Caesars Entertainment (CZR) 2 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Brian Agnew	SVP, Finance, Treasury and IR
Tom Reeg	CEO
Anthony Carano	President and COO
Bret Yunker	CFO
Eric Hession	President, Caesars Sports & Online Gaming
Carlo Santarelli	Deutsche Bank
Joe Greff	JP Morgan
Steven Wieczynski	Stifel
Shaun Kelley	Bank of America
Barry Jonas	Truist
John DeCree	CBRE Securities
David Katz	Jefferies
Daniel Politzer	Wells Fargo
Stephen Grambling	Morgan Stanley
Brandt Montour	Barclays
Chad Beynon	Macquarie
Joe Stauff	Susquehanna

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Caesars Entertainment Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Agnew, conference Finance, Senior Investor like speaker to Treasury now Relations. Brian today, Vice would hand over the your and I President of ahead. go Please

Brian Agnew

on Welcome to Thank ended third investor.caesars.com. our September Investor the of copy announcing earnings. the issued A on you, our good we XXXX conference of afternoon XX, our afternoon, release press Elizabeth, the to XXXX. and quarter is call. section the period a at to This discuss financial our call for available everyone Relations press website release results

Joining Chief Hession, our Eric me on the Chief and call our Yunker, today and are Officer; President, Tom Caesars Executive Reeg, Anthony Chief our Financial Bret Sports Officer; Operating & Officer; President Gaming. Carano, Online

call remind not one to like not statements call, over would guarantees about forward-looking conference today's forward-looking future the you therefore, reliance during may Company's performance I to should make we certain are place them. of the undue statements Anthony, I on Before Such that performance. turn and

are subject differ that to inherent cause the expressed. could also to risks results uncertainties from and actual those materially statements Forward-looking

For over circumstances forward-looking to revise non-GAAP the in the third the measures after the occur differ the call, will to as call forward-looking on Entertainment investor.caesars.com turn update now Regulation you or financial in by Company's GAAP financial the XXXX during the most events concerning selecting discussed from measure refer that non-GAAP Company's release obligation results website the defined filings and Also, with found no any our or at directly measure factors the between be contained reconciliation can to Securities Caesars certain non-GAAP to release differences financial of risk SEC by discuss and additional the and quarter actual Exchange results. today's undertakes in the comparable press each Company's Anthony. to Commission. Company G. today's regarding statements financial call. the The those factors may as that discussed GAAP could to our contained financial each cautionary information measure financial well statements should press statements, cause as reflect I comparable measures

Anthony Carano

good we and the a EBITDA the record new Brian, on Digital call. billion. you, In to third afternoon everyone generated Thank excluding of $X.XX quarter, consolidated

$XXX Our segment adjusted EBITDA, with Las payment. deliver the results excluding real million Vegas strong to continued rent of

adjusted which million QX since areas quarter. Caesars combined Our XX% regional the delivered our August segment, was EBITDA QX 'XX. loss, to Caesars In up segment the EBITDA of 'XX. record same-store Sportsbook Las adjusted Vegas smallest $XXX of EBITDA our strong last a of $XX contribute to all in a reported versus new million, to quarter with of business Digital rebranding

QX and of occupied segment record Las record. XX% July September. nights. Occupancy room generated rent approximately nights revenue during Vegas EBITDA of payments, QX Excluding revenue of new Cash $XXX Group driven a our during by strong, set was room 'XX margin. quarter. real and a and million set also EBITDA XX% a profit reaching new represented the Gaming QX hotel XX%

has very to during next experienced the Vegas improved excluding closed events Lake and our Forward a strong remainder quarter, XX-plus and market the coming group XX is 'XX again million Lake posting of for recover in and were 'XX. XXX third Las XX% versus we continuing Results a and segment segment remained 'XX runway the revenue new was Charles. over Trends double QX QX entertainment trend up same-store results in of pace versus of year. remained in quarter. growth the in growth the with few strengthened margins XX% for year the pre-COVID, second markets, last to continues QX digits to further $XXX over into to our months. Las when many Vegas remains in tailwind. sporting the up in exciting over Reported International travel of In our QX. which regional quarter 'XX, XX% bps third excluding a basis Charles, regional the consistent to versus on EBITDA last EBITDA up quarters. up

in about restaurant of Nobu capital look update at of Turning to in Caesars showcasing the brand-new on Hell's openings and facility. the Kitchen Charles opening Horseshoe to forward XXth, 'XX, set Nobu December on land-based an excited first to the open complete Hotel we our and with is the Renovations program. recent AC of half Tower, and AC. Lake will we're this

also open Pompano to as in expanded expect well. offering in December our We casino

open Columbus, to midyear temporary Virginia and 'XX. in expect both Danville, by Nebraska casinos We

the recently Our room and Hoosier construction progressing Park and amenities Harrah's expansion open our our is hotel tower additional mid-'XX. underway new at and book our new sports opened. with lastly, by should poker on New Orleans is And well property at

