Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to the Caesars Entertainment Inc. 2023 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator

Finance, the now Senior to Corporate Relations. like would conference Vice and to of Agnew, I Brian hand over Investor today your President Treasury speaker

Brian Agnew

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

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

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

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

that those actual statements. could concerning to differ results from information additional For discussed factors forward-looking our in cause

to Securities reflect You Exchange after today's release, statements risk the undertakes should company's that events occur Commission. refer the contained to Cesar's the or press or well and obligation as forward-looking the no with cautionary revise any filings as in call. statements our circumstances factors in entertainment update contained to

as Regulation first the website non-GAAP financial measure XXXX The investor.caesars.com. GAAP each and defined regarding company at reconciliation financial on the by directly non-GAAP company's the financial results. measure differences and the the comparable the may financial SEC company's selecting can quarter release GAAP call, be found press between the each measure of comparable certain G. most discuss financial today's during measures to non-GAAP Also financial discussed measures by

turn now call Carano. Anthony will I the to over

Anthony Carano

Thank XXXX and afternoon everyone good on start We to the to the quarter. in Brian, call. strong you, first had a

a Our strong disruptions quarter, segment margin EBITDA record segment delivered weather Las and in Vegas QX and Northern reported regional our Nevada. a excluding EBITDA

our addition, remained betting two launching XX% during the revenue QX, quarter. in Las during states breakeven, nearly in sports segment despite Trends In last strong EBITDA versus XX% growth was year. Digital Vegas delivering growth and

last Las generated EBITDA adjusted million Excluding up with Vegas XX%, payments, of real versus of a year. rent $XXX XXX basis margin points

beverage hotel XX% led prior Occupancy food and during and and QX occupancy revenues XX% Strong was results. year. in record the versus cash ADRs to

also Our represented record quarter, rooms an Group Convention setting the mix. occupied EBITDA new and segment convention delivered record all-time in XX% quarterly and a for during QX of

segment forward and nights, increasing Convention banquet outlook ADRs for strong, combination exceptionally revenues. Our higher and remained continued room the of a by driven Group strong

delivered segment, versus year. Regional growth revenue a in X% our X% last In and decline we adjusted EBITDA

discuss Tom detail, segment more Northern As Nevada. in impacted in by was severe will weather negatively winter our Regional

However, strong delivering Nevada trends of during quarter, outside the year-over-year. EBITDA Northern remained growth

Columbus, Virginia remain confidence the projects. and us early success QX. expansion by Beach expansion to our on growth projects, of of in Danville, Pompano end rebrand of by facility Indianapolis, and encouraged return on new potential temporary ongoing the rebrand Harrah's returns we're in XXth the recently-completed on Nebraska further Horseshoe including the a May gives projects of capital We remain seeing We The open Charles. land-based Horseshoe, Lake in the the these the and track and

new and THE Work this to of to Park Spiegelworld is we in Hoosier the new XXXX. Harrah's entertainment open slated our summer. launching in are to Horseshoe, we're forward expansion Orleans announced and that is million transforming Vegas HOOK Paris, in the year. Versailles the offerings yesterday majority and QX Our at at is of Jubilee end The continues And Las our former expansion be finally, this AC Tower towards spend Tower $XXX of New completion on our slated Las to at CapEx nearing looking by we completed Vegas.

million and upgrade included rebrand hard capex great first for and of quarter. off XXXX and We're this be our plans completed team to $XXX their to to thank This is this all in work in our a in 'XX start year. members want slated I

experiences. and a Our dedication results exceptional guest to reflection are delivering of their service

With first over in that, some Eric for to I'll the our quarter insights on segment. call now the Digital turn

Eric Hession

Thanks, Anthony.

Digital During year. the the our in performance improvement first quarter the of XXXX, dramatic prior a versus delivered segment we of

on Our by business year, impacted in significant launches the EBITDA revenues and state Louisiana. and brand-related $XXX loss York million a broke-even versus New during last net was spending which quarter nearly $XXX of million in

performance and Our targeted Massachusetts. located as well customers demonstrates customer Ohio this clearly our of new effectiveness our quarter investment that states within this launched we the as base quarter, promotional existing the in

the have XX over with pleased we last progress months. the I'm delivered

revenues we existing enhancements net Our launch three our that to exciting significant platform of our to improvements. states, during base continue grow product retain year. increase and front, to as new deliver On will we tech continue the and executing significantly remainder the customer be

product and new our a iCasino engagement addition drive offerings to First exciting in will marketing third starting a will proprietary to increased through content, include focus us the improved a with capabilities. app be quarter, we application early offering new which will allow on customer game standalone dedicated better launching this

And out of system to expect ultimately management expect tech that in our to of XXXX the operations we in Second, our our to wallet later account lead year, testing in-house Nevada this XXXX. migrate anticipate Liberty a shared ahead season. will football which all player finally, begin we stack to we rolling

where the our costs roughly EBITDA perspective, are now an From cover to able technology. net our at a scale revenues breakeven of and proprietary we are

flow-through We on dollar. each high quarter. revenues extremely each our grow continue plan And expect that will effectiveness will given of year-over-year incremental net drive our to management expense the

jurisdictions. offer our most standpoint, in an in we XX From we American betting five XX in of addition, North now wagering. And jurisdictions, mobile we QX, offer expansion offer after which launches sports recent iCasino in

some the to pass additional Bret for over now call I'll comments.

