Bally's Corp (BALY) 2023 Q4 法說會逐字稿

Please standby your program is about to begin. Good day and welcome to Bally's Corporation fourth-quarter 2023 and full-year earnings conference call. (Operator Instructions)

I'd now like to turn the call over to Charlie Diao, Senior Vice President and Treasurer for Bally's. Please go ahead.

Good afternoon, and thank you for joining us on today's call. The earnings release and presentation that accompanies this call are available in the Investor Relations section of our website at www.ballys.com. With me today are our Chief Executive Officer, Robeson Reeves; our President, George Papanier; our CFO, Marcus Glover; and our Vice Chairman of the Board, Jaymin Patel.

Before we begin we would like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates and projections. That's involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Financial results may differ materially from the results discussed in these forward-looking statements.

In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project nonrecurrent expenses and one-time costs.

This call is also being broadcast live on our investors' website and will be available for replay shortly after the completion of this call.

Let me hand the call over to Robeson.

Thank you, Charlie. I'm pleased to share our thoughts on Bally's solid fourth-quarter and 2023 operating performance as well as our strong forward growth prospects. Our fourth-quarter revenues grew a robust 6% year-over-year, reaching $612 million with increases across all three of our operating segments. Casinos & Resorts, achieved 7% revenue increase and maintained strong adjusted EBITDAR margins as we successfully offset ramp-up costs in Chicago and wind-down Tropicana.

International interactive continued its solid performance, driven once again by our leading market presence in the UK. The North American interactive segment gained additional iGaming market share while the rollout of Bally bet, our steady progress. For the full-year 2023, our revenues and adjusted EBITDA both increased an impressive 9%.

As we turn the page to 2024. I'm excited to share with you our vision for Bally's future, including continued operating performance improvements and our road map of unparalleled development opportunities. George and Marcus will follow and dive deeper into the specifics of our quarterly performance.

Regarding our vision, we strongly believe that Bally's diversity makes for a complex story. However, we view our core business through a lens of high confidence saying that there's a source of opportunity and strength. This distinguishes us within the industry and allows us to successfully navigate through various macroenvironment.

For our equity and credit stakeholders Bally's operations across Casinos & Resorts international interactive North America interactive offers unique and unparalleled long-term growth potential. Coupled with our consistently strong adjusted EBITDA performance and the thoughtful staged development pipeline were crafted a bright future and setting new industry standards.

As adjusted EBITDAR is a crucial measure for assessing our financial health, the strength of our adjusted EBITDA generation and enables us to reinvest in our properties and the development pipeline. Moving to our development pipeline, let's first touch on Chicago. As at the beginning of 2024 and temporary facilities fully operational with a full quarter of financial performance are higher.

The properties began operating route George, laid out during our last earnings call, which he'll update you on in a few moments. As the permanent in line with previous time lines we've shared we remain set to access the Chicago Tribune site late this summer, aligned for demolition and site preparation in the second half of 2024, with completion of the facility coming late in the third-quarter of 2026.

Reflecting this time line, there's just over 1.1 billion remaining hard construction costs per share with the [HCA] that will be concentrated in 2025 and 2026. We're also very close to securing the incremental construction financing needed for the permanent facility. In addition to the existing 300 million Landlease improvement facility, we expect to share updates on this important proponent soon.

In Las Vegas, the formal closure of the Tropicana on April 2, will pave the way for the demolition of the Casino hotel of the coming months with the support of our financing partner, GLPI. Following demolition site prep and approval of affordable plans, construction of the Las Vegas A’s stadium will likely begin sometime thereafter.

We continue to assess our available options for the very valuable development lands next to the stadium. If I look in New York, we're in the early stages of what will be a lengthy multifaceted journey towards building a world-class superregional Casino entertainment complex and the growth of Bally's Golf Links Ferry Point. Securing the licenses is the first step, and should we achieve this milestone, we believe will have a highly attractive and competitive proposal that will allow for numerous pathways to actualize our vision.

Thinking about our development time lines in this way, makes it clear that Bally's has a well-developed started spending time line that extends approximately 5 to 10 years. This approach will maximize the benefits derived from the cash flow generated from kind of core operations while accommodating for potential market and financial position shifts. Moreover, this unmatched development pipeline offers opportunity in two of the largest US cities for the country's most distinguished again destination.

