Chad Beynon

Chad Beynon asked if there have been any changes in the UK iGaming competitive landscape, such as competitor promotions or marketing, that might alter Flutter's mitigation strategy for the upcoming tax impact.

Answer

CEO Peter Jackson stated that no changes in competitor activity have been observed yet, as the tax changes take effect in April. He anticipates moderation in competitor behavior, marketing, and generosity due to the long tail of the UK iGaming market and inferior economics for smaller players, remaining confident in Flutter's mitigation plans.

Chad Beynon inquired about any changes in the U.K. iGaming landscape regarding competitor behavior (promos, marketing) ahead of upcoming tax impacts, and if this could adjust Flutter's mitigation strategy.

Answer

CFO Rob Coldrake stated that nothing different from anticipated has been observed regarding competitor activity, as tax changes take effect in April. He expects competitors to moderate behavior from that point, particularly in the long tail of the U.K. iGaming market, and remains confident in the company's conservative mitigation view against the tax increase.

Chad Beynon of Macquarie asked for a post-mortem on the lost Italian lottery tender, questioning if it frees up capital for other uses and if the experience opened their minds to other lottery opportunities globally.

Answer

CFO Rob Coldrake described the Italian lottery as a "unique opportunity" and stated Flutter has no broader interest in other lotteries. He emphasized that capital allocation remains disciplined and unchanged, continuing to focus on being an "and" business: investing organically, pursuing M&A, and executing its share buyback program while deleveraging.

Chad Beynon inquired about the 1.9x coverage for the Golden Entertainment transaction, asking how VICI evaluated that level at this point in the cycle compared to prior negotiations, and whether it sets a precedent for future negotiations or if each deal is unique.

Answer

John Payne, President and COO, emphasized that every deal is unique. He explained that for the Golden transaction, the 1.9x coverage was deemed appropriate based on underwriting the management team, their plans for the assets, and market conditions for a portfolio deal. He reiterated VICI's belief in the operating team's future success.

Chad Beynon asked about the 1.9x coverage ratio for the Golden transaction, specifically how VICI evaluated this level at the current point in the cycle compared to prior negotiations. He also inquired if this coverage level portends for future negotiations or if every deal is considered unique.

Answer

John Payne (President and COO, VICI Properties) emphasized that every deal is unique. He explained that VICI underwrites the management team and their plans for the assets and markets. For the Golden portfolio, the investment committee believed 1.9x coverage was the appropriate starting point, based on the operating team's expected success with their future plans.

Chad Beynon asked about wagering growth for the upcoming Derby and future, specifically if prediction markets have impacted mobile and digital online wagering in their segment and any potential impact in May.

Answer

CEO Bill Carstanjen noted a gravitation towards larger events like the Derby and Oaks. He explained that pari-mutuel wagering operates under the Interstate Horseracing Act, requiring express consent for content use, and the company has not agreed to provide content to prediction markets, nor does he expect it to in the future.

Chad Beynon asked about wagering growth expectations for this year's Derby and the future, and whether prediction markets have impacted Churchill Downs' segment or could have an impact in May.

Answer

William C. Carstanjen, CEO of Churchill Downs Incorporated, observed a gravitation towards larger events like the Derby and Oaks, indicating a flight to quality content. He explained that pari-mutuel wagering on horse racing operates under the Interstate Horseracing Act, requiring express consent for content use, which has not been granted to prediction markets. He stated that prediction markets are not part of the pari-mutuel wagering story and are not expected to be in the future.

Chad Beynon asked about the company's capital allocation strategy, specifically regarding leverage and the balance between share repurchases and project capital expenditures, given the year-to-date spending on repurchases and dividends.

Answer

CFO Marcia Dall affirmed the company's disciplined capital management, commitment to reducing leverage below 4x next year, and strategic approach to share buybacks, balancing capital investments with a 7% annual dividend growth and other repurchases.

Chad Beynon asked about Churchill Downs' capital allocation strategy, specifically regarding the balance between share repurchases, dividends, updated CapEx projections, and managing leverage.

Answer

CFO Marcia Dall affirmed the company's disciplined capital management, commitment to bringing leverage below 4x next year, and strategic approach to share repurchases. She emphasized balancing capital investments with the consistent 7% annual dividend growth.

Chad Beynon of Macquarie Group questioned the company's strategy for growing international attendance at the Kentucky Derby and asked if recent social media growth reflects successful international marketing.

Answer

CEO William Carstanjen explained that the Derby's global brand recognition provides a strong foundation. The strategy involves a multi-year process of developing the brand in key international markets through initiatives like the 'Road to the Derby' series, focusing on high-end consumers and sponsors. He noted that while most cited social media stats are domestic, they are actively building their international social media presence.

Chad Beynon inquired about the consumer softness observed during the quarter, asking if the decline has accelerated recently, particularly concerning the lower-end and unrated player segments.

Answer

CEO William C. Carstanjen acknowledged that macroeconomic volatility and tariff uncertainty have created consumer hesitancy, which is most evident in lower-tiered and unrated play. He stated this trend has been consistent with recent quarters and that the company is better able to manage its rated players through direct communication and incentives. Carstanjen clarified they are seeing hesitancy, not necessarily a confirmed decline in disposable income.

Chad Beynon of Macquarie asked about the source of confidence for demand in new premium Derby seating, questioning whether it stems from returning high-end guests or from tapping new domestic and international markets.

Answer

CEO William C. Carstanjen attributed the confidence to two factors: a broad consumer shift toward experiential events and specific company strengths. He confirmed high return rates and strong demand from existing customers, but also emphasized that the team is aggressively pursuing new customers, including internationally, to support future expansions.

Chad Beynon requested an update on the growth drivers for the Exacta business beyond internal synergies, specifically focusing on ETG and international opportunities.

Answer

CEO William C. Carstanjen confirmed that plans for international and new jurisdictional growth for Exacta are progressing. He mentioned a deployment in Malta but noted it is not yet material. He expressed confidence in future opportunities, stating that while there is nothing material to announce currently, the team is actively working on the strategy and expects further overseas deployments in the 'relative near term.'

Chad Beynon asked about PENN's opportunity to benefit economically if the iGaming bill in Maine (granting a monopoly to a third party) stands, given PENN's existing presence. He also inquired about the confidence in hitting 45% flow-through on retail revenue targets for 2026, considering same-store expenses (labor, utilities, inflation) and benefits from new properties.

Answer

CEO Jay Snowden expressed strong disapproval of Maine's decision, stating the bill is being legally challenged, but if it stands, PENN will find a way to compete. He expressed confidence in hitting the 45% flow-through, citing a handle on labor negotiations, utility, and insurance expenses. He noted that the first half of 2026 might see less upside due to new supply markets and Aurora opening, but the second half should see stronger margin growth at the same-store level.

Chad Beynon asked about PENN's opportunity to benefit economically from the Maine iGaming bill, given its unique partnership structure. He also inquired about the retail guide's implied OpEx growth rate and 45% flow-through at the midpoint, specifically asking about confidence in managing inflation (labor, utilities, etc.) in 2026.

Answer

CEO Jay Snowden expressed strong disapproval of Maine's decision to grant a monopoly to a third party, calling it 'mind-blowing' and noting it's being legally challenged. If the bill stands, PENN will find a way to compete. Regarding retail OpEx, Jay Snowden expressed confidence in managing growth, citing typical annual merit increases and a good handle on labor negotiations, utility, and insurance expenses. He noted that while H1 2026 might see less upside due to new supply markets and the Aurora opening, H2 2026 should see more margin growth at the same-store level, with flow-through potentially exceeding 45%.

Chad Beynon of Macquarie Group questioned why strong retail KPIs didn't lead to better margin flow-through in Q2 and asked how predictive markets fit into the company's strategy.

Answer

CEO Jay Snowden explained that Q2 retail margins were pressured by the significant impact of new competition in Bossier City and elevated promotional spending in certain markets. EVP of Operations Todd George added that unfavorable table games hold was also a factor. Looking ahead, they expect margins to improve as new projects become accretive. Regarding predictive markets, Snowden stated that Penn is monitoring developments but does not plan to be a first mover.

Chad Beynon asked for PENN's view on predictive markets and whether the company might divest any non-core brick-and-mortar assets to deleverage its balance sheet.

Answer

CEO Jay Snowden stated that while they are monitoring predictive markets, it is considered a niche opportunity and not a current priority. Regarding divestitures, Snowden explained that selling assets is complicated by their master lease agreements. He suggested a more likely strategy is to enhance value by redeveloping older riverboat casinos into land-based facilities, similar to their current projects in Illinois and Iowa.

Chad Beynon from Macquarie inquired about the nature of the $350 million share repurchase program (programmatic vs. opportunistic) and asked about the trends in the retail business, particularly post-election consumer strength.

Answer

CEO Jay Snowden clarified that the $350 million repurchase figure was chosen to be substantive and the approach will be opportunistic, not programmatic. Head of Operations Todd George confirmed that strong consumer volumes seen in Q4 post-election continued into Q1 during non-weather periods, indicating sustained consumer health.

