Q1 2025 Caesars Entertainment Inc Earnings Call

Okay.

Operator: Good day and thank you for standing by.

Speaker Change: Good day and thank you for standing by welcome to the Caesars Entertainment first quarter 2025 earnings call.

Operator: Welcome to the Caesars Entertainment first quarter 2025 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.

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

After the speaker's presentation, there will be a question and answer session.

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Operator: Please be advised that today's conference is being recorded.

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Brian Agnew: I would now like to hand the conference over to your speaker today, Brian Agnew, Senior Vice President of Corporate Finance, Treasury, and Investor Relations. Please go ahead. Thank you, Liz. And good afternoon to everyone on the call.

Speaker Change: I would now like to hand, the conference over to your Speaker today, Brian Agnew Senior Vice President of corporate Finance Treasury and Investor Relations. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Thank you Liz and good afternoon to everyone on the call and welcome to our conference call to discuss our first quarter 2025 earnings.

Brian Agnew: Welcome to our conference call to discuss our first quarter 2025 earnings. This afternoon, we issued a press release announcing our financial results for the period ended March 31st, 2025. A copy of the press release is available in the Investor Relations section of our website at Investor.Caesars.com, along with a supplementary earnings presentation that management will reference during their comments today on the call.

Speaker Change: This afternoon, we issued a press release announcing our financial results for the period ended March 31, 2025, a copy of the press release is available in the Investor Relations section of our website at Investor that Caesars Dot com.

Speaker Change: Along with the supplementary earnings presentation that management will reference during their their comments today on the call.

Brian Agnew: Joining me on the call today are Tom Reeg, our CEO, Anthony Carano, our President and Chief Operating Officer, Bret Yunker, our Chief Financial Officer, Eric Hession, President of Caesars Sports and Online Gaming, and Cherise Crumbly, Investor Relations. 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 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.

Speaker Change: Joining me on the call today are Tom Reeg, our CEO, Anthony Carano, our President and Chief operating Officer, Bret Yunker, Our Chief Financial Officer, Eric Hession, President Caesars Sports and online gaming and Charisse Crumbly Investor Relations before I turn the call over to Anthony I would like to remind you that during today's conference call we may make certain.

Speaker Change: Forward looking statements under Safe Harbor Federal Securities laws, and these statements may or may not come true.

Speaker Change: Also during today's call the company may discuss certain non-GAAP financial measures as defined by SEC regulation G.

Brian Agnew: 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.

Speaker Change: 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 with that I will turn the call over to Anthony. Thank you, Brian and good afternoon to everyone on the call. We had a good start to 2025 as first quarter.

Anthony Carano: With that, I will turn the call over to Anthony. Thank you, Brian, and good afternoon to everyone on the call. We had a good start to 2025 as first quarter consolidated net revenues of $2.8 billion increased 2% and total adjusted EBITDA of $884 million increased 4% year over year. Despite a tough comparison in Las Vegas against the Super Bowl last year and weather disruptions regionally, combined with one less operating day this year compared to last year, our results reflect stable trends within the brick-and-mortar segments and continued strong growth in digital, despite poor hold during March Madness.

Speaker Change: Net revenues of $2 8 billion increased 2% and total adjusted EBITDAR of $884 million increased 4% year over year.

Speaker Change: Despite a tough comparison in Las Vegas against the Super Bowl last year and weather disruptions regionally.

Speaker Change: And with one less operating day this year compared to last year, our results reflect stable trends within the brick and mortar segments and continued strong growth in digital despite poor halt during March madness.

Anthony Carano: Starting in Las Vegas, same store adjusted EBITDARA $433 million, was essentially flat versus the prior year, and was the third best Q1 Las Vegas performance on record. During the quarter, our Las Vegas team did an excellent job navigating through a tough Super Bowl comparison to deliver exceptional results. Occupancy and cash ADR were both down slightly, slots and ETG volumes grew year over year, convention room nights were 20% of our mix, and the Forum Convention Center delivered a Q1 EBITDA record. Same store operating expenses were down 3% year over year, a testament to the strong operating discipline of our teams in Las Vegas.

Speaker Change: Starting Las Vegas same store adjusted EBITDAR of $433 million was essentially flat versus the prior year and was our third best Q1, Las Vegas performance on record.

Speaker Change: During the quarter, our Las Vegas team did an excellent job navigating through a tough Super Bowl comparison to deliver exceptional results.

Speaker Change: Occupancy and cash ADR were both down slightly philosophy atg volumes grew year over year Convention room nights were 20% of our mix and the Forum Convention Center delivered a Q1 EBITDA record.

Speaker Change: Same store operating expenses were down 3% year over year, a testament to the strong operating discipline of our teams in Las Vegas.

Anthony Carano: Las Vegas EBITDA margins were 43.2% up 50 basis points year over year. New capital projects in Las Vegas continue to drive better than expected returns, especially recent hotel remodels like the Versailles and Coliseum Towers, and F&B projects at both the Flamingo and Planet Hollywood. While we recognize the tremendous uncertainty surrounding the economic impact of potential policy change in the U.S., we remain encouraged regarding the forward outlook of Las Vegas. We continue to experience solid occupancy trends driven by both leisure and the group and convention customers. Now turning to our regional segment, we delivered $440 million of adjusted EBITDA for the quarter, up 2% versus last year.

Speaker Change: Las Vegas, EBITDA margins were 43, 2% up 50 basis points year over year.

Speaker Change: New capital projects in Las Vegas continue to drive better than expected returns, especially recent hotel remodels like the Versailles and call Sam towers, and F&B projects with both the Flamingo and planet Hollywood.

Speaker Change: While we recognize the tremendous uncertainty surrounding the economic impact of potential policy changes in the U S. We remain encouraged regarding the forward outlook of Las Vegas.

Speaker Change: We continue to experience solid occupancy trends driven by both leisure and group and convention customer.

Speaker Change: Now turning to our regional segment, we delivered $440 million of adjusted EBITDAR for the quarter up 2% versus last year.

Anthony Carano: The regional segment experienced a significant improvement in trend versus the last three quarters of 2024, driven by stable same-store trends and the contribution from New Orleans and Danville for a full quarter, all despite the negative effect on the quarter from weather disruptions across the portfolio and the extra day last year. The New Orleans and Danville projects completed our elevated CAPEX cycle over the last few years. Both properties are off to a great start, and we look forward to harvesting this cash flow for years to come. We are committed to providing the best experience to our guests as evidenced by the significant amount of CapEx invested into our properties over the last four years.

Speaker Change: The regional segment experienced a significant improvement in trend versus the last three quarters of 24, driven by stable same store trends and the contribution from New Orleans, and Danville for a full quarter all despite the negative effect on the quarter from weather disruptions across the portfolio and the extra day last year.

Speaker Change: In New Orleans in Danville projects completed our elevated capex cycle over the last few years, both properties are off to a great start and we look forward to harvesting this cash flow for years to come.

Speaker Change: We are committed to providing the best experience to our guests as evidenced by the significant amount of capex invested into our properties over the last four years.

Anthony Carano: I want to thank all of our team members for their hard work so far in 2025. Our strong results reflect their dedication to delivering exceptional guest service.

Speaker Change: I want to thank all of our team members for their hard work. So far in 2025, our strong results reflect our dedication to delivering exceptional guest service with that I'll now turn the call over to Eric for some insights on our first quarter performance in our digital segment. Thanks.

Eric Hession: With that, I will now turn the call over to Eric for some insights on the first quarter performance in our digital... Thanks, Anthony. Caesars Digital delivered net revenue of $335 million, up $53 million, or 19% year-over-year, and $43 million of adjusted EBITDA, up $38 million year-over-year. Our flow-through rate was well in excess of our annual 50% target due to cost controls that we implemented in labor, marketing, and overall reinvestment. The results in the quarter were driven by growth in both verticals.

Eric Hession: Thanks, Anthony Caesars digitally delivered net revenue of $335 million up $53 million or 19% year over year and $43 million of adjusted EBITDA.

Eric Hession: $38 million year over year, our flow through rate was well in excess of our annual 50% target due to cost controls that we implemented in labor marketing and overall reinvestment levels.

Eric Hession: Also in the quarter were driven by growth in both verticals.

Eric Hession: Ports betting net revenue, increasing 9% and casino net revenue growing 53% year over year on a hold adjusted basis, we estimate that our digital segment would've grown revenues by roughly $88 million or 31% year over year and EBITDA by approximately $60 million.

Eric Hession: Video Presentation Transcript On a hold-adjusted basis, we estimate that our digital segment would have grown revenues by roughly $88 million, or 31% year-over-year, and EBITDA by approximately $60 million. Net revenue growth was driven by a combination of higher year-over-year hold and lower promotional activity. We were able to achieve the higher hold despite the well-publicized, customer-friendly basketball outcomes due to our increasing parlay mix, which was up 260 basis points versus last Our sports betting customers are responding favorably to our continual product enhancements, particularly within the parlay and cash-out categories.

Eric Hession: In sports.

Net revenue growth was driven by a combination of higher year over year hold and lower promotional activity, we were able to achieve the higher hold despite the well publicized customer friendly basketball outcomes due to our increasing parlay mix, which is up 260 basis points versus last year.

Eric Hession: Our sports betting customers are responding favorably to our continual product enhancements, particularly within the parlay and cash out categories. We have an exciting roadmap plan for the remainder of the year.

