Bally’s Corporation (NYSE:BALY) Q1 2024 Earnings Call Transcript

Bally’s Corporation (NYSE:BALY) Q1 2024 Earnings Call Transcript May 1, 2024

Bally’s Corporation misses on earnings expectations. Reported EPS is $-3.26 EPS, expectations were $-1.13. Bally’s Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to Bally’s Corporation’s First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I’d now like to turn the call over to Charlie Diao, Senior Vice President and Treasurer for Bally’s. Please go ahead, sir.

Charlie Diao: Good afternoon and thank you for joining us on today’s call. The earnings release and presentation that accompany this call are available in the Investor Relations section of our website at www.ballys.com. With me today are our Chief Executive Officer, Robeson Reeves; our President, George Papanier; and our Chief Financial Officer, Marcus Glover. Before we begin, we would like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that involve significant risks and uncertainties. These risks are discussed in the company’s earnings release and SEC filings. Financial results may differ materially from the results discussed in these forward-looking statements.

In addition, during today’s call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project non-recurring expenses and one-time costs. Finally, I also want to note that we will not be commenting on the special committee process during our prepared remarks or during the Q&A portion of today’s call. We refer you to our news announcements from March 12 and March 28. This call is also being broadcast live on our Investors’ website and will be available for replay shortly after the completion of this call.

With that, I’m going to hand it to Robeson Reeves, our CEO.

Robeson Reeves: Thank you, Charlie. We’re pleased to have you join us today to discuss Bally’s solid performance in the first quarter of 2024 and to provide updates on our growth prospects going forward. First quarter revenues increased by 3% year-over-year reaching $618 million with gains in two of our three operational segments. Our Casinos and Resort segments saw a 4% increase in revenue and our North America Interactive segment experienced a substantial 70% growth in revenue. The International Interactive segment saw a 4% decline, however, primarily due to our operations outside the UK. Notably, the UK continued to perform exceptionally well, posting a 12% increase in revenues on a U.S. dollar basis and a 7% rise on a constant currency basis.

Our proactive strategic measures in anticipation of the white paper implementation continue to yield positive results, enhancing revenue generation and significantly boosting segment profitability. As in recent quarters, I’ll start by briefly revisiting Bally’s vision for the future and discussing the current status of our development pipeline. After this overview, I’ll hand the call over to George and Marcus, who will provide a more detailed analysis of our performance for the quarter. As we sit here one quarter into 2024, we believe our robust core business units and our strategically phased development pipeline positions us well. Our development strategy is designed to optimize the benefits from the cash flow produced by our core operations while also enabling flexibility to adjust to potential shifts in the market.

In Chicago, our temporary facility is continuing to ramp up, offering us valuable opportunity to build and nurture relationships with customers as well as gain insights into the market. This intelligence will prove beneficial to our continued operations at the temporary facility and extend into the opening of the permanent casino. We are on schedule to access the River North campus in July and we continue to expect to complete the permanent casino by September 26. In Las Vegas, we closed the Tropicana on April 2 and are preparing the property for demolition. Having recently received receipt of the necessary permits, we expect to demolish the Tropicana in October. This step is crucial for keeping to our expected timeline, which includes Las Vegas A starting construction of their new stadium in the second half of 2025.

Simultaneously, we are actively assessing our options for the highly valuable land next to the stadium and we’ll provide updates as our plans further develop. In New York, the licensing and approval process is extending further. We now anticipate a decision from the state no earlier than late 2025. While this delay will postpone the economic benefits from the planned integrated resort later into the future, it also reduces our immediate and medium term financing needs. Finally, I’ll turn my attention from property development to our interactive segments. In our International Interactive segment, the UK continues to be our most robust market. Our success is largely due to proactive strategic planning ahead of the white paper implementation along with enhanced acquisition efficiency and refined marketing strategies.