Bret Yunker

Eric. Thanks,

Given the our free to brick-and-mortar loan enhanced Today, we in all now which expense of that flow repaid XXXX, million self-funded, fully savings X% ability $XXX flow. due debt is we we cash progress announced the sweep made Forum reduction. resulting Center fully outstanding digital have toward $XX annual cash interest being the in Convention and million segment,

as unchanged, $XXX EBITDA and and $XXX $XXX rent- traditional remain X grow a repay with and debt rent Our on traditional the capex planned times. over maintenance. times of leverage decline basis continues over of net leverage X XXXX plans million, growth million Leverage adjusted for spend with of including just adjusted million and we to just

year the third reduction. of permanent $X billion target We of debt continue to consecutive

turn With over Tom. I'll that, to it

Tom Reeg

all-time numbers, Thanks, into in record was near Recall was about -- Bret. for To Thanks, the was and group XX%. a business XX%. was record, everybody a joining the quarterly Vegas, a EBITDA it for QX mix at little and running very it pre-merger record today. a deeper that quarterly go margin Caesars'

through seeing demand look is each only you're you And continues just that seeing what not -- through as so extraordinary month. what we're Vegas

our raise. profitable players. that our group property in with We're the business dollar comes to attached and higher business continuing is least continuing getting seeing banquet average You're be customer -- to replaces

today. of most a second Obviously, So virtuous sit all-time we cycle comp our difficult is year, was since as Vegas, it's here generally record. quarter our the in that

It in that's this Second $X.XX through quarter did by good Nobu, bridge into books and of really the quarter going project a EBITDA, you almost announced Jubilee forward number high-end very exploded of million the and brick-and-mortar the to Bedford we change we April on last to rest the about business we've a floor as forward, the will with connected be property. look year and Vegas. did Tower Paris $XXX physical the beverage Group options, in including and of billion we Tower food feel as Vanderpump. but the in the business And improved Bally's added casino Versailles Paris. has

are non-gaming they ahead room at room and are significantly rates room Horseshoe. where -- of at both And spend per at -- spend Paris rate

So should a now design and project is this will in stages that we ROI shortly. and high-conviction be ROI high more think begin that importantly, in

on touch of snow, Northern quarter. of XX snow storms those about so feet in Thursday, inches a of area, The hit Tahoe XXX a the I Saturday. Nevada Friday, for if Regional, moment. lot Unfortunately regional for us,

even snow, hits, So of it you to that with amount can lucky when get we not. as did

So weather million cost Nevada the EBITDA $XX in Northern in quarter. of about

both that. the in get as exciting if I'll regional you We've margin a circle have slightly. to for quarter, number back of weather got been and they I'll touch on a that projects up would there deeper, normalize little EBITDA So

Massachusetts in of Really $X.X In we million frankly, amount Digital, well of was the given hold didn't that and Bowl And legs quarter, were us, a positive. with it. any launches a that Super three about very scoring of loss Ohio. we those the were that not part happened of for the the if were

days we're do basis. when versus for and sit for you positive we on will told we thought you ago. I that I considerably there were year-to-day are today, of As Digital, where positive year-to-date that we today, today, a In year on a ago EBITDA even the quarter tell are amount than anticipate already positive we we about we here was I last announced we'll expecting, XXXX. XX can XX-days think EBITDA we we the that generate be basis the we'd better where we year

GE. will a remain we that be losses the of billion as piece specific. business. up XX% to I generated, on to Digital the with to suppose non-Nevada. and to the I'm event, peers, going the super conversations I not the run the hope level Digital comes get It's And be of that generate is 'XX. more that we from we're on we non-Nevada expect by that that track XX% business is XXXX fourth EBITDA-positive And investors our year, than of quarter But just I Nevada. $X.X as and return something a want our that launched rating with be of clear in still Digital we this cumulative

to to out as know want to -- want right you how you -- I and most want tend I I'm to guys So this not this do longer-term transparent. calls XX-days. on think of focus of these the know, get I couch guidance, perspective of next a with I want I from pretty I know as business to now

today. I what see is this So

assets, When assets of trailing brick-and-mortar billion today over we doing $X.X own the that took we the Caesars, we're EBITDA.