As we trends we 'XX, remain consumer 'XX. about healthy, versus our as remainder business look the optimistic to especially of remain

encouraged now operating and impacted COVID-XX. last to so work some of quarter our I international has want return As convention as demographic consumer, been all will the proud insights their team Digital Eric XXXX third call for our service. and on I guest over in that, as of well our far. for their execution the consumer extremely we in to in full by turn thank exceptional teams, Las group the performance I'm the Hession With hard members quarter, their remain regarding the to potential the recovery we older who improving our the trends of most mentioned for Vegas, segment.

Eric Hession

Thanks, Anthony.

a business of revenue and EBITDA growth loss quarter. smaller-than-expected over digital XXX% in reported the Our

created the to recently experience parlay and efforts we team offerings and improvements them our to realize expand to sessions. analytical the also customers. of specifically times by made number offer the customers and side, that overall are from the tools customers, our out more betting responsive to We've benefits trading during sports that started customer markets our the for be and for line assistance in-play in our service real-time several all allowing the being On speeds, our summer cash trading we we've to provide over well response alternative insights improve in-play received

result, a hold increased. volatility our expected have declined our levels and overall has hold As

began this they the the area quarter, We and improve our efforts we growth more towards customers our reward results loyalty our segmented These course also us our over the to initial promotional us for us. of that spending see their During important revenue anticipate enhancements in XXXX. to contributed campaigns marketing as allowed net continued to efficiency. allow play with directly of

rolled product our betting on regulatory component the completed for digital our mobile our Ohio. XX XX with North Washington, be package start for anticipate betting We online our in Illinois, product From wager. Xst with in who have sports a numerous of sports road a quarter, and sports In started product expansion most Maryland betting we out of launched QX, which we Kansas hired enhancements team, in offer an tech growth conjunction the improvement upgraded for current D.C. customers our strategy. during vertical map remains October leader Xst. of approval, on the and we side, online a jurisdictions, the to and iCasino second the in offer On tech we with In pending aggressive launching version. new January identified an American now half our targeted iGaming standpoint, that in critical as full of will XXXX. Pennsylvania

some we for turn plan locations comments. additional In it Bret during third-party new addition, that, With on over two to I'll adding retail the quarter.

Bret Yunker

$XXX Thanks, Eric. QX from flow. perspective was asset of free reduced using proceeds another a approximately quarter balance sheet sale productive million permanently we and debt as cash

expected their City net new support. million, billion A. and banks come at $XXX is XX CapEx Atlantic billion facility total maintenance. spend estimate subscribed domestic and term $XXX and CapEx current the facility, loan approximately we now across our credit for million spend We of appreciate growth which also successfully a syndicated of a also in $X.XX to to new Total a $X and XXXX XXXX revolver is comprised international

a and license look best forward downstate New to casino be begins. we Finally, Green. competitive obviously we York when we will putting in with our announced be It foot a very partner, RFP our the process, that will SL forward pursuing

Given aren't around position at a in go costs into the to around sensitivities project details we inherent bid process, this the stage.

an flow. However, and management our on we can building and to the venture any very new with be tell free and agreement our asset will a not relative cash existing brand long-term joint financed be manageable under you a joint within starts into the equity Caesars project will now will manage the is that that balance venture investment sheet.

turn the call to I'll Tom. Now, over

Tom Reeg

to In well. third the on want the to seasonality results October quarter. a Vegas I Thanks, as strong Las about Brett. further going to in touch Las Vegas, the I'm Normal returned quarter, in talk and very little quarter.

