting a bright future and setting a new industry standard.

As adjusted EBITDA as a crucial measure for assessing our financial health.

Our adjusted EBITDA generation that enables us to reinvest in our properties.

Fly.

Turning to our development pipeline, that's first touch on Chicago.

As at the beginning.

<unk> 24, a temporary facilities fully operational with a full quarter of financial performance behind it.

Rob: The property has begun the operating round George laid out during our last earnings call, which he'll update you on in a few moments. As for the permanent, in line with previous timelines we've shared, we remain set to access the Chicago Tribune site late this summer, allowing for demolition and site preparation in the second half of 2024, with completion of the facility coming late in the third quarter of 2026.

The property has begun the whole pricing route George laid out during the last earnings call, which he'll update you on a few markets.

As the prominent in line with previous timelines with ship, we remain set to access the Chicago Tribune site late this summer, allowing for demolition and site preparation in the second half with Twitch Twitch pool.

With completion of the facility coming late in the third quarter 2026.

Rob: Reflecting this timeline, there are just over 1.1 billion remaining hard construction costs pursuant to the HCA that will be concentrated in 2025 and 2026. We're also very close to securing the incremental construction financing needed for the permanent facility, in addition to the existing 300 million land lease improvement facility, and expect to share updates on this important component. In Las Vegas, the formal closure of the Tropicana on April 2nd will pave the way for the demolition of the casino and hotel over the coming months with the support of our financing partner, GLPI.

Reflecting this timeline there was just a $1 1 billion remaining hard construction costs.

Is that HCA that will be concentrated in 2025 and 2026.

We're also very close to securing the incremental construction financing needed for the permanent facility. In addition to the existing 300 million laundry sitting pretty good facility and expect to share updates on this important sick.

In Las Vegas.

The Tropicana on April will pave the way for the demolition of the casino opens hotel at the coming months with the sports about financing partner G. L. P. I.

Rob: Following demolition, site preparation, and approval of formal plans, construction of the Las Vegas A-Stadium will likely begin sometime thereafter. Meanwhile, we continue to assess our available options for the very valuable development labs next to the stadium. Finally, in New York, we're in the early stages of what will be a lengthy and multi-faceted journey toward building a world-class, super-regional casino and entertainment complex in the Bronx at Bally's Golf Links Ferry. Securing the license is the first step.

Following demolition and site prep the preamble.

Construction of the Las Vegas, a stadium will likely begin sometime thereafter.

We continue to assess our available options for the very valuable development labs next to the stadium.

Hi, Luke in New York, we're in the early stages of what will be a lengthy multifaceted journey towards building a world class CECO Regional Casino Entertainment complex.

Trunks valleys golf links very point.

Securing the license is the first step.

Rob: And should we achieve this milestone, we believe we'll have a highly attractive and competitive proposal that will allow for numerous pathways to actualize power generation. Thinking about our development timeline in this way makes it clear that Bally has a well-developed, staggered spending timeline that extends approximately five to ten years. This approach will maximize the benefits derived from the cash flow generated from our core operations while accommodating for potential market and financial position shifts. Moreover, this unmatched development pipeline offers opportunities in two of the largest U.S. cities and the country's most distinguished gaming destinations. Finally, before I turn the call over to George, I want to touch on our interactive set.

And should we achieve the small study we believe we will have a highly attractive and competitive proposal that will allow us numerous pathways to actualize pathogen.

Thinking about development timelines and this way it makes it clear that fairly well developed stagger spending timeline that extend approximately five to 10 years.

This approach will maximize the benefits derived from the cash flow generated.

Core operations.

Culminating for potential market from financial position chips.

Moreover, this unmatched develop a pipeline of opportunity.

Two of the largest U S cities with the country's most distinguished getting destination.

Finally, before I turn the call to George I want to touch on that contract.

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Rob: Within International Interactive, our UK operations continue to excel in the fourth quarter, making our strongest adjusted EBITDA performance today. This success is attributed to our improved customer acquisition efficiency and refined marketing strategies, which have significantly improved our gross profit margin. Additionally, the segment is benefiting from a strategic reorganization and diligent cost management effort. In Asia, we've seen our business stabilize, and we expect more consistent performance in 2024. In the North American interactive segment, we are pleased with our ongoing progress to refine our strategic approach to the market. NAI delivered its best quarterly revenue in 2023, benefiting from our solid New Jersey and Pennsylvania iGaming results, along with the rollout of Bally Event OSB. It's Now Live in the Southern States.

Within international interact because our U K operations continue to excel with fourth quarter, making our strongest adjusted EBITDA performance to date.

This success it should be.

Due to our increased customer acquisition efficiency.

<unk> marketing strategies, which have significantly improved our gross profit margin.

Additionally, this segment is benefiting from our strategic reorganization diligent cost management efforts.

In Asia, we've seen our business stabilize and expect more consistent twitch coach pool.

In the North America Interactive segment, we are pleased with our ongoing progress to refine our strategic approach to the market.

NII delivered its best quarterly revenue here in 2023 benefiting from a solid New Jersey, and Pennsylvania results, along with the broad relapsed <unk> OSP.

OSP.

It's now live in seven states.

Rob: We continue to optimize our marketing investments and expect to further benefit in 2024 as we transition more functionality to our technology partners, Cambly and White Hat Games. We have launched web-based versions of our apps recently and eagerly await the launch of iDEMI in our home state of Rhode Island later in the first quarter, where Bally's will be the sole provider. For full modeling purposes, our 2023 fourth quarter NII performance should not be directly projected across the entirety of 2024. We will continue to invest and broaden our reach, resulting in an anticipated adjusted EBITDA loss of approximately $30 million for 2024 This is an exciting time for our interactive business, and our commitment is underscored by our conviction that OSB is the foundational step towards successful iGaming futures.

We continue to optimize our marketing investments and expect to further benefit in 2024, as we transition more functionality technology pockets can be a more effectively.

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During the first quarter with valleys will be the sole provider.

For modeling purposes on Twitch 23 fourth quarter.

Performance should not be directly projected across the entirety of trips trips pool.

We will continue to invest and brought the average resulting in anticipated adjusted EBITDA loss was approximately $13 million between transport.

Market expansions inherently involve significant initial investments, but our strategy is to allocate resources wisely to not see the spike in segments.

This is an exciting time for our contract business and that commitment is underscored by our conviction that OSB is just fine.

Based on step towards successful future.

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George: I'll now pass the discussion to George for further details on our operational performance over the last quarter. Thanks for listening. I will begin my commentary with insights from our Casinos and Resorts segment. We're diving into the latest developments of the Chicago Temporary Facility and our continued efforts to ramp up its operation. Here, resorts exhibit a robust performance across most of our portfolio, with revenues up 7% for the fourth quarter and up 11% for the year.

I'll now pass the discussion to George for further details on our operational performance over the last quarter.

Thanks Ross.

Again, my commentary with insights from our Cdos and resort segment.

Good morning dialing into the latest developments of the Chicago temporary facility and our continued efforts to ramp up its operations.

Do you have resorts exhibited robust performance across most of our portfolio with revenues up 7% for the fourth quarter and up 11% for the year.

George: Justin Ibadara was up an impressive 8% for the year, and our two Rhode Island properties have consistently produced strong results in 2023. Similarly, our Kansas City property has seen robust business following the completion of its phased development in mid-September 2023. The city is also performing well, and we're quite pleased with the full year of performance in Atlantic City. For the year, AC outperformed expectations despite a hyper-competitive environment and generated high single-digit millions of adjusted EBITDA, our first full year of profits since acquiring the property. We outperformed market-wide GGR comparisons on a same store basis in 7 of our 10 markets.