Eric Hession: We have an exciting roadmap planned for the remainder of In iGaming, we posted another record quarter, with net gaming revenue up 53% year-over-year, driven by 28% volume growth, higher hold percentages, and lower reinvestment. Customers continue to respond favorably to the product introductions in the game content and overall user interface. Caesars Palace Online, our highest net revenue-generating app, also continues to have the fastest growth. Our newest app, The Horseshoe, is accelerating and already contributing approximately 7% of our segmented net gaming revenue. We recently introduced Branded Live Dealers Studios in Pennsylvania and New Jersey, both of which have been well-received.

Eric Hession: And I gaming, we posted another record quarter with net gaming revenue up 53% year over year, driven by 28% volume growth higher hold percentages and lower reinvestment.

Eric Hession: Yeah.

Eric Hession: Customers continue to respond favorably to the product introductions in the game content and overall user interface Caesars Palace online our highest net.

Eric Hession: Revenue generating App also continues to have the fastest growth our newest app. The horseshoe is accelerating and already contributing approximately 7% of our segment that gaming revenue. We recently introduced branded live dealer studios in Pennsylvania, and New Jersey, both of which have been well received our in house games studio is planning to launch a branded multiyear.

Eric Hession: Our in-house game studio is planning to launch a branded multi-hand blackjack game in the second quarter, which will be our first internally developed product. On the technology side, we remain focused on completing the rollout of our player account management. which delivers a single wallet across state lines. To date, we've successfully integrated 16 states, including entering the field trial for our William Hill app in Nevada, and remain on track. In addition, this quarter, we integrated the horse racing app into the shared wallet for select states, and we'll expand that integration throughout the remainder of the year.

Eric Hession: Blackjack game in the second quarter, which will be our first internally developed product on the technology side. We remain focused on completing the rollout of our player account management system, which delivers a single wallet across state lines to date, we've successfully integrated 16 states, including entering the field trial for our William Hill App.

Eric Hession: Nevada and remain on track to be completed with a full rollout by the end of 2025. In addition, this quarter, we integrated the Horseracing app into the share of wallet for select states and we'll expand that integration throughout the remainder of the year.

Eric Hession: Our EBITDA for the trailing 12-month period is now in excess of $150 million.

Eric Hession: Our EBITDA for the trailing 12 month period is now in excess of $150 million.

Bret Yunker: I'll pass the call over to Brett for some comments on the balance. Thanks, Eric. Very excited to be at the end of our regional investment cycle. We expect 2025 full year capex to be roughly 600 million, excluding our Virginia joint venture, with interest expense also moving down significantly to approximately 775 million.

Eric Hession: I'll pass the call over to Brett for some comments on the balance sheet.

Brett: Thanks, Eric.

Brett: We're excited to be at the end of our regional investment cycle. We expect 2025 full year capex to be roughly $600 million, excluding our Virginia joint venture with interest expense also moving down significantly to approximately $775 million.

Bret Yunker: Our nearest maturity is the 8 1⁄8 stub unsecured notes due 2027, which we expect to tackle in the near future. Earlier this month, we repurchased $100 million of our stock at an average price of $23.84. We will look to continue our track record of debt reduction alongside opportunistic share repurchases as the year unfolds from here.

Brett: Our nearest maturity is the alienate stub unsecured notes due 2027, which we expect to tackle in the near future.

Brett: Earlier this month, we repurchased $100 million of our stock at an average price of $23 84.

Brett: We will look to continue our track record of debt reduction alongside opportunistic share repurchases as the year unfolds from here over to Todd.

Tom Reeg: Over to Tom. Thanks, Bret. Thanks, everybody, for joining. I'm very pleased with how the quarter came in for us, consistent with what we had been telling you on our fourth quarter call. Vegas was facing a very difficult comp versus Super Bowl last year. Recall that we had poor hold below our normal range in the first quarter of last year. We got back into our range, albeit just to the left side of that range. We were still about 200 basis points below normal. So on volume and activity, Vegas would have been up. Year over year, we ended up flat.

Todd: Thanks, Brian and thanks, everybody for joining us very pleased with how the quarter came in for us consistent with what.

Todd: What we had been telling you on our fourth quarter call.

Todd: Legacy was facing a very difficult comp.

Todd: Super Bowl last year recall that we had poor hold below our normal range in the first quarter of last year, we got back into our range, albeit just to the left side of that range. We are still about 200 basis points below normal.

Todd: No.

Todd: Volume and activity Vegas would have been up year over year, we ended up flat.

Tom Reeg: regional, you know, we were anticipating a pickup in weather coming into first quarter this year's first quarter. Last year's first quarter was difficult. As it turns out, this year's first quarter was even more difficult. And in the case of New Orleans added a terrorist event in the middle or in the beginning of the quarter. So we had a lot of headwinds against us still still delivered growth as I talked about on our last earnings call and since. The growth in terms of that was added with Caesars New Orleans, and Danville, Virginia more than offsets the continued competitive impact across markets like Chicago and Council Bluffs in Indianapolis.

Todd: Regional.

Todd: We were anticipating a pickup in weather coming into first quarter. This year's first quarter.

Todd: Last year's first quarter was difficult as it turns out this year's first quarter was even more difficult and in the case of New Orleans added a terrorist event in the middle area at the beginning of the quarter. So we had a lot of headwinds against us So still delivered growth.

Todd: I talked about on our last earnings call and sense.

Todd: The growth in terms of that.

Todd: That was added with Caesars New Orleans.

Todd: In Danville, Virginia more than offsets the continued competitive impact across markets like.

Tom Reeg: And we're very pleased with where we sit, you know, to highlight one particular property that kind of illustrates The extremes of what happened in the quarter, New Orleans, the terrorist event on New Year's Eve, and then snowstorms in New Orleans, had us put up a little over $2 million of EBITDA in January, which is well below any forecast that we would have ever been working off of. February did almost 19 million of EBITDA, obviously helped by the Super Bowl. And so we get to March. And that's kind of our first look in 25 as to what our normalized run rate with no particular weather or Super Bowl impact.

Todd: Chicago in Council bluffs, and Indianapolis, and we're very pleased with where we sit.

Todd: To highlight one particular property that kind of illustrates the.

Todd: The extremes of what happened in the quarter.

Todd: New Orleans, the terrorist event on New year's Eve, and then snow storms in New Orleans.

Todd: <unk> put up a little over $2 million of EBITDA in January which is well below any forecast that we would ever ever been working off of.

Todd: February did almost $19 million of EBITDA.

Todd: Obviously helped by the Super Bowl and so we get to March and that's kind of our first look in 'twenty five as to what our normalized run rate with no particular weather or Super Bowl impact and we did over $16 million of EBITDA in March so feel very good.

Tom Reeg: And we did over 16 million of EBITDA in March. So feel very good about pacing there and in regionals generally. In digital, obviously, everybody's talked about the March Madness sports outcomes, and we were not immune. Still posted very strong growth year over year. iCasino continues to be a stellar performer. Our 53% net revenue growth in iCasino is on top of last year's first quarter when we also grew over 50%. So now stacking quarters like that on top of each other is particularly gratifying for us. If you look at what's going on in April, just starting in digital, again, we're comping to a quarter where iCasino growth was 50% in the second quarter of last year.

Todd: About <unk>.

Todd: Pacing, there and then regionals generally.

Todd: Digital obviously, everybody has talked about the.

Todd: March Madness sports outcomes.

Todd: And we were not immune.

Speaker Change: <unk> posted very strong growth year over year I casino continues to be a stellar performer.

Speaker Change: Our 53% net revenue growth in a casino is on top of.

Speaker Change: Last year's first quarter. When we also grew over 50%. So now stacking quarters like that on top of each other is particularly gratifying for us.

Speaker Change: If you look at whats going on in April just starting and digital again, we're comping to a quarter where.

Speaker Change: I casino growth was 50% in the second quarter of last year through.

Tom Reeg: Through the first 27 days of April, iGaming revenue for us is up almost 70%. So accelerating from where we were in first quarter, feeling very, very good about where we are with Eric and Matt and the team there. And we've talked about, we expect Vegas to grow a little bit this year. Regionals to be flat to slightly up and digital to post strong growth. Obviously, we talked about that, you know, before all of the tariff news in the in our fourth quarter call, there's no change in terms of what we're expecting in the business, we still do not see any of the consumer softness that investors seem to be worried about.

Speaker Change: Through the first 27 days of April I gaming revenue for us is up almost 70%.

Speaker Change: So accelerating from.

Speaker Change: Where we were in first quarter feeling.

Speaker Change: Very very good about where we are with Eric and Matt and the team there.

Speaker Change: And we've talked about we expect.

Speaker Change: Vegas to grow a little bit this year.

Speaker Change: <unk> to be flat to slightly up in digital to post strong growth, obviously, we talked about that.

Before all of the tariff news in the in our.

Speaker Change: Fourth quarter call. There is no change in terms of what we're expecting in the business, we still do not see.

Speaker Change: Any of the consumer softness that.

Speaker Change: Investors seem to be worried about.

Tom Reeg: Our forward booking still look quite strong. regionals are still coming in nicely and digital is continuing to post significant growth. So feel very good about that. We're effectively a third of the way through the year. You know, if you want to take the other side, obviously, we, we see the same macro picture you do in terms of what's going to happen with tariffs and consumer spending and inflation. If you are a bear on what's going to happen with the consumer, keep in mind, we have never had in a prior downturn, a business segment that's growing like the digital segment is.

Speaker Change: Forward bookings still.

Speaker Change: Look quite strong.

Speaker Change: Regionals are still coming in nicely and digital is continuing to post significant growth. So feel very good about that we're effectively a third of the way through the year.