headwinds And the of would construction for the August, we I also disruption. and quarter the high, had We particularly extraordinarily call of caused couple of some had construction that entrance, finish out. utility a which the were expenses

basis margin at it an a and last a back, end on from standpoint. impact of add If up you EBITDA year similar you the and of look two the of would little those ahead bit

above Atlantic temporary third got Anthony of regionals. we've percentage had casinos October October next year. a digits got and As year of Virginia then up as Indianapolis well. you Strongest which on, is bricks Harrah's got We've weekend the in Caesars. quite into for completion the of margin EBITDA year's hit did million basis. October, middle next Park we've the consolidated as for October, strong outside touched of should history We've mortar despite the last ever coming. by had the bit a in Charles one look obviously we've in well is XXXX a as in -- Columbus, over double year. in will October strongest And pacing little $XXX month Hoosier finish spend in Lake fewer Vegas last improvement City was there. the double-digit that We day EBITDA period. Regional Danville, of Las -- got Nebraska, the having on is versus and that It quarter Indianapolis

me. of So, to and also forward. and our to into we tailwinds, assets market touch a to all of strip decision the into asset as shareholders that to ran 'XX. as keep 'XX was to easy invest raise increase intend made move it was that continued the flow overhang a asset number of a I'd We into of is us very the That apologize us that of I going strip cash you this where for was for sale the keep. on discretionary us And to process a ability fruits stock. self-inflicted of rest the financing, the going allowed all for that us, the that. you're to talking like and about it how I shareholders created cash we say in error despite a to see that an of know unnecessary buyers our and

So, we inflected our Strip will keeping as for EBITDA In be move we Digital forward. to -- positive October us. Digital assets Vegas

that's the months extremely XX ahead So, pleased are of we that we anticipated. schedule

of we've fairly Astros. profile most out a the think got aware, with high you I there are liability

fourth will will forward. whether is contributor in we inflected, -- will So expect Digital have be a that and have as that positive move be swing factor but that we'd we a a whole, as quarter

the that that's extremely and of in us. in the for thank in our as by shareholders Digital Digital, for team Great through and to all you Eric capital to and work we invest work it. So news patience exciting his

of outperform believe and really, XX EBITDA annual in to really That on out our in XX continue excess be XX% losses last that of billion maturity, doing inflected the to our EBITDA days. over Digital. we'll that cumulative of expectations business continues $X.X We that to of

are the quite back operator I'll we questions. that. With with So, flip that, for pleased to

Operator

from Instructions] Santarelli [Operator the Deutsche with first of Bank. Carlo comes question Our line

Carlo Santarelli

you bit environment, now perhaps Digital? the guys. And I you football the the infer you're season. afternoon. based on in forward, that October further, the at about little Digital. from experience your Could in appreciate Series bit liability, the saw let's the to then a of a I Tom, comments take EBITDA aside as Good foresaw XQ looking your as on kind a contribution World what could kind Hey year, perhaps next we're you as meat how promotional positive little well of in set of or talk commentary going foresee

Tom Reeg

Yes.

where breakeven, we full feel For but but expect modeling we've purposes, about to we good I'd around that Carlo, good got really be hold, that shot to are. 'XX. very, very you that's year contributor in Obviously, a expect on I'd basis subject that's a a

of got, year In second -- -- customers year, offers in about year very they a come second this -- of your states, operation that's taking advantage terms a that of we've We've of during promotional when environment, as you've their your second mix in they're talked are most new that's time obviously, in, got highest your highest are promotional for full how spending. of if which those at year long states, not football season. least sign-up

So brand. had promotional know, much than we We've full we as year But launched and we at customers. customers smaller typically looking your the That's a you a sign-ups. spigots now, the Digital of to promos are as to in say, the existing got ability launched opened have new I'd your year. which segment also we didn't last business all bite --

customer significant that to market entirely in various position. shutting getting a Eric, XX on flowed changes investment. bottom some off verticals degradation And line look flowed at return our there, made we of our basically is no the on in Now and has the with we led we channels and spend that have last adjust coming cash type based immediately see by the segments days in and what virtually through are can various particular

where we're So, we feel about very, very good at.

results. in led As we're I brick-and-mortar that's and blocking has on is to figure in invest these side best how to that more is and less that what less profitable the we've tackling told this your done customers, customers really in out you, basic and doing your Digital the

Carlo Santarelli

flattish. latter of there traditional regional of to less Yes. the need estimation, OpEx? the that OpEx able Tom. comparison. keep I of against taxes personally. kind good labor It Are pressures be? best like of that noticed inflation, one need creeping I like kind you a more things And outside run just aware Are any follow-up. perspective, our pretty or then obviously, you Thanks appreciate there in to results be to From of rate the were guys or where we kind is ex that. a this looks of were you have gaming that, are to of good terms difficult