This segment has also benefited from our strategic reorganization and diligent cost management efforts. We are actively exploring additional ways to expand our presence in the UK and will soon launch online sports betting to further strengthen our market leading position and serve as a player acquisition funnel. Outside of the UK, we strategically shifted focus to maximize profit yield by pulling back on uneconomic marketing and cost structure reductions. This impacted our year-over-year top line comparisons, but benefited our adjusted EBITDA margin significantly. In Asia, although the market has shown some variability, there are signs that it’s beginning to stabilize, which we view as a critical step for business growth. In Europe, we anticipate benefits from the recent lifting of advertising restrictions in Spain, which we believe will provide a significant boost as the year progresses.

Finally, with respect to Brazil, we remain very focused in the market and expect to provide more updates in the near future. Our North American Interactive Segment delivered a very strong quarter as we continue to capture an incremental large share of the iGaming market in New Jersey and Pennsylvania. Additionally, in March, we successfully launched iGaming in Rhode Island as the sole provider. In just under a month of operation, we generated $1.2 million in gross gaming revenue and we’ve observed an accelerating pace of revenue generation thus far in April. We also successfully continued the rollout of our Bally Bet online sports betting in the United States, which, as we’ve mentioned many times before, we view as a funnel for iGaming growth.

We are very pleased with our transition onto the Kambi and White Hat platforms and believe this transition has been well received by our customers. The results and our continued ability to gain market share clearly demonstrate that our players are recognizing the benefits of this technological transition. Additionally, it’s important to note that our North American Interactive Segment is expected to incur an adjusted EBITDA loss of about $30 million for 2024. However, we anticipate that this loss will decrease in a non-linear fashion as the year progresses. With that, I will now pass the discussion to George for further details on our operational performance over the last quarter.

George Papanier: Thanks Robeson. I will begin my remarks by providing operating insights into our Casinos & Resorts segment’s performance. Following that, I’ll dive into the latest developments at our Chicago temporary facility and our ongoing efforts to build on its results. Our Casinos & Resorts segment delivered strong top line performance revenue growth of 4.1%. This growth was driven by a full quarter of operations at the Chicago temporary facility, which helped offset the wind down of the Tropicana. We all also navigated a few challenges during the quarter, which we believe to be temporary. As we mentioned on our fourth quarter call and has been widely reported, adverse weather in January significantly impacted our results.

Fortunately, we saw a recovery in February and March as conditions returned to more normalized seasonal trends. Additionally, visitation to our Rhode Island properties was notably affected by construction on the Providence Bridge on Interstate 195 critical north south route connecting Rhode Island to Massachusetts. One of the two bridges has suffered structural issues leading to lane closures that disrupt traffic during peak periods. Unfortunately, there is no immediate solution and the disruptions are expected to continue. Despite the weather challenges that impacted our margins this quarter, our underlying operating trends continue to be strong. Encouragingly, aside from weather related disruptions, we observed stable trends across the customer database and properties.

We expect improvements to continue as the year progresses since these impacts are largely temporary. We must manage the effects of wage pressures from recent union contract renewals, but we do not anticipate other major challenges. Additionally, we are actively exploring opportunities to better leverage the synergies within our 16 property portfolio. And we are excited for what the remainder of the year has in store. Moving on to Chicago, we continue to ramp up activities at the temporary facility and expand our customer database. During March, the temporary facility generated GGR of over $13 million, which represented a greater than 50% increase compared to December. Emissions also rose to approximately 118,000 versus 100,000 in December, and we ended the quarter with over 80,000 [indiscernible] members, up from 60,000 at year end.

Each day, our team gains a deeper understanding of our customers. We are already using this knowledge to enhance the performance of the temporary facility, which will also benefit the permanent facility once it opens. Improvements in parking continued, with Bally’s service set to launch soon. Additionally, we’re adding more VIP options and actively seeking partnerships with local dining establishments and outlets to integrate Bally’s comp currency, thereby enriching our guest rewards beyond just free play. We anticipate beginning to hit normalized revenue production rates as we head into the spring and summer months, and we’ll focus on gradually improving profitability over time. As Robeson noted earlier, we are on track to gain control of the North River campus in July and will commence site preparation and demolition shortly thereafter.

