- Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to the PENN Entertainment Third Quarter Results Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations. ahead. go Please

Joe Jaffoni

your Good PENN Frank. get and you well thank management’s Thank XXXX morning, third joining as as momentarily Entertainment’s and We’ll quarter for presentations you, comments everyone, Q&A. conference to call.

During to follow-up. question themselves please one we the and ask Q&A, everyone limit that one

Now, I’ll review Harbor Safe the disclosure.

involve anticipates statements These or Reform of meaning the intends, can Securities Litigation historical In current will, by performance, Such forward-looking of today’s the addition similar facts the to and uncertainties. not conference seeks, and expenditures plans, as or forward-looking or within of conditions, risks of risks beliefs XXXX, be results. the identified by developments, terminologies variations which and Act may, including of projects, statements are future expects, statements operating call events, and contains other forward-looking these words use performance. plans, estimates, future believes, current acquisitions, Private strategies should uncertainties, such or company’s expectations but capital of strategies, negative discussions or statements or or of the reflect guarantees future

including Jay National With now Jay, press statements. Commission, GAAP please in be the to today’s ahead. such, the measures Today’s financial and comparable CEO, reconciliation Regulation When and announcement company’s today’s pleasure turn over go a company’s measures assumes all to company’s call meaning update non-GAAP company’s results Securities that, as As on can XX-K to from calculated accordance the of associated non-GAAP in financial with in in release SEC revise PENN vary the financial expectations. directly and the Exchange of actual well with call forward-looking forward-looking materially filings described are any the reports will G. no with within XX-Q. and found Snowden. it’s presented measures the and publicly most required, Form Form my as risks on the statements or The may the obligation uncertainties to and webcast include news website.

Jay Snowden

Good Joe. morning, Thanks, everyone.

Felicia of investor solid continued headwinds, environment our team. economic report and to $X.XXX has release, members Head today we me if in competitive Interactive and a billion Todd of be our retail you saw which Pleased revenue to our of remarks, is revenues $XXX despite strong as promotional of We EBITDAR along. driven our stable, CFO, we’ll adjusted as Joining earnings in at the George to that X.X% Hendrix; another other link our year-over-year, presentation and by executive largely We well operations. and to million. and quarter provided Operations, the want once growth again our prepared follow our remained with had of results referring segment

job. company the across members team an do and leaders outstanding Our to continue

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marketing ability our disciplined confident remain XXXX. to we deliver that Given in and was revenue our in October, segment approach growth, to our Interactive in strong the profitability profitable fact

for theoretical of In to XX%. and XX-year-old to growth in which we’re I like few in rates bit segments. quarters, our revenue highlighted we’ve seen focus our illustrates group. all grow would older XX group increases strong nearly As mychoice just across in particular XX in prior our see the database Slides year-over-year your in X to attention the except with a this years, XX% a continuing to just we’ve and recent on growth segments from total X, over

retail sports best-in-class sports in technology, will dynamic properties our demographic meaningful quarters refreshed bars, products, re-imagine entertainment F&B the to concepts, third-party continuing believe are books years pay appeal we hotel and and We and which with this dividends to new to ahead.

it property tenth where four live. that Speaking of we’re in in introduced we industry-leading technology, recently XCs states Kansas, our our making

to roll to year approvals. of additional properties expect this the several We technology by end out regulatory the pending

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Felicia Hendrix

Thanks, Jay.

billion reiterating we to we’re range ranges third our $X.XX EBITDA revenue and quarter and to of and results to billion, our EBITDA for for guided billion expect $X slightly performance solid consistent midpoint $X.XXX and year. and our respectively, October, into the $X.XX both adjusted the billion revenue the above adjusted guidance XXXX be Given

billion rate, Our leverage ended cash XXXX. is the X.X debt adjusted of our maturity a until rent is quarter balance inclusive of $X.X nearest strong. balance capitalized with of of of lease liquidity debt XX% and sheet very our and remains We times. billion, fixed $X.X net payments, our Further, not

that I to Additionally, is our highlight are our about are annual modest subject deck, will speak in not moment cap new our annual capped GLPI, which on to a the also escalator. leased CPI. modest of in appendix earnings subject XX Slide as escalators properties to with tied and importantly we and lease a

we that of price remaining X X.XX currently our valuation, million third the intrinsic million average in our have end per $XXX at our there additional stock repurchased under an our $XXX financial between for the $XX.X Given $XX.XX million and the quarter share. million significant an an Subsequent belief strong of price per and authorization. $XX.XX price of quarter, an $XXX or million share. average we dislocation shares continued million to our shares repurchased positioning We is for incremental

Now further $XX.X corporate the moving regarding some stock-based on quarter, inclusive was cash In settled awards quarter. the of details expense, third to million.

on to million, X was York $X.X Category were cash with Morgan CapEx cash was cash Our payments $XX.X net Casinos taxes our landlords million, interest $XXX,XXX Town Hollywood total project our was associated Pennsylvania. and rent $XX were CapEx million debt million, in REIT which traditional and $XXX of

approximately settled XXXX $XXX XXXX expect certain our inclusive awards. Now we of expense cash regarding stock-based items, million, corporate of modeling

