Bally's Corp Q4 FY2023 Earnings Call

Good afternoon, and thank you for joining us on today's call. The earnings release and presentation that accompany 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 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 non-recurrent 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. We're pleased to share our thoughts on Bally's solid fourth quarter and 2023 operating performance, as well as a strong forward growth prospect. 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 a 7% revenue increase and maintained strong adjusted EBITDA margins as we successfully offset ramp-up costs in Chicago and the wind-down of Tropicana. International Interactive continued its solid performance, driven once again by a leading market presence in the UK. The North America Interactive segment gained additional iGaming market share while the rollout of Bally Bet OSB progressed. 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 roadmap of unparalleled development opportunities. George and Marcus will follow and dive deeper into the specifics of our quarterly performance. Regarding our vision, there are some who believe that Bally's diversity makes for a complex story. However, we view our core business through a lens of high confidence, seeing it as a source of opportunity and strength. This distinguishes us within the industry and allows us to successfully navigate through various macro environments. For our equity and credit stakeholders, Bally's operations across Casinos & Resorts, International Interactive and the North America Interactive offers unique and unparalleled long-term growth potential. Coupled with our consistently strong adjusted EBITDA performance and a thoughtful staged development pipeline, we're crafting a bright future and setting a new industry standard. As adjusted EBITDA is a crucial measure for assessing our financial health, the strength of our adjusted EBITDA generation enables us to reinvest in our properties and development pipeline. Turning to our development pipeline, let's first touch on Chicago. As of the beginning of 2024, our temporary facility is fully operational with a full quarter of financial performance behind it. The property has begun the operating ramp George laid out during our last earnings call, which he'll update you on in a few moments. As for the permanent, in line with previous timelines we shared, we remain set to access the Chicago Tribune site late this summer, allowing 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 timeline, there is just over 1.1 billion remaining hard construction costs pursuant to 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 land lease improvement facility, and expect to share updates on this important component soon. In Las Vegas, the formal closure of the Tropicana on April 2nd will pave the way for the demolition of the casino and hotel over the coming months with the support of our financing partner, GLPI. Following demolition, site prep, and approval of formal 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. Finally, in New York, we're in the early stages of what will be a lengthy and multifaceted journey towards building a world-class, super-regional casino and entertainment complex in the Bronx at Bally's Golf Links Ferry Point. Securing the license is the first step. And should we achieve this milestone, we believe we'll have a highly attractive and competitive proposal that will allow for numerous pathways to actualize our vision. Thinking about our development timeline in this way makes it clear that Bally's has a well-developed, staggered spending timeline that extends approximately 5 to 10 years. This approach will maximize the benefits derived from the cash flow generated from our core operations, while accommodating potential market and financial position shifts. Moreover, this unmatched development pipeline offers opportunities in two of the largest U.S. cities and the country's most distinguished gaming destination. Finally, before I turn the call to George, I want to touch on our Interactive segments. Within International Interactive, our UK operations continue to excel in the fourth quarter, making our strongest adjusted EBITDA performance to date. This success is attributed to our improved 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 and 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 revenue of 2023, benefiting from our solid New Jersey and Pennsylvania iGaming results, along with the rollout of Bally Bet 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 to our technology partner, Kambi and White Hat Gaming. We have launched web-based versions of our apps recently and eagerly await the launch of iGaming in our home states of Rhode Island later in the first quarter where Bally will be the sole provider. For modeling purposes, our 2023 fourth quarter NAI performance should not be directly projected across the entirety of 2024. We'll continue to invest and broaden our reach, resulting in an anticipated adjusted EBITDA loss of approximately 30 million for 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 our commitment is underscored by a conviction that OSB is a foundational step towards successful iGaming futures. I'll now pass the discussion to George for further details on our operational performance over the last quarter.