$X.X As alone a the at right the we're post you billion about quarter, little Regional a EBITDA is over run EBITDA from Vegas billion. the $X to billion doing and little less $X prior business first $X.X corporate, assets is When look than that billion. managed Vegas LTM we through we're same of merger.

got sit flow of maintenance million share cost, We've for $X.X rent, operating breakeven. about outflows billion months interest free cash between shares of here per about seven as outstanding cash we $XXX cash about about so $XXX expense, The now is today. Digital business CapEx, that's

to We've that So expect you obviously do we inflecting positive. through ‘XX. told to what

same that similar In that a will the think EBITDA timeframe, come we've business. incremental of amount I brick-and-mortar got through

touched piece that piece the -- that the Anthony December. expansion got upon, you've Charles is Lake So, are of opened in of projects that that

in So property, expanded in already where reopening. the online. start will begin start business. of that Pompano to JV came We development first-half in the see we you'll We've got out pieces year the see racetrack of Casino, the earnest the the we're first post to but still come earnest, the it's around the project

Atlantic those which significantly be from not summer spend, projects. in is is period first mirror. rearview our the we This where We've largely City floors disrupted prime got on will the the

got in XX% Hoosier of Hoosier where is So expect we're we seen We've Park capital on high Park. returns mirrors have ROI which high a of the did, we in would course, outcome that optimistic again project a similar there. Indianapolis, probability, that what expansion in Indianapolis excess

which got Super come you've Bowl then of Orleans, before And over $XXX ‘XX. is will online the New million. That

’XX, going that's transform into that a high-end property end number So a towards of Caesars, of to restaurants. the

in Tower that the the Caesars dropped a will Casino. be You've got middle right of

last of offerings, beverage third-party the and open of You've food months. the across across XX Hotel high-end got number within development the street Four a Seasons got you've street

about excited there. possible we're So what's

company looking So is billion look EBITDA. my of what in pushing a I $X be you think could we're view, if ‘XX, to toward out that at

puts As us $XXX million the the Convention consecutive pay-down down over debt note ‘XX for would That Center to on mortgage Bret year. the paid to said, third I billion same. of and yesterday. we Forum ‘XX on-track expect look $X

billion $X you're today, at sit debt. EBITDA of lease-adjusted here of we $XX as again, billion-ish with So That flat. Digital

you about got X.X leverage. So times

described down the what I against debt we $XX billion from in should $X the and Just do balance $XX as billion. billion to get that organically business,

So billion paying looking you're for $X at year scenario, debt, that you're a effectively -- down in X% three years.

some have less increase but in about inflows. cash lease in payment to $X outflows, going you're cash the stream, talking $XXX You're more in billion million

So in of you're share more cash a looking like flow. or seem in those my $XX.XX more assumptions particularly aggressive. mind None

incremental momentum business we can and brick-and-mortar that $X.X we're I better billion to do in of given an that. generate the the the think I we have think going than out

third. I be of third, and it they'll and and of Digital, think think where Digital, In a you've got legs if of the comes three third, you stool roughly a that in a third a

you continues that's as bulk that should existing You've business see you sports-betting profitable, inflect increase happening what's the drive got positive. positive EBITDA, to us continue volumes more and of to continues the expect get the to

the Eric app us. more to the tables excited in is slot app, for change we will particular We're iGaming a our app is business in through existing existing iGaming our than in and leans going toward third that, peers business going because that that's forward particularly sports-betting our talked portal early iCasino to launch our quarter. improve about about iGaming, that

call to we've be If next, I will that in thought to million and we've to ago. speak come of months going share EBITDA. I to expect we Every equal $XXX you, get that leg in every that to to boost be XX confident XX time our I our times, we I'm stool partnership the third you, time we the have as more talked agreements we've in third that would outperformed then us And the gets months numbers. numerous got plus. where been those iGaming speak about XX-days talent of And sports-betting that up let's share it, that's

what's indulging So to right assets with I'll weeks to what Las get obvious, right that's now our strength And extraordinary doing for into thanks across we're of continue is think we going two longer-term, you all Vegas. strength because and back significant now. to me I know consumer the tell in from see

the ahead. exceedingly are about we So, optimistic road

idea quarter EBITDA that that you the if that just XX the of proud were billion particularly in We're in Northern the -- the $X in add we Nevada posted, so we and back typically not what to of strong point. forward first delivered rest I'm the pleased our and really proud have employees quarter, year. which of the look is seasonal a and our team nearly

And open with that, we'll it up for questions.