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Jay Snowden

Felicia. Thanks,

questions, it Suffice open our where to casino XX, a plans omnichannel projects hotel referenced Before in locations, we’ll happy reimagine addition and at of Columbus through to are to to new Aurora core facilities you our to say, Illinois during a adding properties entertainment provide consistent if each Las Vegas. at these good reinvest we’re more tower on land-based relocate the detail and Slides Resort licenses superior projects second of Felicia casino in M our XX our properties. and to a of like, the color, remain and I riverboat and in up Joliet, with it our at Hollywood these approach provided our to Q&A. bit a construct strategy in in building exciting We

in expanded offer database. that As in appeal are strongest our really I segment upgraded the properties we have to Resort. noted, are from strong seeing excited an to and offerings the footprint M and the VIP on and land that And segments introducing we land-based demand amenities Chicago results at to about of younger brand-new Columbus both our capitalize

GLPI of in the longstanding thank late ability also to toward to and partners the Aurora, once of budget, committing grateful $XX there. XXXX, construction attractive the to of our $XXX want million for financing the from All I relocation in up begin city bulk projects the also early at million spend are XXXX anticipated again and to access four million project $XXX have We’re to expected XXXX. the with of

position We are in strategy and talking pursue while conclude leverage these outlook. to projects by to a preserving able our like a our profile. about more great be bit position and interactive high-growth cash to And I’d overall

also of and over consistent and of learned experiences. couple very our on data customer We emphasizing have aggressive to years refining constantly last marketing we’ve opportunity, lot and strategy course, a based spend. external our products acquisition nascent organic the But approach over remained are the in our latest this

XX, third noted, October, hold by month online our the sports Interactive valuable of betting. in for Bet reasons by are the most like Slide the an While segment, theScore specifically our to which, was America. profitable very results we in highlight which our of for recent way, us North and competitive a the can see as were noisy performance Ontario, quarter month would with momentum which one you in average is in markets I we includes on encouraged

We to betting wholly-owned attractive attribute returns that and iCasino which to our we customer and capabilities are the several relates As generating significant our metrics. compelling certainly enhanced offerings. sports in most both of based we stack, success very to retention the invest but benefits seeing continue that costs to acquisition market, on things, is strong tech tangible

opportunities management has and and on our our in we build player in lower and U.S. customers promotional experience stack profitably. we’ll advanced something in by As seeing to we real our do maintaining the markets once are CPAs, think product attractive spend can we loyal system, tech market own returns in will bonusing in greater here where And in Through features Ontario, account be other we’ve share QX, some identified markets we improved, particular, provided investments, our see we of that features prepared marketing to U.S. invest more our a replicate approach. and returns the the those migrate course, while we in to disciplined

mychoice advantages, are mychoice favorably will robust plan will pending also still very where approval as the the XXXX and from have four which in go us omnichannel This X, We about Massachusetts, and by our success supplement strong highlighted where very excited state, success in of been live leading our as loyal for on in well to driven by our audience a regulatory we Barstool casinos our database be January Kansas, QX live Massachusetts. database. in in help adoption from Ohio, have positions our database

be to that, us up it optimistic to we’ll open And questions, leads with very future. this Frank. of All about our

Operator

Instructions] comes with Please from Greff question JPMorgan. Our first proceed. you. [Operator Joe Thank

Omer Sander

else? Omar Hi, front, the Felicia, questions. your was Thanks a that you maybe Or that Jay taking for is but anything the really South were Sander West specific to it bit estimates Northeast Relative Is our something more little and weaker. to to Joe. for this market and on strong, midwest, our the Is Pennsylvania? stands there out others? relative land-based on to

Jay Snowden

Yes.

there. is the newer have going got mind. two thing be keep there, Pennsylvania two think We’ve longstanding and properties I one in to to we facilities

happy some there’s to but noise over in to to – it that you a of I’m hand one. bit Pennsylvania, answer So little Todd,

Todd George

able new some seeing there. at you’re the coming York It’s to the some some right. some Meadows competition from with up impact in casinos being our up in. more in New did of share new opening from in of Pennsylvania, existing PNRC, of Jay. our settling properties lose that, properties and but pick and satellite kind fortunate Thanks, just We’ve exactly Yes, the Morgantown, we been

areas. isolated it’s much So pretty those to

Omer Sander

across Great. anything call was portfolio, to markets of pressure. you’re that I higher as your well seeing any out? wondering one similar labor peers what about And your you’d talked cost other