Thanks, Robeson. I'll begin my commentary with insights from our Casinos & Resorts segment before diving into the latest developments of the Chicago Temporary facility and our continued efforts to ramp up its operations. C&R exhibited robust performance across most of our portfolio, with revenues up 7% for the fourth quarter and up 11% for the year. Adjusted EBITDA 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 phase development in mid-September 2023. Quad Cities is also performing well and we're quite pleased with the full year of performance in Atlantic City. For the year, AC outperformed expectations, despite a hyper-competitive environment and has generated high single-digit millions of adjusted EBITDA, our first full year of profit since acquiring the property. We outperformed market-wide GDR comparisons on the same store basis in 7 of our 10 markets. The metric we closely monitor as it reflects the underlying strength of our properties and our consistent ability to capture market share. Operationally, we're proactive, assessing every aspect of our properties striving for cost reductions and enhanced efficiencies. It's critical to remember that our property's 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 position us well to drive ongoing operating improvements throughout the portfolio, as we've demonstrated by our operating results in the last several quarters. Let's shift our focus to Chicago. Since opening the Chicago Temp facility in September, our dedicated property team has made commendable efforts to improve operations in 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-up 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 and are responding to demand for shuttle bus services in 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 a new high limit and VIP lounge and upgrading our hospitality offerings, including partnerships with local dining establishments and outlets to integrate Bally's transparency, thereby enriching our guest rewards beyond mere free play. These enhancements are evident in the monthly numbers released by the IGP. We hit a record exceeding 10 million dollars in GDR in January or 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 our competitors who saw declines versus December. We expect this to continue to ramp each month as we move into the second quarter before we begin hitting normalized revenue production rates and benefit from a welcome respite from 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 project. We are here to stay. Second, we received approval from the city for a revised construction plan due to the unexpected discovery of water pipes beneath the site. A revised plan includes the construction of approximately 100 hotel rooms above the casino in the initial phase with an additional 400 rooms and relocated hotel tower planned for a subsequent phase. This adjustment has not impacted our development timeline and remains 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 several weeks. Furthermore, please remember that the Tropicana will close on April 2nd and will have an impact on revenues and contributions beginning in the second quarter. With that, now I'll let you turn the call over to Marcus.

Thanks, George. As Robeson and 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 Casino & 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 dollars, a 7% year-on-year increase, with 94.7 million dollars of adjusted EBITDA, including a full quarter's contribution from the Chicago Temp. Excluding Atlantic City, Tropicana and Chicago, EBITDA margins were a solid 34%. Including these properties, EBITDA margins were 28%. For the full year, Casino & Resorts revenues increased by 11% and adjusted EBITDA grew by 8%, driven by strength in Rhode Island, Kansas City, Black Hawk, and Quad Cities. For the fourth quarter, International Interactive continued its impressive performance, with revenues increasing 2.1% year-on-year to 236 million dollars. The revenue strength was led by our leading U.K. business, where revenues rose 10% year-on-year on a U.S. dollar basis and 5% in constant currency. International Interactive generated record-adjusted EBITDA of 93.2 million dollars 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 EBITDA grew by 6.8%. For the fourth quarter, North America Interactive generated revenue of 33.4 million dollars, a 27% year-over-year increase. The segment generated an adjusted EBITDA loss of 9.8 million dollars as we continued the rollout of Bally Bet, which finished the year live in seven states. We expect full-year adjusted EBITDA 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 will be consolidating our domestic PAM onto the White Hat platform for iGaming and OSB once Rhode Island launches. This will undoubtedly also lead to a better user experience. With that in mind, we are estimating a North America Interactive adjusted EBITDA loss of 30 million dollars for the full year of 2024. The biggest potential swing factors in terms of pace to profitability are the highly anticipated launch of iGaming in Rhode Island, which remains on schedule for March 1st, and any additional states that may legalize iGaming in 2024 or 2025. At the end of the quarter, shares outstanding were approximately 40 million, reflecting the repurchase of 5.8 million Bally's shares on the open market for total consideration of 68.6 million dollars. 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 dollars of cash on our balance sheet and 3.56 billion dollars of net debt. Turning to guidance, Bally's expects to generate 2024 revenue in the range of 2.5 to 2.7 billion dollars. The company also expects to generate 2024 adjusted EBITDA in the range of 655 million to 695 million dollars. We continue to keep a close eye on consumer spending patterns and general economic conditions for impacts to our casino and resource customers. Also, while January was impacted by severe weather across most of the U.S., we have seen an improvement in trends over the past several weeks. Our guidance also assumes the closure of Tropicana on April 2nd, a strong Chicago run rate, EBITDA trajectory in the second half of 2024, continued growth in International Interactive, and approximately 30 million dollars of adjusted EBITDA losses in North America Interactive. We expect a straight line GAAP rent expense of 126 million dollars and cash rent of 121 million dollars. Our 2024 capital expenditure guidance is 165 million dollars in aggregate. Not 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-up of our Chicago Temp, the successful launch of iGaming in 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.

Yes. I have a few questions. I want to begin with Chicago. It seems that the temporary location's performance is improving month-over-month. I'm interested in understanding the type of customer you're seeing there and how that customer base might transition to the permanent casino once it's completed.

