Q1 2024 Caesars Entertainment Inc Earnings Call
Operator: Thank you for standing by, and welcome to Caesars Entertainment Inc.'s first quarter 2024 earnings call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again to remove yourself from the queue. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Brian Agnew, Senior Vice President of Corporate Finance, Treasury, and Investor Relations. Please go ahead.
Okay.
Speaker Change: Thank you for standing by and welcome to Caesars Entertainment first quarter 2024 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone. If your question has been answered and you'd like to.
Speaker Change: Remove yourself from the queue simply press star one again to remove yourself from the queue.
Speaker Change: A reminder, today's program is being recorded and now I'd like to introduce your host for today's program Brian.
And your vice President of corporate Finance Treasury and Investor Relations. Please go ahead.
Brian Matthew Agnew: Thank you, Jonathan. And good afternoon to everyone on the call. Welcome to our conference call to discuss our first quarter 2024 earnings. This afternoon, we issued a press release announcing our financial results for the period ended March 31, 2024. A copy of the press release is available in the investor relations section of our website at investor.caesars.com. As usual, joining me on the call today are Tom Reeg, our CEO; Anthony Carano, our President and COO; Bret Yunker, our CFO; Eric Hession, President, Caesars Sports and Online Gaming; and my colleague, Sharice Crumbly, an investor relations associate.
Thank you Jonathan and good afternoon to everyone on the call and welcome to our conference call to discuss our first quarter 2020 for earnings.
Afternoon, we issued a press release announcing our financial results for the period ended March 31, 2020 for a copy of the press release is available in the Investor Relations section of our website at Investor that Caesars Dot com.
Speaker Change: As usual joining me on the call today are Tom Reeg, our CEO, Anthony Carano, our president and CFO, Bret Yunker, our CFO, Eric Hession, President Caesars sports and online gaming and my colleague <unk> crumbling Investor Relations before I turn the call over to Anthony I would like to remind you that during today's conference call. We may.
Brian Matthew Agnew: Before I turn the call over to Anthony, I would like to remind you that during today's conference call, we may make certain forward-looking statements under the safe harbor provisions of federal securities laws, and these statements may or may not come true. Also, during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. Please visit our press releases located on our investor relations website for a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure. I will now turn the call over to Anthony.
Speaker Change: Make certain forward looking statements under Safe Harbor Federal Securities laws, and these statements may or may not come true.
Also during today's call the company may discuss certain non-GAAP financial measures as defined by SEC regulation G. Please visit our press release is located on our Investor Relations website for a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure I will now turn the call.
Anthony L. Carano: Thank you, Brian, and good afternoon to everyone on the call. During the first quarter, consolidated net revenues of $2.7 billion declined 1%, and total adjusted EBITDA of $853 million declined 10% year-over-year. We faced several transitory Issues during the quarter, including low table holds in our Las Vegas segment and inclement winter weather in our regional segment, plus a loss on the launch of sports betting in North Carolina. Despite these transitory Issues, there were several bright spots during the quarter, including record Q1 occupancy in Las Vegas, driven by strong visitation, 23% OSB net gaming revenue growth, and 54% iCasino net gaming revenue growth in our digital segment, and sequential improvement in operating results in our regional segment each month during Q1.
Anthony L. Carano: Over to Anthony.
Anthony L. Carano: Thank you, Brian and good afternoon to everyone on the call.
Anthony L. Carano: Despite the hole related headwinds in Las Vegas during the quarter, our Las Vegas segment delivered 440 million of adjusted EBITDAR, which is the second best Q1 on record. Occupancy in Q1 reached 97.6%, a new Q1 record, which also drove a record for Q1 cash hotel and food and beverage revenues during the quarter. In our regional segment, in Q1, we delivered $433 million of adjusted EBITDA, down 3% versus last year, driven by unfavorable winter weather during the first six weeks of the quarter.
Anthony L. Carano: The first quarter consolidated net revenues of $2 7 billion declined 1% and total adjusted EBITDAR of $853 million declined 10% year over year.
Anthony L. Carano: We faced several transitory issues during the quarter, including low table hold in our Las Vegas segment, and inclement winter weather in a regional segment plus a loss on the launch of sports betting in North Carolina. Despite these transitory issues there were several bright spots during the quarter.
Anthony L. Carano: Including a record Q1 occupancy in Las Vegas, driven by strong visitation, 23% OSB net gaming revenue growth and 54% I Casino net gaming revenue growth in our digital segment and sequential improvement in operating results and our regional segment each month during Q1.
Anthony L. Carano: Despite the whole related headwinds in Las Vegas during the quarter, our Las Vegas segment delivered $440 million of adjusted EBITDAR, which is the second best Q1 on record.
Anthony L. Carano: Occupancy in Q1 reached 97, 6%, a new Q1 record, which also drove a record for Q1 cash hotel and food and beverage revenues during the quarter.
Anthony L. Carano: And our regional segment in Q1, we delivered $433 million of adjusted EBITDAR down 3% versus last year, driven by unfavorable winter weather during the first six weeks of the quarter regional trends improved each month throughout the quarter with March delivering positive revenue and EBITDAR growth.
Anthony L. Carano: Regional trends improved each month throughout the quarter, with March delivering positive revenue and EBITDA growth. Similar to prior quarters, outside of the negative weather impacts, we continue to face new competition in a few markets and construction disruption in New Orleans, which was partially offset by our new temporary facilities in Danville, Virginia, and Columbus, Nebraska. Turning to CapEx, in 2024, we will finish several construction projects that we expect to generate strong returns and will complete an elevated CapEx cycle for the company.
Anthony L. Carano: Similar to prior quarters outside of the negative weather impact we continue to face new competition in a few markets and construction disruption in New Orleans, which was partially offset by our new temporary facilities in Danville, Virginia, and Columbus, Nebraska.
Anthony L. Carano: Turning to Capex in 2024 wheel finished several construction projects that we expect to generate strong returns and we will complete an elevated capex cycle for the company.
Anthony L. Carano: The permanent facility in Columbus, Nebraska, will open on May 13th, construction in New Orleans should finish by Labor Day, and the permanent facility in Danville is expected to open by year-end. All three of these projects will deliver strong returns on capital to drive growth in our regional segment. I want to thank all of our team members for their hard work so far in 2024. Our strong results are a reflection of their dedication to delivering exceptional guest service. With that, I will now turn the call over to Eric Hession for some insights on our first quarter performance in our digital segment.
Permanent facility in Columbus, Nebraska will open on May 13th construction in New Orleans should finish by Labor day, and the permanent facility in Danville is expected to open by year end.
Anthony L. Carano: All three of these projects will deliver strong returns on capital to drive growth in our regional segment.
Anthony L. Carano: I want to thank all of our team members for their hard work. So far in 2020 for our strong results are a reflection of their dedication to delivering exceptional guest service.
Eric Hession: Thanks, Anthony. Caesars Digital delivered $282 million in net revenues, up 19% year-over-year, and generated $5 million of adjusted EBITDA during the quarter. Results in our digital segment were driven by strong momentum in both online sports betting and iCasino during the quarter. As Anthony mentioned, online sports betting net revenues grew 23%, and iCasino delivered 54% net revenue growth. The strong performance in these two verticals was offset slightly by declines in our retail and other segments.
Anthony L. Carano: With that I will now turn the call over to Eric Hession for some insights on our first quarter performance in our digital segment.
Eric Hession: Thanks Anthony.
Eric Hession: Caesars digital delivered $282 million and net revenues up 19% year over year and generated $5 million of adjusted EBITDA during the quarter.
Eric Hession: Results in our digital segment were driven by strong momentum in both online sports betting and casino during the quarter as Anthony mentioned online sports betting net revenues grew 23% and casino delivered 54% net revenue growth. The strong performance in these two verticals was offset slightly by declines in our REIT.
Eric Hession: <unk> and other segments.
Eric Hession: In our online sports betting segment during the quarter, hold increased roughly 80 basis points year over year. However, despite the increase, it was at the lower end of our expected range due to less favorable results around the Super Bowl and March Madness. Despite the unfavorable large event outcomes, Parlay Mix improved approximately 400 basis points year-over-year during the quarter, driven by our improved user interface and pricing uptime. Higher Parlay Mix gives us confidence in our ability to continue to improve holds throughout 2024 and beyond. iGaming set new quarterly records for active customers, volume, GGR, and net gaming revenue, driven by the success of our new Caesars Palace online app, which, Customers continue to respond favorably to the product interface, game content, and improved loyalty marketing. iCasino remains a critical component of our digital growth strategy for 2024 and beyond.
Eric Hession: Online sports betting segment during the quarter hold increased roughly 80 basis points year over year. However, despite the increase it was at the lower end of our expected range due to less favorable results around Super Bowl and March madness. Despite the unfavorable large event outcomes parlay mix improved approximately 400 basis.
Eric Hession: The year over year during the quarter, driven by our improved user interface and pricing uptime.
Eric Hession: Higher parlay mix gives us confidence in our ability to continue to improve hold throughout 2024 and beyond.
Eric Hession: Gaming set new quarterly records for active customers volume GTR in net gaming revenue driven by the success of our new Caesars Palace online App, which despite only launching roughly seven months ago now makes up more than 50% of the net gaming revenues in this segment customers continue to respond favorably.
Eric Hession: So the product interface game content and improved loyalty marketing I casino remains a critical component of our digital growth strategy for 2024 and beyond during the quarter. We also successfully launched mobile sports wagering in North Carolina. We're encouraged by the early results and have signed up new customers at a faster pace than prior state launches.
Eric Hession: During the quarter, we also successfully launched mobile sports wagering in North Carolina. We're encouraged by the early results and have signed up new customers at a faster pace than prior state launches, translating into a higher initial market share. We remain focused on several key priorities for the remainder of the year. On the sports betting side, work continues on our proprietary TAM, which will enable shared wallet across state lines. We expect to deliver this important functionality across all of the jurisdictions in which we operate by the middle of 2025.
