The paragraph is an introduction to Caesars Entertainment's 2024 Earnings Conference Call. The operator explains that all participants are in listen-only mode until the Q&A session and that the conference is being recorded. Brian Agnew, the Senior Vice President of Corporate Finance, Treasury, and Investor Relations, introduces the call, announcing the release of their third quarter 2024 financial results and mentioning two additional press releases regarding the sales of the World Series of Poker and the LINQ Promenade. He notes that these releases are available on their website. Agnew also highlights that forward-looking statements and non-GAAP financial measures might be discussed during the call and refers listeners to their website for details on financial reconciliations. He then hands over the call to Anthony Carano, the President, and COO.

In the third quarter, the company achieved same-store consolidated net revenues of $2.9 billion and adjusted EBITDA of $1 billion, driven by record non-gaming performance in Las Vegas and a strong Digital segment, despite challenges in the Regional segment. Las Vegas saw a slight dip in adjusted EBITDA but boasted record hotel and F&B cash revenue with high occupancy rates, maintaining steady EBITDAR margins. The Regional segment faced declines due to competitive pressures and construction disruptions, although the company celebrated significant progress with the $435 million renovation of Caesars New Orleans and anticipates opening a new facility in Danville, Virginia, in December. Looking ahead, the company maintains a positive outlook based on strong occupancy and ADR trends.

The paragraph discusses the financial performance and strategic updates of Caesars Digital. The company completed its elevated capital expenditure cycle with new openings in Danville and New Orleans, and is now focusing on benefiting from these investments. Eric Hession reports third-quarter net revenues of $303 million for Caesars Digital, representing a 41% year-over-year increase and resulting in a record adjusted EBITDA of $52 million. Over 12 months, the company generated $126 million in EBITDA. The iGaming segment showed strong growth with an 83% increase in net revenue, driven by higher volume and improved hold rates. The Caesars Palace app's revenue contributions are rising, and the Horseshoe Casino brand has launched in several states with further expansion plans. In the Sports Betting segment, revenue growth also accelerated due to an improved hold rate, driven by enhancements in the app, particularly in parlay and cash-out options. This led to a belief that a structural hold above 10% is achievable in the coming years.

The paragraph discusses the company's financial strategies and updates. It mentions a focus on improving retention in iCasino and sports through targeted marketing, with hopes for continued improvement into 2025. The company has expanded sports betting to 32 North American jurisdictions. Bret Yunker reports a $1.1 billion bond issuance to manage debt, a sale of the World Series of Poker brand for $500 million, and plans to reduce debt which should lead to significant savings. The 2025 budget for cash capital expenditures, excluding a joint venture in Danville, is set at $600 million. Tom Reeg adds that there were some one-time expenses related to lobbying and healthcare claims. Segment-wise, New Orleans expects year-over-year impairments due to disruptions, and Reno will face challenges from the absence of a major group from last year.

The paragraph discusses the strategic developments and challenges faced by a gaming enterprise. They experienced a difficult quarter due to competition impacting several regional properties, including Horseshoe Indianapolis, Tunica, and Chicago locations. However, the recent opening of Caesars New Orleans offers a promising opportunity for significant revenue due to favorable tax structures, and its reception has been positive. Additionally, a new property in Virginia, expected to open by the end of the year, is anticipated to enhance gaming positions significantly. The Gulf Coast and Florida properties were affected by storm-related weather impacts, but these are considered non-recurring. Looking towards 2025, the company is optimistic that the new ventures in New Orleans and Virginia will help counter some competitive pressures in the regional market.

The paragraph discusses the company's financial outlook for 2025 compared to recent quarters, particularly focusing on their operations in Las Vegas. The company experienced a $10 million decline in EBITDA in the third quarter, primarily due to table-hold issues, despite record non-gaming revenue and stable slot performance. Looking ahead, they are optimistic about the fourth quarter, with positive early results from the newly available Versailles Tower and no recurring union contract accruals. The impact of the F1 event contributed $17-$18 million more in EBITDA versus 2022, but expectations for 2023 are flat to slightly down, depending on high-end business performance. The company anticipates a slight year-over-year increase in cash room revenue for the fourth quarter, and they see ongoing strength in their Vegas operations. The first quarter of 2025 posed challenges due to below-average table-hold performance.