Tom Reeg

rate. pretty run you're say a I'd Yes. at good

you've never sidelines. -- us we on long You're we're been that's see around but that the done, cost real enough any don't

through, rearview as some continues to mirror. As and but you've on, been touched for that the labor quite in we've frankly, that's inflation got quarters the cost rolls get picture time, better we labor look

Operator

Our Morgan. comes the next line question of Greff Joe from with JP

Joe Greff

Tom, on just starting off the digital side.

next you gets winding from, want in be you to As as those to say low-hanging profitability or can some of that some think about this about you over beyond segment, some and this talk but don't partnership particularly sort fruit efficiencies of partnership kind extract expenses of that out of years, I how expenses you easy down? few magnitude those to maybe talk of, can of the operating increasing you about coming about with XXXX the increasing business, expenses profitability XXXX, and might talk additional

Tom Reeg

Joe. Sure,

you've iCasino. at what of got current point significant us sports-dominated inflecting leadership this business, in to We now for a in right business Obviously, have have opportunity us, you place the is we profitability. attack front think at that. As to look we in

up last let's of In a to with year. media the case, us, middle as space. So, this we deals with a teams, we I X of is think digital partners, more run X to grow will what's into partnership launch, contributor. years. to much meaningful fairly you're that this referring entire leagues our small say, of unique the throughout contributor kind is a think that But, not from were what all There from number today, and is signed with

have launch a anymore. your look in what generation, going these data running -- off opportunities before, those running those much made you'll and pay you're have So there platform. over than to to at next virtually years. the customers had partnership you'll you'll off new on some that in year, customer in we based three of terms more to we've were sponsorship got a in willing you And were situation assumptions be Obviously, cases for today -- of all opportunities not more were

runs for So -- as million And fixed in $XXX expect north should for for a us, of though and that's us. something now, that's annual of you that expense. expense

away are timeframe ‘XX looking place, fair those out go them those will laid as long you if for amount today. As us expensive form not in that you're out. entirely, contracts in to it be some and should EBITDA you is a of expect live that A should in of that ‘XX, flow straight that will may as as

Joe Greff

clarify just Great. Las over And to Tom, Vegas. comments, switching to your

XQ expenses, EBITDAR those Can the utility comments similar, CPLB. Las utility magnitude that and and and north mentioned X you of to it what about you each and you expense are to Vegas how was would margins onetime? the past those related of have headwinds, of to been think forward? maybe corporate expenses generated And elevated it You disruption explain sort between us the break do to And properties that, you reported that were out corporate? out or sometimes year is in sequentially. of have in help you delta the the may that last versus and explain costs sort at what also shifted Can noted then, is going that an a there down allocated recurring, lot

Tom Reeg

corporate Vegas. will take Bret expense. I'll take

Bret Yunker

run activity due XX bit focus lack continued of yes, are on expenses. our transaction expense, a That's to per a all of we light a rate On typical and to XX corporate to quarter.

Tom Reeg

alone, between And of then August the in well. virtually was margin about idea, or give QX for utilities, you an have that's Joe, gap And October as preliminary us. for disruption you 'XX EBITDA on To rate entire a 'XX. Vegas, construction Vegas basis, QX if XX% was normalize you of which primarily the

Operator

Wieczynski Our comes from of with Steven next question Stifel. the line

Steven Wieczynski

I the guess I are want just is, up holidays mentioned this mean Tom, ask at with -- way that make point. there's expectations $XXX in can October. end coming I being And And and that is, I I the that guess, by to said what question think rightfully set did, hopefully, for Vegas in I you simplistic So this that up makes million quarter quarter you not, obviously, sense. the most what fourth some EBITDA should sure And just in $XXX million EBITDA?

Tom Reeg

is strongest a fourth quarter the fourth -- third you Year's in is then and your get month. not is Sure, quarter. typically -- the so is in Steve. in month October November strong November weakest in the And the Thanksgiving slowest seasonal holiday. December. particularly the New

I the slightly should quarter lower the December thinking if be best lower month, were and should what about November that. does October like, be than So, look

Steven Wieczynski

business, where Okay. potentially you side -- down on brick-and-mortar significant kind Digital the of And the sense closely But tied been at point? want to Tom, in the make business help you clearly, the so probably Perfect. side. and wondering made the a equation. maybe of or to road, I then I possibly my is off And thoughts guess any some point of road this getting some us of down terms with business understand the lot of would give value to the there's side there's see here your question, that just here second would segment if do leverage And at that spin being about, scenario of some the updated question progress profitable. kind