Chad Beynon of Macquarie asked for Penn's perspective on the recent Missouri sports betting vote and its potential impact. He also inquired if hold rates for non-NFL sports, like the World Series, have significant room for improvement.

Answer

CEO Jay Snowden expressed that the Missouri sports betting development is good news for Penn, given its strong land-based presence there and the attractive tax structure. He noted their understanding is that they will receive multiple skins. Regarding hold, he explained that World Series hold depends on the matchup and that while Q4 started with low hold, November and December are higher volume months, providing an opportunity to recover.

Chad Beynon asked about the main catalysts driving pipeline growth in underpenetrated 'rest of world' markets, given IMAX's strong business model, results, and local language success.

Answer

CEO Richard Gelfond identified several catalysts: strong financial returns for exhibitors (e.g., Japan's significant per-screen average increase in 2025 leading to increased activity in 2026), the sharing of performance data, the robust upcoming slate encouraging earlier openings, and IMAX's flexible use of capital to seed markets. He cited the example of 27 theaters opening just before Avatar, which significantly improved their ROI.

Chad Beynon asked about the catalysts driving the high single-digit to low double-digit growth through 2028, particularly focusing on the underpenetrated 'rest of world' opportunity, and what the next inflection point for pipeline growth in these markets might be.

Answer

Richard Gelfond, CEO of IMAX Corporation, attributed the growth to the strong film slate and attractive financial returns for exhibitors. He cited examples like Japan's enormous per-screen average increase in 2025 and strong performance in France and Germany with Avatar, leading to increased activity and inquiries. Mr. Gelfond also mentioned leveraging data on ROI and using flexible capital to jumpstart growth in promising markets.

Chad Beynon of Macquarie Group asked if IMAX's strong box office indexing could lead to improved pricing or royalty rates with partners. He also requested clarification on the tax rate outlook for the second half of the year.

Answer

CEO Richard Gelfond responded that IMAX prefers to use its strong negotiating position to secure enhanced marketing support and filmmaker involvement rather than altering pricing structures, aiming to maintain fair, precedent-based studio relationships. CFO Natasha Fernandes added that the company aims for a normalized effective tax rate for the full year, moving past the volatility seen in H1.

Chad Beynon asked about the source of the Q1 box office outperformance in China, specifically by city tier, and whether there have been any changes to the terms of new system signings, such as the JV versus sales mix.

Answer

CEO Richard Gelfond stated that while he lacked specific city-tier data, he believed the strength was uniform across all markets. He attributed the success to the quality of the film 'Ne Zha 2' and a highly effective new marketing approach focused on social media. Gelfond confirmed that there have been no changes to signing terms, as the company remains disciplined on its ROI calculations despite strong demand.

Chad Beynon from Macquarie Group asked about the scheduling of the dense 2025 film slate, the outlook for films in China for 2025, and the potential operating leverage if the company achieves its box office targets.

Answer

CEO Richard Gelfond described the 2025 slate as exceptionally strong and tightly scheduled, particularly from May to September. CFO Natasha Fernandes added that key local titles like 'Creation of the Gods II' have been approved for China in 2025. She explained that high box office levels create significant operating leverage and margin expansion, amplified by network growth and operational efficiencies.

Chad Beynon with Macquarie inquired about AMC Entertainment's theater portfolio strategy, specifically regarding the ongoing reduction in theater count, the outlook for the fleet given the strong 2026 content slate, and whether the projected CapEx includes new theater builds. He also asked for management's expectations on international admission revenue growth compared to North America for 2026.

Answer

CFO Sean Goodman explained that AMC has closed over 200 theaters and opened 65 in the last six years, with approximately 10% of leases up for renewal annually, providing opportunities to improve theater economics by closing underperforming locations and acquiring more profitable ones. CEO Adam Aron clarified that the strategy focuses on capital-light 'spot acquisitions' rather than expensive new builds, citing the successful acquisition of The Grove theater. Regarding international performance, Adam Aron indicated that Europe is recovering faster than the U.S. in early 2026, and a weaker dollar further boosts overseas revenues in U.S. dollar terms.

Chad Beynon asked about AMC's theater portfolio strategy, including the pace of closures and new builds, and the expected performance of the international box office in 2026 compared to North America.

Answer

Sean Goodman (CFO) explained the ongoing portfolio transformation, noting 213 closures and 65 openings since 2020, with a continued focus on improving lease economics and profitability by closing underperforming theaters and selectively acquiring high-quality ones. Adam Aron (CEO) emphasized a 'capital light' approach for acquisitions, highlighting the success of the 'spot acquisition' model like The Grove. For international markets, Adam Aron (CEO) indicated that Europe is recovering faster than the U.S. in early 2026, potentially making it the best year in six, with a weak dollar further boosting U.S. dollar revenues.

Chad Beynon of Macquarie Group inquired about AMC's theater portfolio strategy, asking if the company is nearing an end to net closures and might begin net additions. He also asked for clarification on the timing of cash benefits from recent capital investments and related tax advantages.

Answer

President, Chairman & CEO Adam Aron responded that while a small number of underperforming theaters may still be closed annually, the focus is on profitability, noting that newly opened theaters are outgrossing the larger number of closed ones. He indicated that future net additions could be driven by attractive M&A opportunities. EVP & CFO Sean Goodman addressed the tax question, explaining that while capital investments generate benefits like depreciation, the actual cash impact will be delayed until 2027 or later due to existing Net Operating Losses (NOLs) that will be utilized first.

Inquired about the future of the theater portfolio, asking if the company is approaching a point of net additions rather than closures. He also asked about the potential future cash tax benefits from capital expenditures and related deductions.

Answer

Adam Aron stated that while they will continue to close a small number of underperforming theaters, the focus is on opening highly profitable new ones and that net additions could be driven by attractive M&A opportunities. Sean Goodman clarified that cash tax benefits from CapEx deductions are a long-term prospect, likely post-2026, due to existing Net Operating Losses (NOLs).

Chad Beynon asked about the legislative landscape for iLottery expansion in North America and the potential for margin improvements in iLottery content creation due to AI. He also revisited the impact of the $5 Mega Millions price increase from April 2025, asking if 2026 guidance or current activity suggests more or higher jackpots, indicating a tipping point.

Answer

Vincent Sadusky (CEO) noted the U.S. iLottery expansion pace of one to two jurisdictions per year and Brightstar's focus on refining its AI-driven game recommendation engine and leveraging AI for game development to increase throughput and reduce costs. Massimiliano Chiara (CFO) added that iLottery margins will gradually improve as contracts mature. Regarding Mega Millions, Vincent Sadusky confirmed Powerball's strong year-end performance but noted Mega Millions' slower jackpot build since the price change, with more hits than statistically expected. The committee is monitoring performance and assessing potential changes, with more data expected in 2026.

Chad Beynon from Macquarie Capital asked a two-part question on iLottery in North America, focusing on legislative expansion for new products and tax revenues, and the potential for margin improvements due to AI in content creation. He also inquired if the $5 Mega Millions increase from April could lead to more or higher jackpots in 2026, indicating a potential tipping point.

Answer

CEO Vincent Sadusky noted the US iLottery expansion pace of one to two jurisdictions per year (e.g., Massachusetts, Missouri, Connecticut, Tennessee, New Jersey draw), with Colorado potentially next. He highlighted Brightstar's strong platform, AI-incorporated game recommendation engine, and focus on content development, leading to top-performing games and cost reduction through leveraging mechanics. Mr. Sadusky stated iLottery is a top investment area. CFO Massimiliano Chiara added that iLottery margins will gradually improve as contracts mature, but currently, in heavy growth mode, investments are ongoing. Regarding Mega Millions, Mr. Sadusky confirmed Powerball's strong year-end run-up, validating the jackpot fatigue thesis. However, Mega Millions' build has been slower than anticipated post-$5 increase, with jackpots hitting more frequently than statistically expected, making inferences difficult. The committee is monitoring performance for potential adjustments in 2026.

Chad Beynon asked about the rationale behind reaffirming Brightstar's Q4 outlook despite tough comparables in Italy and better-than-expected Q3 same-store sales, specifically questioning if the $14 million UK transition impact was previously guided and if any other factors were below expectations.

Answer

CFO Max Chiara explained that the Q4 outlook reaffirmation considers two negative impacts: the UK transition and increased revenue amortization from the new Italy Lotto concession starting December 1st, totaling about $30 million. He noted positive factors like product sales in line with last year, lower G&A, good core business progress, and operational savings, expressing optimism for a strong quarter. CEO Vince Sadusky added that core business share gains, particularly in new markets like Brazil, will take several years to yield cash flow, while near-term opportunities for 2026 are primarily in print and product sales.

Chad Beynon inquired about the timing of Brightstar's share expansion opportunities outside the U.S. and Italy, particularly regarding new bids and printing contracts.

