The paragraph is an introduction to Caesars Entertainment's 2024 Fourth Quarter and Full Year Earnings Conference Call. The operator informs participants that the call is in a listen-only mode with a subsequent Q&A session. Brian Agnew, Senior Vice President of Corporate Finance, Treasury, and Investor Relations, welcomes listeners and mentions the release of their financial results press release, available on their website. Joining the call are key executives, including the CEO, CFO, and Presidents of Caesars Sports and Online Gaming. It is noted that forward-looking statements and non-GAAP financial measures may be discussed, with additional information available on their website. The call is then handed over to Anthony Carano, the President and COO.

In the fourth quarter, Caesars experienced improved regional performance with the opening of Caesars New Orleans in October and Caesars Virginia in December. In Las Vegas, the company maintained flat year-over-year results despite challenging comparisons with the previous year's F1 race. Excluding digital segment impacts in October and December, fourth-quarter consolidated EBITDA would have been flat. For 2024, Caesars reported $11.2 billion in net revenues and $3.7 billion in EBITDA, with a 33.2% EBITDA margin. In Las Vegas, same-store net revenues and adjusted EBITDA decreased slightly but met expectations, with a 96% occupancy rate. Regional segment revenues and EBITDA declined modestly, with improvements seen due to the new facilities in New Orleans and Virginia. Overall, the company benefited from recent investments, increased gaming revenues, and strong room performance in Las Vegas.

The company is looking forward to a full year of results from New Orleans and Danville in 2025 after completing a significant capital investment cycle that began with a merger in July 2020. These investments are expected to yield significant returns in 2025 and beyond. The company predicts a substantial increase in free cash flow in 2025 and 2026, supported by improvements in their property portfolio and strength in both physical locations and Caesars Digital. Eric Hession elaborates that 2024 saw record net revenue, EBITDA, and cash flow from the digital segment, with a 20% year-over-year increase in net revenue. iGaming performed particularly well, achieving 65% net revenue growth in Q4, bolstered by enhanced offerings in their online apps.

In the paragraph, the company announced the launch of a branded online Caesars Casino Live dealer studio in Pennsylvania, with plans to expand to New Jersey and Michigan. They formed a partnership with Bragg Gaming to develop exclusive slot and table content. Sports betting revenue declined due to customer-friendly outcomes, but the company saw record parlay, SGP, and cash-out percentages. They aim for a 10% hold over time and plan to implement a proprietary player account management system by 2025 to enhance customer experience. Financially, they used proceeds from asset sales to repay $500 million in debt and repurchase stock. They refinanced debt to lower interest expenses and extended maturity until 2027.

The paragraph provides a financial update on the company's performance. It highlights that in the fourth quarter, room and F&B revenues in Las Vegas were slightly down, but gaming indicators showed growth. The Regional segment faced competitive pressures, but its performance was better than expected, with new properties exceeding expectations. The digital division experienced significant growth, with a 64% increase in iCasino revenue compared to the previous year. Overall, there is cautious optimism about the company's performance moving forward.

The paragraph discusses a financial update, noting favorable performance despite an unfavorable fourth quarter in sports outcomes. Expectations for 2025 are for flat to slightly up EBITDA in the regional market, with current first-quarter earnings matching the previous year, hindered slightly by a leap year. There's optimism about regional improvements, with increased investment in competitive markets like Iowa and Indianapolis. Virginia outperformed expectations, doubling revenue alongside capacity growth, and maintaining a strong EBITDA margin. However, New Orleans faced challenges following a terrorist event that led to a major convention cancellation, despite having had a successful Super Bowl and good fourth quarter.

The paragraph discusses recent performance and future expectations for properties in New Orleans and Las Vegas. It highlights significant events like measurable snow in New Orleans and hosting the Taylor Swift show and Super Bowl shortly after opening, which have positively impacted the property, despite some challenges like weather and other disruptions. Looking ahead, there's optimism for 2025, especially as competitive pressures decrease and investments in New Orleans and Virginia continue to yield growth. In Las Vegas, despite not having the Super Bowl this year and lower-than-desired performance at the tables, a return to normal operations is expected to offset revenue losses. Overall, the outlook is positive, especially for 2025 and 2026.

The paragraph discusses the positive outlook for Caesar's events and digital performance in the coming years. It highlights the significant growth expected in 2026 due to the return of the State Farm Conference in Las Vegas, which has been successful in the past. In the digital sector, iGaming has seen a strong start, with notable increases in net revenue, positioning the company to achieve the EBITDA target of $500 million by the end of 2025. The paragraph also mentions reduced capital expenses and the company's focus on using its free cash flow primarily for debt reduction, with some stock buybacks starting in 2024. Overall, the company anticipates strong financial performance and achieving its long-term targets.

The paragraph is from a Q&A session during an earnings call. Carlo Santarelli, an analyst, questions the executives (Tom, Anthony, and Brett) about their expense projections for Las Vegas and regional operations in 2025. Thomas Reeg responds by crediting the team for efficiently managing a $50 million labor cost increase in Las Vegas, and acknowledges a smaller increase expected for 2025. They also mention the addition of new food and beverage outlets as a factor for increased expenses. Anthony Carano highlights the team's success in managing costs while expanding customer offerings. Carlo also asks about the valuation of their hybrid owned and leased properties compared to peers.

