Jay Snowden: Yes. It’s a great question, Shaun. And it’s interesting because we’re in a sort of a peculiar spot right now in the U.S. that I’ll describe at a high level. We have our entire engineering and product teams really primarily focused on two things right now. One, of course, is the upcoming migration to our own platforms in the U.S., which will happen sometime in July later this summer, a lot of work going into the preparation for that. And then, of course, we are continuing to, as we always will, innovate and iterate around making sure that we have a best-in-class product in Ontario because that’s the platform that we’re going to be on here in the U.S. and across our portfolio across North America later this summer.
And so that’s really been where the focus has been where we have not been focusing understandably is that the platforms that we run on here in the U.S., which are third-party platforms, we have not been able to throw the resources at those to innovate and iterate and really focus on enhancement. So we’ve fallen a bit behind. And I think our market share in sports betting, this fall and this winter here in the U.S. has softened up a little bit, and we really haven’t been as focused on driving acquisition, knowing that our product isn’t as competitive currently here in the U.S. as it was compared to everybody else a year ago. And so we made the conscious decision that we’re okay with that. We want to focus on retention. Here in the U.S., we want to focus on both acquisition and retention in Ontario but we’re very pleased with the progress that we’re seeing across all metrics in Ontario that’s going to allow us to really lean in once we convert over and migrate to our own platforms in the U.S. second half of the year.
So you should expect us to be, I think, louder from a marketing standpoint as we head into football season €˜23, knowing that we have at that point platform and promotional capabilities and CRM capabilities, bonusing capabilities, parlay capabilities that we just don’t have in the U.S. today. So that’s sort of the way we’ve been thinking about it. We’ve been focused on iCasino growth across North America. We’re happy we’ve made some progress there in the fourth quarter. We’ve got a long way to go, but we’re seeing progress. And then generally speaking, OSB and iCasino, we’ve seen really nice trends in Ontario that we believe we can duplicate here in the U.S. second half of the year.
Shaun Kelley: Thank you very much. And maybe just as my follow-up to keep it short. Could you talk a little bit about the €“ just the €“ when you talk about the demographics on your kind of cohort slide by age type, I find this data like really fascinating. And can you just help us think about some broader implications here for how that spending might evolve and how you’re investing a little bit behind that? I know obviously, the retail sports book initiative has been there. But what other revenue streams are you seeing? What are some of the kind of broader implications of this shift as demographics change a little bit in the business?
Todd George: Yes. Shaun, this is Todd. I’ll take that. So a lot of our investment in the last few years as we sort of spot this trend coming out of the pandemic really involved not only our game offerings where maybe you’ll see now a bit of a greater mix of electronic table games, which allow you a different price point, so you can enter at a different level. But especially in the non-gaming amenities and the entertainment offering. So the way we’re looking at our hotels, and we just completed the Greektown hotel in the fourth quarter of last year, and it’s really been performing quite well. And then sticking with that property, just looking at some of the restaurant offerings as well as the first retail offering that we put in that features the Amazon just walk out technology starting to see that ramp up quite a bit.
And then a lot of the work we did around the 3Cs and making that more relatable to all the folks that have been coming in that use Venmo and Apple Pay in all of those different forms of currency that they are used to, they can now find those in our casino. So we’ve got a great road map in front of us. I think as Jay mentioned earlier, we’re just scratching the surface on that, but we’ve seen great results so far.
Operator: Our next question comes from Joe Greff with JPMorgan. Please proceed.
Joe Greff: Good morning, everybody. I know it’s early days in Ohio, but I was hoping you can talk a little bit about the impact of sports betting on land-based GGR and profitability. And then a follow-up on Interactive, you’re talking roughly about $25 million in positive EBITDA in that segment for the full year. Do you think it could be profitable in the first half? Or is it really weighted towards the second half? If you can give us some details on that? That’s all for me. Thanks.
Jay Snowden: Yes. We will grab both of those, Joe. I’ll hit the second 1 first and Todd can hit the Ohio question, which is a good one. I would say, as you think about sort of the cadence on the interactive side for 2023 by quarter, you should think about the first two quarters both being pretty breakeven-ish, maybe a little positive, a little negative, not a lot of movement there. Third quarter is where we will have some negative numbers, not significant, but they will be negative as we really plan for football season, September being the first month of both college and NFL. And so we will be starting to lean in from a marketing standpoint, but you won’t have an entire quarter of the volumes that come with it. And then the fourth quarter is where you should really expect to see the highest levels of profitability that get you to that positive number for the year. That would be the cadence that I would think about for 2023.