Answer

CEO Vince Sadusky clarified that core business share gains, such as establishing a lottery in a greenfield market like São Paulo, Brazil, will take several years to materialize in terms of cash flow and profitability beyond 2026. He noted that near-term opportunities for 2026 are primarily related to print and product sales.

Chad Beynon asked about the potential impact of prediction markets on tribal gaming exclusivity and GLPI's tribal investment activity, and whether GLPI remains interested in the Las Vegas locals market for additional opportunities.

Answer

Brandon Moore, President, COO and Secretary, stated that prediction markets are not currently impacting GLPI's tribal activity, as tribes are actively legislating to protect sports betting exclusivity, and current underwriting provides sufficient coverage against potential downside. Steven Ladany, Senior Vice President and Chief Development Officer, added that sports betting is not the predominance of tribal cash flow. Steven Ladany confirmed GLPI's continued interest in the Las Vegas locals market, citing the strong performance of the M Resort and demographic shifts from California, and willingness to explore opportunities with smaller operators.

Chad Beynon asked about the potential impact of prediction markets and the CFTC's view on GLPI's tribal activity and pipeline, and inquired about the company's interest in the Las Vegas locals market, including potential opportunities and cap rates.

Answer

Brandon Moore, President and Chief Operating Officer, and Steven Ladany, Senior Vice President and Chief Development Officer, stated that prediction markets are not expected to impact tribal activity, as current tribal cash flow is not predominantly from sports betting, and strong underwriting provides downside protection. Mr. Ladany confirmed continued interest in the Las Vegas locals market, citing satisfaction with M Resort's performance and ongoing evaluation of smaller operators due to favorable demographic shifts.

Chad Beynon from Macquarie inquired about the growing opportunity for funding barge-to-land-based casino moves and asked about GLPI's appetite for international expansion.

Answer

Chairman & CEO Peter Carlino and President & COO Brandon Moore agreed that land-side moves are a growing trend that adds significant value through enhanced amenities, citing upcoming projects in Joliet and Baton Rouge as examples. On international opportunities, Senior VP & Chief Development Officer Steven Ladany stated that while they are open to the idea, tax treaties and repatriation of funds present significant hurdles, making them more focused on the U.S. and tribal gaming for now.

Chad Beynon of Macquarie Group asked about GLPI's interest in participating in Bally's recent deal with Star Entertainment in Australia and the company's general appetite for international markets.

Answer

President & COO Brandon Moore stated that GLPI has not been approached by Bally's to participate in the Star transaction and has not done any work on it. CFO & Treasurer Desiree Burke added that while GLPI regularly looks at international acquisitions, they must carefully consider tax consequences and exchange rate risk before proceeding.

Chad Beynon of Macquarie noted the active conversations with commercial operators for sale-leasebacks and asked what is causing the hesitation to finalize deals. He questioned if it was related to gaming-specific concerns or broader cyclical timing.

Answer

CEO Peter Carlino provided a philosophical view, stating that timing is everything and a seller needs a specific reason to transact, which can change over time. SVP & Chief Development Officer Steven Ladany added that the most active dialogues are currently with private owners, not public companies. For these private entities, there is often a learning curve and a need for personal and financial timing to align, which makes the process longer.

Chad Beynon of Macquarie asked whether the complexity of tribal gaming deals might lead to a smaller competitive set for GLPI and if recent interest rate volatility has altered the company's leverage targets.

Answer

President and COO Brandon Moore and SVP & Chief Development Officer Steven Ladany suggested that while the competitive landscape is to be determined, GLPI's multi-year effort in structuring the tribal deal provides a significant head start. SVP & CIO Matthew Demchyk and CFO Desiree Burke affirmed that the company's conservative leverage philosophy remains unchanged, with a continued focus on maintaining a strong balance sheet and avoiding equity overhangs.

Chad Beynon inquired about the outlook for international attendance in 2026, asking if it could be an inflection point and potentially exceed U.S. expectations, given the decline in 2025. He also asked about any near-term changes expected for Cinemark's loyalty product, Movie Club, to further increase moviegoing.

Answer

Sean Gamble, President and CEO, expressed optimism for a better balance in Latin America in 2026, with a film slate expected to resonate stronger than in 2025, citing examples like Argentina's strong recovery. Regarding loyalty programs, Mr. Gamble stated no materially different changes are expected, but they continuously add elements like surprise and delight events, a new premium tier, and badges to maintain freshness and attract new members. He noted Movie Club membership is up over 50% from 2019 and continues to grow.

Chad Beynon inquired about the decline in international attendance in 2025, the outlook for 2026, and potential changes or enhancements to Cinemark's loyalty programs, particularly Movie Club.

Answer

Sean Gamble, President and CEO, attributed the 2025 international attendance decline to a less favorable film slate for Latin America, but expressed optimism for 2026 with a stronger, more balanced slate expected to resonate well. He noted that loyalty programs, especially Movie Club, have seen significant growth (up 50% from 2019) and continue to be enhanced with elements like surprise and delight events, a new premium tier, and badges to sustain growth and retention.

Chad Beynon asked for an update on the content slate for the second half of the year and inquired about the international segment's performance, questioning why the family-friendly Q2 slate didn't drive the same level of growth in Latin America as it did domestically.

Answer

CEO Sean Gamble expressed strong optimism for the Q4 film slate, calling it one of the most compelling since the pandemic. For the international segment, he explained that Latin America faced a very difficult year-over-year comparison against the prior year's 'Inside Out 2,' which was the region's highest-grossing film of all time. He also noted that certain films like 'Minecraft' and 'Sinners' had different levels of cultural resonance, contributing to the divergent growth rates.

Chad Beynon from Macquarie asked for an update on film windowing discussions and whether Cinemark's market share gains reduce the issue's importance for the company. He also questioned the sustainability of growth in domestic concession per caps.

Answer

CEO Sean Gamble described windowing as an active, industry-wide discussion aimed at finding an optimal, flexible structure, suggesting a 45-day average as a good target to avoid consumer confusion. CFO Melissa Thomas stated that moderate year-over-year growth in domestic concession per caps is expected for 2025, driven by strategic initiatives, though quarterly results will fluctuate with film mix.

Chad Beynon inquired about the primary drivers for future U.S. concession growth and the company's outlook on the spacing and diversity of the 2025 film slate.

Answer

CEO Sean Gamble explained that concession growth is a result of many small initiatives, including product assortment, layout optimization, mobile ordering, and merchandise, with a key focus on driving purchase incidence. CFO Melissa Thomas added that they expect moderate domestic concession per cap growth in 2025. Regarding the film slate, Gamble noted that after a lighter Q1, the rest of 2025 looks strong and diverse, though some content 'bunching' could create positive capacity constraints.

Chad Beynon questioned whether the 2025 film slate would perform differently in Latin America versus the U.S. and asked about the strategy for Movie Club growth and pricing adjustments.

Answer

President and CEO Sean Gamble projected that the 2025 box office in Latin America would be relatively balanced with the U.S. for the full year, despite some quarterly fluctuations based on specific film appeal. On Movie Club, Gamble and CFO Melissa Thomas emphasized maintaining the program's value proposition while periodically reviewing pricing. They confirmed a recent price increase was successful and that they see continued runway for subscriber growth.

Chad Beynon asked about the digital segment's valuation, particularly in light of recent declines related to prediction markets, and whether the company is considering spinning out the business or providing more clarity on its value. He also inquired about potential financial benefits from AI improvements in areas like search, marketing, or purchasing in the near term.

Answer

CEO Tom Reeg stated that the company will prioritize maximizing shareholder value but, given current market valuations, a separation transaction for the digital business is unlikely in the near term, with the focus remaining on scaling and hitting targets. Tom Reeg (CEO) also confirmed that AI is being explored across various areas, including pricing, digital trading, and customer interaction, with expected benefits to profitability and margins over time.

Chad Beynon asked about the recent valuation declines in the digital segment, particularly in light of the 'prediction cloud' discussion, and whether Caesars is considering spinning out the business or providing more spotlight on its value. He also inquired about potential financial benefits from AI improvements in areas like search, marketing, or purchasing, whether developed in-house or through vendors.

Answer

CEO Tom Reeg stated that Caesars will prioritize maximizing shareholder value over the long term. Given current market valuations in the digital space, he deemed it unlikely to pursue a separation transaction in the near term, emphasizing the focus on hitting targets and scaling the business. Regarding AI, Reeg confirmed that it is expected to provide financial benefits over time. He highlighted its potential utility in pricing (e.g., hotel rooms), digital trading, and enhancing customer interactions on the front end, anticipating improvements in profitability and margins.

Chad Beynon asked about the impact of recent Las Vegas city-wide ad campaigns on demand and the potential for their continuation in 2026.

Answer

Tom Reeg, CEO, confirmed Caesars participated in the effective sale, which led to considerable booking pickups. He expects the LVCVA campaign around value to be an ongoing initiative in 2026.