We remain confident that the property will be operational by September 2026, as all timelines are currently on schedule. As a reminder, there are approximately 1.1 billion in hard construction costs remaining under the Host Community Agreement, with the majority of these costs expected to be incurred in 2025 and 2026. Turning to Las Vegas, the Tropicana officially closed on April 2, and we’re currently preparing the building for demolition later this year. This will allow the Las Vegas A’s to begin their stadium development and keep pace with their plans to play at the new Las Vegas stadium beginning with the 2028 Major League Baseball season. While working with the team, we continue to evaluate our development options for the remainder of the 36-acre site.

With that now let me turn the call over to Marcus.

Marcus Glover: Thanks George. As Robeson and George highlighted our core results demonstrate we saw a solid start to 2024 in the first quarter. First quarter revenues on a consolidated basis increased by 3% year-on-year to $618 million, with gains in two of our three operating segments. Revenue for our Casinos & Resorts segment rose to $342.3 million, up 4.1% as performance in February and March somewhat mitigated the adverse impact of January severe winter weather. Other challenges during the quarter included low hold in several markets, construction on a major artery interrupting access to our properties in Rhode Island and the winding down of operations at the Tropicana. Adjusted EBITDAR for this segment was $89.4 million, a 15% decrease from the previous year, primarily due to the negative impacts from the January weather and the aforementioned issues.

As George mentioned just a few moments ago, we expect margins to return to more normalized levels as our core portfolio remains strong. Excluding Atlantic City, the Chicago Temp and the Tropicana adjusted EBITDAR margins were 35% including the January weather effects, giving us confidence for the remainder of the year. With that said, we continually look to improve performance and enhance profitability as we strategically integrate our portfolio of properties as our company matures. International interactive revenues declined by 4% year-over-year to $235 million, primarily due to our strategic reduction in marketing outside of the UK, which affected our year-over-year top line comparisons. This decision is part of our broader effort to optimize marketing investments and cost structure, enhancing profitability, a strategy that is proving effective.

In contrast, our UK operations, the crown jewel, within our international segments, continue to perform strongly, with revenues increasing by 12% year-over-year in U.S. dollars and 7% in constant currency. Overall, our strategic choices and robust results in the UK drove our adjusted EBITDAR up to $84 million for International Interactive a year-over-year increase of 4%. This growth was further supported by significant enhancement in our adjusted EBITDAR margin, which climbed approximately 290 basis points to 36%. North America Interactive generated revenue of 41.5 million, a 70% year-over-year improvement. The segment generated an adjusted EBITDAR loss of 10.2 million as we launched iGaming in Rhode Island late in the quarter, which is off to a quite great start.

We continue to believe that losses for North America Interactive overall will narrow as the year progresses, driven by our strong iGaming operations in New Jersey, Pennsylvania and now Rhode Island, in addition to the scaling of our Bally Bet online sports betting app. Turning to our capital structure, at the end of the quarter, shares outstanding were approximately 40 million. We also have incremental warrants, options and other dilution of approximately 13 million shares. We ended the quarter with $169 million of cash on our balance sheet and $3.57 billion of net debt. Shifting to guidance, we are reiterating the 2024 guidance we laid out on our fourth quarter call in February. We continue to expect to generate 2024 revenue in a range of $2.5 billion to $2.7 billion and 2024 adjusted EBITDAR of $655 million to $695 million.

The guidance reflects the closure of Tropicana on April 2, continued growth in the International Interactive business and approximately $30 million of adjusted EBITDA losses in North America Interactive. In conclusion, we remain very excited by the roadmap and executing the opportunities in front of us in 2024. As we approach the summer we will soon launch sports betting in the UK and our entire team is excited to take over the River North campus in early July to begin preparation for construction of the permanent casino. We will now open the call for questions and answers. Operator?