Todd George

it So people what that More out. seen. open The comes really down back are has it’s helped to now. we’ve so looking for – is jobs, pipeline

a Jay I reimagining kind properties. talk was with our a then really That’s what there quarter. say, the of So we’ve to of in bit in bump, would able of been heard now. And lot you of kind early do about settled a

efficient labor of more little a become out necessity. we just So

So to that we expect as we forward. carry through move

Jay Snowden

been likely think we’ve many our earlier job. It’s was level we as very year, leaders we’re target. they’re And of at over one we property were not which QX those the fantastic margins all in significant beginning cases, XX%, I effectively. And felt and a though dynamics, QX our a in were comment, settle margins good shows in we’re Yes. as that of but our and XX.X%, about think And the that headwinds, course what talking these consistent this managing been will of year was year regionals little XX.X%. you just we XX.X%. I XX% very done year, a Todd the I which this managing QX is was at. of north said property the they believe add would like have

some down But it to QX, will a would into see, XX% You the good us. think for be blend mind, you bit a remains will seasonality for target when little you’ll we keep from naturally margins see XX%. year, the I in together ask natural likely everybody all

Operator

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

Shaun Kelley

up I digital. wanted of and to ask on Jay, following everyone. online morning, Hi, good sort about

stood as rationalization just of you to share lower the promotional sort My question and is, opportunities once lot the tech the some we build market a get mentioned here in online about platform environment. CPAs been of sit today, there’s up. You discussion seeing

far disciplined. course extraordinarily been obviously have You’ve stayed the thus

the iGaming can question offering the direct is a do on really is, lean maybe tech the want the you push little so And maybe side? stack get further the the along where to marketing a you marketing, product in bit you on today? place in Or further before and

Jay Snowden

Yes. bifurcated, own our Great the time. bit platform. now live a that. account we management that we’re we in something as trading player about question, management the of all on Shaun. risk And internally the This answer benefits as are platform our it’s services, is, Because And well talk own right? currently seeing Ontario, is

would had we’ve database we’ve retention an what our our it cost in results, so describe our Ontario was to our been, continue I in Ontario, doing to a U.S., seeing U.S. doing it, lean in that, own very assets than in feeding messaging consistent And And with XXX% per been brands and just owned that year also some spend early acquisition was been we’re And databases. I in U.S. our mentioned. own the and that. the we’re good that organic on because better as we’ve And opportunity way, that levels funnel I to entirely I In but supplemented marketing such in and it’s year, additional we’ve high And saw has because think, the strategy really the acquisition better from seeing marketing, the spend been Ontario this the than even we think we’ve ago. into and

live market where with us we’re expect tech going market. Ontario. number believe already you we stack we to next to a we we we that. is even platforms our profitably. spend. in and believe that think much we’re expect are should of across the our something we’re in retention attractive, as spend the what as U.S. next of can CPAs from second be Shaun, certainly benefit, same to we’ve the in and when tech long this should those So and for summer do that that see It’s dynamics way. if once would U.S. own continued the value half We’ll we We I judicious share been investments higher stand year similar We’ll We into I from and grow seeing go anticipate us you thoughtful doing one make XXXX. would say, in And all on how

share not and can can believe we looking have and we’re own we if do customers, bonus grow our once to share. tech but stack previously in we’re market have and market We’re our promotional grow retain profitably, that we great on can’t we Ontario them we it didn’t seeing continue engine to capabilities acquire that that

Shaun Kelley

much. very you Thank

Operator

comes Jonas Securities. with next Our proceed. from Truist question Please Barry

Barry Jonas

Great.

to you could when getting potentially you of when We’re Barstool. – acquire closer could or XXX%

you if any curious see do major changes expect Just XXX%. once reach to we should

Jay Snowden

Yes.

we’ve there’s We’re of in next already no made publicly – changes Barry, in that – we’ve committed purchase and that to year, February plan.

really owning opportunities been years Certainly, create both about on excited We’ve really, I’ll had the with from I thinking the about this talking we what how They’ve an side, PENN. late, share meetings And we’ll over our to have a say us lot on last the more a course it’s close a we for very exciting that – have And the transaction, media of is to done partnerships. here now. once casino of industry three with do of Barstool. advertising partners all perspective, regard X.X, is amazing and We’re about media almost say really would for statement. assets. historically, true we lot we’re synergies to

the foot and in the traffic a done of are all that and not day. by of out properties monetizing every properties great our eyeballs our have moving job driving We and

plans, the folks great million never on think for to the media some we scenes. in guidance We be in advertising best of that a the mychoice. something would more revenue. for industry, partnership year, sales people partnership we we’re and people opportunities. theScore, XXXX, the Barstool us over we’re XX of have And at and our publicized the assumptions. in beginning XXXX, really yet, grow of be in there opportunities third for I but hard sharing opportunities media and of We’ve working any throughout and talking now probably partnered which more And have there’s about we’ll come, with say, and behind many more monetization to And parties just of haven’t we sports there’ll database next on

Barry Jonas

wanted great. XCs you ask seeing the more rather sounds I maybe just driving more see, the it is then really expect about it follow-up, as to can continue analytics about That And you’re Or to rollout, for better volumes? or benefits a you is Jay, talk the about for marketing purposes?

