Dan Politzer: Got it. And then just pivoting to digital a bit, I mean, this is a business where I think it seems like from an operating expense perspective, it looks like you’ve really reached scale there. As you think about the path forward here. Are there any rules of thumb or high-level ways to think about the flow through, just as it looks like you’ve turned the corner in terms of the cost structure?
Eric Hession: Yes. I’m happy to give you a few thoughts. One of the things that I think we’re particularly proud of over the last few quarters is that we’ve been able to hold our promotional spending constant and even down. This quarter, it was down 25 basis points versus prior year. And so it’s staying in that range that we’ve kind of given you for guidance, of the 1% to 1.25% of volume. And so I think that’s one thing to help build the models. If you look at our tax rate, along with the payments processing fees and a few other variable costs that we have, using 50% or thereabouts in terms of incremental flow-through is a good number to use. I think you’re probably right about thinking where we’re kind of essentially at that point where we’ve covered all of our fixed costs now and the marketing spend is still coming down.
We were down about $50 million year-over-year this quarter versus same quarter last year. And that will start to kind of stabilize as we’ve pulled a lot of it out, with the exception of some of the league and other longer-term commitments coming out over the next year. But from a variable perspective, I would think you could take every incremental dollar and flow 50% through at this point.
Dan Politzer: Got it. Thanks so much for the detail.
Operator: Thank you. [Operator Instructions] Our next question comes from Steven Wieczynski with Stifel. You may proceed.
Steven Wieczynski: Yes. Hey, guys, good afternoon. So Tom, as we think about 2024 in Vegas, maybe from a cost perspective, you’re obviously going to have some labor pressure heading into next year, depending on how the labor negotiations end up. But as we think about flow-through for 2024 in that market, anything we should be thinking about on the positive side that could potentially offset some of that wage inflation?
Tom Reeg: Yes. I mean you’ve got continued shift into group business, which is higher margin for us. So if you look at Caesars, it was historically running at 14% or so, we’re up a couple of points above that. We should be up a couple more points next year. That brings more banquet revenue that brings higher room rate, which has very high flow-through. We’ve got — Versailles Tower comes online as we’ve discussed. We’d expect that, that’s 15%, 20% ROI at a minimum on a $100 million project. So we have wind at our sales in addition to — more than offsetting what you’re noting on the cost side. And you’ve seen that even in third quarter, which had a number of headwinds, and we still posted growth in a quarter that’s not particularly strong from a group perspective.
Steven Wieczynski: Okay. Got you. And then, Tom, in the past, I mean, actually as early as last quarter, you’ve laid out a path to $5 billion EBITDA by 2025. I’m just wondering, as you sit here today, is there anything out there that you’re seeing that would impede you guys from getting somewhere around that target? And I’m guessing you’re going to give me a one-word answer of no, but just wanted to check back in and kind of see how you’re feeling about that target today.
Tom Reeg: Yes, Steve, I told you that I think there’s $0.5 billion of opportunity in brick-and-mortar, $0.5 billion of opportunity in digital, and we still see that in front of us.
Steven Wieczynski: Okay, great. Thanks, Tom. Appreciate it.
Operator: Thank you. [Operator Instructions] Our next question comes from Shaun Kelley with Bank of America. You may proceed.
Shaun Kelley: Hi, good afternoon, everyone. Thanks for taking my question. Tom, I feel like one of the themes from the kind of quarter has rolled out so far is just broader operating expense inflation. You obviously — I mean, based on just what we saw out of the regional margins alone, it seemed like you’re able to find offsets to be able to kind of counteract that. But could you just outline a little bit more broadly, maybe kind of what expense pressures you’re seeing in the business? And do you think you’ve got the ability — kind of going forward to be able to offset that and hold or get close to at least holding margins across the regional segments?
Tom Reeg: Yes, Shaun. I mean, I think you’ve seen it for quite some time. You saw it this quarter. we’ve been good at this for a very long time. This is — kind of how we built the business was being as good as we could be at blocking and tackling. And recall that we’re still, seems like it’s been forever, but it’s been three years since we closed the merger. We’re constantly continuing to find new opportunity to squeeze cash flow out of the business. The cost pressures that you’re hearing from us and others in terms of labor and inflation-related costs, those aren’t new. We’ve been dealing with those kind of since we got out of the pandemic. And we have said all along that we think our margins are — you shouldn’t expect significant degradation margin and you haven’t seen that to date. So that’s what I’d expect going forward.
Shaun Kelley: And then, maybe pivoting to Las Vegas, and I appreciate the comments that you make, especially given the sensitivity around the union side. Just — kind of anything further you could provide to us around timing, as we kind of do get ever closer to Formula 1? And then just — are the accruals that I believe you’re already taking in the quarter, are those in line with your comment about — the kind of step function in costs that you expect that contract to ultimately yield?
Tom Reeg: Yes. You should expect that we’re accruing at a level that we think is consistent with where the contract will shake out. So it’s consistent with our view that our employees deserve what they’re going to get here, and we intend to provide. In terms of timing, we’re in active dialogue. I don’t want to be delivering a play-by-play. This is a five-year contract. So while it seems like, gee, why don’t you just get it done next week. These are complex contracts that cover a long period of time, and we’re going to do the work with the union to make sure that we do it right for all parties. And I can’t tell you if that means it’s going to happen next week, a couple of weeks from now or a month from now. But we are in dialogue constantly with the union and have further meetings this week.
Shaun Kelley: Great. Thank you very much.
Operator: Thank you. [Operator Instructions] Our next question comes from Brandt Montour with Barclays. You may proceed.
Brandt Montour: Hey, good evening, everybody and thanks for taking my question. Congratulations on the strong results. Tom, your comment on the regional consumer, loud and clear, that it’s stable. Obviously, people are a little bit nervous on this particular segment. I was wondering if you could just go a cut deeper on what you’re seeing and maybe talk about sort of — maybe the month-to-month throughout the quarter or spend per visit trends, utilization of loyalty rewards across your system? Anything that I can kind of — put a finer point on that?