<unk> EBITDAR was up an impressive 8% for the year.

Notably our two Rhode Island properties have consistently produced strong results in 2023.

Similarly, our Kansas City property has seen robust business. Following the completion of its phase development in mid September 2023.

But cities is also performing well.

And we're quite pleased with our full year performance in Atlantic City for the year AC outperformed expectations, despite a hyper competitive environment.

And have generated high single digit millions of adjusted EBITDAR, Our first full year of profits since acquiring the property.

We outperformed market wide GTR comparisons on a same store basis and seven of our 10 markets. The metric we closely monitor as it reflects the underlying strength of our properties and our consistent ability to capture market share.

George: This metric we closely monitor as it reflects the underlying strength of our properties and our consistent ability to capture market share. Operationally, we are proactive, assessing every aspect of our properties, striving for cost reductions and enhanced efficiency. It's critical to remember that our property portfolio across 10 markets was assembled in under three years, meaning that we're relatively early in the process of managing it as a cohesive portfolio. Moreover, our resources and management expertise position us well to drive ongoing operating improvements throughout the portfolio, as we've demonstrated by our operating results in the last several quarters. Let's shift our focus to Chicago.

Operationally, we are proactively assessing every aspect of our properties, that's driving for cost reductions and enhanced efficiencies.

It's critical to remember that our properties portfolio across 10 markets was assembled in under three years.

Meaning that we're relatively early in the process of managing it as a cohesive portfolio.

Moreover, our resources and management expertise positions us well to drive ongoing operating improvements through our portfolio as we demonstrated by our operating results over the last several quarters.

Let's shift their focus to Chicago.

George: Since opening the Chicago Temp Facility in September, our dedicated property team has made commendable efforts to improve operations in advance towards our desired operational pace, including the build-out of a robust database. However, as we've noted before, we are several months behind our initial ramp-up schedule due to factors such as delaying opening, restricting operating hours at launch, the absence of valet parking, and limited F&B offerings. We're actively addressing these opportunities for improvement, and we've already seen success with several of them. We initiated 24-hour operations on December 27 and are responding to demand for shuttle bus services in the facility from neighboring communities.

Since opening the Chicago facility in September our dedicated property team has made commendable efforts to improve operations and advance towards our desired operational pace, including the build out of a robust database.

As we've noted before we are several months behind our initial ramp up schedule due to factors such as delaying opening restricting operating hours at launch the absence of valet parking and limited F&B offerings. We're actively addressing these opportunities for improvement and we've already seen success with several of them.

We initiated 24 seven operations in December 2007, and are responding to demand for shuttle bus services in the facility from neighboring communities.

George: We've also expanded parking options for our guests across numerous local garages, significantly enhancing their arrival experience and access to the property. Our team is now focused on adding a new high-limit and VIP lounge and upgrading our hospitality office, including partnerships with local dining establishments and outlets to integrate Bally's currency, thereby enriching our guests' rewards beyond mere free play. These enhancements are evident in the monthly numbers released by the IGB.

We've also expanded parking options for our guests across numerous local garages significantly enhancing their arrival experience and access to the property.

Our team is now focused on adding new high limit and VIP lounge, and upgrading our hospitality offerings, including partnerships with local dining establishment and outlets to integrate valleys currency.

Thereby ritchie our guests rewards beyond mere free play.

These enhancements are evident in our monthly numbers released by the IGD.

George: We hit a record exceeding $10 million in GGR in January, or $9.3 million in AGR, as the IGP report shows, representing a 9.1 month over month improvement despite severe weather conditions, and compared to all the competitors we saw, who saw a decline versus December. We expect this to continue to ramp up each month as we move into the second quarter before we begin hitting normalized revenue production rates and benefit from a welcome respite from Chicago's famous winter. Before passing the call to Marcus, we were fully dedicated to our partnership with the City of Chicago and are extremely excited about our permanent casino development project. We are here to stay. Second, we received approval from the city for a revised construction plan due to the unexpected discovery of water pipes in the site.

We hit a record exceeding $10 million in GTR in January were $9 3 million and a G. R O.

Does the IGT reports representing.

Representing a $9 one month over month improvement despite severe weather conditions.

And compared to all of our competitors, we saw who saw declines versus December.

We expect this to continue to ramp each month as we move into the second quarter before we began hitting normalized revenue production rates and benefit from a welcome respite from the Chicago famous winters.

Before passing the call to markets, we were fully dedicated to our partnership with the city of Chicago and are extremely excited about our permanent casino development project.

We're here to stay.

Secondly, we received approval from the city for a revised construction due.

Due to the unexpected discovery, whereby you can say.

George: A revised plan includes the construction of approximately 100 hotel rooms above the casino in the initial phase, with the additional 400 rooms and a relocated hotel tower planned for a subsequent phase. This adjustment has not impacted our development timeline and remains in accordance with the HCA. Lastly, as with many of our peers, we were impacted by severe weather across our portfolio in January, but we have seen a return to more normal seasonal trends in the past few weeks. Furthermore, please remember that the TROP Account will close on April 2nd and have an impact on revenues and contributions beginning on April 2. With that said, now, I will turn the call over to Mark. Thanks, George.

Our revised plan includes the construction of approximately 100 hotel rooms about the casino in the initial phase with the additional 400 rooms and relocated hotel tower planned, whereas subsequent phase.

This adjustment has not impacted our development timeline and remain in accordance with the HCA.

Lastly.

As with many of our peers, we were impacted by severe weather across our portfolio in January.

We have seen a return to more normal seasonal trends in the past few weeks.

Furthermore, please remember that the Tropicana will close on April 2nd and has an impact on revenues and contributions beginning in the second quarter.

With that now let me turn call over to Marcus.

Thanks, George as ROE said, and George highlighted and as our results demonstrate.

2023 finished on a very strong note.

Heading into 2024, the foundational elements are in place to drive sustained growth across our three operating segments.

Marcus: As Robson and George highlighted, and as our results demonstrate, 2023 finished on a very strong note. Heading into 2024, the foundational elements are in place to drive sustained growth across our three operating sectors. Our casino and resorts portfolio demonstrated solid top-line results characterized by year-over-year organic growth across our portfolio, which helped offset the ongoing wind-down of tropic animals. The segment reported revenues of $342.3 million, a 7% year-on-year increase, and $94.7 million of adjusted EBITDA, including a full course contribution from the Chicago Temp. Excluding Atlantic City, Tropicana, and Chicago, EBITDA For the full year, Casinora Resorts revenues increased by 11%, and adjusted EBITDA grew by 8%.

Our casino and resort portfolio demonstrated solid topline results characterized by year over year organic growth across our portfolio, which help offset the ongoing wind down of Tropicana.

The second have reported revenues of $342 3, million% to 7% year on year increase in $94 7 million of adjusted EBITDAR, including a full quarter's contribution from the Chicago Tim.

Excluding Atlantic City Tropicana in Chicago, EBITDAR margins were a solid 34% <unk>.

Including these properties EBITDA margins were 28%.

For the full year casino and resorts revenues increased by 11% and adjusted EBITDA grew by 8% driven by strength in Rhode Island, Kansas City, Blackhawk and Quad cities.

For the fourth quarter internationally interactive continued its impressive performance with revenues, increasing two 1% year on year to $236 million.