Eric Hession: Translating into a higher initial market share we remain focused on several key priorities for the remainder of the year on the sports betting side work continues on our proprietary Pam, which will enable shared wallet across state lines.
Eric Hession: We expect to deliver this important functionality across all of the jurisdictions in which we operate by the middle of 2025. We will also continue to improve our product on the sports betting side enhancing our same game parlay live wagering.
Eric Hession: We will also continue to improve our product on the sports betting side, enhancing our same game parlay, live wagering, and Internal Price. On the iCasino side, we will continue to add additional game content and functionality and are on track to launch our new iCasino brand in the second half of 2024. We now offer sports betting in 31 North American jurisdictions, 26 of which offer mobile wagering. I'm very pleased with the progress we made in this first quarter.
Eric Hession: Internal pricing on the casino side, we will continue to add additional game content and functionality and are on track to launch our new casino brand in the second half of 2024, we now offer sports betting in 31, North America jurisdictions, 26 of which offer mobile wagering.
Eric Hession: Im very pleased with the project progress we made this first quarter, excluding the effects from new state launches, our net revenue flow through to EBITDA was over 50% consistent with our expectations and setting the stage for continued profitable growth in the years ahead now I will turn it over to Brad.
Eric Hession: Excluding the effects of new state launches, our net revenue flow through to EBITDA was over 50%, consistent with our expectations and setting the stage for continued profitable growth in the years ahead. Now I'll turn it over to Bret. Thanks, Eric.
Bret Yunker: Thanks, Eric. We had an active first quarter on the capital market side, refinancing $4.4 billion of parent-level debt, eliminating the CRC credit entity, and extending debt maturities to 2031 and beyond. On April 26th, we closed on a new $425 million bank financing at the joint venture level for our Danville property. This facility will be used to cover all remaining CapEx requirements for the permanent casino that is expected to open in December. 2024 CapEx, excluding our Danville JV, is expected to be $800 million. We look forward to using strong free cash flow generation to continue to repay debt and reduce leverage toward our stated goals.
Brad: Thanks, Eric we had an active first quarter on the capital market side refinancing $4 4 billion of parent level debt, eliminating the CRC credit entity and extending debt maturities to 2031 and beyond.
Brad: 26th we closed on a new $425 million bank financing at the joint venture level for our Danville property. This.
Brad: This facility will be used to cover all remaining capex requirements for the permanent casino that is expected to open in December two.
Brad: 'twenty 'twenty four capex, excluding our Danville JV is expected to be $800 million.
Brad: We look forward to using strong free cash flow generation to continue to repay debt and reduce leverage toward our stated goals over to Tom.
Thomas Robert Reeg: Thanks, Brad.
Thomas Robert Reeg: We're not in the habit of delivering quarters that look like this, so I want to go through detail on how we got there and want to talk about whether anything fundamental has changed in the business. This is the kind of, the kind of answer the questions I would have if I were in your shoes.
Brad: Yeah.
Speaker Change: We're not in the habit of.
Thomas Robert Reeg: Delivering quarters that look like this.
Thomas Robert Reeg: So I want to go through.
Thomas Robert Reeg: Detail on how we got there.
Thomas Robert Reeg: Want to talk about whether anything fundamental has changed in the business. This is the kind of thing.
Speaker Change: You kind of answered the questions I would have if I was in your seat.
Thomas Robert Reeg: If you look at the biggest bucket, This was kind of a kitchen sink type quarter for us; everything that could go wrong did for us. The biggest pieces are Holden, Las Vegas, weather across the country that was well understood and you've seen with others, and then losses around the launch of North Carolina in digital. There are others that I'll touch on that are more minor, but you know, there were well over $75 million of what were clearly one-time negatives for us in the quarter.
Thomas Robert Reeg: If you look at the biggest buckets.
Thomas Robert Reeg: This was kind of a kitchen sink type quarter for us everything.
Thomas Robert Reeg: Could go wrong did for us the biggest pieces are.
Thomas Robert Reeg: In Las Vegas weather across the <unk>.
Thomas Robert Reeg: Country that was well understood and you've seen with others and then losses around the launch of North Carolina in digital.
Thomas Robert Reeg: There's others that I'll touch on that are more minor but there.
Thomas Robert Reeg: Well over $75 million.
Thomas Robert Reeg: What is clearly one time.
Thomas Robert Reeg: Negatives for us in the quarter.
Thomas Robert Reeg: So, if I look at... kind of where we came out of the quarter and the way the business was operating fundamentally during the quarter, it looks, in my estimation, like a flattish quarter notwithstanding the EBITDA that we posted, starting in Vegas. Typically, hold is a range of 20% to 23%, tables in Vegas. We were 15% for the court. So five to 800 basis points below the normal range midpoint of that is, 650, and that's on $850 million of drop. So you can see that.
Thomas Robert Reeg: So if I look at.
Thomas Robert Reeg: Kind of the.
Thomas Robert Reeg: Where we came out of the quarter and the way the business was operating fundamentally during the quarter. It looks more in my estimation like a flattish quarter notwithstanding.
Thomas Robert Reeg: The EBITDA that we posted.
Thomas Robert Reeg: Starting in Vegas.
Thomas Robert Reeg: R.
Thomas Robert Reeg: Typical hold us.
Thomas Robert Reeg: Range of 20% to 23% tables in Vegas, we were 15% for the quarter.
Thomas Robert Reeg: So five to 800 basis points below normal range midpoint of that is.
Thomas Robert Reeg: 650, and Thats, an $850 million of drop so you can see that.
Thomas Robert Reeg: A very, very large piece of the shortfall in the quarter. You know, this is, this table holds a typical bell curve. We certainly are in the second standard deviation to the negative. Uh, you know, we are completely comfortable that this reverses over time. You'll have quarters that are the reverse. I'm sure you, as you're listening, can think of some in recent history that were two standard deviations to the positive, unfortunately, not for us, but our time will come. This was not an instance of a few players beating us. This was kind of a repeated butt-kicking broadly based throughout the course.
Thomas Robert Reeg: A very very large piece of what.
Thomas Robert Reeg: The shortfall in the quarter.
Thomas Robert Reeg: <unk>.
Speaker Change: This is <unk>.
Speaker Change: Table hold as a typical bell curve, we were certainly in the second standard deviation to the negative.
Speaker Change: We are completely comfortable that.
Speaker Change: This reverses over time Youll.
Speaker Change: You will have quarters that were or the reverse I am sure you as Youre listening you can think of some.
Speaker Change: In recent history that we're two standard deviations to the positive unfortunately, not for us but our.
Speaker Change: Time will come.
Speaker Change: This was not an instance of a.
Speaker Change: A few players beating US this was kind of.
Speaker Change: Repeated butt kicking.
Speaker Change: Broadly based throughout the quarter.
Thomas Robert Reeg: If you look at our volume, Slots were about flat, as Anthony said, Hotel and F&B hit that first quarter record, and both Hotel and F&B overcame, the revenue overcame the increases in union costs to deliver more profitability to us. So volumes were great, and people are still here. We just, we just didn't hold, and if you think about running these properties that are over 97% occupied, you're fully staffed. You know, there is no opportunity to make uphold.
Speaker Change: If you look at our volumes.
Speaker Change: Slots were about flat.
Speaker Change: As Anthony said hotel in F&B had set first quarter records.
Speaker Change: And both hotel and F&B overcame the revenue overcame the increases and union costs to deliver more profitability to us. So volumes were great people are still here.
Speaker Change: We just we just didn't hold and if you think about running these properties at over 97% occupancy.
Speaker Change: You're fully staffed.
Speaker Change: There is no opportunity to make up hold so it's particularly negative.
Speaker Change: On the operating leverage side when you don't hold.
Thomas Robert Reeg: So it's particularly negative on the operating leverage side when you don't hold So we have the additional impact of Adele in Coliseum, Shifted Dates, from March into the fourth quarter. That impacts this quarter, but that's revenue in EBITDA that we will pick up in the fourth quarter with the rescheduled date. So largely a non-event other than in this quarter's numbers. If we look forward, you know, as we sit here today, I'm looking at April, May, June. Each month is forecast at 98% occupancy in the market.
Speaker Change: We had the additional impact of.
Speaker Change: Adele and Coliseum shifted dates from March into the fourth quarter that impacts this quarter, but that's revenue and EBITDA that we will pick up in the fourth quarter with the reschedule date.
Speaker Change: Largely a non event other than in this quarter's numbers.
Speaker Change: If we look at forward.
Speaker Change: As we sit here today I'm looking at April May June.
Speaker Change: Each month is forecast at 98% occupancy in the market.
Thomas Robert Reeg: Our cash rates are, depending on the month, up 8 to 14%. So Vegas remains very, very strong. I am not a guy who likes to talk about hold, so I'm hoping this is the last time I talk about it this year.
Speaker Change: Cash rates are depending on the months up 8% to 14%.
Speaker Change: So Vegas remains.
Speaker Change: Very very strong.
Speaker Change: Hi.
Speaker Change: The guy who likes to talk about hold so I'm, hoping this is the last time.
Thomas Robert Reeg: But if you presume normal hold and what we see in front of us on a forward basis, I would expect Vegas to grow for each of the last three quarters of the year. We're in about a $70 million, a little over $70 million hole out of the first quarter. I don't know that we'll make up that entire $70 million. That probably needs a whole benefit on the right side of the range.
Speaker Change: Talk about it this year, but if you presume normal hold and what we see in front of us on a forward basis I would expect Vegas to grow for each of the last three quarters of the year.
Speaker Change: We're in about a 70 million so a little over $70 million hole out of the first quarter.
Speaker Change: No that will make up that entire $70 million that probably needs.