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Q&A Session

Operator: Thank you, sir. [Operator Instructions] Our first question comes from Barry Jonas with Truist.

Barry Jonas: Hey, guys, wanted to start with international, maybe specifically the crown jewel. Do you think the growth and also the share gains you’re seeing in the UK are sustainable? And then I guess as a follow-up, I wanted to touch on Spain with these restrictions being removed, how meaningful do you think Spain could be for Bally? Thanks.

Charlie Diao: Hey Barry, thanks for the question. Robeson will handle that. He’s straight out of central casting for being able to answer that one.

Robeson Reeves: Yes. So UK performance, yet very solid, very consistent. We’ve got excellent customer attention. So all the KPI’s are high in customer attention with record active levels. We’re getting excellent quality acquisition of volume. And we’ve seen the improved KPIs as well driven by our brand campaigns that we delivered on Virgin. We just launched actually further brand campaigns with Bally’s to drive further awareness, and it’s already doing well. So we’ve got a lot more tools in the locker to continue to grow and drive performance there. Adding sports will be material as well. And as some of you would have seen, the white paper consultations were released by the Gambling Commission today. Firstly, I wanted to say, they’ve done a great job.

The UK Gambling Commission, they’ve worked well with the industry. They’ve worked – listened to all operators, and they’re doing the right thing for players. And this will be a good long-term environment for great operators to exist in. Delighted that it’s been released. What I’ve said before on this topic is still remains true. The larger, high quality operators will continue to gain share and it will get more and more difficult for the smaller operators. I’m very happy with where the UK is. I see a lot more that we can unlock there. If I jump onto Spain, yes, delighted to see that the ad decree largely has been reversed. That means that we will spend in the market. We’ll stick to our normal formulas, exactly formula. So, we’ll spend in a highly optimized fashion.

We’ll deliver growth, but we’ll also drive EBITDA margins in any case. So, yes, very positive with Spain, very positive with the UK, see good upside there. Did you ask about Rhode Island as well or not?

Charlie Diao: No, no, all good.

Barry Jonas: Well, I guess that’s a fair follow-up. I was sort of curious what you’re seeing – if you give more color, what you’re seeing with the Providence Bridge work and maybe just an interactive angle, is there a chance you could maybe offset some of that with iGaming in the state? Thanks.

Charlie Diao: I think George can comment on the bridge and then I’ll give you a bit of color on iGaming.

George Papanier: Hey, Barry, yes, we’re seeing – definitely seeing impact primarily during peak periods, but not material at this time. And we’re obviously mitigating any impact primarily in our variable expenses and geared towards any customer volumes.

Charlie Diao: And I guess we’ve always viewed iGaming and bricks and mortar as complementary products which sit alongside each other. What we’ve seen so far, I’m pleased the launch in March in Rhode Island, as you know, generated in excess of a million dollars GGR. The trends that we’re seeing are very good, and we’ve seen great growth actually through April. We’ve got a lot of confidence in the Rhode Island market, and we think it’s going to be material from a North America iGaming revenue generation perspective and will give good opportunities to offset some negative impacts that you sometimes get with weather and other adverse effects with bricks and mortar.

Barry Jonas: Got it. All right. Thank you so much.

Charlie Diao: Thank you, Barry.

Operator: Our next question comes from David Katz with Jefferies.

David Katz: Afternoon, everyone. Thanks for taking my questions. I wanted to ask about the North American Interactive business and just get a little bit of a qualitative longer-term vision on it. Where can we realistically expect that business to evolve to over some two, three-year period, particularly on the heels, Robeson of your comments about other markets where it’s hard to be smaller and sort of catch up.

