PENN - Earnings call 3 2023 | PENN Entertainment, Inc.

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Operator

Greetings, and welcome to the Penn Entertainment Third Quarter 2023 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead.

Joseph Jaffoni

Thanks, Frank. you Penn thank Quarter XXXX and Call. Conference morning, for Entertainment's joining Third Good management's comments presentation Q&A. to get We'll and momentarily with as

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

today's Now I'll harbor forward-looking safe review discussion note disclosure. statements. contains Please the that

statements assumptions that and Forward-looking could to results actual involve materially. risks, differ uncertainties cause

Entertainment to details CEO, your factors. It's risk For please more specific to please Jay, see information, Snowden. over my Jay our turn pleasure go on host, call press Penn release for the now ahead.

Jay Snowden

and Wyomissing with of Thanks, members our was Joe. at . And I GXE. the Vegas our question George, everyone. Hendrix; help at answer Investor at Good a Las Todd Head other as to you my Felicia of answer morning, executive me as have M it your here our many recent the during host of well Operations, Event team, in end. during [ in pleasure questions who Resort CFO, and ] can the

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the First, quarter. cover for results I our will

our EBITDA margins and As and revenues million. earnings of $XX.X $X.XX $XXX.X third quarter of generated EBITDA release, adjusted of in Penn million provided billion adjusted

customer was behavior, reflecting performance traditional during particularly from the stable rated solid core customer. quarter, our property Our level

our the visit XX-plus return saw in spend per of moderate growth also our trends. We continued demographic and

softness in covered. unrated increased road business this of several South we've which construction helped a to offset of All region, in major markets, projects and supply couple our in the

strength properties, casinos Overall, Kansas, broader of stability with benefits of particularly diversified and resilience our performance highlights portfolio. and our Missouri, our Massachusetts in this the the I'm of Ohio, operations geographically and our pleased quarter the

database betting markets. as in well our -- sustained customer driven growth key As our leading engagement including and offerings and in by investment sports retail new leading the properties, our ongoing of our

in look we database, terms of by most the September, road we year. quarter, new And Black offset end disruptions the to in low Detroit negotiations to at across Charlestown. ongoing of pressures but addition of more our impact fourth onetime and and As conclude Greektown the in thankfully ahead December Hawk, anticipate Which the in construction of on started will in in supply unrated in union of markets, same this stability Colorado.

company our the guidance. year we within year overall ending to X% relates retail of it As full guidance, EBITDAR anticipate

as of fourth ESPN loss to $XXX EBITDA an the approximately $XXX estimate we segment, Interactive million weeks. we the the in for quarter, of couple For million next Bet launch

projects. look X to on retail breaking X our of forward we next the ground growth Over months, all

the which we As to that competition due declines highlighted our replace on Slide these opportunity dated relocations. over and us existing XX, revenue projects expect last to to have our the continue years, experienced several Hollywood Hollywood properties, Joliet Aurora absent provide would Riverboat new

access traffic counts investments from the capital significantly on significant avoid major to maintaining new and enhanced river interstates. amenities by us allow boats to existing quality facilities also building direct destination relocations The with higher

retail proximity offerings. and as entertainment large well As to third-party

building highest hotel XXX-room economic will fully be Hollywood Vegas. performing in casino. at that's with Penn. hotel have think million. in of Westside funding who to And development regional for connected driver projects and has true partner of properties, $XX Columbus our will As project We million you and $XXX and throughout the Aurora, great a be been the a of process has ongoing we're In Resort this in M then X there, to reminder, a a Columbus' resurgence a the this committed the Las our key economic providing create GLPI the it Columbus, city up destination. We'll

revenue and by aggregate the growth to our continuing end, and strong projects early years, free Which the project the X million. also million cost additional considering of over contribution the At accommodate size us the When a Aurora. these nearly expect will Aurora on City is which return rooms, at Joliet percent will of group expected These XXX the building late flow another of be with hotel contribute the in of XXXX $XXX XX-plus business. the tower to demand net we'll few upon we doubling from declines XXXX. our allow cash-on-cash projects larger opening to for generation $XX deliver cash next

the Turning segment. Interactive again to

in betting. rematch sports at College Super is City mentioned televised Bowl football to again be November in Thanksgiving a allows Football to states, week which live As in includes Monday Eagles, go Kansas Philadelphia of the which subject with us NCAA our final very the which advantage approvals, RivalReweek night to the which of the plan XX, and XX the I on we operate will Chiefs on take occur This will outset, the ESPN BET ESPN's sports calendar, active simultaneously

more ecosystem, are regular #X fantasy across wave of users In million connection integrations the in the the nation's ESPN at of whom app launch, with than users of unique ESPN. an will XXX implementing XX U.S., monthly the be ESPN sports million which includes initial exclusive

frictionless an eventually media and by the and Center experience. media L. and with to Following integrations deeper Van even betting initial see platform coming headlined Pelt an you'll ESPN advertising Sports anchors, Dunkin', campaign, Providing begin Scott and months. over unmatched

proven book download proprietary ESPN platform, prompted to will Barstool year been Ontario all under our over BET be Importantly, and go existing of brand. transition ESPN impressive when in wallet by BET. will now and and a has account ESPN Bet in technology live, BET information over the performance we for to Score be their will our customers which the Sports powered driving seamlessly