Thomas Robert Reeg: But I'd expect we're eating at that throughout each quarter the rest of the year, moving to regionals. We were down 3%. As I said, weather was a significant impact that everybody knows about, you know, absent weather, regionals would have been up year over year for us. You know, we are particularly optimistic about the rest of the year, particularly the second half, and continue to believe that regionals will grow on a full year basis for us. Anthony talked about New Orleans and Danville coming online to give you in addition to Columbus, Nebraska, which will start cash flowing in the next couple of weeks.
Speaker Change: Whole benefit on the right side of the range, but I'd expect we're eating at that throughout each quarter the rest of the year.
Speaker Change: Moving to regionals.
Speaker Change: We were down 3% as I said weather was a significant impact that everybody knows about.
Speaker Change: Absent weather regionals would have been up year over year for us.
Speaker Change: We are particularly optimistic about the rest of the year, particularly the second half continue to believe that regionals will grow on a full year basis for us.
Speaker Change: Anthony you talked about.
Speaker Change: New Orleans, and Danville coming online to give you.
Speaker Change: In addition to Columbus, Nebraska, which will start cash flowing in the next couple of weeks. So that's dollars that we've spent that has no EBITDA attached to it.
Thomas Robert Reeg: So that's dollars we've spent that have no EBITDA attached to it until it opens two weeks from now. But if you start in Danville, that's a property that's operating in a temporary structure at the highest win per unit numbers in our entire system, which reflects Unmet Demand. We will almost double our capacity when we open the permanent facility at the end of the year. That's, you know, that will be dilutive to margins because the permanent facilities, I'm sorry, the temporary facilities are operating excessively. 60% margins, but it's accretive to overall EBITDA. And then, if you think about New Orleans.
Speaker Change: Until it opens two weeks from now, but if you start in Danville, that's a property that's operating in a temporary structure at the highest win per unit numbers in our entire system, which reflects.
Speaker Change: Unmet demand we.
Speaker Change: <unk> double our capacity when we open.
Speaker Change: The permanent facility at the end of the year.
Speaker Change: That's.
Speaker Change: That will be dilutive to margins because the permanent facilities I am sorry, the temporary facilities operating excess of <unk>.
Speaker Change: 60% margins, but it's accretive to overall EBITDA and then if you think about New Orleans.
Thomas Robert Reeg: Yeah, as that opens Labor Day, and you think about returns. Recall that the way New Orleans runs it. Gaming Tax Regime in the City of New Orleans.
Speaker Change: That opens labor day.
Speaker Change: And you think about returns recall that the way New Orleans.
Speaker Change: <unk> runs its gaming.
Speaker Change: Gaming tax regime, and the city of New Orleans, Theres, a flat tax until you reach a certain level of gaming revenue as.
Thomas Robert Reeg: There's a flat tax until you reach a certain level of gaming revenue. As we sit here today, on an LTM basis, we're about 75 million below where that property moves to a variable rate versus a flat tax. So if you think about it in terms of returns on the project, the first 75 million of incremental gaming revenue generated has no incremental gaming tax attached to it. So obviously, it has extraordinarily high flow. So that's regionals in Vegas. One more thing about regionals. If you think about trajectory,
Speaker Change: As we sit here today on an LTM basis, we're about $75 million below where that property moves to a variable rate versus a flat tax.
Speaker Change: So if you think about it in terms of returns on the project.
Speaker Change: The first 75 million of incremental gaming revenue generated has no incremental gaming tax to us. So obviously is extraordinarily high flow through.
Speaker Change: So thats regionals in Vegas, one more thing on regionals, if you think about trajectory.
Thomas Robert Reeg: Regional EBITDA in January for us was down more than 20%, in February was down about 4%, and in March was up about 10%. You know, and if you look at this quarter, it's hard to talk much about April in terms of predictive effect since April is the least important month of the second quarter.
Speaker Change: <unk> EBITDA in January for Us was down more than 20%.
Speaker Change: In February was down about 4% and in March was up about 10%.
Speaker Change: And if you look at.
Speaker Change: This quarter, it's hard to talk much about April in terms of.
Speaker Change: Predictive effect since April is the least important.
Speaker Change: One of the second quarter, but we feel good about the quarter and the rest of the year.
Thomas Robert Reeg: But what we feel good about the quarter and the rest of the year is an exciting story for us. I may be repeating some of Eric's numbers, but if you, If you look at digital North Carolina for us was a much more successful launch in terms of customer acquisition than we were anticipating and then what we have seen in recent states. We didn't make any change to how we promoted into it.
Speaker Change: Digital.
Speaker Change: An exciting story for us I may be repeating some of Eric's numbers, but if you if.
Speaker Change: If you look at digital North Carolina for US was a much more.
Speaker Change: Successful launch in terms of customer acquisition than we were anticipating and then what we have seen in recent states. We didn't make any change to how we promoted into it it's really a comment on the strength of our database.
Thomas Robert Reeg: It's really a comment on the strength of our database in North Carolina, but our first month market share was almost 9% of the market, which is about 3x what we've been doing in other new launch states. So, as a result, North Carolina... was negative 11 of net revenue in the quarter and negative 20 million of EBITDA. So if you strip out that launch,
Speaker Change: In North Carolina, but our first month market share was almost 9% of the market.
Speaker Change: Which is about three X what we've been doing in other new launch states.
Speaker Change: So as a result North Carolina.
Speaker Change: Was negative 11 of net revenue in the quarter and negative $20 million of EBIT.
Speaker Change: So if you strip out that launch we were.
Thomas Robert Reeg: We were $25 million of EBIT. OSB revenue was up 33%, and iCasino, as Eric said, which was not impacted by North Carolina, was up 54%. So tremendous momentum in digital for us in the quarter, and that was despite, as others have talked about, March Madness and the Super Bowl were not great from a hold perspective. Our hold was up, our parlay percentage was up over 20% versus the same quarter last year. So our efforts to increase our hold are bearing fruit, as you can see, we were almost 100 basis points better in the queue despite poor sports on the Caesars Palace online launch, as Eric You know, we're now in our seventh month post-launch.
Speaker Change: $25 million of EBITDA.
Speaker Change: OSB revenue was up 33%.
Speaker Change: And I casino as Eric said, which was not impacted by North Carolina was up 54%.
Speaker Change: So tremendous momentum in.
Speaker Change: In digital for us in the quarter and that was despite as others have talked about.
Speaker Change: March Madness Super Bowl were not great from a whole perspective, our hold was up or.
Speaker Change: Parlay percentage was up over 20% versus the same quarter last year. So our efforts to increase our hold are bearing fruit as you can see we were almost 100 basis points better.
Speaker Change: In the Q, despite poor sports outcomes.
Speaker Change: Yeah.
Speaker Change: On the Caesars Palace as online launch as Eric said.
Speaker Change: We're now in our seventh months post launch and that business is already doing more than 50% of our revenue in Oh and I casino it's doing.
Thomas Robert Reeg: And that business is already doing more than 50% of our revenue in iCasino. It's doing exactly what we anticipated in terms of creating an iGaming customer base that looks like our database, looks like our physical floors. Excuse females, excuse the slots.
Speaker Change: Exactly what we anticipated in terms of.
Speaker Change: Creating an I gaming customer base that looks like our database looks like our physical floors.
Speaker Change: Skus females skews to slots.
Thomas Robert Reeg: Well, you know, you should expect us. To continue to build on that momentum, we anticipate launching a second brand very similar to the first before the end of the year. That should allow us to maintain that momentum. There's been a lot of talk for a lot of quarters about, Yeah, gee, can you get to 500 million? I've talked about, you know, the legs of the stool that get us there. But if we look at it in a different way, in terms of, you know, what I see as I look at how we build this business.
Speaker Change: Well you should expect us to continue to build on that momentum, we would anticipate launching <unk>.
Speaker Change: Second brand very similar to the first before the end of the year that should allow us to continue that momentum.
Speaker Change: There's been a lot of talk for a lot of quarters about.
Speaker Change: Gee can you get to $500 million I've talked about.
Speaker Change: The legs of the stools that get us there.
Speaker Change: We look at it in a different way in terms of.
Speaker Change: What I see as I look at how we build this business.
Thomas Robert Reeg: We did a billion dollars of net revenue in digital in 2023. We reported 40 million of EBITDA, you know, on a hold adjusted basis, fourth quarter, that'd be 60. Whether you use 40 or 60, start there. The industry is growing at 30% this year; we're growing, You know, we should be growing at least at that given our eye game is growing considerably faster than the market. As Eric said, our flow through was in excess of 50% in this quarter.
Speaker Change: We did $1 billion of net revenue in digital in 2023.
Speaker Change: We reported $40 million of EBITDA.
Speaker Change: On a hold adjusted basis fourth quarter that'd be 60, whether you use 40 or 60.
Speaker Change: Start there the.
Speaker Change: The industry is growing at 30% this year we're growing.
Speaker Change: We should be growing at least at that given our.
Speaker Change: Gaming is growing considerably faster than the market as Eric said, our flow through was in excess of 50% in this quarter. So if you take the billion.
Thomas Robert Reeg: So if you take the billion, let it grow at the market level, and you flow that through, It's very easy for you to do that math. If you do that again, in 2025, that should get you to something like 1.7 billion in revenue and something over $400 million in EBITDA, that does not include any benefit from the partnerships that roll off in the 24-25 timeframe. That's how I get to the $500 million target in 25 that very few of you believe, that I see as really simple math and a continuation of what is already happening in this business.
Speaker Change: You have us grow at the market level and you flow that through its very easy for you to do that math.
Speaker Change: If you do that again in 2025 that should get you to something like $1 7 billion.
Speaker Change: Of revenue and something over $400 million in EBIT.
Speaker Change: That does not include any benefit from the partnerships that roll off in the 'twenty four 'twenty five timeframe.
Speaker Change: That's how I get to the.
Speaker Change: The $500 million target in 'twenty five that very few of you believe.
Speaker Change: That I see is really simple math and continuation of watts.
Speaker Change: Already happening in this business.