Marcus Glover: David, I’ll start and then Robeson come back cleanup on it. We’ve always stated especially last year, if you recall, when we repositioned and went to the variable kind of cost model and the Kambi White Hat relationship, we kind of at that point repositioned our approach on this OSB side, where we said, we want to have a quality product and quality offering, we want to be available in states. But it was really as a means to an iGaming outcome. And so we believe that our future for North America Interactive lies on the strength of iGaming performance, so far Obviously, we’re in New Jersey, Pennsylvania, now, recently Rhode Island, and we’re seeing some great promise in Rhode Island. But we are very, very prudent with how we’re approaching our positioning with OSB from a reinvestment standpoint.

I want to again have a competitive offering, but we’ll be very measured with how much reinvestment we actually put on the sports side of things. I’ll let Robeson give any additional color that he may have on that, but just wanted to tee it up with that, that initial intro.

Robeson Reeves: Yes. As Marcus said, we’re focusing our investment in the iGaming states, or what might become iGaming in the future. We haven’t made any assumptions around additional states kicking in, so making sure our cost base aligns to that. I would say that the big difference between the UK market and the North America market, whereby in the UK, much more of the operation because of the regulations requires manpower and the human intervention 24/7 that just by definition just means that you need to be much more of a scaled player. Our cost base, as Marcus indicated, we’ve gone for a variable cost structure at our existing scale, but also there’s lower human overhead required for North America as would call it a UK business. It’s just different designs of regulations.

Charlie Diao: And David, just as a reminder, we’ve always stated, and we continue – we haven’t seen anything that gives us pause on what we’ve stated publicly in terms of migrating toward a negative $30 million loss for 2024. We haven’t provided any kind of guidance beyond that in terms of where we think the business will get from a financial performance beyond 2024, obviously better than where we finished. But ideally, we love to get that business to from negative 30 to zero and then eventually positive. But we haven’t given a time horizon specifically on this.

David Katz: I understood. And if I can just throw one follow-up in there with respect to the Tropicana, my impression is there’s a wide range of options. Is there a timetable by which you expect we might have some plan in place, something that we can put our own pencil to when we might know a little bit more?

Charlie Diao: This is Charlie Diao stepping on the question of this. Bally’s are building their stadium for the 2028 season. We have minimal capital required to supply them their portion of land to build in April 28. We have absolutely no urgency whatsoever to get to certainty, because our option value increases over time the closer, the more that they invest and the closer to the 2028 season. While we understand that you would like to have some certainty, that’s not how we maximize the value of that optionality.

David Katz: Understood. Thanks very much.

Charlie Diao: Thanks, David.

Operator: Our next question comes from Jeff Stantial with Stifel.

Jeff Stantial: Hey, great, thanks. Good afternoon, everyone. Thanks for taking our questions. Maybe starting out here on the Casinos & Resorts segment. Marcus, if I heard you correct, you called out 35% brick and mortar margins, excluding AC, the trough in Chicago. If I recall correctly, I think the comparable metric was close to 38% in the prior year quarter. So, first off, could you just break out how much of an impact that flow through from adverse weather in January had on margins? And then second, how do you sort of think about the puts and takes here on the cost side heading into the remainder of 2024? Thanks.

Marcus Glover: Yes. Jeff, I’ll let George – thanks for the question. I’ll let George start and then I’ll give any color commentary should there be the need for it, after he answers.

George Papanier: Hi, Jeff. And let me know if I miss anything. There was a lot to unpack in that. So one of the questions was the impact from weather. Last year, we did 30% margin in January. This year we did 24%. So obviously had a significant impact on weather. Another data point would be, if you look at February and March combined, last year we did 36%, and this year, 33%. This is, of course, without Chicago and also without Tropicana, as Tropicana is winding down during Q1. So really the only impact that we saw was really 100 basis points for those two months. And it was really – as a result of specifically the union increases through collective bargaining last year in the latter part of 2023 that flowed through this year. I don’t know if I missed any part of your question.