Speaker Change: You want to take the other side obviously, we.

Speaker Change: We see the same macro picture you do in terms of what's going to happen.

Speaker Change: With tariffs and consumer spending and a deflation. If you are a bear on what's going to happen with the consumer keep in mind, we have never had in a prior downturn a business segment that is growing like the digital segment is for US. If you look at where consensus is where.

Tom Reeg: For us, if you look at where consensus is, where versus where we were last year, you would have to see a dramatic downturn in brick and mortar performance in the last eight months of the year for us to not be a significant grower of EBITDA this year.

Speaker Change: Versus where we were last year.

Speaker Change: You would have to see a dramatic downturn in brick and mortar performance in the last eight months of the year for us to not be a significant grower of EBITDA. This year.

Tom Reeg: I'd also touch on, you know, we are, we've talked about how we're at a capital inflection point, capital spend inflection point, we put up some slides on our investor website that I'd encourage you to take a look at in terms of where and how much we have spent. Now we are in a free cash flow harvesting mode. You should still expect Substantially all of our operating free cash flow to be used to pay down debt this year. Recall that we have the $250 million World Series of Poker Note. We expect that that will be monetized in the course of 2025.

Speaker Change: I would also touch on we are we've talked about how we're at a capital inflection point capital spend inflection point, we've put up some slides on our investor website that I'd encourage you to take a look at in terms of.

Speaker Change: Where and how much we have spent.

Speaker Change: Now we are in a free cash flow harvesting mode. You should still expect substantially all of our operating free cash flow to be used to pay down debt. This year.

Speaker Change: Call that we have the $250 million World series of Poker note, we expect that that will be monetized in the course of 2025 and those are the.

Tom Reeg: And those are the funds that we're using to buy back stock in April. We will continue to be opportunistic if we can buy our stock at.

Speaker Change: Those are the funds that we're using to buyback stock in April we will continue.

Speaker Change: To be opportunistic if we can buy our stock.

Speaker Change: At.

Speaker Change: 20, 25% free cash flow yield that you should expect that that will be.

Speaker Change: A piece of our free cash flow usage, but again substantially all of operating free cash flow.

Speaker Change: We expect to use for debt Paydown that remains the case.

Operator: And with that, I'll throw it back to the operator for questions. As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 once again. Please stand by while we compile the Q&A roster.

Speaker Change: With that I'll throw it back to the operator for questions.

Speaker Change: As a reminder, if you'd like to ask a question at this time. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Carlo Santarelli: Our first question comes from Carlo Santarelli with Deutsche. Hey guys, thank you, Tom. Tom or Anthony, either one of you want to take this one, but it has to do with kind of the Las Vegas, the outlook, what you're seeing in booking and maybe how you guys could Give us a sense of, you know, what on the books today is kind of group-related as we look through you and where else do you have comfort and visibility, and I'm going to assume that that kind of anything would turn up there. But my sense is April, May, kind of, and then the back half of the year, your group pace is pretty well firm at this point, and just want to get a sense of the magnitude.

Speaker Change: Our first question comes from Carlo Santarelli with Deutsche Bank.

Carlo Santarelli: Hey, guys. Thank you Tom.

Speaker Change: Tom either one of you.

Speaker Change: I want to take this one but it has to do with kind of Las Vegas. The outlook. What you are seeing in booking and maybe how you guys could.

Speaker Change: Give us a sense of what on the books today is kind of group related.

Speaker Change: We look to rebrand warehouse comfort and visibility.

Speaker Change: And assume that that kind of.

Speaker Change: If anything would turn up there, but my sense is.

Speaker Change: April may kind of and then the back half of the year. Your group pace is pretty well firm at this point and just wanted to get sense of the magnitude.

Tom Reeg: Yeah, that's right. Carlo, you know, the group was About 20% of our first quarter room base that's a little bit higher than the full year number, but we would expect and that's it in. that's consistent with what we were we thought coming into the year. We expect that for us 2025 will be a record year in group with particular strength in the fourth quarter of the year. And that 26 will be another record group year for us with particular strength in the first quarter of the year. And if you look, if you think about our forward bookings, as is typical, we can see pretty well, 90 days into the future.

Speaker Change: Yes, that's right.

Carlo Santarelli: Carlo grew.

Speaker Change: Group was about.

Speaker Change: About 20% of our first quarter room base, that's a little bit higher than the full year number, but we would expect.

Speaker Change: And that's in.

Speaker Change: That's consistent with what we thought coming into the year, we expect that for US 2025 will be a record year in group with particular strength in the fourth quarter of the year and that 26 will be another record group year for us with <unk>.

Speaker Change: Particularly strength in the first quarter of the here and if you look if you think about our forward bookings as is typical we can see pretty well 90 days into the future.

Tom Reeg: And cash revenue, room revenue looking forward, looks in line with last year's number for the second quarter. You know, we are not operating any differently than we have, you know, over the last couple of years, if we were to start to see softness, we have levers that we can pull, obviously, that you saw, as we came out of the pandemic, where we were able to outperform peers in the market by tapping in to our database, we have that option. You know, in the case where the economy would soften, we could go deeper into our database.

Speaker Change: Cash revenue room revenue looking forward.

Speaker Change: In line with last year's number for the second quarter.

Speaker Change: We are not operating any differently than we have.

Over the last couple of years, if we were to start to see softness we have levers that we can pull obviously that you saw as we came out of the pandemic, where we weren't able to outperform peers in the market by tapping in to our database we have that option.

Speaker Change: In the case, where the economy would soften we could go deeper into our database, but I want to make clear we're not having to do any of that at this point.

Carlo Santarelli: But I want to make clear, we're not having to do any of that, at this point. And, you know, we're mindful of What happens in the broader economy and looking at the same things you're looking at. Great, thank you, Tom.

Speaker Change: And we're mindful of.

Speaker Change: What happens in the broader economy and looking at the same things you are looking at.

Carlo Santarelli: And then if I could, Eric, last year, I just wanted to kind of clarify something from a reporting perspective. Last year in the 2Q, there was a seemingly outsized kind of other revenue piece outside of the iCasino and sports betting business. Could you kind of talk about what that was?

Tom Reeg: Great. Thank you Tom.

Carlo Santarelli: If I could Eric last year I, just wanted to kind of clarify something from a reporting perspective last year in the Q there was a seemingly.

Tom Reeg: Sized kind of others.

Carlo Santarelli: Revenue outside of the ITC now in sports betting business could.

Eric Hession: And my guess is that will create a little bit of a headwind in the 2Q this year for, you know, unreported net revenue and perhaps EBITDA, but I just want to kind of better understand what that was and the magnitude of it. Yeah, that's absolutely right, Carlo. You saw it this quarter. It was around a $6 million headwind on the EBITDA side for us. That category is generally skin revenues as well as revenues that we receive from World Series of Poker that can consist of royalty rights, hosting fees, etc. And so, as you'd expect, the second quarter and the third quarter when the main event in Las Quartas, that were the peak periods for the World Series of Poker revenues, and those are going to zero.

Carlo Santarelli: Could you kind of talk about what that was and my guess is that will create a little bit of a headwind in the <unk>. This year for segment reported net revenue and perhaps EBITDA, but.

Carlo Santarelli: The only kind of better understand what that was in the magnitude of it.

Carlo Santarelli: Yes, that's absolutely right Carlo you saw this quarter it was around a $6 million headwind on the EBIT side for us.

Carlo Santarelli: Those that category is generally skin revenues as well as revenues that we receive from world series of poker that can consist of.

Carlo Santarelli: Royalty rights hosting fees et cetera, and so.

Carlo Santarelli: So as you would expect.

Carlo Santarelli: The second quarter in the third quarter when the main event in Las Vegas spans the quarters that are where the peak periods for the World series of poker revenues and those are going to zero and then the skin revenues as you would imagine with the number of the smaller operators and other providers exiting markets.

Eric Hession: And then the skin revenues, as you'd imagine with the number of the smaller operators and other providers exiting markets, the skins have deteriorated in terms of what we can command for the royalties there. And so you should expect to see fairly large declines in that segment in Q2 and Q3.

Carlo Santarelli: <unk> has deteriorated in terms of what we can command for the royalties there and so you should expect to see a fair.

Carlo Santarelli: Fairly large declines in that segment in Q2, and Q3, and then Q4 it'll be kind of back to normal.

Carlo Santarelli: And then Q4, it'll be kind of back Great.

Carlo Santarelli: Thank you, Eric.

Eric Hession: Great. Thank you Eric.

Brandt Montour: Our next question comes from Brandt Montour with Barclays. Good evening, everybody. Thanks for taking my question. I don't know if this could be quantified, Tom, but you called out, you know, whether last year, whether this year in regionals, and then you have the one day impact from leap year. Are you able to sort of give us a net impact number this year over last year, just so we can kind of get a sense of how, you know, how much better regionals would have been aside from those headwinds and tailwinds? I would say it would have been in excess of 10 million when you add all of those up.

Speaker Change: Our next question comes from Brian <unk> with Barclays.

Brian Agnew: Good evening everybody. Thanks for taking my question I don't know if this can be quantified it Tom but you called out.

Speaker Change: Weather last year weather this year and regionals and then you have the one day impact from leap year.

Speaker Change: Are you able to sort of give us a net.

Speaker Change: Impact number this year over last year, just so we can kind of get a sense of how how much better regionals would've been aside from those.

Speaker Change: Headwinds in tailwind.

Speaker Change: I would say it would have been in excess of $10 million. When you add all those up leap year in Vegas was another six.