Thomas Robert Reeg: If you want to quibble with me whether 500 million is a full year 25 number, or we're running ratings at that level in 25 and don't quite get to 500 million, I'm happy to have that discussion. I'd say that's certainly up for debate.
Speaker Change: You want to quibble with me, whether $500 million is a full year 25 number or were run rating at that level in 'twenty, five and don't quite get to $500 million.
Thomas Robert Reeg: But the idea that we're not going to do 500 million looks highly unlikely to me. And as I look at that target now, I look at that as a point in time, and we're going to continue to move past. You know, we are going to generate more than $500 million of digital EBITDA. It's just a matter of when we generate So we feel very, very, very good about what's going on in digital and that it really matches the progress against the markers that we laid out when there was no one in the space laying out any similar markers, you know, before we launched on August 21, 2011. We laid out how much we'd spend, and what we thought the return could be. And we are, you know, right on that pace, if not ahead at this point. So, feel fantastic about where digital is today.
Speaker Change: I'm happy to have that discussion I would say that certainly up for debate, but the idea that we're not going to do 500 million to me looks.
Speaker Change: Highly unlikely and as I look at that target now I look at that as a point in time and.
Speaker Change: And we're going to continue to move past that we are going to generate more than $500 million of digital EBITDA. It's just a matter of when we're going to generate that.
Speaker Change: So we feel very very very good about what's going on in digital and that it really matches.
Speaker Change: The progress progress against markers that we laid out when there was no one in the space laying out any similar markers.
Speaker Change: Four we launched.
Speaker Change: In August of 'twenty, one we laid out how much we spend what we thought the returns could be.
Speaker Change: And we are.
Speaker Change: Right on that pace, if not ahead at this point so.
Speaker Change: Feel fantastic about where digital is today.
Speaker Change: In terms of.
Thomas Robert Reeg: In terms of capital, we're spending a lot of capital this year. As I've talked about on prior calls, we walked into a lot of capital expenditure when we did the Caesars merger. Caesars had already agreed to make the New Orleans investment that finishes Labor Day. They'd already won the license in Danville.
Speaker Change: Capital, we're spending a lot of capital this year I've talked about.
Speaker Change: Prior calls we walked into a.
Speaker Change: A lot of capital spend when we did the Caesars merger Caesars had already agreed to make the New Orleans investment that finishes labor day they'd already won the license in Danville. The permanent opened at the end of the year.
Thomas Robert Reeg: The permanent opening is at the end of the year, and New Jersey gently encouraged us to spend the $400 million in CapEx in New Jersey. That's in the rearview mirror now. As we report this quarter, we are one quarter closer to the step down in CapEx spend and the increase in free cash flow that I've talked about as our opportunity to, you know, move to offense, whether offense is buying in stock that, in my estimation, seems attractive or if we're in a different zip code, potentially looking outside for growth opportunities.
Speaker Change: And New Jersey, generally encouraged us suspend the $400 million in.
Speaker Change: Capex in New Jersey, that's in the Rearview mirror at this point.
Speaker Change: So as we report this quarter, we are one quarter closer to the.
Speaker Change: The step down in <unk>.
Speaker Change: Capex spend and the increase in free cash flow that I've talked about as our opportunity to.
Speaker Change: Move to offense whether offense is.
Speaker Change: Buying in stock that in my estimation seams.
Speaker Change: Tractive or if we're in a different.
Speaker Change: ZIP code potentially looking outside for growth opportunities Youre really.
Thomas Robert Reeg: You're really You know, as we sit here at the end of April, you're about five months away from that. So you should expect a step down and gross cat back in 25 in 25 that's in excess of $500 million. Bret told you we just closed on our Danville credit facility, so the funding from Danville doesn't come through our balance sheet this year. So we really feel good about where we're sitting and what the rest of the year looks like.
Speaker Change: As we sit here at the end of.
Speaker Change: April you're about five months away from that so.
Speaker Change: You should expect a step down in gross capex in 'twenty five in <unk>.
Speaker Change: 25, that's in excess.
Speaker Change: A $500 million Brett told you we just.
Speaker Change: <unk> on our Danville credit facilities. So the funding from Danville doesn't come through our balance sheet. This year. So we really feel good about where we're sitting what the rest of the year looks like but as I said.
Thomas Robert Reeg: But as I said, We're not in the habit of reporting quarters like this, so I wanted to give everyone a sense of where I see the business and where I see what this quarter looks like. You'll all do with that what you will. But, you know, we anticipate getting back to quarters like we've been printing for the last 10 years, starting with the, And with that, I'll open it up to questions.
Speaker Change: We're not in the habit of reporting quarters like this I wanted to give everyone a sense of.
Speaker Change: Where I see the business and where I see what this quarter look like you'll all do with that what you will but.
Speaker Change: We anticipate getting back to quarters like we've been printing for the last 10 years.
Speaker Change: Starting with an excellent.
Speaker Change: And with that.
Speaker Change: Open it up to questions.
Operator: Certainly. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11. One moment for our first question. And our first question comes from the line of Carlo Santarelli from Deutsche Bank. Your question, please.
Speaker Change: Certainly and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star 111.
Speaker Change: One moment for our first question.
Speaker Change: Our first question comes from the line of Carlo Santarelli from Deutsche Bank. Your question. Please.
Carlo Santarelli: Hey, Tom, thank you for your remarks. I'm not going to get into the whole stuff. There was some stuff in there that I didn't entirely understand. The occupancy is going up, maybe more comp rooms, and then, as you mentioned, cash rates, you know, we're up nicely in the coming months. But what percentage of the mix, to the extent you could share, should we think about as being cash rates going forward?
Carlo Santarelli: Hey, Tom. Thank you for your remarks, I I'm not going to get into the old stuff. There was some stuff in there that I didn't entirely follow.
Carlo Santarelli: Review of it offline.
Carlo Santarelli: I wanted to ask about though it was kind of the what what I see as kind of a widening gap between.
Carlo Santarelli: Applied Las Vegas G. G R and net casino revenue and I want to understand maybe a little bit is that a change in promotions does it have to do with the.
Carlo Santarelli: The occupancy is going up maybe more comped rooms, and then as you mentioned cash rates were up nicely.
Carlo Santarelli: The coming months, but what percentage of the mix to the extent you could share should we think about as being cash rates going forward.
Thomas Robert Reeg: Cash rates for us versus comp rates. Yes. We're about 75% cash in Vegas, and that hasn't really changed.
Carlo Santarelli: Okay.
Carlo Santarelli: Cash rates for us versus comp rates Sandy.
Carlo Santarelli: Yes.
Sandy: We're about 75% cash.
Sandy: In Vegas, and that Hasnt really changed.
Carlo Santarelli: And then on the other point, just in terms of reinvestment, etc. Acknowledging, look, we don't have your slot hold. But if I were to just make assumptions that it's somewhat, you know, static, that gap seems to widen a little bit. And I was just wondering, is that, you know, some influence from the whole dynamics on the table? Or is there? Has there been a little bit of a change in promotional strategy?
Sandy: Okay.
Carlo Santarelli: And then on the other point just in terms of of reinvestment et cetera.
Carlo Santarelli: Acknowledging look we don't have your slot hold but if I were to just make assumptions that it's somewhat static that gap seems to widen a little bit and I was just wondering is that some influence from the whole dynamics on the table side or is there has there been a little bit of a change in promotional strategy.
Thomas Robert Reeg: We have made zero changes to our promotional strategy.
Speaker Change: We have made zero changes in promotional strategy.
Carlo Santarelli: Okay, some of it, perhaps Rio coming out, I imagine probably has some modest influence as well. Correct. All right. Thank you very much.
Carlo Santarelli: Okay.
Carlo Santarelli: Perhaps rio coming out I imagine you probably had some modest influence as well.
Carlo Santarelli: Correct.
Speaker Change: Okay, Alright, thank you very much.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Joe Greff from JPM.
Speaker Change: Thank you one moment for our next question.
Carlo Santarelli: And our next question.
Speaker Change: Comes from the line.
Speaker Change: Joe Greff from J P. M. Your question please.
Joseph Richard Greff: Good morning, guys, or good morning, good afternoon, guys. Sticking with Las Vegas here, you know, the Q has your table game drop is down 10% year-over-year, and slot handle is down about 7% year-over-year. Last year's numbers included the Rio. What are those numbers excluding the Rio? I'm presuming there wasn't that much net revenue from Rio last year, like $55 million in the first quarter. What's driving those declines excluding the Rio? and a lot of handlers down; slot handle was down 2%, Joe net of the Rio
Joseph Richard Greff: Good morning, guys or good morning, good afternoon guys.
Joseph Richard Greff: Sticking with Las Vegas here.
Joseph Richard Greff: The Q has your table game drop was down 10% year over year and slot handle down about 7% year over year last year's numbers include the Ria what are those numbers are excluding the Rio I'm presuming there wasn't that much net revenue from real last year was like $55 million in the first quarter.
Joseph Richard Greff: What's driving those declines excluding the Rio.
Joseph Richard Greff: And.
Joseph Richard Greff: A lot handle where it's down.
Joseph Richard Greff: Slot handle was down 2% Joe net of Rio.
Speaker Change: Table drop was down.
Thomas Robert Reeg: Table drop was down 7%. So net revenue was down four and a half percent. The bulk of everything that flowed through the quarter was Table Hold Relay, and recall last year's first quarter was ginormous.
Speaker Change: 7%, so net revenue.
Speaker Change: Was down four 5%.
Speaker Change: In the.
Speaker Change: The bulk of everything that flowed through the quarter was <unk>.
Speaker Change: Table hold related.
Speaker Change: And recall last year's first quarter was ginormous.
Joseph Richard Greff: Okay, great. And then... You mentioned CapEx coming down. Obviously, the numbers you're talking about from an operating perspective would suggest, you know, attractive free cash flow generation in the last three quarters of this year and through next year, and you're marked for debt paydown. Outside of deploying excess free cash flow to debt paydown and EBITDA moving in the right direction to reduce your net leverage ratios,
Speaker Change: Okay, Great and then.
