Stephen Grambling: Hey, thanks. You mentioned a few times that looking across, whether it’s the regions or Vegas, your expectations ex one-timers are effectively consistent. But what KPIs are you watching to assess whether it makes sense to perhaps start playing defense as it relates to costs? And as a related follow-up, what are the biggest levers if things were to erode and how should investors generally think about operating leverage as it seems like the market is back to worrying a little bit about the consumer here, and you’ve been able to be nimble in the past? Thanks.
Tom Reeg: Yes, Stephen, I’d say we’re always on defense on costs. And we are – you should presume in a quarter like this, after the run that these businesses have had that we would be going to our local leaders and saying show me how we can tighten further, either by generating more revenue or more or fewer costs so that it’s EBITDA additive. I’m not in the habit of coming up with a pithy name for that type of program. And laying out what those targets would be. But you should expect that we have initiatives in place that are well into nine figures that we would anticipate flowing through the business by the end of this year. And that’s partly just that’s what we do, but it’s also – we recognize that growth is going to be not as easy to come by in the brick-and-mortar as it’s been coming out of COVID.
And we intend to continue to grow. So you should expect that’s ongoing. I don’t have a good acronym for it, but expect that you’re going to see that flowing through in the coming quarters.
Stephen Grambling: Got it. And maybe just not put words in your mouth, but to make sure this is clear. I guess, if things were to erode, you’re already taking action so you would help mitigate any kind of operating deleverage? But on the flip side of things, reaccelerate, we could actually anticipate greater flow through?
Tom Reeg: Correct.
Stephen Grambling: Awesome. That’s it from me. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Shaun Kelley from Bank of America. Your question, please.
Shaun Kelley: Hi. Good afternoon, everyone. I wanted to just dig in on – or go back to digital for a second. Some of the numbers given in the prepared remarks on both OSB growth and iGaming are obviously super compelling. They don’t totally tie out some of the disclosures in the 10-Q. I think some of this has to do with what you’re seeing in maybe the brick-and-mortar side of the sports book [ph] business or maybe the way that some of that played through with Super Bowl. Could you help us square some of those because, again, like I think some of the sports betting numbers, in particular, that were quoted – on the OSB side, we’re up very, very strongly. But we see in the disclosure, at least actual volumes were on sports betting handle were slightly down. So could you help us with that a little bit?
Tom Reeg: So you’ve got North Carolina is a piece of it. But yes, retail sports was negative from a hold perspective in the quarter, and that hit revenue and flows through. That’s where your most acute flow-through of both Super Bowl and March Madness hits.
Shaun Kelley: And Tom, just to clarify, but to retail Sportsbook hold was actually negative for the entire quarter. Was it where the outcome was that significant?
Tom Reeg: No, it was down materially from last year’s first quarter.
Shaun Kelley: Okay. That’s helpful. And then look, I know this one may be a little bit of the dead horse, but just to go back to the Las Vegas volumes, I mean, I think the bottom line here, Tom, is when you see the numbers that you see and strip out or adjust for the Rio, it really sounds like you don’t believe there’s much of a volume or a consumer challenge or change here at the margin. And I just kind wanted to, A, double check that and B, just get your thoughts on kind of broader market share because it does feel like what we see just mostly through industry statistics is share gains, particularly consolidating at like the top end or some of the luxury and more baccarat focused properties on the market. How are you kind of adjusting or moving around the portfolio to compete or to hold share in this environment today?
Tom Reeg: Yes, look, I’m looking at EBITDA. I’m not looking at GGR share. That’s what you move with promo. Our international business was as high as it’s been since going back to 2019 in the quarter. Our high, our VVIP volumes were quite strong. We didn’t hold. If you look at is it March has been reported already? Somebody’s going to tell you they held because it wasn’t us. And baccarat held in the quarter or in the month. So we’re really not seeing much in the way of share shifts that we need to respond to. If you look at the quarter, I would say January didn’t feel great on a year-over-year basis. February and March did feel great and the net result was volumes ended up about the same for the quarter against the biggest first quarter we’ve ever had. So I suspect when you hear others, you might hear January didn’t start that great, but that was very short lived and February and March got much better.
Shaun Kelley: Thanks for the extra detail. Appreciate it.