Jeff Stantial: No, I think you covered it perfectly. I just want to clarify one thing on that last point. So you were saying, if you exclude Tropicana, AC and Chicago margins were down about 100 bps year-on-year in February and March.

George Papanier: No. That includes AC at this point. So if you exclude AC, then we’re up closer to the levels that you described. I think you said 38%.

Jeff Stantial: Okay. So that was adjusted for weather, excluding those three assets, margins were essentially flat.

George Papanier: Yes.

Marcus Glover: And Jeff, one other thing that – I think it was in George’s script, but in addition to weather, there was also some hold impact. Obviously, we expect that to come back to us throughout the year if the math works the way that it’s supposed to work. But that has a slight impact on Q1 as well, modestly.

Jeff Stantial: Okay, perfect. That’s very helpful. Thank you both. For my follow-up turning over to the North America interactive business. In the prepared remarks, you talked about sort of sequential improvement, albeit not linear, through 2024 in losses to get to the $30 million full year number. I think you called out as a ramp in online casino revenues as well as contribution from sports betting as the key drivers to sort of get there of that margin inflection. Can you just remind us kind of more what’s going on the cost side of the equation? How much of that guidance and an eventual inflection to break even and then to positive margins is rationalization of marketing spend? And are you still carrying any duplicative tech costs or we’ll say excess fixed cost, otherwise? Thanks.

Marcus Glover: So I’ll try to unpack and answer all of your questions in there, Jeff. A couple of things. One is, we’ve gotten much better on the cost structure side of things and rightsizing labor contribution. There will still need to be some wind down as we continue to improve that, but definitely some gains on that. But you got to keep in mind, year-on-year, we are in roles and keep me honest on this. I think seven additional markets than we were for sports versus the same quarter prior year. So that definitely helps. We also, in the spirit of how we view our North American Interactive world, we shifted our retail sports betting business that existed in the casinos and resorts to our North American Interactive segment.

Now that had a modest impact, nothing material. But significant revenue gains is really what’s driving the better outcome. Now keep in mind also with the Rhode Island launch in Q1, there was a little bit of an additional labor boost to get open in time. We committed to Rhode Island that we’d be open by March and we wanted to adhere to that commitment. And so there was a little bit of a labor push, which increased a little bit of expense, but we think it was well worth it given the early results that we’re seeing in Rhode Island. So to answer your question, in short, a lot of revenue gains, obviously on the strength of iGaming, but in more markets and sports, some definite cost structure improvements and we expect that to carry on. And the cost to continue to come in line and subside while revenues continue to ramp on both of the verticals within North America Interactive.

Robeson Reeves: Just to add one little piece, there is a bit of duplication in cost as well. We’re currently running two technology stacks across North American Interactive that will go away by the end of the year. That will not only reduce costs, but it will actually allow for much more fluidity players across different state boundaries. Currently, we have multiple apps in the App Store. All of these journeys will become simplified once we’re on a single technology stack.

Jeff Stantial: Okay, perfect. I apologize for the multifaceted questions, but you answered it all perfectly. So thank you all.

Marcus Glover: Thanks, Jeff.

Operator: Our next question comes from Dan Politzer with Wells Fargo. Hello, Dan, your line is live. If your phone is on mute, please unmute it, sir. Moving on. [Operator Instructions] Our next question comes from Chad Beynon from Macquarie.

Chad Beynon: Thanks. Good afternoon. Appreciate it. So wanted to focus on the temporary. I know originally when you were opening, property was generating roughly $9 million of monthly GGR last quarter. And in meetings you’ve kind of talked about all the items that have changed since the – I guess, the December period. Now you’re at $13 million. Can you just talk about what’s left in terms of ramping and then more importantly, where margins are and what that looks like and kind of how that feeds into the annual guide for C&R. Thanks.