The paragraph discusses the financial outlook and business growth for a company. It expects to recoup some losses in the first quarter, with a flat to slightly positive trend for the rest of the year. The convention segment is projected to show stronger growth in 2024 and 2025 compared to previous years. Digital operations are performing well, with over 40% growth in aggregate and a significant 83% growth in iGaming. The company's growth is outpacing peers, particularly after integrating WynnBet customers into the Horseshoe brand without losing clientele. New launches in Pennsylvania and West Virginia are expected to bolster iCasino growth, following an impressive quarterly performance. While October's sporting outcomes have been suboptimal, a strong fourth quarter is anticipated, with expectations of continued growth into the next year.

The paragraph discusses the positive outlook for the company's digital business, predicting it will exceed the $500 million target due to strong results and trends in iGaming. It also details recent strategic moves, including the sale of the Promenade retail lease portfolio in Las Vegas and a $140 million share buyback in the third quarter. The company expects reduced capital expenditures next year and aims to prioritize debt reduction, having already reduced debt by 25% since acquiring Caesars. Although debt reduction is the main focus, the company will also consider further share repurchases, especially if their stock's free cash flow yield remains attractive. Some of the proceeds from the Promenade sale may be used for additional repurchases.

The paragraph discusses the company's ongoing plans for asset sales, noting that they are focusing on non-core assets with more complexity and lower probability of execution compared to past sales like World Series and Promenade. Looking ahead to 2025, the company expects to increase free cash flow due to factors such as refinancing, reduction in interest rates by the Fed, an unsecured note offering, lower lease step-up, and reduced capital expenditures. This financial improvement will allow them to continue reducing debt and responsibly buy back stock. The operator then opens the floor for questions, with Carlo Santarelli from Deutsche Bank asking about the company's digital side strategies, specifically their promotional investments and plans following the launch of a new brand in iCasino.

The paragraph discusses the sports and iCasino reinvestment strategies of the company, as explained by Eric Hession. On the sports side, the company is reinvesting at lower levels compared to the market average but maintains a stable market share. For the iCasino, the company is aligning its reinvestment strategy with market standards, leveraging its brand, app, database, and brick-and-mortar advantages to grow its business and market share. The higher hold in September positively impacted their quarterly reinvestment metrics. Looking forward, the discussion briefly shifts to the outlook for Las Vegas in 2025, with inquiry about metrics for the Group side.

In this discussion, Anthony Carano mentions that from a citywide perspective, nothing seems underappreciated, especially with the Group and Convention segment performing well and expected to drive higher revenues and EBITDA in 2025. Carlo Santarelli agrees and thanks him. Joe Greff from JPMorgan then asks Tom Reeg about his priorities for deploying excess free cash flow in 2025, mentioning recent asset sales, including the World Series of Poker and LINQ Promenade. Tom Reeg clarifies that they are working on other non-core asset sales which vary in complexity and timeline, with values between $275 million and $500 million. The conversation then shifts to Eric on the iCasino side, following the recent launch of Horseshoe.

Eric Hession and Tom Reeg discuss the early stages of launching a multi-brand digital platform for Caesars and the performance of the Caesars Palace online presence. They have converted Wynn customers successfully, contributing to the majority of the business, and are working to expand their marketing efforts as they roll out in three states. The average customer value is trending slightly higher than on the Caesars app, but it is too early for firm conclusions. Regarding the $500 million digital EBITDA goal, Reeg anticipates a roughly equal split between iGaming and Sports Betting, with iGaming states having a more significant impact than new Sports Betting states.