Tom Reeg

the that brick-and-mortar the preference database. tying Caesars our would by remains here competitive say our my owned existing it I'd XXX% So, that and Rewards is business And parent that company. to it advantage be

shareholder you introduced in of the drive you to focused for same constantly you you bases a business. some two see get complexity shareholder we're get businesses, can shareholder when we value. you If on terms see bases to know -- in that peers do that how I'd But in our of different that tell there's in you, different the

we pie If shareholders to Certainly, you market environment, for digital ultimately been sense, where consider. increase In total. placed the value into recent on the get would makes in hasn't way that the there a that's assets. market much something that's and

So we sit it's decision today. a very here as easy

Operator

of comes question with Bank line from Our America. the Shaun Kelley next of

Shaun Kelley

of market, there in on and I could the than I any in us was wanted bit. out third a expecting. you Atlantic strength performance that if key quarter little were on specifically excellent to comment in call could quarter. dig markets might regionals wondering other driven just well not like probably directionally, seen big there, the gross for different I And obviously kind curious kind was evolving The have if think Caesars stronger you something that of many the that the how feel as market performing margin, seasonal is just it's you're a doing basis participants. I quarter -- on I of specifically? but we a that some as had focusing City. on revenue Properties of was if market

Tom Reeg

Yes.

I'd up what our peak we're differently is torn say most we've market of Sorry, during season. had doing the

at Harrah's. So, well-known rooms both what missed Caesars be the and would out peak had and of to the 'XX supply happened peak obviously of intention there's -- we season. as service, season prior a began chain, was we for happened finished that to we've -- what's to and the story obviously, at And project of

focus results had margins. on that function that in the we're of you're on market, not the we've to conscious in are run really, off seeing a So a revenue construction City that's a and making Atlantic -- decision going disruption

a Atlantic underperformer. Regionals So, City was on to the basis relative an

in in years frankly, ago. Reno nicely when has ever what we the Tahoe New quite place this In putting restrictions were dreamed we doing terms be in together then were few both beyond thing continues that extraordinarily of and and city, severe of strong, levels Northern business the that hurricane we're Orleans are, a COVID the to Nevada and from the overperformers, come back

Shaun Kelley

my as follow-up, And then to just Digital, could. switching if I

curious bit the strong much -- been the quarter, in of third that's in hold landscape in or on certainly a a a over market is levels call discussion time. September. Kind out that Eric, we October hold sorry, OSB obviously thoughts one While of really thing point on improving in have you the -- made across the and

you do talk versus September mix in us you this about seeing to is seen and just based maybe a the books? favored think factor we've on you. little and product how is of could how game where much outcomes we're October, definitely market Just in relative really to that some bit what a much Thank sustainable have the luck

Tom Reeg

Yes.

let has flip positive saying start So, the Eric books. pretty own of I'm been going Eric normal of have strong to adjusted There's that trough. favorable started of but right? that, October, changes that's a made for to in far But terms our to number talk hold. the even books. for when improved also this, hold, that in but We've I'll have -- I'm of bulk we're weeks a to flip football me just There's and to season been and there's two reverse pieces your here, couple all luck that so

Brian Agnew

has higher towards as so of translates partially, hold product. Yes. our a of our range luck, uptime increasing football mentioned, tools fortunate as through did in I beyond percentage remarks, Thanks, into higher-than-expected of a to hold which Tom. season hold had that, We the quarter, in-play higher the But the volume, and us far. Tom been lot end mentioned naturally the our place. We're put we and in in-play for

and lot for we side due first bets. second steadily is their to A tech the the to has third quarter improved parlay customers improve ability on grown made of that to parlays in some quarter. our and and to addition, enhancements percentage really place visualize to the relative that In the of

put the also casino game over number longer with models keep We their to come then able be and up the our also retail odds allow more a team our to to that that have that's respect analytics to pricing. of accurate be from have side during traders the together

off our each a really of we through And to when compounds results outcomes, we're when of day. least reasonable at really volatility. really holds. can and still combination we those we solid, particular able when all And day, reduce for factors, some this it even you it get do to on pull with get can not or we see managed hold then the positive so, lucky And a been we've the lucky, double-digit days hold get

in we put but hold lucky a the third place quarter. of lot a overall, So were structural in we also bit changes

Anthony Carano

We a huge fans... Phillies are

Operator

comes Our the from Jonas Barry with line of next question Truist.