Speaker Change: You mentioned.
Speaker Change: Capex coming down obviously the numbers you're talking about from an operating perspective would suggest.
Speaker Change: The free cash flow generation.
Speaker Change: The last three quarters of this year and through next year and earmarked presumably for debt pay down outside of deploying excess free cash flow to debt pay down and EBITDA moving in the right direction to reduce your net leverage ratios can you talk about other potential avenues for you to reduce <unk>.
Speaker Change: Average.
Thomas Robert Reeg: Yeah, sure, Joe, we have We have a number of, assets that produce very little or no cash flow that are non core to the business non operating casinos, that could potentially be monetized at you know, attractive, rates where you wouldn't have to change your Your model much and, you know, without Without getting too forward looking, you shouldn't be surprised if, some of those types of things start to happen in 2020, that our leverage reduction is not limited to only free cash.
Speaker Change: Yes, sure Joe we have.
Speaker Change: We have a number of.
Speaker Change: Assets that produce.
Speaker Change: Very little or no cash flow or that are noncore to the business non operating casinos.
Speaker Change: That could potentially be.
Speaker Change: Monetized at.
Speaker Change: Attractive rates.
Speaker Change: Rates, where you wouldn't have to change your.
Speaker Change: Your model much and.
Speaker Change: Without.
Speaker Change: Without getting too forward looking.
Speaker Change: Shouldn't be surprised if.
Speaker Change: Some of those types of things start to happen in 2024.
Speaker Change: That are.
Speaker Change: Leverage reduction is not limited to only free cash flow.
Operator: Great, thank you. Thank you. One moment for our next
Speaker Change: Great. Thank you.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Brandt Montour from Barclays. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Brian mature firm.
Brandt Antoine Montour: Hey, everybody. Good evening. Thanks for taking my question. Maybe over in the regionals, looking at the margin performance that you guys reported in the 1Q, when I look at OPEX and back on OPEX, it looks like OPEX actually was pretty similar to 1Q23, despite, you know, opening two properties. I'm curious if there were one-time savings in there from the January weather or anything else that we can kind of think about to try and think about your operating OPEX per day going forward.
Brian: Barclays. Your question please.
Brian: Hey, everybody. Good evening, Thanks for taking my question.
Brian: And maybe over in regionals looking at the margin performance that you guys reported in the <unk>.
Brian: When I look at Opex and play it back on Opex. It looks like Opex actually was pretty similar to the <unk> 23. Despite.
Brian: Opening in two properties I am curious if there were.
Brian: Onetime savings in there from Janet from the January weather or anything else that we can kind of think about to try and think about your operating opex per day going forward.
Brandt Antoine Montour: I'm sorry. Can you repeat that, Brant?
Speaker Change: I'm, sorry can you repeat that Brian.
Unknown Executive: Transcribed by https://otter.ai
Brian: Sure. So so your opex was flat and regionals.
Brian: Year over year, right X gaming taxes, and so forth.
Brian: Yes, I'm trying to figure out how you're able to keep costs so low.
Brian: Given you opened two properties since last year and.
Speaker Change: And if maybe there was some savings in January from the from the poor weather or if there was anything else one time.
Unknown Executive: There were no, yeah, there were no positives coming out of the weather, so there were no..., savings there. I mean, you've known us long enough that We're constantly looking at, How can we improve? Our margins were trying to not just be a cork in the ocean in terms of just being washed with where the economy goes. So we're always looking for efficiencies, and you know, that's a testament to our team who've been together for a very long time knowing we were in an environment that's generally inflationary.
Speaker Change: There was no there was no there were no positives coming out of the weather. So there were no savings there.
Speaker Change: <unk>.
Brian: Known us long enough that.
Brian: We're constantly looking at how can we improve our.
Brian: Our margins were trying to not just be a cork in the ocean in terms of.
Brian: Uh huh.
Brian: Just being washed with where the economy goes so we're always looking for efficiencies.
Brian: Efficiencies in.
Brian: That's.
Brian: A testament to our team who has been together.
Brian: Very long time, knowing we were in an environment that's generally inflationary.
Unknown Executive: We're in both Vegas and Atlantic City, where our biggest Union exposure is, you know, dealing with increased costs. And we, you know, we don't intend to just eat that. We intend to improve the business from an operating perspective, become more efficient, and deliver growth. That's our expectation as we move forward.
Brian: In both Vegas, and Atlantic City, where our biggest union exposure is.
Brian: Sure.
Brian: Dealing with increased cost and we we don't intent tend to just eat that we intend to.
Brian: Improve the business from an operating perspective.
Brian: Become more efficient and deliver growth.
Brian: That's our expectation.
Brian: Expectation as we move forward.
Brandt Antoine Montour: Okay, great. That's helpful. And then just as a follow-up on digital, you gave Tom, you gave Digital X, North Carolina. I was just curious if you could give us, or Eric, the theoretical hold with the new, with the bumped up parlay mix export outcomes in March. So we can kind of think about the new normal here, going forward. Yeah.
Speaker Change: Okay, Great. That's helpful. And then just as a follow up on digital.
Brian: You gave Tom you gave digital ex.
Brian: North Carolina.
Brian: I was just curious if you could give us.
Brian: Eric if you could give us the theoretical hold with the new with the bumped up parlay mix export outcomes in March.
Speaker Change: So we can kind of think about the new normal here.
Brian: Going forward.
Eric Hession: Yeah, we haven't disclosed our current structural hold, but we've set the target at 8.5%, and we're well on the way there. Tom had referenced the increase in parlays, but on top of that, we also have an increase in the number of people making parlays; they're making more legs, which has a compounding effect. And so, we're very pleased with the progress we're making, and as we mentioned, absent those two large event outcomes, we would have seen an even larger increase year over year than what we did, what we were able to achieve. Okay, thanks, everyone.
Brian: Yes.
Eric Hession: Haven't disclosed our current structural hold but we've set the target at eight 5% and we're well on the way there Tom had referenced the increase in the parlays, but on top of that we also have increased of the people, making parlays theyre, making more legs, which has a compounding effect and so.
Eric Hession: No.
Brian: We're very pleased with the progress we're making.
Brian: As we mentioned absent those two large event outcomes.
Brian: We would have seen even a larger increase year over year than what we did what we were able to achieve.
Speaker Change: Okay. Thanks, everyone.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Steven Wieczynski from Stifo. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Stephen <unk> from Stifel. Your question. Please.
Steven Moyer Wieczynski: Hey guys, good afternoon. So, Tom, can you help me with some of the numbers that you listed out in your prepared remarks? I got somewhat confused. So, and that's not difficult to do. But, you know, I thought you said 75 million kind of total in terms of weather hold losses around North Carolina, but then I thought I heard you say Vegas was kind of tied to a $70 million hold the rest of the year. So just trying to reconcile what that makes right, that 75 million total impact, right, and then maybe how that broke down a little more between Vegas regionals digital.
Stephen: Hey, guys good afternoon.
Stephen: So Tom can you help me with some of the numbers that you.
Stephen: Lifted out in your prepared remarks.
Stephen: I got somewhat confused so and thats not difficult to do but.
Stephen: I thought you said 75 million kind of total in terms of whether hold losses around North Carolina, but then I thought I thought I heard you say the Vegas was kind of tied to a $70 million hold the rest of the year. So just trying to reconcile what that make sure I have that $75 million total impact right and then maybe how that.
Stephen: Broke down a little more between.
Stephen: Biggest regionals digital.
Thomas Robert Reeg: Yeah, I told you the big ones, the three big ones, hold weather and North Carolina launch were more than 75 million. I mentioned other things like Adele moving that are smaller stuff that gets us to, if I'm looking at, you know, a true, non-one-time performance. I'm getting back to pretty close to even versus last year, which would include an increase in digital if you're losing the $20 million North Carolina loss, an increase in regional, but Vegas is probably still a little short of the record first quarter last year.
Speaker Change: Yes, I told you the big ones, the three big ones hold whether in North Carolina launch where more than $75 million.
Stephen: I mentioned other things like that.
Stephen: Dell moving that are smaller stuff that gets us to <unk>.
Stephen: Im looking at.
Stephen: True.
Stephen: Non one time performance.
Stephen: Getting back to pretty close to even versus last year, which would include an increase in digital if you are losing the $20 million North Carolina loss.
Stephen: An increase in regional but Vegas is probably still a little short to the record first quarter last year.
Steven Moyer Wieczynski: Okay, that's perfect. That makes sense. And then, you know, Tommy indicated that you guys would start to go on the offensive or on offense as your capex is reduced. And you mentioned that that that means you could look at external growth opportunities. So I guess the simple question is, what do you consider a growth opportunity these days?
Speaker Change: Okay, that's perfect that makes sense and then.
Stephen: Tom you indicated.
Stephen: You guys will start to go on the offensive as.
Stephen: We're on offense as your Capex is reduced.
Stephen: And you mentioned that.
Thomas Robert Reeg: That means you could look at external growth opportunities. So.
Stephen: I guess the simple question is what do you consider a growth opportunity these days.
Speaker Change: I think the most attractive opportunity I have four.
Thomas Robert Reeg: I think the most attractive opportunity I have for free cash flow if I'm living in the current neighborhood is my own.
Stephen: Free cash flow if I'm living in the current neighborhood as my own stock.
Steven Moyer Wieczynski: Okay, perfect. Thank you.
Speaker Change: Okay perfect. Thank you.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Daniel Politzer from Wells Fargo. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Daniel <unk> from Wells Fargo. Your question. Please.