In fact, month represents a October record and for both GGR in in betting us sports online NGR and iCasino.

sports Ontario double-digit iCasino. ecosystem. and there's of retention highly cross-selling, As XX% can of players in XX Media's comes our in integration, on you from in competitive share total over leading Slides of betting a terms into market. already market see media Notably, success in cross-sell great And of conversion, the we've terms X-X, online XX, to and Score handle results, within users XX% had

of the Besides with over to Felicia. the the blueprints U.K., in Ontario the Bet, U.S. provides best Score with SkyBet BET. in one for turn ESPN And with success we that, it think I'll

Felicia Kantor Hendrix

Jay. Thanks,

stable South and roughly to and guys quarter, were XX.X%, segment. property $XXX.X level made performance million owing $XX Our EBITDAR adjusted customer million. diverse in onetime net third experience. investments quarter, was Adjusted the $X.XX Property have we the the good we the our of had in level EBITDA in were revenues was billion portfolio in the margins

and quarter million. Interactive in revenues the loss segment $XXX.X adjusted was the million were EBITDA $XX.X

to curtailed reflects online in in the the the BET we segment to brand. transition as U.S., marketing ESPN prepare lower quarter Interactive EBITDA sportsbook Our our

X, $XX in given tax a third XXXX. of divestiture X, the we in gross-up million recorded the compared to $X.X Sports quarter, quarter August Sports From $XXX of loss includes segment 'XX addition, Barstool the be million, of quarter revenues Sports million net on in of our where million. third Barstool last In Barstool will August to Further, July results. and quarter the X $XX the generated Interactive a

total our have inclusive of X.Xx. revolver. of $X.X quarter lease-adjusted leverage Traditional our liquidity. near-term and sheet of and leverage XX ended until Slide X the was $X billion summarizes billion, Notably, net also debt XXXX. we third was net maturities balance no as We X.Xx September liquidity with undrawn

You'll our interest expenditures of cash $XX REIT in X the was table a $X.X our to CapEx quarter, quarter, cash million project find for cash release, payments total on taxes, summarizes CapEx. including and Page total cash landlords, of our million CapEx. Of our that the earnings

include last the that of record a in Sports, quarter, net details our pretax loss noncash Barstool the disclosed third of results XX-Q that the be in will would divestiture Our which we we quarter income filed on today. later

the XX basic Our been shares, million September as fully potential count for was quarter, Because diluted fully outstanding. moderate common million. share shares. income weighted our XXX the average have reported diluted we weighted common of use dilution for $XXX.X shares we If average weighted common would was net anti-dilutive, average common shares

million, $XXX million settled To of you is CapEx. inclusive corporate 'XX project XXXX, Total of of CapEx XXXX approximately for $XX for help with expect inclusive your expense proceeds million, insurance $XXX of cash modeling we awards. stock-based our further and of net

$XX cash interest of $XXX cash million million to expense, the Jay. million million income. year. forecast $XX $XX roughly turn for full And be And for interest with to taxes roughly For we the I'll that, it will back year, full after

Jay Snowden

free our the our event help closing, cash Penn's grow meant economic presentation, significant of and at overall of cover wanted to ability which I the Thanks. unforeseen downturn. flow generate beginning to In included in position, we slides even to cash are remind the of an investors

On X cash on, generation after generated, we TTM our and flow start current free on how over add have So as start operations free where X bridge Slide GAAP XX with the last flow, is years cash basis. illustration let's CapEx much a calculated spending out Slide next cash lay minutes X, maintenance we're couple our which months, on cash a of show retail our retail a X, we with our the We over basis. of an of balance years.

as million modest the illustrative leases escalators, biggest free The course, CapEx period. as lower are operating our over flow subject variable, of year. is be to annual typical than will cash a cash to meant slightly This our maintenance know. $XXX you LTM performance includes be And our flow, our

XX% purposes cash discounted flow and LTM extrapolated our any to this projects. For retail over growth our did years. not we of include from our flow we cash be of And free annual illustration, contribution X this retail conservatively

of growth But the that economy, of whatever assumptions next generate the X the over our our want flow years, amount to going strength regardless significant about cash support free of make a initiatives. will are you properties to

advantage be X when financing projects of to growth $XX open XXXX total earlier, in City the $XXX connection and so with Next, million capital and available Penn mentioned GLPI outlay XXXX million. take will from that, from of in early assets as our Obora contribution these the plans retail I our late

And anticipate going losses that grow interactive to on ranges expect nicely anticipated, period. $X over X more with EBITDA, to you our you of X and year Which to X should total you years, finally, XXXX. mostly to occur we those And position of breakeven Interactive see than back of losses approximately next our accumulated over X, to while positive we the cash year the provided $XXX or by the million, we in modestly year bridges to expect earnings this EBITDA billion, get can last call X-year when inflecting EBITDA.

anticipate near X this quarters thereafter. peaking by term. then QX note, business intend ratio modeling our clarify how down Of year for full grow our in in roughly I to next hope the and helps coming every we a all purposes leverage and we of turn

of As Felicia of our billion total liquidity have we remarks, her $X inclusive billion, revolver. covered undrawn during $X.X