Jay Snowden

Todd I’ll Yes. is the – answer that I’ll let answer yes. let one. Todd

Todd George

about and we Jay. Really, to Barry, excited Tax, we’re the could with date not big thanks, states more horizon. be here what seeing some on

this to move up engage forward. able So kind more real wait having wish they opportunity The as to in them and to a of pick in through to it’s But analytics line, the being real the us the friction from This back to customer, is as is experience, us to winner engage in the overall truly moment, yes provides of behaviors we being hit the waiting property not said, do with time which we as than traverse removing after both. really just then benefit property. driver. all their such with real I guest, the think mail able Jay will they depart the them in that the

Operator

Our Wieczynski with Stifel. Please proceed. Steve next question from comes

Steve Wieczynski

And or the about those pretty remind there we of targeting call different they growth explored your the you’re new you you what same existing the add-on new these Hey, I Or what across help guys. to could are projects us growth much hurdles there kind Jay, return somewhat could return moving help metrics of forward? us across could us that those? And think more these about projects? all also projects on if the there? four? Good And ask are just maybe are out would are then morning. for that so out be wanted portfolio

Jay Snowden

came we’ve Yes, at these And for four number sense And why years, it that internally a announced or some about. for these cases, were are that all pull a we that ago, are there the not four it excited worth all us reasons, projects getting years. great of in past into about looking make in and couldn’t trigger for month we didn’t been for the we questions. together really

some And look there’s seen mentioned this lot a that right we current economic of the – Illinois I’ve supply that Is in we’ve this wow, what everywhere been before, at is the place? there. properties and softness our even have really say, in environment, we addition seeing And we a perspective. and many the offerings entertainment not that well, of properties, portfolio best-in-class don’t assets that performed at we’re and older are with very smaller, offerings from quality database have any

as city. the and anchors And one partnership with Premium Outlet of to case country, business their Simon of Asian malls, be to from had – well. So tremendous in the new, only in we’ll are think to include of commercial mall be Illinois, got tremendous the part Joliet, we locations successful of a to that licenses a great the in both one the that’s visibility of strong we’ve outlet but right of interstate current cases just case obviously going development both facilities, these We’ve us, premium for to into projects much terrific There’s most that going more are and their off that very going those that are next they’re new goes location be there. of attractive malls moving not a are the that they locations in Aurora, but we’re foot residential, mixed-use have amount traffic. in a

properties the definitely but there one Toledo our EBITDA to about with a about more hotel, offensive allow are. of defensive, has our didn’t. and offensive well. lease mentioned lease our more way And top-performing defensive, for have a so we GLPI we with were the been believe is growing some for two Columbus our years. bit have and that Columbus should that be We than property growing new on as resolved and those And it. with projects But mechanisms two that dynamics to revenues terrific think now here and are share little but certainly those both opened there is going as to think properties us, with that we us database Felicia rev we

rooftops So then property the there is feel to part needed really good you for about all see years. that. like rooms Las of just in, crazy That surrounding growing M the go we’ve And Valley more up when the you Vegas there. fly Resort, continuing

So the to really feel Steve, about good individually, all profile question. four, we your return

deliver that return currently than collectively higher feel is better shares, also you trading. return, the growth about to sheet that’s flow we can because that’s these sort cash where We we our And buy cash our projects us and flow to. can back you of do do generation case, projects. four a think invest this balance it free stock will do if deliver in free allows a way we both is In continue

was to what’s tired so then out to stay of And years. probably two are rooms. retail the We strategy, coming of that the tuned to – – really amenities where more are think it and gaming renovations. would hotel would could growth, continue high I sorry. pursue say, the high-growth expand yes, hotel on high-growth of a last a we number and and But have terms two come. yes, and upgrade the hotel where quarters could and our our us at XCs we’ll casinos dated couple said great in and that facilities of and I And the markets say or the for to we’ve potentially just then properties our us. of is grow that of a part more you others opportunity the our core assets nongaming in omnichannel properties I expansion, there’s side. floor on are And to use that really invest for we maxed other

Steve Wieczynski

traditional just ecosystem, versus into like Okay. That’s don’t And about watch of of person about that not, spending way have but that us a do the lot younger of you way rest you I coming seeing capture or higher think great data your if them that demographic and your know and that try younger there from demographic help their of color, this? what properties over demographic Jay. to level time? is talked here And then that for them is the any just that get spend whatnot. kind I looks move and to let that assume what the let about kind younger grow trying database. think Is the there, ability right in kind you’re to mature to you’re

Jay Snowden

that’s by that, business approaching on moving talk this it your are some years XX%. It’s as And in real going a about let – right the you’re the question. All all was encouraged ago, it’s – and most our that things to And now we positive share Todd basis what’s the thinking right and color visibility now, try to it’s and way. was quickly. on segment, we at little for that and exciting. we a titanic quarterly over I’ll the PENN XX-year-old age you about I answer a XX% that and one of is revenues, XX – few just with just of exactly very because the

on getting think the relation, into segment, be lower you associated working than on they really the the but LTV cultivating side the to if so with to close the age them the And is relationship ecosystem, customers, about through is. a those generating older spend you then anything today and might real where years the loyalty the Todd, add? relationship, want value continuing stay factor to them