Daniel Brian Politzer: Hey, good afternoon, everyone. And thanks for taking my question. I wanted to touch on Las Vegas a little bit on the non-gaming side. I know you mentioned that occupancy was up a couple hundred basis points year over year. But if we look at even the non-gaming revenues, even adjusting for Rio, it seems like it's lagging the market a bit. I mean, can you maybe zoom in a little bit there and give us colors at the low end versus the high end? I know there were disruptions during the quarter, but is there anything else, I guess, under the surface, that we should just kind of be aware of?
Daniel: Hey, good afternoon, everyone and thanks for taking my question.
Daniel: I wanted to touch on on Las Vegas, a little bit on the non gaming side.
Daniel: I know you mentioned that occupancy was up a couple of hundred basis points year over year, but if we look at even the non gaming revenues, even adjusting for Rio it seems it seems like it's lagging the market a bit I mean can you maybe zoom in a little bit there and give us color is it low end versus high end I know there was disruption during the quarter, but is there anything else I guess under the surface that we should.
Operator: Thanks.
Daniel: Just kind of be aware of thanks.
Thomas Robert Reeg: I don't have anybody else's numbers yet in terms of the quarter. Our hotel revenues are up, and our food and beverage revenue was up, about 14%. I'll be surprised if that's lagging the market.
Speaker Change: I don't have anybody elses numbers, yet in terms of the quarter.
Speaker Change: Our hotel revenues are up our food and beverage revenue was up above.
Daniel: About 14%.
Speaker Change: I'll be surprised if that's lagging in the market.
Thomas Robert Reeg: That's ex-Rio, isn't it? Correct.
Speaker Change: That's X ray or I assume.
Speaker Change: Correct.
Daniel Brian Politzer: Okay, and then I guess for my follow-up, on the non-cashflow producing assets you mentioned, I mean, you've kind of pivoted to more of a floating rate structure on your capital in terms of your balance sheet. What do you think about where interest rates are and some of those assets? I mean, is Centaur coming back into the mix as a potential option, or when you talk about those non-cashflow-producing assets, is it completely, is that in regionals, or strip real estate? Any incremental detail or clues would be helpful.
Speaker Change: Okay, and then I guess for my follow up I know in the non cash flow producing assets you mentioned.
Daniel: I mean.
Daniel: You've kind of pivoted to more of a floating rate structure on your capital.
Daniel: In terms of your balance sheet, how do you think about where interest rates are and some of those assets I mean, centaur coming back into the mix as a percent potential option or when you talk about those non cash flow producing assets is it completely.
Daniel: Is that in regional strip real estate any incremental detail or <unk> would be helpful.
Thomas Robert Reeg: I'm not going to help you with the clues. I'll tell you Centaur would certainly not be described as a non-operating casino generating cash flow, so that's not part of it. But there are There are a lot of assets in this company that don't make it into your sum of the parts that have real value that we can realize, and You shouldn't be surprised if we start to put some of them on the board in 20.
Speaker Change: I'm not going to help you on the clues I'll tell you Centaur is.
Daniel: I would certainly not be described as a non operating casino.
Daniel: Generating cash flow so that's not part of it but there are.
Daniel: There's a lot of assets in this company.
Daniel: That don't make it into your sum of the parts that have real value that we can realize and.
Daniel: You shouldnt be surprised if we.
Daniel: Start to put some of them on the board in 'twenty four.
Speaker Change: Got it thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Barry Jonas from Tua Securities. Your question, please. Hey guys, learning to dig a little more into what you're seeing with the consumer and the regionals and Vegas and maybe just
Speaker Change: Thank you one moment for our next question.
Daniel: And our next question comes from the line of Barry Jonas from two Securities. Your question. Please.
Barry Jonathan Jonas: Hey, guys wanted to dig a little more into what you are seeing with the consumer and the regionals in Vegas. So maybe just touch on visitation is supposed to spend per visit trends. Thanks.
Barry Jonathan Jonas: Yeah, look, I've tried to make clear that all of our volume indicators were healthy in the quarter. You know, Vegas numbers, obviously, we lost. Con Ag, we picked up Super Bowl. So you had a big group that didn't show up in a big group that wasn't part of last year. But you can see it in our, You know, our hotel occupancy, our hotel revenue, our food and beverage, all of those numbers remain healthy. The fact that, you know, Regional X. January would have grown year over year should tell you that the consumer on balance continues to remain healthy and spending is robust. Got it, got it.
Speaker Change: Yeah look.
Barry Jonathan Jonas: I've tried to make clear all of our volume indicators were healthy in the quarter.
Barry Jonathan Jonas: Vegas number obviously, we lost.
Speaker Change: <unk>, we picked up.
Speaker Change: Super Bowl.
Barry Jonathan Jonas: So you had a big group.
Barry Jonathan Jonas: Didn't show up in a big group that wasn't part of last year.
Barry Jonathan Jonas: But you can see it in R.
Barry Jonathan Jonas: Our hotel occupancy our hotel revenue, our food and beverage all of those numbers remain healthy the fact that.
Barry Jonathan Jonas: Regional ex <unk>.
Barry Jonathan Jonas: January would have grown year over year should tell you that the.
Barry Jonathan Jonas: The consumer on that we see on balance continues to remain.
Barry Jonathan Jonas: Healthy and spending is robust.
Barry Jonathan Jonas: Yeah.
Barry Jonathan Jonas: And then just curious, what are your expectations today around Vici exercising its call option for Centaur? I mean, you guys are closer to, you know, the creation dilution math for them. I suspect that's what ultimately makes the decision; you know, we are operating under the assumption that they intend to exercise, which is what they've told us in the past, but they've also said they won't do a diluted deal. And as I understand it, it's pretty close, as it sits here today.
Speaker Change: Got it got it and then just.
Speaker Change: Curious what are your expectations today around Vg exercising its call option for Sunpower.
Speaker Change: I mean, you guys are closer to.
Speaker Change: Accretion dilution math for them I suspect that's what ultimately.
Speaker Change: It makes the decision.
Speaker Change: We are operating under the assumption that they intend to exercise, which is what they've told us in the past, but they've also said they want to.
Speaker Change: A dilutive deal and as I understand it's pretty close.
Speaker Change: As it sits here today.
Speaker Change: Okay. Thanks, Paul.
Thomas Robert Reeg: Thank you. One moment for our next question, and our next question comes from the line of David Katz from Jefferies. Your question, please. Hi.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of David Katz from Jefferies. Your question. Please.
David Brian Katz: Hi, evening everyone. I appreciate all the detail. I just wanted to drill down a little farther on the digital discussion. If I sort of start off with notionally 50 million and I work through the math as I think you've laid it out, what it appears to imply is that the business grows to something just under 400 million in EBITDA. And is the inference that, you know, those deals that are rolling off are that significant that they're in the nine-figure neighborhood in terms of the cost that goes away? Or is there if you can sort of help me sort of dial in my mistake if I've made one?
David Brian Katz: Hi, good evening.
David Brian Katz: Everyone I appreciate all the detail I just wanted to drill down a little farther on the digital discussion if I sort of start off with Notionally 50 million and I work through the math is I think you've laid it out.
David Brian Katz: What it what it appears to imply is that the business grows.
David Brian Katz: So something just under 400 million of EBITDA and is the influence that those deals that are rolling off are are that significant but there.
David Brian Katz: But they are in the nine figure neighborhood in terms of the cost that goes away or is.
David Brian Katz: You can sort of help me sort.
David Brian Katz: Sort of dial in my mistake, if I've made one.
Thomas Robert Reeg: I-I-I-I-The partnership roll-off is significant and material. I'm giving you, We grow like the market grows, but we grow in excess of that. And that's where I said, you know, we can argue about, is 500 the full year of 25 or are we just short of it, and we surpass it early in 26? I would say the jury is out there, you know, the argument that we're not going to get to 500 million. The math does not support that.
David Brian Katz: The.
David Brian Katz: The partnership roll off is significant and material.
David Brian Katz: I'm, giving you.
David Brian Katz: Grow like the market grows.
David Brian Katz: We're growing in excess of that and Thats, where I said.
David Brian Katz: We can argue about is 500, the full year of 25 or are we.
David Brian Katz: Just short of it and we surpassed that early in 2006.
Speaker Change: I would say the jury is out there.
David Brian Katz: The argument that we're not going to get to.
David Brian Katz: 500 million.
David Brian Katz: The math does not support that at this point.
David Brian Katz: Understandable. So there may be just a little bit more, you know, more growth in the market there and the timing of how that rolls in and the partnerships, etc. But the partnerships are, are pretty, you know, pretty material. They're chunky. Yeah, they are chunky and kind of roll off the bulk of them in that 25 timeframe. But also note, Again, whether that full year of 25 or its beginning of 26. It's a point in time, and we're going to continue growing beyond, understood. You know, 100 million is, you know, When a hundred million is chunky, that's... That's pretty good. Thank you. I appreciate it.
Speaker Change: Understood. So there maybe just a little bit more.
Speaker Change: More growth in the market in there and the timing of how that rolls in and the partnerships et cetera, but the partnerships are a pretty.
Speaker Change: Pretty material is there a chunk right, yes, they are chunky.
David Brian Katz: And.
David Brian Katz: Kind of roll off in that the bulk of them in that 25 time frame.
David Brian Katz: But also note.
David Brian Katz: Again.
David Brian Katz: Other thats.
David Brian Katz: Full year of <unk> 25, or it's beginning of 'twenty six.
David Brian Katz: It's a point in time, and we're going to continue growing beyond that.
David Brian Katz: Understood.
David Brian Katz: Yes.
David Brian Katz: 100 million.
Speaker Change: When $100 million chunky, that's that's that's pretty good.
Speaker Change: I appreciate it.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Stephen Grambling from Morgan Stanley. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Stephen Grambling from Morgan Stanley. Your question. Please.
Stephen White Grambling: Hey, thanks. You mentioned a few times that looking across, whether it's the regions or Vegas, your expectations, X1 timers are effectively consistent. But what KPIs are you watching to assess whether it makes sense to perhaps start playing defense as it relates to costs? And as a related follow-up, what are the biggest levers if things were to erode, and how should investors generally think about operating leverage? It seems like the market is back to worrying a little bit about the consumer here, and you've been able to be nimble in the past. Thanks.
