Barry Jonas

Barry Jonas asked about the current state and future improvements of Flutter's prediction product, and for management's perspective on the likelihood of more US state tax increases and the potential for exiting uneconomically viable OSB states.

Answer

CEO Peter Jackson highlighted plans to improve the breadth and quality of the prediction product, especially for the upcoming World Cup, and leverage global expertise. CFO Rob Coldrake addressed US state tax increases, noting no high certainty but Flutter's ability to mitigate as a scale operator, and mentioned a positive license acquisition in Arkansas.

Barry Jonas asked about the current state and future improvements of the prediction product, and the likelihood of more U.S. state tax increases, including the possibility of exiting uneconomically viable OSB states in favor of FanDuel Predicts.

Answer

CEO Peter Jackson expressed satisfaction with the prediction market product's launch in 18 unregulated states, highlighting upcoming product enhancements and the World Cup as a key opportunity. CFO Rob Coldrake stated that while legislative season brings noise about tax increases, Flutter's scale allows it to mitigate impacts, as proven previously, and there are no current plans to exit OSB states for FanDuel Predicts.

Barry Jonas of Truist Securities followed up on the Illinois fee, asking if the guidance assumes the fee is taxable. He also requested an update on the potential for sports betting in California, particularly in light of the Attorney General's recent opinion on DFS.

Answer

CFO Rob Coldrake confirmed the guidance does not assume the Illinois fee is taxable and that they are monitoring the situation. CEO Peter Jackson commented on California, emphasizing their respect for the tribes as the key stakeholder and that they are following DFS developments carefully.

Barry Jonas asked about the broad deal environment, specifically what VICI is observing in terms of sale leaseback and increasing loan book discussions. He also inquired about the ramifications of Gabe Wasserman's shift to an expanded role in business development and experiential credit solutions on VICI's strategy or focus.

Answer

John Payne (President and COO, VICI Properties) stated that VICI's incentives are tied to AFFO per share growth and total return, driving a focus on sustainable external growth. He noted continued prioritization of real estate ownership while using the loan book for new relationships, highlighting recent partnerships with Cain and Eldridge, Red Rock Resorts, and Golden Entertainment. Regarding Gabe Wasserman's role, Mr. Payne expressed excitement for his shift to business development, particularly in non-gaming and experiential sectors. Gabe Wasserman (Chief Accounting Officer, VICI Properties) acknowledged his new role and also gave a shout-out to Jeremy Waxman, the new Chief Accounting Officer, noting his eight years with the team.

Barry Jonas asked for an overview of the current deal environment, specifically regarding sale-leaseback opportunities and discussions around increasing the loan book. He also inquired about the ramifications of Gabe Wasserman's shift to an expanded role in business development and experiential credit solutions on VICI's strategy and focus.

Answer

John Payne, President and COO, discussed VICI's focus on sustainable external growth, prioritizing real estate ownership while using the loan book to develop new relationships. He noted VICI's active pipeline, referencing partnerships with Cain, Eldridge, Red Rock Resorts, and Golden Entertainment announced in the past year. Mr. Payne expressed excitement for Gabe Wasserman's move to business development, particularly in non-gaming and experiential sectors. Gabe Wasserman, Chief Accounting Officer, also acknowledged his new role and introduced Jeremy Waxman as the new Chief Accounting Officer.

Barry Jonas from Truist Securities asked for an update on the deal discussion pipeline over the last 90 days and inquired about VICI's current stance on iGaming proliferation.

Answer

President & COO John Payne stated that the deal pipeline remains busy across multiple sectors with no significant changes in recent months, noting that the credit book is used to build new relationships. Regarding iGaming, Payne confirmed VICI monitors it closely as it's important to tenant credit. CEO Edward Pitoniak added that the industry is in a 'lively experiment' phase, with regulators needing to balance economic benefits with job sustainment from brick-and-mortar assets.

Barry Jonas of Truist Securities asked if VICI's view on tribal sale-leasebacks has changed and whether macroeconomic factors like tariffs are impacting partners' construction budgets or timelines.

Answer

CEO Edward Pitoniak stated that tribal sale-leasebacks remain complex and VICI is still in a 'learning phase' due to the inability to operate the gaming asset in a default scenario. Regarding construction, management expressed high confidence in experienced partners like Kane and Red Rock to manage cost variability and tariffs, noting their resourcefulness and use of hedging strategies.

Barry Jonas inquired about the considerations for exercising the call option on the Caesars Forum Convention Center and asked if VICI would ever consider operating casinos or other assets in a Taxable REIT Subsidiary (TRS).

Answer

President & COO John Payne stated that the Caesars Forum is a great facility that VICI is well aware of and will continue to study as the option date approaches. CEO Ed Pitoniak clarified that REIT rules would prohibit including a casino with hotel rooms in a TRS and that while never ruling anything out with 100% certainty, operating assets is not in the company's current plans.

Barry Jonas from Truist Securities inquired about VICI's current stance on tribal gaming, specifically the parameters for potential loans or sale-leasebacks. He also asked about the recent sale of the LINQ Promenade in Las Vegas, whether VICI had a right of first refusal (ROFR), and the potential for developing the adjacent land VICI owns.

Answer

CEO Edward Pitoniak detailed VICI's cautious approach to on-reservation tribal gaming, highlighting the "idiosyncratic" risks of sandwich lease structures where the tribe is both operator and ground lessor. He stated VICI is still evaluating how to price this unique tail risk. Regarding the LINQ, Pitoniak clarified that VICI's ROFR did not apply to the Promenade asset but expressed optimism about the new owners and the potential for synergy with VICI's adjacent land holdings.