Todd George

look question, to your in basis. a Thanks, on little Jay. it response per-trip a looking just at bit Yes, I

about this group. XX XX gap. And the But to and traditionally, XX XX we So to then in close where starting the XX, to when you seeing database, really XX up goes delta we’re They increased that more visitation just it groups. that overall are little above, our XX to be then and used to there and close sequentially. decent trip. group all a We’ve delta. been pretty the able older that spend And younger between a per to think

have. in, coming that been engagement the per-trip that of to their properties our So they’ve lot offerings with relates of level a on a we basis, and

So looking way at also only experience, it’s looking it’s way the at gaming not they’re dining, the lodging. they’re the

a seeing where basis, we will but forward. growth the as move spend trip significant we’re per be that decent headway. focus making trip So the really is It’s on

Operator

Craig-Hallum Sigdahl Capital. with next from comes Please Ryan Our question proceed.

Ryan Sigdahl

right said kind want three Felicia. were I you October also it that that? Interactive, your Good QX in morning, I QX, And Jay, confidence XXXX think you confirm maybe I of you positive to in to so and start then but cut months relative with ago? can inflection that where in and for

Jay Snowden

we the we that prepared over holding. in again pretty an and percentage that I’ll our the Sunday hold wasn’t remarks We were in was did Yes, got beat that good that reiterate with the release happy mention month. And of October. profitable – up actually – average in last to

have have It’s the That QX. a is, you’re say QX. very little through months anticipate would So where we’re keep as period they’re going factors work likely, think, looking mind in we the QX. through was there’s couple in system. for don’t dollars way time dollars, EBITDA a One – their X.X that like to the being a date We of driven, match but continuing initial bit I to working in have yet, not that. which of There’s to is I November. hold two on a encouraging. going to side launch state it profitable to hurts deposit months Maryland see sometime usually in the we’re

invest up some going leading So that be Ohio date go obviously, to in to There Jan is the state we’re go-live will will on that going downside. little to in spend X. launches. impact X. But Jan live a to December bit of

but the this, it. the QX and I the So little And that a hit think then noted have quarter. of in we two last other factors bit months others there’s haven’t factor two is, publicized will

We’re Mattress World Series part of bet. the Mack

couple got us that on line of you’ve million. with So up million the a would pay $XX

fills to in And profitable if hit, be go range. probably then sure. we’ll he if will Mattress Mack for be does, breakeven-ish somewhere doesn’t that So closer QX it think I

Ryan Sigdahl

metrics experiences. in over – what of else player kind Then early about? to then mind online One land-based Thanks. so to but nice near-term talk seen land, greater next and positive several than Curious shared to the that about integrate on excited Great. else some maybe is comes and that of the it’s years anything in online follow-up the one just from across that the your pipeline you’re CCC is wallet that excited initiatives. and you’re kind

Jay Snowden

Yes. Thanks, Ryan. on think Likely I’ve our a call, Yes, is huge before, XXXX-ish that piece look, last wallet, for us. a – mentioned that’s event. I shared

tech profitably we’re right the to bringing now back that thinking next live that to We’re tech scenes, in for the on how live want Ontario migration, back summer, the – bringing between and Interactive XXXX we and land-based focused our plan about share grow into U.S., at in the of on technology folks Behind with we collectively leverage market platforms the really working we engineers that have and already to the XXXX. going to our really early half second future. team theScore along in to the operators are

offerings. across So decisions of our our now all to hurt in into we’re not get will wallet quest us making consolidated one that

wallet have relates move perspective, you offerings, are can about I your I sort think one as that of they seamlessly is my stakes So that’s you offerings. migration. that probably from table omnichannel, tech able those after to throughout it it’s to – But be ecosystem, those to offer one it’s customers retail think look, are online a the then whether and think Ryan, must, nearest, your

for to we’ll on that about priority other us from talking think there. in and be high a ready and some internally early so XXXX share that we’re things we And got I

Operator

question next proceed. comes from Jefferies. Katz Our David with Please

David Katz

where taking be from? it to demographic you’ve about coming morning, everyone. talking seems our or started not something come in Have Thanks in did been from – like we’re what the that not your Because peers? of that catalyzed today. much good you for that questions. dynamic Hi, Interested indicated hearing what Like it?