Operator

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

proceed. may You

Carlo Santarelli

remain harvesting embeds through the today, thank Everybody, of where talked for a when Hey, Tom. year-to-date for positive ahead the likely of do quarter? to an kind remarks. Tom, that are odd-sounding positive year? the we but year, season digital you we Will the expect of, fourth then spending in and some obviously kind in the NFL see you from and XQ that question, about you positive being

Tom Reeg

as allude basically, lot flip about coin lot whether our a positive to internal though, are three that a and slightly work as against negative now, probably to. spend, to had we expectations. would if to -- you, we we tell quarter of There's season a or slightly weeks you only that asked the you the that pre-football is you the got or I continue have XQ NFL quarter about Yes, same or of we're were also question beat that. in XX-days me in ago you not

we last cautiously I'm quarter. negative So have seen that optimistic could our

Carlo Santarelli

quarter comparison that Las last groups the pertains meaningful Vegas, Great, some thank with is XQ out. obviously, And then tougher in were you. a year to second as it larger

year, the just casino the half and challenging as of seeing mix into you're on sense year? might of what next kind in of of floor As second-half you're bit you your pace, that the the coupled growth this about you be kind group get back from off shift of and kind year, your as a in a able think to do well the with little of shrug XQ comparison what resume

Tom Reeg

Yes.

put I think it. way that's a great to

we I we very last -- going think what exceedingly -- we strong. be remain to year. if we're did second pleased match quarter is a It's

we fourth to much repeat will the situation that which quarter. -- of quarter, Formula at -- which on most mid-XXs or confidence One, look feel But we the healthy that at at If our next the forecast, strip still occupancy last the better what then and a you're XX-days any utility got we not the boost you significant had looking the the we've about is in point, given in occupancy quarter be the third think year rates. at you're going you've got to

quarter, So place second-half second last quarter I'd to then is last second a to and say year's growth the something be. in -- or similar good

Carlo Santarelli

and those may, Great. Thank one lines. same along follow-up then you, if I just

on guys As cetera., the bookings, a anything are horizon changed and out perspective the talking at towards of I'm look in that from all? leisure you terms et across so has more promotional market you seeing transient,

Tom Reeg

us that like. markets. Nothing the we'd competitors that's various what to depends material are, discuss. market see impact our want to in enough We who looks It

You've actor remained of Caesars sadly, these I Others, and be not. a make seen bad statements The used can anymore. of isn't disciplined. some markets -- lot the in to the one

feel good environment. current about very the So we

Carlo Santarelli

very you much. Thank

Operator

Thank you.

from Our Joe comes Greff JPMorgan. next question with

may proceed. You

Joe Greff

Good afternoon, guys.

you up XX% group for the fairly group Just starting this aggregate of relating with the talk to through segment, XQ how of about balance looks Las the good quarter Vegas, room jump XQ? nights and occupied Can Is the the a rooms pace, group that's in first significant group Tom. Obviously, in to see. year?

Bret Yunker

year last for XXXX. business and in KPIs all the up Joe, in group the convention are

pacing the the year. So revenues both for ahead rest are of rooms, ADRs and banquet

XXXX. to year another record We in have expect group business the

Joe Greff

and you over And just had favorable talked that Digital, OSB? things a earlier your year? last doing is related some you're scale the to is about Great, How that thank outlook structure things the that you Tom, the benefits much And of doing be cost in iCasino How you. you that and much the this I that know have will done is some and spoken rationalized then of on there. XX-days. of of

Tom Reeg

driver is are done change around I the what as quarter promo So has our percent the for on peers. on branding side, and was hitting of chief promo think handle contributors. X.XX%, a main those than which we've been The you're the -- of dramatically lower the

of Ohio in new down month EBITDA state launch so was cost considerably. as for acquisition post-launch. come Our us three a has positive March,

really So the the quarter we're a we're we're continuing the of how opportunity beginning business positioned. great iGaming in job starts to we has third really the platform, running off that of think feeling app. good of about we build that business way current but done iCasino earnest new the when there Matt and and launch

Joe Greff

Great. guys. Thank you,

Operator

Thank you.

with Wieczynski question next from Steven Our Stifel. comes

may proceed. You

Steven Wieczynski

Yes. Hey, afternoon. Good guys.

the they get So, ever a I opinion soapbox I strong especially of Tom, put event They to kind and best as move to if lot for from to minute? is, want I for get calendar. -- going through you the want on they want just feel your to ask investors. on XXXX to question Vegas know, a would to can always a be that we back this is want your we seem get

that's So not the maybe if just that could to case. on why as maybe you opine

Tom Reeg

Yes.

case a market franchises to significantly do the of job And or valuable Formula in that Vegas continuing of customer seen think events. fantastic One market. bring you've the a sports as to more a I add