In the paragraph, Thomas Reeg discusses the challenges and opportunities related to the valuation and monetization of their company's digital segment. He acknowledges that while the digital business is valuable, it is currently not fully reflected in the company's stock valuation. Reeg emphasizes the importance of owning their entire tech stack and mentions plans to consider strategic options to allow investors to invest in the digital segment as a standalone entity. This approach aims to optimize shareholder value, particularly if market conditions remain favorable and the digital business continues to grow. Carlo Santarelli from Deutsche Bank finds this helpful, and the operator prepares for the next question from David Katz of Jefferies.

In the paragraph, Thomas Reeg discusses the company's strategic approach to stock buybacks and debt reduction following a merger. The priority is to reduce lease-adjusted leverage to four times, and the company's focus is on using the majority of anticipated free cash flow in 2025 for debt repayment rather than leveraging activities like stock buybacks. Reeg also mentions that all company assets are considered available for sale, highlighting ongoing interest in non-core, non-operating assets. Although there have been more inquiries about these assets, no imminent sales are expected. The company is open to exploring such opportunities but emphasizes a disciplined approach to asset sales and acquisitions.

The paragraph is a transcript from a discussion about the business outlook in Las Vegas for the company associated with Thomas Reeg and Anthony Carano. Thomas Reeg highlights that future growth in Las Vegas will largely depend on increased room yield driven by growing group business, replacing lower value business. He mentions new projects and amenities, including recent openings like Gordon Ramsay's Burger and Pinky's at Flamingo, as well as other food and beverage offerings, contributing to the positive expectations for 2025 and 2026. Anthony Carano adds that they have opened a new high limit slot area and pit at Caesar's Palace, which has been well-received by customers. Brandt Montour acknowledges these points and prepares to ask a follow-up question directed at Eric.

The paragraph discusses the impressive growth of iGaming, focusing on factors driving this expansion. Eric Hession explains that 30% to 35% of their iCasino business originates from the sportsbook side, while the rest is from the Caesars Palace online app and the newly introduced Horseshoe app. Most growth is attributed to these apps, which previously did not exist. Customers acquired through these channels predominantly come from affiliates or advertising platforms like Facebook and Google, rather than just Caesar's Rewards programs. Customers engaging in both brick-and-mortar and online services are deemed more valuable, promoting long-term loyalty and consolidated spending. Key performance indicators include customer acquisition numbers, acquisition costs, daily active users, and overall volume, with an improving hold percentage expected to continue.

The paragraph discusses the impact of driving up business volume on gaming revenue and emphasizes disciplined reinvestment in sports book and casino operations to maintain or reduce costs and achieve a targeted flow-through of around 50%. Brandt Montour and Dan Politzer participate in the discussion, and Politzer asks about the regulatory landscape for taxes on digital and brick-and-mortar gaming, noting its increased focus this year. Thomas Reeg suggests this focus is part of a news cycle linked to state budget conditions. He mentions mixed regulatory actions, such as increased sports betting taxes and expanded gambling options, while predicting that states might legalize iCasino over the next three to five years to increase revenue.

The paragraph discusses Maryland's intention to increase tax revenue from gaming through additional taxes, potentially leading to more iCasino jurisdictions, which the company is optimistic about given its growth in that sector. Daniel Politzer inquires about the iGaming sector's recent growth, noting a significant increase in performance, possibly up to 4% in the fourth quarter. Eric Hession clarifies that growth is around 3.5 to 3.6% and highlights the potential to achieve higher growth. The company is focused on improving its product offerings and collaborating with vendors to enhance its gaming portfolio, including new products from their studio with higher hold potential.

In the paragraph, Steven Wieczynski asks Thomas Reeg about his changed outlook for regional gaming, which has shifted from expecting slightly down to flat performance to a flat to slightly up projection. Reeg explains that his revised perspective is based on having more information now than he did four months ago. He notes improved responses from their properties to competition, better efforts in key markets, and positive returns from locations in New Orleans and Virginia. Additionally, Reeg mentions that poor weather impacted the previous year's first quarter, so better weather this year could bolster regional performance.

In the paragraph, the speaker discusses the business's performance, noting that despite past weather challenges, improvement has been observed, particularly in the first quarter of this year. They mention progress in markets like Indianapolis and Consol Bluff after trial periods, suggesting potential for similar markets. The speaker's assumptions in October were overly conservative. When asked about regional stability and spending patterns, especially among lower-tier rated players, they note stability, even slight improvement, compared to post-stimulus check periods. Overall, they observe a stable and solid customer base in both regional markets and Las Vegas, although they have limited visibility beyond 90 days in Vegas.