Barry Jonas asked about the early pricing and demand trends for Kentucky Derby 152 and Derby week, seeking more color on the $15 million-$20 million guidance and opportunities to exceed it.

Answer

CEO Bill Carstanjen highlighted strong ticket sales, positive sponsorship, and wagering trends for the Derby, expressing excitement for the additional day of racing. He noted that all systems are go for execution, with strong expectations for 2026.

Barry Jonas asked for more details on early pricing and demand trends for Derby 152 and Derby week, as well as the factors contributing to the differential between the high and low end of the $15 million-$20 million incremental Adjusted EBITDA guidance.

Answer

William C. Carstanjen, CEO of Churchill Downs Incorporated, stated that the Derby is performing strongly with encouraging ticket sales in the latter stages of the process. He noted good expectations for wagering and excitement for the additional day of racing, attributing positive trends to clear execution and tailwinds from tax bill benefits. Marcia A. Dall, EVP and CFO, had previously provided the $15 million-$20 million guidance.

Barry Jonathan Jonas asked about the ROI targets for the Victory Run project, the timeline for achieving those targets, and any lessons learned from the introduction of the Starting Gate Pavilion at Derby 151 that could be applied.

Answer

CEO Bill Carstanjen stated that the company targets a 20% unlevered IRR for such projects, with a focus on achieving this by year three, allowing time for trial and word-of-mouth adoption.

Barry Jonas asked about the ROI targets for the newly announced Victory Run project, how and when Churchill Downs expects to achieve them, and any lessons learned from the introduction of the Starting Gate Pavilion at Derby 151 that could be applied.

Answer

CEO Bill Carstanjen stated that Churchill Downs targets a 20% unlevered IRR for such projects, with a focus on achieving this by year three, allowing time for asset introduction, trial, and word-of-mouth growth.

Barry Jonas of Truist Securities inquired about the company's pricing strategy for the lower-end Starting Gate Pavilion for the upcoming 152nd Kentucky Derby.

Answer

CEO William Carstanjen explained that the Starting Gate Pavilion received 'rave reviews' in its inaugural year. He anticipates that positive word-of-mouth will drive increased demand and pricing power for that section, consistent with the company's experience when introducing new and improved areas of the facility.

Barry Jonas asked for more detail on the composition of the Kentucky Derby results, which are expected to be comparable to last year, and specifically questioned if there was any impact on international visitation from recent macro noise.

Answer

CEO William C. Carstanjen responded that there has been no material negative change in international visitation, suggesting it might even be slightly better. He reiterated that the Derby is a very strong event and this year's financial results will be comparable to last year's record performance. He noted that while upper-tier demand is strong, there has been slightly less demand for lower-tier premium tickets compared to historical trends, though overall demand remains robust.

Barry Jonas from Truist Securities asked about the expected return on investment (ROI) for the newly announced Kentucky Derby projects and whether to anticipate any construction-related disruptions for upcoming events.

Answer

CEO William C. Carstanjen stated that a core principle is to execute major construction without disrupting the guest experience. He expressed high confidence in the projects, calling them the company's best investments that consistently meet financial hurdles and create long-term shareholder value, referencing their strong track record.

Barry Jonas asked about the company's current M&A strategy and the key parameters for potential acquisitions.

Answer

CEO William C. Carstanjen stated that their M&A strategy, exemplified by the P2E and Exacta deals, focuses on acquiring businesses with a strong franchise where Churchill Downs can add value and drive organic growth, rather than pursuing simple synergy plays. He described the current M&A environment as favorable with a promising pipeline, but emphasized that the company remains patient and disciplined, only executing deals when they are confident they can improve the acquired assets.

Barry Jonas inquired about the assumptions embedded within the 2026 retail guidance range, specifically regarding new supply impact, new project growth, and the One Big Beautiful Bill Act, seeking clarity on the differences between the high and low ends of the range. He also asked about the interactive segment's profitability scenarios beyond 2026, considering new iGaming legalization and the potential tail-off of royalties.

Answer

CEO Jay Snowden confirmed that all highlighted factors were contemplated in the guidance. He expects a stronger second half of 2026 due to Q1 weather impacts and Aurora property downtime in Q2, with all four growth projects operational by the end of Q2. Same-store EBITDAR is projected to be flat year-over-year, with overall 3% growth driven by new projects. Regarding interactive profitability, Jay Snowden mentioned Alberta as the only new market expected in 2026 (mid-year launch with an estimated CAD 15M-20M investment). He stated that more time is needed to assess revenue trajectory and the Alberta launch's success to project 2027/2028 outlook, but expressed confidence in achieving breakeven for 2026.

Barry Jonas inquired about the assumptions embedded in the 2026 retail guidance range, specifically regarding new supply impact (first half vs. second half), new project growth, and the One Big Beautiful Bill Act. He also asked about the profitability scenarios for the interactive segment beyond 2026, considering new iGaming legalization and potential tail-off of royalties.

Answer

CEO Jay Snowden clarified that the guidance contemplates all factors, with stronger expectations for the second half due to Q1 weather impacts and Q2 Aurora property downtime. Same-store EBITDAR is expected to be flat, with overall growth driven by the four growth projects. For interactive, Jay Snowden mentioned Alberta as the only new market expected in 2026 and stated they need a few more quarters to assess revenue trajectory and Alberta launch success to project 2027/2028 profitability, but are comfortable with 2026 breakeven.

Barry Jonas from Truist Securities inquired about the potential upside for ESPN Bet from ESPN's new direct-to-consumer (DTC) product and its deal with the NFL, and also asked about the sustainability of strong top-line trends in the retail segment.