Stephen White Grambling: Hi, Thanks, you mentioned, a few times that looking across whether it's the regions or Vegas your expectations ex one timers are effectively consistent but what kpis are you watching to assess whether it makes sense to perhaps start playing defense as it relates to costs and is it related follow up what are the biggest.
Stephen White Grambling: Levers if things were to erode and how should investors generally think about operating leverage as it seems like.
Stephen White Grambling: The market is back to worrying a little bit about the consumer here and you've been able to be nimble in the past. Thanks.
Thomas Robert Reeg: Yeah, Stephen, I'd say we're always on defense on costs and, you should presume, in a quarter like this, after the run that these businesses have had, we would be going to our local leaders and saying, you know, show me how we can tighten further, either by generating more revenue, or more or fewer costs, so that it's an EBITDA additive. You know, I'm not in the habit of coming up with a pithy name for that type of program and laying out, you know, what those targets would be, but you should expect that we have initiatives in place that are well into nine figures that we would anticipate flowing through the business by the end of this year, and Matt, partly just because that's what we do.
Speaker Change: Yeah, Stephen I'd say.
Stephen White Grambling: We're always on defense.
Stephen White Grambling: Costs.
Stephen White Grambling: <unk>.
Speaker Change: Uh huh.
Speaker Change: We are.
Speaker Change: You should presume.
Speaker Change: In a quarter like this.
Stephen White Grambling: After the run that these businesses have had.
Stephen White Grambling: We.
Stephen White Grambling: We would be going to our local leaders and saying.
Stephen White Grambling: Show me, how we can tighten further either by generating more revenue.
Stephen White Grambling: More or fewer costs, so that its EBITDA additive.
Speaker Change: I'm not in the habit of cut.
Speaker Change: Coming up with a pithy name for that type of program and laying out.
Stephen White Grambling: What those targets would be.
Speaker Change: But you should.
Speaker Change: Spec that we have initiatives in place that are well into the nine figures.
Stephen White Grambling: We would anticipate flowing through the business by the end of this year.
Stephen White Grambling: And Thats.
Thomas Robert Reeg: But it's also, you know, we recognize that growth is going to be not as easy to come by in the brick and mortar as it's been coming out of COVID. And we intend to continue to grow. So, you should expect that it's ongoing. I don't have a good acronym for it, but expect that you're going to see that flowing through in the coming quarter.
Stephen White Grambling: Partly just that's what we do but it's also.
Stephen White Grambling: We recognize that.
Stephen White Grambling: Growth is going to be not as easy to come by in the brick and mortar as it's been coming out of Covid and we intend to continue to grow so.
Stephen White Grambling: You should expect that's ongoing I don't have a good acronym for it but expect that youre going to see that flowing through in the coming quarters.
Stephen White Grambling: Okay.
Stephen White Grambling: Got it. And maybe just to not put words in your mouth, but to make sure this is clear, I guess, if things were to erode, you're already taking action. So you would help mitigate any kind of operating D leverage, but on the flip side of things, reaccelerate, we could actually anticipate greater flow through.
Speaker Change: Got it and maybe just.
Speaker Change: Not put words in your mouth, but to make sure. This is clear I guess the.
Stephen White Grambling: If things were to erode youre already taking actions. So you would help mitigate any kind of operating deleverage, but on the flip side of things Reaccelerate, we could actually anticipate greater flow through.
Stephen White Grambling: Correct.
Thomas Robert Reeg: Correct. Awesome. That's it for me. Thank you.
Speaker Change: Awesome that's it for me thank you.
Operator: Thank you. One moment for our next question. And our next question comes to the line from Shaun Kelley from Bank of America. Your question, please.
Speaker Change: Thank you one moment for our next question.
Stephen White Grambling: And our next question comes from the line of Shaun Kelley from Bank of America. Your question. Please.
Shaun Clisby Kelley: Hi, good afternoon, everyone. I want to just dig in on or go back to digital for a second. You know, some of the numbers given in the prepared remarks on both OSB growth and iGaming are obviously super compelling, but they don't totally tie out some of the disclosures in the 10Q. I think some of this has to do with, you know, what you're seeing, and maybe the brick and mortar side of the sportsbook business, or maybe the way that some of that played out with the Super Bowl.
Shaun Clisby Kelley: Hi, good afternoon, everyone.
Shaun Clisby Kelley: I wanted to dig in on our go back to digital for a second some.
Shaun Clisby Kelley: Some of the numbers given in the prepared remarks are the OSB growth and I gaming, obviously super compelling they don't totally tie out some of the disclosures in the 10-Q I think some of this has to do with what Youre seeing and maybe the brick and mortar side of the of the sports book business or maybe the way that some of that played through with Super Bowl could you help us square.
Shaun Clisby Kelley: Could you help us square some of those? Because again, like, I think some of the sports betting numbers in particular that were quoted on the OSB side were up very, very strongly, but, you know, we see, you know, in the disclosure, at least, at least, actual volumes on sports betting handle were slightly down. So could you help us with that a little bit?
Shaun Clisby Kelley: Some of those because again like I think some of the sports betting numbers in particular that were quoted on the OSB side were up very very strongly but we see the disclosure at least actual volumes were.
Shaun Clisby Kelley: Betting handle were slightly down so could you help us out a little bit.
Thomas Robert Reeg: So you've got North Carolina as a piece of it. But yes, retail sports was negative from a hold perspective in the quarter, and that hit revenue and flows through. That's where you get your most acute flow through of both the Super Bowl and March Madness.
Speaker Change: So you've got North Carolina is a piece of it.
Speaker Change: But yes retail sports was.
Speaker Change: Negative from a.
Speaker Change: Hold perspective in the quarter and that hit revenue and flows through that's where you.
Speaker Change: Your.
Speaker Change: Most acute flow through of both Super Bowl and March Madness.
Shaun Clisby Kelley: Yes.
Shaun Clisby Kelley: And Tom, just to clarify, but the retail sports book hold was actually negative for the entire quarter? No, it was down materially from last year's first. Okay. Okay. That's helpful.
Shaun Clisby Kelley: Sure.
Speaker Change: And Tom just to clarify so retail sports book hold was actually negative for the entire quarter.
Speaker Change: No it was down.
Speaker Change: Materially from last year's first quarter.
Shaun Clisby Kelley: And then, look, I know this one may be a little bit of a dead horse, but just to go back to the Las Vegas volumes, I mean, I think the bottom line here, Tom, is when you see the numbers that you see and you strip out or adjust for the Rio, it really sounds like you don't believe there's much of a volume or a consumer challenge or change here at the margin. And I just kind of wanted to, A, double check that, and B, just get your thoughts on kind of broader market share, because it does feel like what we see mostly through industry statistics is share gains, particularly consolidation at the top end or some of the luxury and more Baccarat-focused properties on the market. How are you kind of adjusting or moving around the portfolio to compete or hold shares in this environment today?
Speaker Change: Okay. Okay. That's helpful. And then look I know this one maybe a little bit of a dead horse, but just to go back to the Las Vegas volumes I mean, I think I think the bottom line here. Tom is when you see the numbers that you see and you strip out or adjust for.
Speaker Change: The REO.
Speaker Change: It really sounds like you don't believe there's much of a volume or a consumer.
Speaker Change: Challenger change here at the margin I, just kind of wanted to double check that and B just get your thoughts on kind of broader market share because it does feel like what we see just mostly from industry statistics is share gains, particularly consolidating at like the top end or some of the luxury and more baccarat focused properties on the market. How are you kind of.
Speaker Change: Staying or moving around the portfolio to compete or to hold share.
Speaker Change: This environment today.
Thomas Robert Reeg: Yeah, look, I'm looking at EBITDA. I'm not looking at GGR share, that's what you move with, promo, you know, our International Business was as high as it's been since going back to 19 in the quarter. Our VVIP volumes were quite strong; we didn't hold. If you look at, uh, March has been reported already, somebody's gonna, somebody's going to tell you they held it because it wasn't us, you know, Baccarat held in the quarter or in the month. So.
Speaker Change: Yes look I'm looking at EBITDA I'm not looking at <unk>.
Speaker Change: <unk> share that switch you move with <unk>.
Speaker Change: Promo.
Speaker Change: Our international.
Speaker Change: <unk> business was as high as it's been since going back to 19 in the quarter are high our VIP volumes.
Speaker Change: Were quite strong we didn't hold if you look at.
Speaker Change: Is it March has been reported already.
Speaker Change: He is going to somebody is going to tell you they held because it wasn't us.
Speaker Change: And.
Speaker Change: <unk> held in the quarter or in the month.
Thomas Robert Reeg: You know, we're really not seeing much in the way of, you know, share shifts that we need to respond to. Uh, if you look at the quarter, I would say, you know, January didn't feel great on a year-over-year basis, but February and March did feel great, and the net result was that volumes ended up about the same for the quarter against, you know, the biggest first quarter we've ever had. So I suspect when you hear others, you might hear January didn't start that great, but that was very short lived, and February and March got much better.
Speaker Change: So we're really not seeing much in the way of.
Speaker Change: Share shifts that we need to respond to.
Shaun Clisby Kelley: Thanks for the extra detail. I appreciate it.
Speaker Change: If you look at the quarter.
Speaker Change: I would say.
Speaker Change: January didn't feel great on a year over year basis.
Speaker Change: February and March did feel great and the net result was <unk>.
Speaker Change: Volumes ended up about the same for the quarter.
Speaker Change: Against the biggest first quarter, we've ever had so I.
Speaker Change: I suspect when you hear others you.
Speaker Change: You might hear January didn't start that great but that.
Speaker Change: It was very short lived and February and March got much better.
Speaker Change: Thanks for the extra detail I appreciate it.