Tom Reeg: Leap Year in Vegas was another six. Yeah, I'd just say the team does an outstanding job looking at every vertical, every piece of the business, whether it's in our labor efficiencies, whether it's in our food and beverage outlets, whether it's on price or product negotiations with our vendors. The team does an outstanding job in this market and across the country in driving efficiencies wherever we can while maintaining exceptional guest experience. and keep in mind, Brent, we were a We were heavy rotation in terms of F&B additions really over the last four to six quarters. And as you get to where your anniversary knows you open up, typically, at higher staffing, lower margins than you are a year later.

Speaker Change: Okay. That's really helpful and then over in Las Vegas.

Speaker Change: Impressive margin performance year over year.

Speaker Change: I was hoping you kind of touched on this in the prepared remarks, if you could just unpack where you're finding those cost savings.

Speaker Change: Theres anything one time in there and how should we think about those things as we roll through the rest of the year, if theyre going to be additional sort of tailwind on the cost side.

Speaker Change: Yes, I'd just say the team does an outstanding job looking at every vertical every piece of the business.

Speaker Change: Whether it's in our labor efficiencies, whether it's in our food and beverage outlets, whether it's on price or product negotiations with our vendors. The team does an outstanding job in this market and across the country.

Speaker Change: And driving efficiencies wherever we can while maintaining exceptional guest experience.

Brent: And keep in mind, Brent we were a.

Brent: We were heavy rotation in terms of F&B additions really over the last.

Brent: Four to six quarters and as you get towards year Anniversarying. Those you open up typically.

Brent: Higher staffing lower margins than you are a year later and.

Brandt Montour: And some of it's that. Okay, great. Thanks. Helpful, guys.

Brent: Some of it's that as well.

Brent: Okay, great. Thanks helpful guys.

Brent: Okay.

Steven Wieczynski: Our next question comes from Steven Wieczynski with Stief. Hey guys, good afternoon. So Tom, you might get angry if I ask this question, but I'm gonna, you know, you talked about how you haven't seen any changes in in customer behaviors, but I'm gonna, you know, try to ask a question anyway, and then you can tell me no. But you know, if we think about your database, I would assume your higher end players are holding up pretty well. But if we think about that lower end customer, non rated play customer, you know, have you seen any changes in their behaviors, or, you know, a slowing of your database customers on the lower tiers?

Brent: Our next question comes from Stephen <unk> with Stifel.

Speaker Change: Yeah, Hey, guys good afternoon.

Speaker Change: So Tom you might get angry if I ask this question, but im going to.

Speaker Change: You talked about how you havent seen any changes in.

Speaker Change: In customer behaviors, but I'm going to.

Speaker Change: Try to ask a question anyway, and then you can tell me no.

Speaker Change: But if we think about your database I would assume.

Speaker Change: Your higher end players are holding up pretty well, but if we think about that lower end customer non rated play customer.

Speaker Change: Have you seen any changes in their behaviors.

Speaker Change: Slowing of your database customers on the lower tiers.

Tom Reeg: Any changes in non gaming spend in regional markets, just trying to cover, you know, all about all those bases to make make sure we know we aren't Yeah, no, I understand where you're coming from. There's There's nowhere I can parse it where it's a different story I would tell you as we've talked about before. Since the stimulus checks rolled through the system, unrated play has been softer than rated play. But you know, if you look at, you know, in April, rated play across the enterprise for us is up mid single digits. you know, unrated plays a little softer, so it It's a pretty good story.

Speaker Change: Any changes in non gaming spend in repo markets just trying to cover.

Speaker Change: All of US all of those pieces to make it make sure we arent missing anytime.

Speaker Change: Yes, no I understand where youre coming from.

Speaker Change: There is nowhere I can parse that where it's a different.

Speaker Change: Story I would tell you as we've talked about before.

Speaker Change: Since the stimulus checks rolled through the system on.

Speaker Change: Unrated play has been.

Speaker Change: Softer than rated play.

Speaker Change: But if you look at it.

Speaker Change: April rated play across the enterprise for US is up mid single digits.

Speaker Change: Unrated play is a little softer so it's.

Tom Reeg: You know, I think that We all live in a world where, you know, what's happening in the stock market and on CNBC. is the kind of the echo chamber we live in. I think that The bulk of our customers, the bulk of US consumers are not Stockholm. You know, what they see right now is gas prices are lower. You know, people, people on CNBC are frightened, rich people are losing money. That is not a terrible combination for them. Now, if we get to later in the year and you get to you're seeing real impact. macroeconomically, obviously, we would not be immune to that.

Speaker Change: It's a pretty good story I think that.

Speaker Change: We all live in a world where.

Speaker Change: What's happening in the stock market and on CNBC.

Speaker Change: Is the kind of the Echo chamber, we live in I think that the.

Speaker Change: Bulk of our customers the bulk of U S consumers are not stock owners, what they see right now is <unk>.

Speaker Change: Gas prices are lower.

Speaker Change: People.

Speaker Change: People on CNBC or frighten rich people are losing money.

Speaker Change: That is not a terrible combination for them now if we get to later in the year and you get two youre seeing real impact Macroeconomically, obviously, we would not be.

Tom Reeg: But our customers feel good. You know, I was talking to Anthony, before we started, I feel better about the way the business is going right now, than I did at any point in 24. And I felt pretty good in 24. Now I'm not foolish. I know that that can change given what's happening. on a macro basis, but we are not directly impacted by terrorists at large, hardly at all. Obviously, we have managed Cox through a pretty brutal inflation environment over the past 3.5 years. So we feel very good. And we're watching, you know, the broader macro shifts the same way that you are, we just can't see it in our business.

Speaker Change: Immune to that but.

Speaker Change: Our customers.

Speaker Change: Feel good and I was talking to Anthony.

Speaker Change: Before we started I feel.

Speaker Change: Better about the way the business is going.

Speaker Change: Right now than I did at any point in 'twenty, four and I felt pretty good in 2000 and for now.

Speaker Change: I'm not foolish I know that that can change given what's happening.

Speaker Change: On a macro basis, but we are not directly impacted by.

Speaker Change: Tariffs.

Speaker Change: Hardly at all.

Speaker Change: Obviously, we have managed.

Speaker Change: Cogs through a pretty brutal inflation environment over the past three and a half years. So we feel very good.

Speaker Change: And we're watching.

Speaker Change: The broader macro shifts the same way that you are and we just can't see it in our business yet.

Steven Wieczynski: And all those, Tom, all those comments are through. real time through April meaning regional. Yeah, I have numbers through today's Tuesday. I've got numbers through Sunday. Okay, fair enough.

Speaker Change: And all those all the time.

Tom Reeg: Tom All those comments are through.

Tom Reeg: Like real time through April meaning regional numbers through today's Tuesday, I've got numbers through Sunday.

Tom Reeg: And then one more question, if I could, Tom, you know, I think, if I remember correctly, you guys still own about 60% of your real estate in Vegas, and I think it's like 50% in your regional markets. So, you know, I guess my question is, if there was some kind of change, you know, in the macro environment that really starts to impact you, you know, is that something that you guys could, you know, leverage in order to keep your balance sheet, you know, in a pretty leveraged neutral position versus having that, you know, debt ratio move, or leverage ratio move higher?

Tom Reeg: Okay Fair enough and then one more question if I could Tom.

I think if I remember correctly, you guys still own about <unk>.

Speaker Change: 60% of your real estate in Vegas, and I think it was like 50% in your regional markets.

Speaker Change: So I guess my question is if there was some kind of change in the macro environment that really starts to impact you.

Speaker Change: That something that you guys goods.

Speaker Change: Leverage in order to keep your balance sheet.

Speaker Change: And a pretty leverage neutral position versus having that.

Speaker Change: That ratio moves.

Tom Reeg: Hopefully, that makes Sort of, it makes sense. So We have a piece of our business that at consensus is growing. 200 and something million dollars year over year in EBITDA, which We're certainly comfortable with, you know, I don't anticipate that business will be impacted much at all. So you're talking about really brick and mortar business. And, you know, you and I have been through enough of these. you know, call it normal business cycle recessions versus you know, a GFC. And what you get is you get some softness in destination markets, and you get some substitution into local markets and with digital growing next to that.

Speaker Change: Our leverage ratio move higher.

Speaker Change: That makes sense.

Speaker Change: Sort of if it makes sense.

Speaker Change: No.

Speaker Change: We have a piece of our business that at consensus is growing.

Speaker Change: 200, something million dollars year over year, and EBITDA, which.

Speaker Change: We're certainly comfortable with.

Speaker Change: I don't anticipate that business will be impacted much.

Speaker Change: At all so you are talking about really.

Speaker Change: Brick and mortar business and.

Speaker Change: You and I have been through enough of these.

Speaker Change: Call it normal business cycle recessions versus.

Speaker Change: A GSC and what you get is you get some softness in destination markets and you get some substitution into local markets and with <unk>.

Digital growing next to that and.

David Katz: And, you know, our free cash flow position dramatically improved in terms of where capital spending was. I feel very, very good about. balance sheet now going forward, you know, into an economic, a period of economic softness, I really like how we're positioned. Okay, perfect. Thanks, Tom. Appreciate it.

Speaker Change: Our free cash flow position.

Speaker Change: Dramatically improved in terms of where capital spending was <unk>.

Speaker Change: I feel very very good about balance.

Speaker Change: Balance sheet now going forward.

Speaker Change: Into an economic a period of economic softness I really like how we're positioned.

Carlo Santarelli: Okay perfect. Thanks, Tom I appreciate it.

