Dan Politzer

Dan Politzer asked for justification behind the incremental spend on prediction markets, given that initial results were in line with expectations, and how the competitive landscape is expected to evolve with potential regulatory clarity.

Answer

CEO Peter Jackson emphasized Flutter's disciplined organic investment approach, citing past successes in Brazil and post-PASPA U.S. expansion. He stated that the increased investment reflects the significant opportunity to acquire business, with marketing phasing aligning with the product roadmap. He noted that the company reserves the right to spend more if opportunities prove larger, aiming for strong returns.

Dan Politzer asked for justification of the incremental spend on prediction markets, given that initial performance tracked in line with expectations, and for insights into the evolving competitive landscape with potential regulatory clarity.

Answer

CEO Peter Jackson justified the incremental spend by referencing Flutter's disciplined organic investment history and commitment to acquiring business when opportunities arise. He stated plans for heavy investment in the second half of the year, potentially exceeding the guided range if opportunities prove larger.

Dan Politzer asked for a high-level perspective on Churchill Downs as a sum-of-the-parts story, including the benefits of vertical integration and whether any portfolio elements might not be natural fits over the longer term.

Answer

William C. Carstanjen, CEO of Churchill Downs Incorporated, described the company's portfolio as an interesting collection of businesses linked by a focus on growth margins. He highlighted vertical integration in the ADW and HRM (Exacta) businesses as examples of improving operations. He emphasized that the evaluation of business fit is a constantly evolving process, focusing on continuous improvement and synergistic opportunities.

Dan Politzer asked about the areas of conservatism embedded in the flat to +2% RevPAR guidance, specifically identifying properties or markets. He also inquired about the near-term capital allocation strategy, considering the 5x leverage target, between project investments, share repurchases, and the dividend.

Answer

Sean Dell'Orto, COO and CFO, identified Q4's 8% group pace decline, Hawaiian Village, and Midtown as areas of conservatism in the RevPAR guide. Tom Baltimore, Chairman and CEO, balanced encouraging tailwinds (Fed, major events) with headwinds (geopolitical, inflation, cautious consumer), justifying a measured approach. Sean Dell'Orto stated that non-core sales proceeds will primarily be used for deleveraging to reach the 5x target, with project investments driving returns and organic growth from Hawaii contributing to leverage reduction.

Dan Politzer inquired about the expected RevPAR cadence for 2026, given the guidance, and the status of removing lower-performing properties from the platform and its impact on achieving U.S. domestic rooms growth.

Answer

Patrick Pacious, President and CEO, noted positive occupancy index and improved economy segment performance as green shoots, with international RevPAR up 1.7% year-to-date driven by occupancy gains. He expects RevPAR to improve as the year progresses, aligning with tax relief and gas prices. Scott Oaksmith, Chief Financial Officer, added that Q1 RevPAR would likely be negative due to hurricane impacts, with an inflection point expected in Q2. Regarding property removals, Patrick Pacious stated that while natural churn exists, the Q4 2025 exits were accelerated and targeted (about 20 hotels, 30-40 basis points of NUG impact) to upgrade the portfolio, with future termination rates expected to return to historical normals (3-4%).

Dan Politzer followed up on the Revo topic, asking if other franchisees are in a similar 'danger zone,' if underwriting standards have changed for higher FeePAR deals, and about the general collection rate or frequency of such issues.

Answer

Interim CFO Kurt Albert clarified that the Revo situation was an outlier due to its size, history, and capital deployed. He stated that excluding Revo, there was only about $20 million in total additional loan exposure across other franchisees globally, with no single franchisee holding more than 5% of outstanding development advances. He affirmed the company's commitment to investing in business growth and continuously evaluating past deals.

Dan Politzer followed up on the Revo topic, asking if other franchisees are in a similar 'danger zone,' whether underwriting standards have changed for higher Fee PAR deals, and the historical collection rate or frequency of such events.

Answer

Interim CFO Kurt Albert reiterated that the Revo circumstance was an outlier due to its size and the history of the relationship. He stated that excluding Revo, there was only about $20 million in total additional loan exposure across all other franchisees globally, with no single franchisee holding more than 5% of outstanding development advances. He confirmed that capital deployment for business growth remains a top priority and underwriting processes are continuously evaluated.

Dan Politzer asked about the challenging RevPAR environment, particularly in the economy segment, inquiring about factors within and outside of management's control, and whether there are structural issues concerning the economy segment's recent RevPAR trends.

Answer

CEO Geoff Ballotti stated that Wyndham sees no structural concerns in the economy segment based on leading indicators like booking lead times, lengths of stay, and cancellation rates. He explained that while occupancy is down across all chain scales, the divergence in RevPAR is driven by upscale segments taking rate more aggressively than the price-sensitive economy and mid-scale segments. Ballotti detailed actions to support franchisees, including strategic discounting and efforts to maintain rate on leisure travel, noting share gains in mid-scale brands.