With line repurchase with the retail share And December until on no undervalued. be An have growth the that opportunistic and debt Frank? active being stock remaining that, all We XXXX. we'll if questions. few said, under million maturities near-term our and authorization have to exciting the also fronts. next we catalysts for continues we'll open interactive XXXX $XXX our over up remain and quarters new

Operator

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

Carlo Santarelli

comments wanted that dig made. I kind of just Jay, the into just to you

the that little include sheet EBITDAR to on you is sensitive is kind you XX% slide, room, the each developments, of retail that the end. could being say, that of strength the the assuming just though $X.X cash will guys to even want more stunted of cash of the you show took, be kind basically flow I some $XXX be you're X acknowledging Or bit conservative cash balance a just of from anticipate of But years. billion free about That indicative million and the the position? next towards flow a the, over So that doesn't to provide to and yourself want guidance?

Jay Snowden

of a latter. happen entirely it's the from XX the conservative Carlo, theory the just next can macro months. like everybody's you going to felt We got -- let's on here XX, what's Yes. over be perspective course because a anticipate XX,

be slide of free even if you on really other $X.X of not that a to TTM total those at would so that just not if of TTM. or it's worth work. thing said is there. -- view that basis, the you show take the investments generation, to it The flow any conservative we're it X you making cash free XX% point We So anticipated There's for total I flow, cash years, our $X XX% over to of X X and position take we're that of next loss clarify, by retail building no or us north to retail Interactive the it still the our billion one billion. in growth projects the that's And in XX% cumulative a year, overall is years want you what each just or conservative. need trim reason. keep And it cash

I this month, thinking shows much you and down month, the quarter. about this our continue I to lost liquid growing X-year people gets and next remaining grow look, on cash sometimes extremely too and how position. company last The think drill think, we're also

Carlo Santarelli

And you kind know know that million mentioned XXXX? for of whatnot. variables the course could and us ESPN XXXX I could, of segment, it about pertains you're just we about over in how thinking terms outline to But, XQ to of kind guidepost loss investment go of a things in as how you of the think in the $XXX million follow-up. as a I what lot $XXX kind then if BET. a there's I of

Jay Snowden

going obviously, expect QX losses QX launching. for to And question, should out at between detail, a February guidance Carlo. be then of when think in their we're the and great I sort Yes. you're provide more at a We'll But putting peak level, it's be because XXXX. Interactive you to high

NBA, of running capture lot first-time to system to deposit, you're the NHL. a sort you through you're dollars, but of going promo not got capture NFL, You've capture match and just going

call then when get into basketball, capture you're QX, football and you college championship it, have, to And going you're to Super Bowl. going

think peak. in of XXXX. that's quarters will leverage of the sort quarter perspective, plus to going you're QX But you'll including third a I So leverage a number on of sort the that where peak of from the because this see year TTM, X be first

ESPN us that then year the last really be inflecting where EBITDA the we bridges and full on XXXX breakeven in losses to we'll are. prepared losses growth XXXX. probably it, 'XX. cadence-wise in provided of better, definitely the like be you that of what the I modest to rolling And and where ranges but talk And anticipate at that call. -- BET, you is way those anticipate about third more should of launch think sort That's and in X years 'XX our third then into that in year. looks right we'll quarter about you But provided would the then in showing every remarks, would And then the cumulative into as I first

Operator

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

Shaun Kelley

go just to want back things. X I to

think Jay, remarks, of overall that kind I that? that I X% we're just of clarify imply company mentioned guidance. being X% the Or the wanted conservative First, of midpoint? than within is just in you prepared within does more to

we come going kind are prior can the of given but in. launch to BET under Barstool some able as particularly either front a just about launching see if should on, thoughts are market follow-up, the those possible of be to starts my marketing, what's your I of as some I data map or -- then with the particularly could of talk you're on, success starting some to state kind where sense we programming road here And X focus bit just states? your or obviously more very focused of given there your the little We're launch. on ESPN a get the that a access, broadly, get load so that to we just partnership you're to wanted specific And around operators,

Jay Snowden

yes, good the when mentioned guidance. to Yes. question, guidance, talking of X% be within of clear, I company about No, midpoint And we're Shaun. both

So . on were correct you that.

to probably I relates sports they other in I'd on betting ones ESPN, I that online going don't they're I'm most is obviously, I say states or don't then both information ESPN important long know strong, are mean, weak one the online super I and it from would sure based As to states, the particular look brand for casino. have states. us that we've specific that state. the BET that that that at in be term know, states have seen just not and the

really don't the It's population popularity of based really that. see on as You ESPN.

double any state. So on I collect one wouldn't

we're our media scale now I I be states. will live a and X from being this will really the have It's XX point marketing a do earned to promotionally, a in certainly we perspective, I And national the we regional think be approaching platform, lot and this and paid then you that national of more most stage. don't on X at -- localized. more But side. states it wouldn't or any efforts,

Operator

comes Barry question next Securities. with Truist from Our Jonas

Barry Jonas

for Property were the nearly XX% in margins retail quarter.