I quite quarter congratulations doing fantastic are now, I of they Occupancy high. all are well. at and yesterday, to a we're look them, Vegas But full, as team if us So to well listened here. rates pretty Bill all had

you better customer. both the say, in And last you the average Well, come business to expense in market the average by is what's three of it's how discipline, that's see get And what so happened you years raiders the the our in do natural where get yes, up-tiering the a is microcosm town. our but over market. better also to And you see own customer can that to better? coming Caesars,

You see One. Formula

a that to ago, a You the see of to a to as see market just better us be business. people announced share The in couple has average A, gaining see weeks those, the customer. come Formula group One, tend

and would the out reason customers full, higher-value needs in stop you're kicking we're no bringing or I you're lowest So that that, already to so stop. end. see

that couple it to value, great been know has in come, in over customer continuing We gaming. average add very I've back to to shows market, get of different And to and add involved market reasons was low the This a add parents' done and XX-years to people lobster a job you our that continuing the around capacity continuing up stake bucks. day, in all for here. for

food the beverage continually of talking scenes world among you're in Now adding the world, sports best in best entertainment the to about one and and experiences and the that.

to the to working to up-tier was bringing market. a then LVCVA, to continue to driver to Wynn, that, to be going it's offering Steve of for and are We working credit got -- One here, give at customers. we're he to And MGM, what huge I've all Hill whole the Formula market add Sands, the they're as

about in be I a that work a to that to the sudden that, nice think like over that, back together this -- market do to cycle market XX-year stand bet of is it's quarter well argue And to but who's now. to tallest thing from see So and foolish we we expand. to this going make back, sure all all continues about

Steven Wieczynski

math you then, thanks that And helpful. said as for your giving I that for our you but essentially very going unfortunately, look, was guidance, XXXX. investors And $X said you way, aren't are to billion guidance Tom, know I the -- take know by

ask But are I the get there you word would all pretty consumer the what out it's of kind meaning the the much or about that stretch think $X most now. assume to math, right is your to konw that most, the to I So concerned billion. want you that guess get billion they bucket maybe don't be to buckets, say laid where and is I sense. stays $X those here biggest What if makes I you hopefully, about if one would just

Tom Reeg

Yes, a time right. talking so I'm horizon, about three-year

So horizon time call typically talking about ‘XX, like end on of of we're that this. a not type

Yes, possible years, it that is So in have sure. downturn. you three cyclical a

equivalent billion, might you that. $X right, free give be and want say that $X.XX That's all billion share do So on I'll flow you a cash number. $X

talking ever time, You're about has very company got for we post-merger. that here levered before been and a then here a long

And I see frankly, a Quite X gee, over $XX the $XX, path out against to flow. where lease-adjusted leverage leverage want looks share is to $XX. will free that you instead less we're say, it $XX I less of is if still at spinning good a stock be than and of think X think or times, I that's than conventional cash times, $XX

Steven Wieczynski

Okay, great. Thanks, it. Tom. I appreciate

Operator

you. Thank

question from comes Fargo. Politzer with Our Dan next Wells

may You proceed.

Dan Politzer

afternoon a cadence XXXX into the questions. regionals, seen noise maybe about good on quarter and know sounds Tom. Hey, thanks I the is of you've the of you and for I and over on doing fine. Could there's terms like the comparisons, in consumer versus taking April? But year-over-year course to my both basis. some talk touch it what been wanted

provide that? maybe additional So just some if clarity color you any or can on

Tom Reeg

Yes.

were an get June. April, strong. negative think call, in could record had say all-time we a was you shift you -- in on have that March So back an I'd last record I and was March. Vegas It told we for calendar the us, so all-time regional I

continued roll see we or should see generally you you that portfolio. expect across But expect seeing speaking, -- the I'd numbers. through strength -- So are continue that should to the

Dan Politzer

it. supposed to time JV quickly a Got was was built prepared time. be this And this with I in remarks. a that long-term project Pompano, mean then big you over your horizon out mentioned

now maybe the distributions equity JV near-term, disruption are bigger -- built the gets And from expansion project had out? this we some as think maybe term should You've returns cash casino come and time? How in even seeing flow online. over bigger any this the you coming about

Tom Reeg

approvals share. property stars that, top to is public significant of our as front there's and I a definitely today, had work out in local see and now we're going our to under the XX-days coming of Pompano JV, If to sit that in What and through closed. our we me despite is the Grandstands dirt seeing we so. jumped to the terms Portico track down. Pompano required. Reno of all So last disrupted, We're moving or you're redid of generally. out momentum thankfully Pompano we've, at construction, golf in point finally, here right But the

So lot in cash the over going to XX to a the you're of development months. is XX next There activity JV. see there

to if come expect event. JV, partners, your from would it's JV. ‘XX the where already starts a -- We cash probably don't any to To to be is there capital required out the of we're in JV point, I closer the that's but think

taken only has cash going it. going six than announce the continue to thought quicker the flow allow or quarter was over I originally the the to that's cusp on don't as not the drive going anticipated we're we've I But something right say, and distribution. the into far or longer to particularly much but when JV the that's But importantly, from we that's it momentum we're that now us, to property but last where traffic we years going think now, two. I ‘XX. announced of that's excited pleased that to for that, typically seen happen than ‘XX get

