Daniel Politzer: First, on Las Vegas. I was hoping to learn a little bit more about the room night mix in 2023 versus 2022. I know you mentioned that you’d have record group and convention mix. But I guess — what’s kind of the cohort that this is coming out of? And how should we think about the relative profitability of the group versus casino versus the lead customer as it kind of shifts versus year last year?
Tom Reeg: Yes. You’re seeing group come in increase over ’22 at the expense of OTA and lower-end FIT business. So you’re getting a dramatic lift in rate. That customer is going to skew more toward non-gaming offerings. So you’ll have some impact on casino revenue. But overall, your — in some cases, particularly in — early in this quarter, you’re filling a room that was unfilled last year. As you move through the year, you’re basically trading up to a more valuable customer. And while their mix of spend may be a little different, their profitability is significantly higher than what they’re replacing.
Daniel Politzer: Got it. And then for Digital, is there any way you could help us bridge a little bit. We’re going from 2023 kind of modestly positive, a big jump into 2024 and then an even more significant jump in 2025. Is that some of these larger longer tiered deals kind of coming out of the business? Or is it just a ramp or new states? Or any way to help us better understanding moving pieces there?
Tom Reeg : Sure. Yes, it’s all of the above. So it’s continued momentum from what we’re doing here. You’ve got a business that’s growing organically and has added a bunch of states, some more recently than others. We’re — there doesn’t appear to be a huge new state pipeline coming on. Obviously, we’ve got a significant ramp expected in iGaming as we get into back half of ’23. And then you do have all of that, the original partnerships that were stuck in that should be rolling off starting in ’24, ’25 on and some of the chunkier ones that flow directly to EBITDA as they run off.
Operator: Our next question comes from Shaun Kelley with Bank of America.
Shaun Kelley : I just want to follow up on that last question around online. Could you help us just give us any thoughts on kind of the underlying margin structure there? A number of people who have given some formal targets that talked about a 30% overall style contribution margin, what would be underlying the targets that you kind of laid out as you start to get out into ’24 and ’25? Would it be to that? Can you do even better given some of your own in-house capabilities? Just kind of how would you think about the puts and takes relative to some of the margin goals that have been put out there by others?
Tom Reeg: Yes. So without giving a target, we’ve got an advantage against some others in terms of we own all of our licenses, we think we’ve got a customer acquisition cost advantage tying into our database against all, to some degree, but some significant advantage there. We think that sports will be lower margin than iGaming, but that both will be material margin, and we have a long history of performing well on a margin basis, on a relative basis, and we would expect that to be the same in Digital as it’s been in the brick and mortar.
Shaun Kelley : Got it. And then sort of just wanted to pivot on the land-based side, too, maybe just the cost environment a little bit. We’re starting to hear a number of operators on the hotel side, talk a little bit more about sort of cumulative inflation over the last three and four years. A little bit of a different animal in Vegas. I know Caesars has a decent amount of union contract as well, which probably provides some visibility. But can you just discuss about the overall labor and hiring environment and then specifically maybe drill in on any upcoming union contracts and how that might — how any negotiation there might impact the operating expense?
Tom Reeg : Yes. So I’d say we have been dealing with labor cost inflation since the reopening. We’ve got the — or the Nevada union contracts are up in the middle of this year. We’ve begun discussions with the unions and to put it plainly, we’re doing well. We’ve been doing well. Our employees should do well. So we’ve built into our analysis. We expect labor cost inflation through this new union contract in the back half, starting in the back half of ’23. And with what we’ve got going on in the business, we think we’ll be able to navigate that just fine.
Operator: Our next question comes from Brandt Montour with Barclays.