Answer

CEO Jay Snowden stated that ESPN's recent strategic moves will solidify its market leadership, creating a positive halo effect for the deeply integrated ESPN Bet. For the retail business, Snowden attributed strong performance in markets without new supply to robust employment and lower gas prices. EVP of Operations Todd George added that strength is also visible in non-gaming segments like food, beverage, and hotel, and that property capital investments are yielding returns.

Barry Jonas asked if the upcoming ESPN direct-to-consumer (DTC) product should be viewed as a meaningful catalyst for PENN. He also inquired about the company's view on the risk from skill-based gaming machines in Pennsylvania.

Answer

CEO Jay Snowden described the integration with ESPN's new DTC product as a 'first-in-market' feature that they are 'incredibly excited about' and expect will drive user growth and exposure. Regarding skill-based gaming, Snowden stated that PENN views these devices as slot machines that should be regulated and taxed accordingly, and he expressed cautious optimism about a favorable legislative outcome in Pennsylvania.

Barry Jonas from Truist Securities asked about the anticipated ramp-up for land-based renovation projects, potential for future projects like Council Bluffs, and the company's response to the risk of gaming tax increases.

Answer

CEO Jay Snowden confirmed they are evaluating other high-return projects, including Council Bluffs. Head of Operations Todd George explained the project ramps should be swift due to existing staff and databases. Regarding taxes, Snowden advocated for industry collaboration with states to find alternatives to tax hikes, such as legalizing new gaming verticals or combating illegal operators, noting the approach must be tailored to each state's market structure.

Barry Jonas from Truist Securities inquired about the gap between ESPN BET's user market share and its GGR market share, asking how Penn plans to increase spend per user. He also asked for the outlook on regional land-based gaming growth in 2025.

Answer

CEO Jay Snowden explained that handle per user for ESPN BET is showing sequential weekly growth, driven by a casual mass-market base with a high propensity for parlays. For land-based gaming, Snowden noted stable core business trends and a Q4 uptick but highlighted new supply competition in Nebraska, Chicagoland, and Louisiana as a factor for 2025, which will be mitigated by Penn's own new projects opening in late 2025 and early 2026.

Barry Jonas inquired about the potential opportunity and likelihood of VLT expansion stemming from recent legislative activity in states like Pennsylvania and Missouri.

Answer

Matt Wilson, President and CEO, expressed encouragement regarding legislative progress against unregulated gray markets. He noted Light & Wonder's strong position as a market leader in Illinois, with a product suite ready for deployment if similar regulations are adopted. He anticipates similar market share to existing markets over the long term, with fee per day consistent with Class II performance. He also mentioned other incremental market opportunities in New York and Maine, which are not included in the 2028 long-term guidance.

Barry Jonas inquired about the potential opportunities and likelihood of VLT expansion in states like Pennsylvania and Missouri, given recent legislative activity.

Answer

President and CEO Matt Wilson expressed encouragement regarding VLT expansion as a solution to unregulated gray markets. He highlighted Light & Wonder's strong market leadership in Illinois and readiness to deploy its product suite if similar regulations are adopted in Pennsylvania (estimated 40,000-unit market) or Missouri, noting these opportunities are incremental to the company's 2028 guidance.

Barry Jonas from Truist Securities asked for more details on the Brazil opportunity, including its near-term and longer-term implications for Brightstar Lottery. He also inquired about the competitive M&A landscape in the global lottery space and its implications for Brightstar, specifically commenting on a competitor's acquisition of a prediction markets company.

Answer

CEO Vincent Sadusky described the Brazil opportunity as significant and rare, highlighting São Paulo's economic strength and the government's focus. He noted the partnership with Scientific Games to de-risk the venture, emphasizing the long-term contract and non-consolidated joint venture structure. Regarding M&A, Mr. Sadusky differentiated Brightstar's strategy of divesting gaming businesses due to lack of synergies from competitors acquiring iGaming/prediction market companies. He stated Brightstar is not interested in overpaying for non-strategic fits and believes in organic growth, particularly in enhancing iLottery, game development, and B2C in Italy.

Barry Jonas asked for more details on the Brazil opportunity, specifically São Paulo, and how investors should think about its near-term and longer-term implications. He also inquired about the implications of increasing competitive M&A in the global lottery space for Brightstar, citing Allwyn's acquisition of PrizePicks as an example.

Answer

Vincent Sadusky (CEO) described the São Paulo, Brazil opportunity as significant and a rare Greenfield venture, noting the upfront investment and partnership with Scientific Games to de-risk the launch. He expects it to take time to generate meaningful cash flow but sees strong long-term potential. Regarding competitive M&A, Vincent Sadusky explained Brightstar's strategic decision to divest its gaming business due to a lack of synergies with lottery, contrasting it with competitors acquiring iGaming or prediction market companies. He stated Brightstar's M&A interest is limited to enhancing iLottery, game development, or B2C platforms, believing organic growth offers the greatest value creation.

Barry Jonas inquired about the likelihood of iGaming and skill-based games legislation passing in Virginia and its potential impact on the Cordish project and GLPI's underwriting. He also asked if all funding for Acorn Ridge was complete and if the tribe's five-year sale-leaseback decision timeline remained unchanged.

Answer

Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations, noted that while iGaming legislation is being discussed, its passage is uncertain, but the Cordish project's underwriting is strong and designed to cover rent thoroughly. Desiree Burke, Chief Financial Officer and Treasurer, clarified that Acorn Ridge funding is not fully complete and will continue over the next few months due to construction lags. Steven Ladany, Senior Vice President and Chief Development Officer, stated there's no current indication the tribe will convert to a long-term lease sooner than five years, but GLPI would be amenable if they wished to.

Barry Jonas asked about the likelihood of iGaming and skill-based games passing in Virginia and their potential impact on the Cordish project and GLPI's underwriting, and sought an update on Acorn Ridge funding completion and the tribe's decision on a sale-leaseback conversion.