XX%, about really were talked the you strong. margins I recently, in South, more some you there softness think mentioned While

think there about for any I'm total curious from here? and we flow-through are if So just margin callouts how should range

Jay Snowden

when we every or businesses and I Yes. we you'll to -- Felicia it see quarter, roughly would certainly And it. -- softer. good were did third put always All include that margin is the drop quarter onetime remind even the to of softest considered, any region in EBITDA, country, don't bit. the is very quarter compared it's make that really should last in you than construction. guys and close to always when South margins happening road roughly across year third you reason. results think and million the that had of supply everyone, there's got that's healthy. anticipate what I business Barry, puts pretty that mentioned out callouts We but caught the seasonality to XX-something XX% the things $XX years, we you $XX is, in what new million too, and number. And think benefited mention still I and between -- onetime would earlier, take had not there fourth sure and no little that quarter, takes a business, going I you But it is when that you again look X due really other sort at quarter be calendar, than this just as year, that seasonally of historically of but fourth this stable other The we and

Shaun Kelley

How you Barstool then sort than different how And as the think it. Got should think BETS. around being ESM with it the of experience maybe ESPN your personalities? just, and we similar to opportunity work about personalities, longer-term about with

Jay Snowden

every Yes. how who ones individuals they of of betting passionate, or about look, in in you're I about entertainment. sports both with aspect of terms sports case are the betting. that much and about the and like it's in to is preferences sense on their sports we're of talk are them But talking mean, different, working it's the very one what similar the pretty passionate sides,

in ESPN think wrong and and to and big longer have with excitement our more and of the and and creative XXXX. see speculate tremendous is the will This every is. in the to is seeing who's what of commercials. a personalities. committed is involved involvement found that, as engage think at into and right terms deal. ESPN side. personalities them no first about hard hear But wasn't get on with you mentioned more we of before, that, all we see ESPN start pretty BET and I've ESPN get the about this seeing, ESPN to day. I We we the know in that, It -- how there's a team you'll And guys and amount you'll And find list for includes X who's I to what we think discussions long start that excitement. I

Operator

comes from question with next Our Brandt Montour Barclays.

Brandt Montour

So like launch sounds a you service. the ESPN guys here it like the amount under it looks BET fair -- momentum and and building of on have

might about, And we sometimes, could think what that. and go right wrong worry go kind just of it about so that

you're my that that feel to to volume And just one much if been And if thing the getting how of confident X going mind and curious handle so and be you're to pops before. had X volume that that able able system, or you're -- is comfortable and X so on just or never into stress I'm day able you you've that throughput? you level test

Jay Snowden

Yes. of the decision. why partnership we August, done. get to in of to ready jump a were rushed despite add is I'll app first -- for advance there Todd, We in really to launch, decided of X product we as been part have we things chance to to to announced number driving but One, X football post well. say to -- launch when a a don't in in wanted class, of anything of this launch we've you things. We've make November, the couple this which have having impression. we first sure of obviously if make had that the make to you start try enhancements could that have the let's season, probably

the the us product And We've ESPN time have done by amazing went to Live ready we the team And fill things do ESPN Noah job wanted for getting we launch. and reskin Bet time to them. the really had all an live. and

driving dates. preparation. job our great really team load that through, I a the engineering has other on the And just testing done really of want side, say. And thinking to then the was testing factor low

in -- sort per to of additional Bowl. there the to Super bets time that's we with for space the players being second volume volumes information hardware around plenty And we how much servers on we what had anticipate per second use have order -- out top prepare and and We highest seen. we've of ever

launching thing football, certainly. get nice this build the And and into get to Super time -- night into November And is Bowl but deal, of XX, kind a you weekend. a by is not about not that you on which what then it's Thursday Tuesday, the is, big before the you

pending November about night the into approvals thought date. of XX then roll NBA, a of again, then mostly NFL bit and a And is Sunday It's into the of then we've to you roll this. couple and final that going game, little X maybe big weekend football football be Monday So and college days, you for NHL, game. get to Rivalryweekend, right

good. feel add time load to has we So testing been anything? piece with the if a preparation biggest of on probably of want really Todd, the enhancements. Benji product have been you team spending along and lot and

Todd George

think I No, it half. in covered you second the

to used force went CapEx really vendors the rather that us, in. to was Jay volumes it we the and Bowl of And the example guiding new all thank leaders. through quickly are market servers Just our where compared you for Super with the the working tested

we really, comfortable into that to ready time be such of going busy handle, really a we'll So feel year.