Operator: Thank you. One moment for our next question, and our next question comes from the line of John DeCree from CBRE. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of John Decree from CBRE. Your question. Please.
John G. DeCree: Good afternoon, guys. Thanks for taking my questions.
John G. DeCree: Hey, good afternoon, guys. Thanks for taking my questions.
John G. DeCree: Maybe two the first one back on Las Vegas, I am not sure if I missed it in prepared remarks, if we already touched on it I apologize, but I know you've Tom gave some color on <unk>, but <unk>.
John G. DeCree: So if you guys have any stats in front of you about the balance of the year beyond that perhaps where you have some visibility in Vegas like group bookings are or mix.
Speaker Change: Group pacing or rate pacing, just give us a sense of what the back half might look like.
John G. DeCree: Maybe two. The first one, back in Las Vegas. I'm not sure if I missed any prepared remarks; if we have already touched on that, I apologize. But I know you, Tom, gave some color on 2Q, but I'm curious if you guys have any stats in front of you about the balance of the year beyond that, perhaps, where you have some visibility in Vegas, like group bookings or mix, group pacing or rate pacing, just to give us a sense of what the back half might look like.
Brian Matthew Agnew: John, same comments on group and convention as we talked about on the last call. For the year, we would expect group and convention to be up in 24 versus 23. That segment set records in 2022 and 2023. In the first quarter, we were down a little bit as a percentage of occupied room nights. We were 19% this year versus 21 last due to Con Ag, but the pace for the remaining quarters 2Q, 3Q, and 4Q looks very good.
Speaker Change: John same comments on group and convention as we talked about on the last call for the year, We would expect group and convention to be up in 24 versus 23 that segment set records in 2022 and 2023 in the first quarter, we were down a little bit as a percentage of occupied room nights, we were 19% this year.
Speaker Change: Versus 21 last due to common AG, but the pace for the remaining quarters to Q3, Q and <unk> looks very good.
John G. DeCree: Great, thanks, Brian. And Tom, maybe I have one for you on the external use of capital. I think your response to a prior question is pretty clear about where you see the stock. But given the kind of explosive growth we've seen in costs across the industry in the US and your team's track record of operating efficiency, does domestic M&A as a way of, you know, perhaps finding more EBITDA growth than your peers, or are there opportunities in the domestic market that, you know, might look interesting, given your kind of abilities and your team's abilities relative to the cost growth that we've seen?
Speaker Change: Great. Thanks, Brian.
Speaker Change: And Tom maybe one for you on external use of capital I think your response to a prior question is pretty clear about about where do you see the stock, but given the kind of explosive growth we've seen in costs.
Thomas Robert Reeg: Across the industry in the U S and your team's track record of operating efficiency does domestic.
Speaker Change: Domestic M&A as a way of perhaps finding.
Speaker Change: More EBITDA growth than your peers are there opportunities.
Speaker Change: In the domestic market that might look interesting.
Speaker Change: Given your kind of abilities and your team's ability as relative to the cost growth that we've seen.
Thomas Robert Reeg: The short answer, John, is yes, we think there are, but those that are of and you know, those that make a difference in terms of talking about in terms of scale would require equity as a piece of a transaction. And in the current neighborhood, I'm certainly not a seller of my equity for any
Speaker Change: Short answer John is yes, we think there are.
Speaker Change: But those that are of.
Speaker Change: And.
Speaker Change: Those that make a difference in terms of talking about in terms of scale.
Speaker Change: Would require equity as a piece of a.
Speaker Change: Transaction.
Speaker Change: And in the current neighborhood.
Speaker Change: I'm certainly not a seller of my equity for any reason.
John G. DeCree: makes that stop. I appreciate that. Thanks, guys.
Speaker Change: Makes sense, Tom I appreciate that thanks, guys.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Chad Beynon from Macquarie. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Chad Beynon from Macquarie. Your question. Please.
Chad C. Beynon: Afternoon. Thanks for taking my question. On the digital side, can you just remind us or kind of help us think about what's additive versus cannibalization after you launch your casino brand? And could this just be kind of a step forward for another thing?
Chad C. Beynon: Afternoon, Thanks for taking my question.
Chad C. Beynon: On the digital digital side can you just remind us or kind of help us think about.
Chad C. Beynon: What's additive versus cannibalization. After you launch your casino brand and could this could this just be kind of a step forward for another thing how many brands do you think makes the most sense.
Thomas Robert Reeg: How many brands do you think make the most sense from your consumer data? Thanks.
Chad C. Beynon: Our consumer data thanks.
Thomas Robert Reeg: Well, ultimately, you're limited by how many skins that you have. So you saw the transaction that we did with Wynn in Michigan that allows us, hopefully, before too long, to have another skin in that state. So we have two available in each iCasino jurisdiction, and that should allow us to launch a second brand, and then we'll, you know, Obviously, we'll see what happens after that and where we can get to from a skin perspective, it's different by state, but we have enough at this point to launch in every iCasino.
Speaker Change: Well ultimately Youre limited by how many skins that you have so you saw the transaction that we did with win.
Speaker Change: In Michigan that allows us.
Speaker Change: Hopefully before too long to have another skin in that state. So we have.
Speaker Change: <unk> available in each.
Speaker Change: Casino jurisdiction and that should allow us to launch a second brand and then we will.
Speaker Change: No.
Speaker Change: Obviously, we will see what happens after that and where we can get to from.
Speaker Change: A skin perspective, it's different by state, but we have.
Speaker Change: Enough at this point to launch every casino ste.
Chad C. Beynon: And then coming back to margins, I know you've said before in some of the markets that you need to grow revenue, I believe 5%, to hold margins. Does that broad statement hold true? Or could you grow slightly lower than that and still keep margins flat on a year to year basis?
Speaker Change: Thank you and then.
Speaker Change: Coming back to margins I know before you've said in some of the markets you need to grow revs I believe 5% to hold margins.
Speaker Change: Does that broad statement hold true or could you grow slightly lower than that and still keep margins flat on a year over year basis.
Thomas Robert Reeg: Yeah, I'd say yes to slightly lower, but you know, I'd use 5% as a target.
Speaker Change: Yes, I'd say, yes to slightly lower but.
Speaker Change: Use 5% as a target.
Chad C. Beynon: Okay. Thank you very much. I appreciate it.
Speaker Change: Okay.
Speaker Change: You very much I appreciate it.
Operator: Thank you. One moment for our next question, and our next question comes from the line of Daniel Guglielmo from Capital One Securities. Your question, please.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Daniel Guglielmo from capital One Securities. Your question. Please.
Daniel Edward Guglielmo: Hello everyone, thank you for taking my question. Harrahs and Pompano have continued to perform well after the expansion and rebranding. Outside of the current pipeline, do you all have any similar near-term projects for properties that may be dealing with some of the competitive pressures that were mentioned in the opening remarks?
Daniel Edward Guglielmo: Hello, everyone. Thank you for taking my question.
Daniel Edward Guglielmo: The horrors and pump and that has continued to perform well after the expansion and rebrand outside of the current pipeline you all have any similar near term projects for properties that may be dealing with some of the competitive pressures that were mentioned in the opening remarks.
Thomas Robert Reeg: So the only place we have a similar undeveloped real estate opportunity is Sayoto Downs in Columbus, which could be a longer-term opportunity, but that Popular Development has been, what, five plus years in the making at this point? slow development, but it's gratifying to see what it's doing for both revenue and EBITDA at that price.
Speaker Change: So the only place we have a similar.
Speaker Change: Undeveloped real estate.
Speaker Change: Pes is.
Speaker Change: Scioto Downs in Columbus, which.
Speaker Change: Could be a longer term opportunity.
Speaker Change: That.
Speaker Change: Pompano development has been.
Speaker Change: At five plus years in the making at this point.
Speaker Change: Slow developing but it is gratifying to see what it's doing for.
Speaker Change: Both revenue and EBITDA at that property.
Daniel Edward Guglielmo: Okay, appreciate that. And then just around expenses, so the negotiations and the expense accruals have been pushed through, and the contracts give some predictability for the next few years. But are there any surprises or dynamics you all are thinking through on the expense side this year into 2025?
Speaker Change: Okay I appreciate it and then just around expenses. So the negotiations and the expense accruals have been pushed through and the contracts give some predictability for the next few years, but are there any surprises or dynamics you all are thinking through on the expense side this year into 2000.
Speaker Change: Syed.
Thomas Robert Reeg: No, not really other than what I've discussed in terms of opportunities for both revenues and expenses that we are targeting based on the list we put together at the beginning of the year. There's nothing. You know, it's a lot of small stuff that adds up to a big number that we need to go. Block and tackle, and that's what we intend to do.
Daniel Edward Guglielmo: Okay, I will appreciate it. Thank you.
Syed: No not really other than what I've discussed in terms of opportunities on both revenues and expenses that we are.
Syed: Targeting.
Based on the list, we put together at the beginning of the year.
Speaker Change: There is nothing.
Speaker Change: It's a lot of.
Speaker Change: Small stuff that adds up to a big number.
Speaker Change: That we need to go.
Block and tackle and that's what we intend to do.
Speaker Change: Okay I appreciate it thank you.
Thomas Robert Reeg: Thank you. And due to time constraints, this does conclude the question and answer session of today's program. I'd like to hand the program back to Tom Reeg for any further remarks.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: <unk> time constraints. This does conclude the question and answer session of today's program I'd like to hand, the program back to Tom Reeg for any further remarks.
Operator: Thanks, everybody. We'll talk to you next time.
Thomas Robert Reeg: Thanks, everybody, we'll talk to you next time.
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Thomas Robert Reeg: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Thomas Robert Reeg: Okay.
Thomas Robert Reeg: [music].
Thomas Robert Reeg: Okay.
Thomas Robert Reeg: Okay.
Thomas Robert Reeg: [music].
Thomas Robert Reeg: Hum.
Thomas Robert Reeg: [music].