David Katz: Our next question comes from David Katz with Jeff. Hi, evening. Thanks for taking my questions. So I wanted to just talk about the digital side and the, you know, split between iGaming and sports betting and how you're thinking about those two progressing forward as we get toward, you know, this, this end of the year. Sports betting has been, I guess, a bit more of a challenge, whereas iGaming has maybe been a bit more natural. Help me characterize that. Well, I'd say we do more EBITDA in sports betting than we do in iGaming as we sit here today.

Speaker Change: Our next question comes from David Katz with Jefferies.

David Katz: Hi, good evening, Thanks for taking my.

Speaker Change: Hi, my questions. So.

Speaker Change: I wanted to just talk about the digital side and the split between.

Speaker Change: Gaming and sports betting and how youre thinking about those two progressing forward as we get toward.

Speaker Change: This end of the year.

Speaker Change:

Speaker Change: Hi.

Speaker Change: Sports betting has been I guess a bit more of a challenge, whereas I gaming has maybe been a bit more natural help.

Speaker Change: Help me characterize that.

Speaker Change: Well I'd say, we do more EBITDA in sports betting than we do in high gaming as we sit here today, we do.

Tom Reeg: We do on a per state basis, iGaming looks great. There's not a lot of jurisdictions right now. So I kind of sports betting is going to generate you know, hundreds of millions of EBITDA for us. in the next 18 months. If you're looking through end of 26, as will iGaming. You know, if you want to talk about my my own views, I think that the, you know, what we're seeing in terms of State moves on tax rates in sports betting. is kind of symptomatic of states are now on their own. They had to spend, they had to commit spending the American Rescue Plan funds from the federal government by the end of last year.

Speaker Change: On a per state basis gaming looks great. There is not a lot of jurisdictions right now so I kind of sports.

Speaker Change: Sports betting is going to generate.

Speaker Change: Hundreds of millions of EBITDA for us.

Speaker Change: And the next.

Speaker Change: 18 months, if youre looking through end of 2006 as well.

Speaker Change: Gaming.

Speaker Change: If you want to talk about my.

Speaker Change: My own view is I think that the.

Speaker Change: <unk>.

Speaker Change: What we're seeing in terms of.

Speaker Change: State moves on tax rates and sports betting.

Speaker Change: It is kind of symptomatic of states are now on their own they have to spend.

Speaker Change: To commit spending the American rescue plan funds from the federal government by the end of last year. So for all intents and purposes that money has gone and they're on their own.

Tom Reeg: So for all intents and purposes, that money is gone and they're on their own. So I'm not surprised at all that they start to look to gaming. So I think that's going to put us in a cycle. I-Gaming legislation in 26 and 27 is going to start to look more appealing to some jurisdictions that are looking to plug holes. You know, I think that in terms of the business, the volatility that you have seen in sports outcomes, the last two quarters, shouldn't be surprising. You know, we, we compare, we talk about hold percentages with the precision that we do in the brick and mortar business.

Speaker Change: So I don't I'm not surprised at all that they start to look to.

Speaker Change: Gaming, So I think that's going to put us in a cycle of.

Speaker Change: I gaming legislation.

Speaker Change: 26, and 27 is going to start to look more appealing to some jurisdictions that are looking to plug holes.

Speaker Change: I think that in terms of the business the volatility that you have seen in sports outcomes. The last two quarters.

Speaker Change: Shouldn't be surprising.

Speaker Change: We compare we talk about hold percentages.

Speaker Change: With the precision that we do in the brick and mortar business.

Eric Hession: But the reality is, in sports, there's 270 something NFL games, there's less than 100 games in the NCAA tournament. Small sample sizes, you're dealing with correlated outcomes as you get into parlay betting. So the volatility of hold in sports betting is going to remain. Now, we've seen two quarters in a row where that worked against us as a sector. You're going to have quarters where that works. for us, but I think over time, the steadiness of the hold and the Growth in the iCasino piece is going to become increasingly appealing to investors, and that foots very well with where our strengths lie in terms of, you know, I don't want to, what I said in the beginning, you know, we're doing very well in sports betting, it'll generate hundreds of millions of EBITDA, but iGaming is an even better area for us given our database, so I agree with that premise.

Speaker Change: But the reality is in sports there's 270 something.

Speaker Change: NFL games, there is less than 100 games and the NCAA tournament youre dealing with <unk>.

Speaker Change: Small sample sizes youre dealing with correlated outcomes.

Speaker Change: As you get into parlay batting so the volatility of hold and sports betting is going to remain now we've seen two quarters in a row, where that worked against us as a sector youre going to have quarters, where that works for us, but I think over time the <unk>.

Speaker Change: Even as the hold and the.

Speaker Change: Growth in the high casino piece is going to become increasingly appealing to investors and that fits very well with where our strengths lie in terms of.

Speaker Change: I don't want to what I said at the beginning.

Speaker Change: We're doing very well in sports betting youll generate hundreds of millions.

Speaker Change: <unk> EBITA.

Speaker Change: But gaming is an even better area for us given our database so I agree with that premise.

Eric Hession: And I think we're heading to a period of time with state budgets and with you know where investors are going to go where that's going to be a popular place.

Speaker Change: And I think we're heading to a peer.

Speaker Change: <unk> of time with state budgets and with.

Speaker Change: Where investors are going to go where thats going to be a popular place to be.

Unknown Executive: Unknown Speaker I just want to confirm, you know, one other dynamic because I know we've talked about Las Vegas a little bit. Just confirming that, you know, as we progressed into the second quarter, specifically April so far, that Las Vegas, you know, trends are moving in a positive direction. Yeah, April looks like the first quarter. across the board every Perfect. Thank you.

Speaker Change: Understood I appreciate that and if I may follow up quickly I just wanted to confirm one other dynamic because I know, we've talked about Las Vegas, a little bit.

Speaker Change: Just confirming that as we progressed into the second quarter, specifically April so far that Las Vegas trends are moving in a positive direction.

Speaker Change: Yes.

Speaker Change: April looks like the.

Speaker Change: The first quarter.

Speaker Change: Across the board every segment.

Speaker Change: Thank you.

Unknown Executive: Our next question comes from Barry Jonas with Truant. Hey, guys. Tom, any updated thoughts you can share on spinning digital? Sounds like operating trends are extremely strong, but not sure how market conditions are factoring in right now. Thanks. Yeah, as I said on the last call, our job is to deliver the numbers that we have laid that we laid out starting in 21. We're well on that path. The goals are, you know, in our windshield now as we approach them. And, you know, we'll see where we're at when we get there in terms of are we getting value for what we've created?

Speaker Change: Our next question comes from Barry Jonas with Truest.

Speaker Change: Hey, guys.

Speaker Change: Tom any updated thoughts you can share on spinning digital sounds like operating trends are extremely strong, but not sure how market conditions are factoring in right now.

Speaker Change: Yes, as I said on the last call our job is to.

Speaker Change: Deliver the numbers that we have laid that we laid out starting in 'twenty one.

Speaker Change: Well on that path the goals are.

Speaker Change: Our windshield now as we approach them.

Speaker Change: And we'll see where we're at when we get there in terms of are we getting value for what we've created.

Barry Jonas: And, you know, if the answer is, you know, we've hit our goals and we're moving through them. And we're just not seeing it in the equity. Again, I'll tell you, we will look at any and all options to create value for shareholders. But we are mindful that the first thing we need to do is continue to deliver the numbers on the path that we have. Got it.

Speaker Change: And if the answer is we've hit our goals and we're moving through them and we're just not seeing it in the equity again I will tell you we will look at any and all options to create value for our shareholders, but we are mindful that the first thing we need to.

Speaker Change: To do is continue to deliver the numbers on the path that we have.

Barry Jonas: And then just to follow up, you know, I'm curious to get your thoughts on like, Kaoshi, Polly Markets of the World and how maybe that contract prediction business is impacting your sports betting business? And is it something that you would consider adding as a product? Thanks. So we don't, there's Zero impact so far in that business for us. Um, you are you hit your opinion is as good as mine in terms of what's going to happen.

Speaker Change: Got it and then just a follow up I'm curious to get your thoughts on like.

Kashi poly markets of the world and how may be contra.

Speaker Change: Contract predictions.

Speaker Change: Business is impacting your sports betting business and is it something that you would consider adding as a product.

Speaker Change: So we don't.

Speaker Change: As.

Speaker Change: Zero impact so far in that business for us.

Speaker Change: You are.

Speaker Change: You had your opinion is as good as mine in terms of what's going to happen. If there are ways to drive more EBITDA through our business that open up through legislation and regulation you should assume that we're going to.

Barry Jonas: If there are ways to drive more EBITDA through our business that open up through legislation or regulation, you should assume that we're going to look to how we can take advantage of those opportunities to the greatest extent possible for our share. Got it.

Speaker Change: Look to how we can take advantage of those opportunities to the greatest extent possible for our shareholders.

Unknown Executive: Thank you, Sean.

Speaker Change: Yeah.

Tom Reeg: Got it thank you Tom.

Shaun Kelley: Our next question comes from Shaun Kelley with Bank of America. Hi, good afternoon, everyone. Thanks for taking my question. A couple for Eric, if I could. So, Eric, you know, I think the big debate in, you know, the online sphere is really about handle growth, you know, especially on the OSB side. And just would love to start with your observations there in terms of kind of what you see of overall levels. Obviously, I think idiosyncratically, you're, you know, reprioritizing maybe that business a little bit your own handle growth down, but I'm more interested at the macro level.