The discussion involves a conversation between Steven Wieczynski, Barry Jonas, Thomas Reeg, and Anthony Carano on a call. They touched on a few topics, with Thomas Reeg discussing the impact of New Jersey's recent state tax increase on their $500 million target, expressing confidence in reaching their goals over the long term despite potential short-term delays. Reeg mentioned that reaching the target is not the end and expects further growth. Barry Jonas also inquired about the performance of the Versailles Tower in Vegas, with Anthony Carano noting that it continues to improve and mentioning potential high ROI investment opportunities in Vegas.

The paragraph discusses various improvements and investments in hotel properties, specifically Caesars Palace, Flamingo, and new attractions like a pool at Flamingo. These enhancements have led to significant increases in Cash ADR and room product quality. The discussion then shifts to a question about a double-digit decline in sports betting handle year-over-year. Eric Hession explains that the decline is due to changes in marketing strategies. Last year, their new marketing tool allowed for more segmented marketing, reducing investments in unprofitable lower-end segments and positively impacting profitability, though this led to a decrease in volume for that group. Additionally, there are changes in the very high-end customer segment, particularly in over-the-counter retail books.

In the paragraph, several individuals discuss the growth and changes in the slot machine business at Caesars properties, particularly in Las Vegas. They note an increase in high-limit slot players and attribute the growth to investments like the new Caesars Palace slot room and strong event curation by the staff. Additionally, they have made improvements in slot layout and increased the number of machines without negatively impacting revenue per machine. They believe there are still opportunities for further growth, especially at Caesars Palace, and consider whether these trends apply beyond Las Vegas to regional markets as well.

Thomas Reeg discusses plans to increase spending on slot capital in 2025 to update outdated gaming floors, which is expected to yield returns in gaming revenue. Stephen Grambling from Morgan Stanley asks about achieving a $500 million goal, specifically regarding sports betting and monetization. Reeg indicates that sports betting volumes should grow in the latter half of the year, especially in iGaming. However, he seems unclear on Grambling's second question regarding how to think about incremental costs in comparison to public peers.

The paragraph involves a discussion about the potential separation of a digital business from a larger entity, including considerations of modest dissynergies and the impact on business valuation due to its reliance on centralized functions. Thomas Reeg mentions the importance of documenting interactions, particularly the access to Caesars Rewards, as a key advantage. The discussion also includes questions from analysts about New York sports betting numbers, improvements in hold rates, and possible changes to player reinvestment strategies, with Eric Hession involved in the response.

The paragraph discusses the closing of the performance gap in their business, particularly in New York, due to various factors such as increased parlay bets, higher percentages of single-game parlays (SGPs), and cash outs. They believe that while their competitors still have higher percentages, there's potential to further close the gap. When asked about the impact of higher hold rates and key performance indicators (KPIs) on reinvestment strategy, Eric Hession indicates that the reinvestment strategy, as a percentage of Gross Gaming Revenue (GGR), has declined and is not expected to change broadly. The strategy may vary by state or segment, but overall, reinvestment levels are determined by a test-and-control approach rather than competitive dynamics.

The paragraph discusses the company's strategy of focusing on and investing in their most valuable players while reducing spending on less valuable ones. They plan to incentivize top players without significantly increasing promotional spending. An unidentified analyst inquires about international visitation trends in Vegas for 2025, considering a stronger dollar and political factors. Thomas Reeg responds that political influences don't significantly affect their guests, who are primarily looking to enjoy their time. Another analyst, Jordan Bender, asks about tax changes and whether the strategies to offset tax increases are the same for both IDM and sports betting businesses. Thomas Reeg indicates that the approach is generally the same.

The paragraph discusses financial considerations and strategy adjustments in a business context. Jordan Bender asks whether changes in the online customer base affect flow-through assumptions, and Eric Hession responds that it does not, as these changes occur above the net revenue line. Thomas Reeg explains that the company is replacing low-value customers with those more likely to engage in higher-risk activities like parlays, improving structural hold. Daniel Guglielmo questions about metrics for success in competitive markets. Reeg explains that they evaluate relative property strength compared to competitors, using Council Bluffs as an example where their properties hold an advantage over less developed tribal casinos in Omaha.

The paragraph discusses a strategic approach to market competition and investment decisions. The speaker describes being aggressive in reclaiming market share, particularly in areas like Indianapolis where they have a superior product compared to nearby competitors, such as Fort Wayne. They are evaluating investments on a county-by-county basis to determine their effectiveness in gaining market traction. Challenges include dealing with newer competitive properties in advantageous locations, which might affect older properties. Despite these challenges, there is confidence in achieving financial goals, with early results indicating a positive outlook for a $25 million return. Additionally, a significant project in Tahoe is under construction, highlighting ongoing investments in growth and maintenance.

The first phase of the Tahoe project involves renovating Harvey's tower, which is located near the lake. The construction work is underway on public areas such as the casino floor, valet, lobby, and one of the hotel towers, aiming for completion by mid- to late June in time for the summer season. There will be a break during summer, before resuming work on the second half of the casino, convention space, and other areas. The goal is to transform the property into a new, appealing destination for season Rewards members. The total project cost is around $160 million, with expenses spread over 2024, 2025, and 2026. The conference call ends with Thomas Reeg expressing appreciation and a promise to provide updates after the first quarter.

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