The revenue strength was led by our leading UK business, where revenues rose, 10% year on year on a us dollar basis and 5% in constant currency international.

Marcus: Driven by Strength in Rhode Island, Kansas City, Black Hawk, and Quad City. For the fourth quarter, International Interactive continued its impressive performance, with revenues increasing 2.1% year-on-year to $236 million. The revenue strength was led by our leading UK business, where revenues rose 10% year-on-year on a U.S. dollar basis and 5% in constant current. International Interactive generated Record Adjusted EBITDA of $93.2 million this quarter, a 4.3% increase year-on-year.

International Interactive generated record adjusted EBITDA of $93 $2 million this quarter, a four 3% increase year on year.

Importantly, we began to see stabilization in Asia, a trend that has continued into 2024.

Full year International interactive revenues increased by two 8% and adjusted EBITDA grew by six 8%.

For the fourth quarter, North American interactive generated revenue of $33 4 million or 27% year over year increase the segment generated an adjusted EBITDA loss of $9 8 million as we continued the rollout of valley bed, which finished the year live in seven states.

We expect full year adjusted EBITDA to improve significantly as marketing efforts will remain measured given our view of OSB as a funnel for I gaming growth.

Marcus: Importantly, we began to see stabilization in Asia, a trend that has continued into 2024. For the full year, international interactive revenues increased by 2.8%, and adjusted EBITDA grew by 6.8%. For the fourth quarter, North America Interactive generated revenue of $33.4 million, at 27% year-over-year; the segment generated an adjusted EBITDA loss of $9.8 million as we continued the rollout of Bally Bet, which finished the year live in seven states. We expect four-year adjusted EBITDA to improve significantly as marketing efforts will remain measured given our view of OSB as a funnel for iGaming growth. As we announced in our last call, we have identified additional ways to mitigate costs and will be consolidating our domestic PAM onto the White Hat platform for iGaming and OSB once Rhode Island launches.

As we announced on our last call we have identified additional ways to mitigate costs and we will be consolidating our domestic pam onto the <unk> platform for I gaming and OSB once Rhode Island marches. This will undoubtedly also lead to a better user experience.

With that in mind, we are estimating in North America interactive adjusted EBITDA loss of $30 million for the full year of 2024.

The biggest potential swing factors in term, okay in terms of pace to profitability, our highly anticipated launch of I gaming in Rhode Island, which remains on schedule for March one.

And any additional states that may legalize gaming in 2020 for 2025.

We ended the quarter shares outstanding were approximately $40 million, reflecting the repurchase of $5 8 million Bally shares on the open market for total consideration of $68 6 million.

We also have an incremental warrants options and other dilution of approximately 12 million shares.

2 million shares outstanding fully diluted share count.

Marcus: This will undoubtedly also lead to a better user experience. With that in mind, we are estimating an adjusted EBITDA loss of $30 million for the full year of 2024. The biggest potential swing factors in terms of pace to profitability are the highly anticipated launch of iGaming in Rhode Island, which remains on schedule for March 1st, and any additional states that may legalize iGaming in 2024-2025. At the end of the quarter, shares outstanding were approximately $40 million, reflecting the repurchase of $5.8 million Bally shares on the open market for a total consideration of $68.6 million. We also have incremental warrants, options, and other dilution of approximately $12 million a share. Thus, 52 Million Shares Outstanding is a fully diluted share. We ended the quarter with $163.2 million of cash on our balance sheet and $3.56 billion of net debt.

We ended the quarter with $163 2 million of cash on our balance sheet and $3 $5 6 billion of net debt.

Turning to guidance valleys expects to generate 2020 for revenue in the range of two 5% to $2 7 billion.

The company also expects to generate 2024, adjusted EBITDAR of $655 million to $695 million.

We continue to keep a close eye on consumer spending patterns and general economic conditions, where it impacts to our casino and resort systems also while January was impacted by severe weather across most of the U S. We have seen an improvement in trends over the past several weeks.

Our guidance also assumes the closure of Tropicana on April 2nd a strong Chicago run rate EBITDA trajectory in the second half of 2020 for continued growth in international interactive and approximately $30 million of adjusted EBITDA losses in North America Interactive.

We expect straight line rent expense of $126 million in cash rent of $121 million.

Our 2020 for our capital expenditure guidance of $165 million in aggregate.

Not included in our capital expenditure guidance is spending in Chicago for site prep and demolition for the permanent casino as well as similar expenses for Tropicana.

In closing I want to reiterate my enthusiasm for 'twenty 'twenty four which will include the continued ramp of our Chicago.

The successful launch of <unk> gaming in Rhode Island, and progress on the other growth initiatives, which are underway.

Marcus: Turning to guidance, Bally's expects to generate 2024 revenue in the range of $2.5 to $2.7 billion. The company also expects to generate 2024 adjusted EBITDA of $655 to $695 million. We continue to keep a close eye on consumer spending patterns and general economic conditions for impacts on our casino and resorts. Also, while January was impacted by severe weather across most of the U.S., we have seen an improvement in trends over the past several weeks. Our guidance also assumes the closure of Tropicana on April 2nd, a strong Chicago run rate, EBIDA's trajectory in the second half of 2024, continued growth in international interactive, and approximately 30 million adjusted EBIDA losses in North America interactive. We expect a straight line gap rent expense of $126 million and cash rent of $121 million.

That concludes my comments, we will now open up the call for Q&A.

Great.

Okay.

Apologies for the delay.

At this time, if you would like to ask a question. Please press the star and one on your telephone keypad keep in mind Humira remove yourself from the question queue at any time by pressing star and two.

Ken.

Ask a question please press star and one.

We will take our first question from Barry Jonas with Trust Securities. Please go ahead. Your line is open.

Yes.

Yes, let me add a few.

Wanted to start with Chicago.

It looks like it's starting to ramp on a month over month basis curious what kind of player you are seeing there and how do you think that player database could transfer to the permanent once completed.

Barry It's George I'll take that question.

So obviously.

We're increasing database, we started with zero and within six months, we're up to 65000 and our database.

We really just started actively mailing to that database and November after we got <unk> approval.

We've only been at it for a.

A couple of months now.

What we're seeing right now is it demographics, that's kind of slightly skewed towards a younger demographic, primarily driven by table games.

We've seen that we are already ranked second in the state from a table games perspective still got a little work to do on the slot side. What we're seeing is a little bit younger customer on the spot side as well, we think a lot of that has to do with.

Operator: Our 2024 capital expenditure guidance is $165 million in assets. Not included in our capital expenditure guidance is spending in Chicago for site prep and demolition for the permanent casino as well as similar expenses for Tropical. In closing, I want to reiterate my enthusiasm for 2024, which will include the continued wrap of our Chicago 10, the successful launch of IDAMI in Rhode Island, and progress on the other growth initiatives which are underway. That concludes my comments. We will now open up the call for Q&A. Apologies for the delay. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. Keep in mind, you may remove yourself from the question queue at any time by pressing star and 2.

Providing the appropriate provisions for parking, which we now have contractual arrangements with several.

The garages.

And.

And within a couple of blocks of us. So we're starting to see a lot of increases from that we also have increased shuttle busing in the vicinity.

And we're starting to see growth in that as well. So I think the goal really is to build that this database.

And absolutely transfer 100% of that to the permanent facility, but we're really happy about the growth short term and a week over week, we're continuing to see all of the metrics that we measure our success with the increasing so we've gone from $6 8 million.