Barry Jonas

the structure It move New you a found like right forward looks to York. with bid in

Just curious in, greenfield either you're internationally? if any there opportunities are other interested domestically or

Tom Reeg

greenfield mean, a open, see would look but we're expect you international, for I way the participate In highly major there. say, you never say a U.S., you unlikely. going highly, like, to if I market never, Texas, say should that to

open us is next You've in Nebraska, Virginia, Danville, temporary the temporary will year; seen where year. Columbus, which smaller where will next open

focused. and expect to domestic it should choose, be pick but we will you So,

Barry Jonas

then, And to Digital. just it. Got it. shifting Got

Maryland for for making iCasino on legislative Puerto seeing? push whether iCasino, the softer you could jurisdictions, think for you're thought. Rico? Ohio And Any then movement talked been other about live. that's progress I a and expectations share Nebraska, going -- just You Any states has people that than for Massachusetts,

Brian Agnew

take Yes, one. that I'll

of that You of. a listed ones lot definitely the off aware we're

of will sounds Maryland, first It looking hasn't hopefully addition the first in for date and October got the pretty quarter. be we're and in that. and online, there, good side Xst, which on participating in but finalized like November online retail will open then you've So, been then to Massachusetts. locations Ohio also The it's

late probably forward, has to been -- addition going moving Massachusetts, if Maine not be to In this into sorry, year, that's late rather. XXXX

Nebraska in And will we're our Windsor, launch week. And as the could fourth to then, year, full at in that the quarter are or to be next up happen Puerto up early you in quarter. a first this will Rico Canada, And kiosks then well. later plan casino push We then might we open that some well, we'll temporary for to Sportsbook as kiosks have planning going launch as mentioned there. a Casino to with book

Barry Jonas

see to from on Got the you're states? it. Any the iCasino movement that starting side

Brian Agnew

two state has out to have at Yes. more outlaid, don't call we with that us year. little sometimes states The At There's that coalition. the that state our any be Tom's another a But legislation. particular tricky. incremental participate look and this really ancillary of industry the interests with that a when or lot iCasino sometimes there at from I compete could through point. real There model to bit on both wouldn't from a that businesses about add it's just legalizes be within And is point, possible we those certainly think passed that, really us. any competing to been and next already this

anything get be states I upside those the that any side on or model. So the we to beyond would even iCasino additional mentioned

Operator

comes Our DeCree line the John next of from CBRE Securities. with question

John DeCree

Covered ground, October record of Vegas, this of a EBITDA little a one's the in bit kind on I apologize, levels. more granular maybe so lot performance Las

mentioned Curious bigger think insight kind I customer like a little us typically from mix correctly. bit you October room everything if you've seems quarter, I group into XX% you of that I in of kind could think XX Curious customer bit what pushed customer low-XXs nights is of guess terms heard unpack margin, if of a mix but I customer kind performance and a kind the working percent perspective. could with group of of in give record if little that margin, XQ. a it

Tom Reeg

a are was week. But October, John, it. Yes. deep I'd in here this super big groups yes, same as part not of business Group go strong to prefer there.

We're things over demand culmination we're that have included in just been a revenue that ago. not it's which have cash billion together. are room -- and Caesars for a with Vegas that to thrilled of would now long that wave market has those the side, the So group of the going do in impossible, and $X way significant as coming viewed

So, we're on here. really hitting cylinders all

John DeCree

Maybe for follow-up a outlook. the

acceleration see big the started in room next I benefit on think a expect of an still mentioned for or some away, nights if maybe, traction for both that have are ‘XX Have think year. I to it's kind Curious opportunity group pricing next next events of a We the big there's FX, you get you of to the an pacing really see nights pricing year booking? but room think, now. of and if to in year group year? events ways started you all some you with bit the Anthony, above that

Tom Reeg

positive like little about I'm things extremely sorry be groups, the back, beyond One it's Certainly, but reflects rolled you There's all -- is in normal impacting should a with We skewed animal. rates yes. for we of the The out second a what that is saw event talk into -- sorry, year the big events expecting and 'XX of toward demand Formula lot is we that, the early deeper the Omicron pricing that. the comps -- of with different as in look market CES to particular 'XX, half quarter 'XX. and rates coming you for think first easy it room bigger a as kind Yes. But the further beyond traction, yesterday, in occupancy well 'XX were