Hi, Barry. It's George. I'll take that question. So, obviously, we're increasing our database. We started with zero, and within six months, we're up to 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 for a couple of months now. What we're seeing right now is a demographic that's kind of slightly skewed towards a younger demographic, primarily driven by table games. You've probably seen that we were already ranked second in the state from a table games perspective. Still got a little 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 with 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 shuttle busing in the vicinity, and we're starting to see growth in that as well. So, I think the goal really is to build this database and absolutely transfer 100% of that to the permanent facility. We're really happy about the growth short-term. And week-over-week, we're continuing to see all the metrics that we measure success with increasing. So, we've gone from 6.8 million in September 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, great. And then just shifting to Trop, we haven't heard a lot just yet about what the ACE Stadium will ultimately look like. Wondering if you have any better visibility and if you could talk about some of those scenarios you're considering for Tropicana? Thank you.

Yeah, I'll take that again, Barry. So, listen, we announced closure just on the 2nd. We announced closure just towards the end of January that we're closing on April 2nd. Obviously, we did that in order to put us in a position to deliver a construction-ready site to the ACE, which is within our contractual arrangement with them. And their goal is to open for the season 2028. The ACE are still finalizing their stadium plans, 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. I wanted to ask about the 2024 guidance for Casinos & Resorts. Can you maybe quantify the weather impact in January? Or share any additional underlying assumptions, say what base same-store EBITDA growth you're expecting, if that's sort of flattish. But any additional color there I think would be helpful?

Sure. So, let me take a little bit of a step back. We continue to see growth throughout 2023 on our higher-tier customer across our portfolio. But we did, like everyone else, experience 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. Then, of course, we ran into the weather, which is really what your question is. Has that impacted us? It's like you've seen the impact in most of the regional operators. Las Vegas really was not impacted, obviously. But to quantify it, it was probably about a 20% impact on us. You'll probably see that translated into the top-line revenue numbers. But obviously, we were able to mitigate that at the EBITDA line. But as a follow-on, we're seeing weather that's kind of more back to normal weather patterns in February. And right away, we bounce back, and we feel that we're back to normal 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 meet.

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

Hi, great afternoon, everyone. Thanks for taking our questions. Maybe starting off here on the international interactive business, Robeson, can you just update us with the latest with respect to the U.K. regulatory overhaul? What are you hearing with respect to some of the more impactful categories of proposed changes, whether that's the affordability checks, the state limits, what have you? And then in the past, you talked to or guided a low single-digit top-line impact at the worst. Have your views on that changed at all, since more parameters are clarified? Thanks.

Thanks, Jeff. Regarding the white paper, we are collaborating closely with the Gambling Commission and DCMS. The progress is slow, but I feel confident in our discussions aimed at protecting consumers, which is important to me. We have been adaptable in our operations, so I’m not worried about the regulatory changes. I believe they will create a better market, even though larger operators may face some displacement, smaller operators will be impacted more significantly, allowing us to gain market share. You may have seen recent headlines discussing online slot stake limits. The reports suggest that players under 25 will have a £2 stake limit, while those over 25 will have a £5 limit. My gut feeling is this will be implemented between July and September. Overall, this will lead to more sustainable gameplay and longevity for our business. Our model is resilient during recessions. Looking at our performance in the U.K., I feel very positive. Additionally, we will be launching sports betting in the U.K. and investing further in our Bally brand. We are the largest iGaming operator in the U.K. without sports, which will help with customer acquisition. The same strategies apply in North America. I am optimistic about the U.K. market.

Okay, great. That's really helpful. Thank you for that. And then 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 improvement in underlying consumer trends? Any additional colour you can offer would be helpful. Thanks.

Yes, so we're B2B in Asia and what we're seeing is that the market sentiment from players engaging with the product, it's building back. So there's more new customers coming into the funnel and they're still loving our product and engaging with it. We've added extra types of content which has appealed to different audiences. Yes, so it feels like Asia is stable, it 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, the U.K. was really kind of holding that thing up. I'm 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 dollars EBITDA 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 projecting toward that. Just a moment of clarity and a couple of things as it relates to Chicago. The 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 are overcoming in that. And so to answer your question in short, yes, that contemplates hitting our run rate that we've shared ending third quarter, that still holds true today.

Good afternoon. I want to touch on Barry's question and the C&R guidance. Presumably, Trop 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 are the major hits and then Q2 through Q4 should be more stable? And then are there any run rate losses implied with Trop being closed?

Yeah, so with Trop being closed, that definitely is incorporated in our model and what we've shared with you for guidance. Weather definitely on the first half of the year is going to impact that guidance as well. But one thing, and George kind of teased this a little bit we're seeing and focusing on the top end of our database and ensuring that that stickiness stays in place. We are keeping a cautious eye on the lower ends of our database and 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 our more competitive markets.

Great. And then switching to the 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've said in our marketing approach. We have got a great partnership with both Kambi and White Hat, which has enabled us to manage the appropriate investment costs across all of these states. We do view sports as 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.

