Boyd Gaming Corporation (NYSE:BYD) Q4 2022 Earnings Call Transcript

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Operator: Thank you. The next question comes from Ben Chaiken with Credit Suisse. Please proceed.

Ben Chaiken: Hey, how is it going? You mentioned earlier, basically taking back the Stardust brand in mid-2023, I think you said in a few months in vertically integrating. How do you think about the puts and takes of retaining those customers? So, I guess what I mean is, on 1 hand, they have the wallet established with you. Obviously, the brand loyalty. On the other hand, presumably, FanDuel, who’s been running that, wants those customers as well. So, just like net-net, do you have any idea at retention or care to take a shot?

Keith Smith: No, I do not care to take a shot. Expect that there will be breakage. And when I asked a little bit earlier in the conversation about kind of the economics, once we take this over, that’s why we’re saying, look, in the first year, expect the economics not to change. And that what we made as a revenue share with FanDuel, it will be the same thing we will make operating this 100% on our own because of breakage and ramp-up and learning the business, running it ourselves from a marketing perspective. Hopefully better, but we’re expecting it to be kind of same for the first year, and then we’ll ramp up from there. FanDuel will continue to exist in those markets, certainly a tough competitor, but we’re — we have a large database of customers in the markets we’re going to launch in, and I think we’ll do fine.

Ben Chaiken: That’s helpful. I appreciate it. And then the management fee is going to $50 million in 2023 for Sky River. I believe the previous kind of bogey you guys have thrown out there was $30 million or $35 million, if I’m not mistaken. Did the property sequentially accelerate? Or what was the inflection that made you comfortable this is the right number?

Keith Smith: I think when we had given a $25 million to $30 million or $30 million to $35 million, I think I don’t recall our last specific guidance, it was simply early. The property opened in August. We didn’t have enough time under our belt. Now, that we’ve got a good five months under our belt, and we see where the — kind of the opening has settled in, obviously, the opening month is extremely strong, which is what drove the significant management fees in Q4. But we kind of see where it is settling in, in December and in January. That’s just our current expectation.

Ben Chaiken: Got it. Makes sense. Then the last just housekeeping–

Keith Smith: Said another way, they have been a little conservative last–

Ben Chaiken: Totally appreciate it. Thank you. And then just like the last housekeeping. Did you say that for full year 2022, digital was $40 million of EBITDA? Or did I mishear you?

Keith Smith: No, you heard correctly. So, including social, online, sports betting, the whole bit was $40 million.

Ben Chaiken: Great. Thank you very much.

Keith Smith: Welcome.

Operator: Thank you. Our next question comes from John DeCree with CBRE Securities. Please proceed.

John DeCree: Hi guys. Thanks for taking my question. You covered a lot of ground already, but maybe 1 more on the consumer patterns. I guess as you think about what you saw in the first half of fourth quarter and then exiting the fourth quarter, I know you called out some markets, Louisiana, Mississippi, but have you seen a change maybe across demographic cohorts or just infrequency of visit or spend per visit as the quarter progressed? I guess are those kind of trends pretty consistent with what you’ve seen? Or has there been a shift in the kind of pattern of consumer behavior?

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