Chad Beynon asked about the effectiveness of recent city-wide ad campaigns in Las Vegas in stimulating demand and whether these campaigns are expected to continue into 2026 to enhance the perception of value for customers.

Answer

CEO Tom Reeg confirmed Caesars' participation in the effective ad sale, which boosted bookings. He stated that the LVCVA intends for this value-focused messaging to be an ongoing campaign, continuing into the future.

Chad Beynon of Macquarie Group questioned the halt in share repurchases after April and asked about the potential future pace of buybacks. He also inquired about the company's view on the emerging prediction markets.

Answer

CEO Tom Reeg explained that the focus in Q2 shifted to redeeming the company's most expensive debt, which is why share repurchases paused. He stated that going forward, capital allocation will be a balance of debt repayment and buybacks, but called the stock 'particularly attractive' and said investors should 'expect us to be a buyer.' President of Caesars Sports & Online Gaming Eric Hession commented on prediction markets, stating they are actively watching the situation but have no updated views.

Chad Beynon asked for an explanation of regional margin trends, given new properties are contributing, and inquired about the potential activity level of the share buyback program.

Answer

CEO Tom Reeg explained that the flat year-over-year regional margin reflects the positive contribution from new properties like Danville and New Orleans offsetting competitive pressures in other markets. He expects both overall EBITDA and margins to improve as these competitive impacts are anniversaried. Regarding buybacks, Reeg stated that if the stock price dislocates as it did in early April, investors should expect Caesars to remain active in the market throughout 2025.

Chad Beynon noted the iGaming segment's EBITDA flow-through was above the 50% target and asked if 50% remains the correct near-term expectation. He also inquired if there was any observable deterioration in the lower-tier, unrated customer segment within the regional business, separate from competitive and weather impacts.

Answer

Eric Hession, President of Caesars Sports and Online Gaming, affirmed that while the flow-through will fluctuate, 50% remains a 'reasonable expectation' for incremental revenue conversion for next year and into 2026. CEO Tom Reeg responded that they saw no further deterioration in the lower-tier customer base, stating that while a segment remains challenged by pricing, the primary driver of regional performance is competitive impacts, not a change in consumer behavior.

Chad Beynon asked about the potential impact of the 2026 World Cup on international customer visitation and frequency at Wynn properties in Boston and Las Vegas. He also inquired about Wynn's internal use of AI for operational efficiency or customer experience, and whether improvements in 2026 could impact revenue or margins.

Answer

President & CEO Craig Billings anticipated a direct impact on ADR in Boston from the World Cup and a targeted strategy for high-value customers in Las Vegas, but not a primary driver for the year. Regarding AI, he noted existing wealth creation from AI customers and discussed future OpEx efficiency gains, customer delight through personalization, improved machine learning for reinvestment, and generative engine optimization (GEO) for discoverability in hotel and F&B sales.

Chad Beynon asked about the potential impact of the 2026 World Cup on international customer visitation to Wynn properties in Boston and Las Vegas, and the company's internal use of AI to improve revenue or margins.

Answer

President & CEO Craig Billings anticipated a direct ADR impact in Boston from the World Cup and a targeted strategy for Las Vegas to leverage the event for high-value customers, but not as a primary driver for 2026. Regarding AI, he noted existing wealth creation from AI customers, expected OpEx efficiency gains over several years, and current focus on customer delight through personalization, improved machine learning for reinvestment, and generative engine optimization (GEO) for discoverability.

Chad Beynon asked about the disconnect in Las Vegas between lower occupancy and strong slot/table drop growth, seeking additional color on whether customers were spending more or if non-lodgers were contributing. He also inquired about the capital allocation strategy, specifically regarding share buybacks, given past recurring activity.

Answer

CEO Craig Billings and COO Brian Gullbrants attributed the gaming growth to premium play, disproportionately from lodgers, resulting from their focus on service, amenities, and improved casino marketing. CFO Julie Cameron-Doe stated they are not programmatic buyers of stock and retain flexibility, buying when they see value. Craig Billings added that their buyback grid wasn't in play during Q3 due to stock movement, highlighting the significant free cash flow inflection coming in 2027.

Chad Beynon asked about the potential impact of tariffs on food and beverage costs and high-end retail pricing in Las Vegas, and also inquired about the general structure of retail leases.

Answer

CEO Craig Billings clarified his earlier remarks, stating they do not expect a significant OpEx impact from tariffs as they can re-source most F&B items. On retail, he noted performance was flat against a very strong Super Bowl comp, and they have not seen or heard of price increases from tenants, which would be the retailers' own decisions. He added that lease structures vary, so gross sales cannot be inferred from lease revenue.

Chad Beynon of Macquarie asked about the expected returns on Macau's concession-related CapEx projects and whether foreign exchange fluctuations could impact Wynn's international customer base in Las Vegas.

Answer

CFO Julie Cameron-Doe stated it's too early for specific ROI on Macau projects but they are brand-consistent and designed to drive visitation. CEO Craig Billings added that entertainment drives market share in Macau. Regarding FX, Billings stated it would have no impact, explaining that the Las Vegas business has become significantly more diversified and less levered to international play than ever before, with strong growth in domestic business.

Chad Beynon inquired about how the extended capital updates for Green Valley Ranch and Sunset Station, reaching into 2027, might affect the timing of Greenfield developmental pipeline projects. He also asked about activity and results in the locals market during Super Bowl weekend.

Answer

Lorenzo Fertitta, Vice Chairman, stated that current property investments do not impact the timing of Greenfield projects, as ongoing investment in existing assets is crucial for long-term success and market share gains. He confirmed that multiple Greenfield projects are in full design and entitlement. Scott Kreeger, President, reported strong activity and positive results from Super Bowl weekend across all Station Casinos properties, with no observed slowdown in the locals market.

Chad Beynon inquired how the additional capital investments at Green Valley Ranch and Sunset Station, extending into 2027, would affect the timing of Greenfield development projects. He also asked about traffic and activity at Red Rock properties during Super Bowl weekend.

Answer

Lorenzo Fertitta, Vice Chairman, stated that current property investments do not impact Greenfield project timing, emphasizing the strategy of continuous investment in existing assets to maintain competitiveness and gain market share, particularly in high-limit segments. He mentioned ongoing design and entitlement processes for multiple new builds. Scott Kreeger, President, reported that Red Rock properties were 'buzzing' during Super Bowl weekend, with decent betting results and even better gaming and food & beverage performance, indicating no slowdown.

Chad Beynon asked about the sustainability of Red Rock Resorts' cost management, specifically the flat to down operating expenses per day and flow-through, considering labor and utility costs. He also sought clarification on the timing and economics of the North Fork project's fees, including accruals, cash influx upon opening, note receivable, and management agreement fees.

Answer

Scott Kreeger, President, attributed flat to down operating expenses to strong margin control and expense management by operating teams, deeming these efforts sustainable given a rational marketing environment. Stephen Cootey, EVP, CFO, and Treasurer, detailed North Fork's fee structure: $3.9 million accrued this quarter, with $3.4 million expected through opening, followed by a cash influx and true-up of the development fee. Frank Fertitta, CEO, and Stephen Cootey added that the $74.5 million note payable will accrue cash interest immediately upon opening, with management fees of $40 million-$50 million expected upon stabilization.

Chad Beynon asked if the company's strong performance and lower leverage had accelerated the timeline for its next major development project and inquired about the status of the revenue backfill at the Red Rock property.

Answer

Lorenzo Fertitta, Vice Chairman, stated that the development strategy remains unchanged, with an update on the next project likely on the Q4 earnings call. Stephen Cootey, EVP, CFO & Treasurer, described the revenue backfill at Red Rock as being in the 'mid-inning' of a process that historically takes about three years, noting the core properties are now driving growth.

Chad Beynon asked if there was a performance divergence between the core seven resort properties and the smaller Wildfire casino portfolio. He also inquired if pursuing additional tribal management contracts is a strategic priority for the company.

Answer

Executive Stephen Cootey stated that top-line trends are very similar across all property classes. On management contracts, Executive Lorenzo Fertitta explained that while they are always looking, significant ground-up tribal development opportunities are rare. He affirmed their strong reputation and commitment to tribal partners but does not expect a multitude of new opportunities to arise.

Chad Beynon from Macquarie inquired about the 2025 margin outlook, considering various cost pressures, and asked for an update on the company's plans for its tavern business.

Answer

Executive Stephen Cootey expressed confidence in maintaining a 45%+ margin profile, noting that while food costs are a concern, the market is rational and they are lapping prior wage increases. Executive Scott Kreeger added that they are bringing six more taverns online within the year, following the successful performance of the first two new locations.

Chad Beynon asked about MGM China's strong fourth-quarter performance, the sustainability of its mid-to-high 20s margins, and early indications for Lunar New Year bookings.

Answer

CEO of MGM China Holdings, Kenneth Feng, highlighted rational competition and stable comp rates, reaffirming MGM China's consistent delivery of mid-to-high 20s margins. He expressed optimism for Lunar New Year, citing very strong trends, a long waiting list for top players, and a focus on quality over quantity and yield management for their premium mix.