Jay Snowden

Felicia David, in I in say want and Todd I a that of add would Yes. anything things to And you about couple that. missed jump please color. or

in when on we XXXX. years. reopened this been we’ve COVID. certainly of of – think the was We really And when we in you casinos, time did, July destinations helped know, started the them One May, one lot. reopening all last entertainment helped several so I Two March open that is of things that we was closed June, XXXX. obviously COVID very few way a that focused at that were as time. we And the the frame for

And demographics saw so an influx in. younger we of come

we into was to loyalty them relationships. got course, get we Of build our to focus the program, our have at time

they – don’t contact very on your worked hard them so very, leave have program, not they to in the they in, come do know you that. And back we if Otherwise, don’t end. to loyalty and they’re how

of losing segments exciting very was the our teams customers. didn’t is and to of big great slides not – see us, in showing them. previously, which opportunity want these think as growth now with I for XXXX into up we on think and we that showing top loyalty we mentioned we’re people signed I’ve So that And growth in that growth younger provided, did a all job I property getting make you lose the program. but sure that we’re our in here XXXX, saw those a in we And XXXX,

as the quantity relationship to in and We’re grow segment that actually grow continuing well.

that think, from look bring which fascinating our you database able is, grow, been The into number XXXX the betting May is the we of fall other really offerings. the if sports and actually up were been of live in I customers legalization other factor, that able we course, we of and the XXXX, to online interactive this looking have we’ve of at ended day, going in to at

XX from revenues betting, XX% between online and And Our coming if online casino, of old. are at XX XX%-plus total between XX XX look you people we old. it’s sports years our years have and

being interactive bring online post-COVID customers particularly we’re relationships into and to our no our customers look them bringing was another And but X opportunity excited does contributing with doubt through of loyalty most offerings, in big like able younger building XX the is when betting, obviously X look down course, So road years factor. that sports what that the years, you we’re about. casinos years,

Todd George

sports it point, and your that problem when more the were became were is add only them. see start the to how discretionary open, in concerts the a everything kind budget. thing I them maybe one this looked inflection is the else and as Jay, that was we is Then we and for at everything we we budget, did we solving partner. would to else competition And – entertainment that to more retain past, view Yes. a of closed that was

And us to do I became experience casino we that people then sporting how year, experiences offer that with multiple how as And our better in growth think viewing experience. it unlock do across So this entertainment engage point, channels. people all Jay’s an more professional events. then with to the entertainment, we led

experience casino So online XX%. then over and up a an experience is

we’re us So really seeing royalty with as channels, people more create across which move engage helps us we forward. multiple

David Katz

loyalty the program that Jay, that Understood. younger it’s I of and durable GXE, the rebranding technology-wise. comes when of PENN you’re can and group long-term. the of something I this, last you’re of was over reimagining there this on of repositioning to if of that the and that up, is what demographic at follow re-imagination cultivating we stuff talked discussion that’s the And that and about heels this doing all assume all of part obviously a comfortable

Jay Snowden

rebranding and exactly evolution program, and to share That’s XXXX. right, loyalty in David, we’ll more have early on the

definitely work We’re on thinking about is. And it. now at right are we that what hard

also program to we’re a even We’re from and in and us And on I them our you the the ecosystem. not it folks but program called you some just to more things for thinking to don’t that the that and to we’re for. been. with the you think have we business vernacular how it then opposed how it’s trying expect points should use build and the be way entertainment starting younger interactive deconstruct long-term, demographics and as expect keeping and gaming and in new should has be – appeal but should currently should have loyalty of in the about can can that, really what hear you whiteboarding we’re what the what up this within all hear to around customers what mine, that And we

Operator

proceed. Our next Canaccord from question Jason with Genuity. comes Tilchen Please

Jason Tilchen

in-game thanks Jay, for on the growth in and comment was average maybe the outsourced? remarks, much In rate you by talked in stack Ontario hold talked digital any due if How October. I’m about just morning, in mix of for favorable strong wondering taking different digital tech QX. or of versus the terms Good the being was the driven outcomes. questions. Ontario, you And the in the you mix partly U.S. versus performance really Yes. in the to there, than in-house about the prepared

Jay Snowden

to We and – think Happy four QX, think been the Jason. Yes. I I month it’s a good in had was for weeks season. football football. for NFL it well three noted weeks college

the being don’t direction So hold July work I in and noisy one August, other. really recall or our favor.

probably hold. So average-ish

the that what for and you’re intents still of impact was the three It for We’ve have the seeing for parlay I sort quarter. we think wasn’t it’s really Ontario, worth. really stack purposes. season of is really fact was. weeks that on been of are early. all our really, now that just just given again, I October when do me football really for for front us, it take in So don’t tech looking material But and at and own – this strong what play.

to in-game out We’re our build offerings. starting parlay

side where all year. to us on and features from we’re covered here before sports more of parlay November, major launching see in the have you’ll several end the in-game So going the parlay the

business sports active it’s market momentum is as great about we own U.S. that’s continuing And that all line higher betting We’ve handle in as here have there, fighting percentage arm should in tech again, Slide we the differently can online that way. same obviously we with users, show that as doing more a are betters parlay the to seeing offerings we than migrate it – relates continuing are we’re in in have and that’s the we’re are of to monthly betters slightly we that U.S. the really got Ontario, our our on that grow as don’t We doing hold a given grow in how one over but we that next we profitable and with to behind assume early, sort us think Ontario and slightly all money versus on target stack, once everyone active be the the of Ontario, users, and daily tied summer. we’ll been good in XX. that a share back. you happening, that So GGR else has, results in and