In September.

ITB to almost $10 million.

And we're happy about.

We're happy about what we're seeing we're getting a little bit more aggressive from an advertising perspective in the market as well.

Barry Jonas: Again, if you'd like to ask a question, please press star and 1 now. We'll take our first question from Barry Jonas with Trus Securities. Please go ahead, your line is open. Yeah, let me add a few. I want to start with Chicago.

We are open to see some real real growth in March which is typically when you see that growth in the market.

Hearing that through the summer months.

Great Great and then just shifting to trop.

George: The temp looks like it's starting to ramp up on a month-over-month basis. Curious what kind of player you're seeing there and how you think that player database could transfer to the permanent once completed? Larry, it's George.

We haven't heard a lot just yet about what the Ace ADM will ultimately look like wondering if you have any better visibility and if you could talk about some of the scenarios you're considering.

For Tropicana Thank you.

George: I'll take that question. So obviously, you know, we're increasing our database. We started with zero, and within six months, we're up to 65,000 in our database.

Yes, I'll take that again alright.

So listen we announced closure on the just on the second.

Announced closure just towards the end of January that we're closing on April 2nd.

George: We really just started actively mailing to that database in November after we got IGB approval, so we've only been at it for a couple months now. What we're seeing right now is a demographic that's kind of slightly skewed towards a younger demographic, primarily driven by table games, probably seen that we were already ranked second in the state from a table games perspective. Still got a little work to do on the slot side.

Obviously.

We did that in order to put us in a position to deliver construction ready site the age which is with which is within our contractual arrangement with them and their goal is to open up for season 2028.

These are still finalizing their stadium fans and we just continue to evaluate our options.

For what we feel is a very valuable development land that's next to the stadium so.

We don't have anything further from our perspective.

George: What we're seeing is a little bit of a younger customer on the slot side as well. We think a lot of that has to do with providing the appropriate provisions for parking, for which we now have contractual arrangements with several of the garages within a couple blocks of us. So we're starting to see a lot of increases from that. We also have increased shuttle busing in the vicinity, and we're starting to see growth in that as well. So I think the goal really is to build this database and absolutely transfer 100% of that to the permanent facility.

Got it and if I could just sneak in.

One more.

I wanted to ask about the 24 guidance for casinos and resorts.

Can you maybe quantify the weather impact in January are all share any maybe additional underlying assumption say what base same store EBITDAR growth, you're expecting if that sort of flattish, but any additional color. There I think would be helpful.

Sure.

Yes, So let me take a little bit of a step back we yes, we continued.

We continue to see growth throughout 2023, and our higher tier customer across our portfolio.

But we did like everyone else experienced market softness during the back half of 2023.

George: We're really happy about the growth short-term, and week over week, we're continuing to see all the metrics that we measure success with increasing. So you know, we've gone from 6.8 million in September of IGB to almost 10 million dollars. So we're happy about what we're seeing. We're getting a little bit more aggressive from an advertising perspective in the market as well. And we're hoping to see some real growth in March, which is typically when you see that growth in the market and continue that through the summer months. Great, great. And then just shifting to TROP, you know, we haven't heard a lot just yet about what the A's stadium will ultimately look like. Wondering if you have any better visibility and if you could talk about some of those scenarios you're considering for TROP Accounta. Thank you. Yeah, I'll take that again, Barry.

No.

And by the way during that period, we actually saw a market improvement from our perspective and 10 of our 13 markets that we compete in so we saw we saw some real.

The real impact in October a lot of softening, but then we've got a nice bounce back in December then of course, we ran into the weather, which is really what your question is that impacted us just like you've seen.

Impact.

Most of the regional.

Most of the regional operators Las Vegas, really was not impacted obviously us but to quantify it.

It's probably about a.

A 20% impact on us.

Youll, probably see that translated into.

Into the top line revenue numbers.

Obviously, we were able to mitigate that.

EBITDA at the EBITDA line, but as a follow on we're seeing.

Whether that's kind of more back to normal nor.

Normal weather patterns in February and right away, we bounce back.

George: So listen, we announced closure just on the second that we've announced closure just towards the end of January that we're closing on April 2nd. Obviously, we did that in order to put us in a position to deliver a construction-ready site to the A's, which is within our contractual arrangement with them. And their goal is to open for the season 2028. And the A's, the A's are still finalizing their stadium plans.

We feel that we're back to.

We're back to normal kind of inflationary growth.

<unk> levels. The other point I am going to make is that from a guidance perspective.

Last year, just talked about the softness we had in the second half, we think thats an opportunity in the second half of this year.

Since that comp is going to be a little a little easier too.

To me.

Great Alright, thank you so much.

Okay.

Welcome Mark.

We will take our next question from Jeff Stansell with Stifel. Please go ahead. Your line is open.

Great afternoon, everyone. Thanks for taking our questions.

Maybe starting off here on the international Interactive business Rosa can you just update us with the latest with respect to the UK regulatory overhaul. What are you hearing with respect to some of the more impactful categories of proposed changes whether that's the affordability check the stake limits what have you and then in the past you talked to you or guided a low single digit top.

George: And we just continue to evaluate our options for what we feel is a very valuable development land that's next to the stadium. So from our perspective, we don't have anything further.

George: And if I could just sneak in one more, you know, I want to ask about the 24 guidance for casinos and resorts. Can you maybe quantify the weather impact in January, or I'll share any maybe additional underlying assumptions, say what base same store EBITDA growth you're expecting if that's sort of flattish, but any additional color there I think would be helpful. So, let me take a little bit of a step back.

<unk> impact at the worst of your views on that changed at all since.

Parameters are clarified.

Thanks, Jeff.

Just on the White paper of rural we're working very closely with the gambling Commission.

Dcms, the government body lines to those areas.

The pipeline is still progressing slowly.

I feel very comfortable with every discussion that we're having it's rational with a genuine focus on protecting the consumer which I parallel path.

George: We continue to see growth throughout 2023 in our higher tier customers across our portfolio. But we did, like everyone else, experience market softness going into the back half of 2023. And by the way, during that period, we actually saw market improvement from our perspective in 10 of our 13 markets that we competed in. So, you know, we saw some real, real impact in October, a lot of softening, but then we got a nice bounce back in December. Then, of course, we ran into the weather, which is really what your question is about. That impacted us, just like you've seen the impact on most of the regional operators. Las Vegas really was not impacted, obviously, but to quantify it, it was probably about a 20% impact on us.

We have been.

We're very flexible when it comes to how we operate that business.

So I'm not I'm not concerned at all about these regulatory changes I think it makes for a better market. Even if there is a degree of displacement from any of the larger operators. This will impact much smaller much smaller oil prices most severely so youll pickup share that way.

I think some of you may have seen headlines released today and over the past few days on state limits slot stake limits online.

Essentially the.

The press is saying and I suspect it will be very close to this as the under 20 Five's. We will have a two pound stake limit 20, fives will have a five pound stake limit properly implemented somewhere in my gut feel is someone that July to September window, I feel good about that all that ends up resulting in.

That's much more sustainable play again, it means that there's greater longevity for this business. This model is very robust when it comes to recession and the challenges that people face there and when I look at our business performance right now.