Chad Beynon inquired about the strong performance of MGM China, specifically the margin environment, the sustainability of mid-to-high 20s margins, and early booking trends for the Lunar New Year.

Answer

Kenneth Feng (CEO, MGM China Holdings) confirmed a rational competitive environment and stable comp rates, reiterating that MGM China's margins have consistently been in the mid-to-high 20s. He expressed strong optimism for the Chinese New Year, citing very strong trends, a long waiting list for top players, high player quality, and effective yield management despite limited room inventory.

Chad Beynon from Macquarie Group asked for an update on the investment phase and performance of the wholly-owned MGM Digital business, particularly in Brazil, and questioned the sustainability of MGM China's high margins.

Answer

Gary Fritz, President of MGM Interactive, reported that the MGM Digital portfolio is approaching breakeven when excluding investments in Brazil, where marketing spend ramped up in Q2 with positive results. On Macau, MGM China executives Kenneth Feng and Hubert Wang expressed confidence in maintaining their mid-teens market share and mid-to-high 20s EBITDA margin, supported by a consistent focus on the premium mass segment.

Chad Beynon asked about Las Vegas non-gaming performance, specifically if KPIs were up year-over-year excluding the Super Bowl, and whether potential tariffs could alter the ROI calculations for major future projects.

Answer

CFO Jonathan Halkyard noted no change in non-gaming spending trends, and COO Corey Sanders added that revenue per occupied room was up 3% excluding the Super Bowl. CEO William Hornbuckle stated that tariffs would not change their thinking on planned capital projects, as the main risk would be sourcing for room remodels, which are proceeding regardless.

Chad Beynon asked if the luxury segment in Las Vegas is expected to continue outperforming the core segment and inquired about market share goals for the digital business in new markets.

Answer

Executive William Hornbuckle responded 'absolutely' that the luxury segment will continue to lead, given MGM's scale and appeal to premium customers. Executive Gary Fritz stated that while digital market share targets vary, the company would not enter a market without a goal of achieving at least a 5% share.

Chad Beynon from Macquarie inquired about the Las Vegas customer mix, asking if there was any deterioration in the core casino guest and if that segment's share would decline in 2025. He also asked about potential M&A opportunities in U.S. regional markets.

Answer

Executive Corey Sanders responded that the core casino guest segment remains solid and consistent, and he does not envision a significant change in the customer mix for the upcoming year. Executive Jonathan Halkyard added that the company's criteria for M&A are highly restrictive, requiring significant scale in new markets, which makes the list of potential targets 'pretty narrow.'

Chad Beynon asked about the impact of the government shutdown so far in Q4 and the FAA's announcement to further cut airline traffic, and how these could affect travel in the fourth quarter.

Answer

Mark Hoplamazian, President and CEO, Hyatt, stated that direct government business is relatively small and not materially impacting results, with government-related business (e.g., defense contractors) generally positive. He emphasized the agility of hotel teams to pivot and rebalance through revenue management and distribution channels, using AI tools. He acknowledged that reduced air travel would impact travel but noted mitigating factors like drive-to resources and potential back pressure on lawmakers.

Chad Beynon asked about the impact of the government shutdown in Q4 and the FAA's announcement to cut airline traffic on Q4 travel.

Answer

Mark Hoplamazian, President and CEO of Hyatt, stated that direct government business is relatively small and not materially impacting results, with government-related business generally positive. He emphasized the agility of hotel teams to pivot and mitigate risks through revenue management and alternative distribution channels. While acknowledging that reduced air travel would impact overall travel, he noted the availability of drive-to resources and strong lift into key all-inclusive markets.

Chad Beynon inquired about the 2025 outlook for non-hotel-related fees, asking if anything had changed and whether the recent softness in leisure travel typically correlates with performance in that fee line.

Answer

CFO Joan Bottarini stated that the outlook for non-hotel fees remains positive, with strong Q1 results in franchise and other fees, partly boosted by the UVC transaction. She anticipates healthy growth for the remainder of the year and noted that the performance of incentive fees is closely tied to the U.S. and China markets, where they see potential for improvement.

Chad Beynon sought more detail on net unit growth confidence, focusing on the APAC region's pipeline, and asked if construction starts have improved to support growth beyond 2025.

Answer

President and CEO Mark Hoplamazian stated that while the portion of the pipeline under construction is stable, he expects it to improve. He expressed optimism for Asian markets, citing momentum from the first Hyatt Studios opening and the rapid 9-10 month conversion cycle of the UrCove brand in China, which supports a constructive outlook for openings this year.

Chad Beynon of Macquarie asked about the upcoming Missouri sports betting launch, specifically Boyd Gaming's partnership with Fanatics, including their branded retail sportsbooks, and potential future opportunities with Fanatics given their market share ascension. He also inquired about near-term inflection points in the Vegas and destination market, asking if November is seen as an inflection point for year-over-year growth, considering F1's impact and Q1 strength, and how internal bookings reflect this.

Answer

Keith Smith, President and CEO, confirmed the partnership with Fanatics for Missouri sports betting at Ameristar Kansas City and Ameristar St. Charles, noting it's their first relationship with Fanatics and expressing a strong relationship thus far, with potential for future expansion. Regarding Vegas, Keith Smith reiterated that 90-day forward bookings are "much more positive" than three months prior, though still soft, indicating a better outlook for the next several months for Downtown Las Vegas and Locals properties with hotels. He added that a rebound in Strip occupancy and rates would also benefit Boyd Gaming.

Chad Beynon asked about the Missouri sports betting partnership with Fanatics, seeking details on the relationship and future opportunities. He also inquired about near-term inflection points in the Vegas and destination market, including expectations for November, F1, and Q1 strength, particularly regarding internal bookings.

Answer

President and CEO Keith Smith confirmed it's Boyd Gaming's first relationship with Fanatics in Missouri, describing it as strong with potential for expansion. He noted that the 90-day booking pattern for Vegas (Downtown and Locals hotels) is significantly more positive than three months ago, though still soft, and anticipates benefits from a Strip rebound.

Chad Beynon asked for an update on the overall CapEx budget and whether management feels more comfortable managing potential impacts from tariffs compared to the previous quarter.

Answer

EVP and CFO Josh Hirsberg confirmed they are more comfortable managing tariff impacts through mitigation strategies like alternative sourcing and pre-ordering. He stated their capital budgets are not at risk and emphasized that the company's stronger balance sheet, with leverage below 2x, provides significant flexibility to handle any external uncertainties.

Chad Beynon questioned the rationale for the flat year-over-year guidance for the Managed and Other segment, given the strong historical growth and planned expansion of the Sky River Casino.

Answer

President and CEO Keith Smith explained the flat guidance is due to the Sky River property operating at its physical capacity limits on weekends, which restricts near-term growth. EVP and CFO Josh Hirsberg added that the next growth phase will begin after the Phase 1 expansion is completed, with contributions expected in 2026.

Chad Beynon asked about the significant increase in share repurchases above the $100 million quarterly baseline and whether this new level should be the new expectation. He also inquired about any impact from the F1 race in Q4 of last year on the Las Vegas segments.

Answer

President and CEO Keith Smith advised analysts to remain anchored to the $100 million per quarter baseline for share repurchases, explaining that the recent increase was an opportunistic move based on stock price dislocation and financial flexibility. Regarding F1, he confirmed it was not a positive event for the Locals or Downtown markets last year as customers stayed away, and he expects a similar dynamic this year, though the weekend will be boosted by a Raiders home game.

Chad Beynon asked about the company's exposure to declining Canadian travel to Las Vegas and the potential risk of cannibalization from a proposed sports betting bill in Hawaii.

Answer

Executive Keith Smith stated that exposure to Canadian customers is minimal, representing less than 0.1% of the business. Regarding Hawaii, he does not believe legal sports betting would significantly impact travel to Las Vegas. He asserted that due to Boyd's 50-year relationship with Hawaii, the company would expect to be a participant in any gaming that is legalized there.

Chad Beynon asked for an outlook on the West Region, particularly the conference and concert calendar for the Nugget in Reno, and inquired if the 'One Big Beautiful Bill' would provide direct financial benefits to Century Casinos through mechanisms like accelerated depreciation or lower cash taxes.

Answer

Erwin Haitzmann, Chairman & Co-CEO, stated that while 2025 conference business is soft due to long lead times, short-term room booking trends for July and August are encouraging. Margaret Stapleton, CFO, clarified that the company does not expect a major impact on its cash taxes from the bill, as any benefits would be offset by existing deferred tax assets.

Chad Beynon questioned the primary focus for the Missouri properties—revenue growth or margin maintenance—and the strategy for attracting distant customers. He also asked for an updated timeline on the Poland asset sale and the potential scale of the announced share repurchase program.