Dan Politzer asked about the challenging RevPAR environment in the economy segment, questioning if there are structural issues and what Wyndham is doing to manage factors within and outside its control.

Answer

CEO Geoff Ballotti stated that Wyndham sees no structural concerns based on leading indicators like booking lead times, lengths of stay, and cancellation rates. He explained that RevPAR divergence is driven by ADR, with upscale segments taking rate while economy and mid-scale are not. Wyndham is helping franchisees with discounting strategies, urging holding rates for leisure, and gaining share in mid-scale, particularly in weekday RevPAR index.

Dan Politzer asked about the current state of the Las Vegas leisure customer, including booking windows and near-term trends, and what promotional or value proposition strategies might be needed to re-engage this segment. He also inquired about the potential legalization of iGaming in Maine and Virginia, the expected revenue lift, and the regulatory timeline for these states.

Answer

CEO Tom Reeg and President and COO Anthony Carano explained that the leisure customer softness is a normal economic cycle, with strong performance during peak events like F1 and the Super Bowl, while shoulder periods remain challenging. They noted that Las Vegas occupancy, at 92.5% for the quarter, is still historically strong. Regarding iGaming, Tom Reeg (CEO) indicated that Maine appears highly likely to launch, potentially adding significant EBITDA, and Virginia's legislative progress is a positive sign, driven by states seeking new revenue sources.

Dan Politzer inquired about strategies to stimulate the Las Vegas leisure customer, potential structural pricing issues, and how Q4 estimates compare to Q3. He also asked about the balance between regional promotional strategy and capital investment in property amenities.

Answer

CEO Tom Reeg addressed Las Vegas pricing, emphasizing the market's value proposition and strong Q3 EBITDA despite softness. He highlighted $3.1 billion invested in regional assets since the merger, explaining current marketing as a way to reactivate customers to see these improvements.

Dan Politzer questioned the balance between the regional promotional strategy and capital investments in property amenities.

Answer

Tom Reeg, CEO, highlighted the $3.1 billion invested in regional assets since the merger, particularly in key properties. He explained that current marketing efforts aim to reactivate customers to experience these improvements, driving organic momentum and aggregate cash flow.

Dan Politzer asked about DraftKings' accelerated focus on prediction markets, the regulatory environment, and the anticipated investment level for 2026. He also inquired about the implied revenue deceleration in the 2026 guidance and the underlying components for sports betting revenue.

Answer

Co-Founder and CEO Jason Robins explained that increased excitement stems from the CFTC's clear regulatory stance and strong early performance, noting that existing infrastructure reduces the need for entirely new investment. He also clarified the company's conservative guidance philosophy, aiming to consistently exceed expectations.

Dan Politzer asked about DraftKings' accelerated investment in prediction markets, the regulatory environment, early rollout confidence, and the expected investment level for 2026. He also inquired about the implied deceleration in 2026 revenue guidance and the underlying building blocks for sports betting and broader revenue growth, particularly handle.

Answer

Jason Robins (Co-Founder and CEO, DraftKings) explained that the increased excitement stems from the CFTC's clear regulatory stance, strong early numbers, and a potential $10 billion market opportunity. He noted that DraftKings leverages existing pricing models and marketing, reducing incremental investment. Regarding guidance, Mr. Robins stated a philosophy of conservative forecasting to ensure beats and raises, emphasizing that the current guidance is intentionally set low. He clarified that handle growth naturally slows when net revenue margin increases due to better hold and promo optimization.

Dan Politzer asked about DraftKings' discussions with regulators regarding prediction markets and the company's comfort in proceeding where some peers have not. He also questioned how the prediction market product might evolve, specifically if it will remain limited to sports or expand to broader offerings.

Answer

Jason Robins, Co-founder and CEO of DraftKings, affirmed numerous conversations with regulators and policymakers, gaining comfort in their approach. He noted that focusing on states without legal online sports betting aligns with both regulatory sensitivity and market opportunity. Mr. Robins believes the primary volume and opportunity for prediction markets will remain in sports, citing overseas trends and U.S. growth drivers, while acknowledging other innovations are less proven.

Dan Politzer asked about the growth trajectory for Wynn Las Vegas in 2026, considering high-end customer demand, group business strength, and the impact of the Encore Tower remodel. He also inquired about OpEx growth parameters for both Las Vegas and Macau in 2026.