The paragraph discusses the challenges faced by a company in the iGaming and sports betting industry, as they entered the market later than their competitors and had to establish their brand and infrastructure. Despite these setbacks, they are optimistic about future state rollouts of iCasino operations. Joe Greff and Brandt Montour posed questions during a call, prompting Tom Reeg to comment on October's sports betting outcomes. He noted that October was challenging due to unfavorable sports results, particularly from parlay bets, impacting their performance. Despite a difficult month, Reeg maintains that these fluctuations are typical of the industry and do not affect the company's long-term strategic outlook.

In this segment of the article, Brandt Montour inquires about the factors contributing to the year-over-year growth in iGaming, specifically asking if there are structural changes influencing this or if fluctuations are expected to stabilize. Tom Reeg attributes the increase to the introduction of Caesars Palace online, which emphasized slots over tables, resulting in less volatility and more predictability in the business. Dan Politzer then asks about a cash inflow from Pompano and its consistency going forward. Tom Reeg confirms that the development with Cordish involves significant land sales, leading to cash distributions within the partnership and indicates agreement on the estimated amount distributed during the second quarter.

The paragraph discusses future financial expectations and strategic directions for a project, including anticipated distributions and free cash flow aspects for 2025. Bret Yunker outlines the rent, cash CapEx, and cash interest expenses projections, while emphasizing that cash taxes will be a percentage of the free cash flow. Dan Politzer inquires about the performance of the Danville property, noting its high operational level, particularly in gaming positions. Tom Reeg responds, mentioning that expanding the property will likely reduce margins compared to temporary properties, yet it will increase revenue and expenses due to the growth in gaming positions.

The paragraph is from an earnings call where Tom Reeg discusses the state of asset sales for his company. A few years ago, there was interest in selling an asset along the strip, but it was halted due to an unfavorable rate environment. Recently, interest in these assets has increased due to a better rate environment. However, Tom clarifies that, while there is more interest and inquiries about their assets, there are currently no active asset sale processes for their casinos. They remain open to transacting if it makes economic sense.

In a conversation with David Katz from Jefferies, Tom Reeg and Anthony Carano discuss the transition from a temporary facility to a new permanent facility in Danville. Reeg explains that the transition should be seamless, with the temporary facility operating until the permanent one opens, so there's no significant disruption in operations. He suggests modeling the temporary facility's operation until mid-December, with a brief overlap with the new facility. Carano mentions the excitement about the new permanent facility, highlighting its potential to attract a new segment of clientele with its hotel and restaurants, appealing beyond those who visit the temporary facility.

The paragraph discusses the stability of the Vegas market and ongoing developments in digital functionalities by a business. Tom Reeg mentions that despite rapid changes on the investment side, the on-ground business remains stable with high occupancy rates and growth in group business. They anticipate a good setup for the first quarter, aided by the online presence of Versailles. Eric Hession updates on the progress of a shared wallet for digital functionality, which is being rolled out in nine states with plans to expand further by the middle of next year. Currently, the shared wallet is not yet available in Nevada and some other key states.

The paragraph discusses the progress and challenges in improving a company's parlay mix in the current quarter compared to the previous year. The parlay mix reached an all-time high, positively impacting the hold percentage, indicating successful progress. However, there are still gaps, particularly in live same-game parlay offerings in non-main markets, where the company lags behind competitors. Despite these challenges, the company has made significant progress over the past year, enabling them to reinvest less while retaining customers. In response to Shaun Kelley's question about the regional gaming outlook, Tom Reeg acknowledges that headwinds still outweigh tailwinds, predicting a slightly down or flat year for regional gaming next year, especially with new competition like Poarch Creek's product launching on November 11.

The paragraph discusses the market strategy of a company, likely Caesars, in response to competition in regional markets like Indiana, Chicago, Mississippi, and Iowa. The company anticipates 2025 to potentially be a growth year, driven by their ability to recapture customers in these competitive areas. There is also a focus on sports betting and iGaming expansion, with the company expressing a desire to see them legalized across all U.S. jurisdictions in a way that benefits both operators and states. Additionally, there is mention of watching the legal developments in Missouri.