Dan Politzer

Got it, much. so thanks

Operator

Thank you.

comes Montour question with Barclays. from next Brandt Our

proceed. may You

Brandt Montour

for Thanks evening, questions. taking my everybody. Hey, good

refresh call longer-term to back questions. update of longer-term big-picture if whatever a of couple planning. guys just or your go to or billion through testing $X sort wondering you you'd it, When that discussion. a be scenario more last your willing So stress Tom you planning bear to case or

Tom Reeg

Yes.

we're So $XX or billion plus revenue minus. an company,

crisis, If you're about back ‘XX, an hit to you look to that talking number. the X%

in flows a that through. about scenario. $XXX I'd it, of GFC-type XX% million So call expect

that in risk. $XXX GFC-type scenario, So of a I think million EBITDA coming. see scenario your personally I that's at don't

you what be numbers, it into a had Las slowdown, In think here. shallow. based increase crisis those there's Vegas, relatively a we can particularly occur doesn't that see, I financial should the supply if on massive in

$XXX So risk the half I'd of balance see and sheet as our more along here of thinking a that lines be of what $XXX kind I today in sitting downturn. cyclical as normal

Brandt Montour

That's for super And digital. the helpful. then Thanks three-legged for over at that. stool

legs, it you maybe sort the a those and from knocked then of of rank way If you be in those do you ball? of just -- could is you which least challenging to think sort you consider of could three? sitting three off what force years three challenging could And here the legs cover the most we couple any of

Tom Reeg

I mean, over say, months been an have really iCasino I would XX are all I'm talking terms good today. been a about not business Feel turned. we the say has we that they're and quite for while, from cognizant I've of This I'd challenging. in zero. about last building this where experience

So one the frame. that that's what's to as terms in where to understand three-year got required to show surprise given and have also vertical, we've need I But the where think over it in what now that the do you upside we that's would look place we can at that I in you. time to leadership that I there of we

Brandt Montour

color. for thanks the Great, all

Operator

you. Thank

comes question Securities. next Truist from with Our Barry Jonas

proceed. may You

Barry Jonas

Dubai sale-leasebacks deleverage is I'm cushion? that do really could appreciate I Tom. three-year there? that things sensitivities. New even some upside? and curious, York, Or on of the potentially the and in or potential fit like EBITDA where where commentary all the a Is Hey, get just

Tom Reeg

Yes.

gave So real any the you estate don't include activity. I numbers

perspective. numbers as win you to, VICI has cash free we leverage exercises both given York, on a that that's if Centaur indicated flow and if its is New that from So it upside those from it going I've call

Barry Jonas

as follow-up, a are or for an on digital vertical side, acquisition Curious I game just what more announced general? Great. of think integration thoughts developer. M&A an your And online just in investment content the then MGM just

Tom Reeg

more would want I migrate app could more a That's allows moving We our of our that a PAM versus new we change builder And own buyer, ultimately if us our to do. say attractive. but what to see and we games. something are to tomorrow of of part to

Barry Jonas

Perfect, thanks so much.

Operator

you. Thank

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

may You proceed.

Shaun Kelley

I my taking corporate on question out for of of But Tom, take Thanks Hi, get by we it. a these math wanted we if doing about finance yield. as you're about you that's we take question. numbers, flow XX% cash you run kind little think flow, to mean, good just as free of if cash free is this afternoon, to kind your internally think a a know everyone. high-level $XX.XX scratch further

the You're long-term at and of going moment, debt some available probably closer moving coming X% is? your X% in terms to point just cost at what's paying debt of be where down debt to

it maybe turn expressing point, paying somewhere some when here, one that of at stock yield you that place So sense to XX%? to corner way to the when is in be start ignore? your saying it makes can -- I.e., from going to 'XX, it, that think probably flip as where relates would because you is a attractive to just when different down just back to to view buying debt too it's incredibly start

Tom Reeg

It's acceptance Shaun. it's story. also investor think of that cognizant track the rough. certain down the owe question, I not of of factor is kind terms that We're sector owe. outcome of I important record in of a no pay it's delever, a I buying terms fair in have doing. money a that's that I this debt, longer continue what That's we simple in question. Yes. I'm a because limiting that that to We If

stock, the for free As the about macro, which point down of a is story has to space that midpoint probably our the been you around continuing story. XX you're your where 'XX, in out certainly the months. there's would flow be you subject go wins a of addition that buying And element a talking to But into good to somewhere in you're last leverage this the should cash which in expect the of pay of with guess. that's terms time I pretty to return expectations, that debt capital frame laid there