Answer

Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations, noted that iGaming legislation is progressing for discussion, but emphasized the strong underwriting of Cordish leases, not expecting significant impact. Desiree Burke, Chief Financial Officer and Treasurer, stated that Acorn Ridge funding is not fully complete, with a lag for construction verification. Steven Ladany, Senior Vice President and Chief Development Officer, confirmed the tribe could convert to a long-term lease in five years, but there's no immediate indication, and GLPI would be amenable to an earlier conversion.

Jeremy, on behalf of Barry Jonas from Truist Securities, asked for GLPI's perspective on the pending Intralot transaction's impact on Bally's credit profile and the potential implications of the 'big beautiful bill' for REITs.

Answer

Senior VP & Chief Development Officer Steven Ladany stated that the Intralot deal is viewed as a positive, providing Bally's with liquidity to pay down debt, which improves collateral coverage and may ease the path for the Lincoln sale-leaseback. Regarding the bill, CFO & Treasurer Desiree Burke noted it would have very little impact on GLPI itself.

Barry Jonas of Truist Securities asked how GLPI views the evolution of Bally's risk profile since their relationship began and how the potential for iGaming expansion factors into their underwriting process.

Answer

SVP & Chief Development Officer Steven Ladany acknowledged that while GLPI's exposure to Bally's has grown, the relationship has evolved, and the Chicago deal was structured thoughtfully to mitigate risk. President & COO Brandon Moore emphasized the strength of the underlying assets in GLPI's portfolio. On iGaming, Moore stated that GLPI is cautious, viewing it as a potential threat but also a potential credit enhancer if tied to brick-and-mortar tenants. CEO Peter Carlino added that the company lobbies against iGaming from operators without a physical presence in a state.

Barry Jonas from Truist Securities inquired about the pipeline for co-investment opportunities with Cordish and the potential to convert GLPI's equity stake into real estate. He also asked about the company's equity issuance plans for its 2025 and 2026 capital needs.

Answer

SVP & Chief Development Officer Steven Ladany confirmed ongoing positive dialogue with Cordish, stating that converting equity to real estate would be transaction-specific. CEO Peter Carlino added that they view the relationship positively and are excited about future prospects. SVP & Chief Investment Officer Matthew Demchyk explained that the current cash position and forward sale agreements cover the 2025 business plan, and they will be methodical and balanced in planning for future capital needs, retaining significant optionality.

Barry Jonas from Truist Securities inquired about GLPI's first tribal gaming loan with the Ione Band of Miwok Indians, asking about the comfort level with the structure, confidence in its conversion to a sale-leaseback, and the outcome after the 45-year maximum term.

Answer

President and COO Brandon Moore explained that the Ione transaction was the result of a multi-year effort to create a REIT-compatible structure for tribal land. He detailed that the structure includes a 5-year loan with an option for the tribe to convert it into a long-term lease, a framework that received a declination letter from the National Indian Gaming Commission (NIGC). Moore noted that GLPI has the same collateral protections as a typical commercial lender and can foreclose on the lease, though not operate the casino floor. At the end of the 45-year term, the tribe retains the land.

Barry Jonas asked about other legislative activities in Virginia beyond iGaming, specifically a bill for a Northern Virginia casino and skill games legalization. He inquired about Caesars' interest in participating if a Northern Virginia casino opportunity arises and the potential impact of skill games. He also asked about the variance in EBITDAR performance between wholly-owned and leased properties and how that might evolve.

Answer

CEO Tom Reeg stated that Caesars is always open to new opportunities, citing the success of Danville, Virginia, and would consider a Northern Virginia casino if it materializes, but would not be involved in skill games. Regarding EBITDAR performance, Reeg clarified that there's nothing unusual in how wholly-owned versus leased properties are operated. He attributed the variance to leased properties being more impacted by competitive openings in recent years, which he described as coincidental, and expects performance to normalize as these impacts abate.

Barry Jonas asked about Caesars' perspective on the various expansion bills in Virginia, including iGaming, a Northern Virginia casino, and skill games legalization, and whether the company would be interested in participating in a Northern Virginia casino opportunity. He also inquired about the variance in EBITDAR performance between wholly owned and leased properties and how that might evolve.

Answer

CEO Tom Reeg expressed openness to new opportunities, citing the success of Danville, Virginia, but stated the company would not be involved in skill games. He confirmed interest in a Northern Virginia opportunity if it arises. Regarding EBITDAR, Tom Reeg (CEO) explained that leased properties have been disproportionately impacted by competitive openings, but expects performance to normalize as these impacts abate.

Barry Jonas asked about Caesars Digital's perspective on prediction markets, their impact on sports betting, and future plans.

Answer

Eric Hession, President of Caesars Sports and Online, stated no current impact, suggesting most volume comes from non-legalized states. Tom Reeg, CEO, added that Caesars will not risk its licenses, viewing prediction markets as sports gambling, and will only participate if regulatory clarity allows without risk.

Barry Jonas asked about Caesars Digital's stance on prediction markets, whether they have observed any impact from these markets, and their overall strategic plan regarding this emerging trend.

Answer

President of Caesars Sports and Online Eric Hession stated no impact has been observed so far, with monitoring and planning underway for regulatory clarity. CEO Tom Reeg added that Caesars views prediction markets as sports gambling and will not risk licenses, but is preparing for participation if a compliant path emerges.

Barry Jonas of Truist Securities asked about Caesars' perceived chances of winning a New York City casino license and for any updated thoughts on the potential timing and strategy for a spin-off of the Digital business.