Speaker Change: Our next question comes from Shaun Kelly with Bank of America.

Shaun Kelly: Hi, good afternoon, everyone. Thanks for taking my question.

Shaun Kelly: A couple for Eric if I could so Eric I think the big debate in.

Shaun Kelly: The online sphere is really about handle growth, especially on the OSB side, and just would love to start with your observations there in terms of kind of what you see of overall levels. Obviously I think idiosyncratic Lee your re prioritizing maybe that business a little bit your own handle growth down, but I'm more interested at the macro level do you think youre seeing a broader.

Eric Hession: Do you think you're seeing a broader slowdown and kind of core trend is as you look or evaluate the business, or how are you kind of framing, you know, the organic growth in the on the OSB side? That'd be that'd be helpful. Yeah, sure, Sean. You know, as we've mentioned the kind of prior couple quarters, we've reduced our reinvestment levels at the extremely low end customer where we were unprofitable. And then we've reduced also at the extremely high end of the database. And that's where you're seeing the general declines in volume in aggregate across our business.

Shaun Kelly: Slowdown in kind of core trend is as you look and reevaluate the business or how are you kind of framing.

Shaun Kelly: The organic growth in the <unk>.

Shaun Kelly: The OSB side that'd be that'd be helpful.

Shaun Kelly: Yes sure Sean.

Shaun Kelly: As we've mentioned the kind of prior couple of quarters, we've reduced our reinvestment levels at the extremely low end customer, where we were unprofitable and then we've reduced.

Shaun Kelly: Also extremely high end of the database and Thats, where youre seeing the general declines in volume in aggregate across our business. If you look at the other segments of the business that you are kind of in the middle where you've got somewhat more recreational players some fairly large players, but not high astral.

Eric Hession: If you look at the other segments of the business, which are kind of in the middle, where you've got, you know, somewhat more recreational players, some fairly large players, but not astronomically high wagers, that business is solid. It's growing. It's in our case, it's growing, you know, high single digits, low double digits, depending on which segments in which states you're looking at. So I would I would characterize it as very solid at this point. You know, we're, there's just a lot of noise out there, which I think is what a lot of people are seeing, you know, for example, North Carolina launch, where lapping that you've got some other events happening, you'll have the Olympics annualization this summer.

Speaker Change: <unk>, Hi, wagers that business is solid it's growing.

Speaker Change: In our case, it's growing high single digits, low double digits, depending on which segments and which states youre looking at.

Speaker Change: I would I would characterize it as very solid at this point.

Speaker Change: Theres just a lot of noise out there, which I think is what a lot of people are seeing for example, North Carolina launch, we're lapping that you've got some other events happening Youll have the Olympics annualize Asian.

Tom Reeg: So there are some some different things that are going on. But broadly speaking, I think it's it's still solid. Maybe it's not at the 30% level that we were seeing, as you had just continually new states opening. But from our perspective, it's a it's still a solid growth business. And at the same time, you'll see our hold slowly creep up as we get the mix higher. And so you do get a compounding effect with, you know, higher volume growth and higher hold. Yeah, Shaun, I would I just say.

Speaker Change: This summer. So there are some some different things that are going on but broadly speaking I think it's still solid maybe it's not at the 30% level that we are seeing as you had just continually new states opening but from our perspective.

Speaker Change: Still a solid growth business and at the same time Youll see our hold slowly creep up as we get the parlay mix higher and so you do get a compounding effect with higher volume growth and higher <unk> growth.

Sean: Yes, Sean I would just say.

Tom Reeg: This should be what you're expecting when there are not new states. you should expect. and I'm talking industry wide so handle growth should decline when there are not new states. I think investors should want. Operators to become more to become better and more efficient at marketing to the right customers. And that's ultimately going to lead to the profitability numbers that I see out there in reports, I don't see a scenario where you can hit those numbers. with. handle growth where it was in promo where it was that has to rationalize and you're seeing that happen.

Speaker Change: This should be what's your expected when there are not new states.

Sean: You should expect.

Speaker Change: I'm talking industry wide so.

Sean: Handle growth.

Sean: Should decline when there were or when there are not new states.

Sean: I think investors should want.

Sean: Operators to become.

More to become better and more efficient at marketing to the right customers and that's ultimately going to lead to.

Sean: The profitability numbers that I see out there in <unk>.

Sean: Reports I don't see a.

Sean: Scenario, where you can hit those numbers.

Sean: With.

Sean: Handle growth, where it was in promo where it was that has too.

Sean: Rationalize and Youre seeing that happen and part of the effect of that is unprofitable customers are not going to be placing bets and youre going to see handle growth not quite as spectacular as when there were a bunch of new states I don't see.

Shaun Kelley: And part of the effect of that is unprofitable customers are not going to be placing bets. And you're going to see handle growth not quite as spectacular as when there were a bunch of new states. I don't see anything happening that should be unexpected. Regardless of, I understand that different investors. invest for different reasons and like super high growth rates in terms of driving profitability of this business as an industry, this should be what you expect to have. Thank you very much.

Sean: Anything happening that should be unexpected regardless of I understand that.

Sean: Different investors.

Sean: Invest for different reasons.

Sean: Like Super high growth rates in terms of <unk>.

Sean: Driving profitability of this business as an industry. This should be what you expect to happen.

Sean: Thank you very much.

John Decree: Our next question comes from John DeCree with CBRE.

Sean: Okay.

Sean: Our next question comes from John Decree with CBRE.

John Decree: Hi everyone. One question on digital to start. So I think that in your remarks you mentioned that April iCasino was up maybe 70% on top of 50% last year. I just wanted to confirm if that was GGR and then if you could speak to that a little bit. What do you think is driving the acceleration in April specifically and you know if you expect that trajectory to continue for 2Q if there was something kind of one time against the comps?

John Decree: Hi, everyone.

John Decree: One question on digital to start so I think that in prepared remarks, you'd mentioned that April.

John Decree: Casino was up maybe 70% on top of 50%.

John Decree: Last year I just wanted to confirm if that was <unk> and then if you could speak to that a little bit what it is.

John Decree: Driving the acceleration in April specifically, and if you expect that.

John Decree: That trajectory to continue for <unk>, if there was something kind of one time against the comp.

Eric Hession: That's NGR, John. I really don't care what GGR is. And in terms of what's driving it, it's the same Eric can talk about what we're doing in iGaming that's moving. Yeah, it's, you know, similar to prior quarters, where we continue to enhance the app. We're very excited about launching our first in-house designed game. What we found is that the branded and exclusive content really drives, you know, action from our customers, in addition to having a better cost profile. And so as we roll out these internally designed games, we'll expect to see that. The, as I mentioned, the Caesars Palace app continues to be our fastest grower and our largest app.

John Decree: That's MGR, John I really don't care with <unk>.

John Decree: And in terms of what's driving it. It's the same Eric can talk about what we're doing and I gaming that's moving it.

John Decree: Yes.

John Decree: Similar to prior quarters, where we continue to enhance the App. We're very excited about launching our first in house designed game.

John Decree: What we've found is that the branded and exclusive content really drives.

John Decree: Action from our customers in addition to having a better cost profile and so as we rollout. These internally designed games, we will expect to see that.

John Decree: As I mentioned, the Caesars Palace App continues to be our fastest grower in our large staff.

Eric Hession: The Horseshoe app is accelerating now, which is nice to see. And so it's just basic blocking and tackling. We are improving our CRM capabilities. We've mentioned this for the last few quarters with respect to having OptiMove in there, that as we continue to push more campaigns through OptiMove allows us to do better and better segmentation. And then have less leakage in terms of reinvestment into segments where we're not getting a return. And so when Tom mentions the NGR growth, and you can see it in our numbers from this quarter, our GGR growth wasn't as high as our NGR growth, because we're actually reducing our promo expense as we're growing at those high levels.

John Decree: The Horseshoe App is accelerating now which is nice to see and so it's just basic blocking and tackling we are improving our CRM capabilities. We've mentioned this for the last few quarters with respect to having optimum in there.

John Decree: That as we continue to push more campaigns through Optum move allows us to do better and better segmentation and then have less leakage in terms of reinvestment into segments, where we're not getting a return and so when Tom mentioned the MGR growth.

John Decree: And you can see it in our numbers from this quarter, our GTR growth wasn't as high as our NGL growth because we're actually reducing our promo expense as we're growing at those high levels. So it's a virtuous circle.

John Decree: So it's a virtuous circle that we're currently in. And, you know, there's no reason to believe that the 50% growth trend for the year doesn't Thanks, Eric.

John Decree: We're currently in and Theres No reason to believe that 50% growth trend for the year doesn't continue.

John Decree: I appreciate that.

Tom Reeg: And Todd, maybe one on Las Vegas. You've given us a lot of color about what you're seeing, but maybe specifically customer segment, international travel. There's been some numbers and a lot of talk about decreasing international demand to the U.S. broadly, whether it's political or a stronger dollar. So could you help us understand how much exposure you have, I guess, in Las Vegas or destination marks, if it's relevant in some of your regional destinations? But how much exposure to international customers, either room nights or whatever you can provide that you have, and if you've seen anything, any slowdown at all in that business for you?

John Decree: Thanks, Eric appreciate that.

John Decree: Maybe one on Las Vegas, you've given us a lot of color about what youre seeing but maybe.

John Decree: Specifically customer segment International travel there has been some numbers and a lot of talk about <unk>.

Speaker Change: Decrease in international demand to the U S broadly, whether it's political or a stronger dollar. So could you help us understand how much exposure you have I guess in Las Vegas or destination marketing, if it's relevant in some of your retail destinations, but how much exposure to international customers.