George: You'll probably see that translated into the top line revenue numbers, but, you know, obviously, we were able to mitigate that at the EBITDA line. But as a follow-on, we're seeing weather that's kind of back to normal weather patterns in February, and right away, we bounce back, and we feel that we're back to normal inflationary growth levels. The other point I'm going to make is that from a guidance perspective, you know, last year I just talked about the softness we had in the second half. We think that's an opportunity in the second half of this year, since that comp's going to be a little easier to manage. Great. All right. Thank you so much, George. Welcome Mary.

In the U K I felt great.

Even if I'll just add a bit more color, even if there are any impacts.

We'll be rolling out sports since the U K market.

And we also will be investing further in our Bali brand in that market.

I always take the lens and saying we are the biggest gaming operator in the U K with that sports. This will aid the funnel same principles apply to North America is applied to the UK.

So I feel good I feel good about the UK.

Okay, Great. That's really helpful. Thank you for that and then sticking on the international segment could you just expand a bit more on some of your commentary with risk with regards to what youre seeing in Japan. When you talk to stabilization is that mostly a function of sort of the comps normalizing or are you seeing actual uplift or kind of improvement in underlying.

George: We'll take our next question from Jeff Stanchel with Stiefel. Please go ahead, your line is open. Hey, great afternoon, everyone.

Humor trends just.

Any additional color you can offer would be helpful. Thanks.

Jeff Stanchel: Thanks for taking our questions. Maybe starting off here on the international interactive business, Rosen, could you just update us on the latest with respect to the UK regulatory overhaul? What are your hearing with respect to some of the more impactful categories of proposed changes, whether that's the affordability checks, the state limits, what have you?

Yes.

We're happy to be in Asia, and what we're seeing is that the market sentiment from players engaging with the product.

It's building back.

So there is more new customers coming into the funnel.

Still have enough product and engaging with it we've added extra types content.

Which has appealed to different audiences.

Robeson: And then, in the past, you talked to or guided a low single-digit top line impact at the worst. Have your views on that changed at all since more parameters have been clarified? Thanks. Thanks, Jeff. So just on the white paper overall, we're working very closely with the Gambling Commission and DCMS, the government body aligned to those areas. The paper is still progressing slowly.

Yes, so it feels like Asia stable feels like.

It's.

Under control and we will see consistent revenues from that area as you can see intra international interact performance in 'twenty three.

K was really kind of holding that thing up.

I'm, hoping everything can contribute this year.

Okay, Great and then if I could just squeeze in one more here and apologies if I missed this but the $50 million EBIT our target for the Chicago temporary facility is that is that still intact is that what's embedded in guidance for 'twenty four.

Robeson: I feel very comfortable that every discussion that we're having is rational, with a genuine focus on protecting the consumer, which I care a lot about. We have been, and we are very flexible when it comes to how we operate our business. So I'm not concerned at all, to be honest, about these regulatory changes. I think they make for a better market. Even if there is a degree of displacement from any of the larger operators, this will impact much smaller operators more severely.

Yes so.

To answer your question in short, yes, we our trajectory toward that just just a moment of clarity and a couple of things as it relates to Chicago, Georgia team as you guys can see are making.

Pretty substantial progress toward our goal.

We've contemplated.

Driving revenues, but there are some costs that we're overcoming in that and so to answer your question in short, yes that contemplate hitting a run rate that we've shared ending third quarter. That's still holds true today.

Robeson: So you'll pick up share that way. I think some of you may have seen headlines released today and over the past few days on state limits, slot state limits online, so essentially what the press is saying, and I suspect it'll be very close to this, is that under 25s we'll have a £2 stake limit, and over 25s we'll have a £5 stake limit. Probably implemented somewhere in my gut feel is somewhere in the July to September window. I feel good about that. All that ends up resulting in is a much more sustainable play.

Okay, great very helpful. Thank you all.

Yeah.

We will take our next question from Jordan Bender with citizens and JMP. Please go ahead. Your line is open.

Good afternoon, I wanted to touch on Barry's question, and the CNR guidance, presumably trop should help the overall margin profile for that segment, so with margins guided down about 200 basis points year over year.

It implies that a lot of that.

Down year over year should happen in the first quarter is that fair to assume that the weather plus the ramp in Chicago, where the major hits and then.

Robeson: Again, it means that there's greater longevity for this business; this model is very robust when it comes to recession and the challenges that people face there. And when I look at our business performance right now in the UK, I feel great. Even if, and I'll just add a bit more color, even if there are any impacts, we will be rolling out sports into the UK market, and we will also be investing further in our Bally brand in that market. I always take the lens and say we are the biggest iGaming operator in the UK without sports. This will aid the funnel. The same principles apply to North America as apply to the UK there.

Q2 through Q4 should be more stable and then are there any run rate losses implied with chop being closed.

Yes, so you chop being close that definitely using incorporated.

In our in our model and what we've shared with you for guidance.

Weather definitely on the first half of the year is going to impact that guidance as well, but one thing that enjoys kind of teased us a little bit.

We're seeing and focusing on the top end of our database and ensure that that stickiness stays in place we are keeping a cautious eye to the lower ends of our database in the unrated segment.

And so some of that free business could materialize into some some margin impact.

Robeson: So I feel good. I feel good about the UK. Okay, great. That's really helpful. Thank you for that. And then, sticking with the international segment, can you just expand a bit more on some of your commentary with regard to what you're seeing in Japan? When you talk to stabilization, is that mostly a function of sort of the comps normalizing? Or are you seeing, you know, actual uplift or kind of improvement in underlying consumer trends? Just, you know, any additional color you can offer would be helpful.

We haven't experienced that yet, but we are contemplating.

That being the case as we enter some of our competitive more competitive markets.

Great and then switching to North American online.

Last year, you kind of shifted the strategy in Thai gaming so.

You assess your market position in some of these sports betting only markets would you look to exit any of these states, particularly New York, we've seen blade skin price would go for in the state. Thank you.

Hi, <unk>.

No. We don't have any intention to leave any of these markets.

Robeson: Yeah, so we're B2B in Asia. And what we're seeing is that the market sentiment from players engaging with the product is building back. So there are more new customers coming into the funnel, and they're still loving our product and engaging with it. We've added extra types of content, which has appealed to different audiences.

We're being very measured as we said in our marketing approach.

We have got a great partnership with cambium half, which has enabled us to manage the appropriate investment costs.

Across all of these sites, we do view sports is the pathway to I gaming.

Today, we will stay in all these states, we're very focused on investing in gaming is that's where we're achieving great success.

Robeson: Yeah, so it feels like Asia, stable, feels like... it's under control, and we'll see consistent revenues from that area. As you can see in our International Interactive Performance in 2023, the UK was really kind of holding that thing up. I'm hoping everything can contribute this year.

Thank you very much.

We will take our next question from Chad Beynon with Macquarie. Please go ahead. Your line is open.

Afternoon. Thanks for taking my question Robinson wanted to return to the International Interactive segment margins in the quarter of 39% certainly higher than I think what you had kind of talked to before and kind of where the street was for 'twenty four I believe your guidance implies.

George: Okay, great. And then, if I could just squeeze in one more here, and apologies if I miss this, but the 50 million EBITDA target for the Chicago Temporary Facility, is that still intact? Is that what's embedded in guidance for 24?

33% to 35% and you kind of just talked about maybe some of the other regions hopefully picking up.

George: Yeah, so to answer your question in short, yes, we are trajecting toward that. Just a moment of clarity and a couple of things as it relates to the Chicago Georgian team, which as you guys can see, are making pretty substantial progress toward our goal. We've contemplated driving revenues, but there are some costs that we're overcoming in that. And so to answer your question in short, yes, that contemplates hitting our run rate that we shared ending the third quarter. That still holds true today.