Jason Tilchen

one just Great. Kansas. That’s really quick helpful. follow-up on And

there marketing you strong or that You and or depositors. – you those call out in or take and anything acquisition that talked from you anything terms can there there about Is the Massachusetts? Maryland of can really and in apply anything did customer from Ohio tactics learnings differently

Jay Snowden

when we’ve sign-ups it’s in sure. to all casino for And prefaced I to database, when been you mean, and there sports a Yes, mychoice Kansas our do able will at and then date Todd a you is comments retail to look capita terms of deposits online this. cross-selling to smaller with betting. population speak combine what been so But best launch we our state, it’s on of and per basis. our

there there’s that elsewhere. Todd learnings will Ohio, sure, Massachusetts can apply So that cover for Maryland, to and

Todd George

Yes. Jay. Thanks,

mobilize bit to little database. we earlier we’re out and our mychoice So a able jumped

a comments from been lot with book of database. the see our have in where that one the on of have You mychoice come out that us the the right engaging slides and through sports people called

the So we’ve big us, with omni-channel really say Kansas Sportsbook. that then created, how to XX% since impact And that almost to of app, the to other amount. education download the have there accounts I us tremendous helped that new would been it engage and getting working out property launch created early, real our our at process, opportunity how out creating back that for of through goes a the

database and have property. engage whether the We’ve finding online new property significantly with our total Sportsbook ways new the or them, our applying very the Jay accounts that base jumped we state. optimistic as learnings So for these population again, which, then there, the for into as launching feel and just of go great seen that, since to we doing Ohio, size it’s in mentioned, results to coming

Jay Snowden

And fact aware database Ohio state always there give in addition us Barstool but go a of And that we and to when we that’s in has live. Massachusetts, last huge I to this, Barstool everyone going advantage that know in is the our is the casino started in state comment over-indexed. another think QX

Todd the for us. And so assets strength to good we our very brand four and between These be states referenced in database to that the are of anticipate addition sports Barstool going the there.

Operator

Our with & next Please question from Bernie Company. Needham proceed. comes McTernan

Bernie McTernan

Great. for taking the Thanks question.

in double that for sense I for million to to check. so the if still think positioning other call think relative check industry? industry do profitability, better-than-expected double reporting not implications wanted as competitors broader $XX I sure sports the I’m but it’s too U.S. the any early wanted interactive X.X, implications this if then prior betting And your year. but losses just you there’s given or for to don’t made Just commentary,

Jay Snowden

in I think think couple not questions. Very to addition on which quarter, not state fee But was we at With of based of year you for prepared in launches, number to and I quarter when the you the bit the ahead of mid-point remainder XX, anticipated to good processing use. both a of as revenues fourth mentioned million, year the is to come expect the regard remarks, just right into if Felicia payment guidance, in total probably going that the of mid-point a EBITDA number little for the for the at her our look look the and results. $X

the are that’s math slightly fourth be where be for looking probably So through I think you QX, interactive where should the year positive you QX if in we add the the should quarter, quarter. that there, where to and probably fourth for at coming you’re do in and you

I really as it I the great day There it, been said think organic us. now right leaned profitability, a And that think all We’ve model lot profitable the is marketing relates we’ve focused more industry way always so I from term one. it’s great a to think of ecosystem today, of tapping good think. moving is I on an hard for have focus which putting a through we’ve that a sort industry, X.X, on and have cross-sell. to and to we what partnerships far. proven on of that PENN, overused the that well perspective database from That’s we’re on an and at magic ecosystem into have really ability but this owned from people the throughout termed doing It’s we that of execute work omni-channel. technology, from

think of more probably more to the I to sense. lean have likely CPAs door us on ability to already that And when focus see continues to we’re starting makes it the profitability, and open for will attractive. and in as going we as that continue Ontario to rest more into industry that’s look the the where even

that We stack. tech the we’re U.S. until our in not will live own on do

us expect pushing shouldn’t to So you forward with see that strategy.

CPA over push the months, which support U.S. in grow will will lean eventually continuing attractive our what well, Ontario to here half of us, as great continue XXXX time. three retention market course, in of and into for up be we’ll second and profitably forward coming and launches, in coming is We the state share the results and to

Bernie McTernan

media And with theScore to you if and integration complete Barstool? then of strong your could financial for position. strength interesting Or kinds expand strategically it. you what the guys? or and could And media Jay, Got Are look M&A either assets with you of assets so, your partnerships? in through be Canada given the

Jay Snowden

speak. so have currently. say missing game, There’s like would hole don’t no I we’re to anything don’t – the feel we Yes. we in

say radar. really on I’d that So nothing that with the it’s today you share we

We’re very we’re at curious always PENN. a – bunch

thinking looking for So media about music. areas same We but partnerships in engaging companies, we’re or entertainment of interesting thing always and sale do they’re live and other whether potentially. with the not,

takes and sports it’s so long-term. audiences our databases lot know us the – our There’s overall where and area, entertainment media just I not we do can to assets. that a that’s the I know just we’re really and on don’t that across casinos strategy betting, focused going not with is casinos. base fan broader And in our that do retail

as would we for nothing look opportunities say So today, value stay looking five missing the road over the we’re always next three, I create but down to tuned, years.