Shaun Kelley

quick a Thanks. of that just then kind just union renegotiation, my of follow-up, on on update impacts the the any helpful. front. cost And Very maybe with

in that to things in hard you're Las you appreciating a into of through general, on obviously all how public expecting negotiations that still are are those that's just the specific call? see types conference that comment Assume to Vegas, factored growth playing do achieve but

Tom Reeg

are our built expectations. expectations I of first into all, broader Yes. mean, those

contract everybody for Vegas been they in up seen terms at to they out at EBITDA of you've so a per us As raise to a in to doing with now and well expect but short-term billion is the a We've built quarter, that -- for would on it. a deserve workers billion I well. sharing it. $X.XX of in for our the Nevada is expectations. terms deal, I month. to while, is in the quite the results doing you're see this quite extension frontline our in going that's that frontline $X.X of going market. in those We've significant we're And numbers over Northern of you're laid year. see a got employees final market, We getting our deserve end

Shaun Kelley

much. very you Thank

Operator

Thank you.

next with Beynon comes Our from Chad question Macquarie.

may You proceed.

Chad Beynon

appears has my more some interest Afternoon, question. would it space. potentially slowed M&A the spark and activity thanks taking here, that potentially for acceleration Tom, rate broadly which hiking in

you're not anything makes when of 'XX to Caesars? these running the of in Vegas 'XX, number markets, terms portfolio of for has Thanks. So future sold, in in the goals, anything regional assets of that but kind about that you're changed sense just the be thinking

Tom Reeg

about become year think addition M&A shareholder capital our value point ability the the feel whole next as M&A, effectively sale don't where the you what start you is short said, complex I'd before, anything back is to past. today. Shaun's you to answer through That told know everything a is a comfortable, anytime company, driven which we've say little public We've you got for for to to return Yes. a question, sale day, at in sale to more we every in leverage-wise, But I've be as in expect have of offensive lot nothing obviously approached no. for Don't with. element, you'll of to get soon. but so a size, as

see think don't in with it neutral, calculus cash flow doing be where would your looking I And up, there the are but we're maybe well. would very -- free far what of maybe we maybe flip offensively kind as would that from doesn't, where something you to of versus shows we

Chad Beynon

with And Okay. about Obviously, it asked Las nobody impact, overall positive. should a benefits DAs then potentially has be Thanks, Tom. Vegas. moving potential to just

seen with to we've and future of thoughts this growth? terms sports mean to properties, in Thanks. what any Las other As teams Vegas, just overall but programming, to your would additional

Tom Reeg

Bill's on It's that -- the welcome eventually to unnecessarily market get Similar their Yes, The yesterday. customers. important our county manner this passed to to continue done taxes us that it's announcement. tax to we see the have is exciting a to doesn't remarks develop. in coming that or

we idea So we town. and visit reason for there, the market, another are to It we're chop come coming customers our A's the get but the there's at customers. provides of those think to of wood and going thrilled share to to

Chad Beynon

Appreciate Tom. it. Thanks,

Operator

Thank you.

Our John DeCree next question from CBRE. comes with

You may proceed.

John DeCree

be like iCasino. for be mentioned on everyone. horizon just additional taking key product that, execute or capabilities some to enhancements about for would iGaming. And incremental to that of that revenue it of app you generate you Thanks what or to and able enhancements do executing some helpful some with talked Eric, bring. Tom kind marketing in start to you'll some get think product these a Hi, one my might you the Maybe iGaming understand investors what But specifically perhaps question. or two-parter. on I for single

If helpful. little be more bit elaborate that you on maybe that, a would could

Eric Hession

Sportsbook. when if have, we sure. get Caesars they app see perspective, goes Sportsbook. think they the on you And the Casino the store, want the or Yes, somebody app they and current play Caesars that about searches to the the highest that From for

go Then them go the to to Sportsbook. takes the they can that it and then click casino casino. They they time button start on the sign Sportsbook. through playing to the download and Sportsbook they takes The app, the log to have So find to go again next up the for they they to casino. and the the them then

the who's casino, of likes to a side. want Sportsbook it's some bit a little fine to a to somebody are Sportsbook who then start So go they mostly likes they But a predominantly can where app right but or homepage casino player with. to primary games who's the who for engaging or for customer casino dabble experience casino somebody and play the they of the see that somebody want into Casino play

to akin then which to frankly, and highest playing. likes level, going casinos customer the that, So somebody see come to play are, what favorite more likes you're attract our to their game slots, at in, a quite who is start is very

deliver we're going that. to able And so be to

promotion able advertise to prioritize real-time new on, whether have we're them, terms be enhanced our that they're to to on them easier much lobby be In so them newly to the a for it team make a to incremental designed we'll or functionality have of going based move -- there's the that will around, games going get, marketing to capabilities. much we'll some

able to greatly the we'll some will do do So and the is enhanced. of trigger-based speed customers, able app we're to which be then general to not something that right appearance be responses now. the And

to product the for they in a unable it's somewhat that we're that buried customer going currently, experience much that the it's to overall, provide want So because better provide Sportsbook.