Answer

President & CEO Craig Billings and President, Wynn Resorts Brian Gullbrants expressed confidence in Wynn Las Vegas's ability to perform well in 2026, citing strong group business and effective pricing strategies despite the Encore remodel headwind. CFO Julie Cameron-Doe provided OpEx guidance, maintaining $4.3 million-$4.5 million per day for Las Vegas (outside major events) and $2.7 million-$2.9 million per day for Macau, noting Q4 2025 figures were slightly higher due to event periods and new amenities.

Dan Politzer inquired about the growth trajectory for Wynn Las Vegas's high-end luxury properties in 2026, considering factors like the limited booking window, group and convention business visibility, and the Encore Tower renovation disruption. He also asked for parameters regarding OpEx growth in both Las Vegas and Macau for 2026.

Answer

President & CEO Craig Billings and President, Wynn Resorts Brian Gullbrants highlighted strong group business and healthy gaming volumes in Las Vegas, allowing for effective room pricing despite the Encore remodel headwind. CFO Julie Cameron-Doe provided OpEx guidance for Las Vegas at $4.3 million-$4.5 million per day (excluding major events) and Macau at $2.7 million-$2.9 million per day, attributing increases to event periods, wage inflation, and variable business volumes.

Dan Politzer asked about the current environment in Las Vegas, including share gains and Q4 trends, and expectations for group growth in 2026. He also inquired about the puts and takes between the low, base, and high-case EBITDA scenarios for Wynn Al Marjan Island, particularly given the apparent lack of competitors.

Answer

CEO Craig Billings and COO Brian Gullbrants explained that Wynn Las Vegas reacted to the summer by focusing on rate over occupancy, leading to a record August and strong Q4 momentum, with 2026 group pacing ahead despite an Encore Tower remodel headwind. For Wynn Al Marjan Island, Craig Billings stated that GGR market size is the primary driver for EBITDA scenarios, and the absence of near-term competition likely introduces conservatism into their base case estimates.

Dan Politzer inquired about Hilton's engagement with AI and technology, asking about potential partnerships, opportunities for OpEx efficiencies internally, and external revenue generation through distribution.

Answer

Chris Nassetta, President and CEO of Hilton Worldwide, emphasized Hilton's modern tech stack as a significant competitive advantage for AI adoption. He outlined three key areas: creating system efficiencies (e.g., G&A, hotel openings), enhancing distribution (working with major players like OpenAI and Google, developing natural search/booking integration), and revolutionizing the customer experience (dreaming function, seamless booking, pre/post-stay, problem resolution). Nassetta believes the opportunities in AI far outweigh the risks, especially given Hilton's scale and control over inventory.

Dan Politzer from JPMorgan Chase & Co. asked about Hilton's engagement with AI and technology, including potential partnerships, and the opportunity set for both internal operational efficiencies (OpEx) and external revenue generation through distribution.

Answer

Chris Nassetta, President and CEO of Hilton Worldwide, emphasized Hilton's modern tech stack as a competitive advantage for AI adoption. He outlined three buckets: efficiency gains (e.g., hotel openings, G&A), distribution (working with major players like OpenAI and Google, developing connectivity, and enhancing natural search/booking within Hilton's platforms), and customer experience (dreaming function, seamless booking, pre-arrival, on-property, problem resolution, post-stay). Nassetta expressed optimism, viewing AI as a pathway to lower distribution costs and a tool to revolutionize customer interaction and empower team members.

Dan Politzer asked for details on Hilton's accelerating net unit growth, specifically the expected mix between conversions and new brands, and the contribution from accelerating construction starts.

Answer

Kevin Jacobs, EVP and CFO, explained that the acceleration in net unit growth (6.5%-7% for the year) is broad-based, driven by the post-COVID development cycle. He expects nearly 40% of openings to be conversions, with new brands like Spark and future conversion-oriented brands contributing. Strong new development starts (up 20% globally, 25% in U.S.) underpin the 6%-7% NUG for the next few years. Growth also comes from exporting core brands to emerging markets, with conversions making up 30-35% of total units.

Dan Politzer inquired about the 35% step-up in credit card fees, specifically asking why the royalty rate was increased now, what drove this change, the magnitude of the rate, and if this effectively pulls forward benefits from ongoing credit card deal negotiations.

Answer

CEO Tony Capuano explained that the increase was due to a modified existing contractual agreement, ensuring the financial strength and stability of the Bonvoy program, and preserving the value proposition for its 271 million members. CFO Leeny Oberg added that careful evaluation and efficiencies allowed for balancing the needs of all constituents, confirming confidence in the new royalty fee percentage.

Dan Politzer inquired about the 35% step-up in credit card fees, asking for clarification on the timing and drivers behind the royalty rate increase, its magnitude, and any potential impact on ongoing credit card deal negotiations.