Finally, before I turn the call to George, I want to touch on that interactive segment. Within international interactive our UK operations continue to excel with fourth-quarter means we have strongest adjusted EBITDA performance to date. This success is attributed to our increased customer acquisition efficiency and refined marketing, strategies which have significantly improved our gross profit margins.

Additionally, the segment, is benefiting from our strategic reorganization and diligent cost management efforts. in Asia, we've seen our business stabilize, expect more consistent performance in 2024. In the North American interactive segment we are pleased with our ongoing progress to refine our strategic approach to the market.

NAI delivered its best quarterly revenues 2023, benefiting from a solid New Jersey and Pennsylvania gathering results, along with the rollout, the Bally and OSB. It's now live in seven states we continue to optimize our marketing investments and expect to further benefit in 2024 as we transition more functionality for our technology partner with Cambium more effectively.

We have launched web-based versions of our apps recently, we eagerly await the launch of idea in a home state of Rhode Island later in the first-quarter with Bally, we'll be the sole provider. For modeling purposes on 2023, fourth-quarter, NAI performance should not be directly projected across the entirety of 2024. We'll continue to invest, improved leverage, resulting in an anticipated adjusted EBITDAR loss of approximately $30 million 2024.

Market expansions inherently involve significant initial investments, but our strategy is to allocate resources wisely to nurture this vital segment. This is an exciting time for our interactive business, and that commitment is underscored by conviction that OSB is a foundational step towards successful iGaming features.

And I'll now pass the discussion to George for further details on our operational performance over the last quarter.

Thanks, Robeson. Begin my commentary with insights from our Casinos and Resorts segment. We're diving into the latest developments of the Chicago temporary facility and our continued efforts to ramp up this operations. Casinos and Resorts exhibited robust performance across most of our portfolio, with revenues up 7% for the fourth-quarter and up 11% for the year. Adjusted EBITDAR was up an impressive 8% for the year. Notably, our two Rhode Island properties have consistently produced strong results in 2023.

Similarly, our Kansas City property has seen robust business following the completion of its phased development in mid-September, 2023. Quad Cities is also performing well and we're quite pleased with the full year performance in Atlantic City. For the year AC outperformed expectations despite a hypercompetitive environment and have generated high single digit millions of adjusted EBITDAR.

Our first full year profits since acquiring the property. We outperform market-wide GGR comparisons on a same-store basis in 7 of our 10 markets. In metric we closely monitor as it reflects the underlying strength of our properties and our consistent ability to capture market share. Operationally, we have proactive assessing every aspect of our properties and striving for cost reductions and enhanced efficiencies.

It's critical to remember that our properties portfolio across 10 markets was assembled in under three years, meaning that we're relatively early in the process of managing it as a cohesive portfolio. Moreover, our resources and management expertise positions us well to drive ongoing operating improvements throughout portfolio as we've demonstrated by our operating results over the last several quarters.

Let's shift our focus to Chicago, since opening the Chicago Temp facility in September, for dedicated property team has made commendable efforts to improve operations and advance towards our desired operational pace, including the build-out of a robust database. As we've noted before, we are several months behind our initial ramp of schedule due to factors such as delaying opening, restricting operating hours at launch, the absence of valet parking and limited F&B offerings.

We're actively addressing these opportunities for improvement, and we've already seen success with several of them. We initiated 24/7 operations in December 27, and are responding to demand for shuttle bus services and the facility from neighboring communities. We've also expanded parking options for our guests across numerous local garages, significantly enhancing their arrival experience and access to the property.

Our team is now focused on adding the new high-limit and VIP lounge and upgrading our hospitality offerings, including partnerships with local dining establishments and outlets to integrate Bally's constant currency, thereby reaching our guests rewards beyond mere free play. These enhancements are evident in the monthly numbers released by the IGP.

We had a record exceeding $10 million in GGR in January were $9.3 million in AGR as the IGP reports representing a 9.1 month-over-month improvement despite severe weather conditions and compared to all other competitors we sold through saw declines versus December. We expect this to continue to ramp each month as we move into the second-quarter before we begin getting normalized revenue production rates and benefit from a welcome respite from the Chicago's famous winters.

Before passing the call to Marcus, we are fully dedicated to our partnership with the City of Chicago and are extremely excited about our permanent casino development projects. We are here to stay. Second, we received approval from the city for revised construction plan due to the unexpected discovery of water pipes for these two sites.