Brandt Montour

then sort super of of on the question customer a That's more helpful. And day X. experience bit on nuanced

ESPN prompted just and that app Jay, all prepared day you if up be we Barstool in phones. BET, already the on have our on or said, X, earlier to download think I we comments wake

that considered do that layer that itself and consumer extra some of foresee be just it's download at I point expecting playing kind you is minor a might could friction? sort maybe but experience? for of we think Or were something it how the of out semantics, that

Jay Snowden

Yes.

use time. I think this there's done plenty examples before. of you the all that of Felicia, companies one have

Felicia Kantor Hendrix

Yes.

to experience the took app, and the -- it new Max seconds. whole you open we'll that then could you HBO prior your on ESPN The -- went when just If all takes with you've like used you the credentials. like when have BET. it prompted app thing and X download to MAX, then use That's

Jay Snowden

just opportunity that you is history ratings the resets. stuff you all -- to the start an And comments part terms also there of reset that just and thinking and in everything, of the and get of the

and go in So on we live, it again, historical focused final all will consistent, no pending XX. app ESPN information be approvals November when on BET the

Operator

comes Our Macquarie. next question Gaffer Sam with from

Unknown Analyst

relates strategy of Jay, to your and was wondering overall brand, mentioned you of grow that as the launch, of hold then as points as we we data it look can more stages previously about any are to, rates And pricing, ESPN changes and your retention. experienced betters follow-up, to new hope in size market, rates versus a or reach the earlier the if that betters? retention sports there sports the for you the that stats strength given I your think

Jay Snowden

of of the I that's of big is I a are terms for say retention versus on thinking that focus first your TAM, sort of we let's existing let's growing us. Yes. one in of put new. terms part about -- would question, hold, in how What would say that the

we point. we starting And a have great -- have

million Barstool play. got up, We've Pen social customers of that there, Sports roughly got historical book that we We picked Casino, we've the have database X digital with gaming. the obviously, our bulk then ecosystem within and Hollywood

a we and to million pretty them know able X those history. be digital ESPN very well. their we're BET, that cross-sell going to to got we've database We So know big people

And equity, ESPN maybe grow and side the the the can then, once course, of they betters. of casual by really brand intrigued twice the ESPN, we trust on that we think lot with bet a brand. the have it or market or brand, really Who

with database. BET, from we as ecosystem media high their Fantasy opportunity the there, to know ESPN cross-sell there's in like million sports, a into propensity There's our our so to ESPN we chances particularly bet really And with Fantasy XX players. on the

think share of and grow couple market then success. first in like, of talked not months. over is have the we giant what What first But about you like to we've to to terms speak see we and time. deemed success I We that look want in to see is that market one to leak to the that whatever But we is don't, share, want that internally, -- the and the does be look, want that in would the X, I month a of don't continue that splash product or retention. things will

last and But you're a sit February. of as getting more we're we'll more, year-end. here the as still Investor time after had year-end. have enough early in going Day, retention, then, about together we in just it about before We to earnings not So information thinking to to we'll we lot we're But by more which do. able our of to don't the we jam on share share said course, launch. talked if any we call share, before KPIs, as about initially We to obviously, try And it thought today. an be plan have we we

do to So Super the QX. in of X Madness, time start and of results sometime between of belt. likely to X March have good the months Bowl and do year Most it we'll sometime under our it, we'll

we're how go out build that ecosystem. time. X be month how media, stay and all share. a not that's continue integrations, market We or not tuned customers everybody think to you'll or terms X going marketing gun you That's thinking try a paid have high bring So and terms share the giant and I going promotional time our and approach we not we're in of why to want over day retention, I how want that's level, would over our That's then there in thing continue shot And around that we this it the X in to and to find to build X over of very the market slowly goal. build investing leak to say month into about dollars, time. be we're KPIs to but at day

Operator

Our with Joe Susquehanna. next Stauff question comes from

Joseph Stauff

that on as ask questions math maybe guess, to wanted say share. your a couple the I the of sort indicate double-digit Ontario analog. of you market did look market, being I at and I

spend as not? if market, numbers growing where gets changes certainly And or an of you're on on market, wondering basis. with operator say, promotional year-over-year the based in kind It seems well. just that seen you've a So with aggressive, more the say, I'm any,

that's there's in And previous of last or stabilized market terms market quarter? where that the the think the share the quarter you you to you in everyone's see book first media do an product today, Ontario, the effort do in again, integrated Ontario have question guess large I number of casino? kind is of like offering to with market, is, anyone Or second then say, sports same has a an question. versus have market, them,

Jay Snowden

transaction and click you stats, integration the I'll really your competitors no. the word very place sort Score bet, the and checking a media Ontario in and see hang X. it deep differently. you're between question, on you story right define getting it's We app over doing this you're got it's is that Good populating envision in U.S. cetera. think you're ESPN. But may and you score hesitate point it the to because move or to I were with one over et don't we've reading a think right you bet, answer scores that in sports betting. finish the the to and first the your whatever pretty people I then have the in there sports the second here easier And don't And any slip. you And on focused score back in quickly the you that really because hit U.S., ready where place of the when of Ontario, Joe. frictionless. know and bet we And takes or when I of media

able that ESPN possible. about shared quickly the as at have been news U.S. the is we in deliver Ontario there, and execute we've on great a in that to have as the friends our vision getting of experienced And integrations here that and

there's not to vision a want though different as and we it's how want we for cross-sell. or disagreement integrate a So how to

And our mentioned from before the of on as wagers you XX and users and slides handle coming in about of XX media that we those speaks XX% to before, were the included launch. we Ontario couple and ecosystem that

Those our strong. sports to our online within than results. very And cross-sell casino It's then that's of quarters. ability are into app, greater betting from XX%. great So X

that ever mentioned audit broke would preliminary. were XX, October we then It's on to this through record results month in we preliminary best is have But Obviously, every in And we our in in we've I highlighted year-over-year, I say, basis, also delivered showed GGR the October. growth NGR a Ontario. or everything. and Slide our what actually and

tremendous have we So momentum.