Answer

Co-CEO Erwin Haitzmann stated they are pursuing both top-line growth and bottom-line discipline in Missouri, actively marketing to the 75+ mile segment while optimizing costs. On the Poland sale, Co-CEO Peter Hoetzinger said they believe it will happen this year but acknowledged prior delays. He also indicated the initial share buyback would be in the single-digit million-dollar range before the next earnings call.

Chad Beynon asked for an update on the company's online gaming and sports betting strategy in Alberta and U.S. markets, and whether the previously stated 2025 financial goal could now be considered a 2026 target.

Answer

Co-CEO Erwin Haitzmann stated their Canadian online strategy is to use a third-party partner, but plans are pending government rules. Co-CEO Peter Hoetzinger confirmed the U.S. strategy is also to license to third-party providers for a revenue share. Peter Hoetzinger agreed that the previous financial goal is now pushed out by approximately 12 months, making it more of a 2026 target, due to consumer weakness.

Chad Beynon asked about the illustrative 2025 EBITDA guidance, specifically questioning the timing of the expected earnings ramp-up from new projects like Caruthersville. He also inquired about the company's capacity and timeline for executing share repurchases.

Answer

Executive Co-CEO Peter Hoetzinger stated that the full EBITDA potential from new openings would likely materialize from the second quarter of 2025 onward, rather than linearly. Regarding capital allocation, he noted the company expects to generate $25-$30 million in free cash flow next year and will opportunistically use a portion of its available cash for both debt paydown and stock buybacks, potentially starting late in the current year or early next. The existing repurchase authorization is for $15 million but can be changed.

Chad Beynon of Macquarie Group asked whether the Virtual Sports segment could return to a higher growth trajectory in 2026 and if recent privatizations of competitors have impacted the hardware market's competitive landscape.

Answer

President & CEO Brooks Pierce expressed his hope that Virtual Sports will return to a 'real growth trajectory' in 2026, driven by rollouts in Brazil and North America. Regarding competition, Pierce noted it is too early to see substantive changes from competitor privatizations, as Inspired's primary head-to-head competition with them is limited to specific markets like Illinois and Canadian provinces.

Chad Beynon from Macquarie Group requested color on consumer spending trends in international markets like the U.K., Greece, and Italy. He also asked for an update on management's expectation for the digital segment's contribution to total EBITDA by year-end.

Answer

Executive Brooks Pierce reported that the U.K. retail market is challenged, though the company's business is up due to strong performance from new William Hill terminals, while Greece and Italy are relatively flat. Executive A. Weil stated that with Interactive outperforming and Virtuals stabilizing, he expects the digital business's EBITDA contribution to meet or exceed previous forecasts by year-end, a sentiment bolstered by the planned divestiture of the holiday park business.

Chad Beynon from Macquarie asked about the Interactive segment's performance in the U.K. and Ireland, focusing on regulatory stability, growth, and market share. He also questioned the expected timeline for achieving the company's 40% consolidated EBITDA margin target.

Answer

Executive Brooks Pierce confirmed market share gains in the U.K., driven by game quality. Executive A. Weil added that the company's strong retail presence in the U.K. creates an omnichannel advantage. Regarding the 40% margin goal, both executives explained that the shift in business mix toward high-margin digital products makes it an inevitability, but they declined to provide a specific timeline for achieving it.

Chad Beynon of Macquarie Group inquired about the status and opportunities in emerging markets such as India, Africa, and Brazil, shifting focus from the more mature markets discussed earlier.

Answer

Mark Locke (Co-Founder, CEO & Director) pointed to the 43% revenue growth in the 'Rest of World' segment as evidence of strong opportunities in these markets, specifically mentioning Brazil as a focus. However, he also reiterated that Europe remains a significant growth area for the company, with 26% growth and substantial opportunities for continued product distribution and investment.

Chad Beynon asked for management's view on the rise of predictive markets as a potential threat or opportunity, and inquired about the assumed NFL in-play betting percentage used in the 2025 guidance.

Answer

CEO Mark Locke characterized predictive markets as a positive opportunity for new products and partners, noting it could also influence the broader conversation around federal sports betting legislation. CFO Nicholas Taylor stated that the guide assumes a small increase in the NFL in-play percentage for the upcoming season, with any more significant shift representing potential upside.

Chad Beynon asked about the potential long-term impact of various proposed tax changes around the world, particularly in the United States, on Genius Sports' business.

Answer

CFO Nicholas Taylor highlighted the resilience of the company's business model, stating that regulatory and tax changes are not new. He explained that Genius's global diversification, multiple growth levers, and the fact that the U.S. is not a majority of revenue, mean that any single state or country's tax changes have an immaterial impact on the overall business.

Chad Beynon of Macquarie Group inquired about the consistency of growth in the Illinois market during the second quarter, given broader market volatility, and asked about Accel's M&A strategy, specifically concerning target asset size and leverage tolerance.

Answer

Mark Phelan, President of U.S. Gaming & Interim CFO, responded that growth in Illinois was consistent throughout the quarter without significant peaks or valleys. Andrew Rubenstein, Founder, President, & CEO, added that the M&A strategy remains opportunistic and disciplined, focusing on smaller, accretive acquisitions in the fragmented local gaming market without taking on excessive leverage. He noted that Accel's scale and technology provide a competitive advantage in these transactions.

Chad Beynon of Macquarie Group inquired about the consistency of growth in the Illinois market throughout the second quarter, given broader market volatility, and also asked about Accel's M&A strategy, specifically regarding target asset size and leverage tolerance.

Answer

Mark Phelan, President of U.S. Gaming & Interim CFO, confirmed that growth in Illinois was consistent throughout the quarter without significant peaks or valleys. CEO Andrew Rubenstein elaborated on the M&A strategy, stating that the company remains opportunistic but conservative, with no plans to over-leverage the balance sheet. He highlighted their strong cash flow and credit facility. Mark Phelan added that the fragmented local gaming market presents many smaller, 'bite-sized' acquisition opportunities where Accel can implement its technology and scale to improve margins.

Chad Beynon from Macquarie Group asked about the potential impact of tariffs on the company's CapEx and future growth, particularly for the Fairmount project. He also inquired about any quantifiable effects of weather on Q1 performance and sought confirmation that strong consumer trends continued into April without any pockets of weakness.

Answer

Executive Andrew Rubenstein stated that tariffs would have a minimal effect on the existing business as most CapEx prices for the year are locked in. Executive Mark Phelan added that while steel prices for Fairmount's Phase 2 have increased, the overall impact is uncertain, and Phase 1 was unaffected. CFO Mathew Ellis confirmed that weather was a neutral factor in Q1 due to geographic diversification and that April trends were in line with forecasts, showing no change in consumer behavior.

Chad Beynon asked about the timeline for completing the pruning of underperforming Illinois locations, the potential for Accel to enter the e-pull tab market, and the legislative outlook for new route gaming or iGaming expansion.

Answer

CEO Andy Rubenstein explained that pruning underperforming locations is a continuous process to improve free cash flow, with noticeable profitability improvements expected later in 2025 and into 2026. President of U.S. Gaming Mark Phelan described the e-pull tab space as a content-driven market where Accel would need a strong partner to participate. Regarding legislation, Andy Rubenstein stated that iGaming is unlikely to gain traction in the current session, especially in established route gaming markets like Illinois.

Chad Beynon inquired about the U.S. in-play betting penetration during Q2, its evolution, and its alignment with the company's Investor Day targets. He also asked if the Q2 sports betting margin differed significantly from forecasts.

Answer

CEO Carsten Koerl reiterated that U.S. in-play betting is tracking towards their Investor Day projections, currently around 50% of handle and trending towards over 70%, noting each 1% conversion adds approximately $6 million in EBITDA. CFO Craig Felenstein added that betting margins came in as expected, with the company's diverse global sports content minimizing the impact of any single event's outcome.

Chad Beynon of Macquarie Group inquired about the company's strategy and outlook for the Live Dealer casino segment and asked for an explanation of the trend in G&A expenses.

Answer

CEO Richard Schwartz described Live Dealer as a growing segment where RSI is focused on improving the user experience by aggregating games, adding exclusive tables, and leveraging partnerships to build player trust. CFO Kyle Sauers explained that G&A benefited from favorable foreign exchange in Q2 but is expected to rise sequentially in the back half of the year, though the company will continue to gain leverage on the line item as a percentage of revenue.

Chad Beynon inquired about the performance and total addressable market (TAM) outlook for other international markets like Mexico and Peru, and whether RSI is eyeing other regions. He also asked about OSB product trends, such as single-game parlay performance and hold rates.

Answer

CEO Richard Schwartz highlighted strong, accelerating growth in Mexico, which is tracking ahead of Colombia at the same post-launch stage and is expected to be a larger market. He noted Peru is still in an optimization phase. Executive Kyle Sauers confirmed that sports betting hold rates have continued to improve due to better product mix and merchandising, despite player-friendly event outcomes in Q1.

Chad Beynon asked about the company's plans for its growing cash balance, specifically regarding M&A opportunities and share buybacks. He also inquired whether the 2025 guidance assumes an improvement in sports betting hold or is based more on user and revenue-per-user growth.