John DeCree

terms see. question in a Eric. follow-up helpful, That's Maybe what of you

One without a of the been customer some that database opportunity Relative really that is what Just expectations, of your of app? visibility there app, get to big of into the haven't single peers if chunk board look you you that on kind database is? digital. your single see able have database and that you penetration for to at advantages is your without and your or

Eric Hession

to table to would Yes. we're what which that. customer. business, slot But skew the translates general, on customers Sportsbook the percentage core is and casino great. we say, tend like on younger higher games then more tend what to that of app. is And I in that missing skew We a male have the side that is

respect here you hub-and-spoke business have casino regional about that to the model the when is we and so think that And really with players Vegas, the player valuable with core on slot side. the

that's what something them the with in option experience. be able provide their giving more expecting line to we'll And an that to so go we from think they're that directly app, by customer into with

higher percentage perspective. our is And so question to answer core which it's customer the I land-based of to going think the your slot from directly, customer, a attract

John DeCree

Thank sense, you. additional makes That I that Eric. color. appreciate

Eric Hession

Thanks.

Operator

you. Thank

comes Katz question with Jefferies. from David next Our

proceed. You may

David Katz

$XXX laid it's Thanks Hi, afternoon discussion announcement whether Vegas of the is headed entering with And the we game. that, and Hard Fat or say Rock tower and there, this Strip, begs press questions. with should an everyone. it over would I that the other accounting With game had for and right, up time, over into the out. strip you respect real competitors Las strip positive sort Blue market, And the the your Is think sort turning many of you've starts where project expect taking here to time? sort money. agree kind my thing and million outlook upping used I to about of a as because of your

Tom Reeg

room rate that into absorbed the higher Bellagio I higher considerably property mean, -- that higher are the have of We've And got existing face that no it fountains across project. street that a unique this rooms a at pretty rooms. can be room windows. spend is that a tower has those rate, considerably has out

some So see And in it's that those the terms can the a quite are strip, there here numbers will non-villa of and the to upgrade create returns the probably very is easy run do of that market. attractive the rooms our in simple we side get and rate product then most what on strong. facing

I'll with XX for that has there capital you, be more a than tell returns seconds one this us to yet approve. the project to of took

even in at of and spend about Food Flamingo beverage, not quantum particularly food strip Paris you're talking its You're upgrade that terms the you're frontage. to talking see going but its of Bally's. about us beverage, and and

at at exceedingly the one-off XX-yard right a thing better there's generation. line. opportunities is the great right, high is are on location that demand the but So portfolio and than it's few our the all mid-field, I ROI, a strong that think been And for about has strip

be are to feel necessary done that projects ton can good, a there's we've historically, what and not but maintain beyond very there we capital some additive. of that So interesting

David Katz

you. Thank Perfect. Understood.

Operator

Thank you.

Our next question Morgan with Stanley. comes from Stephen Grambling

You proceed. may

Stephen Grambling

thanks. Hi,

Just questions following business. on earlier on John's iGaming digital and up the

what going you could move standalone have could sign-ups any spend branded names? casino we incremental have the potential rewards think there app, to as assess for wanted app, to way a be is occurred omnichannel of multiple Just to to-date? the under that through brands total as to each you Or iGaming? for is iGaming And Caesars your as that through example, be clarify,

Tom Reeg

have into it it's tell So for me number, think. Caesars XX% was about brick-and-mortar that then told And larger to was a the like digital, a that reactivated new that last customers. specific on through enterprise you more let I'd the to into getting we today. on the than million that about wait time than XX-days Stephen, or you number, Without The further to and on generated tell Rewards, an we've brand, I that. you, answer talked you way But play basis. $XXX about on annual

Stephen Grambling

And that, on embedding hypothetical but not that follow-up you're just your billion quick $X XXXX? in very something a as that's

Tom Reeg

to in that what No. in the I and or both, already a needs factor the the brick-and-mortar, terms on digital happen happens of directly indirectly, mean nothing contributing there's but happening horizon of in part isn't there projects. is the

Stephen Grambling

so Fair Thanks enough. much.

Tom Reeg

All for let to right. next Stephen. everybody your to you that, Thanks and go. With time I'm Thank you, going We'll talk quarter. attention.

Operator

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

may You disconnect. now

Caesars Entertainment (CZR) 2 May 232023 Q1 Earnings call transcript