Our revised plan includes the construction of approximately 100 hotel rooms above the casino in the initial phase, with the additional 400 rooms and relocated hotel tower planned for a subsequent phase. This adjustment has not impacted our development time line remain in accordance with the HCA. Lastly, as with many of our peers we were impacted by severe weather across our portfolio in January, but we have seen a return to more normal seasonal trends in the past few weeks.

Furthermore, please remember that the Tropicana will close on April 2, and have an impact on revenues, income contributions beginning in the second-quarter.

With that now let me turn call over to Marcus

Thanks, George. As Robeson, George highlighted and as our results demonstrate 2023 finished on a very strong note. Heading into 2024, the foundational elements are in place to drive sustained growth across our three operating segments. Our Casinos & Resorts portfolio demonstrated solid top line results, characterized by year-over-year organic growth across our portfolio, which helped offset the ongoing wind-down of Tropicana.

The segment reported revenues of $342.3 million, a 7% year-on-year increase and $94.7 million of adjusted EBITDAR, including a full quarter's contribution from the Chicago Temp. Excluding Atlantic City, Tropicana and Chicago, EBITDAR margins were a solid 34%, including these properties EBITDAR margins were 28%. For the full year Casinos & Resorts revenues increased by 11% and adjusted EBITDAR grew by 8%, driven by strength in Rhode Island, Kansas City, Blackhawk and Quad Cities

For the fourth-quarter international interactive continued its impressive performance with revenues increasing 2.1% year-on-year to $236 million. The revenue strength was led by our leading UK business where revenues rose 10% year-on-year on a US dollar basis and 5% in constant currency. International interactive generated record adjusted EBITDAR of $93.2 million this quarter, a 4.3% increase year-on-year. Importantly, we began to see stabilization in Asia, a trend that has continued into 2024.

For the full-year international interactive revenues increased by 2.8% and adjusted EBITDAR grew by 6.8%. For the fourth-quarter, North America interactive generated revenue of $33.4 million, a 27% year-over-year increase. The segment generated an adjusted EBITDAR loss of $9.8 million as we continued to rollout Bally Bet which finished the year live in seven states.

We expect full year adjusted EBITDAR to improve significantly as marketing efforts will remain measured given our view of OSB as a funnel for iGaming growth. As we announced in our last call, we have identified additional ways to mitigate costs, and we'll be consolidating our domestic BAM onto the VIA platform for gaming in OSB once Rhode Island launches. This will undoubtedly also lead to a better user experience.

With that in mind, we are estimating in North America interactive adjusted EBITDAR loss of $30 million for the full year of 2024. The biggest potential swing factors in term of pace to profitability are highly anticipated launch of iGaming in Rhode Island, which remains on schedule for March 1. And any additional space that may legalize iGaming in 2024, 2025.

For the end of the quarter, shares outstanding were approximately [40 million], reflecting the repurchase of 5.8 million value shares on the open market for total consideration of $68.6 million. We also have incremental warrants options and other dilution of approximately 12 million shares. 52 million shares outstanding is the fully diluted share count. We ended the quarter with $163.2 million of cash on our balance sheet and $3.56 billion of net debt.

Turning to guidance, Bally's expects to generate 2024 revenue in the range of $2.5 billion to $2.7 billion. The company also expects to generate 2024 adjusted EBITDAR of $655 million to $695 million. We continue to keep a close eye on consumer spending patterns and general economic conditions for impacts to our Casinos & Resorts customers.

Also, while January was impacted by severe weather across most of the US, we are seeing an improvement in trends over the past several weeks. Our guidance also assumes the closure of Tropicana on April 2, a strong Chicago run rate EBITDAR trajectory in the second half 2024 continued growth in international interactive and approximately $30 million of adjusted EBITDAR losses in North America interactive.

We expect straight-line GAAP rent expense of $126 million and cash rent of $121 million. Our 2024, Capital expenditure guidance of $165 million in aggregate and included in our capital expenditure guidance is spending in Chicago for site prep and demolition for the permanent casino, as well as similar expenses for Tropicana.

In closing, I want to reiterate my enthusiasm for 2024, which will include the continued ramp of our Chicago, Temp, the successful launch by iGaming, Rhode Island and progress on the other growth initiatives, which are underway.

That concludes my comments. We will now open up the call for Q&A. Operator?

(Operator Instructions)

Barry Jonas, Truist Securities.