John DeCree

Tom. I additional Thanks color. great. appreciate That's the

Operator

from line comes of question Jefferies. David next Katz with Our the

David Katz

as wanted we number step the I lower? quarter that seems some in was back may benchmark. of Were topic XX% well just raised And Vegas it can I normalized as to about that headwinds. saw last had the a was to implying Vegas? is discussion be go to a some XX% XQ take maybe of may think It if I further, seasonality around we or neighborhood, what think attributable be Las and some kind that those level that I full cost margins. year higher the Las me to that And we

Tom Reeg

when Yes, Vegas. Las talking that And I impact, that's accurate. entirely was utility the about was

between again, we're aggregate high-XXs. But margin. say us. for if the is in XX% let's not what of been around, and That XX% we a first talking then about EBITDA and about necessarily really normalize, see you be model, quarter, you should out fourth not target EBITDA, should have than falls manage XX%, that talking be for we should third operating that, you're second somewhere should So, quarters better

David Katz

Understood.

current So, quarter? points in there impact XXX was XXX or the basis

Tom Reeg

I'd XX have to basis points. XX, we'd much. say XXX said call I to not that it, XX, quite XXX been so

David Katz

And we more with for that sort wondering be you're sense? getting just on I'm to a one whether way level is or the when start may not if Digital, can longer-term and But it And Got it. it's Okay. margin other either. Digital, I aggregate about the the level this to thinking respect ask normalized of business makes there Company. dilutive accretive a to questions

Tom Reeg

So, record a non-U.S. being margin mature track EBITDA of We've got leader. good we generate can in in pretty see what margins. other mature other -- what a operators markets

rest the away that, ultimately, better expect going to XX% than in XX%, seeing I should that would do line you're us, from the with if of be business. around we're which So,

Operator

question line Wells Our of the with Fargo. from Politzer Daniel comes next

Daniel Politzer

return Can from to it Is just think interactive, from growth maybe just million you the, it, on sports return? you XX% investment. I you us to back that Is of betting? get get that industry? Tom, how that dollars it general the call $X.X on you it hundred off still few bridge to mentioned Is that the iGaming? roll partnerships the billion

Tom Reeg

with to is that We we happening structure, measure. our clearly, be iGaming as -- know some of comfortable on. do and to and we'll on grow. structure, industry It's assumptions move very return what's terms forward cost with able we loss the in to make EBITDA happen to cumulative What with annual XX% what's our plus EBITDA cost continuing going

Daniel Politzer

Got it. the moving balance sheet. And then just to

that reduce here? thinking on just to to up be should topical certainly now, levers, it from And any other levers we pulling You've a mind become cash what your do where right been Centaur period debt levers short generating How debt have we're topical? given your additional about in some more some in order? reduce and Thanks. is coming you might

Tom Reeg

Yes.

the something free neighborhood, flow $X So, we should 'XX. if billion in not, in exceeding of doing cash be

be It in expect would has end option It toward the VICI to of debt. 'XX. of on call has should You January choose that assets closes will the down our that it Centaur year. pay that used the opened exercise this to always been expectation

been anticipate clear they very has that VICI So, exercising that option for us.

that assume period, end be and forward you to should a If about of it toward us. they billion do that $X.X inflow the run that

nothing expect And and another of else, do to have flow we've pay cash you'll free of generated you substantial. have quite down the that couple should we then, debt. -- use then, if dollars between So, billion vast we now majority to by

Operator

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

Stephen Grambling

As benefits a said do follow-up think zooming you input general? to in think this your about you in comments on XX% out, the market as How those Digital ROI. how margins. Or I to XX% business is business important for hitting scale the an assumptions. share XX% And

Tom Reeg

But it's We business. think to we're that the benefits prove space. that let's me clear investment to we that try we the time, laid make generate important for there's promotions. to going expect in share remain on shareholders scale to personally and iGaming that over allowed go our -- And static not we grab we've can before the our significantly us any we're through to the out out returns more that doing particularly --

return looking It's target is expect So, as can in Difficulty] us not a this share falls ultimately that been not to share out that. input. the we the of an for business [Technical market and you us. in on living It's get share should for of be that we've living we're market brick-and-mortar that investment band

Stephen Grambling

think just $X sales? when cash And then year. a I taxpayer? next do in being any cash one follow-up sense. you said be Thanks. perhaps quick expect on, Within you assumption, flow general, a Makes in anticipate you And excluding do to asset cash other that free billion taxpayer,

Tom Reeg

be be should do you we want to cash 'XX. Bret, not taxpayer talk? not will in -- a we No,

Bret Yunker

Yes, of taxpayer. a multiple before we've got years runway we're

Operator

the Barclays. next question comes Montour from with Our of line Brandt

Brandt Montour

that you to the wants lay that out sort about incremental manageable of it. map? the you're to the map for should we Just of is just follow-up whoever business? road the on started just on How digital running sort new for take road a quick revised existing iCasino But currently side, curious that sort investment OpEx And us. any that or think in within of

Brian Agnew

Yes.