But as we think about margins and just the overall marketing environment I guess historically, you've talked about 30 now your 33% to 35 can you just kind of provide a little bit more color in terms of what.

The marketing environment is like and if this 39% in the fourth quarter should be viewed as more of an anomaly. Thanks.

So touching on fourth quarter view that as an anomaly.

The 3% to 35 range that we discussed.

Allows us to ensure that we can continue to invest we can continue to look at other ways to grow.

George: Okay, great. Very helpful. Thank you all. We'll take our next question from Jordan Bender on Citizens and JMP. Please go ahead.

So there's some room in that to test if youre not testing can never actually always find stable growth.

Jordan Bender: Your line is open. Good afternoon. I want to touch on Barry's question and the C&R guidance. Presumably, drops should help the overall margin profile for that segment. So with margins guided down about 200 basis points year over year, it implies that a lot of that, you know, down year over year should happen in the first quarter. You know, is it fair to assume that the weather plus the ramp in Chicago or the major hits and then should be more stable?

Our margins should be holding exactly that I feel good about.

We are going to go above the line width, both valleys in Virgin in the UK.

Definitely within that we have expansion in Brazil.

Other markets too.

The tooling.

Locker that we haven't unlocked over the past few years is looking at wider market expansion outside of North America attractive and running at these margins, which I know are very sustainable because we retain our customers so well.

Charlie Deal: Yeah, so with TROP being closed, that definitely is incorporated in our model and what we've shared with you for guidance. Weather definitely in the first half of the year is going to impact that guidance as well, but one thing that, and George kind of teased this a little bit, you know, we're seeing and focusing on the top end of our database and ensuring that that stickiness stays in place. We are keeping a cautious eye on the lower ends of our database in the unrated segment, and so some of that free business could materialize into some margin impact. We haven't experienced that yet, but we are contemplating that being a case as we enter some of our more competitive markets. Great

Allows us to look at expansion opportunities.

Okay, great. Thanks, great to see that in terms of capital returns you repurchased $70 million worth of stock in the quarter, So nice to see.

You are being opportunistic there for 'twenty four capex is still reasonably low I believe it picks up in 'twenty five 'twenty six with Chicago. So how should we think about capital returns I know you have.

I believe $95 million left on the current program do you have the availability to be opportunistic in the market if shares remain depressed.

Charlie Deal: And then switching to North American online, you know, last year, you kind of shifted the strategy into iGaming. So as you assess your market position in some of these sports betting-only markets, you know, would you look to exit any of these states, I guess, particularly New York? We've seen what a skin price would go for in the state. Hi Robeson here.

Hi, This is Charlie deal.

Speaking.

I think that.

We've always said is that we allocate capital.

Capital.

Among different opportunities internal investments development as well.

Obviously, returning capital at any point in time, the dynamics of each of those options may change.

Robeson: No, we don't have any intention to leave any of these markets. We're being very measured, as we said, in our marketing approach. We have got a great partnership with both Canby and White Hat, which has enabled us to manage the appropriate investment costs, you know, across all of these states. We do view sports as the pathway to iGaming. Today, we will stay in all these states. We're very focused on investing in iGaming as that's where we're achieving our greatest return. Thank you very much.

Hi.

The point being we do have significant development.

<unk>, we expect to get the financing for those development expenditures.

And at different points.

See where the stock is in May.

Makes sense.

Exercise at the board will exercise that decision.

Thanks, Charlie I appreciate it guys.

Okay.

And as a reminder, if you'd like to ask a question today. Please press the star and <unk> on your telephone keypad.

Robeson: We'll take our next question from Chad Beynon with Macquarie. Please go ahead, your line is open. Afternoon, thanks for taking my question. Robeson wanted to return to the international interactive segment.

We will take our next question from Jonathan <unk> with TD Cowen. Please go ahead. Your line is open.

Hey, how are you guys have Jonathan on for Lance.

Chad Beynon: Margins in the quarter, 39%, certainly higher than I think you had kind of talked about before and kind of where the street was. For 24, I believe your guidance implies 33% to 35%, and you kind of just talked about maybe some of the other regions, you know, hopefully picking up. But as we think about margins and just the overall marketing environment, I guess historically, you've talked about 30, and now you're 33 to 35. Can you just kind of provide a little bit more color in terms of what the marketing environment is like, and if this 39% in the fourth quarter should be viewed as more of an anomaly? Thanks. So touching on the fourth quarter, I'd view that as an anomaly.

I wanted to touch on international.

<unk> to the state of the UK consumer so far in 2024.

Hi, Jonathan broken here.

With respect to UK consumer, we're seeing very stable spending patterns from our players.

We don't have very many big players right.

Much consistent consumer we're getting high enough volumes of new customers into the funnel and we have enough levers to pull such as hold such as.

On the content mix and everything else to ensure that we can manage the returns from our investments that so we're not seeing a slowdown there was definitely the usual sort of January post Christmas.

But we'd understood that.

All of our numbers and that happens every single year.

Robeson: The 33 to 35 range that we discussed allows us to ensure that we can continue to invest. We can continue to look at other ways to grow. So there's some room in that to test, and if you're not testing, you can never actually always find stable growth.

We've seen good trends through the end of January and into February as expected.

Yes, I feel very comfortable about the consumer and the U K.

Okay.

In terms of Capex, you called out 165, no could we just get the split of maintenance versus growth.

Robeson: Yeah, our margins should be holding exactly where we are. I feel good about our plans. We're going to go above the line with both Bally's and Virgin in the U.K. We definitely have expansion in Brazil. We're looking at other markets to use the tool in our Locker that we haven't unlocked over the past few years is looking at wider market expansion outside of North America Interactive, and running at these margins, which I know are very sustainable because we retain our customers so well, allows us to look at expansion opportunities. Okay, great. Thanks. It's great to see that. In terms of capital returns, you repurchased $70 million worth of stock in the quarter. So it's nice to see you're being opportunistic there. For 24, CapEx is still, you know, reasonably low. I believe it picks up in 25 and 26 with Chicago.

Uh huh.

Yes.

About I think I would think of it. This way there is about probably $65 million to $70 million that will go to.

Maintenance for the casino and resort side, we have some growth that's probably in the neighborhood of $35 million to $40 million.

Capital that will go into the properties, but probably will not see the rois on that until 2025, So we will activate and develop this year.

Online for 25, and then a significant portion for continued development and investment in our development efforts for interactive.

That includes both North America and <unk>.

And international Interactive and then a very very small portion for some enabling technology for centralization and integration efforts across the enterprise.

Understood. Thanks.

And you also called out demolition costs, that's not included in Capex.

Charlie Deal: So how should we think about capital returns? I know you have, I believe, 95 million left on the current program. Do you have the ability to be opportunistic in the market if shares remain depressed?

Just wanted to know what is that figure like is it substantial or is it somewhat insignificant.

Call it out.

We separate out now I'll, let George add anything on to it if he.

Charlie Deal: Hi, this is Charlie Deal speaking. I think that what we've always said is that we allocate capital among different opportunities, internal investments, development, as well as, you know, obviously, returning capital. At any point in time, the dynamics of each of those options may change. The point is, we do have significant development expenditures. We expect to get financing for those development expenditures.

Has anything to offer we separate out our development capital from what we shared in that 165, So Chicago and Tropicana are separate.

Won't give you we are still going through the process now working with.