Good afternoon. Thanks for taking my question. Robeson, I wanted to return to the international interactive segment. Margins in the quarter, 39%, certainly higher than I think what you had kind of talked 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? Thanks.

So touching on the fourth quarter, I'd view that as 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 there's some room in that to test and if you're not testing, you can never actually always find stable growth. Yeah, our margins should be holding exactly there. 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, too. The tool in our locker that we haven't unlocked over the past few years is looking at wider market expansion outside of North America Interactive. 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 dollars 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 dollars left on the current program. Do you have the availability to be opportunistic in the market if shares remain depressed?

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

Hey, how are you guys? This is Jonnathan on for Lance. I want to touch on international. Any insight into the state of the U.K. consumer so far in 2024?

Hi, Jonnathan, Robeson here. With respect to U.K. consumer, we're seeing very stable spending patterns from our players. We don't have very many big players, right? So it's a 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 call it content mix and everything else to ensure that we can manage the returns from our investments there. So we're not seeing a slowdown. It was definitely the usual sort of January, post-Christmas pause but we understood that 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 U.K.

Great. In terms of CapEx, you called 165 million dollars. Can we just get the split of maintenance versus growth?

Yeah, about think of it this way, there's about probably 65 million to 70 million dollars 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 dollars capital that will go into the properties, but probably will not see the ROI on that until 2025. So we'll activate and develop this year, bringing online for ’25. And then a significant portion for continued development and investment in our development efforts for interactives, that includes both North America and International Interactive. And then a very, very small portion for some enabling technology for centralization and integration efforts across the enterprise.

Understood. Thanks. And you also called out demolition costs, that's not included in CapEx and just want to know, what is that figure like? Is it substantial or is it somewhat insignificant that you don't need to call it out?

We separate our development capital from what we report in that 165. Chicago and Tropicana are distinct. We are still in the process of working with our contractors to determine the demolition costs, so we don't have a figure to provide today. However, those costs are excluded from that 165 and are not part of the number we disclosed. I'm not sure if George has anything additional to add.

No, you're right. We're going through the bid process right now, both Chicago and Tropicana.

I think the other issue is as relates to, I mean, it's just not the demolition of blowing it up as site prep and over some period of time. So, the really fixing on a particular calendar year, some of that's going to wrap over, like, wrap over to 25. So that's another reason why we don't have specific guidance and held to a certain timeframe.

Sure. Okay, thanks. And the last one, can you just remind us where we are with the New York license and as a competitive process and just where Bally stands at the moment?

So, it, you know, we will. So, obviously, it's public that we're part of the process. We're working on presenting an appropriate plan once the RFP process begins. We've secured the land and we think that it's a real opportunity at State. We think that anyone that does a project here will be successful and we're just putting ourselves in a position, to build the appropriate project there and be successful. But the first step is acquiring the license.

We can't give you any color on New York's timeline. We are taking every step and measure that will put our name in the hat for consideration. So we're very interested in it. We think we have a very, very compelling proposition and site anchored by our Bally Links golf course. And so we are, we will engage and await New York's decision and timeline.

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 updates on what's in bounds or out of bounds as potential outcomes would be helpful.

Hi, David. This is Charlie Diao. I think we haven't changed. You know, we expect to finance it when we need to have the financing. 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 4, 2024. And we're going to spend the back half of this year demolishing 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 to tell you about. If and when we do, we shall do that, but we continue to progress towards that outcome. And we are, you know, confident of our ability to finance the project because it's a great project.

Hey. Good evening, everybody. Thanks for taking my question. I want 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... you know, read between the lines here on the different segments, it sounds like, you know, 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 it sounds like Asia's stable, but maybe you have to lap, right, a reset there from last year. And so on a year-over-year basis for the year, Asia will probably be down and maybe those two offset. Am I 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 there 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 forecasts, you can't predict perfectly in some of these environments. So we know that what we have in there is rational and we know that we have enough levers to pull on 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 think of how you're thinking about it going forward. I guess just sort of thinking or looking back on the fourth quarter, we noticed you drew down some of your revolver and maybe it's separate though, cash sponge, well, you know, you bought some of your stock back and so leverage picked up a little bit on that. And so I guess the question is, maybe just remind us your philosophy on your leverage, where, when it sort of is to add a level where, you know, it doesn't make sense to the stock price to buy back stock and sort of how you think about that.

Yeah, look, at any point, this is Charlie Diao, at any point in time we have different options and certainly in the fourth quarter the equities got too cheap. But we also have various forms, you say our leverage, we do have a land bank that we know that we can monetize at any point in time. It 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. That's point one of a turn. So, I don't know if 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.

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

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. We see a huge opportunity ahead and 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 you 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.