Answer

Executive Kyle Sauers stated that the lack of Q4 buybacks should not be correlated with M&A activity and that the company will remain opportunistic with its buyback program. CEO Richard Schwartz confirmed they are actively assessing M&A, particularly bolt-on opportunities. Regarding guidance, Sauers affirmed that it includes an expectation for additional sports betting hold improvement in 2025, building on gains made in 2024.

Chad Beynon of Macquarie Group Limited inquired about the retention rates of new Latin American customers acquired during the Copa America event and asked for commentary on the impact of the widely reported low sports hold rates in North America on the company's Q4 guidance.

Answer

Executive Kyle Sauers explained that despite a massive influx of new users during Copa America, ARPMAU remained nearly flat, which is impressive. He noted that October's year-over-year user growth trends in Latin America are as strong as August and September's, indicating good retention. Regarding Q4, Sauers confirmed the guidance accounts for the player-friendly football results in October and also noted currency headwinds and one less NFL week compared to the prior year.

Chad Beynon inquired about the importance of EBITDA margins in Macau, asking if investors should still focus on a margin target given the company's new, more aggressive promotional strategy. He also asked for an update on potential developments in Thailand following recent political news.

Answer

President & COO Patrick Dumont explained that while the company is not targeting a specific EBITDA margin, revenue growth is the primary focus due to the high fixed-cost base. He stated that reinvestment will be market-based to drive revenue, and margins will follow. Chairman & CEO Robert Goldstein added that while margin is important, EBITDA matters more. Regarding Thailand, Goldstein called it the 'greatest opportunity in Asia' but noted its development is uncertain, while Patrick Dumont confirmed LVS would consider it if the framework is appropriate.

Chad Beynon of Macquarie inquired about the decline in turnover rent at the Four Seasons in Macau and asked for an update on the company's perspective on potential gaming legislation in Texas.

Answer

Sands China CEO Grant Chum explained that the turnover rent decline was due to a difficult comparison against a record-setting 2023 driven by post-COVID demand, not a structural issue. He noted they are well-positioned with new flagship stores opening. On Texas, President and COO Patrick Dumont reiterated its great potential but stated there was 'nothing to report at this point.'

Chad Beynon asked about potential changes in market focus with the new incoming executive in Macao and inquired if Las Vegas Sands continues to study investment opportunities in the Middle East.

Answer

Chairman and CEO Robert Goldstein and Executive Vice Chairman Dr. Wilfred Wong both anticipate "business as usual" in Macao, with the government's focus remaining on diversification and non-gaming investment. President and COO Patrick Dumont confirmed that the company continues to study the Middle East as a potential market.

Chad Beynon asked for an update on Gambling.com Group's strategy and performance in Brazil, noting reports of a slower-than-expected start for operators in the newly regulated market. He also inquired about how conversations with U.S. partners change when headlines about potential state tax increases, such as in New Jersey, become more frequent.

Answer

CEO Charles Gillespie described the company's Brazil strategy as a cautious "wait and see" approach, confirming they have no meaningful revenue from the market and have avoided the challenges faced by peers. While still open to the right M&A, they remain extra cautious due to operational complexities. Regarding U.S. tax hikes, he explained that while higher taxes negatively impact player lifetime values, the effect is not immediate or fully passed on to affiliates. He added that the rise of tax-free prediction markets might make states think twice about raising gaming taxes.

Chad Beynon asked about the impact of Artificial Intelligence, both as an internal productivity tool and an external competitive factor, and also inquired if operator hold percentages affected Q4 results or could impact 2025 performance.

Answer

CEO Charles Gillespie described AI as a 'boom' internally, increasing capacity and ambition across the organization. Externally, he views AI-powered search as incremental, not a replacement for traditional search, and believes it favors large, authoritative brands like theirs which get cited in AI responses. Regarding hold, he explained it only affects revenue-share deals. While this revenue stream is growing, its impact is limited as it's spread globally, and unfavorable hold in one region doesn't typically coincide with others.

Speaking on behalf of Chad Beynon, an analyst asked about expectations for the newly legalized Missouri sports betting market and the outlook for other state legalizations in 2025. The follow-up question concerned performance trends in newer European markets like Greece and Romania and other potential international launches.

Answer

CEO Charles Gillespie described Missouri as helpful but not massive, noting the state's attractive regulatory regime and the company's existing media assets there. For 2025, he is watching Minnesota, Texas, and New York for iGaming. Internationally, he cited growth in Italy, the Netherlands, and German-speaking areas, with a clear growth path for newer markets like Greece and Romania. He also mentioned the company is exploring opportunities in Colombia and Peru.

Asked for details on margin trajectory, the impact of one-time costs, and the potential for margin upside from jackpots. Also inquired about the drivers of strong growth in the Rest of World segment.

Answer

The Q1 margin was impacted by ~3 percentage points due to exceptionally low jackpot activity. One-time costs for contracts and tech investments are proceeding as planned. The full-year margin could improve if jackpot activity normalizes. The strong Rest of World performance was driven by a strong EuroMillions jackpot, not underlying macro immunity.

Asked about the expected impact of the Mega Millions price increase on H2 2025 results and the strategic benefits (growth vs. margin) of the new instant ticket printing press.

Answer

The Mega Millions price increase is expected to be a net positive for sales, especially in the second half of the year, though it may take time to see the full effect. The new printing press is expected to provide benefits in both winning new contracts due to increased capacity and improving margins through greater efficiency and reduced waste.

Asked about the timing and drivers for international growth in the gaming business and whether the legislative environment for iLottery adoption in the U.S. is improving.

Answer

International gaming growth is driven by the success of North American games in LatAm and EMEA, with a focus on both premium and core titles expected to drive results in late 2024 and 2025. Regarding iLottery, while state budget pressures could accelerate adoption, the company continues to grow its existing iLottery business and content offerings while waiting for new markets to open.

Chad Beynon from Macquarie questioned the potential impact of a recent Apple ruling on alternative payment methods on the SciPlay business and its direct-to-consumer (DTC) strategy.

Answer

CEO Matt Wilson characterized the ruling as a "favorable" tailwind that creates margin opportunities for the social casino industry. He noted that SciPlay's DTC revenue has already grown to over 13% and this ruling allows them to be "a little bit more aggressive," with specific targets to be unveiled at the upcoming Investor Day.

Chad Beynon asked a two-part question about margins, seeking clarity on the drivers of Q4 gaming margin growth and the outlook for overall company margins in 2025.

Answer

CFO Oliver Chow attributed the gaming margin strength to ongoing enhancement initiatives and manufacturing efficiencies, which he expects to continue. For the broader company, he anticipates margin tailwinds from SciPlay's DTC initiatives and a positive impact from the iGaming segment's exit of the Live Casino business. CEO Matt Wilson added the Live Casino divestiture was a strategic decision based on degrading pricing dynamics in that category.

Chad Beynon inquired about the impact of Canadian travel on U.S. properties and the general sentiment among Canadian executives regarding travel, given recent political and trade tensions.

Answer

President and CEO Christopher Nassetta acknowledged that travel from Canada and Mexico was down high-single digits, but this was offset by stronger inbound travel from other regions like Asia and the U.K., resulting in a neutral overall impact in March and April. CFO Kevin Jacobs added that Canada and Mexico combined represent only 1.5% of total company revenue. Furthermore, Nassetta noted that development teams have not sensed any negative sentiment affecting business opportunities in Canada.

Chad Beynon asked about the observed acceleration in travel from large corporations, seeking to understand when this trend began and if it could become a significant positive factor in the coming months.

Answer

Christopher Nassetta, President and CEO, confirmed an uptick throughout Q4, which accelerated post-election, demonstrated by midweek strength. He noted that conversations with corporate accounts indicate a broad expectation for more travel in the year ahead. While this positive trend bodes well for continued business transient recovery, it has not been aggressively built into the company's formal guidance.

Chad Beynon noted the reduction in the full-year guidance for key money (contract acquisition costs) and asked if this reflects a delay in projects to 2025 or successful efforts to reduce this type of spending.

Answer

CFO Kevin Jacobs clarified that the adjustment is simply due to the timing of a few projects that are now more likely to close next year. He affirmed there has been no change in Hilton's strategic approach to key money, which is still used selectively on less than 10% of deals. He projected that next year's spending would likely fall between the levels of last year and this year.

Asked about the path to achieving target margins at American Place, given that current margins are below the 30% goal despite strong revenue. Also requested clarification on the lower corporate expense in the quarter and the outlook for 2025.

Answer

Management expects margins at American Place to improve gradually as revenues continue to grow and they implement cost-saving measures, such as shifting marketing from physical mail to email. They believe reaching over $10.5 million in monthly revenue will lead to $40 million+ in EBITDA. The lower Q4 corporate expense was due to reversing over-accruals, and the run rate for 2025 is expected to be around $6 million, similar to 2024.