Operator

Bender Please comes question JMP proceed. from next Our with Securities. Jordan

Jordan Bender

online. questions. cross-sell Great. of question. piggyback Thanks that a pretty for to Kind for good my that pretty last on database taking well is It’s casino the understood

assets yourself up you presence can kind omni-channel land-based I bolster think that Canadian buying Canada, to in see there? of

Jay Snowden

I imminent. knows? – knows? we’re Who Who – not there’s nothing

to going not – looking not on we’re anything We’re now. comment at right

around guess we as land-based would that you But these companies Canadian-based I much would never the that. there’s types Canada. at on of rule out can assets that So about out what and out. comment talk There’s future large always wouldn’t I two I I We up rule rule maybe look in questions. there. is

Sure. strategy So could that effective help important been overall in has given how U.S.? in the and omni-channel for the us

could presented the itself right now. in that right at nothing some price any we’re engaged imminent. make think if It be conversations There’s opportunity right the not interesting right us. for the But time. could I at sense

Jordan Bender

my just then And Great. follow-up.

talked over about the how in-house your just you’ve seen in-house are and of some platform? your Can quarters. of of third-party the your couple the content impressive or you about that content versus last games kind on You’ve growth talk maybe metrics performing

Jay Snowden

handle shared our And XX% coming total but we New homegrown little were digital We created, just front me, we looked, that we in now the Blackjack seeing we’re the growth of in the have side a handle and of the you in show games. that particularly was Jersey slides We’ve bets. proprietary time don’t games. last I – games from our over stats Yes. continued have on bit in the seeing that here

different those We at we with the PENN. have branded IP that have collection

really by encouraged an interesting land-based proprietary and as XXX% It’s working because with casinos past, we’ve always like So for third-party that. with time. industry, in manufacturers up the they the have themes game of we’re tried come failed, the

games encouraging content cases do better and some we that in the to of we third-party can providers. actually create that can see some this it’s So than

encouraged We video to pretty down the that just able content. us now keeps product what road. our for new do we’re we launched developing in we’ll slot I that be mentioned a So Roulette multi-line – slides,

at we that this, but come, and rapidly more to getting early more create impression so the we’re can And be down is can successful more games think that we road. the we doing

Operator

question Susquehanna. next Our with Please comes from Joe Stauff proceed.

Joe Stauff

customer quarter-to-date I’m Good seeing in been morning, male-oriented. And attract quarter Jay, your answered hear conclude these one, like it’s Felicia. the maybe sports you’ve customer retail of customer I in but guess, was certainly a curious in segments, what most that apologize trends in? provide some you which the customers secondarily digital question any wondering traditional think I I I it, where just on had of to change this, and kind to two that, from slots I X questions. you of And of the where then based you skews demographic? Has younger can within of to and to the or betting, the didn’t markets? your online has of I naturally been are commentary, on very and younger increase if there maybe another terms that naturally came strategy kind kind fair come Slide the slots in

Jay Snowden

I’ll mean is three saw second we quarter-to-date, the at first Great consistent is answer QX. that highlight with I are the This particular, here. in we’re one very I’ll of that in which October. Trends really November there one, quickly question. Again, seasonality. is day Yes. what which is

very the at remember happen a the three from usually what Just they’re have you’re quarter. of likely the bit quarter average consistent. look historically that like That gaming XXXX. fourth revenues again very, EBITDA as a first off as and will trends been margins here to But looking and in drop

covered very results with October that. on our We’re interactive happy already the side. We’ve

today, happen their good stable honestly, we question, good, predictable, things constituencies narrative we on consistent. They’re look it’s what going the as feeling as daily So got it is and environment things answer some environment what’s the And look business. soon. here around everybody’s to and is own but from sit the rational, get like in seems asked competitive happening promotional

number. obviously with what of but to younger is So through younger number a into I that answer. not regard men slot online better, with to large think own regard as the our to I a through third-party coming know answer, as are betting, younger as It’s starting who there that well coming better you are, sports as the well better library but skewed really today. results We are is getting see and but male we us lot games, system highlight, with large are there these our you do the broader online segment, both we content. casino. to majority, they’re also and develop With content are as don’t definitely good a growth, even But for as a of continue as the grow. of demographic get you’ll that have more women And

female continue So both can I growth audiences do as we audiences. the this we slot from we get, the really at side, on think, the male think and what better

Joe Stauff

you. Thank

Jay Snowden

And Frank, I think we’re out of time.

joining of speaking So forward companies us quarter. next busy catching know this with this We earnings lot to everybody. thank I’m for you with to have calls a up morning. I look everybody going it’s morning. Great

Operator

ask disconnect thank conclude you please day, call for today. you great your does the Have that We line. for everyone. conference your participation a That and

PENN Entertainment (PENN) 3 Nov 222022 Q3 Earnings call transcript