Answer

CEO Tom Reeg stated that while Manhattan may be an underdog for a license, Caesars is confident it would be the winner if one is awarded there. Regarding a digital spin-off, Reeg said the company's first priority is hitting its financial targets. He indicated that Caesars will be in a position to evaluate a separation in 2026 and would 'absolutely pursue' it if it would drive significant shareholder value.

Barry Jonas inquired about any updated thoughts on spinning off the Digital business and asked for the company's perspective on the emerging prediction markets.

Answer

CEO Tom Reeg stated that the primary focus is on delivering the financial results laid out for the Digital segment. He added that if the company achieves its goals but does not see the value reflected in its equity, management will explore all options to create shareholder value. Regarding prediction markets, Reeg said they have had zero impact on the business so far but affirmed that Caesars would explore any new, legally permissible opportunities to drive EBITDA.

Barry Jonas asked if potential state tax increases could risk the company's $500 million Digital EBITDA target and inquired about the performance of the Versailles tower and other high-ROI projects in Las Vegas.

Answer

CEO Tom Reeg asserted that while a tax hike could shift timing slightly, the company is 'well on the path' to its $500 million EBITDA target. President and COO Anthony Carano reported that the Versailles Tower is performing well with cash ADR up 61%, and highlighted other successful projects like new F&B outlets and the upcoming Flamingo pool.

Barry Jonas asked for an update on the development of key functionalities in the Digital segment, specifically inquiring about the progress of the shared wallet rollout and other efforts to bridge product gaps with market leaders.

Answer

Eric Hession, President of Caesars Sports and Online Gaming, reported that the shared wallet is now live in nine jurisdictions, with a target for a full rollout by mid-2025. He also noted that parlay mix hit an all-time high, driving hold percentage improvements. While acknowledging some product gaps remain, particularly in live same-game parlays for non-main markets, he feels they have made significant progress in closing the overall gap with competitors.

Barry Jonas asked about the expected Q4 to Q1 EBITDA seasonality, specifically if it would fare better or worse than the typical 6-7% increase, and the expectations for any top-line benefits from the tax refund season, particularly from the 'One Big Beautiful Bill'.

Answer

Stephen Cootey, EVP, CFO, and Treasurer, clarified that typical Q4 to Q1 EBITDA seasonality (pre-COVID) was closer to 5.5%, with the $9 million Green Valley Ranch disruption being an additional factor. Regarding tax refunds, he noted the season's start and highlighted various tax benefits, including the elimination of federal tax on tips, new senior tax credits, and expanded deductions, which Red Rock Resorts is well-positioned to capitalize on due to its market presence.

Barry Jonas asked about the expected Q4 to Q1 EBITDA seasonality, considering potential disruption, and the anticipated top-line benefits from the upcoming tax refund season and the 'One Big Beautiful bill.'

Answer

Stephen Cootey, EVP, CFO, and Treasurer, clarified that typical Q4 to Q1 EBITDA seasonality is around 5.5% (pre-COVID) and is achievable for this year, factoring in the $9 million Q1 Green Valley Ranch disruption. Regarding the tax refund season, he noted it just began and expects key measures like the elimination of federal tax on tips, overtime, new senior tax credits, reduced marginal tax rates, and expanded child/family tax credits to boost discretionary income in the Las Vegas locals market, benefiting Red Rock Resorts.

Barry Jonas requested guidance on typical Q3 seasonality to help with financial modeling and asked for any early insights into the potential finalists for the company's next large-scale greenfield project.

Answer

Stephen Cootey, EVP, CFO & Treasurer, advised that Q3 EBITDA is historically down about 10% from Q2, also reminding analysts to account for project disruption. Frank Fertitta, Chairman & CEO, confirmed that a Durango expansion is a definite option and that a decision on the next major greenfield site would be shared on the year-end call.

Barry Jonas inquired about plans to manage operating expense margins in light of potential tariff impacts and the strategy behind expanding the STN Sports betting brand to third-party locations like Treasure Island, moving beyond the core locals market.

Answer

Executive Scott Kreeger stated they are not yet seeing major operational cost impacts from tariffs and would prioritize alternative sourcing over passing costs to customers. Regarding sports betting, Kreeger and Executive Lorenzo Fertitta explained the expansion increases market penetration and is a good fit with non-competing Strip properties, leveraging a core competency for the company.

Barry Jonas from Truist Securities inquired about the development plans for the company's 8 acres in Reno and asked about the status of the North Fork tribe's gaming compact discussions.

Answer

Executive Scott Kreeger stated that while the Reno land is a great, entitled location, developing their Las Vegas assets is a higher priority. Executive Stephen Cootey clarified the North Fork project went through secretarial procedures, which bypasses compact negotiations, ultimately leading to higher margins and allowing for 2,000 Class III games at opening.

Barry Jonas asked about the 'Cactus' development site's position in the pipeline and whether the company is pursuing other tribal or non-Las Vegas deals beyond the North Fork project.

Answer

Executive Scott Kreeger described the Cactus site as a unique, large-scale hybrid location serving both the Strip and local markets. Regarding other deals, executives Stephen Cootey and Frank Fertitta emphasized their focus on the North Fork project. Executive Lorenzo Fertitta added that while Las Vegas is the core focus, they are actively seeking new tribal development opportunities that meet their criteria.

Barry Jonas asked if MGM has observed a 'trade-down' dynamic in its database, where customers might be opting for gaming closer to home instead of visiting Las Vegas. He also inquired about the latest developments regarding the 90% gaming loss tax deductibility, its next steps, and potential impact.

Answer

Bill Hornbuckle (CEO) stated that MGM has not seen a significant trade-down issue, viewing the omnichannel approach (e.g., BetMGM app) as additive to the customer experience. Ayesha Molino (COO) noted continued strength in slot handle despite the tax deductibility change, confirming that MGM is closely monitoring the situation and partnering with the industry to advocate for a fix.