Chad Beynon asked about the competitive impact on Silver Slipper from the newly land-based Treasure Chest casino and inquired about the timing of capital expenditures for the permanent American Place facility.

Answer

Executive Daniel Lee stated that Treasure Chest is too distant to have a major impact, identifying the aggressive new management at the nearby Hollywood casino as a more significant competitive factor. On CapEx, he explained that major spending on the permanent American Place will only commence after financing is secured, which is contingent on Chamonix's performance. Executive Lewis Fanger added that maintenance CapEx remains low and the company expects to pay no cash taxes in 2024 due to NOLs.

Chad Beynon asked if the promotional environment in the Las Vegas locals market has abated and inquired about the company's M&A strategy, including potential size, leverage, and geography.

Answer

President and CFO Charles Protell and CEO Blake Sartini both described the promotional environment as stable and rational, focusing on food and beverage. On M&A, Protell stated they would not pursue greenfield projects or small single-asset deals, but are open to larger, transformative opportunities. Sartini added that any deal must 'move the needle.' The company's long-term leverage target is 3x or less, but they would consider going higher for the right deal with a clear path to deleveraging.

Chad Beynon revisited the M&A discussion, asking if the company might re-evaluate opportunities later in the year. He also inquired about the STRAT's exposure to specific international markets like Canada and the outlook for citywide events.

Answer

President & CFO Charles Protell reiterated that given the dislocation between asset price expectations and the company's own stock valuation, share repurchases remain the priority, stating there are no attractive M&A opportunities currently. CEO Blake Sartini clarified that the STRAT has immaterial exposure to international markets like Canada. Protell added that while near-term events like EDC are strong, visibility beyond June is limited due to the short booking window.

Chad Beynon of Macquarie inquired about the sources of growth for Marriott Bonvoy members by age or region and the impact of the MGM deal. He also asked about the recovery in China outside of Tier 1 cities, particularly around Chinese New Year.

Answer

CEO Tony Capuano stated that Bonvoy growth is occurring globally and that the entry into mid-scale offers a great opportunity to attract younger members. He also highlighted a renewed focus on leveraging partners like MGM. Regarding China, he noted that while January was encouraging, it's too soon to call a broad recovery, though the record deal volume in 2024 shows long-term developer confidence.

Chad Beynon from Macquarie asked for more detail on the 2025 convention business pacing, specifically regarding new versus renewing clients, and inquired about the initial demand for the City Express brand in North America.

Answer

President and CEO Tony Capuano explained that the strength in group business comes from both existing clients building out their meeting calendars and new partners starting to schedule events, partly driven by limited availability of dates and space. He also confirmed that demand for City Express is quite strong, with franchise applications coming in and the first openings expected in the next few months, attracting both existing and new franchisees.

Chad Beynon of Macquarie asked about DraftKings' current thinking on international expansion and the timing for looking at markets outside North America.

Answer

CEO Jason Robins characterized international expansion as an 'opportunistic thing' rather than a current 'need.' He emphasized that with over 30% growth and strong margins, the company feels no immediate pressure to expand internationally but remains open to the right opportunity and is staying patient.

Inquired about the 2025 CapEx budget in light of the Zilara project, how it balances with the share repurchase program, and the outlook for expense trends and margin improvement potential.

Answer

The 2025 CapEx budget is expected to be similar to 2024's ($100M-$120M). The company plans to continue its significant share repurchase program, funded by strong free cash flow, alongside these investments. On the expense side, F&B procurement savings are helping to offset labor cost headwinds, and the company aims to maintain its margin-neutral ADR growth hurdle at approximately 4%.

Asked a two-part question about Jamaica's performance during spring break and the strategy regarding ADR versus filling rooms with locals. Also requested an update on the status of the Jewel Palm Beach property, including potential divestment.

Answer

The company's strategy is to hold ADR in Jamaica and not discount to fill rooms. The Easter holiday timing had a minimal positive impact on Q1 but will negatively affect Q2. The Jewel Palm Beach property is actively being marketed for sale, with an announcement hoped for in the near future.

Chad Beynon of Macquarie questioned the path to profitability for the North America Interactive segment, asking for details on the cost structure, state launch timelines, and customer acquisition. He also asked for the rationale behind the recent reduction in 2024 CapEx guidance.

Answer

CEO Robeson Reeves outlined the North America Interactive strategy, noting recent launches and the ongoing tech platform consolidation set for Q4, which will simplify operations. He highlighted share gains in Pennsylvania. CFO Marcus Glover explained the CapEx reduction resulted from a reevaluation of smaller expansion projects to allow for more thorough planning.

Asked for details on the North American Interactive business, including the cost structure related to the tech stack transition and the timeline for new state launches. Also inquired about the reasons for the reduction in the full-year CapEx guidance.

Answer

The company confirmed the tech stack transition is ongoing, with the proprietary PAM to be replaced in ON, PA, and NJ in Q4, which will simplify operations. They recently launched OSB in Maryland, with Illinois and Tennessee to follow. The CapEx reduction is due to a reevaluation of some smaller expansion projects to allow for more thorough planning before proceeding.

Chad Beynon of Macquarie requested details on the North American Interactive segment's path to profitability, focusing on the cost structure during the tech platform transition and the timing of new state launches. He also asked for the rationale behind the full-year CapEx reduction.

Answer

CEO Robeson Reeves noted recent sports betting launches in Maryland, with Illinois and Tennessee planned for later in the year. He explained the tech stack transition to a single platform will complete in Q4, simplifying operations and improving cost-effectiveness. CFO Marcus Glover clarified that the CapEx reduction resulted from re-evaluating and pausing some smaller expansion projects to ensure proper diligence.

Asked about the remaining ramp-up potential and current margins for the temporary Chicago casino. Also questioned the marketing strategy and cost implications for the upcoming online sports betting (OSB) launch in the U.K.

Answer

For the Chicago temporary casino, the focus remains on aggressive marketing to drive top-line growth and expand the customer database, so profitability is currently light but that is intentional. For the U.K. OSB launch, the strategy is to cross-sell to the existing database and acquire new customers more cheaply via sports. They do not intend to increase marketing spend but rather to drive more volume and better ARPU with the new product.

Chad Beynon from Macquarie asked about the remaining ramp-up potential and current profitability of the Chicago temporary casino. He also inquired if the U.K. online sports betting launch would require new marketing spend or focus on cross-selling.

Answer

CFO Marcus Glover stated the focus for the Chicago temporary casino remains on driving top-line growth, with profitability being 'pretty light' but intentional for now. President George Papanier added that they will remain aggressive on marketing to grow the database and are adding amenities like a VIP lounge. For the U.K. OSB launch, CEO Robeson Reeves explained the goal is to consolidate wallet share from existing customers and acquire new players more cheaply via sports, without intending to increase overall marketing spend.

Chad Beynon asked about the Chicago temporary casino's ramp-up, inquiring about what operational improvements are left, current margin levels, and how it factors into guidance. He also asked if the U.K. online sports betting launch would require additional marketing spend.

Answer

CFO Marcus Glover and President George Papanier explained that the Chicago focus remains on aggressive marketing and top-line growth to build the database, with profitability being intentionally light for now. George Papanier mentioned adding a VIP lounge as a future improvement. Regarding the U.K., CEO Robeson Reeves stated the plan is not to increase marketing spend but to use sports betting to acquire customers more efficiently and increase wallet share from existing players.

Questioned the high Q4 margins in the International Interactive segment and the outlook for 2024 margins. Also asked about the strategy for capital returns, specifically share buybacks, given upcoming development spending.

Answer

The high 39% margin in Q4 for International Interactive was an anomaly; the guided 33-35% range for 2024 is sustainable and allows for investment in growth. On capital allocation, the company will remain opportunistic with share buybacks when the stock is cheap, balancing it with development needs and financing plans.

Asked about the sustainability of the Fintech segment's strong growth into 2024 and the expected contribution from the Venuetize acquisition and non-traditional gaming initiatives.

Answer

The company is very optimistic about Fintech's continued growth in 2024, driven by their broad product portfolio and ability to win new business. The Venuetize acquisition is seen as a key complement to their mobile strategy, which is gaining traction with customers and is expected to contribute to momentum into the next year.

Inquired about the drivers of the Interactive segment's growth and potential international expansion, and whether the strong 2023 EGM sales performance represents a new baseline for the company.

Answer

The Interactive segment's growth is driven by strong game content and an improved release cadence in the core North American market. The strong EGM sales momentum is expected to continue, supported by the successful Spectra cabinet family (with a new model launching in Q4) and a robust product pipeline, suggesting a new, higher level of performance.

Chad Beynon questioned why the company did not utilize its share repurchase program during the soft August box office and asked about the forward-looking G&A expense run rate.

Answer

CEO Amy Miles explained that the trading window was closed due to normal course of business shortly after the buyback was announced late in the quarter, and that the program remains a tool for capital allocation. CFO David Ownby noted that G&A is generally consistent, with the main variable being legal and professional fees tied to specific activities like acquisitions.