Todd George: Thanks, Jay. And Joe, as it relates to the Ohio properties. This was really our most successful launch for Barstool Sportsbook and the property teams and the corporate marketing, everybody just working so well together. And what we’ve seen also would have been good if maybe we could have launched a day earlier or Ohio State would have won that game because then we would have picked up another huge day. But Jay and I were just talking last weekend one of our properties in Ohio had an all-time record for volumes since opening, beating out New Year’s Eve. And it was really amazing to see. So again, what we’ve seen in other states with that 21 to 44-year-old demo coming in, experiencing things for the first time. It’s really been a great complement to our existing database that’s in there. So I could not be more pleased with the way we’re looking at it right now with all four of our Ohio properties exceeding budget in prior year.
Jay Snowden: And just to be super clear on that all-time volume record day, that was last Saturday, which was not a holiday weekend. It was just a Saturday in January. So we do attribute a good portion of that to the addition of retail sports betting, the influx of €“ for the most part, younger customers coming in, being introduced to new people and people realizing once they come in, there is a lot of fun things to do other than just bet on sports, but to do some gambling and partaking the restaurant and entertainment offerings. So Yes, very encouraging. I think Todd and the team have done a great job in all these markets, and we’re just €“ we’re getting smarter every time we launch in a new state in terms of the collaboration between interactive and retail and really planning for omni-channel effect as opposed to just for what’s our market share in to handle the first month.
Operator: Our next question comes from Ryan Sigdahl with Craig Hallum Capital. Please proceed.
Ryan Sigdahl: Good morning, Jay and Felicia. I want to stay on Interactive, so congrats on the positive EBITDA in Q4, likely the only operator from our standpoint that will probably report that here in Q4. But given the Mattress Mack World Series loss, your previous expectation was likely for a swing to a loss potentially in the quarter. Given that what went better to report that $5 million of positive EBITDA? Was it primarily the cost side or the user side?
Jay Snowden: Yes. I would say, as you look at it, probably better results in Ontario than we had expected, which is great for lots of reasons. And then we have seen some progress. Again, we’re not where we want to be yet in iCasino, but we have grown our market share in iCasino as you can see in one of the slides that we provided. So I would say those are the two primary reasons. The cost structure is really it’s quite predictable. We’re €“ this is what happens when you’re on third-party platforms and then you’re working on a migration. But we have ramping up of our own internal resources while we’re still paying full cost for third-party resources on the outside, but at least the ramp that you’re seeing in engineering and product and other areas is part of our budget, part of our plan and not surprising, quite predictable.
So the cost structure really shouldn’t be a surprise throughout the year. It’s really going to depend on what happens with revenues, what happens with hold percentage those things would tend to fluctuate the results more so than the cost structure.
Todd George: Yes. Agree with all that. The only other thing I would add, and Jay touched on this earlier. The great thing for us, and it’s a little bit unique to our business model with the partnerships that we have. But keeping that CPA low, especially as we launch into these new states, always helps with that expense structure as well.
Ryan Sigdahl: And then for my follow-up, just curious any thoughts on Massachusetts with the recent launch live with the three retail sportsbooks there and then your plans hit over the next couple of months. Thanks.
Jay Snowden: Yes. I appreciate it, Ryan. I mean look, we have high expectations for sports betting in Massachusetts for obvious reasons. Barstool was founded there, huge following. They €“ we’re celebrating Barstool’s 20th year since being launched in 2003. So there is long-term relationships and loyalty there with the audience. And based on what we’re seeing in Ohio, and again, we haven’t seen market share results, all we’re seeing is our own numbers, but we’re feeling really good about our launch in Ohio. We expect that to be one of our top-performing states, not just from a total revenue. Obviously, there is a significant population there, but we think from a market share standpoint as well and we expect Massachusetts to be very similar.
And just a reminder for those that may not know, we’re only live currently as of yesterday with retail sportsbook, which was great timing, at least to be in time for Super Bowl wagers. We won’t be live with mobile until right before March Madness is what the regulators currently have planned. So we will be live in March. And I think we will have a lot more information as we get on our Q1 call in early May about both Ohio and Massachusetts.
Operator: Our next question comes from Bernie McTernan with Needham & Company. Please proceed.
Bernie McTernan: Great. Good morning. Thanks for taking the questions. To start, the $100 million swing in interactive profitability, how much of that is driven by just organic growth versus synergies, whether it’s revenue synergies or cost synergies?