Barry Jonas inquired if MGM Resorts observed a 'trade-down' dynamic where customers opt for regional gaming over Las Vegas, and asked for an update on the 90% gaming loss tax deductibility, its next steps, and potential business impact.

Answer

CEO Bill Hornbuckle stated that MGM has not seen a significant 'trade-down' issue, viewing omnichannel offerings like the BetMGM app as additive. COO Ayesha Molino noted continued strength in slot handle despite the tax deductibility's effect, confirming close monitoring and industry collaboration to advocate for a fix.

Barry Jonas of Truist Securities inquired about the financial impact of the MGM Grand renovation, asking if the $65 million disruption estimate is still accurate, and sought commentary on concerns regarding pricing and value perception in Las Vegas.

Answer

CFO Jonathan Halkyard confirmed the $65 million impact estimate for the MGM Grand remodel, noting approximately $40 million had been incurred year-to-date. CEO & President Bill Hornbuckle addressed the value concerns by highlighting that luxury properties like Bellagio saw ADRs increase and high-end gaming volume grow 25%, while acknowledging some weakness at value-oriented properties which he expects to improve in Q4 and into 2026.

Barry Jonas inquired about the potential impact of higher tariffs on domestic development projects and asked for an update on the UAE project, including gaming opportunities and the involvement of board member Barry Diller.

Answer

CFO Jonathan Halkyard stated that tariffs are expected to have a minimal impact on development, as major purchases are complete or have alternatives. CEO William Hornbuckle explained that Barry Diller is an active board member involved in the UAE project. He confirmed the Dubai resort is being built to accommodate gaming, with a Q3 2027 completion date, but the decision to legalize gaming rests with the UAE's rulers.

Barry Jonas inquired about the expected ADR uplift and ROI from the MGM Grand hotel renovations and asked about concerns regarding potential gaming tax increases by states.

Answer

Executive Corey Sanders stated the renovation will drive lift through higher rates for convention business and new suites, but did not quantify a specific ROI. Executive William Hornbuckle addressed tax concerns, stating that while it's an ongoing issue, it's manageable and not a top concern, citing successful advocacy in Maryland by highlighting economic contributions.

Barry Jonas from Truist sought to confirm the expected year-over-year EBITDA headwind from the Formula 1 event and asked for an update on international development opportunities in the UAE and Thailand.

Answer

CEO William Hornbuckle confirmed the previously guided F1 headwind holds, attributing it to lower room rate leverage and the expensing of construction costs that were capitalized last year. Regarding development, he noted Thailand's legislative process is ongoing, while construction on their UAE project has begun for a late 2027 opening, with the company keenly monitoring the potential for gaming.

Barry Jonas asked about potential risks of wider bet type restrictions (e.g., player props, micro-betting) due to integrity concerns like the NBA scandal, despite Genius Sports' integrity solutions. He also asked Brian Castellani about his approach to the CFO role and how his background adds value.

Answer

Mark Locke (CEO) reiterated that the focus remains on official data, league integration, and regulatory visibility, and he does not foresee particular risks as long as the market evolves collaboratively with sports leagues to protect consumers. Bryan Castellani (CFO) expressed excitement for his role, leveraging his background in sports, media, and entertainment to drive top-line growth, EBITDA, cash flow, and ensure responsible capital stewardship.

Barry Jonas asked about potential risks from wider bet type restrictions (e.g., player props, micro-betting) due to the NBA scandal, and also inquired about Brian Castellani's approach to the CFO role and how his background adds value.

Answer

Mark Locke (CEO) reiterated that the focus remains on official data and league/regulator visibility, not seeing particular risks as long as the market evolves with sports leagues to protect consumers. Bryan Castellani (CFO) discussed his background in sports, media, and entertainment, focusing on increasing top line, EBITDA, cash flow, and being good stewards of capital.

Barry Jonas of Truist Securities asked for insight into the financial and ROI expectations for the Serie A and European Leagues contracts, noting a competitor's comment that the economics were unworkable, and also asked if Genius is pursuing other material rights deals.

Answer

Mark Locke (Co-Founder, CEO & Director) emphasized that Genius has a high bar for returns and that these deals are immediately accretive, pushing up both revenue and EBITDA. He explained that the company's long-term investment in technology allows it to secure rights on more favorable terms, proving their strategic model. He added that Genius has all the rights it currently needs and is not actively pursuing other major deals, noting the market has become more rational.

Barry Jonas asked about the main drivers of weakness in the Las Vegas destination business, seeking comfort that the non-destination business would not be affected. He also inquired about the M&A pipeline and environment for acquiring assets or opcos.

Answer

President and CEO Keith Smith noted that destination weakness is widely reported, but 90-day forward bookings show improvement. CFO Josh Hirsberg clarified that the impact is focused on the Orleans, with the rest of the portfolio showing gaming revenue, overall revenue, and EBITDA growth. Keith Smith added that Boyd Gaming maintains a disciplined M&A strategy and continues to monitor opportunities.

Barry Jonas of Truist Securities inquired about the primary drivers behind the weakness in the Las Vegas destination business and sought assurance that this weakness would not impact the non-destination segments. He also asked for an update on the M&A pipeline and the current environment for acquiring assets or operating companies.

Answer

Keith Smith, President and CEO, explained that the weakness was concentrated in the destination business, primarily at the Orleans, while core Locals customers showed strong growth. He noted improved 90-day hotel bookings, though still soft. Josh Hirsberg, CFO, emphasized that excluding the Orleans, the Locals segment showed growth in gaming revenue, overall revenue, and EBITDA, with consistent margins. Regarding M&A, Keith Smith stated the company maintains a disciplined strategy, monitors opportunities, and is prepared to engage for the right asset, market, and price.