Answer

CEO Anthony Capuano explained that the increase was due to a modified contractual agreement, aimed at preserving the financial strength of the Bonvoy program and its value proposition for members. CFO Leeny Oberg emphasized that it resulted from a careful evaluation of the appropriate royalty level, balancing the needs of customers, owners, and the company, and expressed confidence in the new percentage.

Dan Politzer inquired about MGM Resorts' strategy for returning to growth in Las Vegas, specifically focusing on the first and second quarters, and asked about any one-off financial impacts in the fourth quarter for modeling purposes.

Answer

CEO Bill Hornbuckle and COO Ayesha Molino highlighted stabilization, upcoming events like CON/AGG, strong high-end luxury performance, the success of the Holiday Gift Shoppe, and the positive impact of the MGM Grand room remodel. CFO Jonathan Halkyard clarified that table hold contributed approximately $20 million to the Las Vegas bottom line in Q4 and noted that corporate expenses, typically $110-$115 million, included some non-recurring items in Q4/Q1 of the prior year.

Dan Politzer questioned the company's rationale for supporting iGaming legislation in Virginia, given its significant land-based resort development there, and asked about the chances of such legislation passing. He also inquired about concerns regarding Strip demand weakness potentially bleeding into the Las Vegas locals business.

Answer

President and CEO Keith Smith declined to comment on the chances of iGaming legislation passing in Virginia but reiterated the company's general support for iGaming as a complementary business that broadens the customer base, based on past experiences in states like Pennsylvania and New Jersey. Regarding the Las Vegas locals business, Keith Smith stated there's no concern about Strip weakness bleeding over, as the strength comes from true local residents who typically don't play on the Strip. CFO Josh Hirsberg added that the locals business continues to perform consistently, with weakness isolated to destination play at the Orleans.

Dan Politzer followed up on Boyd Gaming's support for iGaming in Virginia, questioning the rationale given their new property development and asking about the chances of legislation passing. He also inquired about concerns regarding Strip demand potentially bleeding into the locals business and any signs of fatigue from that customer base.

Answer

President and CEO Keith Smith declined to comment on the chances of iGaming legislation passing but reaffirmed general support for iGaming as complementary to land-based business, broadening the customer base, and not detrimental, while emphasizing the importance of bill details. Regarding Strip demand, Mr. Smith stated they haven't seen any impact on the true local residents' market, even historically, and expects increased discretionary income for Southern Nevada consumers from tax legislation. CFO Josh Hirsberg added that weakness is focused on the Orleans (destination), with other parts of the locals business performing well.

Dan Politzer asked about the strategic rationale, expected returns, and potential disruption from Durango's Phase 3 expansion, particularly its non-gaming components. He also inquired about the sports betting hold for the quarter and the year-to-date construction disruption impact compared to previous estimates.

Answer

Lorenzo Fertitta, Vice Chairman, explained that Durango's expansion is driven by strong guest demand for entertainment assets in a growing submarket, expecting similar high returns as the initial build. Stephen Cootey, EVP, CFO, and Treasurer, clarified that sports betting hold returned to normal in Q4 after an unfavorable Q3 last year. He quantified Q3 disruption at Green Valley Ranch at $2.5M-$3M and estimated Q4 disruption at Green Valley Ranch at $8M, with minor impacts at Durango and Sunset Station.

Dan Politzer asked about the rationale behind the Durango Casino Resort Phase 3 expansion, including the disruption impact and expected returns, particularly given the significant non-gaming component. He also inquired about the sports betting hold for the quarter and the cumulative disruption impact from ongoing construction projects.

Answer

Lorenzo Fertitta (Vice Chairman, Red Rock Resorts Inc) and Scott Kreeger (President, Red Rock Resorts Inc) explained that the expansion is driven by strong guest adoption, lack of local competition, and customer demand for entertainment amenities like movie theaters and bowling, expecting similar returns to the initial build. Stephen Cootey (EVP, CFO, and Treasurer, Red Rock Resorts Inc) clarified that sports betting hold returned to normal after an unfavorable prior year. He quantified Q3 disruption at Green Valley Ranch at $2.5-$3 million, with an estimated $8 million for Q4, and noted disruption at Durango and Sunset Station.

Dan Politzer from Wells Fargo asked for a comparison of demand for Europe versus the Caribbean and the impact of the strong U.S. dollar. He also inquired about the company's perspective on potential changes to U.S. taxation of the cruise industry.

Answer

CEO Harry Sommer explained that strong European demand has been consistent and is product-driven, while noting the Caribbean is a smaller part of the summer deployment. CFO Mark Kempa added the strong dollar is an EPS headwind but not a major demand driver. On taxes, Sommer called the issue highly complex and declined to speculate, instead highlighting potential tailwinds from peace in regions like Northern Europe, which could benefit their large 2026 deployment.