Yeah, let me ask you, Want to start with Chicago the temp looks like it's starting to ramp on a month-over-month basis. Curious what kind of player you're seeing there and how do you think that center database could transfer to the permanent once completed?

They've averaged storage of the fed by 10%. So obviously we're increasing database, we started with 0 and within six months, roughly 65,000 in our database. We really just started actively mailing to that database in November after we got iGB approval. So we've only been at it at a couple of months. what we're seeing right now is a demographic that's kind of slightly skewed towards a other demographic, primarily driven by table games, probably seen that we were already ranked second in the state from a table games perspective.

So got a lot of work to do on the slot side. What we're seeing is a little bit younger customer on the slot side as well. We think a lot of that has to do is providing the appropriate provisions for parking, which we now have contractual arrangements with several of the garages within a couple of blocks of us. So we're starting to see a lot of increases from that.

We also have increased shallow blessing in the vicinity, and we're starting to see growth in that as well. So I think the goal really is to build that this database and absolutely transfer 100% of that to the permanent facility. So we're really happy about the growth short term and week-over-week. We're continuing to see all the metrics that we measure our success with the increasing.

So we've gone from $6.8 million in September of volume of iGB to almost $10 million. So we're happy about what we're seeing we're getting a little bit more aggressive from an advertising perspective in the market as well. And we're hoping to see some real growth in March, which is typically when you see that growth in the market and continuing that through the summer months.

Great. And then just shifting to Trop, we haven't heard a lot just yet about what A stadium will ultimately look like. Wondering if you have any better visibility and if you could talk about some of the scenarios you're considering for Tropicana? Thank you.

Yeah, I'll take that again, Barry. So listen, we announced closure on the just on the second that we have announced closure just towards the end of January that we're closing on April 2. Obviously, that we did that in order to put us in a position to deliver construction ready site, to the A's, which is within our contractual arrangement with them and their goal is to open for season 2028 and A's. The A's are still finalizing their stadium fans, and we just continue to evaluate our options for what we feel is a very valuable development land that's next to the stadium. So we don't have anything further from our perspective.

Got it. And if I could just sneak in one more the I wanted to ask about the '24 guidance for Casinos & Resorts? Can you maybe quantify the weather impact in January? Or I'll share any maybe additional underlying assumptions say what base same-store EBITDAR growth you're expecting, if that sort of flattish, but any additional color there? I think would be helpful.

So let me take a little bit of a step back. We yeah, we continue to see growth throughout 2023 on our higher tier customer across our portfolio. But we did like everyone else experienced market softness during the back half of 2023 and by the way, during that period, we actually saw market improvement from our perspective in 10 of our 13 markets that we compete in.

So we saw some real impact in October, a lot of softening, but then we got a nice bounce back in December. And then of course, we ran into the weather, which is really what your question is that impacted us is like you've seen the impact. And now most of the regional operators, Las Vegas really was not impacted, obviously, but to quantify, we probably about a 20% impact on us.

You'll probably see that translated into the top line revenue numbers, but you obviously were able to mitigate that at the EBITDA line. But just as a follow on. We're seeing whether that's kind of more back to normal weather patterns in February and right away, we bounced back in. We feel that we're back to normal kind of inflationary growth levels.

The other point I'm going to make is that from a guidance perspective. Last year, I just talked about the softness we had in the second half. We think that's an opportunity in the second half of this year, since that comp's going to be a little easier to me.

Great. All right. Thank you so much, George.

Welcome, Barry.

Jeff Stantial, Stifel.

Hey, great afternoon, everyone. Thanks for taking our questions. Maybe starting off here on the international interactive business. Can you just update us with the latest with respect to the UK regulatory overhaul. What are you hearing with respect to some of the more impactful categories of proposed changes, whether that's the affordability check, the stake limits? What have you and then in the past you talked to or guided a low single digit top line impact of the worst. Have your views on that changed at all since as more parameters are our clarify? Thanks.

Thanks, Jeff. So just on the white paper overall, we're working very closely with the Gambling Commission and DCMS, the government body aligned to those areas at the papers still progressing slowly. I feel very comfortable with every discussion that we're having. It's rational with a genuine focus on protecting the consumer, which I care a lot about.

We have been very flexible when it comes to how we operate our business. And so I'm not concerned at all about these regulatory changes. I think it makes for a better market. Even if there is a degree of displacement from any of the larger operators, this will impact much more much smaller operators more severely. So you'll pick up share that way.