Operator: Thank you. One moment for our next question. And our next question comes from the line of John Decree from CBRE. Your question, please.
John Decree: Good afternoon, guys. Thanks for taking my questions. Maybe two. The first one back on Las Vegas. I’m not sure, if I missed any prepared remarks. If we already touched on it, I apologize. But I know you, Tom gave some color on 2Q. But you’re curious if you guys have any stats in front of you about the balance of the year. Beyond that, perhaps where you have some visibility in Vegas, like group bookings or mix group pacing or rate pacing just to give us a sense of what the back half might look like?
Brian Agnew: John, same comments on group and convention as we talked about on the last call. For the year, we would expect group and convention to be up in 2024 versus 2023. That segment set records in 2022 and 2023. In the first quarter, we were down a little bit as a percentage of occupied room nights. We were 19% this year versus 21% last due to CON/AGG. But the pace for the remaining quarters, 2Q, 3Q and 4Q looks very good.
John Decree: Great. Thanks, Brian and Tom, maybe a one for you on external use of capital. I think your response to a prior question is pretty clear about where you see the stock. But given the kind of explosive growth we’ve seen in costs across the industry in the U.S., and your team’s track record of operating efficiency, does domestic M&A as a way of perhaps finding more EBITDA growth than your peers or their opportunities in the domestic market? That might look interesting given your kind of abilities and your team’s abilities relative to the cost growth that we’ve seen.
Tom Reeg: Short answer, John, is yes, we think there are. But those that are of – those that make a difference in terms of talking about in terms of scale would require equity as a piece of a transaction. And in the current neighborhood, I’m certainly not a seller of my equity for any reason.
John Decree: Makes sense. Tom, I appreciate that. Thanks, guys.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Chad Beynon from Macquarie. Your question, please.
Chad Beynon: Good afternoon. Thanks for taking my question. On the digital side, can you just remind us or kind of help us think about what’s additive versus cannibalization after you launch your Casino brand? And could this just be kind of a step forward for another thing, how many brands do you think makes the most sense in your consumer data? Thanks.
Tom Reeg: Well, ultimately you’re limited by how many skins that you have. So you saw the transaction that we did with Wynn in Michigan that allows us hopefully before too long to have another skin in that state. So we have two available in each iCasino jurisdiction and that should allow us to launch a second brand. And then we’ll, obviously we’ll see what happens after that and where we can get to from a skin perspective it’s different by state, but we have enough at this point to launch in every iCasino state.
Chad Beynon: Thank you. And then coming back to margins, I know before you’ve said in some of the markets you need to grow revs, I believe, 5% to hold margins. Does that broad statement hold true or could you grow slightly lower than that and still keep margins flat on a year-over-year basis?
Tom Reeg: Yes. I’d say yes to slightly lower, but I’d use 5% as a target.
Chad Beynon: Okay, thank you very much. Appreciate it.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Daniel Guglielmo from Capital One Securities. Your question, please.
Daniel Guglielmo: Hello, everyone. Thank you for taking my questions. The Harrah’s in Pompano has continued to perform well after the expansion and rebrand. Outside of the current pipeline do you all have any similar near-term projects or properties that may be dealing with some of the competitive pressures that were mentioned in the opening remarks?
Tom Reeg: So the only place we have a similar undeveloped real estate piece is Scioto Downs in Columbus, which could be a longer term opportunity, but that Pompano development has been, what five plus years in the making at this point? Slow developing, but it’s gratifying to see what it’s doing for both revenue and EBITDA at that property.
Daniel Guglielmo: Okay. Appreciate that. And then just around expenses. So the negotiations and the expense accruals have been pushed through and the contracts give some predictability for the next few years. But are there any surprises or dynamics you all are thinking through on the expense side, this year or into 2025?
Tom Reeg: No, not really. Other than what I’ve discussed in terms of opportunities on both revenues and expenses that we are targeting based on the list we put together at the beginning of the year, there’s nothing. It’s a lot of small stuff that adds up to a big number that we need to go block and tackle on and that’s what we intend to do.
Daniel Guglielmo: Okay. I appreciate it. Thank you.
Operator: Thank you. And due to time constraints, this does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Tom Reeg for any further remarks.
Tom Reeg: Thanks, everybody. We’ll talk to you next time.
Operator: Thank you. Ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.