Our contractors to understand what those demolition costs will look like so we don't have a number to share with you today, but those are separate it out from that 165%.

Charlie Deal: And at different points, we'll see where the stock is. And if it makes sense, we'll exercise, the board will exercise that. Thanks, Charlie.

Not included in that number that we published I don't know what George has any anything else to offer.

No Youre right were going through the bid process right now both Chicago and Tropicana.

Chad Beynon: Appreciate it, guys. And as a reminder, if you'd like to ask a question today, please press the star and one key on your telephone keypad. We'll take our next question from Jonathan Navarette with T.D. Cohen. Please go ahead, your line is open. Hey, how are you guys? It's Jonathan on freelance.

I think the other issue is as it relates to.

I mean, it's just not the demolition of blowing it up its site prep and over some period of time, so a bit really fixed.

Fixing it on a particular calendar year.

Some of that's going to wrap over like the trough.

Jonathan Navarette: I want to touch on international business. Any insight into the state of the UK consumer so far in 2024? Hi Jonathan, Robson here. With respect to the UK consumer, we're seeing very stable spending patterns from our players. We don't have very many big players, right?

<unk> 25, so that's another reason why we we don't have specific guidance.

It helped to a certain time frame.

Sure.

Thanks, and the last one.

Can you just remind us where we are with the New York license I know, it's a competitive process and just where it stands at the moment.

Robson: So it's a very consistent consumer. We're getting high enough volumes of new customers into the funnel, and we have enough levers to pull, such as hold, such as, call it content mix, and everything else to ensure that we can manage the returns from our investments there. So we're not seeing a slowdown. It was definitely the usual sort of January, post-Christmas, but we've understood that in all of our numbers, and that happens every single year.

Oh, yes so.

Yes.

So.

Obviously, it's public that were part of the process.

We're working we're working on presenting an appropriate plan.

Once the RFP process begins.

We've secured the land and.

And we think that there is a real real opportunity we think that the.

Do you think that anyone that does the project will be successful and we're just putting ourselves in a position.

To be to build the appropriate traffic there and be successful, but the first step is acquiring the license.

Got it just to think of it you can see.

Robson: We've seen good trends through the end of January and into February, as expected. Yeah, I feel very comfortable about the consumers. In terms of CAPEX, you called out 165 mil. Can we just get the split of maintenance versus growth? Yeah, about think of think of it this way there's about probably 65 70 million that will go to maintenance for the casino and resort side we have some growth that's probably in the neighborhood of 35 to 40 million capital that will go into the properties but probably will not see the ROI on that until 2025 so we'll activate and develop this year bring online for 2025 and then a significant portion for continued development and investment in our development efforts for interactive that includes both North America and and international interactive and then a very very small portion for some enabling technology for centralization and integration efforts across the enterprise, Understood, thanks, and you also called out demolition costs that's not included in CapEx and I just want to know what is that figure like? Is it substantial or is it somewhat insignificant that you don't need to call it out?

Can't give you any color on new York's timeline, we're taking every step and measure that will put our name in the hat for consideration.

We're very interested in it we think we have a very very compelling proposition and site anchored by valley links golf course.

So we are.

We will engage in a way new York's decision timeline.

Thank you.

We'll take our next question from David Katz with Jefferies. Please go ahead. Your line is open.

Hi, good evening, everyone. Thanks for taking my question.

And I apologies I was a couple of minutes late but I wanted to just go back on Chicago financing.

Which I know is still an open question.

You may not have conclusions for us today, but any updates on what's the inbounds are out of bounds as potential outcomes would be helpful.

Hi, David This is Charlie.

Thank you.

Haven't changed we expect to finance it when we need to have the financing.

I know that the <unk>.

Market with like tap rate of certainty, but the fact is we don't get access to the site until July four 2024.

But in the back half of this year.

Demolishing.

Site prep.

So as <unk>.

<unk> mentioned in the introductory the bulk of the Capex is in 2025 and 2026. So unfortunately.

Robson: Yeah, we separate out now; I'll let George add anything to it. If he has anything to offer, we separate out our development capital from what we share in that 165, so Chicago and Tropicana are separate. I won't give you the number. We're still going through the process now, working with our contractors to understand what those demolition costs will look like. So we don't have a number to share with you today. But those are separated out from that 165 and are not included in that number that we published. I don't know if George has anything else to offer. You're right; we're going through the bid process right now with both Chicago and Tropicana. I think the other issue is, as it relates to, I mean, it's not just demolition and blowing it up. It's like preparation and over some period of time.

We don't have.

A commitment in place to tell you about if and when we do we still do that but we continue to progress towards that outcome.

And we are.

Im confident of our ability to finance the project because it's a great project.

Okay.

Well, we'll have to leave it there I appreciate it thank you.

We will take our next question from Brian <unk> with Barclays. Please go ahead. Your line is open.

Hey.

Good evening, everybody. Thanks for taking my question.

Wanted to circle back on the International Interactive segment guidance.

Guidance.

Switches, which is essentially flat on the top line right for 24, and I, just I guess I'm just trying to.

Read between the lines here on the different segments. It sounds like Youre constructive on the U K.

Which I would expect to mean that you expect that part of the business to grow somewhat and then and then it sounds like Asia is stable, but maybe you got maybe you have to lap a reset there from last year and so on a year on a year over year basis for the year Asia would probably be down and maybe those two offset.

George: So really, fixing it on a particular calendar year, some of that's going to wrap over, like TROC may wrap over the 25. So that's another reason why we don't have specific guidance entailed to a certain time frame, tour. Great, thanks. And the last one, can you just remind us where we are with the New York license as a competitive process and just where Bally stands? So, you know, we will. So obviously, it's public that we're part of the process. We're working on presenting an appropriate plan once the RFP process begins. We've secured the land, and we think that it's a real opportunity for us as a state. We think that the We think that anyone that does a project here will be successful, and we're just putting ourselves in a position, you know, to build the appropriate project there and be successful. But the first step is acquiring the license. We can't give you any color on New York's timeline.

Wildly off there in terms of thinking about the different geographies within that line.

No I think you've interpreted it pretty well.

Asia does have to lap because it was.

Significant decline that over the course of 'twenty three now we're seeing recovery that.

Which is good but we have to lap that we obviously when we're thinking about our guidance thinking about our forecast.

Predict perfectly in some of these environments. So we know that what we have and that is rational and we know that we have enough levers to pull and marketing optimization to ensure that we have the right flow through to the bottom line.

Yes, and we're making investments in other markets to set ourselves up for the future as well.

Got it.

George: We are taking every step and measure that will put our name in the hat for consideration. So we're very interested in it. We think we have a very, very compelling proposition and site anchored by our Bally Links golf course. And so we will engage and await New York's decision and timeline.

That's helpful and then and then a follow up to the capital allocation discussion.

You guys gave some color on how you think of how youre thinking about it going forward I guess, just sort of thinking or looking back in the fourth quarter. We noticed you drew down.

Some of your revolver.

George: Thank you. We'll take our next question from David Katz with Jeffreys. Please go ahead, your line is open. Hi, everyone.

And maybe it's separate though cash is fungible.

You took you bought some you bought some of your stock back into leverage ticked up a little bit a little bit on that.

David Brian Katz: Thanks for taking my question. And apologies, I was a couple minutes late. But I wanted to just go back on Chicago financing, which I know is still an open question. You may not have conclusions for us today. But any updates on what's inbounds or out of bounds as potential outcomes would be helpful. Hi, David. This is Charlie Dio.

