At our renewals, which happened in the second half of the year, we saw big increases in those categories. We don’t expect those similar level of increases in 2024, but we’ll have to get through to the second half of the year before we’re on a comparable basis. So, those are the bigger categories where we’ve seen pressure historically. And so, it will take — depending on the rollout of those expenses in 2023 will affect kind of how we look at it in 2024. But the main thesis that I think we’re saying is, is that — we believe we’ve seen the worst in terms of the increases. We don’t expect to see those level of increases. And now we just have to work through what we have experienced. And as I said in an earlier comment, I wouldn’t use Q4 as a run rate, because it’s more like some of the first two or three quarters of the year 2023.
Joe Greff: Great. Thanks, guys.
David Strow: Thank you, Joe. Our next question comes from Barry Jonas of Truist. Barry, please go ahead.
Barry Jonas: Hey, guys. I wanted to start with Boyd Interactive. Can you maybe give us some — any color on how that’s performing? And also help us understand how Boyd Interactive factors into the flat Online guidance relative to FanDuel? Thanks.
Keith Smith: Yeah. So, Boyd Interactive is obviously still kind of a very new venture for us, a little over a year since we’ve owned that business. We’ve been successful in launching online casino in New Jersey and PA, I think both performing well. We launched a social gaming product under the Stardust brand earlier in January, that have been out there, but it being run by somebody else. And so, I think we’re very happy with the way it’s performing. Remember, it also has a smaller B2B business that it operates that existed when we bought it. So look, overall, we’re pleased with this performance. The team is doing a great job executing on the plan that’s in front of it and looking to continue to grow that business. It is a long-term play for us.
It’s not about the short term. And when we describe kind of a flat Online segment or Online business category, I think it’s a combination of both the online sports betting as well as Boyd Interactive that we think will be reasonably flat for the year.
Barry Jonas: Got it. And just as a follow-up, can you maybe just talk about the M&A environment and your appetite for M&A here?
Keith Smith: So look, our main priority every day is making sure that we’re running a strong business that we’re looking at ways to grow profitable revenues and bring those revenues to the bottom-line and just make sure that we have a very, very strong business and that we’re reinvesting in our business at the right level. Beyond that, if something interesting happens to come up, we’ll take a look at it, but we’ve talked in the past, we’ve always been a very, very disciplined investor, a disciplined acquirer of assets. It’s got to be the right assets at the right price, at the right market, and be the right strategic fit and have the right strategic reason to do it. And once again, our core priority right now is focusing on running a strong business, generating incremental EBITDAR and incremental shareholder value. And if something interesting comes up, we’ll probably take a look at it. But we remain very disciplined.
Barry Jonas: Great. Thank you, Keith.
David Strow: Thanks, Barry. Our next question comes from Dan Politzer of Wells Fargo. Dan, please go ahead.
Dan Politzer: Hey, good afternoon, everyone. I just wanted to follow up with maybe one more on Durango. Could you maybe talk about the overlap in terms of your database or geographic or from a demographic standpoint? And then similarly, Josh, I think last quarter, you maybe conservatively benchmarked a $25 million or so impact. I know we’re only 70 days into the opening, but I mean, do you still feel like that’s a good number or maybe on the more conservative end of the spectrum there could be upside there? Thanks.
Keith Smith: Look, from an overlap standpoint, I certainly don’t have any insight into what their demographics look like. From just a pure geography standpoint, you look at ZIP codes, where our customers come from, what our various properties, what ZIP codes are closest to them, what ZIP codes are in kind of a jump ball category. We understand all that. We understood all that well before they opened and we’re able to put the right plans in place. Our comments we’ve made a couple of times today about thus far, we have not seen a significant impact to our operations to our customers as a result of that is about all we can say. We know customers has visited as customers always do. But I think the proof is in the numbers, and we’re not seeing a significant impact as of yet, but it’s only 70 days, and we’ll just be very cautious going forward.
Josh Hirsberg: And Dan, in terms of kind of our 5% and $25 million, I think we characterized it as conservative. And I think for today, we’re going to stick to those numbers just given it’s still very early. And we’ll just have to see how things play out over the rest of the year.
Dan Politzer: Got it. Thanks. And just for my follow-up, also on the Locals. This is more of kind of a margin and OpEx question, but you’ve been running 50%-plus margins three years, and certainly, I recognize the first half of this year, you have a couple of headwinds that you called out. But I mean, to the extent that you see things stabilize and overall, the market looks similar to last year, is there any reason we shouldn’t still be in that same margin range over the course of the full year?
Josh Hirsberg: Yeah. I don’t — I think we’ve been able to maintain LVL margins, Midwest and South margins pretty consistently, overall, property margins in this 40% range for literally three years now. So, I’m sure there’s going to be quarters where things get out of hand, whatever, but it shouldn’t be kind of a permanent change because I think we’re running our business in this manner with this philosophy of being disciplined around reinvestment, using our tools and capabilities, and it’s yielding the results that you’re seeing. I mean, we’re generating a significant amount of free cash flow, significant level — consistent level of performance at these levels. So again, I’m sure time to time, we won’t deliver, but I think generally, this is what you should expect from us.