Marcus Glover: Yes. Chad, I’ll start and then maybe George can give some additional color. Yes. As you stated, the property continues to do well with ramping. Obviously, I don’t know that there’s a science behind how much ramp is enough ramp, right. So the team’s going to continue to push and grow their market and continue to drive additional sign ups and customers for the database. But the idea is to really continue to drive that top line. We feel that if we continue to drive top line, we can have enough meat to really begin focusing on profitability later. And so you’ll continue to see us focus on driving top line. Right now, profitability is pretty light, but that’s somewhat intentional as we continue to focus on marketing, introducing people to our customers, to the property and introducing them quite candidly to the Bally’s brand and operations. So, George, I don’t know if you have any additional color to have.

George Papanier: The only thing I’ll add, hey, Chad is, Marcus is right. We’re going to stay very aggressive on the marketing end of this and continue to drive primarily database. We think there’s still a lot of opportunity there. We still have a lot of runway to penetrate the market. So we’re going to stay aggressive there. And obviously as you’re ramping and spending costs, your margins are impacted. At a certain point, we’ll flip the switch and we’ll see a lot of that flow through and margin increases. We still have some tools. We continue to add parking. We continue to add certain types of incentives from a physical perspective. We’ve added a high limit slot lounge. We’re in the process of providing a VIP lounge, which is something that we feel we need primarily on the slot end of our business.

And when you just break it down and look at table games, we’re already at the metric that we thought we should be in the temporary environment and we still think there’s a lot of headroom to grow there. And on the slot side, we’re just a little deficient or a little under where we think we need to be, so because of that we’re going to just keep very aggressive from a marketing perspective.

Chad Beynon: Great. Appreciate it, and I see the progress. And then with the launching of OSB in the U.K. should we expect some additional marketing cost or is the approach as of now really kind of focus on the current database, just cross selling them another product that would be, I guess, margin neutral or maybe even margin accretive long-term? Thanks.

Robeson Reeves: Yes. So we’ve got the two prongs as you call out. You’ve got existing players who already spend on sports offerings with our competitors. There’s a large proportion of our player base who do that, so we’re hoping to consolidate some of that wallet into our system just by having a product that we’re missing. Also, as you’ll see in virtually every market, acquiring through sports is much cheaper than acquiring direct to casino, yet sports players often play casino too. So we look at it in both ways. I don’t intend to spend more in marketing. I intend to just drive more volume through acquisition longer term because I’ve now got another tool in the locker. And we expect to see better ARPU, because you’re just getting a little bit more spend from the same players which are spending on other offerings.

Chad Beynon: Appreciate it. Thanks, Robeson. Best luck.

Operator: Our next question comes from Colin Mansfield with CBRE Institutional Research.

Colin Mansfield: Hey, everybody, thanks for taking the call. Maybe first a follow-up on the temporary in Chicago. I mean, a second it’s definitely nice seeing the trends that you guys are putting up month-over-month. So what are you guys learning about sort of the customer that’s coming there? Is there anything you can share there in terms of what the catchment area radius is? Maybe mix between local versus tourist, demographic mix or repeat visitation, things like that, that would help us understand a little bit more about the customer that’s coming there?

George Papanier: I’ll take that Colin, its George. We mentioned that we’re about 80,000 in our database now. I think 74,000 at the end of March. We’re continuing to grow that database. Right now the customer is skewing younger than you would typically see in a regional environment. And again, remember, this is not a resort facility or anywhere close to what we’re going to have in a permanent facility. It’s again a temporary facility, although very nice. It’s more along the lines of what you would produce in a regional environment. So the customer is a little young. It’s primarily driven by cable games. On the slot side of the business, typically you’d see a higher percentage of female and the age skews a little bit older.

We’re not seeing that yet. We’re drawing significantly right now within a five-mile radius, that’s not to say we don’t draw significantly outside of that, but there’s more of a concentration within the five miles. And we’re going to continue to try and penetrate certain – certain areas that we think demographic makes sense primarily through a lot of busing that we’re currently doing in the market.