Chad C. Beynon

Chad C. Beynon asked about the impact of the upcoming UK tax change on the company's guidance and discussions with partners, as well as the capital allocation strategy, specifically regarding stock repurchases or bolt-on acquisitions given current market valuations and the threat of prediction markets.

Answer

Brooks Pierce, President and CEO, explained that UK customers are adjusting RTP and bonusing structures to reflect the tax increase, and the company feels comfortable with the anticipated impact. Lorne Weil, Executive Chairman, commented that the company is insulated from prediction market impacts, which are primarily sports-focused, and noted that while deleveraging is a priority, current stock valuations make share repurchase an attractive option given existing buyback plans and credit headroom.

Chad C. Beynon of Macquarie Group inquired about the impact of upcoming UK tax changes on Inspired Entertainment's guidance, specifically asking about mitigation strategies and discussions with partners. He also asked for an update on the company's capital allocation strategy, including potential stock repurchases or bolt-on acquisitions, and how current market valuations, particularly concerning prediction markets, influence these decisions.

Answer

Brooks Pierce, President and CEO, explained that many UK customers plan to adjust their RTP and bonusing structures to reflect the tax increase, expressing confidence in mitigating the impact. Lorne Weil, Executive Chairman, addressed the prediction market's focus on sports, suggesting it might ironically accelerate iGaming growth due and noted that while deleveraging is a priority, current stock valuations make share repurchases a compelling opportunity, given the existing buyback plan and credit agreement headroom.

Chad C. Beynon asked about the sustainability of Red Rock Resorts' cost management, noting a decrease in OpEx per day, and sought insights into future expectations for labor and utility expenses. He also requested clarification on the timing of top and bottom-line economics for the North Fork project, including any deferred payments.

Answer

Scott Kreeger (President, Red Rock Resorts Inc) and Stephen Cootey (EVP, CFO, and Treasurer, Red Rock Resorts Inc) confirmed that overall operating expenses were flat to down, with COGS flat and utilities/repairs down, while payroll was up due to a 3% raise. They believe these efforts are sustainable given rational marketing and strong operating team focus. Stephen Cootey detailed that development fees are being accrued, with an influx of cash upon successful opening, a true-up of fees, and cash interest on the $74.5 million note payable immediately upon opening, with the seven-year management agreement expected to generate $40-$50 million in fees upon stabilization.