Joe Stauff

Joe Stauff asked about Generosity investments and returns for FanDuel, specifically if iGaming yields higher returns and if those customers cross-promote to OSB, and how the Q3/Q4 Generosity approach was impacted.

Answer

CEO Peter Jackson clarified that Generosity was not deployed efficiently in Q4, especially during periods of very high margins, leading to customer confusion due to inconsistent deployment. He emphasized that bundling Generosity within a loyalty program, as successfully done in casino, helps customers better understand rewards, and the goal is to achieve more efficient and effective Generosity distribution.

Joe Stauff inquired about generosity investments and returns for FanDuel, specifically whether iGaming customers are unique and if OSB generosity investments cross-promote, seeking to understand the Q3 and Q4 approach and why returns might be lower.

Answer

CEO Peter Jackson clarified that Q4's issue was inefficient generosity deployment during sustained high margins, not lower returns. He emphasized the benefits of bundling generosity within a loyalty program (as seen in casino) for better customer understanding and potential wallet share increase, committing to a more efficient and consistent distribution of generosity.

Joe Stauff asked for a follow-up on Electronic Table Games (ETGs) in Kentucky, specifically regarding any bottlenecks in increasing their availability, and opportunities for Derby media rights and sponsorship, particularly from international mega-sponsors.

Answer

William C. Carstanjen, CEO of Churchill Downs Incorporated, explained that the rollout of ETGs is a new product requiring responsible and careful implementation, starting with roulette. He stated there is no bottleneck, but rather a thoughtful process to ensure regulatory comfort, customer understanding, and optimal floor placement, with new products to be introduced over time. For the Derby, he highlighted increased focus on international interest, particularly from the Middle East, including new 'Road to the Derby' races, to harvest the brand's global component for sponsorships, high-end attendance, licensing, and wagering.

Joe Stauff asked about any bottlenecks in increasing Electronic Table Game (ETG) availability in Kentucky and, more broadly, about opportunities for media rights and sponsorship for the Derby, particularly from international markets like the Middle East and Japan.

Answer

CEO Bill Carstanjen explained that ETG rollout is a new, responsible process, starting with roulette, with no bottleneck but rather careful, thoughtful introduction of new products over time. For the Derby, he highlighted increased international focus, especially from the Middle East, including new 'Road to the Derby' races, to harvest the brand for sponsorships, high-end attendance, and other avenues.

Joe Stauff asked for an update on the process of shutting down illegal gaming machines in Virginia, whether it's still a 'whack-a-mole' situation, and if it's negatively affecting Churchill Downs' assets or providing a tailwind.

Answer

CEO Bill Carstanjen confirmed it remains a 'whack-a-mole' process due to manufacturers' attempts to introduce variations, but noted significant progress and strong enforcement. He stated that while vigilance is constant, illegal machines are not a material concern or a big driver for the company's current growth.

Joe Stauff asked for details on the early returns and ramp-up of the Joliet and M Resort projects, specifically inquiring about win per unit at Joliet and record gaming volumes at M Resort, and how these performances de-risk the projected 15% cash-on-cash returns. He also asked if the new Aurora property is opening in a mixed-use development similar to Joliet.

Answer

CEO Jay Snowden differentiated hotel expansions (M Resort, Columbus) from water-to-land conversions (Joliet, Aurora). He explained that hotel expansions show immediate positive impact due to existing infrastructure and unmet demand, with M Resort doubling capacity while maintaining strong occupancy and ADR. Joliet, part of a large mixed-use development, has seen significant growth (130% active database, doubled daily visitation, table volumes, non-gaming revenue, 40-50% slot revenue growth), with margins expected to improve after initial fine-tuning. Aurora is not a mixed-use development but benefits from immediate adjacency to the Chicago Premium Outlets, providing critical mass and unmet demand for dining and amenities.

Joe Stauff asked about the Italy digital product offering, specifically identifying the biggest opportunities (converting retail sales to digital and iCasino) and their importance for the Lotto renewal return. He also inquired about when Brightstar expects to gain traction in this digital channel and what KPIs will be released to track progress.

Answer

Vincent Sadusky (CEO) affirmed the Italy digital opportunity as a significant growth lever, with the greatest potential in converting retail players to digital iLottery purchases. He explained the strategy to offer a full entertainment experience, including iCasino and sports betting, within the My Lotteries app for convenience, leveraging existing customer relationships. He noted that development is ongoing in 2026 to achieve a best-in-class digital platform. Massimiliano Chiara (CFO) added that initial KPIs include growing iLottery market share, which increased by 3 percentage points in 2025, and the recent activation of eInstant as the second provider.