has XX more competing and brands Ontario, There's levels. our growth business in XX grow to over competitive. market The over only above gotten and operators we continue at or market

get sports slides and cross-selling effective and can more online between casino. the online especially as more online on of As the casino betting you see there, we in side

calendar. a moratorium standpoint I able promotions we -- your for during anything able I the what of you've a it's of question, you'll promotionally, don't that advertise makes pretty even story to first I more see -- don't in of of generally advertising. to times from waves to anybody. growth deliver your think might some are. the -- waves and the being companies ability really on on But gets what confident see from stable crazy more here got promotional we've It's our U.S. the being more which Ontario brand been But be sports So certain in aggressive and speaking, to part impressive execute of There remember, sort us don't more

Operator

John with question next from comes DeCree CBRE. Our

John DeCree

kind elements flow of kind just of kind kind your cumulative the cumulative but bit? guess, included Is Slide could interactive losses, cash housekeeping, just in I EBITDA you CapEx, could on help million. the if to with the of one, if with it $XXX clarify translated bridge, X, digital of in frame little Maybe net is that free us a investment you

Jay Snowden

that will goes ready but of out a built the a see things. launch, there on magnitude what into of team, not some, side example, casino at now the BET not interactive Yes. it's be CapEx, and we've ton for you of we've for side gotten that ESPN retail There's the

the So of $XXX wanted we million, to the to be $XXX we all million range that reason inclusive. provided

be and will see accumulate then in would losses to mentioned really investment I before, starting So third And EBITDA in time CapEx horizon. and as the anticipate the over again, year. that X-year the inflecting EBITDA positive loss and years, the we first some X

John DeCree

on your visibility and of outlook you're for you inflation. us terms pretty Curious is And helpful. wage any was Conversation strong. onetime were there your OpEx be utility of there, in still you level. inflation, if it. benefits pretty that million I maybe have Earlier the in we but $XX margins could realize at labor seeing business, then would the what views that of good question, give property margins. in still often inflation? if kind of have Got where And

Todd George

take Todd. that. This Thanks. is I'll

coming COVID, So this We've have utilities looking on helped projects we efficiency. energy that got has been around at actually team completed us the great a several lot. out of a really We've front.

So in we've that, the use. some locking we as able utilities mitigate lot a of for really as that futures to of been well

very kind have deal with we So, of been this. very fortunate and to prepared

A have seen that where do us labor. more lot haven't some yet. with most the we can yes, technology there, more then operations. the made wage wage of creep happening for less dynamic, part, a in and labor you and there But are we place you're at Griptown this we out So the initiatives new have that efficient that, labor looking there. what's And I would specifically front, say and on and called

mitigate So well. a that of as we're able to lot

Jay Snowden

nature. insurance of some the on insurance. property especially but calls, I insurance their It's where of have concern where cost in and around you're seeing market there believe some down, our cyber creep just industry, of area after late. hurricanes of just one this The in certainly so happened our plus is is mentioned side, now competitors on many not course, the right what's that not And things going

done seeing And our an I on and on, all headwinds. and amazing operations job of cost obviously, those the have of Todd delivered that insurance some the some good margins So think a on you're side. he handle creep this. as we've definitely But mentioned, team includes have

Operator

Our next from Wells Fargo. question Dan Ppolitzer comes with

Daniel Politzer

that the to at Interactive. us think there's start market aspired few cadence as forward. we'll you've a to? of on you're then rate start run inflect, costs about you operating pieces here that commentary scale, we kind in think about lot do But kind gave unpack you as feel -- one to see look where get gave guess you of that you on to and But fixed fees in way try kind your expenses, related Just to and of think business? a I to Barstool of the how I mean a XQ And to access of going share the there. EBITDA any maybe this and I good at really of your scale losses like help that GGR

Jay Snowden

trying the of sort what keep focused think laid of versus just because we've in speaks to mean out way you to the largely on I what year X of I Dan, I'm anticipate Yes. years it timing the next we already, inflection. can couple said

think kind year. as having information We the asked the about of throughout over think platform a we anticipate gave I cadence, successful having a I period, next you're growing for time. And stable earlier, what thinking on the Carlo should some launch, that question that launch expect business you

add what Todd, know to I don't in anything don't to or terms if but anything do I else there, really have Felice of So have you expect.