Speaker Change: Room nights or EBITDA, whatever you can provide that you have and if you've seen any anything any slowdown at all in that business for you.

Tom Reeg: So we're primarily a domestic business. We have some international high end play that has continued no change in that cohort for us. Yeah, Canada for us is something like three or 4% of Las Vegas, we have certainly seen reduction in Canadian visitation. But you have been able to, again, we're at 97 98% occupancy business So you at that level, you were turning away others we've been able to replace that business, but that's the only one that I'd call out that's been visible to us. You know, we see the rhetoric elsewhere, but it's Canadians that have been visible.

Speaker Change: So we're primarily a domestic business.

Speaker Change: Some <unk>.

Speaker Change: International High end play that is.

Speaker Change: Continued no change in that.

Speaker Change: Cohort for us.

Speaker Change: Canada for Us is <unk>.

Speaker Change: Something like three or 4% of Las Vegas, we have certainly seen rich.

Speaker Change: The reduction in Canadian visitation, but.

We have been able to.

Speaker Change: Again, we're at 90, 798% occupancy business so.

Speaker Change: At that level, you were turning away others, we've been able to.

Speaker Change: Replace that business, but that's the only one that I'd call out that's been visible to us.

Speaker Change: We see the rhetoric elsewhere, but it's Canadians that have been visible.

Tom Reeg: Understood. Appreciate that.

Tom Reeg: Thanks, Tom.

Speaker Change: I understand I appreciate that thanks, guys.

Chad Beynon: Our next question comes from Chad Beynon with Macquarie. Afternoon, thanks for taking my question. I wanted to ask about regional margins. A little bit of noise, positive noise with Danville and New Orleans benefiting revenues in EBITDA in Q1, year-over-year margins were about flat. So that would kind of imply that the same store margin on the rest of the portfolio was down. Wondering if you could help us with that bridge. And then as we look forward, Tom, I know you gave rough Outlook for regionals, but could we actually see margins ramp up as Danville and New Orleans continue to ramp here?

Speaker Change: Our next question comes from Chad Beynon with Macquarie.

Afternoon, Thanks for taking my question.

Speaker Change: Wanted to ask about regional margins.

Speaker Change: Little bit of noise positive noise with with Danville, Danville, and New Orleans, benefiting revenues and EBITDA in.

Speaker Change: In Q1 year over year margins were about flat, so that would kind of imply that.

Speaker Change: The same store margin on the rest of the portfolio was down I'm wondering if you could help us with that bridge and then more importantly, as we look forward Tom I know you gave rough.

Speaker Change: Outlook for regionals, but could we actually see margins ramp up as Danville, and New Orleans continue to ramp here. Thank you.

Tom Reeg: Yeah, so what you're describing as you parse margins is what I've talked about. for a couple of quarters now that the The addition of Danville and New Orleans is offsetting competitive pressures in a number of our properties that would see it both from a revenue and margin perspective. And the net result is we're growing the segment. Virginia margins have held up. significantly better than we were anticipating when we moved from the temporary to the permanent. But as you anniversary more of the competitive impact. in the regional asset. I would expect both overall EBITDA improves and margins improve and the You know, if you think about by the end of this year, will be faced with one more Penn, Illinois, move, I can't recall if it Aurora or Joliet that happens in early 26.

Yes. So what you are describing as you parse margins is what I've talked about.

Speaker Change: For a couple of quarters now that the.

Speaker Change: The addition of Danville, and New Orleans is offsetting competitive pressures in a number of our properties that.

Speaker Change: We'd see it both from a revenue and margin perspective, and the net result is we're growing the segment, Virginia margins have held up significantly better than we were anticipating when we moved from the temporary to permanent.

Speaker Change: But as you.

Speaker Change: Anniversary more of the competitive impacts.

Speaker Change: In the regional assets I would expect both overall EBITDA improves.

Speaker Change: And margins improve and the.

Speaker Change: If you think about by the end of this year.

Speaker Change: We'll be faced with one more.

Speaker Change: <unk>, Illinois move I can't recall, if its Aurora, our Joliet that happens in early 2006.

Tom Reeg: But all of the competition we've been talking about will be in our rearview mirror, and most of it will have been anniversary. So we think regional continues to get better from here.

Speaker Change: But all of the competition, we've been talking about will be in our rearview mirror and most of it will have been anniversaried. So.

Speaker Change: We think regional continues to get better from here.

Speaker Change: Okay. Thank you.

Bret Yunker: Um, and then with the buyback, how should we think about how opportunistic or how active you are? in the market. You talked about the WSOP node and just, you know, the cash that's available. We can see your CapEx guide, make an assumption for cage cash, but how much more flexibility do you have this year on the buyback? I would say if in if the stock dislocates as it did in early April, you should expect us to remain active throughout Thank you very much.

Speaker Change: And then with the buyback how should we think about how opportunistic or how active you are.

Speaker Change: And the market you talked about the <unk> node and just the cash that's available we can see your Capex guide.

Speaker Change: Making assumption for cage cash, but how much more flexibility do you have this year.

Speaker Change: On the buyback.

Speaker Change: I would say.

Speaker Change: And if the stock Dislocates as it did.

Speaker Change: In early April you should expect us to remain active throughout 'twenty five.

Speaker Change: Great. Thank you very much.

Jordan Bender: Our next question comes from Jordan Bender with Citizens Jam.

Speaker Change: Our next question comes from Jordan Bender with citizens JMP.

Jordan Bender: Good afternoon, everyone. Tom, I appreciate the color on the outlook and the levers. If we do see consumer weakness in the prepared remarks, but if we can isolate Las Vegas, and I don't want to hold you to a number, but how should we think about negative operating leverage and the cost levers you have to pull there in the event that we do go into some sort of downturn? Yeah, we've got the these the lever in terms of filling our rooms that I've discussed. You know, we've. We've operated now through COVID this portfolio. And so we know that in a particularly dire economic condition.

Speaker Change: Good afternoon, everyone. Tom I appreciate the color on the outlook and the levers if we do see consumer weakness in the prepared remarks, but if we can isolate Las Vegas.

Speaker Change: I want to hold you to a number but how should we think about negative operating leverage in the cost levers you have to pull there in the event that we do go into some sort of downturn.

Speaker Change: Yes, we've got that.

Speaker Change: These <unk>.

Speaker Change: The lever in terms of filling our rooms that I've discussed.

Speaker Change: We've.

Speaker Change: We've operated now through Covid this portfolio.

Speaker Change: And so we know that in a <unk>.

Tom Reeg: There are there's you can be. aggressive with hours of operation, days open of non-gaming pieces that help you to manage that. But you know, keep in mind in Vegas, these are giant buildings. So they operate their best and at their best margins. when they're full or close to full. And so that's the key piece for us. How do we manage that if and if and when? Demand softens, which again, we have not.

Speaker Change: Particularly dire economic condition. There are there is you can be.

Speaker Change: Aggressive with hours of operation days open of non gaming pieces that help you.

Speaker Change: To manage that but keep in mind in Vegas. These are giant buildings. So they operate their best and at their best margins.

Speaker Change: When they are full or close to full and so thats. The key piece for us how do we manage that if and if and when.

Speaker Change: Demand softens, which again, we have not seen today.

Eric Hession: Okay, and Eric, on my follow up, if my math is correct, structural hold in the last several quarters has been in the low eights. So taking that, can you kind of bridge us from a timing standpoint of when we can get from, you know, low 8% hold to your 10% long term target? Thank you. Yeah, it's tough to say with a huge amount of precision because it really https://www.youtube.com.uk And so there are a number of those things on our list. I would estimate that we would get to that 10% hold probably at the back part of next year.

Speaker Change: Okay.

Speaker Change: And Eric on my follow up if my math is correct structural hold in the last several quarters has been in the low eights.

Speaker Change: Taking that can you kind of bridge us from a timing standpoint of when we can get from.

Speaker Change: So low a percent or two year, 10% long term target. Thank you.

Speaker Change: Yes.

Speaker Change: It's tough to say.

Speaker Change: <unk>.

Speaker Change: A huge amount of precision because it really.

Speaker Change: Requires us to make some changes on the tech and the trading side.

Speaker Change: And the reason I say that is for example, right now we can't do player cash outs on our App.

Speaker Change: We have the ability to price it we launched it but we have a bottleneck with one aspect of our tech stack and so we're really moving that bottleneck and.

Speaker Change: Later.

Speaker Change: In a few months will not will be able to re enable the.

Speaker Change: STP cash outs clear, perhaps cash outs, alright, and so that will as a result improve our hold because it will allow us to offer more cash outs at a higher margin.

Speaker Change: And so there are a number of those things on our list I would estimate that we would get to that 10% hold.

At the back part of next year.

Eric Hession: I think given the roadmap that we have and the execution timelines that it takes to push all these things through, that's probably a reasonable timeline. But we're obviously trying to get there as quickly as possible. And it'll also depend on customer behavior. We do find that more and more customers are enjoying making the SGPs and the player prop wagers. And so as long as that continues to trend in the right direction, it could be sooner than later.

Speaker Change: I think given the roadmap that we have in the execution.

Speaker Change: <unk> is that it takes to push all of these things through that's probably a reasonable timeline, but we're obviously trying to get there as quickly as possible and it will also depend on customer behavior, we do find that more and more customers are enjoying plant, making the suvs and the player prop wagers and so as long as that.

Speaker Change: The trend in the right direction, it could be sooner than that.

Stephen Grambling: Great.