I think some of you may have seen headlines released today and over the past few days on our state limits, slot state limits online. So essentially what the press is saying and I suspect to be very close to this is the under 25s will have a GBP2 stake limit and over 25s will have a GBP5 stake limit. Probably implemented somewhere in the my gut feel is somewhere in the July to September window. I feel good about that.

All that ends up resulting in a much more sustainable play. Again, it means that greater longevity for this business model is very robust when it comes to recession and the challenges that people face. And when I look at our business performance right now in the UK. I feel great, even if I'll just add a bit more color, even if there are any impacts, we will be rolling out sports into the UK market. And we also will be investing further in our value brand in that market.

I always take the lens and saying we are the biggest, iGaming operator in the UK without sports. This will aid the funnel. Same principles apply to North America, the likes of the UK that so I feel good about the company.

Okay, great. That's really helpful. Thank you for that. Sticking on the international segment, can you just expand a bit more on some of your commentary with regards to what you're seeing in Japan, when you talk to stabilization, is that mostly a function of sort of the comps normalizing? Are you seeing actual uplift or kind of improvement in underlying consumer trends? Just any additional color you can offer would be helpful.

Yes. So we were (inaudible) to be in Asia. And what we're seeing is the market sentiment from players engaging with the product, it's building back. So there's more new customers coming into the funnel and there still have in our product and engaging with it. We've added extra types of content which has appeal to different audiences.

Yeah. So it feels like Asia stable feels like it's under control and we'll see consistent revenues from that area. As you can see in our international interactive performance in '23 UK was really kind of holding that thing up from hoping everything can contribute this year.

Okay, great. And then if I could just squeeze in one more here and apologies if I missed this, but the $50 million EBITDAR target for the Chicago temporary facility, is that still intact? Is that what's embedded in guidance for '24?

Yeah. So to answer your question in short, yes, we are trajecting toward that. Just a moment of clarity and a couple of things as it relates to Chicago, George and team, as you guys can see, are making pretty substantial progress toward our goal. We've contemplated driving revenues. But there are some costs that we're overcoming in that. And so to answer your question in short, yes, that contemplates hitting our run rate that we've shared in the third-quarter that still holds true today.

Okay. Great. Very helpful. Thank you all.

Jordan Bender, Citizens JMP.

Good afternoon. I wanted to touch on Barry's question and seen our guidance of presumably trough should help the overall margin profile for that segment. So with margins guided down about 200 basis points year- over-year it implies that a lot of that down year-over-year should happen in the first-quarter. Is that fair to assume that the weather plus the ramp in Chicago or the major hits and then Q2 through Q4 should be more stable. And then are there any run rate losses implied with Tropicana close?

Yeah. So you mean Tropicana close that it definitely isn't incorporated in our model. And what we have shared with you for guidance on weather, definitely on the first half of the year is going to impact that guidance as well. But one thing that enjoys kind of teased us a little bit, we're seeing and focusing on the top end of our database and ensure that stickiness stays in place.

We are keeping a cautious eye to the lower areas of our database in the unrated segment. And so some of that free business could materialize into some margin impact. We haven't experienced that yet, but we are contemplating that being a case as we enter some of more competitive market.

Great. And then switching to North American online last year, you kind of shifted the strategy into iGaming. So as you assess your market position in some of these sports betting only markets, would you look to exit any of these states, I guess, particularly New York, we've seen what a skin price would go for in the state? Thank you.

Hi, Robeson here. No, we don't have any intention to leave any of these markets. We're being very measured. As we said in our marketing approach, we have got a great partnership with both Cambium White Hat, which has enabled us to manage the appropriate investment costs across all of these states. We do view sports that the pathway to iGaming. Today we will stay in all these states. We're very focused on investing in iGaming as that's where we're achieving our greatest return.

Thank you very much.

Chad Beynon, Macquarie.

Afternoon and thanks for taking my question. Robenson, wanted to return to the international interactive segment margins in the quarter, 39%, certainly higher than I think what you had kind of talk to before and kind of where the street was. For '24, I believe your guidance implies 33% to 35% and you kind of just talked about maybe some of the other regions hopefully picking up.

But as we think about margins and just the overall marketing environment, I guess historically, you've talked about 30%, now you're 33% to 35%. Can you just kind of provide a little bit more color in terms of what the marketing environment is like? And if this 39% in the fourth-quarter should be viewed as more of an anomaly?