The paragraph discusses the ongoing efforts in legalizing and licensing operators in the gaming industry, emphasizing their economic contributions through investments, employment, and taxes. There is a focus on expanding online sports betting (OSB) and iGaming across more regions. Eric Hession notes a shift in iCasino customers with the introduction of the Caesars Palace Online app, attracting more slot players and increasing crossover with brick-and-mortar operations. This integration leads to a higher share of customer spending. A question is posed about previous financial projections, seeking to connect current discussions on EBITDA growth.

In the paragraph, Tom Reeg discusses the company's financial performance, noting consistent EBITDA of around $1 billion, and describes their strategic path toward reaching $4 to $5 billion in enterprise value. This involves minimal current contributions from their digital operations, although digital is showing positive inflections. He points out the potential for significant growth from investments in regional areas and Las Vegas, projecting hundreds of millions in additional EBITDA over the next few years. Reeg reflects on the major efforts involved in integrating the Caesars acquisition, establishing a digital business, and completing substantial projects, with the company now nearing completion on these fronts. He expresses optimism about future EBITDA and free cash flow improvements. Following this, another speaker, John DeCree, asks about the potential for legalization of online sports betting and iGaming in Florida and the possibility of partnering with the Tribe there given a recent lawsuit settlement.

The paragraph is a discussion among Tom Reeg, John DeCree, Bret Yunker, and Chad Beynon regarding market entry prospects in Florida, capital expenditure (CapEx) expectations, and performance in the iGaming business. Tom Reeg indicates skepticism about entering the Florida market soon. Bret Yunker provides guidance on maintenance CapEx, projecting $400 million for maintenance, and $200 to $250 million for growth CapEx. Chad Beynon asks Eric Hession about the iGaming business's performance, noting a higher than expected EBITDA due to better revenue growth and questions how the business is expected to perform over the next four to eight quarters. Eric Hession suggests maintaining a 50% flow-through target under normal conditions.

The paragraph discusses expectations for revenue flow-through rate at a company, emphasizing that a 50% target is reasonable despite fluctuations due to various factors like record iCasino growth and strong sports growth. The expectation is that revenue flow-through will continue around this level into the future, particularly as marketing expenditures roll off by 2026. Additionally, in the regional segment, while some customers have been financially challenged, there are no alarming trends. The competitive impact of new properties and market changes is noted, with recent positive developments in New Orleans. The conversation involves Chad Beynon asking questions and Tom Reeg responding.

The paragraph discusses the growth strategies and performance in the Online and Regional segments of a business. Eric Hession explains that the Online Casino segment is experiencing rapid user and activity growth, along with an increase in hold percentage, indicating strong performance. In contrast, the Sports segment shows flat volumes due to a decrease in high-end wagers and unprofitable customer retention, but an improved hold percentage is increasing the value per customer. Jordan Bender inquires about underperformance in the Regional segment's hotel revenue, specifically attributing it to New Orleans, and Tom Reeg confirms this and expresses an expectation to recover the revenue next year.

In the article paragraph, Tom Reeg discusses ongoing and planned renovation projects within their casino portfolio. The most significant project is a multiyear $160 million renovation at Harveys Lake Tahoe, which includes updates to the casino floor, room tower, and suites. They emphasize the unique location of this property on Lake Tahoe as a competitive advantage. Additionally, projects at Caesars and Flamingo in Las Vegas include new restaurant openings and redesigned high-limit gaming areas. Despite strong slot handle performance, table game drop in Las Vegas was softer than expected.

In the paragraph, Tom Reeg addresses a question regarding any changes in player mix or betting behavior for the quarter. He mentions that the results were influenced by a few large players who adjusted their trip schedules compared to the previous year, leading to different outcomes. Tom Reeg then concludes the call, wishing everyone happy holidays and announcing that the next call will be in February.

This summary was generated with AI and may contain some inaccuracies.