Barry Jonas inquired about the company's philosophically optimal leverage level following the deleveraging from the FanDuel deal and asked for an update on the promotional environment in key markets.

Answer

EVP and CFO Josh Hirsberg noted that while leverage will fall below their previous 2.5x target, they will not rush to add leverage, instead remaining disciplined. CEO Keith Smith added that sub-2x leverage is a 'point in time' and the goal is to find higher-returning investments. Regarding promotions, Smith described the environment as stable and rational, stating Boyd is not participating in any 'room rate war' in Las Vegas.

Barry Jonas inquired if the poor NFL hold during the quarter negatively impacted the Online segment's results and asked for Boyd's perspective on the greatest legislative risks and opportunities.

Answer

President and CEO Keith Smith confirmed the lower NFL hold had an impact but was offset by strong growth from market access agreements and their online gaming business. Regarding legislation, he noted it was too early in the session to predict outcomes but that the company is actively monitoring all developments.

Barry Jonas requested an update on the status of the closed Eastside Cannery property and the ongoing impact from the I-15 and Tropicana interchange construction project.

Answer

Executive Keith Smith stated that the company's view on Eastside Cannery is unchanged: the property remains closed because the market does not support additional capacity. He confirmed the I-15 construction continues to negatively impact business, particularly at the Orleans, by disrupting customer access. The company is hopeful the project will be substantially complete later in the year.

Barry Jonas from Truist Securities questioned how the company's outlook for 2026 has changed compared to 90 days ago, given recent market shifts. He also asked for updated thoughts on the opportunity in prediction markets.

Answer

Co-Founder and CEO Charles Gillespie stated that while traditional search revenue expectations have moderated, the company is successfully scaling other channels like apps and paid media, which will drive future growth. On prediction markets, Gillespie expressed strong optimism, viewing it as a potentially transformative, consumer-friendly category that could open a new chapter of growth for the industry, pending favorable legal outcomes.

Barry Jonas requested color on the potential path to achieving the company's $100 million adjusted EBITDA target, including the role of M&A, business line composition, and timing. He also asked for the latest thinking on the revenue share versus CPA deal mix, given recent concerns about decelerating handle trends in North American online sports betting (OSB).

Answer

CEO Charles Gillespie stated that with guidance at $68 million for the year, the company is well on its way to the $100 million EBITDA goal. He noted that while organic growth is strong, a significant acquisition could meaningfully shorten the timeline to "another year or 2." Regarding deal mix, Gillespie confirmed no concerns about the OSB market, which he sees growing. He reiterated a philosophically agnostic view on rev share vs. CPA, noting the company models and picks the most profitable deal. He highlighted that total recurring revenue, including subscriptions and revenue share, is expected to be over 50% of group revenue in 2025.

Barry Jonas asked for an assessment of the M&A pipeline for both domestic and international assets, given recent market volatility. He also sought the company's perspective on the affiliate opportunities within the growing sweepstakes and predictive markets verticals.

Answer

CEO Charles Gillespie stated the M&A pipeline is 'as busy as we've ever been,' characterizing it as a 'buyer's market.' He noted the company is looking beyond traditional affiliate assets to other B2C or B2B opportunities. Regarding new verticals, Gillespie said the popularity of sweepstakes casinos highlights U.S. demand for iGaming, and the company works with select operators who meet its legal standards. He also sees a 'bright future' for predictive markets and intends to develop relationships in that space.

Barry Jonas from Truist Securities asked for clarification on the new fiscal 2025 guidance range, seeking to understand the drivers behind the high and low ends, the company's visibility into its expected cadence, and confirmation that the 2028 targets remain unchanged.

Answer

President & CEO Matt Wilson and CFO Oliver Chow confirmed the new guidance of $1.43B to $1.47B includes a ~$65M contribution from the Grover acquisition. Wilson stated the base business still targets $1.4B, but the wider range accounts for potential second-half investments (e.g., Indiana expansion, studio scaling) that support the 2028 target of $2B in EBITDA. Chow added that while Q4 growth is expected to be sizable, the range provides transparency on potential variables.

Barry Jonas from Truist Securities inquired about the impact of tariffs on Light & Wonder's business, focusing on both input costs and customer behavior regarding the replacement cycle and game operations.

Answer

CEO Matt Wilson described the tariff situation as "dynamic" but currently "mitigatable," outlining a strategy of internal cost management, supplier burden-sharing, and potential price pass-throughs as a last resort. CFO Oliver Chow added that the company is leveraging its multi-year supply chain diversification efforts and is taking a balanced, not overreactive, approach to policy changes.

Barry Jonas asked for an assessment of the rationality in the current pricing environment for sports rights deals and inquired about the company's stance on prediction markets.

Answer

CEO Carsten Koerl emphasized Sportradar's disciplined approach to rights acquisitions, citing the recent European leagues and Serie A deals as examples where the price did not meet their commercial return hurdles. On prediction markets, he stated the primary barrier is regulatory, specifically tax clarity. He also noted that while they welcome the business, traditional sports betting offers more flexibility and is the dominant market.

Barry Jonas asked if certain customer segments or cohorts are performing differently amidst the current macroeconomic environment. He also inquired about the company's current thinking on capital allocation, specifically share repurchases.

Answer

CEO Jason Robins stated that the company has analyzed its customer base extensively and has seen no signs of macroeconomic effects, with all cohorts performing as expected. On capital allocation, Robins confirmed the company repurchased $140 million in shares in Q1 and that the board-authorized $1 billion buyback plan remains in place.

