Barry Jonas: That’s great. And then I just wanted to ask one on the land-based business. Curious to get your thoughts on expanding the land-based portfolio, whether that’s M&A or greenfield. In the past, we’ve talked about interest in the strip and I believe some new jurisdictions are looking at legalization.
Jay Snowden: Yes. I mean, look, our position is we’ll continue to be looking at opportunities, whether those are acquisitional opportunities or Greenfield as those opportunities present themselves. And that hasn’t changed. That won’t change. If there’s a great opportunity and we think we can generate value in an investment and that’s something we’re going to strongly consider sometimes that’s easier said than done. Las Vegas Strip, there’s very limited opportunities and nothing really hot at the moment. if there’s a new state, then that’s something that we would be taking and have been taking a hard look at, obviously, nothing is imminent at the moment but we’re continuing to keep the tires; that won’t change.
Operator: Our next question comes from Brandt Montour with Barclays.
Brandt Montour: First question is on the non-ESPN marketing spend budget that we heard about from you 3 months ago. Has that — the outlook for that spend bucket change at all based on what’s happened with ESPN and sort of your efficacy there in the first few months? And what have you baked in, in that 24% guidance?
Jay Snowden: So you should assume, Brandt, that what we’ve said previously is consistent with how we feel today. It’s going to be roughly matching the on-channel spend with ESPN. That’s a number that obviously we can flex. But we think that’s a good target. That’s sort of what’s built into our modeling for 2024. It gives us plenty of dry powder to utilize for state launches. You should think about that spend as being much more performance-based marketing spends and probably more targeted. Obviously, the ESPN spend is almost entirely national and some of the off channel is national as well. But a lot of it is performance and more local and regional focused.
Brandt Montour: And then just a follow-up, good to see, obviously, cash handle moving upward. I think one of the things that people are concerned about out there is third-party data providers suggesting that deposit share hasn’t moved up and is tracking below your handle share. And so I guess the question is, are you seeing similar improvements in cash deposits?
Jay Snowden: Yes. I think the deposit information that you’re referencing goes back to what I mentioned. I mean you can see in the weekly active user numbers, monthly active user numbers, we’ve got engagement. That’s not an issue. And we’ve got really good ratings on the iOS store app. So we feel really good about that. I think our job is to continue to improve the products and get deeper integrations with ESPN and eliminate friction, so that we can get people more seamlessly from ESPN’s ecosystem, whether that’s media, fantasy and the like over to ESPN BET when they’re ready to engage in bedding. So I think the deposits is really a function of we don’t have our share of wallet yet. We’re getting the deposits, we’re probably not getting the same size of deposits as we are with maybe the top competitors but I’m confident in saying that we’re one of 3 or maybe 4 apps on their phone and they’re on our app and they’re placing wagers, I think they’re waiting for more enhancements.
And I think that that’s okay. Our ability to keep people engaged is taking care of itself now. And I think that any that have gone — that will have gotten dormant by the time we get to a football season next year, we can reactivate quickly because of our relationship with ESPN and the product is going to continue to get better and better. So we feel great. I mean we have over 1 million new people in the database. Most of them are engaged with us on a regular basis, as you can see on Slide 8. And we just have to build out the relationship, the loyalty and earn more share of wallet as we go and I think you’ll see deposit growth come along with that.
Operator: Our next question comes from Chad Beynon with Macquarie.
Chad Beynon: First one on the bricks-and-mortar business. The margin guidance of 34% to a little bit over 35% assumes some slippage from what you produced in 2023. Felicia, you called out some competition and obviously, the weather. As we think about kind of same-store margins, is it safe to assume that properties that aren’t being hit by competition could drive the same margins? Or is there a major reason why you would expect for margins to decline in ’24?
Todd George: This is Todd. I’ll take that. Yes, that’s basically everything that’s modeled in there from a same-store basis, putting January behind us, looking at very strong, stable margins, I think the variables that Felicia provided are everything that’s modeled in there but we don’t see that changing.
Chad Beynon: Okay. And then for ’24 in terms of stock buybacks, can you remind us what’s left on the program? And if there could be opportunities given where the stock is right now to buy back shares at these levels?