So touching on fourth-quarter our view that this is an anomaly, the 33% to 35% range that we discussed allows us to ensure that we can continue to invest. We can continue to look at other ways to grow so that there's some room in that to test. And if you're not testing, you can never actually always find stable growth.

Yeah, margins should be holding exactly I feel good about our plans. We're going to go above the line with both Bally's and virgin in the UK. We definitely within that we have expansion in Brazil. We're looking at other markets to the tool in a locker that we haven't unlocked over the past few years is looking at wider market expansion outside of North America contracted.

And running at these margins, which I know are very sustainable because we retain our customers so well allows us to look at expansion opportunities.

Okay, great. Thanks. Great to see that in terms of capital returns, you repurchased $70 million worth of stock in the quarter. So nice to see you're being opportunistic there, for '24 CapEx is still reasonably low. I believe it picks up in '25 and '26 with Chicago. So how should we think about capital returns? I know you have -- I believe, $95 million left on the current program. Do you have the availability to be opportunistic in the market if shares remain depressed?

Hi, this is a Charlie Diao speaking. I think that what we've always said is that we allocate capital among different opportunities, internal investment development as well as obviously, returning capital. At any point in time the dynamics of each of those up options still may change to the point being. We do have significant development expenditures, we expect to get some financing for those development expenditures and at different points, we'll see where the stock is. And if it makes sense, we'll exercise that the Board will exercise that decision.

Thanks, Charlie. Appreciate it guys.

(Operator Instructions)

Jonathan Navarrete, TD Cowen.

Hey, why you guys have started on finance. Wanted to touch on international and any insight into the state of the UK consumer so far in 2024?

Hi, Jonathan, Robeson here. And with respect to UK consumer, we're seeing very stable spending patterns from our players. We don't have very many big players, right. So it's very much consistent consumer. We're getting high enough volumes of new customers into the funnel, and we have enough levers to pull such as hold, such as content mix and everything else to ensure that we can manage the returns from our investments there.

So we're not seeing a slowdown there is definitely the usual sort of January post Christmas pause, but we understood that and I'm in all of our numbers and that happens every single year. We've seen good trends through the end of January and into February as expected. Yeah, I feel very comfortable about the consumer in the UK.

In terms of CapEx equal to $165 million, could you just get the split of maintenance versus growth?

Yeah, about I think of it this way, there's about probably $65 million, $70 million that will go to maintenance for the Casino Resort side, we have some growth that's probably in the neighborhood of $35 million to $40 million of capital that will go to the properties, but probably will not see the ROI on that into 2025. So we'll activate and develop this year and bring online for '25, a significant portion for continued development and investment in our development efforts for Interactive. That includes both North America and international interactive and then a very, very small portion for some enabling technology. For our centralization and integration efforts across the enterprise.

Understood. Thanks. And you also called out demolition cost, that's not including CapEx. And I'm just wondering what is that figure like is it substantial or is that somewhat insignificant that you want me to comment out?

Yeah. We separate out now I'll let George add anything on to it, if he has anything off and we separate out our development capital from what we share in that $165 million . So Chicago and Tropicana are separate. I won't give you we're still going through the process now of working with our contractors to understand what those demolition costs will look like. So we don't have a number to share with you today, but those are separated out from that $165 million and are not included in that number that we published.

I don't know if George has anything else to offer .

Yeah, you're right. We're going through the bid process right now in both Chicago and Tropicana.

I think the other issue is that as it relates to I mean, it's just not the demolition of blowing it up at site prep and over some period of time. So that bit really fixing it on a particular calendar year. Some of that's going to wrap over like trough, maybe wrap over '25. So that's no reason why we we don't have specific guidance held to a certain timeframe.

Sure. Thanks. And the last one, can you just remind us where we are with the new license? I know it's a competitive process and just we're barely stands at the moment?

Yeah. So -- it's obviously, it's public that we're part of the process we're working. We're working on presenting an appropriate plan once the RFP process begins. We've secured the land. And we think that there's that's a real opportunity at state. We think that the I didn't think that anyone that does project will be successful and living with it, putting ourselves in a position to build the appropriate traffic there and be successful. But the first step is acquiring a license.

(multiple speakers) obviously, we can't give you any color on New York's time line. We are taking every step measure that will put our name and they have for consideration and so. We're very interested in and we think we have a very, very compelling proposition and site anchored by our Ballly links golf course. And so we are engage and await New York's decision and time line.