Tom you're not revenue things, to going growing at product a but improvements, and pace business. as is to types quarter-over-quarter, up XXX% mentioned, same we expansions, to as not scalable close think staff continue those even are the to state really that to level. I this handle of when And

labor will with And to year. minimal. increases iCasino associated fairly the P&L impact We have the actual will some be in next slight capitalized product any

Tom Reeg

from very a sports. perspective, business different promo a than And it's

around So, different launching a will sports it's in local terms advertising our advertising, very while some scale market in see you activity product, the of casino business.

numbers I earlier. the out laid within So certainly easily that manageable

Brandt Montour

market? terms Tom, into guys Las concern, habits? sports something question, a one's macro in customers seems sports-focused your related macro? a on what sensitivity friendly the something And what this in follow-up of asked guess of you no be take Vegas, other as you sort then that, from the as a might that of a But bit with so And Las shot. well I of are as part a is of any of as Vegas continues And to on fit in agents seeing or a that the second evolve destination, little that gambling that's line to terms travelers part more in seen have to I is

Tom Reeg

Yes.

a the rate we facing we macro are -- recession. can't what out of see We're to any I others of see for cognizant that the of there. here consumer, happens with anything that you rises out certainly not. in same that what's of we're going We're our Brandt, terms shows Vegas in business instance forward continued point So or in slowdown consumer. in

good. very feel strong. we obviously October very So, was

is see that of that -- And then, terms look You see that in business business. we in metrics at to us. we in investors own third quarter. We seeing not the what are the in for forward sports, We're know digital sports our our date, nor anticipating.

of casino stays very very, travel on they're in for digital. grow. generates the visiting Sports Vegas, lot play getting to the of that out are in good a That number $XXX over been continues of in weekends length city, million of additional have teams. incremental give were Raiders customers from brick-and-mortar We incremental that town, the us sourced

So, home that's a we've the perspective able been been from and city's to run really benefit.

Operator

the Beynon Macquarie. from comes line of Chad question next with Our

Chad Beynon

on Just Vegas. last one follow-up

take sports with piece back? of on as it's Is out that pretty going international, the opportunity that you everything passage that that on this VIP of the But do customer, we do So, get and the it really it to of you a inflect is much bring more holidays just business when FX back kind What side? think the . of related, covered time? think Is or kind it can to bring in to I tailwind. there. just kind maybe think the

Tom Reeg

see the New business over wood on start with to Yes. come this will or impact and We've that Year -- virus Chinese back quarter the travel. without to Obviously, be ability of without started to last so. first knock just the the

be will something we're that closely. watching So

November. you clientele. Adele board, like an we've I tell is in the enormous of to she And starting got here, international that high-end middle appeals across you, As know, but draw particularly

was places that. So we we Vegas that do to stopped about gambling. a and years Chad, that been point, to understand this it excited it as it's road that's were coming they back. when at to those I we're other travel build think But They X.X found be to going people long don't play, impacted,

Operator

of the with Our comes Stauff line [Operator from next question Joe Instructions] Susquehanna.

Joe Stauff

maybe wondering this your your question. give what believe caps, or adjusts it the just -- rent us this And quarter, CPI you maybe I can does without what just and month changes result a decision that investments, I as to you about, annual number the that just some the had -- adjusts way older and from? that? wondering a now you keep in mentioned have your you. to do you invest to that say, those if of Thank think assets strip of had properties

Eric Hession

started VICI Joe, escalator, Xst. on on X.X%, which CPI it's November the

be And GLPI. so, including consolidated, billion should rent next $X.XXX around year

Tom Reeg

we of that about we've buyers ever talking particular done terms we're about. fruit that potential were had assets low-hanging we're in as Joe, here. talking The to EBITDA doing And obviously, as much investment, some

XX shouldn't months. in advantage coming be we of You surprised XX if that take the to

Joe Stauff

lot. a Thanks sense. Makes

Tom Reeg

you talk We'll next quarter. to

Eric Hession

everybody. lot, a Thanks

Operator

Thank conference participating. for today's call. you concludes This

You may now disconnect.

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