Speaker Change: Great. Thanks, everyone.

Daniel Guglielmo: Our next question comes from Daniel Guglielmo with Capital.

Speaker Change: Our next question comes from Daniel Guglielmo with capital one.

Daniel Guglielmo: Hi, everyone. Thank you for taking my questions.

Daniel Guglielmo: Hi, everyone. Thank you for taking my questions.

Tom Reeg: In Las Vegas for March and then any numbers you have for April, have there been any changes in the overall spend per customer versus last year? You mentioned that the everyday domestic consumer is probably in a better spot than the news flow would indicate. So I'm just curious if you see people coming in and spending more in Vegas. Yeah, Danny, we've not seen any change in consumer spending patterns in our business today. I'm fully aware of what's happening. I'm on the broader stage and If and when we see any impact from that, we will certainly communicate.

Daniel Guglielmo: In Las Vegas during March and any numbers you have for April have there been any changes in the overall spend per customer versus last year, you mentioned that the everyday domestic consumers probably in a better spot than the news flow would indicate so I'm just curious if you see people coming in and spending more Vegas.

Daniel Guglielmo: Yeah, Danny we've not seen.

Daniel Guglielmo: Any change in.

Daniel Guglielmo: Consumer spending patterns in our business to date.

Speaker Change: I'm <unk>.

Daniel Guglielmo: Slowly aware of what's happening.

Daniel Guglielmo: On the broader stage in.

Daniel Guglielmo: If if and when we see any impacts from that we will certainly communicate that.

Tom Reeg: Okay, that's helpful. Thank you.

Bret Yunker: And then the expected CapEx spend for 25 stay pretty consistent with prior quarter. Are there anything? Is there anything around like the supply chain that you guys are watching? Or is that all pretty buttoned up for the projects that you're working through this year? Yeah, no impact to the CapEx guy.

Speaker Change: Okay. That's helpful. Thank you and then the expected capex spend to 25 stay pretty consistent with prior quarter are there anything is there anything around like the supply chain that you guys are watching or is that all pretty buttoned up for the projects that youre working through this year.

Daniel Guglielmo: Yes, no impact to the Capex guidance.

Stephen Grambling: Our next question comes from the line of Stephen Grambling with Morgan State. Hey, thanks.

Speaker Change: Our next question comes from the line of Stephen Grambling with Morgan Stanley.

Tom Reeg: And this is I guess a question for maybe both Tom and Eric. Thomas, you think you've said that the volatility in the sports betting holds and then, therefore, if it does, it's kind of like a feature, not a bug. And so we should expect that to continue. But what are some of the things that you can do or that you are doing to improve kind of the odd setting? And maybe, should we anticipate that the upper and lower bound on that should narrow in the future? So I'd say within a season, no, but obviously as the numbers get bigger.

Stephen Grambling: Hey, thanks.

Speaker Change: This is I guess a question for maybe both Tom and Eric.

Stephen Grambling: Tom do you think you have said that.

Speaker Change: The volatility in the sports betting.

Stephen Grambling: And then therefore EBITDA is kind of like a feature or not not a bug.

Stephen Grambling: And so we should expect that to continue but what are the some of the things that you can do or that you are doing.

Stephen Grambling: To improve kind of the odd setting and maybe <unk>.

Stephen Grambling: Should we anticipate that the upper.

Stephen Grambling: Copper and lower bound on that should narrow in the future.

Stephen Grambling: So I would say within a season.

Stephen Grambling: But obviously as the numbers get bigger.

Tom Reeg: You're going to be more toward True, you're true odds. But my point is When you make a blackjack better we calculate hold in blackjack or baccarat That's over millions of outcomes and pretty certain You know, when you're setting sports lines, and we're all getting better at it, you know, there's a human element in every piece of, you know, from setting the line to the players know when the commanders and Eagles play in the playoffs, they've already played each other twice. The players know that, the odds makers know that, the bettors know that, that all impacts.

Stephen Grambling: Youre going to be more toward.

Stephen Grambling: Your true odds, but my point is.

Stephen Grambling: When you make a blackjack better we calculate holding blackjack or baccarat.

Stephen Grambling: Over millions of outcomes and pretty certain.

Stephen Grambling: When you're setting sports lines, and we're all getting better at it.

Stephen Grambling: There is a human element in every piece.

Stephen Grambling: From setting the line to the.

Stephen Grambling: The players know when the commanders in Eagle's play in the playoffs, they've already played each other twice.

Stephen Grambling: Players know that the oddsmakers know that the bettors know that that all impacts.

Tom Reeg: you know, the precision of those odds. And the fact is, your customers, the general public bets favorites, and they bet overs. And I you cannot move the lines to the point where you're going to change that on a broader basis. and the things that we like about the business in terms of The parlay percentage going up across the industry with us not being an exception is increasing hold, but as parlay percentage goes up and The general public bets the favorites and the over when favorites and over congregate in terms of sports outcomes, that's going to be negative, and the reverse is going to be positive.

Stephen Grambling: The precision of those odds and the fact is your customers the general public bets favorites and they bet overs and.

Stephen Grambling: You cannot move the lines to the point, where you are going to change that on a broader basis.

Speaker Change: And the things that we like about the business in terms of.

Speaker Change: The parlay percentage going up across.

Speaker Change: The industry with us not being an exception.

Speaker Change: Is increasing hold but as parlay percentage goes up.

Speaker Change: The general public bets the favorites in the over when favorites and over.

Speaker Change: Congregate in terms of sports outcomes thats going to be negative and the reverse is going to be positive that's not going to change.

Eric Hession: That's not going to change. And the only thing I'd add to that, Stephen, is if you look at our first quarter results, we did report hold improvement year over year, despite the bad outcomes in the NCAA. And that's made up because we're doing a better job with tennis, with soccer, with other sports like that. And so I do think you'll see the average hold continue to rise. But to Tom's point, you're going to continue, as more and more people bet parlays, to see volatility as well.

And the only thing I'd add to that Steven is if you look at our first quarter results. We did report hold improvement year over year. Despite the bad outcomes in the NCWA and Thats made up because we're doing a better job of tennis with soccer with other sports like that and so I do think youll see the average hold continue to rise.

Speaker Change: But to Tom's point Youre going to continue as more and more people bet parlay to see volatility as well.

Stephen Grambling: Got it. Makes sense.

Eric Hession: Maybe one other follow up to some Omnichannel. I guess maybe I missed this in some of the opening remarks, but are there any major initiatives that you have to try to bolster and not just digital separately or thinking about? and the Brick and Mortar sports betting. But thinking about it holistically from an omnichannel standpoint, is there any way that you think about the synergies that you get from the combined efforts today? Yeah, we've got a great group of hosts and player development team members across the country that have been brick-and-mortar hosts for a while now, have great relationships with players.

Speaker Change: Got it makes sense and maybe one other follow up just on.

Speaker Change: Omnichannel I guess, maybe I missed this in some of the opening remarks, but are there any major initiatives that you have to try to bolster.

Speaker Change: And not just digital separately or thinking about.

Speaker Change:

Speaker Change: Okay.

Speaker Change: The brick and mortar sports betting, but thinking about it holistically your Amit from an omnichannel standpoint or is there any way that you think about the synergies that you get.

Speaker Change: From the combined efforts today.

Speaker Change: Yes, we've got a great group.

Hosts and player development team members across the country.

Speaker Change: Had been brick and mortar host for a while now have great relationships with players.

Eric Hession: We have a program in place to incentivize them to get sports and online casino customers into Caesars Rewards and onto our app. And we also have a great group of online hosts that do the same, but also get those online customers to come and use their rewards and experience the great assets that we have on the brick-and-mortar side of the business, whether it be in Vegas or elsewhere. We're also – we have large events for very good players, and whether it be Super Bowl or whether it be other events, those are events that are now being attended by not only our best brick-and-mortar customers, but also our best digital customers as well.

Speaker Change: We have a program in place to incentivize them.

Speaker Change: To get sports and online casino customers into Caesars rewards and onto our App.

Speaker Change: And we also have a great group of online house that do the same but also get those online customers to come and use their rewards and experienced a great assets that we have on the brick and mortar side of the vagaries of the business, whether it be in Vegas or elsewhere.

We're also we have large events for a very good players whether it be super bowl or whether it be other events. Those are events that are now being attended by not only are our best brick and mortar customers, but also our digital customers as well.

Unknown Executive: You saw we put out an announcement a couple weeks ago about a relationship that we did with AGS, as an example, because we do buy so many slot machines and buy them as a group. We're going to launch a product at brick and mortar facilities and online at the same time. And that is a pretty unique component for our customers that we're able to offer. Great, thank you.

Speaker Change: And you saw that we put out an announcement a couple of weeks ago about our relationship that we did with Ags as an example, because we do buy so many slot machines and by them as a group we're going to launch a product at the brick and mortar facilities and online at the same time and that is a pretty unique component for our customers.

Speaker Change: But we are able to offer.

Speaker Change: Great. Thank you.

Operator: That concludes today's question and answer session.

Speaker Change: Yes.

Speaker Change: Yeah.

Tom Reeg: I'd like to turn the call back to Tom Reeg for closing remarks. Thanks, everybody. We'll talk to you in July when we release second course.

Speaker Change: That concludes today's question and answer session I would like to turn the call back to Tom Reeg for closing remarks.

Tom Reeg: Thanks, everybody, we'll talk to you in July when we release second quarter.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Yes.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Okay.

Unknown Executive: Thanks for watching!

Speaker Change: Okay.

Speaker Change: [music].