Barry Jonas from Truist Securities asked what measures DraftKings has taken to offset the impact of the higher tax rate in Illinois. He also requested a framework for the expected investment for a potential launch in Missouri.

Answer

CEO Jason Robins stated that the company has mitigated some of the Illinois tax impact by reducing promotional intensity and marketing in the state, though it did not offset the entire hit. He declined to quantify the investment for a Missouri launch, explaining that the timing is still uncertain and the EBITDA impact will depend on the launch date.

Barry Jonas of Truist Securities asked which states DraftKings is targeting for future legalization of OSB or iGaming and specifically requested commentary on the potential opportunity in Florida.

Answer

CEO Jason Robins identified Texas, Georgia, and Minnesota as key OSB targets, and New York, Illinois, Maryland, and North Carolina for iGaming. On Florida, he said he was 'very encouraged' by recent comments from the Seminoles but stressed that discussions are 'pretty early stage,' though it remains a very attractive potential market.

Barry Jonas of Truist Securities inquired about the potential impact of U.S. tariffs on business costs and consumer behavior, and whether the planned sale of the holiday park business and restructuring of the pub business would position the company to achieve its 40% EBITDA margin target.

Answer

Executive Brooks Pierce stated that tariffs are not a significant issue, as the primary impact would be on Illinois equipment sales, a small part of the business. Executive A. Weil added that a potential U.S.-U.K. trade deal would negate any tariff concerns and confirmed that the strategic business changes would guarantee EBITDA margins comfortably exceeding 40% upon completion.

Barry Jonas of Truist Securities asked for more detail on the expected performance uplift from product refreshes, specifically the Vantage terminals with William Hill. He also inquired about the business model for bespoke Interactive content, such as the deal with FanDuel, versus off-the-shelf products.

Answer

Executive Brooks Pierce stated they expect a 12-15% uplift from the William Hill Vantage conversion, similar to past projects. On bespoke content, Pierce explained the strategy is a blend: bespoke deals involve upfront development fees and recurring revenue for major partners like FanDuel, while standard products allow for faster deployment to a wider customer base. He noted that having a mix of both is the ideal approach.

Inquired about the Italy lotto rebid process and potential for digital synergies, as well as the impact of pushback against the lottery courier model in Texas.

Answer

The Italy lotto bid is due March 17, with an award expected in Q2; IGT feels well-positioned due to its performance and iLottery growth. The ban on lottery couriers in Texas is expected to have an insignificant impact on IGT's revenue, as couriers represent a small portion of sales.

Asked about CEO Vince Sadusky's transition to leading the lottery business and his strategic goals, as well as an update on the Italian Lotto renewal process, timing, and potential ROI.

Answer

The CEO is excited to lead the pure-play lottery company, seeing it as undervalued with growth potential from innovation and iLottery. The Italian Lotto renewal process is on track with known terms; the company is confident in achieving a good ROI by leveraging its expertise to grow the market, justifying the increased upfront fee.

Barry Jonas from Truist Securities inquired about the M&A landscape, the potential for a sale-leaseback transaction, and any observed impact from the recent election on consumer spending.

Answer

Charles Protell, President and CFO, noted a disconnect between buyers and sellers on run-rate EBITDA, making M&A less compelling currently. Blake Sartini, Founder, Chairman and CEO, added that the company is actively considering all strategic alternatives, including leveraging its real estate, to address its undervalued stock price. Regarding the election, Sartini confirmed a historical pattern of consumers pulling back on spending in the short term around major elections.

Barry Jonas asked for an update on the STRAT's booking window trends and its progress toward reducing its Online Travel Agency (OTA) mix. He also inquired about the current M&A environment and how macroeconomic factors are impacting discussions.

Answer

CEO Blake Sartini noted the STRAT's booking window remains short, but April and May are pacing strong. He stated the OTA mix is around 65% and trending down towards the 50% target. President & CFO Charles Protell added that value dislocation and interest rate uncertainty have put a damper on M&A discussions, making share repurchases a more attractive use of capital.

Barry Jonas asked about the sustainability of growth and market share gains in the U.K. International Interactive segment, the potential impact of Spain lifting advertising restrictions, and the operational impact of the Providence bridge construction on Bally's Rhode Island properties.

Answer

CEO Robeson Reeves stated that U.K. growth is sustainable due to strong customer retention, quality acquisition, and upcoming sports betting launch, adding that the reversal of Spain's ad restrictions is very positive. President George Papanier noted the Rhode Island bridge impact is currently not material, while CEO Robeson Reeves added that the strong launch of iGaming in the state provides a complementary revenue stream that can help offset such impacts.

Barry Jonas from Truist Securities inquired about the sustainability of growth in the U.K. International Interactive segment, the potential of the Spanish market after ad restrictions were lifted, and the impact of Providence bridge construction on Rhode Island properties.

Answer

CEO Robeson Reeves stated that U.K. performance is solid and sustainable due to high customer retention and effective brand campaigns, with sports betting expected to add material growth. He also expressed positivity about Spain's ad decree reversal, anticipating optimized spending to drive growth and EBITDA. President George Papanier acknowledged the bridge's impact during peak periods but noted it wasn't material yet. Reeves added that the Rhode Island iGaming launch has been strong and can help offset negative impacts on the brick-and-mortar business.

Inquired about the strategic rationale for keeping the Games and Fintech segments combined and asked for more details on the company's international expansion plans and potential scale.

Answer

The company continues to believe in the synergistic value of combining Games and Fintech but remains open to compelling offers. The international expansion, particularly into Australia, is in its early stages but represents a significant growth opportunity for late 2024 and 2025, complementing other growth initiatives in VLT and HHR markets.