Joe Stauff of Susquehanna asked about the Italian digital product offering, specifically if converting retail lottery sales to digital and expanding into iCasino represent the biggest opportunities and were key considerations for the Lotto renewal. He also inquired about the timeline for gaining traction in the digital channel and whether related KPIs would be released.

Answer

CEO Vincent Sadusky affirmed that Italy's digital opportunity is a significant growth lever, with the greatest potential in converting retail players to digital iLottery and, to a lesser extent, iCasino. He emphasized providing a "fulsome entertainment experience" through a best-in-class, frictionless MyLotteries app that integrates iLottery, iCasino, and sports betting. Mr. Sadusky stated that iLottery is the primary driver, with iCasino and sports betting offered for convenience, not to be market leaders. CFO Massimiliano Chiara added that initial KPIs include growing iLottery market share, which saw a 3 percentage point increase in 2025, and the launch of eInstant as the second provider in the market.

Joe Stauff inquired about the expected completion and launch timeline for the new Sphere Experience, "From the Edge," and the factors involved in its debut.

Answer

Executive Chairman and CEO Jim Dolan indicated that "From the Edge" is expected to debut in the fourth quarter, potentially extending into the first quarter, with the exact timing dependent on maximizing revenue from "The Wizard of Oz." He emphasized that all new products are designed to optimize facility capacity and generate the highest possible return.

Joe Stauff asked about the anticipated launch timeline for 'From the Edge,' the next Sphere Experience, which is expected to be completed later this year, and what factors are involved in its debut.

Answer

James Dolan, Executive Chairman and CEO of Sphere Entertainment, expects 'From the Edge' to debut in the fourth quarter, potentially slipping into the first quarter, with the exact timing dependent on maximizing revenue from 'The Wizard of Oz.' He emphasized that new products are designed to optimize facility capacity and generate the highest returns.

Joe Stauff asked Grant Chum to elaborate on his comments regarding reaching a level of stability in Macau's investment and promotional mix, inquiring if this is due to inflecting KPIs or a lack of competitive response.

Answer

Grant Chum, CEO and President of Sands China, explained that observations from recent months, particularly Q4, show stabilization in promotional incentives. He noted that the company has caught up with the market since May, leading to higher market share and patronage, especially in premium and rolling segments, though competitive dynamics remain fluid.

Joe Stauff inquired about the awareness of prediction markets among state legislators, particularly as new legislative sessions approach in early 2026, and the potential implications for the competitive landscape and policymaker decisions.

Answer

Jason Robins, Co-founder and CEO of DraftKings, confirmed that legislators are "absolutely aware" of prediction markets. He believes the continued growth of prediction markets will increase pressure on policymakers to consider legalizing sports betting and will make them think twice about tax increases, as operators might pivot if taxes become too high. Mr. Robins views this as a significant positive for DraftKings, providing both a competitive opportunity and a powerful lever in policy discussions.

Joe Stauff asked about legislators' awareness of prediction markets and the implications for the competitive landscape as new legislative sessions approach in early 2026.

Answer

Jason Robins, Co-founder and CEO of DraftKings, confirmed that legislators are aware of prediction markets. He believes their growth will increase pressure on policymakers to legalize sports betting and reconsider tax increases, as operators might pivot if taxes become too high. He views this as a positive lever for DraftKings, offering both a new competitive opportunity and influence on policy.

Asked about Powerball's pricing plans, the expected growth drivers for the U.S. and Canada lottery business excluding multistate games, and for an update on the timing of the gaming business sale.

Answer

Executives confirmed that Powerball has not announced a price change. Growth in the core U.S. and Canada lottery business is expected to come from continued portfolio management, new game launches, and expanding retail distribution and automation. The timeline for the gaming sale closing remains unchanged, targeted for the end of Q3 2025.

Asked for more specific timing on the Italian Lotto renewal and for an overview of the lottery business's competitive landscape and IGT's advantages.

Answer

The Italian Lotto tender is expected by year-end or early 2025, with a final outcome likely in Q2 2025. Competitively, IGT sees itself as unparalleled due to its global scale, B2B expertise, full product suite, and diversification, which should be recognized by investors once it's a pure-play company.