And so I guess the question is.

Maybe just remind us your philosophy.

On your leverage.

When it sort of is at a level where.

It doesn't make sense for the stock price to buy back stock.

And sort of how you think about how you think about that.

Yes look at any point. This is Charlie I think point in time, we have different options and certainly.

Charlie Dio: I think we haven't changed, you know; we expect to finance it when we need to have the financing. I know that the market would like to have greater certainty, but the fact is, we don't get access to the site until July 4, 2024, and we're going to spend the back half of this year demolishing and site preparation. So, as Robson mentioned in the introduction, the bulk of the CapEx is in 2025 and 2026. So unfortunately... We don't have it. David Katz, David Hargreades, Ricardo Chinchilla, Robert Lavan, Bally's, Okay.

In the fourth quarter.

Sure.

The equity you Scott too cheap.

And but we.

We also have various forms.

Our leverage.

We do have a land bank.

Yet we made we know that we can monetize.

Any point in time, it doesn't necessarily mean that we're going to monetize it and then buy stock or do other things with it. So those are levers that are available to us at the end of the day, we only expect.

Lots of $70 million for that.

Yes, that's one of a turn.

So.

I don't know if I can.

Satisfy you but.

Charlie Dio: We'll have to leave it there. I appreciate it. Thank you, and many more.

Point is that that option is never off the table for us.

Brant Montour: Thank you. We'll take our next question from Brant Montour with Barclays. Please go ahead, your line is open. Hey, good evening everybody, thanks for taking my question. I want to circle back on the international interactive segment, guidance, which is essentially flat on the top line, right, for 24. And I guess if I'm just trying to, you know, read between the lines here on the different segments, it sounds like, you know, you're constructive on the UK, which would mean that you expect that part of the business to grow somewhat, and then it sounds like Asia's stable, but maybe you have to do Am I wildly off there in terms of thinking about the different geographies within that line? No, I think you've interpreted it pretty well. Asia does have to lap because there was a significant decline there over the course of 23.

But it doesn't mean that we're focused on.

On.

Doing that exclusive to other opportunities available to us.

That's helpful. I mean I guess.

Now that said that satisfied I guess I'm just curious if you think it's worthwhile to sort of send that signal.

That you care about bringing leverage down or if you think that this is this is this level youre very comfortable with and you don't need to do that.

I think we're very comfortable.

With our leverage.

Our leverage is elevated because of significant investment in the Chicago development effort.

I think we've been in the market in the past that ultimately.

Is completed we expect to get all our money back and more.

And so.

We're in a transitory period or a three year development project.

And.

The denominator the numerator are not matched.

Robson: Now we're seeing recovery there, which is good, but we have to lap that. We obviously, when we're thinking about our guidance, thinking about our forecasts, you can't predict perfectly in some of these environments. So we know that what we have in there is rational, and we know that we have enough levers to pull on marketing optimization to ensure that we have the right flow through to the bottom line. Yeah, and we're making investments in other markets to set ourselves up for the future as well. That's helpful.

Looking at our temp.

We spent $70 million in.

And within a year, we expect that to have a $50 million per annum return granted as a temporary but that's a very high return on capital, but obviously, we have to buy and license and other things associated with it that will ultimately be used for the permanent so we don't look at things as a point in.

Time, but over a period of time.

That help.

That's crystal clear thanks for all of that.

Yes.

Brant Montour: And then as a follow-up to the capital allocation discussion, you guys gave some color on how you're thinking about it going forward. I guess just sort of thinking or looking back on the fourth quarter, we noticed you drew down some of your revolver, and maybe it's separate though, Cash Spongebob, you bought some of your stock back, and so leverage picked up a little bit on that. And so I guess the question is, maybe just remind us your philosophy on your leverage when it sort of is at a level where it doesn't make sense for the stock price to buy back stock and sort of how you think about it. Yeah, look, at any point, this is Charlie DeYoung. At any point in time, we have different options. And certainly in the fourth quarter, the equities got too cheap.

This does conclude the Q&A session I will now turn the program back to our speakers for any closing comments.

Okay. Thank you. Thank you all for joining US I think we should all just remember we have an exceptionally robust core to our business and we're handling development pipeline with cat Alright, we see a huge opportunity ahead, and we really wanted to deliver value for our stakeholders.

I look forward to sharing much more of you very soon.

So I'll speak to you in the next quarter. Thank you all for joining.

This does conclude today's call. Thank you for your participation and you may now disconnect.

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Goodbye.

Charlie DeYoung: But we also have various forms of, you say, our leverage. We do have a land bank that we know that we can monetize at any point in time. It doesn't necessarily mean that we're going to monetize it and then buy stock or do other things with it. So those are levers that are available to us. At the end of the day, we only expect less than $70 million for that. That, you know, that's 0.1 of a turn.

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Charlie DeYoung: I don't know if I can satisfy you, but the point is that that option is never off the table for us, but it doesn't mean that we're focused on doing that exclusively to other opportunities available to us. That's helpful. I mean, I guess...

Okay.

Brant Montour: I guess I'm just curious if you think it's worthwhile to sort of send a signal that you care about bringing leverage down, or if you think that this is this level you're very comfortable with and you don't need to do anything else. I think we're very comfortable, you know, with our leverage. Our leverage is elevated because of the significant investment in the Chicago DEVELOP effort. I think we've been in the market in the past that ultimately, as that project is completed, we expect to get all our money back and more. You know, we're in a transitory period where it's a three-year development project, and, you know, the denominator and the numerator are not matched. But if you look at our camp, You know, we spent $70 million on it, and within a year, we expect that to have a $50 million per annum return, granted as a temporary basis, but you know, that's a very high return on capital. But obviously, we have to buy the license and other things associated with it that will ultimately be used for the permanent.

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Charlie DeYoung: So we don't look at things as a point in time, but over a period of time. That's crystal clear. Thanks for all of that. This does conclude the Q&A session. I'll now turn the program back to our speakers for any closing comments. Hey, thank you, thank you, all for joining us. I think we should all just remember we have an exceptionally robust core to our business, and we're handling our development pipeline with care, right?

Yeah.

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Okay.

Rob: We see a huge opportunity ahead, and we really want to deliver value for our stakeholders. I look forward to sharing much more with you very soon, so I'll speak to you in the next quarter. Thank you all for joining. This does conclude today's call. Thank you for your participation, and you may now disconnect. Goodbye!

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Operator: David Karnovsky, David Hargreades, Ricardo Chinchilla, Robert Lavan, Bally's, Ricardo Chinchilla, Bally's, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, and David Hargreades. Thank you. Thank you. The Roots

Uh-huh.

Yes.

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Okay.

David Karnovsky: David Karnovsky David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David Karnovsky, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David Karnovsky, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David Karnovsky, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David I'm David Karnovsky. Thank you for listening. I hope you enjoyed the show.

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Okay.

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Okay.

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David Karnovsky: I'm Ricardo Chinchilla. I'm Bally's. David Karnovsky, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David Karnovsky, Ricardo Chinchilla, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's, David Hargreaves, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, David Karnovsky, David Hargreaves, Ricardo Chinchilla, Robert Lavan, Bally's David Karnovsky, music Cat, David Hargreaves, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, Robert Lavan, Bally's, Ricardo Chinchilla, Robert Lavan, Bally's, Congratulations, Class of 2011. Congratulations, Class of 2011, and others. Around the World.

Alright.

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