Thank you.

David Katz, Jefferies.

Hi, good evening, everyone. Thanks for taking my question and apologies, I was a couple of minutes late. But I wanted to just go back on Chicago financing which I know is still an open question. You may not have conclusions for us today, but any update on what the inbounds are out-bounds as potential outcomes? Would be helpful.

Hi. David, this is Charlie. I think we haven't changed if we expect to finance it when we need to have the financing. The I know that the market would like to have greater certainty, but the fact is we don't get access to the site until July for 2024. And we're going to run the back half of this year, demolishing and and site prep.

So as Robeson, mentioned in the introductory, the bulk of the CapEx is in 2025 and 2026. So unfortunately, we don't have a commitment in place and tell you about what been. And when we do, we still do that. But we continue to progress towards that outcome. And we are confident of our ability to finance project because it's a great project.

Okay. We'll have to leave it there. I appreciate it. Thank you.

Brandt Montour, Barclays.

Hey, good evening, everybody. Thanks for taking my question. I wanted to circle back on the international interactive segment guidance which is essentially flat on the top line right for '24. And I just I guess if I'm just trying to read between the lines here on the different segments. It sounds like you're constructive on the UK, which I would expect to mean that you expect that part of the business to grow somewhat.

And then and then it sounds like Asia is stable, but maybe you got maybe yet to lap rates have reset there from last year. And so on a year-over-year basis for the year, Asia would probably be down and maybe those two offset my wildly off there in terms of thinking about the different geographies within that line?

No, I think you've interpreted it pretty well. Asia does have to lap because there was a significant decline that over the course of '23. Now we're seeing recovery there, which is good, but we have to lap that. We obviously when we're thinking about our guidance thinking about our forecast you can't predict perfectly in some of these environments.

So we know that what we have in, is rational and we know that we have enough levers to pull marketing optimization to ensure that we have the right flow through to the bottom line. Yeah and we're making investments in other markets to set ourselves up for the future as well.

Got it. That's helpful. And then a follow-up to the capital allocation discussion. You guys gave some color on how you're thinking about it going forward. I guess just sort of thinking or looking back in the fourth-quarter, we noticed you drew down some of your revolver and maybe it's separate, though, cash is fungible. You don't you took you bought some stock back into leverage, picked up a little bit on that.

And so I guess the question is maybe just remind us your philosophy on your leverage when it sort of is at a level where it doesn't make sense for the stock price to buy back stock and sort of how you think about that?

Yeah, look at any point this Charlie Diao. Any point in time we have different options. And certainly in the fourth-quarter, the equities got too cheap. And but we also have raised forms that you say our leverage. We do have a land bank of that we made. We know that we can monetize at any point in time. That doesn't necessarily mean that we're going to monetize it and then buy stock or do other things with it.

So those are levers that are available to us. At the end of the day, we only spent less than $70 million for that's 0.1 of the term. So I don't know if I can -- that satisfies you, but the point is that option is never off the table for us, but it doesn't mean that we're focused on doing that exclusive to other opportunities available to us.

And that's helpful. I mean, I guess now that said that satisfy, I guess I'm just curious if you think it's worthwhile to sort of send a signal that you care about bringing leverage down? Or do you think that this level you're very comfortable with and you don't need to do that?

I think we're very comfortable with our leverage. Our leverage is elevated because of significant investment in the Chicago development effort. I think we've been in the market in the past that ultimately, as that project is completed, we expect to get all our money back and more. And so you're in a transitory period or a three year development project.

And then the denominator and numerator are not matched. But if you look at our Temp, we spent $70 million and within the year. We expect that to have a $50 million per annum return granted as a temporary, but feel that's a very high return on capital. But obviously, we had but the license and other things associated with it that will ultimately be used for the permitted. So we don't look at things as a point in time, but over a period of time that help.

That's crystal clear. Thanks for that.

And this does conclude the Q&A session. I'll now turn the program back to our speakers for any closing comments.

Okay. Thank you all for joining us, I think we should all just remember, we have an exceptionally robust core to our business and we're handling our development pipeline with care, right. We see a huge opportunity ahead, but we really want to deliver value for our stakeholders. I look forward to sharing much more of you very soon. So I'll speak to in the next quarter. Thank you all for joining.

This does conclude today's call. Thank you for your participation and you may now disconnect.