Felicia Kantor Hendrix

you said No, it. think I

Jay Snowden

I whatever a just question, covered Yes, you -- you I unless yes. have think saying. specific I don't Dan, are

Daniel Politzer

that is guess in may Or from of incremental at you cost Yes. to incremental stuff? you it assuming way ask there, advertising? I marketing the we adds another where engineers and are or are kind administrative fixed all some Is be losses today? any

Jay Snowden

It's there's of And many all of. share, to going X-year to wanted and driving. what's look GGR this factors and market your go percentage what's That's so hold handle that cost and your in. yes, What's what's of media. your in. handle your is mean, I one not to be -- there's going I those do promo it's be, don't things percentage why we -- paid

hundreds for as ramping, over example. last done a X this course lot for launch. you imagine, can in here provided people of of months members of with more our of staffing on and X-year operators. we product the outlook, what and engineers center, this includes team marketing think ramping We've side call the the I all We've anticipation folks on And the and including hired that,

that any So third the has there's have of quarter yet we BET reported, a launch. the we ESPN into of that benefits just gone that lot but of result, ramping, don't

the thought So number. $XXX around of That as range per we how There they'd off be year looks assume, there. we this you million includes that channel loss spend disclosed Dan, show side, roughly like. on outlook some to and noise from that But perspective, X-year marketing as that that you media and on a both same with what covered. onetime not process you why on thoughts has this going all our then we Felicia changed, well the we're ESPN X-year approach just should that's the see were provided that and and channel,

Operator

Stanley. comes next Stephen question Our from Grambling with Morgan

Stephen Grambling

I clarify thought the guidance just I some of commentary.

] I for $XXX.XX the think year. you EBITDA million talked to [ previously

puts want million. Just my looking at and make that XQ sure to takes $XXX we're that the on the of some in gets math, if maybe around

the we should be you looking some could provide if brick-and-mortar terms of Just what at at around XQ least business. in brackets

Jay Snowden

brick-and-mortar for the midpoint business year for The the $X.XXX is Yes. billion.

for and So brick-and-mortar. million fourth when of we quarter. million talking gave Interactive in $XXX We within the between say for guidance losses separate $XXX about X%, we're

Stephen Grambling

one follow-up. And Great. helpful. other quick then That's

So I this Or quarter should is kind of things? of bit, and side, cost like little but relative digital I expectations, bit ESPN think to top deal elevated, be past base onetime people's kind you this a little some of of include new the on a the know of? that that also was on touched on layering level that does reflective we a

Jay Snowden

about the results, Stephen? third talking You're Interactive quarter

Stephen Grambling

Yes.

Jay Snowden

out mean on that money we X on to our covered on that, switching brands August X. literally things. spent no Sports marketing as XX. of July I And time the Yes. in Felicia closed beyond we're really November then media there's side, One, it's we ownership from one because Barstool there

sense spend doesn't were money the that make So brand to you using it previously. on

had a things and in should we a seen that of volume the on have and ramp side scale that significant payroll you we assume at getting before. for level be there And so expect -- ready but to certain launch, because we're not of we

with preparing future. drove the incorporates XQ. upside of number purposes what so that number have the -- the of that the sort the of use the of launch. of for it's got any out the wouldn't the downside any launch, I like So for all That's you've XQ really don't you revenues come modeling but

Operator

David Katz with comes Our next Jefferies. from question

David Katz

the I all can there If just upfront, anticipating there I'll follow-up sort be on go Do that those? can that? of data to is that of making land-based appreciate have with business? any detail. there with support respect of to the any way? you Digital, And I product crossover which you benefit tuck-ins or we potentially ask some would out to the point digital, enhance insight of sort is or their put my seen Should journey any we've operators they tech other the as could in be stack

Jay Snowden

tuck-in first the our has we're get ask your and to question second one to Todd anything very significant answer to -- where brand certainly point very strong Well, out made proven ones, Canada, to investment. the lead we like don't today. with a way, we've be We've me let that a question. a successful this then got in part tackle I'll missing investments, of the tackle feel to I'll which first, David, is

go acquired we're the proprietary now of the stack. we as with ready the tech to fully own migrated to We've that course, ESPN U.S., BET Of technology, part and Score acquisition. on our

investing app in we've -- we got you make at take and that go acquisition, more product could things don't or features -- or we level. better, the to to And your launch, small, but And today, offer anything. like owning we're so we large as an faster, there don't to perhaps, sit missing next make little markets the here to are think certainly feel about

It's our migration. is focused side been perspective, continuing. the really on about, We've from product so on

And us with feel can -- throughout on BET, of hearing Todd, answer template done on as in the how make envision frictionless U.S. all going change, in on know be let the the a a it question. things certainly XX of of and we've first and Again, near we We've on but a we'll the got on and executing already effort today. sit we've a we're the it. the enhance on we as got you as from over XX, to ESPN markets, really anticipate the got the and how be features deeper ESPN months think that not the integrations But here we've I term, in going we in to to that be seamless Ontario. lot example. don't to lot well. like is next product ideas lot of here course position road map acquisitions. strong things you'll I I'll We deeper for and accomplish do as

Todd George

myself, here great we Take Thanks, kind this we multiple talked at refer last properties. that example see omnichannel when question. same Jennifer and have us a then then of the just multiple the properties joins the property they Weissman, Jay. approach. see for of our dynamic that a in And somebody kind significant from David, marketing can channels only this. to but And about can a this several really, with and of Jay, as have you on And across consumer, And visits play plays up not years, it, We for online market. through multiple. that value us apply -- us, basis, property

I future, much find around how that in offerings X, through think it's X, X we're And that team, or they property to they to as we'll us play around this we're seeing. when data channels encouraging introducing because have more are more see consumers. detail be and sure valuable we very the talk but channels. a Whether through have more other leadership making in able the our different these goals to a they online And multiples

betting, So if there. have some those us that bet and online through unlocking they property, if offerings, casino with states then they especially value in really online play at sports we're