Felicia Hendrix: Yes. Thanks, Chad. We do have $750 million remaining on our stock repurchase authorization. But look, as Jay and I talked about in our prepared remarks, this is a year of investment as we focused on growing and building out ESPN BET. So you probably won’t see share repurchases in 2024. But as we transition from the growth phase of our Interactive segment towards profitability and a free cash flow base, we’ll have plenty of opportunities to consider return of capital to shareholders. But again, this year, we’re focused on investment.
Jay Snowden: Yes. I mean, look, we have a pretty recent history of buying back shares when it makes sense for us and that’s the best use of capital allocation. And right now, as we’ve covered in this call, we’re investing in a high-growth business that’s going to generate a lot of value for our shareholders long term. So that’s the priority. It doesn’t mean that you can’t do or won’t do anything else. It just means that right now, that is the number 1 priority.
Operator: Our next question comes from Steven Wieczynski with Stifel.
Steven Wieczynski: Jay, so if we think about the 1.2 million new members to your database that you called out. And you talked about 90% of those are ESPN BET customers. I know it’s still early but can you give us any indication of how many of those new members have visited one of your brick-and-mortar casinos and/or have used your iGaming platform. I guess what we’re trying to figure out here is kind of what that cross traffic play has looked like as this — as your ecosystem continues to grow.
Jay Snowden: Sure. I mean, look, we’re — Todd will have some comments on this as well. We’re in the very early stages, as you referenced, I mean, we’re 3 months here. So we’ve built up a really nice database. We know where they live. We know how the proximity is we talked about, 1/3 of them within 50 miles of one of our retail businesses. So we’re going to start working on that now. That’s not something that we’ve had a lot of time to get going on. But we’re very excited about the cross-sell opportunities that a lot of new people into the database. Our overall database is now approaching 30 million people. It feels like just yesterday we were at 25. So that’s a big opportunity for us. Todd, anything that you want to add overall?
Todd George: Yes, Jay. The only few items I would add and Jay gave the data point around how many people are so close to our property. When you expand that kind of concentric circle around our properties that number grows significantly. And then just based on what we did through some promotions at year-end with some of our properties moving these people to a property we see such a great multiple, especially on that low to mid customer that’s engaging with us online. When they get to a property, we’re seeing great play, great engagement as well as additional spend on the other amenities. So that will be in the playbook as we move forward and it will be a key component this year and all the years as we move forward.
Jay Snowden: And I think just your other part of the question on cross-sell to iCasino. You can see from the monthly active user slide that we have on Hollywood Casino that cross-sell has been great. Again, it’s one of those — our product today, I would say, is good but it’s got to be great. And we’re working on that diligently as well with our product team and we think that we can see our market share from a handle perspective, continue to grow probably to what our daily active and monthly active user share us.
Steven Wieczynski: Okay, got you. And then, this is probably for Todd. Going back to your embedded guidance on the top line for the brick-and-mortar side of the business. I guess, Todd, can you maybe give us a little bit of color of kind of how you guys are thinking about your core customer this year in terms of spend levels and maybe what gets you to the low end of that range versus the high end of that range?
Todd George: Yes, Steve. Great question. So for us, especially this last quarter, maybe in the last 2 quarters, we did see tremendous engagement return from that 65-plus customer which has traditionally always been strong for us but just took quite some time to come back into our properties. So looking at those positive trends, those continue into this year. And then our core customer, looking at that midrange high frequent customer, we are still seeing a little bit of elevated spend per trip and slight increase in trips in Q4. So looking at how that continues through this year in almost every region, that remains strong. So I would say that slight fall off maybe in the 21 to 34 which has been running hot for a long time but we make that up in the 65 plus.
Jay Snowden: Frank, why don’t we have one more question, please?
Operator: We have a question from Bernie McTerlan with Needham & Company.
Bernard McTernan: Just wanted to ask on that Slide 8, the weekly active users and I know the commentary in terms of what the embedded guidance is for market share this year. But do you think there’s a structural difference in terms of what your weekly active users would be versus what your handle or GGR share would be just trying to get at if it’s a more casual user, if there should be that difference maybe if they’re lower spend or if it’s — right now, you’re a second or a third app that someone is using it and the goal is to migrate that to the primary app over time. And just how you’re thinking about navigating that customer journey.