Operator

Tichen comes with Genuity. Canaccord question from next Our Jason

Jason Tilchen

seen existing to a hold understanding just uplift have relative rates because you observed since First, investment. in tough migration in the the U.S. of of it's similar what compare to sort of in the But customer the base, terms par in that to in Ontario? prior apples-to-apples that level July, mix early or lane marketing within the to you've of

Jay Snowden

It's number start early very to It's live to from similar. obviously, October, U.S. we coming you month a have well we Until I in make been full of of the as hold We football to when enhancements strong in U.S. go both had actually with days. of migration mean, got app off still as a the so July. season season, updates between in were and and in continuing football in the Ontario, -- in BET the the ESPN November. we're

So same there personalities home I have were stats featured start our the integrated comfortable the day you going. and got we'll drive sharing post and And some in and past behavior and the much on some with activities we which you options with that questions in marketing can and we Parlay, we've Parley, than the launch weekend. of as dynamically more when asked to think KPIs more of around fantastic be ESPN, differently, is ESPN given now a or throughout that can that do around page, a bet merchandise more game we we betting promotions

wait get we'll better So we the product I think KPIs ESPN. until better. some And and continues those to on launch with of

Jason Tilchen

at ESPN to books. as Great. the weeks? brand, your from around follow-up. called I'm That's of In those? are the press few the Barstool curious, what from properties has there plans surrounding presence you land-based release, sports next been some branding away And one just positive the the the the any And retail of the you the impact use out quick determination potential transition here helpful. in

Todd George

question. great Yes,

completely with we almost sitting markets to their has now date, and really in. honoring been kind as removing We're our great. sent feedback several the Barstool properties. operate Sportsbook we're that of They're to And theme. the ESPN the local ESPN. representatives working So a de-themed there of has

So of about something works find can our us. this both brand at where we'll talk that and we retail for take locations

Operator

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

Ryan Sigdahl

keeping time hard new the having with was a guidance. up I

you're And the just I thought don't you updated the in you exactly QX. heard stool is bar you talked IC could And believe EBITDA clarify and the I year. last. for then full I sales guiding So QX, -- last to? last which included what

relative guess can minus then or margin? EBITDA specify And X% you to? versus thinking we I metric So specifically, should sales versus be what plus

Jay Snowden

confusion. side talking of will for EBITDA we Ryan, I And all think at We're be Yes. about the or the on quarter. year any Interactive the midpoint, that end on there's at don't year $XXX if referenced sorry, business sales we for EBITDA we'll margin. retail and was the loss number. million X% retail billion. the the between separately within the $X.XXX fourth of $XXX million believe side

Operator

with next Guglielmo from question Daniel Capital Our One Securities. comes

Daniel Guglielmo

Just last Would like on highlighted have And names accelerating the developments pipeline? the ever to the traded a of little coming few months. projects you brick-and-mortar any your side, near-term developments of it adding or seems those about better over additional the gaming properties development up. think you

Jay Snowden

accelerated for say on now, market basis. and would I and It's anything of driven chains by to not construction supply really an there's schedule. the do Dan, sort plan a

lot a not can would there's to So you do those. or accelerate

the early provided right that's timeline 'XX to that I think think is of end about. line time between 'XX for those we the and

opportunities We're to businesses. always at looking invest our in

land the these of your offerings, come a have get and gaming and maintenance into Joliet from don't mode both efficiencies a to you to your deferred upgrade in properties. greatly chance Aurora all improve side, an once the that opportunity out always I go you decade, on get a mean growth that to mode. with greatly nongaming sort You of based projects and the relocate are CapEx location, and riverboat

And add about there we're long And at hotel, those be reasons, hotels we and are the don't Columbus didn't for more lots couldn't course, be that the to for the excited want had first always announce. M now one a looking we've X. like right Columbus hotel years. So new have the more anything? overdue We you -- projects internally of to demand and addition couldn't we we of at ready down could that, at trigger. pull or Todd, we're anything just and But road. for

Todd George

labor I Jay, the the force are would I and especially that thing only Jay with lines these time all Great for is else. aggressive the line add reasons already think everything answer, time fairly mentioned, and Yes.

we very can a of again, feel at ] our point, sense. [ constantly make X we Jay's there. options make targets. out we deployment comfortable capital hit But And So to these that look that these ton are look for

Daniel Guglielmo

a for when need those funding you for just frame the then X the how time developments, And side on to when would from is you Great. decide GLPI? there get and funding

Felicia Kantor Hendrix

No, that funding is we've Thanks. we'll What end the line. the past no at No. said time of project. the in there's take the

we're and wouldn't would be if we rent to were not projects, opening think open the as So on paying want then you generating that funding take about before because it, we they EBITDA.

matching. So you want that to have

-- you model would I the assume as it projects out, complete. that funding I the would take So we as

Operator

Mr. Snowden, there are no further questions at this time.

Jay Snowden

again with dialing we All in. February. right. for everyone, speaking to in Great questions, forward Great. Frank, and look thanks, you and

Operator

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

PENN Entertainment (PENN) 2 Nov 232023 Q3 Earnings call transcript